4 ways to build a productive sales culture (Harvard Business Review)

By Frank V. Cespedes & Steve Maughan

Source: https://hbr.org/2015/06/4-ways-to-build-a-productive-sales-culture June 16, 2015

All businesses face opportunity costs. In the case of a sales organization, money, time, and effort allocated to accounts A and B are resources not available for accounts C, D, and so on. That reality drives the distinction between effectiveness (optimization by doing the right things) and efficiency (doing things right) that Peter Drucker and others made years ago. A confusion between efficiency and optimization plagues many sales efforts. If we use an automobile analogy, sales efficiency (SE) initiatives — like CRM, training, and KPI dashboards — improve the engine’s horsepower. Sales optimization (SO) decisions — like aligning sales tasks with business strategy, customer selection, and sales force deployment across opportunities — set the direction in which the car will travel. As the saying goes, “If you don’t know where you’re going, any road will take you there.” But if a car is going in the wrong direction, getting there faster is not the solution.

Companies will spend about $30 billion on CRM alone by the end of 2015, according to Gartner. But consider the work of the Boston Consulting Group, which indicates that SO practices, such as targeting high-value customers and deploying sales resources with strategically-appropriate criteria, have more than three times the impact on revenue growth than SE initiatives. The lesson is clear: How and where you allocate available sales resources is where the leverage resides for more profitable growth. Once you appreciate the importance of sales optimization, you need to focus on four capabilities, which will help you form a foundation on which to build a productive sales culture.

Strategy and planning process. According to surveys, about two-thirds of companies treat strategic planning as an annual precursor to the capital budgeting process. Companies tend to do plans by business unit, regardless of the firm’s go-to-market approach (which often spans business units). Further, this process now takes, on average, four to five months. While this is going on, the market is doing what the market will do. No wonder only 11% of executives say that strategic planning is worth the effort, and why in a survey of 1,800 executives more than half (53%) of the respondents said their employees don’t understand their company’s strategy. Keep in mind: Customers’ buying processes have no interest in accommodating your planning process, so sales must respond account by account. Hence, even if the output of planning is a great strategy (a big if), the process itself often makes it irrelevant to those on the front lines who must make important decisions throughout the year in accord with external buying rhythms and selling cycles.

Cost-to-serve and customer selection. All customers are not equal, and prioritizing customers is how firms make real the crucial “scope” component of a coherent strategy — i.e., decisions about where to play in a market. Profit is the difference between the price a customer pays the seller and the seller’s total cost-to-serve a customer, which can vary dramatically. Some customers require more sales calls, or geography makes them more or less expensive to serve; some buy in large, production-efficient order volumes, while others buy with many just-in-time or custom orders that affect setup time, delivery logistics, and other elements of cost to serve. These differences are important, if you, or your investors, take seriously the notion of return on capital, because many capital costs are embedded in cost-to-serve differences, which are typically ignored in SE metrics. If you can’t measure your cost-to-serve, then your salespeople will be driven by competing price proposals. And when you chase price and volume — as most sales compensation plans provide an incentive for salespeople to do — you can wind up damaging profits and your business model. You won’t allocate sales resources optimally. Finally, you are ultimately at the mercy of competitors who can measure their true costs and do these things more effectively.

Sales capacity and allocation of effort. Sales productivity is largely determined by how much the sales force can do in terms of call capacity and its capability to reach target customers. Allocating that capacity is a crucial SO lever, but many leaders lump SE and SO together and the result is a strategically inappropriate allocation of resources. The issue is not lack of data. It’s knowing what data and how to use it. A common metric used by the C-Suite for evaluating sales is the expense-to-revenue ratio. This SE measure can shed light on the relative cost efficiency of selling activities, but not (by itself) on their cost effectiveness, which is a more complex relationship between selling costs, revenues, profit margins, and customers acquired through one or another means of organizing sales resources. Big data analytics make these relationships accessible. But the average U.S. firm with more than 1,000 employees already has more data in its CRM system than in the entire Library of Congress. To make sense of this tsunami of factoids, never forget that data and analysis are not ends in themselves. To have value, your analysis must result in better resource allocation decisions. Good leaders know that data are not just numbers; they are also a way of viewing reality by the people who should use that data. And sales people will ignore analytics that they can’t apply to where they live: in daily encounters with customers.

Performance reviews. The most under-utilized lever for improving sales is the performance review. Busy sales managers tend to treat reviews as cursory, drive-by conversations that are mainly about compensation, not evaluation and development. Yet, core SO issues are often only apparent at the account level and via conversations with those account managers. Reviews are where strategic direction (versus a random-walk allocation of effort) is revealed, where call patterns and customer selection are supported or changed, and where data are applied to customer interactions. Effective reviews can look at options ranging from changing prices to reflect cost to serve, reducing technical support for certain customer segments, changing the locus of relevant support, determining different ordering or delivery options, and perhaps instituting a channel strategy that offloads some cost-to-serve to resellers whose economies of scope allow them to perform these tasks more efficiently.

