Redefine Selling to Create Customer Value

RETHINKING THE
SALES FORCE
THESUMMARYINBRIEF

By Neil Rackham and

John De Vincentis

INSIDE. . .
Why Create Value?

Different Customers,
Different Values

Transaction Selling

Consultative Selling

Enterprise Selling

Redesigning the Sales

Process

Changing Mindsets

Dont Forget the Sales

Channel

Whatisthepurposeofasalesforce?
WhenauthorsNeilRackhamandJohnDeVincentisaskedsalespeople,sales
managersandsalesvicepresidentsthisquestion,theyreceived(invariousphrases)
thesameanswer,overandover:Asalesforcecommunicatesthevalueofyour
offering.

Inotherwords,accordingtotheseprofessionals,thejobofasalespersonistoexplain
thefeaturesanduseofaproductorservice.Ortouseacommonimage,salespeople
arelittlemorethantalkingbrochures.

RackhamandDeVincentisdisagree.Asalesforceshouldnot,andmustnot,belimited
tocommunicatingvalue.Itmustcreatevalue.

Noorganizationcansurvive,theauthorsargue,ifitdoesntfindawaythroughits
productsandservicestocreatevalueforcustomers.Everyfunctioninthe
organization,fromproductdesigntoaftersalesservice,mustbefocusedongiving
customerswhattheywantandneed.

Andthatincludesthesalesforce.For,asRackhamandDeVincentisexplainonthe
followingpage,customersdontneedtalkingbrochures.

Thissummaryshowsyouhowtotransformyoursalesforcefromvalue
communicatorstovaluecreators.
Specificallyyoulllearn

Howallcustomersfallintooneofthreecustomercategories:
Howtomatchaspecificsellingstrategytransactional,consultative,or
whattheauthorscallenterprisesellingtothecategorythatfitsyour
customer;
Howtocreatevalueforyourcustomerswithineachsellingstrategy

Andtheresmore.Howtoredesignthesalesprocessdependingonthetypeof
customersyouhave.Howtomakechangestoyoursalesforcewhentheyarepursuing
thewrongstrategy.Howtorethinkthesaleschannelstoyourcustomers.

Butthefirststepistounderstandwhytheeraofthetalkingbrochureisover.Turnthe
pagetofindout.

THE CHANGING PURPOSE OF THE SALES FORCE

Dont Communicate Value, Create It

Thetraditionalroleofthesales
forcesistocommunicatethevalueof
theproductorserviceitisselling.The
salesforceexplainsthedifferent
featuresoftheproductandhowitwill
helpthecustomer.

We Have the Information

Inthepastthiswasvaluable.
Salespeoplewereasourceof
informationthatthecustomercould
getnowhereelse.
Butthisistheinformationage.
Easyandaccessibleformsofdataare
nowavailabletoeveryone.
ConsumerscanconsultConsumer
Reports:productresearchcompanies,
suchasJ.D.Powerspecialinterest
magazines,suchasPCWorldorRoad
andTrack:andtheInternet.
Businessbuyersarealsobetter
informedthaninthepast.Theydont
waitforsupplierstoinformthem
aboutwhatsnewinthefield.
Insum,forgettheproductinfo,say
thebuyers.Weknowallaboutit.
Whatelsecanyoudoforus?

Commodity Products: So What?

Anotherproblemwith
communicatingvalueasacentral
purposeisthatthereislessvalueto
communicate.Perhapstwentyor
thirtyyearsago,asalespersoncould
argue.Myproductismuchbetter
thanmycompetitorsandhereswhy.
Buttoday,everymarketiscrowded
withcompetitors,eachstrivingto
buildtheultimatemousetrap.Asa
result,productsandservicesare
becomingcommoditized.Your
mousetrapmighthavesome
interestinganduniquefeatures,butso
dotencompetingmousetraps.

Sothebuyersspeakupagain.
Forgetthepitch.Werenotimpressed.
Whatelsecanyoudoforus?

