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Articles
Order
From The Chaos
Situational Sales Management No matter what the size, truly effective
businesses use a systematic approach to all
aspects of their operations—from telephone
calls coming into the office to shipping products
out to the end-user. They consider details
and measure quality. Sales management is no
exception. In the early stages of a business,
the entrepreneur may do seat-of-the-pants selling
along with everything else from product development
to shipping the finished product. Yet, as a
business progresses, effective and systematic
sales management becomes increasingly crucial.
Understanding the sales management process—documenting
it and executing it effectively—separates the
merely average companies from those that exceed
their corporate revenue goals.
Rate Your Company
The more the company grows and changes, the
more the person in charge of sales must put
systems in place and create order from chaos.
Over many years as a sales person and sales
manager I have developed a theory that I call
the Situational Matrix of Sales Management.
In short, the more the company has the potential
to grow with new products or services, the
more thoroughly the company must define and
manage its sales system.
This theory revolves around four components:
the company's overall business position, the
maturity of company's products and service,
the effectiveness of its distribution channels
and the sophistication of the sales management
systems.
To understand the concept, take a look at
the diagram below. The left horizontal axis
represents the company's overall business position
and the right horizontal axis the effectiveness
of the distribution channel. The upper vertical
axis is defined by the product/service maturity
and the lower vertical line describes the sophistication
of the sales management systems.
Rate each component 1 through 5 for your
company. The company's business position: 1
= Development Stage, 2 = Growth, 3 = Turnaround,
4 = Steady, 5 = Mature. On the right horizontal
side we describe the maturity of the Distribution
Channel (Direct or Indirect): 1 = Nonexistent,
2 = Weak, 3 = Growth, 4 = Established, 5 =
Dependable.
On the upper vertical axis rate the Service/Product
position: 1 = Creation Stage, 2 = Launch, 3
= Market Awareness, 4 = Market Acceptance,
5 = Refinement. On the lower vertical axis
rate the sales management sophistication: 1
= None, 2 = Testing Concepts, 3 = Minimal Systems,
4 = Established Process, 5 = Sophisticated
Reporting
In the past, when markets and opportunities
did not move as quickly as they do in today's
business climate, most companies' management
processes would move along all four axes at
about the same speeds. So, if one component
worked at a four then the others would work
at similar levels. Not so with rapidly growing
companies launching new products. Things get
out of balance. The situational matrix demonstrates
this basic premise. If a new product or service
affects the company's maturity in terms of
growth or turnaround it requires a more sophisticated
sales management process.
A development stage or growth company entering
new markets with new products must establish
sales management systems to attract, build
and manage a distribution channel. For example,
even in a mature company with an established
distribution channel, a new Web-based e-commerce
product quickly changes all aspects of sales
management including recruitment, compensation,
account management and measurement tools.
The overall situation of the company affects
all aspects of its sales management process
including strategies, sales goals, compensation
and much more. It provides a framework to begin
developing or refining your current sales management
plan. A solid plan enhances the sales leader's
ability to clearly communicate vision, strategy,
tactics and set standards for the performance
of the sales team.
Individuals responsible for successful and
effective sales management undertake the necessary
research, think through possible actions, develop
focused processes and set standards of measurement.
If an organization's revenues have flattened
or declined, sales managers have clearly failed
or missed critical links within the sales management
structure.
Components of a Sales
Management Plan
The question is how to start developing this
structure. A sales management plan must coordinate
with the corporate business and marketing plans.
People often ask, "How do marketing and sales
differ or how do they work together?" A common
answer is that marketing does the product positioning
and planning and if the plan doesn't work,
the company fires the sales force. What this
attitude reveals is that we measure sales by
how well the sales force executes the company's
overall business and marketing plan.
These are the areas that must be defined
in the company's sales management plan:
Upcoming columns will examine in more detail
the specifics of creating an effective sales management
process. We'll cover how to build a predictable
revenue stream, interviewing and recruiting salespeople
and how to keep the sales pipeline full while making
time to accomplish the rest of the goals on your "to-do
list".
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