Assess Your Sales Organization – 8 Questions

I just read a GREAT blog post by Melissa Raffoni on the HBR Now blog. I have long believed that many organizations are leaving money on the table because they do not have a clear sales strategy or an effective sales organization to execute the sales strategy.  Too often as I talk to executives about sales and what they are doing to improve sales the extent of the work being done is to consider training or compensation and there are so many other elements that can to be considered and leveraged to improve the sales team effectiveness. Melissa in her blog considered the question of sales effectiveness and by asking good questions suggests some of the opportunities that are out there for companies to capitalize on.

Here are Melissa’s questions. Can your organization answer these questions?

  1. “Okay, tell us again, what’s your value proposition? Why should customers choose you over the competitors?” It’s so basic, isn’t it? Yet, I continue to be amazed at how difficult it is to answer this question well. With the constantly changing competitive landscapes and customer needs, every company should take a second look at what they are pitching and why it still resonates today. I’m sure, for most, the value proposition needs a face lift.
  2. “What is your sales process and how does your organizational structure map to it?”
  3. “Do you think your overall cost of sales is where it should be? What makes you think that? Are you comparing to an industry standard or mapping to a projected financial model?”
  4. “What key measures are you using to track sales effectiveness? Do you have a sales dashboard?” Is it cost of sales as a percentage of revenue, close ratio, sales person productivity? Something else? You can’t really optimize if you don’t know which lever you want to move.
  5. “If you believe there are two ways to drive sales–increase the funnel and/or increase the close ratio–what are you doing to achieve those increases?”
  6. “Is sales compensation driving the right behaviors?” Is there enough of a variable compensation component to make a difference?
  7. “It’s a new world, how are you taking advantage of it?” Partners are willing to talk, new talent is on the street, customers are looking for high ROI offerings, social media is changing how people communicate. Are you experimenting?
  8. “Do you have the right people?”

Check out Melissa’s entire blog post here: Eight Questions To Assess Your Sales Organization

Standardize and Document Your Sales Process

During my last post, I highlighted the challenge of high turnover which exists in many sales organizations. The thought that I shared was to suggest building an operating model within the sales organization that takes this reality into consideration instead of hoping for the day when turnover can be reduced. Probably, the most critical step to building this operating model is to standardize and document your sales process.

It is important at this juncture to differentiate between a sales methodology and a customized sales process. There are a number of sales methodologies out there – Target Account Selling, Spin Selling, Solution Selling, etc. Methodologies give you a framework for outlining what you need to do and for training selling skills:  find the economic buyer, build rapport with your prospect, close the sale, etc.

In addition to sales your methodology, a sales process further outlines the ‘how’ and gives the sales team a “recipe” to follow. My roommate in grad school was one of those rare individuals who could open up the cupboard and make a fantastic meal with whatever scraps of food he found on the shelves. Most of us are not that talented. Perhaps we can manage scrambled eggs easily enough, but what about making Eggs Benedict without a recipe for Hollandaise sauce? or tackling a five-course meal and having it all ready at the same time? Similar to preparing a complicated meal, the more complicated the customers buying process is the more critical it is to define a sales process. The sale process defines what a sales ready lead it, what steps should be taken & when to qualify the lead, it defines how to engage other members of the sales team into the selling process and it captures different sales stages and what activities should be happening to shorten the sales cycle. The sales process helps everybody remember critical activities and thereby increases the likelihood of a successful outcome.

Detailed documentation of your sales process will be particularly useful in helping to get new employees up to speed. Recent research showed ramp-up time for new reps was over seven months for half of the companies surveyed. Any improvement to reduce this time, even by one month, will have significant impact on generating revenue and hitting quarterly and annual targets. With any volume of new sales representatives due to growth or turnover it will become hard, if not impossible, for the manager to keep up with the ‘windshield’ time required to on-board a new employee. The detailed documented sales process compliments the management coaching to help the reps be successful as quickly and independently as possible.

Whenever possible standardize your sales process across teams, divisions and departments. Your sales process gives you a language to use to discuss events and opportunities within your organization. It facilitates the sharing of information up the organization as well as across the organization. The more terms are standardized, the easier it is for this flow of information and learning to occur.