Give Us Real Value

Whatthesalesforcemustdois
createvalue.
Onewayistoreducethecostof
theproduct.Businessesareunder
intensepressuretolowertheircosts
(seecolumnatright).Suppliersmust
findawaytohelp.
Buttherearemanyothervalue
creatingopportunitiesinbusinessto
businesssales.Howeasyisthe
producttoacquire?Canitbe
customizedtothecustomersneeds?
Whatsupportcomeswiththe
product?Willithelpcustomersreduce
leadtimeorinventoryrequirements?
Thegoalofasalesforceisto
discovertheseandothervalue
creatingopportunitiesthatbestfitthe
needsofitscustomers.*

Business Buyers
Are Watching the Costs
Globalization and
deregulation are creating a host
of new competitors from around
the world and from different
industries. To remain competitive,
businesses need to bring their
costs down.
Financial restructuring is also
having a major impact. The rash
of leverages buyouts and mergers
and acquisitions created massive
debt, which also pushes
companies to focus on lowering
costs.
The result: Businesses are
more price sensitive and value
conscious in their purchasing.
For example, business
purchasers now look at the
lifetime cost of a product or
service, not just the initial cost. A
machine part that is cheap
initially but that requires higher
maintenance or higher operator
skills is more expensive in the
long run.
Buyers are also segmenting
suppliers, for example, by
strategic importance or cost of the
product. They are ready to invest
time and money in developing
partnerships with suppliers of key
components --- but shop around
for the best price on standard
parts.

THREE SELLING STRATEGIES

Different Customers Want Different Value
Howcanyoursalesforcecreatevaluefor
itscustomers?
Startwiththestandarddefinitionofvalue:

Value = Benefits minus Costs

Theequationshowsthatvaluecanbe
createdintwoways:increasingthebenefits
ofwhatyoureofferingor,asmentionedon
pagetwo,reducingthecostsofcurrent
benefits.
Ifyoursalesforcegatherstheinformation
neededtocustomizeaproduct,itincreases
valuebyofferingbenefitsbeyondthe
product.
Ifyourproductisofferedatacheaperprice
throughtheInternet,yoursalesfunctionadds
valuebyreducingcosts.
Differentcustomerswantdifferenttypesof
value.Someareonlyinterestedinlowcosts.
Otherswanttheadditionalbenefits,suchas
technicalsupportinusingtheproducts.
Therefore,thefirststepindevelopinga
salesstrategybasedoncreatingvalueisto
segmentcustomersbasedontheirvalue
requirements.

Three Customer Types

Customersfallintooneofthreedistinct
types:
Intrinsicvaluecustomersknowtheproduct
andknowhowtouseit.Theydontneedor
wantanyadditionalhelpfromthesalesforce.
Forthemallvalueisintrinsicintheproduct

valuestartsandendswiththeproduct.
Forextrinsicvaluecustomers,valueis
notlimitedtotheproductitselfbutin
howtheproductisused.Theyarelooking
forsolutionsandapplications.
Extrinsicvaluecustomersbelievetheir
supplierssalesforcecanbevaluableifit
fullyunderstandstheirneeds.These
customerswantthesalesforcetotake
thetimetodeveloptheirunderstanding.
Strategicvaluecustomersdemand
muchmorethanadvicefromthesupplier
salesforce.Theywanttoleveragethe
corecompetenciesofthesupplieritself.
Strategicvaluecustomersarelooking
forapartnershipofequalsinwhichthe
twopartiesjoinforcestodevelopthe
customersproduct.

Three Sales Strategies

Thethreetypesofcustomershave
vastlydifferentexpectationsofthevalue
theycanreceivefromasupplierssales
force.Fulfillingtheirexpectations,
therefore,requiresdifferentsellingskills.

Transactionsellingoffersthebestset
ofsellingstrategiesandskillsforintrinsic
valuecustomerswhotreatsuppliersasa
commodityandaremainlyinterestedin
priceandconvenience.
Transactionsellingisfocusedoncost
reductionreducingthecostofthe
processandmakingthe
transactionhasslefree
forthecustomer.
TheCarMaxchainof
usedcardealerships
hasautomatedkiosks
givinginformationon
whatsavailableandat
whatprice.Customers
avoidcompletedthe
bothersome
negotiationswith
salespeople.

