Efficient and Effective Salesforces: Key elements for optimal commercial operations

Transcription

1 Efficient and Effective Salesforces: Key elements for optimal commercial operations BY: ALEXANDER UGAZ Y FERNANDO ESPINOSA, SINTEC In increasingly competitive environments and unstable economies, managing operation costs becomes a critical or even indispensable issue. Those costs are related to the appropriate use of resources, and resource utilization is related to the levels of standardization, control and available information in business operations. As noted by the marketing VP of a services corporation in Trinidad and Tobago, My goal is to have reliable information that reduces uncertainty and enables decision making. And the commercial director of a services company in Mexico complained, Our salesforce lacks reliable and up-todate information to help them close sales. And the director of operations of an auto company in Mexico quipped, Each of our dealers acts on their own I d like to standardize their execution. various variables of business results. Also, guidelines will be proposed in order to achieve optimum Salesforce operation (World-Class levels) that drive higher competitiveness for organizations, as well as enhanced profitability. KEY ELEMENTS FOR A COMPREHENSIVE MANAGEMENT OF SALESFORCES There s a series of elements that need to be present in any schema for the comprehensive management of a Salesforce, especially for massive Salesforces (mainly due to the more difficult nature of their control and their impact on business results). Taking into account common organizational impact patterns, we determined how each operational element becomes to each of the business variables (Figure 1). Comments like these are very often heard in the operation areas of various Latin American corporations, especially in regards to Salesforce operations and especially when operating with massive salesforces, in which standardization, controls and optimization become highly complex due to the size of the operation or the large number of employees involved. Salesforces that merit the description of optimal are focused on comprehensive management schemas, which not only call for business result goals (sales, clients, etc.), but also demand efficiency and effectiveness. In these cases the logic is to make sales, but at the appropriate cost and higher degrees of client satisfaction (which has gained increasing importance as a differentiator in the face of stronger competition and improved access to technologies and knowledge.) Due to the above, this article seeks to explain the various elements existing in the operation of a Salesforce, pointing out their degree of impact on the FIGURE 1: SINTEC MATRIX OF KEY SALESFORCE ELEMENTS AND THEIR IMPACT ON BUSINESS VARIABLES

2 2 A conclusion that may be drawn from the matrix is that having a wellestablished methodology, training the Salesforce on such methodology, aligning incentives to such methodology, and above all, monitoring the delivery of set goals (via indicators and management), are key to a comprehensive (i.e., efficient and effective) management of a Salesforce. Route logistics and technology become increasingly relevant in the case of massive Salesforces, where control and management becomes highly complex due to the inherent complexity of the operation. If the desired approach of a company is more focused on cost-savings, the emphasis should be on making the salesforce more productive, with optimal routes, increased productivities, more effectiveness in sales and retention (salesperson specialization), enhanced controls of in-field execution via operational indicators, etc. If the focus is on increasing revenues, the way to go is to establish working routines that are clearly related to the sales strategies and techniques to be used, as well as to properly train the team regarding the products and services being offered, plus align incentives to the strategy and control and manage those sales operations. It should be stressed that having comprehensive management in place helps increase client satisfaction and reduce employee turnaround, which in turn affects revenues and expenses but most especially the rapport between salespersons and their clients. This rapport build raise barriers that prevent entry by competitors, and thus it enables companies to better capitalize available market opportunities. SALESFORCE MATURITY LEVELS Because most organizations have developed some of the elements but lack others, three levels of maturity can be defined in terms of a comprehensive management of Salesforces: Basic, Intermediate, and World-Class (Figure 2). In Figure 3 we describe the characteristics of each of the elements in terms of the degree of maturity of a Salesforce. Arriving at a comprehensive level of management of a world-class Salesforce is a goal for all corporations, not only large ones. In reality, any company working with a Salesforce and seeking optimum operations should focus on working each of the elements listed and strive to implement a level of management that incorporates all of the integrated elements; this would enable them to have more efficient and effective execution and, consequently, stronger financial results. WHAT ARE THE IMPLICATIONS OF LACKING AN INTEGRATED SALESFORCE? Failure to consider adequate controls that ensure the execution of a welldefined and efficient methodology leads to what could be described as a series of losses (immediate, mid-term and long-term) for the business, including high operation costs, missed sales, low responsiveness vis-à-vis the competition, low ability to discern changes in client behavioral patterns, and loss of clients. As examples of the causes of high service costs we may mention inefficient routes with redundant travel (deficient zoning and/or routing of the area of operations), downtimes between visits to clients (poor management of salesperson schedules) and offering the same service portfolio to each of the clients, even though their requirements are different or vary in time. By missed sales or low responsiveness to the competition, we mean among other items the loss of prospects due to deficient follow-up, lack of promotion of the product/service because the salesforce isn t familiar with it, the incentives or even the sales targets; very short or inadequate times devoted to clients (especially in the case of service corporations), all of which leads to low client satisfactions. Additionally, as regards the schema of incentives, the lack of strategically aligned goals (service, competitive or convenience related) may impact on the levels of sales, client attention and satisfaction, or even employee turnaround. HOW CAN YOU ACHIEVE WORLD CLASS SALESFORCE OPERATIONS? The real challenge is to be able to evolve from the basic or intermediate levels to a world-class level. This isn t an easy task, nor is it quick. It involves a lot of effort, time and commitment, especially when it comes to achieving true transformation in an organization that has operated in a fixed way for many years, or even worse, in a company where everything has been all right from an economic viewpoint and growth has been satisfactory for many years. To transform the organization and achieve an appropriate level of maturity, with proper attention to resources and maximized benefits, it is necessary to have: FIGURE 2: LEVELS OF MATURITY IN SALESFORCE MANAGEMENT - SINTEC Working Methodologies or Routines: establish activities to be conducted in the field to provide focus for the salespersons and help them with strategies to execute during their daily routines. These guidelines support salespersons with information and proven methods to make their work more efficient and achieve enhanced results.

