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How to structure your commercial machine efficiently
Sept. 11, 2018
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Dominique Seguin, Director of Business Development and Partnerships of KESTIO LIVE came at the Partech Shaker to give his pragmatic approach to the 7 levers of commercial performance.
Identifying your first customers and being able to scale up and replicate your growth is essential, but not easy. Particularly in France, where there is a dominant engineering culture. Mobilizing the most effective levers to build, implement and drive your customer acquisition and retention strategy is key. Payroll to turnover ratio is a good indicator of your business efficiency: if it is above 40%, then you are investing too much for insufficient return.
Corporate commercial vision and strategy are often clear to the management team but may be less clear to the sales reps in charge of its commercial execution in the field. You need to realign vision and execution. A comprehensive approach to all levers can enhance business performance faster and improve efficiency and resource use.
1 / Define, share and deliver a clear business strategy
What elements should you develop to build your commercial structure?
It is very important to project how you intend to build your revenues and identify your key revenue drivers for the future.
If your objective is to generate €1 million in sales, with a 200,000 € incremental, how will your active customers contribute to this target and what commercial prospection actions are required?
In order to split your commercial efforts between high and low potential customers, you should analyze and know your customers. Your role as a manager is to focus the teams and their efforts on the high potential targets.
Three steps to building your business model:
1 - Segment your clients into small, medium and high potential targets
Which targets interest me and why will I succeed? To be able to define and classify your targets, you need to mix customer attractiveness criteria with your assets.
Then you can build your matrix:
- Gold Customers: Conquest / High Potential
- Silver Customers: Loyalty / Medium Potential
- Bronze customers: Low potential
Sales team time and resources should be focused on the targets with the highest potential.
2- Identify the most effective commercial actions for each customer segment
Administrative activities often take up 30% of the commercial team’s time. Try to balance revenue objectives and allocated resources. You should determine the total sales rep time available for the sale, and then organize this time between building customer loyalty and winning new clients.
3 - Identifying marketing and commercial resources by channel
If you have 7 salespeople costing you 300 K € with no increase in sales, this is not good news!
2 / Sales force recruitment and motivation and skills development
Let’s look at the 3 key points for your salesforce:
- Product knowledge: are they familiar with the products?
- Skills: can they do it?
- Motivation: do they really want to go for it?
Chasing new customers and building customer loyalty doesn’t require the same skills: you need salespeople who can hunt new clients, convert detected projects into contracts, and build customer loyalty.
The evangelization phase is often underestimated: you must address issues and not needs. Understand your customers’ expectations before selling them your products. 90% of the first meeting should focus on understanding customer expectations. This is key to defining customer potential (identify a gold, silver or bronze customer) and then to building the action plan for each sales person.
Building a skills grid for your sales people is a good way to ensure the replicability of your business performance. A leader’s role is to determine the skills needed for each step.
You should adapt your level of management to the knowledge, skills and motivations of the salesperson: participative, persuasive, delegative or directive management style. For example, a participative style is well adapted to managing a very competent sales rep. with a low level of motivation, while a delegative style is more adapted to a highly motivated less-skilled sales person.
The pay package is obviously a key component for employee motivation (with a variable part and a fixed part) but this is not the purpose of this workshop.
3 / Generate leads
Internet is your salesforce’s number one competitor: 89% of buyers go online to get product information. Let’s look at how you can assess the commercial efforts required to achieve your objectives: you need to go through all the sales steps to analyze the time, resources and organization to be put in place.
Calls made, call results, number of appointments, number of offers submitted, number of contracts signed: you should analyze the conversion rate to identify the problem.
Lead generation is not an exact science: it can be modeled but it takes time. Marketing also plays a key role in lead conversion. You need to mix marketing and sales, as marketing is becoming increasingly important.
Classic Outbound Prospecting: Cold Mailing / Cold Calling is not efficient.
Three key levers to look at when prospecting:
1 - Targeting customers: identifying the ideal customer, selection criteria, purchasing behavior
2 - Quantity of actions: achieve the goal of 2 appointments per day
3 - Quality of actions: good pitch, approach, mindset ...
Prospecting must be the number one priority on the agenda, even if it's not a natural approach. No appointments, no potential leads! You need to block a time slot for prospecting in your sales representatives’ schedules.
4 / Lead conversion and retention
There is no prize for second place in the sport of selling. In general, 10 appointments materialize into 8 proposals and 2 leads, i.e. 80% inefficiency. Your objective is to transform these 10 appointments into 5 proposals and 4 leads. You should sort the opportunities and guide your sales reps to the priority deals. To maximize conversion, you should intervene further upstream, in the client discovery phase and not when your salesperson is preparing to sign the deal.
5 / Drive and steer commercial actions
Four tools can help you to drive your sales force: performance indicators, monthly performance interviews, accompanying sales reps to customer appointments and team meetings.
The monthly performance interview is the most effective tool for measuring the salesperson’s performance, reviewing which actions he has launched, identifying strengths and progress points, building the commercial action plan and ensuring result achievement.
You should plan at least one 60-minute appointment per month. Prepare this meeting well and be sure to discuss the following points:
- review of previous actions,
- analysis of previous month’s action plan (customer visited, results achieved, prospects, potential results),
- analysis of figures,
- active customers and opportunities analysis,
- focus on the skills of the salesperson,
- definition of action plan for the following month.
The objective is to spend 70% of the meeting time on building the future.
From a field support perspective, we believe that a manager should spend 70% of his time on coaching his sales force. There are several support modes:
- accompanying new recruits: 3 weeks of on-boarding to show to them how you operate;
- helping salespeople to progress: attend one of their commercial appointments to see how they are doing and to give them positive and constructive feedback. You should prepare the sales rep. upstream to ensure that he is in listening mode and prevent any negative reactions. You should go over the following points with him: did he visit the right customers? Did he use the appropriate sales activities? With the most impactful frequency?
- helping employees to succeed
6 / CRM and support
It is important to choose your CRM tool well and define your business strategy before subscribing to a CRM service. 80% of CRM tools are unused and migrating to another CRM tool can be complex and expensive.
7 / Vision and leadership
The leader's vision and his ability to project growth are key. Where do you want to be in 5 years-time?
If you don’t ask yourself this question at the very beginning, it will be difficult to get everybody behind you. Beyond being a manager, you need to be a leader. How can you embody your vision? This question is the key to ensuring the future of your business.
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