Customer-Centric Sales Management

Before you can become customer-centric as a business, you need customers! Sales and sales management are part of the marketing programme of most organisations, and although marketing and selling are not the same, sales is part of the promotional mix. Sales management, therefore, includes a collection of activities inside the area of marketing management. As an important element of your business’ action plan, sales management will assist in implementing your business marketing strategy.

Recently economic downturn has resulted in major pressure for business to business organisations, and, therefore, a more competitive approach is required from sales teams in order to attain and retain customers. In this chapter the various steps of the customer-centric sales management process will be discussed, with the intention to enhance your business’ competitiveness.

For your organisation to survive the unpredictable external environment, it must develop practices and capabilities that allow it to be flexible to adapt to customer demands, changing technology, and competitors. The customer is at the centremost of these changes and an organisation can no longer compete through their products alone. Your salespeople are the implementers of your marketing strategy and they represent your business in the marketplace. It is required that they spend their time effectively by focusing on the necessary activities required for sales success.

The most important aspect of a salesperson’s role is customer knowledge and the development of strong customer relationships. For your business to move towards service orientation and customer-centricity, your sales team is required to implement your strategy effectively, while supporting your business and continuously self-developing.

Your salespeople are to create a sense of urgency for your customers and focus on both macro- and micro-activities, while collaborating with your marketing team as well as the rest of your business.

Step One: Planning the Sales Effort

The first task of the sales management process is the identification of the role of sales within your marketing strategy. During this step, set the objectives for your business, evaluate the future for your business, and create an action plan to achieve the set objectives. By planning the sales effort, you will be able to predict future trends that may affect your business, while influencing what your business is trying to accomplish. A deliberate and descriptive plan of how your sales team anticipate achieving your objectives is to be provided, and focus is placed on the activities required to achieve those objectives.

This important step in the sales management process helps you to assess your business’ environment, including the changes and intricacies involved. Problems that may occur in the future may be anticipated and decision-making principles are to be provided in order to ensure control. Market opportunities are to be analysed, sales targets are to be set, and objectives and goals for your sales team are to be established.

It is at this stage in the sales management process that the leadership team is to introduce the concept of customer-centricity. While the external factors that may influence the sales volumes for your business are uncontrollable, the internal, and therefore the controllable factors that can positively affect sales volumes begin with the planning of the sales effort. A well-planned sales effort coupled with a focus of customer satisfaction will provide your business with a competitive advantage.

The process of implementing the right strategy for the right customers relates to both the acquisition and re-acquisition of new and old customers. Both these types of customers are to be included in your goals because re-acquisition may result in higher-value sales and stronger relationships between your business and your customers, resulting in a robust competitive position.

Step Two: Forecasting and Budgeting

The second step of the sales management process is for your business to measure the potential of sales for the company through the use of forecasting and budgeting techniques. The forecasting of sales volumes is a vital element for your business, as it depicts the success of the organisation, and acts as a lead for every other forecast in the business, including production planning, cash flow, human resources, marketing and procurement (Connett, et al., 2010).

Forecasting depicts probabilities, and it is necessary for you to take the environment into account, including its increased competition, economy, political climate, and technology.

If your business has an enterprise resource planning (ERP) system, you can use the centralised data collected and stored within the system to forecast sales volumes through the marketing decision support system (MDSS). With this information, you are then able to follow the market potential, sales potential, sales forecasting, and sales budgeting process. This requires your leadership team to assess the economic environment, and estimate the market potential as the total possible sales for your industry during a particular time period under the best conditions. The market potential (MP) for your business can, therefore, be defined as: MP = Number of Potential Users x Usage Rate of the Product (Connett, et al., 2010).

Your leadership team is then required to estimate sales potential (SP). This is the percentage of the MP your business can expect to accomplish within the specified market, during the defined time frame, under the best conditions. This allows you to ascertain your company’s maximum sales potential.

Thereafter your leadership team is to develop the sales forecast, which is the unit sales and revenue for your business. The sales forecast for your company will be lower than its SP, and can be developed by using the three-scenario model, which is to include the optimistic scenario, the most likely scenario, and the conservative scenario.

