I just had a phone conversation with a client who had a familiar
story to tell. He had built his business on the model of an
entrepreneurial sales force. Give them a territory, pay them
straight commission, and tell them they are in business for
themselves, free to develop the customers they chose with the
products they wanted.
And for a couple decades it had worked well. The business grew
and expanded. More entrepreneurial sales people were added, and
the model was duplicated over and over again.
So far so good. But then the growth in sales began to slow down.
Three flat or declining years in a row has caused this company
president to question the status quo. Not only is business flat,
but he's unable to get his sales force to promote the lines that
he wants to promote, he's unable to get them to use some of the
new technology that the company wants them to use, and he's
unable to get them to prospect for new customers. Now he's faced
with an experienced sales force, who for the most part, are
unmanageable.
The culprit? A sales model that was built on the concept of the
entrepreneurial salesperson. There was a time when this model was
effective, but in today's competitive economy, there are serious
difficulties with the entrepreneurial model.
This model works best when the market is growing. As long as
there is more and more business out there to be had, the focus of
most companies is to grab as much as they can, without caring a
whole lot as to which customers and which products make up the
business. Employing a group of entrepreneurial salespeople
reduces the demands on sales management so that the company's
executives can focus on building the infrastructure necessary to
keep up with the consistent growth.
As we all know, this was the case for most of the previous
decade. By shifting the responsibility for sales management unto
the salespeople, however, you give up much of your management
influence. In effect, you cede management of the sales force to
the salespeople. And they generally make decisions that are in
their own self interest, not yours. The very concept of an
entrepreneurial salesperson is that he/she will manage himself.
By definition, you abdicate your managerial role and cede
management to the salesperson.
Is it any wonder that you can't direct the salesperson?
As long as business was consistently growing, this wasn't an
issue. But now it is a concern. Most distributors have
experienced a reduction in sales volume over the last few years.
Many have come to the conclusion that they have to initiate
significant changes in their sales organizations if they are
going to be profitable and growing.
Now, instead of just more business, progressive distributors want
to expand the business in target accounts, emphasize key product
lines, and acquire new accounts. In other words, they want to
direct the sales force more precisely, to focus them on the
behaviors that further the company's strategic objectives.
At just the time that they want to more precisely focus the sales
force, they are faced with a group of experienced salespeople who
have become satisfied and content.
These sales people would rather not move out of their comfort
zones of established customers and established products. They
have no desire to do the hard work of prospecting for new
accounts. And many are content with the diminished incomes of the
past few years.
The culprit in this difficult situation is the entrepreneurial
model. This is not to say that there are no entrepreneurial
salespeople. Certainly a certain percentage of every large group
of sales people will turn out to be highly motivated, constantly
improving, driven to succeed and willing to accept your
direction. From my experience, this is about one of 20 sales
people. The chances of your entire group fitting this mold are
slight. The issue is not the occasional exception to the rule;
the issue is the model that no longer supports your strategic
interests.
What to do?
The company president on the phone was looking for solutions. How
could he change the established routines, attitudes and practices
of his experienced sales force? How could he revive the
slumbering entrepreneurial drive? How could he gain some degree
of directability?
Unfortunately, the answers are larger and more challenging than
that which could be discussed in a half hour phone call. Decades
of a certain way of doing business have resulted in attitudes
cast in granite. Half-way measures can't be counted on to work.
The solution is going to require strenuous work.
Wipe the slate clean and start over. Begin with the definition of
what you would like the salespeople to do. What do you really
want your sales force to do? Noodle your ideas onto a blank sheet
of paper, and review it for a couple of days. When you have a
well-articulated full page of detail, you will have taken a major
step forward.
Once you have a clear and specific idea of what you want them to
do, then start dealing with implications of that. For example,
does you compensation plan support the behavior you want? If not,
then change that.
Does you training and development program equip the sales people
with the skills that support your vision? If not, it's time to
revise that.
Does you infrastructure support your idea of what the sales
people should be doing? In other words, does customer service,
purchasing, delivery, operations, sales management, etc., all
support the revised job description? If not, make some
refinements.
Finally, do you have the kind of people who will whole-heartedly
embrace your new vision? If not, then it's time to begin the
process of recruiting new sales people.
Each of these is difficult and challenging issues that speak to
the heart of how you have your sales force structured. Designing
and implementing these changes can take the better part of a year
or two. Each of these initiatives will be met with resistance
from some. It won't be easy. Before you rush into the fray,
however, make sure you count the cost. You may decide that you
are not up for the task and that it is easier to continue to cede
management to your sales people.
Should you decide to revise your sales force, you can anticipate
arriving at a focused and directable sales force - an enormously
powerful asset for any distributor.
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