Sales Eats First focuses on the importance of sales management in corporate success. What approach did you take?
For this book, we studied the leading sales organizations companies like FedEx, Cisco, Whirlpool, Honeywell, Xerox, HP, Mastercard, and Sony, among others. These are well-known, top companies that have had consistent organic growth and profitability. We interviewed the top sales and sales operations executives in each organization. Simply put, we asked: What do the most successful organizations do? What do they consider the essence of their success?
We found answers in the variety of ways these companies approach sales. Xerox, for example, recognized that its relationships with major customers were so important that it took senior executives, people who had managed sales regions, and put each one in charge of a single customer. Companies are realizing that with competition getting tougher, the sales force is absolutely critical. In fact, in many organizations you now see CEOs, like John Chambers at Cisco or Larry Ellison at Oracle, spending a lot of time with customers because they realize how important maintaining those relationships are. CEOs know their companies have to generate revenue, and salespeople are the ones who do it.
How has the traditional view of the salesperson shifted in organizations today?
There’s a general feeling that sales is low on the totem pole. Organizations feel that marketing and R&D are important; then it’s like, okay, we’ve got these great products, now someone has to sell them. Salespeople are not seen as the intellectual heavyweights of an organization.
But many companies now have fewer and bigger customers, and relationships with those customers are increasingly critical. Some senior salespeople are now very well respected in their organizations. There is recognition that the sales organization blends expertise regarding product and expertise in the customer’s business to deliver business solutions that add real value. There is a real shift in process. If you don’t make a sale, no one gets paid. There’s a general move to recognize the importance of sales in a company, which there wasn’t for many years. Stronger competition, particularly global competition, has helped to change that.
Your research revealed five key areas in which successful sales organizations excel. What are they?
First, successful sales managers lead from the front. This is opposed to the top salesperson or CEO who comes out of the field and wants to sit and manage from a big office. Instead, top sales executives spend time in the field working with their sales managers and sometimes with salespeople. They’re active and visible as leaders within that sales organization. They often hold weekly or monthly calls directly with the sales force. One of the sales managers described this as acting like it’s your own business and convincing your salespeople to behave the same way to treat their sales territory as their own business, so they get really committed to it.
Second, speak loudly and carry a big carrot. This is somewhat in line with Teddy Roosevelt’s motto, except that rewards financial incentives and recognition play a big role here, as opposed to punishment. The most important people in a sales organization are the salespeople and their immediate managers. You use “tough love” up front put a lot of effort into recruitment, training, development, and coaching but you also expect results. Make a significant investment in your people and hold them accountable, but be sure to reward as well.
Third, advance the science of sales and the art of the customer relationship. These involve quantifying what sales does and developing close relationships with customers in new ways. In particular this means articulating more complex sales processes and giving sellers the tools needed to effectively scale these new processes in a way that delivers both excellence to the customer and results to the company.
Fourth, make loud mistakes. In other words, empower salespeople to fail, to take chances, to do different things for customers hopefully they’ll work, but sometimes they won’t. But only reprimand a salesperson if they make the same mistake twice, not for trying new things. If you are going to fail, fail quickly, then move on to something else. If something works, scale it up and do it throughout your sales organization.
Fifth, live the mission. The most successful sales organizations have salespeople who are not just in it for the money. Clearly salespeople choose the profession to make money, but the best ones also feel like they are doing something important. A salesperson at a healthcare organization told us that one reason he goes to work every day is because the products he sells help save lives.
What are some approaches companies can take to strengthen the relationships between customers and salespeople?
Getting closer to customers starts with looking for ways to tap into the science of selling. Quantifying what the sales organization does can be difficult. To do so, companies can use systems to scientifically manage the sales force.
For example, there are various ways of contacting customers now. You have an on-the-road sales force, telemarketing, e-mail, and you can also an assign an account manager to a single account. The most successful companies work hard to figure out which of these is the appropriate sales approach for each particular type of customer, based on the revenues, profits, and ROI they can expect from that customer.
Large customers may be contacted using all of these channels depending upon whether they are renewing an old contract or making a complex decision about buying something significant and completely new. Excellent sales organizations know that routine fulfillment sales can best be handled over the phone or through the website. Real selling expertise focuses on helping customers think through the risky decision process of trying something new.
Sales organizations can also focus on pipeline systems. It’s like a funnel: first you identify an opportunity, then customers show interest and eventually sign contracts. You can actually measure this process across the sales force to see how the number of sales opportunities translates into signed contracts. That’s a good forecasting tool that also helps quantify how salespeople are building customer relationships.
The other thing successful sales organizations use to strengthen customer ties is the intellectual capital in the sales force. Generally, it’s thought that marketing figures out what the customer’s needs and wants are, works with research and development to create products, then gives those products to the sales force to sell. But increasingly, due to intensified competition, salespeople, especially account managers, are closer to their customers and learn more about what they need than anyone else. Companies as diverse as Oracle and FedEx deploy sales talent that are expert, not only in their own products, but, more importantly, in how customers can use those products to better run their businesses. Sellers don’t just bring their customers “things”; they bring them insight. These are ideas that go directly against the traditional view of what a salesperson is or does.
You also say that modern salespeople serve as a company’s “moral compass.” What do you mean by that and why does it matter?
If you think about it, which part of your organization is the one that spends the most time with customers? It’s often the salespeople. Because they are such a visible part of the organization, their behavior can be widely observed and may reflect a company’s character to customers.
This taps into the mission of the organization too. If an organization can instill in its salespeople the notion that “we do good things, and you’re part of that,” it can have a huge impact on how the company is viewed, especially in the eyes of its major customers the ones who create revenue.
Noel Capon is the R. C. Kopf Professor of International Marketing and a senior scholar at the Jerome A. Chazen Institute of International Business at Columbia Business School.
Gary Tubridy ’83 is senior vice president and founding partner of the Alexander Group, Inc., a sales management consulting firm.
Read the Research
"Sales Eats First: How Customer-Motivated Sales Organizations Out-Think, Out-Offer, and Out-Perform the Competition"