Harvard Business Review

Turbocharge sales

The TOPSales framework can boost both sales and margins.

Par Dianne Ledingham and Darrell Rigby

First published on décembre 10, 2008
min


When companies are hit with declining sales and shrinking margins, the options can start to look bleak. Attacking one challenge—by raising or lowering prices, for example—can make the other worse. But one powerful way to shore up both sales and margins in a downturn is to make your salesforce more effective. A global network equipment company, for instance, recently reversed three consecutive years of declining revenue and improved its gross margin, primarily by revamping its sales efforts. Some of the most effective sales operations are adjusting their go-to-market approaches by using data, disciplined analysis and systematic selling tools to focus their selling efforts and retain more of the customers they want. The key is a numbers-driven approach to boosting the effectiveness of your sales organization. The methodology is summed up in a framework we call TOPSales. Let's look briefly at the four levers: View the larger version of this chart Targeted offerings. You know who your best customers have been. Which customers will still be strong and keep buying in a down market? And which prospects should you go after now? Once you identify these high-potential customers, you can create a "heat map" of the market as a guide for your sales efforts. A few months ago, a broadcasting company refocused its sales team on market segments such as specialty retailers, who badly needed advertising to counter declining consumer spending. The result: after two months, sales in the broadcaster's two test regions were up 90 percent and 450 percent. Optimized tools and procedures. Sales cycles always lengthen in a downturn. But close, disciplined pipeline management attuned to the heat map can improve win rates. Tools such as "digital cockpits" can help. But what matters most are rigorous management processes and disciplines: systematic channeling of leads to reps; routine, detailed account and pipeline discussions; and meticulous tracking of customers' readiness to purchase under current cash-and-credit positions. Performance management. Territories and quotas that made sense last year may not be realistic in today's conditions. The network equipment company, for example, had been pursuing 15 different industry segments, but its heat map showed that five accounted for most of its revenue and profits. So it redesigned territories and reset quotas accordingly. Sales resource deployment. Measure the time reps spend in front of customers; if it's less than it should be, consider channeling some functions to support staff or rearranging territories to minimize travel. A downturn also offers opportunities to beef up less-expensive sales channels, such as telesales or sales through partners. Aggreko North America, the equipment rental company, directs inquiries about commodity rentals to the Internet or handles them through telesales, while inquiries about large consultative projects are routed to specialized sales reps. Read the full article, which describes in more detail how a disciplined, data-driven approach to salesforce effectiveness can keep revenue and margins as strong as possible. Dianne Ledingham is a partner with Bain & Company and a senior member of Bain's Customer Strategy and Marketing practice. Darrell Rigby is a Boston-based partner at Bain & Company and leads the firm's Global Retail practice.

When companies are hit with declining sales and shrinking margins, the options can start to look bleak. Attacking one challenge—by raising or lowering prices, for example—can make the other worse.

But one powerful way to shore up both sales and margins in a downturn is to make your salesforce more effective. A global network equipment company, for instance, recently reversed three consecutive years of declining revenue and improved its gross margin, primarily by revamping its sales efforts.

Some of the most effective sales operations are adjusting their go-to-market approaches by using data, disciplined analysis and systematic selling tools to focus their selling efforts and retain more of the customers they want.

The key is a numbers-driven approach to boosting the effectiveness of your sales organization. The methodology is summed up in a framework we call TOPSales. Let's look briefly at the four levers:

View the larger version of this chart

Targeted offerings. You know who your best customers have been. Which customers will still be strong and keep buying in a down market? And which prospects should you go after now? Once you identify these high-potential customers, you can create a "heat map" of the market as a guide for your sales efforts. A few months ago, a broadcasting company refocused its sales team on market segments such as specialty retailers, who badly needed advertising to counter declining consumer spending. The result: after two months, sales in the broadcaster's two test regions were up 90 percent and 450 percent.

Optimized tools and procedures. Sales cycles always lengthen in a downturn. But close, disciplined pipeline management attuned to the heat map can improve win rates. Tools such as "digital cockpits" can help. But what matters most are rigorous management processes and disciplines: systematic channeling of leads to reps; routine, detailed account and pipeline discussions; and meticulous tracking of customers' readiness to purchase under current cash-and-credit positions.

Performance management. Territories and quotas that made sense last year may not be realistic in today's conditions. The network equipment company, for example, had been pursuing 15 different industry segments, but its heat map showed that five accounted for most of its revenue and profits. So it redesigned territories and reset quotas accordingly.

Sales resource deployment. Measure the time reps spend in front of customers; if it's less than it should be, consider channeling some functions to support staff or rearranging territories to minimize travel. A downturn also offers opportunities to beef up less-expensive sales channels, such as telesales or sales through partners. Aggreko North America, the equipment rental company, directs inquiries about commodity rentals to the Internet or handles them through telesales, while inquiries about large consultative projects are routed to specialized sales reps.

Read the full article, which describes in more detail how a disciplined, data-driven approach to salesforce effectiveness can keep revenue and margins as strong as possible.

Dianne Ledingham is a partner with Bain & Company and a senior member of Bain's Customer Strategy and Marketing practice. Darrell Rigby is a Boston-based partner at Bain & Company and leads the firm's Global Retail practice.