Originally published in: MASS High Tech
They say there are no guarantees in life. Not so. Building the wrong
sales structure will guarantee you won't get top sales performance.
A Towers Perrin survey of U.S. high tech executives determined that 64 percent believe their sales forces lack the competencies to be effective and 62 percent believe the design of their sales organizations hinders customer satisfaction.
Those on the positive end of that equation are probably using a combination of tactics designed to maximize sales performance. One of their most powerful strategies is to rethink the relationships between telesales, field sales, and channel partners to maximize the strengths of each.
Every sales organization differs, so naturally there's more than one right way to structure them. If your company already has a field sales force, you may be able to stretch its range by adding telesales. A volume-oriented sales approach is critical when fighting for company or product awareness, or broad market penetration.
One company enhanced results of its 125-person field sales force by adding 25 telesales reps to amplify efforts; they aligned field sales and telesales by geography to reduce conflict. Since then, telesales has established relationships and sold to MIS departments, the company's application partners and government agencies, and the restructuring has helped the firm become a dominant player in its marketplace.
This company also discovered a small pocket of revenue lurking in its business. Management determined that application development partners with less than $25,000 in orders represented just 12 to 13 percent of revenue. The field sales organization, however, spent 40 percent of its time on these accounts.
To eliminate this misapplication of resources, they refocused telesales on that segment of the company's business. Because those customers had been underserviced, this change provided several benefits:
- Field salespeople were freed to pursue larger opportunities
- Small accounts became better known and receive more service
- Telesales helped field sales develop major applications
- The entire sale could be handled inside.
For years, sales at a manufacturer of test equipment, had been driven by nine telesales people. Then the company developed a field sales organization to call at senior management levels and handle the top ten major accounts within a telesales territory.
With defined geographic territories, telesales reps are compensated for their own and resellers' sales. Field salespeople, working in conjunction with telesales, receive compensation on all business in the territory in addition to a bonus based on how the telesales reps in their territory perform against plan.
The rationale behind introducing field sales was to carry the momentum established by the telesales group. Management points to the integration of telesales and field sales as the force that strengthened customer relationships, improved customer satisfaction and drove up revenues.
When business strategies change, the sales organizational structure can be rendered obsolete. For many years about one-third of a Midwest company's $30-million business came through telesales. Reps spent 85 percent of their time selling to end-users. But the vice president of worldwide sales recognized that the strength of its products was the capacity to integrate with third-party applications. He repositioned the sales organization to put as much business as possible through value-added reseller channels.
The company now sells to VARs and corporate organizations through a 15-person field sales force rather than through telesales. Telesales resources were repositioned to 20 telemarketing positions with vertical market expertise.
At that time, they moved to a team selling model, which consists of a corporate account manager, a VAR manager, inside telesales and technical support. The new model minimized conflict between field and VAR salespeople, and customers like the wider choice of options. Revenue has grown 25 percent, and about a quarter of that growth is attributed to this organizational shift.
To assess your sales structure, ask these questions:
- Are selling costs too high?
If they are, look at telesales as an option.
- Are your sales reps frustrated because their turf is being invaded?
Perhaps aligning field sales with telesales would create synergies.
- Do field salespeople lack time to cover all their accounts?
Refocusing telesales efforts might help.
- Does field sales spend too much time on accounts with little return?
Telesales could mine those accounts and free up field sales to develop larger ones.
- Are telesales' customer relationships beginning to fade?
Adding field sales for face-to-face selling could enhance those accounts.
- Spending unproductive time settling channel conflict issues?
A team selling model might help.
- Are there new market segments that could boost revenue?
Turn telesales loose and find out.
Whatever combination of models you choose, it's important to incorporate the needs of your sales teams, channel partners and customers. The best solutions are fair to all. So yes, there are guarantees in life. One of them is that if you pick a winning combination of sales strategies, your profits will increase.
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