Aligning strategy and sales also means sometimes “firing” customers that, despite all attempts, remain unprofitable accounts. It would be naïve to expect salespeople, especially those bonused on volume, to do that on their own. Managers must manage this decision. It’s not our intention to discourage efficiency improvements. But ultimately there is no such thing as effective selling, no matter how efficient versus a benchmark, if it is not linked to your strategic goals. SO decisions are the prerequisite for any SE improvements. Among other things, a focus on SO allows sales leaders to grow the top line using the resources they already have by deliberately focusing selling efforts on what will really make a difference.

One of our top MBA theses on leadership development (UP Space)

Leadership development for general management 

By: David Marais

Source: http://repository.up.ac.za/handle/2263/44026  November 10, 2015


Leadership effectiveness, and how it affects organisational performance, is a much researched area of interest. This study focuses on those leadership skills and behaviours that possibly could increase leadership effectiveness at the senior level of leadership. This is a qualitative research project and the data has been collected using a combination of a qualitative questionnaire and in-depth interviews, conducted with highly qualified individuals with extensive leadership development experience. The research showed a significant relationship between leadership skills and leadership effectiveness and revealed that certain behaviours impact leadership effectiveness at the senior level. In addition it confirmed that leadership skills and behaviours that increase leadership effectiveness could be both continuous and discontinuous in nature when transitioning from the middle management to the senior level. Within the context of sub-Saharan Africa, adaptability and learning agility are especially important behaviours for leadership effectiveness at the senior level. The research also showed that interpersonal skills is the most important skill group to be developed when transitioning to the senior level and, of these, political and cultural sensitivity emerged as the most important interpersonal skill for leadership effectiveness at the senior level.

11 immediate fixes a customer service consultant would make at your company (Forbes)

By Micah Solomon

Source: http://www.forbes.com July 10,2015

Most every company in business says it “strives to provide superior customer service,” or other words to that effect. (The exceptions are incredibly rare: a few delis that are legendary for their brusqueness, a few other companies with Soup N*zi-esque personas. But for the most part, we are all aiming for the same thing.)

I’m sure your goal is similar. However, I can tell you–as a customer service consultant–that you’re probably missing the mark, in spite of your good intentions. In which case, the results can be catastrophic for the success and sustainability of your business if the situation isn’t remedied. The good news is that your problems are unlikely to be unique. Even without visiting your business, I can give you a solid list of likely customer service and customer experience problem areas that could bring you immediate improvement if you get to work on them. Go ahead and take a peek yourself and save my consulting fee:

  1. Learn to hire customer-facing employees based on the right criteria. And it’s time to start being methodical and uncompromising about applying these criteria to every new customer-facing employee you consider hiring.
  2. Onboarding: From the moment a new employee walks in the door, it should be clear to them that they’re now in a world where the pro-customer (and pro-employee) values of the organization are front and center and taken seriously.  Learn to stress this right away, rather than having your onboarding process be essentially “here are all the ways you can get fired at this company–watch your step” and “here are a thousand meaningless forms to fill out”?
  3. Daily reinforcement: Do you have a meaningful “lineup” procedure at the beginning of every shift, to reiterate the values of your company, to celebrate the ways your employees have succeeded in serving customers, to reinforce and further educate employees on what matters at your company and how to make it happen?  You’ll be amazed the difference this can make: in the attitude and performance your employees will be able to deliver and sustain every single day for your customers.
  4. Have you, yourself, shopped your own business lately–offline and online, on the phone and via mobile, in person and via chat? If not, how do you know anyone is even answering the web queries that come in, let alone answering them in a timely manner? That customer parking spaces are sufficient and are properly marked? That your “handicapped accessible” entrance doesn’t have a stray trash can blocking the way? That cigarette butts aren’t marring the passage into your store? That your website login is actually workable for those without your internal override to bypass it? That your site is readable and usable on mobile?
  5. Is all the “ stupid stuff” that customers need answers to readily available without them having to track down an employee to personally answer the questions? Do your FAQ’s actually have the questions that are frequently asked (as well as the more obscure questions that are asked from time to time) that shouldn’t require human intervention to answer for your customers? Or are you forcing customers to contact you, only during business hours, for answers and options that should be available on a self-service basis?
  6. Are you losing it on the handoffs? The easiest place for well-intentioned customer procedures to fall apart is in the handoff from one employee to the next, from one department to the next. The employee initiating the procedure needs to double-check the results as well.
  7. Are you making use of the customer data you have to improve the experience for them? When customers entrust you with information, you should make use of it for their (and ultimately your company’s) benefit. Half of this is to avoid being obnoxious: When you know where a customer lives and what their interests are, don’t fill their inbox with marketing that is geographically or otherwise inappropriate. The other half of this is finding creative ways to take what you know about a customer to do something special, uniquely special, for them. Just like you would have done when you only had ten customers, not an entire database full of them.
  8. Do you involve your employees in continuous improvement? Or do you just use them for their labor and not involve them in creating a better organization? (Here’s a simple continuous improvement system, pioneered at The Ritz-Carlton Hotel Company, that you can involve ever single employee in making use of.
  9. Is everyone trained in customer recovery, in how to apologize for and resolve an issue? If not, here’s what you need: a service-recovery system that will do wonders for you.
  10. Are your employees empowered to solve every, or nearly every, customer issue that comes up? Or do they have to track down their manager to get approval to do just about anything out of the ordinary that a customer might need?  There is a better way: At Ritz-Carlton hotels, famously, every employee has the discretion to spend/discount up to $2,000 to solve any guest problem. At Hampton Inn, they don’t go that far, but every frontline employee can comp a night’s stay or the equivalent without running to a manager.  What this buys you are employees who don’t have to be stressed and defensive when a customer comes to them with an issue-because they know they can solve it themselves–and who never need to inconvenience a customer waiting for a manager’s determination.
  11. Do you offer intelligently designed self-service options? Customers today expect that self-service will be offered as part of the service mix, in part because they need to do business with you in spite of, often, working unusual shifts and operating in a variety of time zones, and partly because they’re already making use of sophisticated self-service options at airlines and other technologically-savvy companies they do business with regularly.

