The document summarizes key points from a discussion between L.E.K. Consulting and Chief Executive Network on improving sales force performance. It identifies common sales challenges such as misaligned sales strategies, poor lead generation and customer retention. It also outlines critical levers for effectiveness including properly defining sales strategies, improving sales processes, and establishing sales force enablers like performance measurement and an effective sales culture. Case studies show how addressing these areas can accelerate sales growth and profits.

1. Bangkok
Beijing
Boston
Chennai
Chicago
London
Los Angeles
Improving Sales Force Performance
Melbourne
November 21, 2013
Mumbai
Milan
Munich
New Delhi
New York
The materials contained in this document are intended to supplement a
discussion between Chief Executive Network and L.E.K. Consulting on
November 21, 2013. These perspectives are confidential and will only
be meaningful to those in attendance.
Paris
São Paolo
San Francisco
Seoul
Shanghai
Singapore
L.E.K. Consulting llc, One North Wacker Drive, 39th Floor, Chicago, IL 60606, USA
T: 312.913.6400 F: 312.782.4583 www.lek.com
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© 2013 L.E.K. Consulting LLC. All rights reserved.

2. Agenda
Agenda
 Introduction to L.E.K. Consulting
 Key selling effectiveness pain points
 Critical levers for sales force effectiveness
 Closing statements
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3. Key selling effectiveness pain points
Common Sales Force Challenges:
Sales Strategy
& Channel
Alignment
 Prioritization of
target markets
 Difficulty in
articulating a
company’s value
proposition
New Lead
Generation
Sales
Conversion
Customer
Retention
 Low sales pipeline / chasing the wrong leads
 Low win rates
 Internal support break downs (e.g., slow response to customers,
operational handoffs, etc.)
 Customer or star sales performer defections
 Poor account management – lost opportunities to grow share
Sales Force Enablers:
Sales Organization & Management
Performance Measurement
Systems & Tools
Sales Force Performance Culture
Source: CSO Insights, L.E.K. Consulting
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4. Key selling effectiveness pain points
Demographics of survey respondents
n=48
Percent of respondents
100
90
Other*
Consumer Products
80
Hospitality & Food Service
HR manager /
director
>1,000
Marketing manager /
director
500-999
70
Sales manager /
director
60
50
40
100-499
Manufacturing
30
Senior executive
(e.g., VP Sales)
20
50-99
10
<50
0
Industry
Title
Number of employees
Note: *Other includes transportation, technology, healthcare, consulting & professional services and others
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5. Key selling effectiveness pain points
Review of our survey results (I of III)
Selling Process
Percent of Respondents rating 6 or 7*
We clearly understand our customers’
issues before we propose a solution
44%
Sales and Marketing are aligned in
what our customers want and need
40%
We have a formalized value proposition
that is very compelling to our prospects
33%
We always review the results of our
solution with strategic accounts
29%
Our sales pipeline is clearly aligned
with our sales priorities - we are not
chasing the wrong sales opportunities
21%
0
10
20
30
40
Note: *Please rate your level of agreement with each of the following statements on a scale of 1 to 7, where 1=
strongly disagree and 7= strongly agree
5
50
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6. Key selling effectiveness pain points
Review of our survey results (II of III)
People & Organization
Percent of Respondents rating 6 or 7*
We know why our top performers are successful
48%
Our management team is highly effective in helping
our sales team advance sales opportunities
38%
Our organization is highly effective in allocating
the right resources to pursue large deals
31%
Our sales team focuses most of their time on actual
selling activity rather than non-sales activities
such as administration and customer service
21%
We leverage the best practices of our top
performers to improve everyone else
19%
0
10
20
30
Note: *Please rate your level of agreement with each of the following statements on a scale of 1 to 7, where 1=
strongly disagree and 7= strongly agree
6
40
50
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7. Key selling effectiveness pain points
Review of our survey results (III of III)
Systems & Metrics
Percent of Respondents rating 6 or 7*
Our sales compensation policies are
aligned with our business objectives
35%
Specific criteria have been established to
define a strategic account in our company
29%
Our sales management team is highly confident
in the data available from our CRM system
19%
In an average week, our sales force definitely
spends sufficient time with customers
19%
0
10
20
30
Note: *Please rate your level of agreement with each of the following statements on a scale of 1 to 7, where 1=
strongly disagree and 7= strongly agree
7
40
50
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8. Critical levers for sales force effectiveness
A holistic view of the sales function is necessary in order to identify
and capture sustainable performance improvement opportunities
1 Sales Strategy Definition
Sales Strategy &
Channel Alignment
Key  Market strategy
Sales
 Sales-led
Areas
growth strategy
 Channel alignment
and growth strategy
2
Sales Process and Management Improvements
New Lead
Generation
Customer
Retention
Sales
Conversion
 Content marketing  Solution sales
& program focus
(incl. ROI/TCO)
 Account
planning
 Lead generation
and qualification
 Proposal and
pricing
 Account
maintenance
 Pipeline
management &
forecasting
 Negotiation and
closing
 Customer upsell
 Customer and
 Win-back
channel value
proposition
 Innovation
3 Sales
Sales Organization & Management (incl. sales ops and comp)
Force
Performance Measurement
Enablers
Systems & Tools
Sales Force Performance Culture
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9. Critical levers for sales force effectiveness
1
Sales Strategy Definition: Companies often face challenges
prioritizing target markets and optimizing resources to penetrate them
Common Challenges
Key Questions to Consider
 Lack of understanding of target
markets, customer needs and
competitive differentiation
 Can management demonstrate an in-depth
understanding of its target market segments and
how it best meets customer needs?