3 3 SALESFORCE CHARACTERISTICS IN TERMS OF THEIR LEVEL OF MATURITY - SINTEC FIGURE 3.

4 4 Training: establish knowledge-transfer mechanisms that are effective and enable the execution of best sales practices and techniques in the field. This should be achieved within the parameters indicated by the methodology to aim for adequate services and the optimum cost of service. The challenge lies in validating that this provided knowledge is truly utilized in the execution of field operations. Operation Indicators: define a set of indicators that enable total visibility of Salesforce operations, and not just of the economic results of the business; i.e., implement causal indicators that explain the effects. An example would be to analyze the degree of route fulfillment by a salesman (the cause) and his sales levels (effect). Integrated Business-Management Process: have in place a proactive commercial management schema that helps leaders and responsible individuals to anticipate weekly activities and thus maximize available resources. This enables focusing efforts on planning and moving forward, rather than on solving emergencies and executing reprocesses. The target is to turn this management mechanism into work methods and culture, rather than an isolated, forcible model (Figure 4). happening in field execution, (ii) learn about the true levels of service being provided, (iii) make the sales team proactive in order to attract and retain clients, (iv) measure the behavior of existing clients, (v) learn about the most common causes of staff and client turnaround, (vi) control the execution of field visits (electronic schedules and routes), (vii) contribute to the transactional performance of processes by optimizing other administrative processes, (viii) force the elimination of certain detrimental practices, to mention just a few examples. Organization chart: have in place an organizational structure consistent with the challenges faced by this types of organizations and having, among other things, areas to receive and process the generated information and officials that use such information to make decisions. Such a structure may also involve having a different profile for the Salesforce, one that complies with the processes and methodology (and also values) established by the company. Change Management: establish a communication and training strategy aimed at promoting acceptance of change, via the contact stages described by Daryl R. Conner (Managing at the speed of change): learning, understanding, positive perception, adopting, institutionalizing and internalizing (Figure 5). Figura 4: Gestión de negocio en todos niveles Compensation Schema: have in place a schema of incentives that is challenging, easy to remember, and also covers issues of compliance with the methodologies (targeting the quest for efficiencies) and sales objectives (sales amounts, number of clients, etc.). Route Logistics: begin with a zoning and routing process that reduces downtimes, optimizes the workdays of each of the salespersons, and prevents their mutual cannibalization of zones and points of sale. Service Models: identify appropriate service schemas, with the relevant officials as applicable, focused on increasing productivities and sales through a focus on client characteristics and/or behaviors. Commitment by Leadership Team: involve senior leaders. Their support and role-modeling for these types of controls, management and decision-making is crucial to extend this mechanism to the entire Salesforce. Technology and Automation: leverage technology (for instance, mobile devices) and automate control processes (for example, reports with indicator calculations), especially within companies with Salesforces with large geographical coverage or simply very large in volume. Technology helps to: (i) gather information that helps learn and understand what is FIGURE 5: STAGES IN DRIVING THE ADOPTION OF CHANGE It is critical to thoroughly explain the benefits of these new practices and validate which of them truly add value to each member of the service team, as well as provide success stories so that this schema of change transcends the sphere of mere good intentions.

5 5 THE CHALLENGE In environments in which differentiation is decreasing and customer demand and competition are forever increasing, it is critical for an organization to be aware of, and adequately execute, the key elements for a comprehensive management of its salesforce. Following this guidelines to become a world class operation will lead to significant competitive advantages generated by efficient operation costs, improved client satisfaction, and decreased employee turnaround. The remaining question is, does your organization leverage all of the opportunities described in this article? The challenge isn t easy, but the rewards of your efforts will be plentiful. Alexander Ugaz, Sintec alexander.ugaz@sintec.com Fernando Espinosa, Sintec fernando.espinosa@sintec.com MEXICO CITY MONTERREY BOGOTA SAO PAULO informes@sintec.com