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Best Practices of the Best-Run Sales Organizations
Learn from today's sales leaders who have benefited from building a sales strategy based on a position of deep customer knowledge."
Source : SAP
Best Practices of the Best-run Sales Organizations: Sales Opportunity Blueprinting
Best Run Sales is also known as :
Best Run Sales,
Best-run Sales Organizations,
Best-run Sales Teams,
Blueprinting Sales Cycle,
Best Practices Best-run Sales,
Sales Opportunity,
Sales Leaders,
Sales Strategy,
Building Sales,
Systems Best Run Sales,
Best-run Business,
Sales Force,
Best-run After-Sales,
Asset Management Empowers Best-run Sales,
Sales Process,
Sales Distribution,
Best Run Sales Flow,
Run Online Sales,
Best-run Supply Chains,
Sale Increase,
Best Run Affiliate Program,
Shortages Sales,
Best-run Finance Methods,
Sales Effectiveness,
Sales Manufacturing,
Secrets Best-run Practices,
Sales Method,
Sales Operations Planning.
Why are we talking about blueprints? After all, blueprints are
used in the construction of buildings, highways, or airplanes –
providing a plan of action for pulling together complex
materials and steps to successfully accomplish a project.
No one would compare sales activities to construction. But
we can say that deciding where to direct our time, energy,
and assets can be a difficult decision, a decision that may
mean the success or failure of the company. That’s why
some of the most proficient and effective sales organizations
today use a "blueprint" to evaluate their sales opportunities
and create the best chance for success.
Leadership teams in today’s strongest sales groups have
discovered best practices to achieve exponential results.
This SAP Executive Insight looks at leading-edge companies
and examines how they excel in areas where most sales
organizations struggle.
To move your sales team to the next level, you need answers
to the following:
- How do you determine which customers provide the
greatest opportunity for a successful sale?
- Can you develop and present a comprehensive view of
your value position to a prospect?
- How do you drive sales activity to ensure optimal
coverage?
- What is the role of IT and talent management in driving a
best-run sales organization?
EXECUTI VE AGENDA
At a Glance
Determining the Right Customers
Sales managers and sellers are continually
challenged to increase their sales volumes
and margins in a growing and
dynamic market. Sellers are routinely
stretched to broader territories and product
lines. Determining which customers
to pursue and qualifying your customers
are essential steps for effective sales
activities. But how do you know which
customers to focus your effort on?
A recent benchmarking survey conducted
by Americas’ SAP Users’ Group (ASUG)
and SAP shows that the greatest gap
between importance and actual performance
is in the area of opportunity management
and activity management (see
Figure 1).1
To determine which customers to focus
on, you should:
- Analyze the territory to quantitatively
determine where your best opportunities
exist
- Blueprint the opportunity to gain a
greater understanding of the customer
and potential opportunity
- Make customer data visible to sales
teams via a centralized customer database
that supports internal communication,
sales team strategy, and execution
- Quantify the value your customer
gains from the relationship with your
company in comparison to the cost of
your product
- Analyze the information from sales
teams to dramatically improve the company’s
understanding of both the customer
and market
Blueprinting the Sales Cycle
Best-run sales teams are effective at
determining who their best prospects and
customers are by working effectively with
their customer contacts to build a broad
information base on customers.
Essential elements in the sales cycle
blueprint include:
- Qualifying the contact to understand
how to best approach the opportunity.
What is the contact’s buyer type? How
are buyers evaluated in their performance,
and how can the seller match
the sales strategy to the buyer?
- Qualifying the business to understand
the opportunity both by products and
financial viability.
- Qualifying the opportunity to understand
the value for both companies.
How does it fit into each company’s
competitive landscape?
- Developing the sales strategy based
on a comprehensive understanding of
the customer, the opportunity, and the
effect of the opportunity on the selling
company. Furthermore, what resources
are needed to achieve success?
Continuing to Excel Through
Talent and Processes
Developing sales skills to better understand
and evaluate the customer is a difficult
task for all companies.
Many of today’s best-run sales groups
focus their sales training on:
- Internal processes such as forecasting,
pricing, and supply chain
- Sales tools like customer relationship
management (CRM) and price and margin
management (PMM)
- Customer and opportunity evaluation
to develop a demonstrated need, ready
market, and the ability to provide a solid
return on investment for both parties
- Business and financial acumen to
form a fundamental understanding of
your customer’s industry, ranging from
financial literacy to global business
trends
Each of these skills drives the seller’s
proficiency both internally and externally –
within the sales team and with the customer
– to qualify opportunities. This
enables both sellers and business groups
to make better business decisions.
Determining the Right Customers
Driving Seller Activity to the
Highest-Priority Opportunities
Knowing your customer is essential for
effective sales activities. But how do you
know which customers to focus your
effort on?
