How Sharp is Your Sales Structure?
by Dave Kahle
Published on this site: November 30th, 2005 - See
more articles from this month
How can I get greater productivity out of my salespeople?
In one form or another, that's a question every owner and
sales manager ponders regularly.
As a sales trainer and consultant, it is the basic question
that I confront. And it is the underlying question behind
every attempt to train salespeople. Investing in training
and developing your salespeople is always a good idea. But
it isn't the entire solution for many organizations.
Often, enormous improvements in sales productivity can be
achieved by sharpening the structure of your sales organization.
The structure is the sum total of all the policies, guidelines,
procedures and tools your company uses in its sales effort.
It's everything about how your company sells, other than the
people themselves. For example, your compensation plan is
part of the structure. It doesn't matter (hopefully) who the
salesperson is, the compensation formula is the same for everyone.
Your sales automation system is part of the structure. Whether
you use palm devices, laptops or paper to manage customer
information - the way that you do it in your company is part
of the structure. How you manage your salespeople is part
of the structure. Do they report to branch managers or sales managers? How many salespeople
are there per manager? How often do you have sales meetings?
What forms are salespeople required to submit to their managers?
All of these decisions you have made about how things are
done in your sales organization have gradually been codified
into a structure. That structure forms the rules for the salespeople,
and tells them what to do and how to do it. That structure
stimulated certain behavior, and the salespeople create practices
and habits that reflect your structure.
Here's a list of the major components of a typical sales
structure:
- Sales tools
- Information systems
- Sales process design
- Sales training program
- Sales territory design
- Sales compensation plan
- Sales automation systems
- Sales management practices
- Sales administration/support
- Job descriptions for salespeople
- Assignment of markets and customers
- Processes for continuous development of salespeople.
Why does all this matter? Because of a powerful truth
of human behavior: Change the structure and you change
the behavior of the people who operate within that structure.
This is true for any organized group of people, whether it
be a family, a school, a volunteer organization, a business,
or a sales team.
Here's an example. For years my wife and I were foster
parents. We cared for 19 foster children over a fifteen-year
period of time. Most of these children came from miserable
home situations, and were out of control when they came into
our home. Over the years, I watched my wife impose a structure
on them that always resulted in the kids responding positively.
On the first day they came into our home, my wife would
show them the bed where they would sleep, and let them know
that
they were expected to sleep in that bed. They were expected
to wash their faces, brush their teeth, eat three meals at
the table with the family using silverware and plates, go
to bed at certain time, get up at a certain time, etc. She
imposed a clear and comprehensive structure on them.
The responses
were predictable. At first they would test
the limits. But once they discovered that the rules really
were the rules, that there was a clear and understandable
structure, they began to blossom within that structure. They
knew what was expected of them, they sensed that the rules
were good for them, and they began to develop within the
rules. That shouldn't
be any surprise. Because, when you change the structure,
you change the behavior of the people who operate within
that
structure.
This fundamental principle of human behavior is just as
true when it is applied to sales efforts. From my experience
as
a sales consultant, I can assert, without a shred of hesitation,
that you can expect significant and
measurable improvements
in the productivity of your sales efforts if you will sharpen
your structure. For example, we're often involved in helping
to
revise a sales compensation plan. Let's say we create a plan
that provides an additional incentive for the salesperson
to acquire new accounts. We've changed the structure. What
happens as a result? The salespeople modify their behavior
and call on more prospects, acquiring more new accounts.
Here's another example. We'll often work with branch
managers or sales managers to help them institute a certain
kind of sales management system. Part of our system requires
a highly structured monthly one-on-one meeting between the
manager and the salesperson. As part of this meeting, managers
discuss the coming month's plan with their salespeople.
When this system is implemented, it represents a change in
the way things are done - a modification of the structure.
Since we've changed the structure, we can expect a change
in the behavior of the people. What kind of change do we normally
see? Typically, salespeople become more strategic and less
extemporaneous. They spend more time planning because the
structure requires that of them.
We can go on and on with countless examples. But you get
the idea. When you change the structure, you change the behavior
of the people who operate within that structure. So, now
the question becomes, "How can you use that
insight to improve the performance of your salespeople?"
Typically, most sales structures have evolved over time as
a result of specific decisions that were made in years gone
by. Over time those decisions have been hardened into the
real rules of how things get done in your organization. Some
aspects, like compensation, are often finely articulated,
while other portions of the structure, like how samples are
distributed, are rarely written down.
