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Jump-Start Growth

by Sharpening Sales
Force Focus
By George Bene, Mark Lubkeman, Vaishali Rastogi, and Vikas Taneja

E very successful business under-


stands the critical importance of effec-
tive selling. Too often, however, sales force ef-
subtracting all selling costs. In our opinion,
a customer-centric approach and a focus
on achieving business objectives are criti-
fectiveness decreases over time. The reasons cal to success. While we recognize that di-
are varied. Bad habits take hold, paperwork rect B2B selling is occurring more and
gets in the way of face time with customers, more in a multichannel environment, the
incentives become misaligned with objec- traditional sales force is still a very effec-
tives, managers don’t spend enough time tive way to generate demand.
coaching in the field, or sales reps focus more
on products than on customer needs. In oth- Every company will have a different starting
er cases, the sales force loses sight of which point and a different end goal when it
accounts are actually generating a profit once comes to increasing sales force effectiveness.
sales costs and support are factored in. As a Some businesses will seek to continually re-
result, most companies are leaving money on fresh their sales capabilities; others will aim
the table and growing more slowly than they for a longer-term transformation. The key is
could. Some are even losing money on high- to understand where the critical areas for
touch customer accounts. improvement are by diagnosing all aspects
of selling and support—and targeting those
By rethinking the most important aspects with the biggest upside potential.
of the sales process and pulling the right
levers, managers can make even high-
performing sales forces more productive— Five Areas of Attack
and increase the revenue and profits of the Opportunities for improvement and trans-
business by 10 to 15 percent. formation lie in each of the five key compo-
nents of selling: targeting, deploying, execut-
We measure sales-force effectiveness (SFE) ing, engaging, and enabling. As shown in the
by looking at the gross profit per sale, after exhibit, each of these areas has specific im-

For more on this topic, go to bcgperspectives.com


provement levers, all of which are intercon- proach these levers with insufficient
nected. Some companies choose to tackle rigor or use incomplete or outdated
many levers at once for a broad-based information. A quick review of custom-
transformation of the sales force, while oth- er segments, for example, often reveals
ers achieve meaningful results by first fo- a lack of meaningful detail that sales
cusing on a subset of levers and then ad- reps can act on. Without greater insight
dressing others over time. An initial into the needs, buying patterns, and
analysis and diagnostic can identify the ar- overall value of different customers, the
eas with the greatest improvement poten- sales force has no way of knowing
tial. Moreover, we’ve quantified the results where to focus its activities. But too
that each lever delivers, on the basis of our much data can be overwhelming. The
experience with a wide range of companies. key is to clarify where the highest-value
opportunities lie, so that sales reps can
Let’s examine each component of sales prioritize accordingly.
and its improvement levers more closely.
•• Deployment: direct sales resources to
•• Targeting: focus on markets and customers opportunities with the biggest payback. As
with the highest value. Defining a clear businesses become more complex,
sales strategy and goals, understanding clarity about where to deploy resources
the market, and prioritizing the custom- is increasingly elusive. Multiple factors,
er accounts to go after should be table such as products, customers, competi-
stakes for an effective sales organiza- tion, geographies, channels, and indus-
tion. But too often, sales teams ap- tries, come into play and must be

Each Component of Selling Presents Opportunities for Transformation


Components of selling Improvement levers Revenue impact (%)
Strategy, goals, objectives
Targeting: Impact results from
focus on high-value Market sizing and prioritization the use of additional levers
customers
Customer segmentation

Channel mix 0 5 10 15 20
Deployment: Territory deployment
direct resources to
high-payback options Coverage, resources per account
Roles and responsibilities

Account planning and preparation 0 5 10 15 20


Sales force Execution:
effectiveness = increase face time Sales process optimization
gross profit per with key customers
sales cost Time on task

Customer discovery 0 5 10 15 20
Lead generation and qualification
Engagement: Touch frequency and quality
make interactions
more productive Share of wallet
Loyalty, retention, and renewal
Price realization

0 5 10 15 20
IT/CRM tools
Enablement: Target metrics, measurements
balance sales Compensation, incentives
support and cost Impact results from all levers
Training/skills used in combination
Churn management

Range Average
Source: BCG project experience.

