Qua Vadis Sales Management?

Where is sales management going? Where should it go and when should it be there?
How do we know that it is moving forwards or is it standing still instead and the world around it is moving and giving us impression that it is on the way?

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What does this desired orientation to the future mean and what kind of capabilities and management systems we should be able to create to be ready to meet the challenges and opportunities that mostly unpredictable future will give us.

There is no such a thing as “a stone of wisdom”. At the end nobody really knows what kind the actual future will be. However without a visionary touch we easily stay in present or in worst case in history and world overrides us.

Where are we now?

When we start to think of future, at the beginning we should know where we are now. What kind of business environment we have at the moment for our own industry and what kind of drivers are affecting to our customers and to ourselves as well.

Based on that we should analyse, why we are acting as we do and what is the basis or reasons to that behaviour. This means we must objectively determine, what our Sales Management function is at the moment. It is not enough that we think we know, we must really do it as well.

There is normally very little use of widen the thinking in this stage to the global trends and methods, the best way is start from the nearest point; from our own methods and practices.

We may find some obvious trends:

1. Globalisation. What it means to us?

– Customers may merge into larger ones. Is it the case in our own business as well?
– Customers may consolidate their numbers of suppliers. How about in our industry?
– Many suppliers have fewer but larger customers. Is it same in our industry?

As a result this may mean that sales people are dealing with highly trained, professional and well organised purchasing departments.

This trend will continue and create new challenges to the capabilities of our sales people and sales management as well. Are we prepared and how do we know we are?

2. Changes and development of information technology

– Internet has empowered customers with a wealth of information
– Customers can compare their suppliers

Could it be, that the sales people are being replaced by the Internet, because they have failed to add real value? The reason could be, that sales do not know what the desired real value really is? There is so much assumptions and wrong analyses of available information.

3. Growing importance of governance and ethics

– The growing importance of ethical and high moral behaviour has in some cases given sales function negative name. Result of this may be that selling is evolving from an art, based on personal skills and characteristics to a science based on clear, replicable and predictable processes. At the same time the importance of knowing, understanding and respecting customers’ value chains is growing and building ultimate success factors. This, if sales people and sales management are aware of this.

What about the future?
Where do we want to be or where should we be?

Kyle Porters idea starts from convergence of sales and marketing. His idea is that we are moving from individualistic sales world to a team- based sales environment. Motto could be ”It is great to be number 1 sales person, but it is way better to be number 1 sales organisation.” He sees the sales and marketing functions migrating into single revenue generating function.

At the moment in many companies marketing is in one corner and sales in the other. Porter thinks that there should be better concerted effort around a “revenue generation” department inside the organisation. It should not be “Hey he´s a sales guy, he´s a marketing guy.” Instead here´s all the functions in a revenue generation funnel, and here are the people that fulfil those and they works as a team.

I think this kind of convergence is a good start. However the final goal should be convergence of sales and finance and sales and logistics as well. This means that the final result is that all functions are working close together creating a real revenue generating organisation, not only reengineered department.

Creating customer value

“All sales efforts will not depend on high-level professional expertise”, says Neil Rackham.
Enabled by online technologies more transactional sales will continue to migrate away from the face-to-face selling. As the extremes of the spectrum grow farther apart, customer segmentation will become more critical and more difficult.

Racham´s idea is that if we look at customer value, there always be two important components: the cost and the benefits. You may create benefits by increasing the expertise that you will give them.

You can decrease the cost for the more transactional customer. There is an interesting point; customers are neither entirely one nor the other. It will depend on the opportunity.

So we may see that organisations are developing two or even more different sales forces.
Racham´ thinks that old farmer/hunter model is old-fashioned and it will not be predominate in the future. The evidence show that the successful company must be able to use multiple models and target them appropriately.


What kind of future there will be?

If these trend continue, what does the future look like for a salesperson and sales manager?
Rackham predicts that the number of face –to –face salespeople will fall, however the demands on them as far as job complexity is concerned will rise. This means different kind of people, different kind of skill sets and different kind of autonomy, which are supported by a dynamic organisation structure which is more rational and more flexible than present structures.

Regardless what capabilities the salesperson of the future may need the personal interaction will continue to be a critical part of the sales process. Humans are doing the decisions not the organisations. This means there will be even bigger need for human interactions in the future when technology and sales automation at the same time are spreading wider and creating new sales processes.

So sales, as we know it will not go away. It changes and sales management must realise that in the future management work will be architecture, creating internal convergence and co-operation and at the same time lead the sales  not through individuals but through sales teams/-groups.

Sources:
Neil Rackham :
Kyle Porter; CEO Salesloft

 

Writer:
Jorma Nordlund, Sales Management lecturer, Haaga-Helia eMBA in Service Excellence
Senior Partner, Nordcase Consultants Ltd
Owner, Nordcase Consultants Ltd

Read more: http://www.haaga-helia.fi/en/education/emba/emba-team/jorma-nordlund

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