Some of these structural rules are positive, in the sense
that they are well thought out and designed to stimulate certain
behavior on the part of the salesperson. Unfortunately, much
of the structure is not positive. It developed unconsciously
instead of thoughtfully, and detracts from positive sales
behavior. For example, your salespeople may have developed
the habit of coming into the office every Monday morning for
a few hours to start their week. No one told them to do that,
it's not part of any management plan, it just happened. Somewhere,
some time in the past, some one started doing that, and it
became part of the structure. No one has ever considered whether they ought to
do that, or whether that practice is wise and time effective.
If you want to make measurable changes in the productivity
of your sales team, refine your sales structure. Here's
how
to go about it.
Four Steps to Sharpening Your Sales Structure
- Identify and clarify your current structure.
Since much of the sales structure is composed of unspoken
rules and habits, you may not even be aware of it. So, you
need to identify and clarify exactly what rules and procedures
your salespeople operate within.
You may want to gather a task force for this project. Enlist
the involvement of a couple of your most insightful salespeople,
and add in some bright managers and executives. It's also
helpful to have someone from outside your company be a
part
of this process.
Charge the group with identifying the real structure. Write
it down. What are the procedures that govern the communication
between your sales managers and salespeople? What are the
routine practices of your salespeople? How about your
sales
managers? How are samples and literature distributed? What
computer-related skills do you expect of your salespeople?
What is your sales compensation program? How are our sales
territories configured? How are proposals written and
tracked?
What training do you provide your sales force?
Take all the pieces of your structure - the rules, procedures
and tools, and describe them in writing. Use the list at
the beginning of this article to guide you. Now you have
a starting point. Pay attention to what really happens in
your organization, not what is supposed to happen. For example,
you may have a policy somewhere that says that branch managers
will have a monthly meeting of the entire sales staff. The
reality may be that it rarely happens. You want to record
the reality.
- Analyze the structure.
Look at each piece of the sales structure and ask this question,
"What impact does this have on the productivity of
our sales efforts?"
Does that straight commission sales compensation plan really
encourage salespeople to acquire new accounts? Does the
common practice of salespeople starting every week with
two to three hours in the office on Mondays really help
them be more productive? Are those irregular sales meetings
well designed and helpful? Is learning "on the job"
really the best way to create a professional salesperson?
Is the practice of salespeople reviewing every big order to make sure it has been keypunched
correctly really necessary? Are geographically defined sales
territories the most effective organization?
- Prioritize the revisions.
If you've never attended to the structure before, you may
discover that you have unearthed a huge task, with an overwhelming
number of practices, procedures and rules that need to be
changed. Best to prioritize and start with those that will
make the biggest difference first. From my experience, here
are the areas that hold huge potential for stimulating transformational
change:
* your job descriptions for salespeople (not that
piece of paper you have in some file drawer, but the reality
of what you expect your salespeople to do)
* your sales compensation plan.
* your sales information system (sales force automation)
or lack thereof.
* your sales management system - the procedures that govern
the way in which salespeople communicate with their supervisors.
* your system for training and developing salespeople (or
lack thereof).
This may not be true for your business, but typically the
list above contains the five major pieces of sales structure.
And, while the task of articulating and clarifying every
piece of your sales structure is daunting, every well managed,
productive sales team needs to have well thought-out, clearly
articulated policies, procedures, practices and tools regarding
these major five components.
If you have these things in place, then move on to other
issues, prioritizing them according to their potential for
stimulating positive behavior change in the salespeople.
- Make changes as necessary.
If only it were this easy. Some of these practices have
been around so long that many of the salespeople consider
them sacred. How dare you change the compensation plan that
you inherited from the previous administration ten years
ago?
If you've gathered a task force earlier, that group can
be a powerful tool for change management. Gather their input
on priorities and the best way to implement and announce
changes.
Start with those issues about which you are most passionate,
and that you know will make the biggest change in sales
force behavior. If you've not made major changes in your
sales structure recently, you are likely to meet some passionate
resistance. It's not unusual to lose 5 - 10% of your sales
force when you make significant changes in each of the five
issues mentioned above. Make sure you count the cost before
you act.
Give yourself time to carry out each initiative and to guarantee
the success of the change before you start on the next one.
It typically takes a full year, for example, to refine and
implement a new compensation plan.
In some organizations, this project is so large it becomes
a permanent job - managing structural change in the sales
system. In others, it's a periodic task. Regardless, it is
one of the best things a sales executive can do, almost guaranteed
to return sales and profits far in excess of what it costs
to carry it out.
Dave Kahle is a consultant and trainer who helps
his clients increase their sales and improve their sales productivity.
His latest book for sales managers is Transforming Your Sales
Force for the 21st Century http://www.davekahle.com/mdtransforming.htm
. You can also sign up for his sales ezine called "Thinking
About Sales" at http://www.davekahle.com/mdmailinglist.htm
You can reach Dave personally at 800-331-1287 or by emailing
him at [email protected]
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