作者：Dianne Ledingham, Mark Kovac, Heidi Locke Simon
Today, smart companies are turning selling into science. And like GE, they're not solely depending on a few sales stars' native talents and gut instincts. Instead, they are reinventing their go-to-market approaches by using data, analysis and systematic selling tools to increase the productivity of reps across the board and help boost the performance of fair-to-middling performers up closer to the top quartile.
"...Smart sales leaders know they can no longer rely solely on their top sellers to sustain sales growth..."
- Dianne Ledingham
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By taking a systematic, data-driven and disciplined approach to reinventing their sales processes, top-performing organizations are better able to respond to new market environments, according to Bain & Company analysis. They are attracting the customers they want at a faster pace, and they're boosting average productivity across the entire sales force. Their average sales per rep increase by as much as 50% in two or three years, with most firms seeing increases in sales around 30%. As a result, these companies are growing at surprising rates. SAP America, for example, has more than doubled its software licensing business in three years, increasing its market share by 17 points.
Companies implementing the approach tend to follow a few common practices:
Segment with a science. GE Commercial Finance revised the way it looked at customers in its database--using past company transactions--and instead turned to sophisticated analysis to identify prospects with the highest likelihood of doing business with GE. These customers were three times more likely to buy, but under the prior system, half of them--10,000 customers--hadn't been considered top priorities by sales managers. With new leads in hand, GE restructured the sales territories to ensure that each had plenty of high potential sales opportunities. And it introduced new marketing campaigns to support the sales force with the tools and processes necessary for field sales.
Scope the market. Instead of setting the same sales goals for every region and segment, top performers take an outside-in, bottom-up approach to setting sales goals. They gather market and competitive data, then adjust growth goals in an iterative fashion to make them more realistic. Sales management can use the new data to develop highly accurate forecasts and set expectations for salespeople that are better aligned with corporate goals.
Step up productivity. Best-practice organizations hit their sales targets by first increasing an individual rep's productivity and only then selectively (and judiciously) adding more "feet on the street." To make sales force productivity predictable and manageable, sales leaders focus on four levers included in an integrative approach that we call TOPSales:
Targeted offerings--sell products and services to the most appropriate and profitable segments;
Optimized automation, tools and procedures--to reach those targets, bolster technology with disciplined sales management processes;
Performance management--align metrics, incentives and skill development to prompt the right behaviors and reward high-performing reps;
Sales force deployment--cover the market opportunity with the right sales channels (such as direct sales, indirect sales, telesales and so on) at the right levels so that prospects and current customers can be serviced effectively and economically.
Look to the "next practice." Successful companies are always asking "How can I do better?" Cisco Systems, famed for its use of Web-based sales tools, draws information from a data-rich sales-performance website to improve its forecasting accuracy. The company recently provided its reps with state-of-the-art personal digital assistants with custom applications for the devices that let reps check all of their customers' recent activities.
Like Cisco, smart sales leaders know they can no longer rely on their top sellers to sustain sales growth. One pharmaceutical services company has developed a multistage sales mentoring program that pays a small commission to the mentor for the productivity of the sales mentee during the program. The overall goal: to narrow the gap between the stars and the rest of the sales force. Those companies that do it well have seen the sales of lower-performing reps increase by an average of 30% in two to three years.
But practitioners of the scientific approach also know that improved sales can vanish in an instant. Those sales leaders are already incubating their next generation of tactics and strategies so that they can continue to reinvent sales force effectiveness.
Dianne Ledingham is a partner with Bain & Company in Boston. Mark Kovac is a partner in Dallas and Heidi Locke Simon is a partner in San Francisco. All three are leaders in Bain's Global Performance Improvement Practice.
For more information on how your company can improve the effectiveness of its sales organization, read "The new science of sales force productivity," by Dianne Ledingham, Mark Kovac and Heidi Locke Simon, from the September 2006 issue of Harvard Business Review.