Consultativeselling
fitstheextrinsicvalue
buyerwhowants
morethanjustthe
product.Asthename

Goodbye Segmentation
By Customer Size
Traditional sales forces segment
customers by purchase size: one set
of strategies for small customers,
another for medium customers, and a
major account strategy for large
accounts.
Size is irrelevant to value,
however. A large customer that buys
paper clips in bulk doesnt need
consultative selling, while another
large customer looking for machine
tools may want that supplier advice.
The exception to the rule is
enterprise selling, which, because it
requires huge investments, involves
both suppliers and customers of
substantial size.

suggests,consultativesellinginvolves
givingadvicetobuyersforexample,
helpingcustomersunderstandtheir
problemsandissues.
Microsoftssalesforceoncesoldbulk
softwaretocorporateaccounts.Now
Microsoftproductsareoftensoldthrough
independentsolutionproviderssuchas
systemsspecialists.
Enterprisesellingisrequiredfor
strategicvaluecustomers.Inenterprise
selling,boththeproductandthesales
forcearesecondary.Theentiresupplier
organization,usuallythroughcross
functionalteams,isinvolvedin
contributingtothecustomerssuccess.
AppliedMaterialsdesignsandproduces
chipmakingmachines.Morethanone
hundredAppliedMaterialsemployees
fromengineerstoaccountantswork
withcustomerIntelonadailybasistomeet
Intelsneeds.
Thefollowingpageslookatthesethree
strategiesinmoredetail.*

TRANSACTION SELLING

facilitatingthetransactionbyreducingthecost,risk,or
difficultyofacquiringtheproductorservice.Youcould
forexample,eliminatethesameforce.Thatswhat
Saturndid.Inadditiontoallowinglowerprices,
eliminatingthesalesforcesavedcarebuyersthehassle
ofwhatshouldbeasimpletransaction.
Anotheroptionistomovetolowercostchannels.
Recognizingthatcomputerbuyinghadmovedintoa
transactionphasemostcustomersknewwhatthey
wantedMichaelDelldevelopedadirectsaleschannel
forcomputers.

Add Services, Cut Costs, or Give Up

Asthechartaboveshows,sellerscanadd
valueinanumberofwaysduringthebuying
process,suchashelpingcustomersdefinetheir
needsorconsidersolutionstheymightnothave
thoughtof.
Intransactionalselling,however,allofthese
valueaddedpathsareblindalleys.Productsare
commoditiesundifferentiatedproducts
availablefromscoresofsuppliers.Asaresult,
buyersalreadyknowwhattheyareandhowto
usethem.Andcommoditiesarentcustomized.
Sowhatcanyoudo?
Facedwithasalestransaction,Sellerscantake
oneoffourdifferentsalesstrategiesto
succeed.

Create New Value

Thefirststrategyistoescapethe
transactionalsalebyfindingawayto
differentiateyourproduct.
Onewayistoaddspecialservices.

AmericanExpressschargecardservicecould
havedevolvedintoatransactional
environment.Toavoidthis,AmericanExpress
offersanumberofspecialservicesthat
differentiatethecarefromothers.For
example,customersareautomaticallyinsured
whentheyusethecardtorentacar,it
guaranteeshotelroomseveniftheyarrive
late,andthecardcanbereplacedwithin
twentyfourhoursnomatterwhereonearth
customerslostit.
Anoteofwarning:Someescapeattempts
candestroyvalueinsteadofcreatingit.For
example,dontbeefupyourtechnicalsupport
staffforcommodityproducts.Customersstill
wontneedyourhelp.Insteadofbreakingfree
ofthetransactionalsale,youveonlyaddedto
yourcostsandmademattersworse.