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matched against numbers and types of full range of customer needs, taking
resources. Since needs inevitably advantage of every cross-selling
overlap, decision making about how opportunity, and finding out if and
best to deploy resources given numer- where price sensitivities exist, sales
ous market opportunities becomes that reps can optimize their share of wallet.
much more complicated. Typically, Often, simply understanding how
these decisions involve tradeoffs and frequently sales reps interact with
require a deep understanding of customers, the quality of those interac-
customers in order to identify, for tions, and how well reps perform on
instance, accounts in which direct renewals relative to the competition
selling is either inefficient or ineffective. can lead to important insights. Again,
Even the best companies can benefit the key is to quickly identify the things
from a systematic, data-driven review of that will make the biggest difference.
how they deploy their salespeople. This Improvements in this area typically
type of analysis can reveal critical gaps increase revenues by 5 percent.
and significant improvement opportuni-
ties that—if addressed—can boost •• Enablement: find the right balance between
revenue by 20 percent. sales support and cost. Supporting the
sales force is critical, but some tools and
•• Execution: increase face time with key benefits may cost more than the actual
customers. Sales reps who spend less value they deliver. By evaluating sales
time on low-value administrative tasks coaching and management, software
can spend more time selling or deepen- tools, training programs, support
ing their relationships with customers— manuals and brochures, incentives, and
which ultimately will increase their compensation packages, companies can
productivity. To this end, we recommend weigh the cost-value tradeoffs and make
three levers. First, make sure that sales informed decisions about which ones
reps are thorough in their account are the most effective.
planning so they know where and how
to spend their time most effectively. Because every situation is different, the right
Second, make the sales process, tools, solution—and the bottom-line impact deliv-
and handoffs as streamlined and simple ered—will depend on your company’s start-
as possible—perhaps by using digital ing point, industry, and competitive position.
tools to reduce costs and increase
efficiency. And finally, identify and try to
minimize the tasks and activities that SFE in Action
take the sales force away from custom- Many companies, even those with world-
ers. Each of these levers involves a fairly class sales forces, realize that they have a
significant effort but can have a major problem when revenue growth slows—de-
impact on productivity, so companies spite significant increases in sales resourc-
should zero in on the ones with the most es. The telltale signs may include lower
upside potential. The payback will be sales levels, complaints from top customers
worth it: the typical revenue impact is that they rarely hear from their account
between 5 and 10 percent and can managers, new entrants gaining market
exceed 15 percent in some cases. share, or the departure of top sales reps.

•• Engagement: make customer interactions An end-to-end analysis of the five areas


more productive. Sometimes just outlined above typically reveals a range of
improving how leads are generated and problems with targeting, deployment, en-
vetted can lead to better outcomes. But gagement, and execution. For example,
as a rule, greater upfront research and sales reps may be focusing more on large
planning can help reps get far more out but slow-growing customers than on ac-
of both initial sales calls and visits with counts with low penetration and high po-
existing customers. By exploring the tential. Or there may be little correlation

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between the size of an account and the their reps far better than their less experi-
number of sales reps assigned to it full enced peers, and they were able to coach
time. Often, sales territories are too large, and manage more effectively. The less ex-
unwieldy, and unfocused to cover in a perienced managers spent less time in the
meaningful way. As a result, potential cus- field with the sales force, less time on calls,
tomers are underserved, and sales reps— and less time coaching sales reps.
because they don’t contact accounts more
often—lose out on opportunities to explore Given this insight, a key part of the SFE
customer needs and provide information program was to develop a training program
on products that could meet those needs. for these front-line supervisors. After test-
ing and refining the program around the
The solution could be to move from a prod- world, the company set up a global acade-
uct-centric to a customer-centric organiza- my with international training centers to
tion and improve global teamwork. By shift- increase the overall discipline, standardiza-
ing resources to the highest-value areas and tion, and professionalism of the sales pro-
bringing in teams of functional and industry cess and sales force. Account management
experts, companies can better address cus- and performance management are now im-
tomers’ specific needs. Smaller territories portant parts of selling. All members of the
and greater focus can help, too. Sales reps sales force have tools to monitor how ac-
with more manageable territories—whether counts are doing, view market share, and
because they have fewer accounts or have manage their territories. Reps and their
been assigned to a targeted geographic sales managers are given clear KPIs that
area—can invest more time in building cus- measure the quantitative aspects of perfor-
tomer relationships. In our experience, this mance, such as activity levels and results,
approach delivers sharp improvements in as well as qualitative factors such as call
sales performance metrics. Typically, reve- quality for reps and coaching effectiveness
nue and quota attainment increase by 20 for line managers.
percent or more, and sales productivity im-
proves by double-digit percentage points. The impact of the transformation was sig-
nificant. Sales activity grew by more than
30 percent with no additional hiring, while
When Transformation revenue and market share for three import-
Is the Objective ant brands increased substantially—by 10
The same principles can be tailored to larger, percent on average in one key country.
more transformational efforts. For instance, Driving these results were significant im-
we worked with a major pharmaceutical provements in sales force activity. Calls per
company that was about to launch three new sales rep jumped by more than 25 percent,
products but had a costly selling model and a compliance with plan grew by 30 percent,
limited budget with which to increase the and sales managers increased their coach-
sales force. Because of these constraints, the ing time by 55 percent.
company had to sharply improve the effi-
ciency and productivity of its existing sales
reps. The solution was a multiyear transfor- Getting Started
mation that addressed many SFE levers, with Choosing which levers to focus on is just the
a special focus on the enablement area and beginning. A good next step is to review the
providing better support to the sales reps. key lessons we’ve distilled from our work
and experience. As noted in the sidebar be-
An initial diagnosis revealed that the first- low, it’s a good idea to start with focused,
line sales managers and the length of time visible efforts. Be sure to carefully sequence
they’d been on the job were the biggest fac- the initiatives and create an improvement
tors driving sales performance—not the agenda with a manageable number of le-
sales reps themselves. These experienced vers to start with. A few quick wins can
managers knew their regions and territo- build enthusiasm and momentum—and
ries, their customers, and the strengths of won’t overwhelm the sales function.