Use these 8 lesser-known marketing tools to help spread the word (Entrepreneur)

By Sujan Patel

Source: http://www.entrepreneur.com/article/247862 July 06, 2015

Having the right tools can mean the difference between success and failure. But with so many different tools available for small-business marketing, it can be challenging to know which ones to choose. While there are plenty of well known, and often, expensive options out there, these eight lesser-known tools can be a great help when it comes to marketing success.

  1. Edgar

Edgar is an awesome tool that lets you make the most of your social media updates. It’s hard to believe, but the average lifespan of a tweet in terms of its value is only 24 minutes. Edgar allows you to schedule tweets and other social media updates that recur periodically, increasing the chance your audience will be reached by an update. In addition, scheduling is automatic, meaning that social media updates take far less of your time.

  1. Narrow.io

Narrow is another tool that allows you to optimize social media presence. Narrow allows you to build a targeted Twitter following of engaged users. By focusing on users who talk about subjects relevant to your brand and industry, you gain followers who are interested in what you have to say and who are more likely to interact with your posts. By taking advantage of key elements of Twitter automation, Narrow sets you up for success.

  1. Content Marketer

Content marketing is key to every business, and Content Marketer is the tool that’s going to help you excel. Currently only released to a select group of early users, the program is expected to launch fully in July, when it will help users promote content to key influencers, increase traffic and build relationships with readers. As you likely already know, manual influencer outreach is very time-consuming, giving tools such as Content Marketer the potential to save hours and hours of work. One last feature marketers will want to watch for is Content Marketer’s ability to assist in finding contact information for industry authorities, simply by entering an article they wrote into the tool.

  1. Filament

You can’t affect what you don’t measure, which is what makes measuring the impact of your website one of the most important aspects of today’s marketing. Manually understanding what’s happening by wading through most traditional analytics programs is difficult — that’s where Filament comes in. Instead of reporting tons of dense data, Filament helps you answer the specific questions you have about increasing engagement, which traffic sources to focus on, and the types of content that perform best on your site, among others. Filament doesn’t just count visits, it also tracks sign-ups, shares and subscriptions. It’s an all-in-one tool for measuring the impact of your website.

  1. Five Second Test

Getting user input is important, but it’s often extremely time-consuming. Enter Five Second Test. Signing up for the service will show you what a user recalls about your design after only five seconds of seeing it — giving you a good sense of the impression you’re making in that critical engagement window. With average user attention spans shorter than ever, tools such as Five Second Test are critical to knowing whether you’re making the impact you intend.

  1. Scroll Depth

This Google Analytics plug-in allows you to dive deeper into user metrics — literally. Scroll Depth measures the extent to which users scroll down your pages, helping you to determine whether your content is effective and which pages visitors engage with more. This insight is invaluable for making sure viewers get the key messages you intend every time they visit your site.

  1. Trapit

Want to have all of your staff contribute to your content marketing campaigns, but you’re not sure where to start? You’re not alone. The creators of Trapit are ready to help, following their company’s merger with Addvocate at the end of 2014. Empower employees to spread your company’s message by giving them created content that they can easily share with their own social networks. Then, measure the impact of their shares with access to the tool’s content library and built-in analytics.

  1. Canva

Many marketers excel at creating messages and spreading them, but aren’t quite so strong when it comes to visual design. Canva can come to the rescue. This easy-to-use program allows anyone to create great designs, even without extensive training. Not only is it fun to use, it’s much less expensive than tools such as Photoshop. Stick with standard design elements, fonts and photo editor tools for free or use custom images for just $1 each.

Marketing tools are an important part of getting your work done successfully every day — but don’t feel like you have to stick with the same old programs you’ve been using for years. With these eight lesser-known tools, you’ll be able to easily ramp up your productivity on your most important activities — boosting not only your company’s success, but your own career as well.