Adapt to Transactional Sale

Youdontnecessarilyhavetoescape.As
thebottomcharshowsthereisonevalue
addingpathopenintransactionalsales:

Athirdoption:Reducethecostof
thesalesforce.Forexample,
culminatenonvalueaddingactivities,
suchasfrequentsalesmeetingsand
timeconsumingadministrative
reports.

Make the Market

Thetransactionisthemeansto
moveproducts.Oneinnovativewayto
increasevalueinatransactionsaleis
toturnthetransactionintoaproduct
initsownright.
AmericanAirlinesdevelopeda
computerizedreservationsystem
calledSABREtohelpsellflights.The
ideawasingenious:Whentravel
agentsusedSABRE.AmericanAirlines
flightsappearedfirst.
Regulatorsjudgedthedeviceunfair.
However,SABREdidsuchanexcellent
jobfacilitatingthebuyingprocessthat
itbecameastandardtravelagency
toolgivingAmericanAirlinesparent
companyAMRprofitsonflightsof
everycompany,notjustAmerican.In
1996AMRmademoremoneyfrom
SABREthanfromtheairline.

Exit
Somecompanieshavemanagedto
maketransactionsellingprofitable.In
mostcases,however,transactionsales
offertheleastadvantagetosellers.
Buyerswhocaneasilytaketheir
businesstocompetitorsareinthe
driversseat.Somecompaniesare
findingthatthebeststrategyistocut
theirlossesandrefocustheir
resourcesonsalessituationinwhich
theyhaveabetterchanceofsuccess.*

CONSULTATIVE SELLING

Uncover Customer Problems and Issues

Intransactionalselling,thesellers
contributiontocustomervaluewaslimited
toprovidinginformationabouttheproduct
andprocessingorders.
Inconsultativeselling,you,asaseller,
makeamuchgreatercontributionto
customervalueby
Helpingyourcustomersunderstandtheir
problems.Issues,andopportunitiesina
newordifferentway:
Showingyourscustomersneworbetter
solutionstothoseproblems:
Actingasadvocatesforyourcustomers
withinyourorganization.
Consultativesellingrequiresdifferentskills
fromtransactionalselling.Yoursalesforce
hastochangefromtellerswhoexplaina
productsadvantagestoseekerswho
knowhowtoaskthequestionsthathelp
uncovercustomerproblemsandissuesand
createsellingopportunities.
Yoursalesforcemustalsoinvestthe
necessarytimeandefforttounderstand
customerproblemsandissues.With
transactionalsales,thegoalistoclosethe
saleasquicklyaspossible.Movequicklyina
consultativesalessituation,however,and
youllprobablyloselucrativeopportunities
tocreatevalue.
Finally,yoursalesforcemustbereadyto
waitforthereturnoninvestment.Ina
transactionalsale,youmakethemoney
immediately.Inconsultativeselling,you
havetoinvestupfronttime,effort,and
moneyinarelationshipthatleadstoa
seriesofsales.Youstartmakingmoneynot
withthefirstsale,butthefourthorfifth.
Note:Whatyoumeasureiswhatyou
get.Performancemeasurementsoften
discouragethesalesforcefrommakingthe
requiredupfrontinvestmentoftimeand
effort.Forexample,salespeoplewilltryto
rushthroughasalescallbecausetheir
performanceismeasuredonthebasisof
thenumberofcallsorcontactstheymake
oronshorttermsalesresults.
Ifyouareusingtransactionalperformance
measurements,youwillgettransactional:
selling.

Consultativesellingdoesnotworkin
everysituation.Ifyourproductisthe
sameaseveryoneelsesorthecustomer
knowsexactlytheproblemstheyhave
andthesolutionstheywant,consultative
sellingdoesnotaddanyvalue.

Rise of the Rainmakers

Manyorganizationsfind
themselvesdependentonrainmakers
highlypaidsellingsuperstarswhohave
thecontacts,knowledgeandskillsto
makeconsultativesellinghappen.

