Mint
Are great salespeople made or born? GE Commercial Finance discovered it was much more the former than the latter in 2005. That's when the company achieved a dramatic $300 million (about Rs1,224 crore) increase in new business—not by relying on its top sellers to make it rain or by deploying an army of new reps, but by harnessing new tactics that helped its existing reps sell more.
Today, smart companies are turning selling into science. And like GE, they are not depending solely on a few sales stars' native talents and gut instincts. Instead, they are reinventing their go-to- market approaches by using data, analysis and systematic selling tools to increase the productivity of reps across the board and help boost the performance of fair-to-middling performers up closer to the top quartile.
By taking a systematic, data-driven and disciplined approach to reinventing their sales processes, top-performing organizations are better able to respond to new market environments, according to Bain & Company's analysis. They are attracting the customers they want at a faster pace, and they are boosting average productivity across the entire sales force. Their average sales per rep increase by as much as 50% in two-three years, with most firms seeing increases in sales around 30%. As a result, these companies are growing at surprising rates. SAP America, for example, has more than doubled its software licensing business in three years, increasing its market share by 17 points.
Companies which implement the approach, tend to follow a few common practices:
GE Commercial Finance revised the way it looked at customers in its database—using past company transactions-and instead, turned to sophisticated analysis to identify prospects with the highest likelihood of doing business with GE. These customers were three times more likely than others to buy, but under the prior system, half of them—10,000 customers—hadn't been considered top priorities by sales managers. With new leads in hand, GE restructured the sales territories to ensure that each had plenty of high-potential sales opportunities. And it introduced new marketing campaigns to support the sales force with the tools and processes necessary for field sales.
Instead of setting the same sales goals for every region and segment, top performers take an outside-in, bottom-up approach to setting sales goals. They gather market and competitive data, then adjust growth goals in an iterative fashion to make them more realistic.
Sales management can use the new data to develop highly-accurate forecasts and set expectations for salespeople that are better aligned with corporate goals.
Best-practice organizations hit their sales targets by first increasing an individual rep's productivity and only then selectively (and judiciously) adding more "feet on the street". To make sales-force productivity predictable and manageable, sales leaders focus on four levers included in an integrative approach that we call TOPSales:
(i) Targeted offerings—Sell products and services to the most appropriate and profitable segments; (ii) Optimized automation, tools and procedures—To reach those targets, bolster technology with disciplined sales management processes; (iii) Performance management—Align metrics, incentives and skill development to prompt the right behaviour and reward high-performing reps;
(iv) Sales force deployment—Cover the market opportunity with the right sales channels (such as direct sales, indirect sales and telesales at the right levels so that prospective and current customers can be serviced effectively and economically.
Successful companies are always asking, "How can I do better?" Cisco Systems, famed for its use of Web-based sales tools, draws information from a data-rich sales-performance website to improve its forecasting accuracy. The company recently provided its reps with state-of-the-art personal digital assistants with custom applications for the devices that let reps check all of their customers' recent activities. Like Cisco, smart sales leaders know they can no longer rely on their top sellers to sustain sales growth. One pharmaceutical services company has developed a multi-stage sales mentoring programme that pays a small commission to the mentor for the productivity of the sales during the programme. The overall goal: to narrow the gap between the stars and the rest of the sales force. Those companies that do it well have seen the sales of lower-performing reps increase anywhere from 40% to 200%.
But practitioners of the scientific approach also know that improved sales can vanish in an instant. Those sales leaders are already incubating their next generation of tactics and strategies so that they can continue to reinvent sales-force effectiveness.