Hilti Corporation, a company providing
leading-edge fastening technology solutions
to the global construction industry,
utilizes robust opportunity analysis to
direct their sellers’ activities. Hilti meticulously
maintains a database supported by
the SAP® Customer Relationship Management
(SAP CRM) application. This
database is regularly segmented and
scoured to prioritize the greatest opportunities
and risks, and it provides visibility
to the sellers’ activity level at each
account.
Where do these opportunities come from
and how are they delivered to the seller?
Hilti builds the opportunity database from
several sources, including existing job
history, Internet services and research,
and opportunities entered by sellers into
the database. Utilizing this data, Hilti performs
extensive territory analysis for buying
trends by trade segment, geography,
and customer size; an additional gap analysis
is done on existing customers to
ensure that any cross-sell or up-sell
opportunities are captured.
Driving Seller Activity to Ensure
Optimal Coverage
Once you have effectively identified
where sellers should be spending their
time, the question is how to best measure
and manage their efforts? How do
you know how often a seller interacts
with prioritized customers? Hilti provides
a very effective solution in their ability to
maintain activity information in the CRM
database.
Seller activity at each customer is documented
within the CRM database by sellers,
providing visibility not only to sales
management but also to customer service
agents working with the customer on
the phone. Customer information and
activity shared via a CRM tool strengthens
a virtual team and creates a greater
sense of customer satisfaction, which is
more supportive of long-term customer
success.
Extracting the Value of Customer
Information
Sellers have long complained that their
job is to be in front of the customer and
not in front of a computer entering data.
However, if the seller is in front of the
wrong customer, that isn’t the optimal use
of time either.
The capturing of complete customer data
has driven Hilti to dramatic sales improvements
since first implemented in 2005.
Prior to using the CRM database, Hilti
had very little complete customer information;
for example, only 3% of contacts
had e-mail addresses and only 16% had
phone numbers. Today, Hilti has well over
a 90% completion rate for customer data.
Having comprehensive data allows companies
to better segment their customers
and communicate with more focused
campaigns, and it has helped Hilti better
understand its market.
Prior to Hilti’s CRM initiative, the company
estimated its market opportunity at
US$4 billion. Today, armed with more
complete data, the company estimates it
at $16 billion. Having a greater understanding
of market potential has driven
Hilti to continue developing more robust
analytics to better manage sales efforts.
Territory analysis reports have been
extremely effective in driving seller activity
to the highest-priority opportunities
and active accounts. Each metric provides
visibility at the customer and product
level for revenue changes, product
information, and year-to-date sales activity,
which, in turn, drives greater overall
value for the company.
Blueprinting the Sales Cycle
Getting to the Best Prospects
Qualifying the Contact
Understanding your customer begins at
understanding the people involved in the
relationship and whether that relationship
is a transactional or strategic one.
- Who are the purchasing decision
makers?
- What is their buyer type?
- Who are the influencers?
- What are their needs and requirements
for doing business?
Qualifying the Business
The customer’s business can be delineated
into two key areas. First are the customer’s
operations, including products,
packaging, inventory requirements, payment
terms, and competitors. How does
the customer’s needs match up with the
seller’s ability to supply?
The second qualifier is at the corporate
level. Sellers need to be able to identify
the company’s financial strengths and
weaknesses. They need to effectively
forecast if the customer will be a good
business partner under the terms of
agreement set by your company.
Qualifying the Opportunity
Only after acquiring a good command of
the company’s personnel and business
attributes can a seller begin to formulate
the real opportunity. To truly qualify the
opportunity, the seller needs to find
answers to questions about the customer
and seller companies.
Questions about the customer’s company
include:
- What does the customer want to buy?
- What makes the seller’s company distinctive
to the customer?
- Who is the competition, and what are
their strengths and weaknesses at the
account?
- How does the customer gain value
from the seller’s product?
- Can you quantify the value your customer
gains from the relationship with
your company in comparison with the
cost of your product?
How much value the seller’s company
can provide the customer can be easily
overlooked. Understanding the value of
the customer’s final product in relation to
your product costs should lend insight
into the optimized price for your product.
This should be a fundamental element in
developing the sales strategy.
Questions about the seller’s company
include:
- Can the seller’s company compete and
win?
- Does the seller’s company have the
ability to supply the product?
- Is there an opportunity to sell additional
products or services that provide your
customer with additional value or competitive
position?
Formulating the Sales Strategy
The final step of "blueprinting" a customer
involves the formulation of a sales
strategy. This strategy outlines how the
company approaches the customer and
what business it will pursue.
Questions to clarify the approach include:
- How often will the seller visit the
customer?
- What resources and management support
are needed?
- What type of relationship-building exercises
are needed and at what levels?
- What type of negotiation tactic should
be initiated?
- What are appropriate pricing parameters
based on the customer’s value
gained, the selling company’s margin
requirements, and competitor
expectations?
- What is the customer’s process for
closing a deal?
Are you approaching the right customers?
