Don't Turn Your Sales Team Loose Without a Strategy

Frank V. Cespedes; Steve  Thompson

Article | Harvard Business Review (website) | December 15, 2015

Don't Turn Your Sales Team Loose Without a Strategy

Abstract

When formulating a strategy, markets and segments are typically important categories. But only customers buy. Hence, for most firms, de facto strategy and much resource allocation are the aggregate result of the deals their salespeople close. However, few firms clarify their deal selection criteria, and most sales compensation plans (about 70%, according to surveys) incentivize volume independent of the type of sale or cost-to-serve different customers. This is ineffective deal management and, to avoid this, some firms establish a Strategic Deal Profile. This article focuses on an example that illustrates what a Strategic Deal Profile is, why it is important, and the issues involved in making such a Profile part of actual selling behaviors and performance management practices.

Keywords: Strategy; Salesforce Management;

Format: Electronic

Citation:

Cespedes, Frank V., and Steve Thompson. "Don't Turn Your Sales Team Loose Without a Strategy." Harvard Business Review (website) (December 15, 2015).

Common advice in sales is to provide insights to customers during sales calls. But this advice generally stays at the level of “tell people something they don’t already know” and results in sales conversations littered with many irrelevant factoids. This article provides examples of how salespeople develop and deliver resonant insights in customer conversations and why the framing of insights depends upon to whom they are talking and when in the sales cycle.

Most research and training in sales focus on acquiring new customers. But winning back previous customers is increasingly important: mergers, choice in supply chains, and uncertainty about trade wars mean that B2B customers are constantly re-evaluating relationships with suppliers and making changes. Meanwhile, large buyers account, on average, for over 25% of revenues at publicly traded firms, up from 10% in the 1980s. This article discusses how and why the process for reacquiring lost customers requires a different approach than acquiring new ones and illustrates the process and its implications via a case example.

Fred Shilmover and Sam Clemens prepared for their fourth quarter board meeting. They were excited to have scaled their software startup, InsightSquared, to $2 million in revenue and secured an $8 million round of venture capital. However, they disagreed on the path ahead, specifically on the sales and marketing plan. Shilmover preferred a sales-centric approach to growth while Clemens preferred a marketing-centric one. Which strategy was optimal for their venture’s next phase of growth?

Faculty & Research

Don't Turn Your Sales Team Loose Without a Strategy

Abstract

Citation:

About the Author

More from the Author