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).

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?

Teaching Note for HBS Case No. 819-010. Shindigz sells party and celebratory items through its branded direct online channel, third-party retail and wholesale channels, and online marketplaces. Shindigz has for decades successfully executed a premium-priced branded strategy across its distribution channels. But market developments put this approach at risk. The teaching note discusses the impact of omni-channel buying processes on marketing requirements in an event-driven product category; the links between channel choice, pricing, and business strategy; and the requirements for change in response to market conditions that put pressure on established processes in a business model.

In August 2017, Cumplo’s Founder Shea and CEO Kirberg meet to discuss growth and strategy issues faced by this Chilean fintech startup. What sales and marketing strategy will best foster the compny’s growth? Are changes needed in the product lineup? How and when should Cumplo begin to expand beyond Chile, to other countries in Latin America? The company raised $1.4 million in its first three years, mainly from individual investors, and then issued new shares for $3 million in 2015. By June 2017, Cumplo was debt-free, had achieved break-even, and had raised an additional $2.3 million.

Faculty & Research

Don't Turn Your Sales Team Loose Without a Strategy

Abstract

Citation:

About the Author

More from the Author