1. Transforming the Sales Force
Anticipating the Journey
Harvard Business School: Thought Leadership on the Sales
Profession
June 5, 2012
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ZS Associates | 312.233.4800 | www.zsassociates.com

2. Sales & Marketing effectiveness is achieved by focusing on the
drivers & their interdependencies
Market Insight Go-To-Market Strategy Operational Excellence
Sales Force Channels
• Sizing
• Segments
Sales • Territories
• Capacity
Resources • Account Targeting
Planning
• Territory & Pipeline Mgt
Channels & • Culture
Customer Sales Force Knowledge,
• Competency Model
Skills & • Benefits &
Insight Structure • Hiring Rewards
Behaviors • Training & Coaching
• Partner
• Performance Measures Program
Management
Motivation • Incentives & Rewards
• Performance Reviews
Segmentation Value
Competitor & Growth Proposition Tools • Sales Process & Decision Support Tools
Insight Strategy Strategy
• Marketing Mix
• Demand Generation
Marketing • Lead Nurturing
Programs • Sales Force & Partner Enablement
Market Customer • Community Building
Environment Engagement
Process • Data & List Management
• Sales Admin
Operations
• In-line Forecasting
(Sales, • Reporting
Marketing, • Analytics
Channels) • Agency Management
• Platforms & Systems Management
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3. The path to success is not always the same
Incremental Transformational
Year-over-year Larger scale
continuous strategy &/or
improvement capabilities change
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4. Continuous or Discontinuous?
Incremental Transformational
• Always • Significant change in
buyer needs or
processes
• New corporate strategies
(organic, M&A)
• Structural change in a
market
• Company or market
lifecycle
• Lagging performance
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5. The Transformation Journey – A Case Example
• Manufacturer of injection
molding equipment
• Increasing number of global
customers
• Complex customer landscape
• Mold Makers
• Low market growth
• Molders
• End-Users
• Diminishing technology
advantage, aggressive and
• Industry leader at ~15% share
rapidly growing competitors
• Global operations and
• Experiencing declining share,
customer base in diverse
and slightly declining price
industries
premiums
• Complacency at many levels
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6. “Can’t we just provide training and change
the sales force’s incentives?”
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7. A deep dive evaluation resulted in important insights &
precursors to successful change
Workout 1 Workout 2
I. Sales Strategy II. Market Coverage III. Sales Process & Tools
• Customer Needs, Buying • Sales Force Structure & Roles • Sales & Service Process,
Processes & Potentials Activities & Roles (CRM
• Sizing & Allocation Strategy)
• Segmentation
• Territories • Sales Tools & Enablers
• Growth Strategy
• Account Targeting
• Market Offerings & Value
Propositions
• Pricing Strategy
Workout 3
VI. Sales Support V. Culture & Motivation IV. Knowledge & Skills
• Sales Administration • Sales culture • Competency Model
(Territories, Goals, Incentives) • Measures & reporting • Hiring & Selection
• Reporting (Standard, Ad-hoc) • Recognition & rewards • Training
• Analytics (Standard, Ad-hoc) • Goals • Coaching
• Account Universe Data & • Performance Reviews
Systems
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8. First pivotal moment: “We’re good, but need to be far better”
1. Improve our 3. Instill a
coverage of 2. Increase the performance
the most impact of each focused and
valuable and every accountable
customers and sales call sales culture
prospects
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9. Transformation requires a systematic, fact-based
approach to strategy design & sustainability
May June July Aug Sep Oct Nov Dec
Launch
Sales Force Structure Territories
& Sizing Design
Customer Insight
& Segmentation
Baseline Value
Sales Process & Tools
Proposition
Competency, Selection
Training
& Hiring
Incentives Plan Goals Setting
Dashboard &
Performance Mgt.