Theproblemwithrainmakersis
thattheyarescareandtheyarefickle.
Likeallsuperstarswhoknowtheirworth,
rainmakerscanbeluredtoacompetitor
fortherightprice,leavingyour
organizationinalurch.

Arainmakerscontactsarehard
toreplace,butyoudonthavetoremain
hostagetorainmakersifyoudevelop
valuecreationcapabilitiesintherestof
yoursalespeople.

Youcantransferarainmakers
abilitytohelpcustomersunderstandtheir
needsandfindsolutionsthrough
Coachingandtraining
Support,tools,andinformation
Aguidingsalesprocess
Inotherwords,giveyoursalespeoplethe
coachingtoasktherightquestions,
accesstoasophisticateddatabaseof

Dead Accounts Come

Alive at Kodak
If you dont take the time, you wont
make the sale.
Take what Kodak sales people
call their dead accounts. These are
customers who have not bought anything
in more than six months because, in the
view of the Kodak salespeople, they have
no needs to which Kodak can add value.
The salespeople still made periodic visits
to these dead accounts ---- usually a
fifteen-minute sales call --- to show the
latest products. But they never expected a
sale.
The authors asked a group of
salespeople to visit five dead accounts
but not to talk about Kodak products.
Instead, the salespeople were just to ask
questions to help them understand
customers issues, problems, and needs.
To their surprise, these non
selling calls uncovered a number of
issues in which Kodak could help and
resulted in more than a million dollars of
new business.
informationtohelpcustomersfind
solutions,andasalesprocessasaguide
toensurethateverytaskthecustomer
willexpectiscovered.
Ifyoujustcontributeanofficeanda
telephonetothesalesprocessexpectto
remaindependentonyourrainmakers.
Butyoucandomuchmore.*.

ENTERPRISE SELLING

Redesign Boundaries with Your Customers

Intransactionalselling,thecustomerbuys
theproduct.Inconsultativeselling,the
customerbuystheproductandarelationship
basedonadvicefromtheseller.

underthecontrolofasalespersonor
evenasalesteam.Therearemanymore
peopleandmanymoretypesofpeople
whoparticipate.

Inenterpriseselling,thecustomerbuys
theentirevaluecreatingabilityofthe
enterprise.

TheBaxterStonecaseinvolvedsales,
purchasing,andsalessupportstaff,but
alsoproductionstaff,plantengineers,
materialsmanagers,andmanyother
functions.

ForExample,aconsultativesalesperson
wouldmeetwithacustomerdevelopan
understandingofhisorherneeds,andfind
theappropriateproducttoresolvethose
needs.
Inanenterpriserelationship,the
customersR&Ddepartmentwouldworkwith
thesellersR&Ddepartmentonanew
producttofulfillthecustomersneeds.

Stone and Baxter

StoneContainersuppliespackagingforthe
pharmaceuticalgiantBaxter.EveryStone
departmentandfunctionisfocusedonfinding
waystocreatevalueforBaxter.
ForExample,StonesR&Dteamswork
withBaxteronproductandpackagedesign.
Engineersfrombothcompaniesoperatein
eachothersplantstoimproveperformance
andtobringnewthinkingtoeachothers
problems.StonestruckscarryBaxters
products.
Inall,thetwocompanieshaveworkedon
twohundredjointprojectstoreducecosts
andcreatevalue.

Players and Roles

Unliketransactionalorconsultative
selling,theenterpriserelationshipisnot

Setting
strategy and
agenda

Supplier can
influence and
improve strategic
agenda

Identifying
execution
gaps

Supplier can offer

insight into gaps
and opportunities

The intimate cooperation needed for

enterprise selling is easier to describe
than achieve. If you are considering an
enterprise relationship with a partner, be
prepared to answer yes to each of the
following five questions:
Are both parties prepared to change to
create value?

Anothercharacteristicofenterprise
sellingistheequalityofthetwo
companiesintherelationship.Ina
transactionalsaleespecially,vendorsare
inferiorsatthebeckandmercyoftheir
customers.Consultativesalespeopleget
morerespectbuttheyarestillnotequals.