The recent SAP/ASUG benchmarking
survey on sales effectiveness shows
that the best-performing companies
closed sales in 60% of their customer
interactions, while companies whose performance
was average closed sales in
only 33% of interactions.
Achieving Success in the Sales Cycle
Continuing to Excel Through Talent
and Processes
Implementing the Necessary Skills
Developing skills to better understand
and evaluate the customer is a difficult
task for all companies. Sales training provides
long-term value for both the customer
and the company across numerous
disciplines.
Many of today’s best-run sales groups
focus their sales training on:
- Customer and opportunity evaluation
- Development of value statements demonstrating
benefits as a supplier
- Improvements to the seller’s competitive
landscape by providing additional
products and services
- Business and financial acumen
- Internal processes such as forecasting,
pricing, and supply chain management
- Use of sales tools like CRM or PMM
Each of these skills helps the seller’s proficiency
both internally and externally in
working with the sales team and working
with the customer to qualify opportunities.
The better sellers understand their
customers, the more they are able to
save time and reduce costs for both customer
and supplier.
Some companies have developed salesexcellence
teams made up of sellers,
sales managers, and business personnel
from across all regions and products who
are focused on improving sellers’ skills,
tools, and processes. The team creates
an effective single point of contact for
sellers and provides a valuable voice to
sales management as to where and how
improvements should be made.
Executive Involvement and
Support
Executive support is essential for innovative
sales processes to be successful.
Effective use of tools to maintain customer
information requires disciplined efforts
from sellers and may at times appear to
cause a reduction in job efficiency. But
this ignores the value gained from focusing
on the right customers.
Standardization of Sales
Information and Processes
In the increasingly flat world, more and
more customers are truly global customers
with multiple needs in multiple geographies.
Today’s CRM tools help sales
teams effectively manage their customers
by institutionalizing customer data via
standardized processes and creating collaborative
space for sales teams to work
together. This collaboration leads to better
communication and decision making
for the organization regarding sales and
product strategies.
Often the most immediate benefit of centrally
maintained customer data is in dramatically
reduced seller ramp-up time
when sales territories turn over. Without
a CRM database, customer data is lost
when sellers transition out of a territory
and take their contacts and customer
notes with them. But when customer
information is maintained centrally, it’s
available to the new seller, dramatically
reducing the ramp-up time in the new territory.
For example, Brenntag Canada has
reduced seller ramp-up time from 12
months to 6 months due to the effective
transition of data from seller to seller.
Another benefit of standardized data is
the ability to model market expectations
based on price fluctuations. Marketing
managers can utilize customer data to
quickly understand the effects of a price
change and view where the competition
has the most entrenched position. The
ability to analyze market initiatives and
fluctuations based on existing customer
information provides greater credibility to
the estimates and immediately aids in the
sales cycle.
The Road Ahead
The Ess entia l Steps You Need to Take
So how do you make a smart decision as
to where and when to focus your sales
efforts? Today’s sales leaders would tell
you to gather as much customer information
as possible and build your strategy
from a knowledgeable position. Each step
in managing your sales opportunities is
essential for the ultimate success of the
sale. Sellers that skip over process steps
leave themselves vulnerable to failure in
the later stages of the deal.
- Determine who the "right" customers
are. Today’s sellers are stretched thin for
time. Therefore, choosing the right customers
to focus your resources upon is
essential for your company’s success.
Best-run sales groups use both quantified
and qualified analysis to determine
the right customers. Utilizing in-depth territory
analysis to understand the potential
and comparative value of opportunities
and then coupling this with market knowledge
give sales managers a robust analysis
of where to direct their resources.
- Blueprint the sales cycle. Once the
right customers are identified, they need
to be qualified. Sellers need to gain a
comprehensive understanding of how the
customer’s and the seller’s company can
best do business together. They must fully
assess the value of the sales opportunity
to both the customer’s and the
seller’s company and then use this information
to pull together a sales strategy
with their business and management
team.
- Continue to drive sales excellence
through talent and process development.
The ability to effectively determine
who your right customers are and then
how to blueprint the sales cycle is not
easily mastered. Today’s best-run sales
organizations effectively train their sellers
on their internal processes and sales
tools, build business and financial acumen,
and foster an understanding of the
comprehensive value of business relationships.
And they develop an understanding
of the attributes that drive an
effective sales strategy and why they are
successful. Scaling seller’s best practices
so they are transferable to the entire
organization, instead of being limited to
just the "prime performers," is essential
to the health of the company.
Opportunities need to be discovered,
developed, and cultivated to reach their
full potential. It’s important to close deals,
but they have to be the right deals. Deals
that are a good fit for both customer and
supplier can ensure the long-term success
of both parties.
Understanding your customer and maintaining
a robust customer database in a
CRM tool not only provides your sellers
and sales managers with actionable information,
but it can provide significant value
to the entire organization.