Sales & Marketing Operations Capabilities
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10. 1. Improve our coverage of the most valuable customers and
prospects
§ Role pollution, too little selling time
1. Improve our § Too much focus on small accounts, to
coverage of little focus on new mid-market accounts
the most
valuable
customers and
§ Fragmented approach to global customers
Current
prospects
Situation § Best talent not on most important
accounts
§ Heavy & light territories
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11. Quality estimates of account-level potential was key to a new
growth strategy, sales force optimization, and goals setting
Average Estimated Potential and Sales (US)
1,500
Potential
($ 000s)
1,000
Sales
500
0
Value Segment 1 2 3 4 5
Accounts 42 125 187 434 2,351
Avg. Annual Pot.
1,470 316 142 74 33
($000s)
Avg Annual Sales
364 124 21 18 8
($000s)
Mid-Market Very Small
Key Accounts
Accounts Accounts
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12. An actionable segmentation enabled better value proposition and
sales force design strategies & execution
Needs & Buying Processes
Global Accounts
(10 strategically critical accounts)
Program Buyer Systems Buyer
(no / low sale)
(>$500k in Pot.)
Primary Decision-Maker Primary Decision-Maker
Prospects
Key
Account Potential
Program Buyer Systems Buyer
Secondary Influencer Secondary Influencer
Mid-market
market
Systems Buyer Systems Buyer
Primary Decision-Maker Secondary Influencer
(<$50k in Pot.)
Accounts
Small
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13. A detailed review of sales force activities and effort allocations
resulted in significant rationalization
Maintain
Increase
Current
Activities Decrease
&
Effort Stop
Allocations Re-assign
New
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14. Restructuring the sales force improved role clarity, coordination
and accountability – while reducing redundant work
Strategic • Named global accounts & key Project
Accounts accounts Engineer
Manager • Executive sponsorship program (Global, Key &
(Global & Key Mid-market
• Elevated support levels accounts)
accounts)
• Mid-market customers and global / • Technical due
Field Sales key account affiliates diligence, order
(Mid-market • Grow under-penetrated and prospect fulfilment
accounts) accounts administration and
coordination of
account service &
support
• Senior PEs aligned
Inside Sales against SAM accounts
• Named small accounts (and some
(Small
geographically remote accounts)
accounts)
New roles
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15. Sales response analysis provided new insight into sales force value,
optimal size, and optimal allocation
Revenue
$ Impact
Profit
Contribution
Sales Force Size
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16. Territory optimization improved coverage and goals fairness
2.2
2.0
1.8
Territory Workload (FTEs)
Be Heavy Territories = Lost Growth
1.6 fo
re
1.4
1.2
Afte Acceptable Balance: +/- 20%
1.0 r
0.8
0.6
0.4
Light Territories = Wasted Resource
0.2
0.0
Territories Sorted by Target Account Workload
(per Account Coverage Plan)
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17. 2. Increase the impact of each and every sales call
§ Role pollution (more service than
selling)
2. Increase the § Order takers (vs. proactive selling)
impact of each
and every § Features and price pitches
Current
sales call
§ Not calling on the front office (only the
Situation manufacturing contacts)
§ Little attention to territory, account or
call planning
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18. A bottom-up / top-down approach proved to be an effective way
to break through to the next level of sales process capability
Early Experience Team Full-Scale Rollout
& Accounts
Hiring & Selection
Process
Refined Sales
Processes & 360o Training
Proof Competency
Approaches
Points & Model
Coaching Process
Advocates & Tools
Role
Expectations Performance
Customized Sales
Tools & Enablers Review Content
Reward
Systems
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19. A “3-legged race” (vs. “baton hand-off”) proved to be a powerful
approach for developing winning value proposition strategies and
enablers
“For companies looking to maximize manufacturing performance, we provide the
leading solution, helping to lower overall costs and minimize business risk”
Leading technical Lower total cost of Reduced business
solution ownership risk
• Leading technologies and • Reduced production costs: • Leading provider, with global
innovations manufacturing, sales and
–High up-time and
service footprint
• Broad product portfolio reliability
addressing spectrum of • Industry leadership in
–High quality
applications, from simple to technical due diligence and
highly complex –Minimized waste design, minimizing
implementation risk and
• Tailored solutions to meet –Lowest running costs
quality issues
specific application needs
• Streamlined product
• Industry leading warranty
fulfillment process
programs
• Rigorous project
management and fulfillment
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20. A new class of sales tools proved instrumental in motivating and
enabling effective value-based selling
Key Sales Process Enablers
Value proposition tools: Other Sales process enablers:
• Baseline market offerings & • Pre-call planning template
value proposition
• Needs assessment checklist
• Value proposition
communication tool • Prospect lists
• Cost-in-use calculator • Account review presentation
template
• Competitive offerings
comparison (Fighting guide) • Account planning template
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21. Training was critical. Apprenticeship was even more
important. Coaching is the secret sauce.