Is there sufficient potential for value

creation that cant be achieved with
other types of sales?
Are both sides committed and able to
work cross-functionally?
Will there by access to each others
strategy?

Inenterpriseselling,thesellerand
buyerareequalpartnerscreating
customervalue.

Are the values of both organizations

compatible?

Creating Value
Howdothetwopartnerscreate
value?Insimpleterms,theycreatevalue
byredesigningtheboundarybetween
customerandsupplier.

Thetraditionalboundarybetween
customerandsupplierisawallof
indifference.Afterall,thetwocompanies
areseparate.Whateachcompanydoes
onitssideofthewallisofnoconcernto
theotheraslongascontractual
expectationsaremet.

Thesuppliersproductionschedule
doesntmatchthecustomers
requirementsschedule.Thusthe
supplieriseitheroverproducing,
leadingtoexcessinventory,or
underproduction,leadingtolossof
sales.

Thecustomeronlycaresthatthe
supplierdeliversthepartontimeandthe
supplieronlycaresthatthecustomer
paysontime.Theproblemwiththis

Eachcompanyhasitswonlogistics
systems,includingseparatebutoften
duplicatepaperwork,transportation,
andwarehousing.

Thecustomerisdoingthingsinternally
thatthesuppliercouldnobetter.

Exploring
relationship
feasibility

Supplier can
provide resources
for exploring the
benefits and costs
of a high impact
relationship

Adding value in an enterprise sale

Are you Ready

For Enterprise Selling?

Creating
Joint
vision

Supplier can
act as a
business
equal to setup
goals, metrics
and guidance
system for
relationship

Initiating
Enterprise
relationship

Supplier can
invest
resources to
ensure early
successes

boundaryisthatitcreatesinefficiencies.
Someexamples

Eliminatetheboundarywallbetween
supplierandcustomerandeachofthese
issuescanbeaddressed.ForExample,a
utilityreducedthetypesofcablesitused
fromtwentyseventonineinorderto
allowitscablesuppliertooptimizeits
productionscheduleandreduceexcess
inventory.
Inanotherexample,WalMartand
Procter&Gambleworkedtogetherto
eliminateduplicationintheirlogistics
process,allowingP&Ggoodstoreach
WalMartstoresatamuchlowercost.*

REDESIGNING THE SALES PROCESS

Enterprise Sales: Erase Functional Walls

Thekeytosuccessfulenterprisesellingisto
eliminatetheinefficienciesandwastethat
existattheboundarybetweenthecustomer
andthesellingorganization.
Boundaryproblems,however,existnot
onlybetweencompaniesbutalsobetween
functionsorotherdepartmentswithina
company.
Theguidingprincipleofprocessthinkingis
tobreakdownthesebarriersbyorganizing
workaroundcrossfunctionalcoreprocesses
insteadofseparatefunctionaldepartments.
Thestrengthofthisapproachismost
evidentinenterpriseselling,whichdepends
oncrossfunctionalteamsinboththeselling
andcustomerorganizations.Ifthefunctions
onyoursideofthepartnershipareatwar,
youarelesslikelytosuccessfullycreatethe
companytocompanyrelationshiprequired
forenterpriseselling.

IBM Comes Together

IBMestablishedanenterprise
relationshipwithMcDonaldsCovering
operationsinninetycountries.Butwith
differentprocessesforeachcountry,IBM
couldnotrespondtoMcDonalds
requirementforconsistentsolutions
offeredworldwide.
In1994IBMshiftedtoprocessthinking,
developingacustomerrelationship
managementprocessthatcreatedcross
functionalcustomersolutions.Thus,IBM
establishedacrossfunctionalglobalteam
thatoperatesinpartnershipwith
McDonaldsglobalheadquartersa
unifiedenterprisearrangementthat
createsmuchgreatercustomervalue
thanthesplinteredrelationshipofthe
past.*

Improving Transactions:
Process Without People
A smooth cross-functional process
adds value in enterprise selling. In
transactional selling, add value by
designing a process that reduces the cost
of increases the convenience of the
transaction.
The way most transactional
processes are improved is by designing
out the sales person.
New Brunswick Telephone, for
example, created interactive phone
stores. Customers can get billing details,
make account inquiries, and buy a range
of products and services through their
touch-tone telephone or computer
twenty-four hours a day ---- all without
talking to a single sales person. With this
new process the cost per transaction fell
from eleven dollars to less than half that
amount.

