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How
Sharp is Your Sales Structure?
by
Dave Kahle
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How
can I get greater productivity out of my
salespeople?� In one form or
another, that's a
question
every owner and sales manager
ponders
regularly.
As
a sales trainer and consultant, it is the
basic
question that I confront. And it is
the
underlying question behind every attempt
to train
salespeople.� Investing in
training and
developing
your salespeople is always a good
idea.�
But it isn't the entire solution for many
organizations.
|
Change
the structure and
you
change the behavior of the people who operate
within
that structure. |
Often,
enormous improvements in sales
productivity
can be achieved by sharpening
the
structure of your sales organization.
� |
The
structure is the sum total of all the
policies,
guidelines, procedures and tools
your
company uses in its sales effort.� It's
everything
about how your company sells,
other
than the people themselves.� For
example,
your
compensation plan is part of the
structure.�
It doesn't matter (hopefully) who the
salesperson
is, the compensation formula is the
same for
everyone.� Your sales automation
system
is part of the structure.� Whether
you use
palm
devices, laptops or paper to manage customer
information
- the way that you do it in your
company
is part of the structure.� How
you
manage
your salespeople is part of the structure.
Do they
report to branch managers or sales
managers?�
How many salespeople are there per
manager?�
How often do you have sales meetings?
What
forms are salespeople required to submit to
their
managers?
All
of these decisions you have made about how
things
are done in your sales organization have
gradually
been codified into a structure.� That
structure
forms the rules for the salespeople,
and
tells them what to do and how to do it.
That
structure stimulated certain behavior, and
the
salespeople create practices and habits that
reflect
your structure.
Here's
a list of the major components of a typical
sales
structure:
-
Sales
process design
-
Sales
management practices
-
Sales
compensation plan
-
Sales
administration/support
-
Sales
tools
-
Assignment
of markets and customers
-
Sales
training program
-
Information
systems
-
Sales
territory design
-
Sales
automation systems
-
Processes
for continuous development of
salespeople
-
Job
descriptions for salespeople.
Why
does all this matter?� Because
of a powerful
truth of
human behavior:� Change the
structure and
you
change the behavior of the people who operate
within
that structure.� This is true
for any organized
group of
people, whether it be a family, a school, a
volunteer
organization, a business, or a sales team.
Here's
an example.� For years my wife
and I were
foster
parents. We cared for 19 foster children over
a fifteen-year period of time. Most of these children
came from miserable home situations, and were out
of control when they came into our home.�
Over the
years, I watched my wife impose a structure on them
that always resulted in the kids responding positively.
On
the first day they came into our home, my wife
� would
show them the bed where they would sleep,
and let
them know that they were expected to sleep
in that
bed.� They were expected to wash
their
faces,
brush their teeth, eat three meals at the table
with the
family using silverware and plates, go to bed
at
certain time, get up at a certain time, etc. She
imposed
a clear and comprehensive structure on
them.
The
responses were predictable.� At
first they
would
test the limits.� But once they
discovered
that the
rules really were the rules, that there was
a clear
and understandable structure, they began to
blossom within that structure. They knew what was
expected
of them, they sensed that the rules were
good for
them, and they began to develop
within
the rules. That shouldn't be any surprise.
Because,
when you change the structure, you
change
the behavior of the people who operate
within
that structure.
This
fundamental principle of human behavior is
just as
true when it is applied to sales efforts.
From
my experience as a sales consultant, I can
assert,
without a shred of hesitation, that you can
expect
significant and measurable improvements in
the
productivity of your sales efforts if you will
sharpen
your structure.�
For example, we're often
involved
in helping to revise a sales compensation
plan.�
Let's say we create a plan that provides an
additional incentive for the salesperson to acquire
new
accounts.� We've changed the
structure.
What
happens as a result? The salespeople
modify their behavior and call on more prospects,
acquiring more new accounts.
Here's
another example.� We'll often
work with
branch
managers or sales managers to help them
institute
a certain kind of sales management system.
� Part
of our system requires a highly structured
monthly
one-on-one meeting between the manager
and the
salesperson.� As part of this
meeting,
managers
discuss the coming month's plan with
their
salespeople.
When
this system is implemented, it represents a
change
in the way things are done - a modification
of the
structure.� Since we've changed
the structure,
we can
expect a change in the behavior of the people.
What
kind of change do we normally see?� Typically,
salespeople
become more strategic and less
extemporaneous. They spend more time planning
because the structure requires that of them.
We
can go on and on with countless examples.
� But
you get the idea. When you change the structure,
you
change the behavior of the people who operate
within
that structure.
So,
now the question becomes, "How can you
use that insight to improve the performance of
your salespeople?"
Typically,
most sales structures have evolved over
time as
a result of specific decisions that were made
in years
gone by.� Over time those
decisions have
been
hardened into the real rules of how things get
done in
your organization.� Some
aspects, like
compensation,
are often finely articulated, while
other
portions of the structure, like how samples
are distributed, are rarely written down.
Some
of these structural rules are positive, in the
sense
that they are well thought out and designed to
stimulate certain behavior on the part of the
salesperson.�
Unfortunately, much of the structure
is not
positive. It developed unconsciously instead
of
thoughtfully, and detracts from positive sales
behavior.
