Dear Readers,
Here’s a precursor to the next installment of the Sales Plan video series:
Going through the table of contents in order puts us at Team (Mission and background should be obvious) – if you have no idea what I’m referring to, check out the first video here.
To say this is an iterative process is an understatement. Before you can properly define the Team, you’ve got to consider Target Market, Positioning, Marketing Strategy and Prospecting Strategy, all of which aren’t addressed until later in the plan. And, all of this has to be aligned with your business plan.
I’ve discussed Sales Organization strategies in previous posts, but let’s take a more in-depth look here:
Inside sales – regardless of the your final structure, this one will always be a constant. You will require at least some inside sales functions to be performed,100% guaranteed (yes, even if you are 100% online/e-commerce). But there is a lot more to consider. I’ve been noticing a recent trend where inside sales are being asked (and incentivized) to be more revenue generators than just the typical customer service role. I think this can be beneficial, especially for small companies with limited budgets. However, I’ll offer one word of caution – ‘order logistics’ can be time consuming and are not revenue generating activities.
For the purposes of this discussion, I’ll leave Distribution and OEM out of the equation, as they are going to be far less typical in most small enterprises. This brings us to Outside Sales – and I could write an entire article just about this. You basically have three options here: direct, manufacturer’s representative or a combination as they are not mutually exclusive.
I’m finding that many business people have very strong feelings towards manufacturer’s reps. They either love them or hate them (mostly the latter) – with few people holding the middle ground. Now, I can understand the reasoning for this – but there are some situations where reps are simply the best solution, and allowing ‘feelings’ to win over logic will be to your business’s detriment. The reverse is true as well – you may be unintentionally limiting the growth of your organization by not wanting to bring direct headcount in.
I recall a time very early in my career when I was working for a small company that utilized a mix between direct and manufacturer’s reps. I overheard the president commenting that a particular rep was going to make more money than he was that year. Soon thereafter, that rep was replaced with a direct headcount. Regardless of the outcome, the logic was as flawed as AOC not wanting to give Amazon $3B to move to New York. Reps cost a company nothing (other than a small cost for training and marketing support), and what they get is a percent of revenue you would have otherwise not had.
Am I in love with the rep model? Well, not really – I just want to ensure I am providing the very best solution for any given situation. When it comes to small manufacturers (service businesses are more limited in their options), quite often that is the rep model. They are especially useful when first entering a new geography or market, as not only is the cost to entry lower, but signing an experienced rep will bring you instant access to a network you likely wouldn’t have otherwise had. [simple_tooltip style=’background:#9BA1A8;color:#2664A8;’ content=’
‘ ]You always have the option to go direct once the business case is there.[/simple_tooltip]
What are my outside choices if I do have a service organization? Limited! Trust me, this is something I know a bit about as I live with it everyday. Honestly, depending on the business, even direct outside salespeople may not make financial sense – at least not dedicated salespeople without any ‘billable hours’. Think about it, when is the last time you were contacted by a salesperson from a legal or accounting firm?
Small service organizations typically have little choice other than building a referral network. As the business grows, it is common for billable staff to look for new business when they don’t have hours to bill. The anatomy of a professional services organization is very different than that of a manufacturer. Ping me if this interests you and perhaps we can go into greater detail in the future.
Back to outside sales….remote staff.
Although typically not your first or second outside sales hire, eventually you will likely have to deal with a remote outside salesperson. These pose a particular management challenge. Far too often I’ve seen sales leaders fall into the ‘out of sight, out of mind’ trap. Remote outside salespeople are a special breed for sure, but regardless of how much vetting you’ve done during the hiring process, you’ve got to make the extra effort to almost over-engage with them. This is especially true during the first year.
In previous management positions, I’ve found the following to be particularly useful. Anytime I’m at my desk and not sure what to do next (or, if you’re like me and can only sit for a limited period of time without getting up), I do one of the following: 1) take a walk around the office and spend a few minutes with a coworker, or 2) pick up the phone and call a remote salesperson.
People on the fringe- we’ve covered the majority of your organization, but not quite everyone. Since you likely won’t have a separate marketing department, that needs to be figured in – perhaps a ‘lead’ inside salesperson or an outsourced solution? And let us not forget about the unsung heroes of all of this – Admin. Depending on the size (and maturity level) of your outside sales team, one of the multitude of functions your heroic admin will have to contend with is that of a babysitter. Seriously though, an outside salespersons’ office is essentially their car – and the remote portion of your team doesn’t even have the office as a resource.
Those of you paying attention may get the feeling I don’t really like salespeople – I’ve previously referred to managing them akin to herding cats and just now indicated they need babysitters. And although it is true that like any other role in an organization some people are better at their jobs than others, nothing could be further from the truth. I have nothing but respect for those true salespeople out there.There simply is NO other role in your organization more important. None! I don’t care how important you think your MIT engineer is, or even how important you think you are. Without sales you don’t have a business.
Until next week!
Rick, your Chicagoland Sales Strategist