Consultative Sales: Put Up Boundaries

Oneofthemajorsingsofaninefficientsales
processisthelengthofthesellingcycle.A
salespersonwhoconsistentlytakestwiceas
longasanothersalespersontoclosethesale
ofaproductissomehowwastingtimeand
effortwhich,intheend,costsboth
customerandseller.
Anineffectivesalesprocessisonewhich,
forthetimeandmoneyinvested,yieldslittle
valueforthecustomerorseller.
Withenterprisesales,youcanimprovethe
efficiencyandeffectivenessoftheprocessby
resolvinghandoffproblemsatthe
boundariesbetweenfunctions.
Intheconsultativesalesprocesshowever,
therearenohandoffs.Theentireprocessis
usuallymanagedbyasinglesalespersonora
singlesalesteam.
Sohowdoyouimprovetheperformance
ofasalespersonorteamthatisinefficient,
ineffective,andaddslittlevaluetothe
customer?

Theanswer:Breakdowntheconsultative
salesprocessintoseparatestepswhat
wecallmilestones

Breaking Up the Process

Milestonesarestepswithinthe
processthatcanbemeasuredobjectively.
Establishingandcomparingthe
milestonesofeffective,efficientsales
withineffectiveorinefficientsalesreveals
theareasthatneedimprovement.
AtoneXeroxdivision,forexample,
highperformerscouldsellaprinting
systeminsixmonthswhilemostother
salespeopletooktwiceaslong.
Xeroxexaminedthehighperforming
processestoestablishcertainsuccess
criteria,suchasthelevelofcustomer
contacts,thepointatwhichproduct
solutionswereintroduced,andthe
involvementofotherXeroxresources.
Basedonthesecriteria,Xeroxandthe
authorsestablishedaseriesofmilestones
toguideunderperformingsalespeople
duringthesalesprocess.

Traditional Selling Steps

Breakingthesalesprocessinto
separatestepsisnotnew.Youmaybe
familiarwiththetraditionalprocessthat
beginswiththeprospectingphaseand
endswithclosing.Thesesteps,however,
dontaddvaluetocustomers(who
dontcare,forexample,thatyouve
achievedyourgoaloffiftycoldcallsina
week).
Makesureanymilestonesyoucreate
addcustomervalue.
Oneconsultingcompanyreplaced
theprospectingandcoldcallphases
withavalueidentificationprocess.

Salespeoplefirstdevelopeda
valuehypothesisthatexplainedhow
thecompanywouldcreatecustomer
valuebasedontrendsthataffected
selectedindustriesorcustomertypes.

Theynextidentifiedspecific
prospectswhomightbenefitfromthe
valuehypothesis.Finally,theymetwith
thoseprospectstocustomizethe
hypothesis.*

CHANGING THE SALES FORCE

What You Can Do to Change Old Habits

Oldhabitsandmindsetsarehardtobreak.
Pushingasalesforceaccustomedto
transactionalsalesintoconsultativeselling,
forexample,orintroducingenterpriseselling
toanorganizationthatsneverdoneitbefore
willtakesometimeandeffort.

Inconsultativeselling,whichdependson
moreindepthknowledgeofcustomers,
youmightwanttostructurearound
accountsorcustomers.Thus,aglobal
accountteamwouldsupplythecustomer
foritsworldwideneeds.

Tomakesignificantsalesforcechanges,
focusonthefourchangelevers:vision,
structure,capabilitiesandmetrics.

