2001

Managing the transformation of the sales force

By Tony Welch

Sales Director,  01 November 2001

Customer Relationship Management (CRM) has become one of the most talked about topics within boardrooms across the globe. The concept of maximising profitable growth and shareholder value - by attracting, serving and retaining high-value customers - has become a driving force for many organisations.

CRM's popular currency is also a result of the difficult markets in which many businesses now operate. Customer expectations are rising, and many businesses are facing significant challenges to attract and retain profitable customers. Customers with unlimited product and service choices demonstrate reduced loyalty and increased price sensitivity.

In this environment, the winning principle is becoming the manner in which you treat your most valued customer relationships. By aligning sales channels to give a single view of the customer across the business, and continuous process improvement, the customer experience is enhanced at all the organisation's touch points. The organisation's underlying systems architecture and CRM software applications are the key enablers to achieving a single view of customers.

The sales force is a critical channel to market for organisations selling high-value or complex solutions to customers, or managing key accounts. A plethora of software products has emerged to support the selling process, offering valuable information to plan and execute sales. But are the deployments of this technology fully delivering the expected benefits? Are organisations seeing quantum leaps in sales revenues to justify the investment in technology? If not, why?

Technology for the sales force
CRM software technologies, in the form of Front Office systems, equip sales staff with powerful tools to improve their efficiency and effectiveness in selling situations. Systems suppliers include Siebel, Oracle, SAP and many niche players.

Their applications are designed to help make sales people become more effective, by helping them increase the probability of winning each opportunity, which in turn shortens the sales cycle, and increases the value of each transaction. The applications typically include everything from product information to competitor analysis (see Figure 1).

Figure 1: The functions and integration links for a sales information system

Key considerations for software selection
Many of the products in this market have very similar functionality and look similar from the user interface perspective. Organisations often focus on the user interface and out-of-the-box functionality, but fail to examine important and somewhat hidden factors lying just below the surface. These key factors are the flexibility of the underlying architecture in meeting changing sales business processes, integration to legacy systems and total cost of ownership. Organisations require flexible products capable of meeting the needs of changing sales processes, customer needs and support for new channels. Some considerations for selection are outlined in the table below.

Correctly selected, technology underpins the increased efficiency and effectiveness of individual sales staff and the wider organisation (see Figure 2)

Figure 2: Sales effectiveness

• Individual efficiency: Technology is used to reduce administration time and provide information on contacts, opportunities and accounts on a single source, thus increasing productive selling time
• Individual effectiveness: Technology is used to tailor proposed solutions to customers' needs, with detailed product specifications, competitor product information and knowledge of the customer
• Sales team effectiveness: Technology provides support for team selling, account strategy and planning, and the management of key accounts
• Enterprise effectiveness: Legacy back-office systems are fully integrated with front-office technology to share a single view of the customer across the organisation.

In this new environment, the selling dynamic moves from a straight buyer/seller relationship through a co-operative account management focus to a collaborative, cross-functional account team. In essence, sales staff move from 'rep' to 'consultant', as shown in the table below.

Realising the full benefits of the technology
CRM technology is critical to this new integrated approach. Sales staff must be authoritative sources of product information and should be equipped to handle questions and queries convincingly. They need to have the ability to construct solutions that appeal to customers and, where possible, up-sell and cross-sell to widen margins. Sales managers should understand an organisation's pipeline and make accurate forecasts. To manage the sales force effectively, they need sight of, and access to, all the existing opportunities. Another benefit provided by the technology is the ability of the sales and marketing departments to share information and feedback. Organisations have many points of contact with their customers besides sales, such as after-sales service, accounts payable and product development. Systems integration between front and back-office systems offers organisations a single view of customer data.

However, there may be a critical gap between the promise of increased sales revenues and the benefits organisations are actually seeing.

One problem is that management underestimate what is involved in implementing a CRM system and a customer-centred philosophy. It is a long journey and not a quick fix. The CRM transformation involves reviewing sales, marketing and channel strategies; reviewing market and customer segmentation; re-engineering sales processes; and progressing from a product-centred to a customer-centred organisation. The approach and focus of the sales force will need to change to reflect the transformation. For example, shifting from a product to an account focus, or an industry as opposed to a geographic organisation.