For example, your salespeople may have
developed the habit of coming into the office every
Monday morning for a few hours to start their
week.�
No one told them to do that, it's not part of
any
management plan, it just happened.� Somewhere,
some time in the past, some one started doing that,
and it became part of the structure.� No
one has ever
considered
whether they ought to do that, or whether
that
practice is wise and time effective.
If
you want to make measurable changes in the
productivity of your sales team, refine your sales
structure.�
Here's how to go about it.
Four
Steps to Sharpening Your Sales Structure
Step
one:� Identify and clarify your
current structure.
� Since
much of the sales structure is composed of
unspoken rules and habits, you may not even be aware
of it. So, you need to identify and clarify exactly what
rules and procedures your salespeople operate within.
You
may want to gather a task force for this
project.
Enlist the involvement of a couple of
your
most insightful salespeople, and add in
some
bright managers and executives.� It's
also
helpful to have someone from outside
your company be a part of this process.
Charge
the group with identifying the real structure.
Write it
down. What are the procedures that govern
the
communication between your sales managers and
salespeople? What are the routine practices of your
salespeople?� How about your
sales managers? How
are samples and literature distributed?�
What computer-
related skills do you expect of your salespeople?�
What
is your sales compensation program?� How
are your sales
territories configured? How are proposals written and
tracked?� What training do you
provide your sales force?
Take
all the pieces of your structure - the rules,
procedures and tools, and describe them in writing.
� Use
the list at the beginning of this article to guide
you. �Now
you have a starting point.� Pay
attention to
what
really happens in your organization, not what is
supposed to happen. For example, you may have a
policy somewhere that says that branch managers will
have a monthly meeting� of the
entire sales staff. The
reality may be that it rarely happens.�
You want to
record the reality.
Step
two: Analyze the structure.
� Look
at each piece of the sales structure and
ask this
question, "What impact does this have
on the
productivity of our sales efforts?"
Does
that straight commission sales compensation
plan
really encourage sales people to acquire new
accounts?� Does the common
practice of salespeople
starting every week with two to three hours in the office
on Mondays really help them be more productive?�
Are those irregular sales meetings well designed and
helpful?� Is learning "on
the job" really the best way to
create a professional salesperson? Is the practice of
salespeople reviewing every big order to make sure
it has been keypunched correctly really necessary?�
Are geographically defined sales territories the most
effective organization?
Step
three: Prioritize the revisions.
� If
you've never attended to the structure before,
you may
discover that you have unearthed a huge
task,
with an overwhelming number of practices,
procedures
and rules that need to be changed.
Best to
prioritize and start with those that will make
the
biggest difference first.� From
my experience,
here are
the areas that hold huge potential for
stimulating
transformational change:
-
�
your job descriptions for salespeople
(not
that piece of paper you have in some file
drawer,
but the reality of what you expect your
sales
people to do)
-
your
sales compensation plan
-
your
sales information system (sales force automation) or lack thereof
-
your
sales management system - the procedures
that govern the way in which
salespeople
communicate
with their supervisors
-
your
system for training and developing sales-
people (or lack thereof).
This
may not be true for your business, but
typically
the list above contains the five major
pieces
of sales structure. And, while the task of
articulating
and clarifying every piece of your sales
structure is daunting, every well managed, productive
sales
team needs to have well thought-out, clearly
articulated
policies, procedures, practices and tools
regarding these major five components.
If
you have these things in place, then move on
to other
issues, prioritizing them according to their
potential for stimulating positive behavior change
in the
salespeople.
Step
four:� Make changes as
necessary.
� If
only it were this easy.� Some of
these practices
have
been around so long that many of the salespeople consider them sacred.�
How dare you
change the compensation plan that you inherited
from the previous administration ten years ago?
If
you've gathered a task force earlier, that group can
be a powerful tool for change management. Gather
their input on priorities and the best way to implement
and
announce changes.
Start
with those issues about which you are most
passionate, and that you know will make the biggest
change in sales force behavior. If you've not made
major changes in your sales structure recently, you
are likely to meet some passionate resistance.�
It's not
unusual to lose 5 - 10% of your sales force when you
make significant changes in each of the five issues
mentioned above.� Make sure you
count the cost
before you act.
Give
yourself time to carry out each initiative and to
guarantee the success of the change before you start
on the
next one.� It typically takes a
full year, for
example,
to refine and implement a new compensation
plan.
In
some organizations, this project is so large it
becomes
a permanent job - managing structural
change
in the sales system.� In others,
it's a periodic
task.�
Regardless, it is one of the best things a sales
executive can do, almost guaranteed to return sales
and
profits far in excess of what it costs to carry it out.
�
�About
Dave Kahle, The Growth Coach:
Dave
Kahle is a consultant and trainer who helps
his clients increase their sales and improve their
sales productivity.� Dave has
trained thousands
of salespeople to be more successful in the
Information Age economy. He's the author of
over 300 articles, a monthly e-zine, and three
books.� The Six-Hat Salesperson,
was recently
released by AMACOM. You can join Dave's
"Thinking About Sales Electronic Newsletter"
on-line at www.davekahle.com/mailinglist.htm
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