Consider this scenario: Your company is in growth mode and has acquired several smaller players in your space in recent years. The newly combined selling organization is a mess. Not only are multiple reps calling on the same customers, but it is evident that some sellers are focused on accounts with minimal potential, while others don’t even appear to have the skills necessary to sell and deliver on your value proposition. You aren’t seeing the results you expected and are under pressure to rectify the situation before you lose more market share.
A reorganization of your salesforce is necessary, but where do you start? And how do you ensure you are making decisions that will maximize impact and not just “rearrange the deck chairs,” so to speak?
Whether you are merging disparate sales teams into one or merely restructuring your team to compete more effectively, a reorg can be quite daunting. Truthfully, there are many “balls” to juggle when restructuring, but if you stay focused on the three essential considerations of alignment, size, and enablement, you’ll end-up with a sales organization poised for success.
In Symmetrics Group’s Sales Resource Optimization Guide, written by Michael Perla, we define Sales Resource Optimization (SRO) as the process by which companies align, size, and enable their sales organizations to maximize the impact on top and bottom lines. SRO is – and has been – a hot topic for B2B sales organizations, regardless of industry. It’s all about having the right number and type of sales resources on the right customers, with the right skills and capabilities to win.
Step 1: Get Alignment
Before you start moving boxes around on the org chart, you first need to ensure that you have alignment, both with and across the organization, as well as with the marketplace.
Alignment With the Organization: Does your reorg goal align with/support the strategic goals of the broader organization? For instance, if a Company goal is to reduce costs, perhaps your reorg goal could be to find efficiencies through the elimination of duplicative positions. Or, if a Company goal is to increase gross revenue, a supportive reorg goal would be to drive top-line revenue by implementing a new coverage model. Whatever goal(s) you decide upon, it should work in conjunction with the overarching strategic goals of the Company.
Alignment Across the Organization: Sales won’t be the only department impacted by changes made to achieve the reorg goal, so don’t forget to include the affected department decision makers in the conversation and ensure that everyone buys-into the final approach. The new sales structure will need this cross-functional support to be successful. For more information on the importance of cross-functional support to an organization, see Step 4 of our book 7 Steps to Sales Force Transformation, where the authors, Warren Shiver and Michael Perla, review why it’s vital to involve multiple functions in a change effort.
Alignment with the Marketplace: Once the decision-makers from all affected areas of the organization agree on the reorg goal, the next step is to evaluate whether the Company is aligned to sell to the markets and customers with the highest potential for success (see page 7 of the SRO Guide). What market segments are best for your products/services? Are you competing where you can win? Are you setting-up your sales reps to lose, because you are competing against larger companies with more resources? Within the right market segments, what customers fit within the target market? Are you focused too heavily on low-return clients that eat-up your resources and can’t help you reach your revenue goals? It is critical to get the right customer segmentation model in place before you can determine how many reps you need, where you need them focused, and if you have the right resources onboard.
Step 2: Size-Up Your Coverage and Capacity Needs
Now that you have alignment with your Company and the marketplace, you can start to focus on the people component of this process.
Coverage: The coverage model determines the type of resources necessary to service, or “cover,” your various, identified customer segments across the customer lifecycle. How do you “cover” these prioritized markets and accounts in the most optimal way? If your sales are transactional, can you push customers through your online channels? If your sales are more complex in nature, would field sales reps provide what you need to achieve your goals? Is there a combined coverage approach that might be better suited for your Company’s needs? (see pages 9-10 of the SRO Guide)
Capacity: The capacity model determines how many resources you need within each role to achieve your revenue goals, as well as the span of control for sales managers. Do you have enough salespeople in the right roles today to address your needs? Do you have too many people covering specific roles? If so, can you use the overflow in a different capacity? Does your capacity fall short anywhere? (see pages 11-12 of the SRO Guide)
Step 3: Enable Your Salespeople and Teams
Once the coverage and capacity models have been defined, it’s a good idea to perform a capabilities analysis of the current sales force (we do this via a Way of Sales Assessment) to determine who has the abilities and tenacity to be successful and then fill in the gaps with new-hires or with sales training to improve their skills.
Successfully putting your plans into action requires having the right tactics in place – and in use. Often companies have multiple sales processes and tools, all of which may not effectively align with the selling needs of the new organization. This is a great time to assess what’s working, what’s not working, as well as evaluate the support, tools, and resources the sales team requires to be successful. (pages 14-15 of the SRO Guide)
Beyond the sales organization, it is critical to have clear roles and responsibilities outlined across every affected team. Sales, Marketing, Finance, Customer Service, etc. should all understand what roles they play in the sales process and who is accountable for each outcome along the way.
Impact of Effective Sales Restructuring
At Symmetrics Group, we’ve written on this topic and addressed go-to-market strategy numerous times, because it is critical that companies regularly evaluate their structure to appropriately align with changes in the marketplace. It’s not a “one-and-done” exercise but rather one that requires consistent tweaking to stay ahead of the curve.
You might argue that it’s not worth the effort for your company – that optimizing your sales team will require more time and resources than you can dedicate for the return you’ll recognize. If you are unsure whether it’s time to optimize your sales resources, check out the qualifying questions in this blog to assess your readiness.
If done right, however, the benefits far exceed merely reducing costs. Page 6 of the Sales Resource Optimization Guide highlights the benefits of thoughtfully executing an SRO:
- Sales Productivity: Improved win rates and cross-sell; reductions to sales cycle time
- Employee Engagement: Improved sales rep satisfaction and lower attrition rates
- Profitability: Improved average deal size and customer retention rates
With these benefits, how can you afford not to optimize your sales organization?