Most important, these aims require a change in the attitudes and behaviour of individuals. Successful CRM technology deployment requires:

• Business process change
• Training and coaching
• Changes in remuneration philosophy and approach

Sales staff retention: Changing the business process
The adoption of technology changes the sales dynamic. To achieve a quantum leap in sales effectiveness, organisations must take the opportunity to redesign the sales process in line with their sales and marketing strategies. In one example, an organisation selling office stationery products fundamentally changed its sales team from a product focus to an account focus, with the emphasis on growing the share of sales the company had with key accounts.

The change was fundamental for the sales force, which comprised product specialists selling to a wide range of customers. Making individuals responsible for key accounts necessitated cross-selling by sales staff supported by sales technology. The change in strategy was successful and yielded significant revenue increases for the organisation.

The change for the sales force were enormous, however. Not only was new technology introduced, but new account management skills had to be learned. New metrics had also to be adopted, relating not to volume sales but account profitability. The cultural challenges involved in achieving the behavioural change in this example are significant. We find that the introduction of sales management technology often fails because organisations do not allow for the people dimension and organisational change implications for the sales force.

Training and coaching
One key reason for failing to derive full value from CRM technology is a lack of commitment and buy-in from the sales force. Sales staff who are accustomed to working alone find sharing account information, leads, and personal contacts with their peers and other parts of the organisation a challenge. The new technology must be made part of an essential change process for the sales force to fully embrace and champion the concepts. Yet the training and coaching given to prepare for roll out of the system and the communication beforehand are often a low priority. Sales force systems are often imposed, without formal training, because of the difficulties of withdrawing individuals from the field to be trained.

A process of coaching to develop commitment - and training to refine user skills - is essential. There are no short cuts to achieving real commitment. Individuals need to be made part of the solution rather than part of the problem.

Remuneration philosophy and approach
With the changing emphasis away from quantity to quality of sales and customer relationships, another key dynamic is the remuneration scheme. A change from volume product sales to focused account profitability can be seriously undermined by a remuneration scheme that pays commission on volume.

Yet many organisations press ahead with new technology and modified sales processes without redesigning the system of motivation that drives behaviour. The results are often frustration and failure to meet the strategic objectives. Aligning remuneration with the new strategy is crucial. Some organisations have taken to splitting commission between volume and account profitability, while others have eliminated commission altogether. Creative reward structures, which produce outstanding commitment to customer relationship quality, are key.

Sales staff retention
Many organisations suffer their highest staff turnover and attrition in sales. Some senior executives see this as an inevitable inconvenience. Others believe a high level of staff turnover in sales drives individuals to greater levels of effort. However, high turnover in sales can seriously affect customer retention and customer loyalty. It also adversely affects the successful adoption of technology, due to the lack of continuity. More worrying still, when an individual from the sales account team leaves the organisation, they are likely to join a competitor. They will take with them a wealth of information and a thorough knowledge of how to beat the organisation in a competing sales situation.

The reality is that, as organisations seek to establish long-term profitable relationships with key customers, they also need to establish a stable, highly competent and empowered sales force to help meet these objectives. Quality sales people can be an organisation's most valuable asset. There are many reasons why organisations suffer a high turnover in sales staff:

• Sales recruitment is often poorly conducted
• The organisation is not paying enough to attract individuals of the right calibre
• Not enough is invested in personal development for sales staff. Where is the career path?
• New technology and business processes are not matched by the skills of individuals, and new skills are not developed through training and mentoring.
  

Managing the people dimension of sales technology
To succeed with customers, an organisation must succeed with its people. The challenge is to create in organisations and their people the desire to achieve success, the belief that it is achievable, and the capability and motivation to see events through to success:

• Desire is about giving people a vision with which they identify and which energises them
• Belief is essential to make people overcome the inevitable obstacles and setbacks that stand in the way of doing things differently
• Capability ensures that people are able to deliver what is asked of them
• Motivation of the individual is critical, not merely to gain commitment to what needs to be done, but also to guarantee the tenacity, ingenuity and whatever else is required to see things beyond completion and through to the next challenge

These points might seem intuitive. By ignoring their implications, however, many organisations never realise the full potential of their investments in new CRM technology.

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