You may combine the three-scenario model with subjective methods to forecast sales, such as the buyers’ intentions method, based on the planned purchases from your retailers, or the sales force composite, whereby each sales team member estimates their sales numbers for the period. In addition, you may add objective methods of sales forecasting, such as the time series analysis, whereby historical sales data can be used to predict future demand. This will allow you to identify any sales trends through the least squares technique; however, this would only indicate that sales are due to time rather than the combination of sales and marketing activities across your business, and it is, therefore, recommended to be used in conjunction with the other forecasting methods.

The sales forecast is to be compared with the corporate, marketing and sales objectives of your business. Upon agreement across the company, sales quotas are to be established to provide your sales force with incentives and to enable leadership team to assess the sales force’s performance in an objective manner. These quotas are to be challenging but achievable, and directly linked to the compensation and rewards systems for the sales force in order to motivate the team.

Once the sales forecast is approved, you can develop the sales budget as the estimated expenditure needed to achieve the sales volumes forecasted through the objective and task method. Use historical data to attain the details and cost of each element of the sales programme. The sales revenue determined by the sales forecast less the costs will result in your gross margin, less the total expenses of the sales programme, providing you with the contribution margin for your sales department. It is recommended that the sales budget for your business be flexible in order to deal with unanticipated events as they emerge.

Step Three: Organising Your Sales Force

The third step of the sales management process is the organisation of your sales team in relation to the total marketing function of your business. The sales organisation will include the team of individuals who are aiming to achieve your marketing objectives through selling. A flexible sales organisation is required in order to provide for the changing needs of your customers, therefore, making your business more customer-centric. In addition, two-way communication between the sales organisation, your customers, and the other departments within your business is required. Poor communication between your departments negatively affects throughput times for idea generation and the accessibility of up-to-date market information. This information is necessary for you to best service your customers.

Your sales organisation should be built around activities, with a hierarchy that balances authority and responsibilities. This will boost proficiency of work through assignment and promote work specialisation. The unity of command principle is to be followed, whereby each sales team member is to report to only one supervisor. This ensures that your team members do not become confused, frustrated and demotivated. The result is a motivated and focused salesforce that is dedicated to the satisfaction of your customer. A satisfied customer results in a connection between organisational orientation and customer orientation. This connection becomes the vital link that is required for a competitor advantage.

In order to ensure attentiveness and customer-centricity, your sales organisation needs to follow a decentralised structure. Your sales force is to be organised by geographic location; therefore, it will be geographically specialised. This will ensure that each branch or distribution centre is closer to its customers and, therefore, more reactive to their needs, while decreasing travel time and expenses for the sales programme. Furthermore, you can introduce regional managers who will benefit from additional management responsibilities and authority, resulting in enhanced job satisfaction.

Key account management (KAM) is to be introduced to improve the relationship between your customers and your business. This will allow your company to become more competitive in the market, while ensuring that sales opportunities are successfully achieved.

Step Four: Recruitment and Selection

To ensure competitiveness within your market, your sales force needs to be of a high standard. This requires the recruitment of high-quality salespeople that are customer-centric and who require less supervision. The recruitment and selection of a skilled customer-centric salesforce will reduce staff turnover resulting in cost benefits. Staff that stay with your business will cultivate stronger and more trusting relationships with your customers, and, therefore, enhanced sales performance and customer-centricity.

Delegate salesforce recruitment and selection to your regional sales managers. The regional sales managers are to sell the benefits of the vacancy to potential applicants and are required to make a decision as to which applicants should be selected for the positions available. A screening device, personal interviews, reference checks and psychological testing should be used to assist the process, as well as the identification of relevant skills and customer-centric behaviours.

Ensure that your business develops a demographically representative team, so that your company connects with their customers more effectively, creating a distinct competitive advantage for the organisation and aligning with your strategy of customer-centricity.

Step Five: Sales Training

According to Antoncic, Antoncic and Aaltonen (2016), individuals will perform their tasks more effectively when they believe that they have the right skills to succeed. Research has shown that self-efficacy in sales is an important indicator of success in sales-related tasks and careers, and exceedingly successful salespeople often achieve enhanced performance because they are proficient in dealing with task-related obstacles, while managing the challenging and intricate circumstances that occur in customer interaction and relationships. It is, therefore, necessary for your sales force to continuously attend training programmes to renew their selling skills and product knowledge.