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Lessons from the Front Line
Based on our work with leading compa- •• A flexible, collaborative approach
nies in a wide range of industries, we’ve wins over sales teams and makes it
distilled a number of key insights for easier to get their buy-in.
improving SFE:
•• Start by fixing the basics, and use the
•• Look beyond the sales force. Think savings and revenue increases to
globally and across channels to fund a broader transformation.
achieve greater impact.
The key is to think big but start with
•• The initial diagnostic builds the case focused, visible efforts. Look at the global
for change, drives buy-in, and is the picture while systematically reviewing the
basis of a roadmap forward, so make end-to-end sales process. An analysis and
sure it sets up the larger opportunity. rapid diagnostic will reveal the biggest
improvement opportunities—and the
•• Customer input brings credibility to levers that will have the greatest impact.
the diagnostic and helps the improve-
ment program get early commitment
from sales managers and reps.

As with any major improvement effort, an rigorous program management that in-
SFE program is an exercise in change man- cludes clear milestones and accountabilities,
agement and behavioral adaptation that effective project teams, and strong stake-
must be driven by business executives and holder engagement. Without a high degree
line management—not just sales leaders. of executive commitment and oversight,
Major change starts with a clear under- high-potential initiatives often become wa-
standing of why an improvement in the tered down or programs lose momentum.
sales force is necessary and what lies at the
end of the road. This clarity must come Sales force effectiveness is a key driver of
from top executives and be communicated revenue growth, which in turn drives a com-
to all levels of the organization. It is also pany’s shareholder value. In fact, BCG re-
critical to have agreement among business search shows that revenue growth is the
and sales executives on the goals of the single most important driver of long-term
SFE program and how to achieve them. value creation. By following our SFE ap-
proach, even world-class sales organizations
Even with a clear vision and executive align- can grow revenue, cut costs, increase mar-
ment, SFE success will be elusive without gins, and boost their overall effectiveness.

About the Authors


George Bene is a partner and managing director in the Boston office of The Boston Consulting Group.
You may contact him by e-mail at bene.george@bcg.com.

Mark Lubkeman is a senior partner and managing director in the firm’s Los Angeles office. You may
contact him by e-mail at lubkeman.mark@bcg.com.

Vaishali Rastogi is a senior partner and managing director in BCG’s Singapore office. You may contact
her by e-mail at rastogi.vaishali@bcg.com.

Vikas Taneja is a senior partner and managing director in the firm’s Boston office. You may contact him
by e-mail at taneja.vikas@bcg.com.

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The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advi-
sor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all
regions to identify their highest-value opportunities, address their most critical challenges, and transform
their enterprises. Our customized approach combines deep in­sight into the dynamics of companies and
markets with close collaboration at all levels of the client organization. This ensures that our clients
achieve sustainable compet­itive advantage, build more capable organizations, and secure lasting results.
Founded in 1963, BCG is a private company with 81 offices in 45 countries. For more information, please
visit bcg.com.

© The Boston Consulting Group, Inc. 2014.


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