Bi-weekly Sales Activity • Review pipeline activities (penetration, retention & acquisition)
Meeting • Review account targeting
Tactical+ • Agree on & review “Top 5” opportunities
(1st: 30 min., conf. call) • Review account plans & next steps on “Top 5” opportunities
(2nd: 60 min., face-to-face)
• Resolve issues
Quarterly Performance & • Performance review & feedback
Territory Plan Review – Performance to goal
Strategic – VBS capabilities
(90 min., face-to-face) – Personal development plan
• Win/loss reviews
• Assess & agree territory & pipeline development plan
• Review account plans for top priority accounts
Rep Rides Review/coach:
• Call planning
Tactical
Top 20%: 3x/Qtr • Call execution
Mid 60%: 4x/Qtr • Value proposition development & communication
Low 20%: 3x/Qtr • Sales process execution
• Basic sales skills
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22. 3. Instill a performance focused and accountable sales culture
§ Pockets of complacency
3. Instill a § Account hoarding
performance
focused and § Inconsequential goals
accountable
Current
sales culture § Tolerance of poor performers
Situation
§ No common sales culture
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23. Rate-gate incentive plans and new metrics drove greater pay for
performance relative to critical objectives
Goal based component = 80% Management by Objectives (MBO) = 20%
SAM FS IS PE SAM FS IS
Payout curve
250% Performance vs. expectation
% of target payout
200% Metric Below Meets Exceeds
New product sales
150%
Pricing
100%
Strategic account
50% conversion (SAM only)
0%
50% 100% 150%
Goal attainment (%)
© 2012 ZS Associates − 23 − HBS_Moorman_Sales Force Transformation 060512

24. Performance reporting, including ranking, proved to be
tremendously motivating
Sales Dashboard
June 10, 2010
John Smith
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25. Competency models aligned to the sales process increased
relevance and impact
Level
Dimensions Pre-Basic Basic Intermediate Expert
General
1. Territory and pipeline management
2. Account Planning
3. Call planning
4. Accountability and performance focus
All Roles
Sales Process Focus
5. Customer needs & opportunities assessment
6. Market offering / value prop development
7. Value prop communication & proof
8. Negotiations & solution agreement
9. Implementation management
10. Value reinforcement / account management
KAM/SAM/GAM
11. Team leadership & coordination
12. Internal impact
Role Specific
First Line Manager
13. Coaching & Apprenticeship (1-10 above)
14. Hiring
15. Performance management
16. Translating business strategy to team
17. Motivating the team
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26. Sales leadership was disciplined. No warm body placement or
hiring.
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27. Currently tracking significantly above plan, in large part driven by
SFE initiative
SST Business Case CAGR
10%
Projected +2% share 28%*
point growth and 7%
+28% revenue
growth for 2010:
• ~15% revenue growth
driven by market
recovery
Base Case Forecast
• ~13% revenue growth
driven by market share
gains (from historically SST Forecast
flat to declining share
position) Actual
2009 2010 2011 2012
SST Business Case
Projected Share Increase 1.1% 2.1% 2.4%
1-yr ROI 20% 125% 158%
3 Year Discounted ROI 93% 262% 315%
* Projected based on 2010 actuals through mid-September
© 2012 ZS Associates − 27 − HBS_Moorman_Sales Force Transformation 060512