It is necessary for your business to focus on building its capabilities to improve your competitive advantage. Sustainable success is achieved by building capabilities rather than excessive campaigning. Once the best sales team has been recruited and selected, they are to be trained and developed effectively to become productive. Sales training needs are to be assessed through periodic audits to ensure a high standard of sales skills, technical skills and product knowledge. This will provide your business with a realistic perspective of your team’s strengths and areas for improvement. In addition, past salespersons’ exit interviews are to be used to ascertain areas that require further training.

Your business will be in a better position to compete with your competitors if it deliberately aligns the external market requirements with its internal skills. The objectives of your sales training are, therefore, to increase productivity, reduce staff turnover and encourage customer-centricity. In addition, improved morale, improved customer relationship management, and enhanced time and area management should result.

Decentralised basic product training, sales skills training, and customer relationship management training is to take place before a new recruit enters the field, and is to be conducted by your business itself. Once the new salesperson has spent some time in the field, they will be eligible to join the advanced sales skills and customer relationship management training. Outside training specialists can be brought in to facilitate decentralised advanced sales skills and customer-centricity training on a continuous basis. This ensures salesforce skills assessment objectivity, and that the most up-to-date sales skills and customer-centricity training is received by your sales team from industry specialists. A well-trained salesforce will provide your business with knowledgeable and skilled sales staff, resulting in increased sales volumes, enhanced customer relationship management, and a competitive advantage within your market.

Step Six: Selling

Salespeople have the perception that they spend too much time on non-productive activities, such as technical support and administration. Despite these activities being a necessary aspect of the sales process, it is recommended that a salesperson’s time is better spent calling on qualified prospects to sell products and services, take orders, collect payments, and build upon existing customer relationships through socialising and entertaining.

To create a sense of urgency for your customers, salespeople need to initiate both macro and micro activities. Examples of macro activities include trade shows, conferences and training sessions for the customer, and micro activities include the number of contact attempts made by the salesperson to secure an appointment, or the amount of first, second and closing appointments required to close the sale.

Both macro and micro activity goals are to be in place in order to guide the salesperson as to how much, which and when certain activities are required to secure a sale. Your sales leadership team should negotiate rather than dictate sales forecasts, budgets, quotas and activities with both the sales team and the marketing team. This will assist in motivating and controlling the sales team, while ensuring a sense of commitment and urgency through the transformation of the sales forecast into selling actions.

In order to meet their macro and micro activity goals, your sales team is required to plan their sales calls, prospect for new business, and present or demonstrate solutions to your prospective customers. Here you can use customer segmentation as the basis of the sales plan for your business. This customer segmentation is to be conducted in conjunction with your marketing team to ensure commercial effectiveness, providing a customer targeting plan for the salesforce.

The key objective of the sales call is for the conversation to progress to the subsequent stage of the sales process. It’s a great idea for your marketing team to work closely with your sales force. This will encourage the use of your business’ positioning statement as a sales script combined with a set of related tools for your sales team to attain sales success.

Depending on what products and services your business sells, following the initial meeting between a customer and your salesperson, an in-depth analysis of the customer and their needs and requirements is to be conducted. Thereafter your salesperson is to demonstrate or present your company’s solution to the prospective customer. For the sale to be a success, the salesperson is required to welcome and handle opinions and objections from the customer with the use of appropriate communication techniques during the trial close. There is no need to make use of manipulative closing techniques during the closing stage of the sales process in order to make sales, but rather make your customers aware of their needs and create a sense of urgency for the customer to satisfy those needs.

Once a customer is secured, as long as the relationship between the customer and your business is rewarding and non-threatening, your customer should be comfortable with repeating the sales process with you.

Step Seven: Compensation and Incentives

Your business should aim to create a high level of marketing orientation and innovation orientation to attain enhanced levels of customer equity. Furthermore, your brand’s performance will be improved if you are effective in attaining new customers and retaining your current customers. Research has indicated that the compensation system used in a sales environment has considerable effects on individual salesperson performance. It is able to reward both the activities required by management, and the performance outcome of the salesperson (Kuster & Canales, 2011).

The objective of the compensation plan for the sales team of the manufacturing group is to assist in the attainment and retention of its customers. The plan is to be aligned with the organisation’s customer-centricity strategy, and the goals specified in its marketing plan. It is to be simple to follow, provide unlimited earning potential, and be based on suggestions provided by the sales force themselves, in order to align with personal motivators.

