We’ve worked with several clients on elements of their sales strategy, which clearly define who you are selling to, what you are selling, how you are selling, and why you are different -- all to support better returns for the sales organization (Revenues – Cost of Sales). Asking fundamental questions like these begin to point to significant gaps and opportunities around sales structure and alignment.
While decisions related to sales strategy, model, and structure are highly unique to an organization, we find that investigating four core areas -- what we call the 4 C's of sales strategy -- can help guide those decisions:
- Customer – How do you segment customers based on size, potential, needs, capacity, location, etc? Which are your highest priority segments?
- Coverage – Based on what you learned in customer analyses, how should you define your coverage model to best align with your highest value segments?
- Capacity – What is the workload required to sell and service customers and how do we size/resource our team (and selling roles within it) accordingly?
- Capability – What competencies do our people need in order to engage in the right conversations with different levels of customers, which for many companies span strategic/consultative selling to tactical selling?
By examining each of these areas, a sales organization can maximize both selling efficiencies (e.g., reducing overlapping resources, reducing T&E, and expanding the “bag” of solutions) and sales effectiveness (e.g., more value for the customer through broader solutions, better experience through single point of contact).
In numerous interviews that we completed for our book 7 Steps to Sales Force Transformation, Michael Perla and I heard executives tell us that determining whom you should and should not sell to is the first step (as indicated by our first "C" -- the Customer). That decision alone will inform everything else you do. It’s a key piece in defining your sales transformation roadmap as the strategy informs everything that follows: the structure of the sales team(s), and the capabilities, tools, people and processes that are required for success. There is no one-size-fits-all strategy.
One client that we’ve worked with, a technology hardware provider selling to large corporate customers, wanted to reexamine how it went to market (direct vs. channel), as well as whether to focus on large, global accounts. In its initial state, the company focused more on territories, but many of those territories had little market opportunity and distracted them from what was actually driving their business: the top 5% of the account base. Their structure needed to be more account-based, with a strategy to capture higher wallet share and sell more differentiated solutions, including intellectual property, services and hardware.
Once sales structure and go to market strategy were reformulated, our client began to re-evaluate its team capability and whether they could effectively execute the new strategy, along with the tools and processes to enable it. The company’s roadmap included work streams covering up-skilling and hiring new talent, deploying new tools and technologies, and defining and adopting new business processes to support the future state strategy.
Another client, a large CPG firm, reshaped their business from what was essentially a portfolio of siloed companies, into a single, more integrated company that could better meet the needs of customers and deliver substantially better results for shareholders. This company had six separate sales and marketing teams calling on the same retail customers and sought to streamline these disparate teams into an integrated selling organization offering the “full bag” of solutions.
Based on the 4C framework, we helped them with the following:
- Customer – ranked more than 7,000 customers based on current revenues and cross-sell potential.
- Coverage – created revised sales territories that reduced average overnight stays from 89 to 41 for a geographically focused field-based team.
- Capacity – determined the amount of time required to sell and service customers and the financial cutoff for covering a customer with a field-based sales person.
- Capability – facilitated sales leaders through a process to calibrate the existing sales talent and align to the revised territories and then equipped the sales team to sell the full portfolio of brands by working with Brand and Marketing on sales training that integrated with a new unified sales process.
As a result, the company realized $1.9m (11% of the COS) in savings from consolidating the sales team and saw a 22% increase in sales due to the number of customers buying multiple products/categories along with increases in customer satisfaction by having a single point of contact.
How well have you aligned the 4 C’s for your sales organization? Does your sales team need to be re-structured to better align with market opportunities? For a more in-depth approach to sales restructuring and resourcing decisions, download our Guide to Sales Resource Optimization here:
For a broad, comprehensive look at sales model and go to market considerations, see our Go-to-Market Strategy Primer here.