Originally published in: The Culpepper Letter
It is said there are no guarantees. Not so. Building the wrong sales structure will guarantee you won’t get top sales performance.
One of the most powerful strategies for improving sales performance 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 skin the 'structuring' cat.
For instance, if your company already has a field sales force, you may be able to stretch its range by adding telesales. According to Jeanne Lambert, President and CEO of Telesales, Inc., "A volume-oriented sales approach is critical when fighting for company or product awareness or broad market penetration."
Four years ago, Progress Software Corporation of Bedford, MA, enhanced results of its 125-person field sales force by adding 25 telesales reps to amplify efforts in field territories.
Progress found it reduced conflict by aligning field sales and telesales by geography. Since then, telesales has established relationships and sold to MIS departments, the company’s application partners and government agencies. This restructuring helped Progress become a dominant player in the 4GL relational database management system marketplace.
Progress Software also discovered a small pocket of revenue lurking in their business. Senior VP of Sales and Marketing, Cary Johnson, determined that application development partners with less than $25,000 in orders represented just 12 to 13 percent of Progress revenue.
However, the field sales organization spent 40 percent of its time on these accounts. To eliminate this misapplication of resources, Johnson refocused telesales on that segment of the company’s business. Because these customers had been underserviced, this change provided the following benefits:
- Field salespeople can pursue larger opportunities.
- Small accounts are well known and receive more service.
- Telesales helps field sales develop major applications.
- The entire sale is handled inside.
- Cost of sales is decreased.
In another instance, the success of a strong telesales group eliminated the need for any field sales force. Concentric Data Systems, Inc. (now part of Wall Data, Inc.) historically used only advertising to create demand for its report writers. An inbound telesales group handled all the inquiries.
In 1993 when Concentric decided to take a more proactive approach, it added an outbound telesales group to rejuvenate flat sales. As a result, the company has yet to field a feet-on-the-street sales team.
Up until two years ago, sales at SQA, Inc., a $10 million developer of testing software, had been driven by nine telesales people. Since then, however, the company has 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, SQA 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.
According to Bill Dedrick, VP of Sales, SQA introduced field sales to carry the momentum established by the telesales group. He points to the integration of telesales and field sales as the force that strengthened customer relationships, improved customer satisfaction and drove up 1994 revenues.
When business strategies change, the sales organizational structure can be rendered obsolete. Until 1994, about one-third of MapInfo’s $30 million business came through telesales. Reps spent 85 percent of their time selling to end-users.
But Matthew Szulik, senior VP of worldwide sales and services, recognized that the strength of MapInfo’s products was their capacity to integrate with third-party applications. He repositioned the sales organization to put as much business as possible through Value-Added Reseller channels.
MapInfo 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, MapInfo moved to a team selling model. The team consists of a corporate account manager, a VAR manager, inside telesales and a systems engineer.
The new model minimized conflict between field and VAR salespeople, and MapInfo customers like the wider choice of options. Since that change, 1994 revenue has grown 25 percent. About a quarter of that growth is attributed to this organizational shift.
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 equally fair.
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 refereeing channel conflict issues?
A team selling model might help.
- Are there new market segments that could boost revenue?
Turn telesales loose and find out.
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