The Edge

Manager@Work: How to build a salesforce that delivers

Today's smart companies are turning selling into science.

By Satish Shankar, Seow-Chien Chew, Dianne Ledingham and Mark Kovac

First published on maio 28, 2007
min read


Buoyed by record economic growth rates throughout Asia. Singapore and Vietnam expect a final tally of 8% for 2006 and China projects it at 10%, multinationals are eager to gain a foothold in the Asian marketplace. Their pursuit of growth comes at a time when new tools are allowing companies to vastly improve the effectiveness of that key resource: the salesforce. Today, smart companies are turning selling into science. They're not solely depending on a few sales stars' talents. 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. By taking a systematic, data-driven approach to reinventing their sales processes, top-performing organisations are better able to respond to new market environments, according to Bain & Company analysis. They attract the customers they want at a faster pace, and they're boosting average productivity across the entire salesforce. Average sales for each rep have increased by as much as 50% in two or three years, with most firms seeing sales increased by around 30%. As a result, these companies are growing at surprising rates. Consider the example of a global pharmaceutical company trying to capture more market share in China. By revamping its approach, the pharmaceutical giant has made dramatic inroads. First, it refocused its market push around cities with the highest concentration of targeted hospitals and physicians; next, it systematically mapped deployment of sales teams, focusing on physicians with strong prescription potential; and, third, it reorganised sales teams around large hospitals, instead of broad disease areas. The new approach has allowed the company to beat market growth in China, with sales in the targeted hospitals growing twice as fast as other facilities. In our experience, salesforce leaders share a few common practices. They include: Segment with a science. GE's Commercial Finance division achieved a dramatic US$300 million (RM1.1 billion) increase in new business by revising the way it looked at customers in its database using past company transactions, and instead turned to sophisticated analysis to identify prospective customers 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 salesforce. 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 repeatedly 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 organisations 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 salesforce 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; - Optimised 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 behaviours and reward high-performing reps; and - Salesforce—Cover the market with the right sales channels, such as direct sales, indirect sales and telesales, 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. Smart sales leaders like Cisco know they can no longer rely on top sellers to sustain sales growth. That's why a pharmaceutical services company has developed a multi-stage sales mentoring programme that pays a small commission to the mentor for improved productivity of his or her sales mentee. The overall goal: to narrow the gap between the stars and the rest of the salesforce. Companies that do this well have seen the sales of lower-performing reps increase from 40% to 200%. Also, sales leaders always look ahead, incubating the next generation of tactics and strategies so that they can continue to reinvent salesforce effectiveness. Satish Shankar is a partner with Bain & Company Southeast Asia and a member of the firm's Performance Improvement Practice. Seow-Chien Chew is also a partner in SE Asia and a member of the Customer Strategy Practice. Dianne Ledingham is a partner with Bain & Company in Boston, and Mark Kovac is a partner in Dallas.

Buoyed by record economic growth rates throughout Asia. Singapore and Vietnam expect a final tally of 8% for 2006 and China projects it at 10%, multinationals are eager to gain a foothold in the Asian marketplace. Their pursuit of growth comes at a time when new tools are allowing companies to vastly improve the effectiveness of that key resource: the salesforce.

Today, smart companies are turning selling into science. They're not solely depending on a few sales stars' talents. 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.

By taking a systematic, data-driven approach to reinventing their sales processes, top-performing organisations are better able to respond to new market environments, according to Bain & Company analysis. They attract the customers they want at a faster pace, and they're boosting average productivity across the entire salesforce. Average sales for each rep have increased by as much as 50% in two or three years, with most firms seeing sales increased by around 30%. As a result, these companies are growing at surprising rates.

Consider the example of a global pharmaceutical company trying to capture more market share in China. By revamping its approach, the pharmaceutical giant has made dramatic inroads. First, it refocused its market push around cities with the highest concentration of targeted hospitals and physicians; next, it systematically mapped deployment of sales teams, focusing on physicians with strong prescription potential; and, third, it reorganised sales teams around large hospitals, instead of broad disease areas. The new approach has allowed the company to beat market growth in China, with sales in the targeted hospitals growing twice as fast as other facilities.

In our experience, salesforce leaders share a few common practices. They include:

Segment with a science. GE's Commercial Finance division achieved a dramatic US$300 million (RM1.1 billion) increase in new business by revising the way it looked at customers in its database using past company transactions, and instead turned to sophisticated analysis to identify prospective customers 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 salesforce.

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 repeatedly 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 organisations 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 salesforce 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;

- Optimised 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 behaviours and reward high-performing reps; and

- Salesforce—Cover the market with the right sales channels, such as direct sales, indirect sales and telesales, 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.

Smart sales leaders like Cisco know they can no longer rely on top sellers to sustain sales growth. That's why a pharmaceutical services company has developed a multi-stage sales mentoring programme that pays a small commission to the mentor for improved productivity of his or her sales mentee. The overall goal: to narrow the gap between the stars and the rest of the salesforce. Companies that do this well have seen the sales of lower-performing reps increase from 40% to 200%. Also, sales leaders always look ahead, incubating the next generation of tactics and strategies so that they can continue to reinvent salesforce effectiveness.

Satish Shankar is a partner with Bain & Company Southeast Asia and a member of the firm's Performance Improvement Practice. Seow-Chien Chew is also a partner in SE Asia and a member of the Customer Strategy Practice. Dianne Ledingham is a partner with Bain & Company in Boston, and Mark Kovac is a partner in Dallas.