In a relationship selling environment, a common area of concern for the sales leadership team is the remuneration plan. This plan should motivate the sales team to achieve both their short term and long term goals, yet be flexible enough to be adjusted with changing objectives.

The compensation plan is required to control your team’s results and rewards, while providing the salesperson with a regular income and rewards for great performance. Specific outcomes are to be determined in alignment with your marketing objectives. In order to remain competitive in your market, your compensation plan’s objectives are to include the fostering of long-term relationships with customers, increased sales volumes, the attainment of new customers, and additional incentives for extra effort. These objectives are to be a stretch for the salesperson, but are to remain attainable and measurable in order to keep them motivated.

It is recommended that the compensation method for a sales team be a combination plan, including a salary, commission and sales contests (non-monetary incentive plan). This will provide your sales team with the security of a regular income, and both a financial incentive to increase performance and a non-monetary incentive for superior performance.

An unlimited or limited expense plan is to be introduced for the sales team, with regular checks conducted by your regional sales managers.

Step Eight: Leveraging Information

According to research conducted by Rogers and Rodrigo (2015) on sales teams, it was identified that there was significant value in integrating the sales activity with the rest of the organisation. It was discovered that this collaborative skill of the salesperson within their organisation was the most significant and direct connection with enhanced sales performance. Thus, in addition to helping train new sales recruits, your salespeople are to represent the organisation in the market, allowing them to collect marketing intelligence about your customers, competitors and the market, which can be relayed back to your leadership team for strategic decision-making purposes.

In order for your sales team to perform effectively, they must have access to accurate, transferrable, up-to-date and quality information. Sales force automation (SF) stored in a customer relationship management (CRM) system is to be introduced, which will provide your sales team with customer information that can be used to develop strong customer relationships, resulting in a considerable competitive advantage for your business.

A formalised process of continuous secondary and primary data collection is to be introduced. This data is to be kept safe and secure, and transformed into actionable information to depict your sales trends, as well as regional and individual sales performance. This will allow your business to take instant action in rectifying any issues that may arise, and provide for accurate decision making.

Step Nine: Exceptional Customer Service

One of the most important aspects of a salesperson’s role is customer knowledge and the development of strong customer relationships. Cost, quality, and technology leadership are no longer sufficient aspects for organisations to ensure critical advantages within the competitive environment. To distinguish yourself from your competitors, your business needs to enhance your service orientation, thereby becoming customer-centric. This change to service delivery allows your business to offer its customers a combination of both products and services, compared to the traditional focus of products alone.

The move towards service orientation is a large step for any business. Service business development is to be strategically positioned in the value chain, and the total organisation is to use strategies consistent with delivering high quality products and service levels. All the business functions are to be included in the development, resulting in cross-functional teams. Your salespeople are to enhance service delivery by providing your customers with solutions to their needs, and by providing advice when required.

Step Ten: Leading and Motivating

Your leadership team is required to understand the needs and personal goals of the members of the sales force for motivation purposes. In addition, the leadership team is to instil confidence in your salesforce, encourage idea generation, understand the business as well as be sales specialists, and encourage high performance from your salespeople.

Your leadership team is required to inspire your staff with the shared vision of the organisation and its strategy of customer-centricity, while acting as enablers for your salespeople to achieve their personal and professional goals. Fair and attainable sales quotas are to be set, and incentives are to be introduced for reaching and exceeding these quotas. A highly motivated sales force that is inspired by your leadership team will provide your business with a distinct competitive advantage, and will attract and retain top talent within your industry.

Step Eleven: Evaluating and Control

The control measurements to be considered include a real-time dedicated information system. With access to this information system, you will be able to compare the actual results of your sales process with planned performance. Any deviances from the planned performance are to be evaluated, and activities are to be put in place in order to rectify the identified deviances.

It is recommended that sales performance evaluation programmes be introduced. This will allow you to analyse sales volumes, marketing costs and salesperson performance. Any misdirected marketing efforts are to be redirected towards the achievement of your organisation’s objectives. A profitability analysis may assist you with decision making regarding unprofitable territories, products and customers, and constant sales performance evaluation will allow the leadership team to take appropriate action immediately for any underperformance identified.

This is an excerpt from my book 'Competing in the Customer-Centric Economy'. To order your own copy, please visit https://www.amazon.com.au/s?k=competing+in+the+customer-centric+economy+samantha+worthington&ref=nb_sb_noss