Thesametypeofaccountstructureis
appropriateforenterprisesales,except
thatseniormanagementmustleadthe
accountteams.

Vision
Youmuststartwithaclearvisionforyour
salesforce.Thatis,theymustclearly
understandyourorganizationscustomertype
andthetypeofsalesrequiredforthese
customers.

Capability Building
Establishingtheappropriateskillsor
capabilitiesinyoursalesforceisanother
majorchangelever.

Therightsalesstrategydoesntworkwith
thewrongstructure.Youmustdesigna
structurebasedontheneedsofyour
customertype.

Aconsultativesalesforce,for
example,musthavebothextensive
productandindustryknowledgeandthe
authoritytobuildcustomizedsolutions
forthecustomer.Developingthistypeof
knowledgerequiresextensivecoaching
fromexperiencedsalesmanagers.

Forexample,intransactionalsalesyou
wantcostefficiency.Onecostefficientwayto
structuresalesisbygeographicalarea,in
whicheachsalespersonhasresponsibilityfor
allproductsandaccounts.

Enterprisesellingrequiresevenmore
substantialskills.Oneofthemost
important:theabilitytoworkcross
functionally.Asalesforcemustbeableto
workwellwithitsowndesign,

Structure

Intransactionalsales,ontheotherhand,
theknowledgeandcapabilitiesneeded
fortheothertypesofsalesarenot
necessary.Youwillfinditmorecost
efficienttoputproductknowledgeina
databaseorothertypeofeasily
accessibleelectronicformatratherthan
investingintrainingforeachsalesperson.

Metrics
Performancemeasurementsandthe
rewardslinkedtothemarealsokey.
Traditionalcostbasedmetrics,suchas
costpertransaction,makesensefor
transactionalsales.
Forconsultativesales,theyrenot
goodenough.Consultativesellingcanbe
alongprocess.Dontwaitforthefinal
closeofthesaletomeasureresults.One
earliermeasurement,forexample,would
beintheneedsassessmentphasefor
example,howmuchpotentialforcreating
valuedidthesalespersonuncover.
Enterprisesellingrequires
measurementsforexample,returnon
investmentforbothpartiessinceboth
partiesareinvestingintheprocess.*

Dont Forget the Sales Channel

Nomatterwhichsellingmodel
transactional,consultative,orenterprise
isbestforyourcustomers,youllfind
opportunitiestoaddcustomervalue
throughyoursaleschannels.Howproducts
gettocustomersplaysabigpartinthe
buyingdecision.
Thus,customersbuyfromcatalogs
becauseitseasierthangoingtothestore.
Inabusinesstobusinesssale,abuyer
choosesasupplierbecauseitoffersthe
easiestdeliveryoptions.
Whatstepscanyoutaketoaddvalue
throughyourchannels?
Startbylookingforwaystoimprove
yourcurrentchannel.Forexample,
electronicdatainterchange(EDI)connects
thecomputersofmanufacturers

andretailintermediariessotaskssuchas
orderentryandbillingaredone
automaticallyandmoreefficiently
Indirectly,theendcustomerbenefitsfrom
thisefficiency.
Youcanalsoaddvaluedirectlytothe
endcustomer.Computerusersnolonger
havetoturntocomputerstoreclerksfor
helpwithproblems.Theycancallthe
manufacturers800linedirectly.
Thefinalstrategyforaddingcustomer
valueistoaddorshifttoabetterchannel
option.
Onecompany,whoseproductswere
becomingmoreandmorecomplex,
switchedtoaspecialtydistributorwiththe
technicalsupportandexpertiseits

traditionaldealernetworklacked.
Opportunitiesforaddingnew
channels,includingelectronicchannels
suchastheinternet,seemtobe
exploding.
Oneinnovativewaytoaddtoyour
channelsistosharechannelswith
anothercompany.MCIoffersfrequent
flyermiles,thussharinganairlinessales
channel.Inreturn,theairlinegetsfee
income.Andendcustomersgetthevalue
ofearningmileswithoutmoretravelor
addedexpense.