 Opportunistic sales
 How much time do Sales Reps spend on core
markets vs. opportunistic sales?
 Lack of understanding of sales
drivers
 Misaligned resources
 Changing market dynamics that
lead to conflicts between the
company and its channel partners
 Difficulty in articulating a
company’s unique selling
proposition
 Can management demonstrate the ROI from sales
team investments on growth and profitability?
 Do growth and Sales plans reflect this
prioritization?
 Has the company’s share of key channel partners
deteriorated? Have channel partners shifted their
alliances?
 How clear is the value proposition? Can sales,
channel reps and key supporting team members
clearly and consistently explain it?
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10. Critical levers for sales force effectiveness
It is critical to have the sales model in place that best reflects the basis
of competition and aligns with the strategy and value proposition
Highly
Differentiated
Coverage Selling Model
 Needs based
Solution Selling Model
 High touch selling and support
(e.g., direct sales)
 High touch selling and support (e.g., mix
of direct and technical sales reps)
 Unique needs based
 Example: Pharmaceuticals
Highly
Commoditized
Degree of Differentiation
Sales Models: Degree of Differentiation vs. Product Complexity
 Success requires ‘challenger sales’
versus relationship sales talent and focus
Low Cost Coverage Selling Model
 General needs based
Mixed Coverage Selling Model
 Needs based
 Low touch selling and support (e.g.,
inside sales, partners, web, etc.)
 Low touch selling and support (e.g.,
direct, inside sales, partners, web, etc.)
 Example: MRO supplies
 Example: Enterprise hardware
Little / No Customization Not Technical
High Customization Highly Technical
Product / Service Complexity
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11. Critical levers for sales force effectiveness
2
Sales Process and Management: Sales process and capability
breakdowns may appear isolated and minor when viewed on an
individual basis, but can have a significant aggregate impact
Common Challenges
 Sales training programs fall short in
preparing sales reps to be effective in their
roles
 Sales and channel reps have trouble
determining qualified leads
 Informal allocation of qualified leads to sales
regions or channel partners
Key Questions to Consider
 How varied is individual sales rep performance? How
varied is individual channel performance?
 Are reps pursuing opportunities that are misaligned with
targeted sales?
 Is there a real-time feedback loop from the Sales team
on potential customer needs?
 Are sales opportunities all treated equally?
 Lack of formal customer feedback
 A ‘one size fits all’ process to support sales
reps complete proposals
 Sales reps have limited authority to negotiate
prices
 Do customers complain about Sales Reps’ inability to
make a timely decision on a request?
 Is there a real-time feedback loop between Sales and
Operations on order fulfillment and delivery?
 Does the Sales team know which customers and
customer segments drive sales and profits?
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12. Critical levers for sales force effectiveness
3
Sales Force Enablers: High performing sales teams are structured
to draw support from across the company to achieve sales goals
Common Challenges
 Channel marketing, development and
management are out of alignment
 Sales force structure, size and territory
coverage are out of alignment
 Cross-functional links are not strong
between Sales and support functions
 Performance/sales metrics and targets are
not aligned with drivers
 The sales force compensation plan is
misaligned
Highlighted on the next page
 Sales operations/support do not provide the
necessary leverage to the sales force
 Culture does not effectively support sales
performance and promote accountability
Key Questions to Consider
 Can management demonstrate the economics
associated with the sales force model and current
performance?
 Do support functions view the sales function as a
‘customer’?
 Do the sales performance measurement systems
provide frequent, actionable feedback?
 Does the sales force compensation plan reward Sales
Reps and managers for the desired outcomes?
 Can sales reps access the right information at the right
time while selling and serving customers?
 Are sales rep ‘stars’ celebrated? How are laggards
supported to improve performance?
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13. Critical levers for sales force effectiveness
3
The overall sales force compensation plan must align to the
business strategy
Guiding Principles for Administering a
Sales Force Compensation Plan
Sales Force Compensation
Plan Design Elements
 Keep the compensation plan simple; complex
plans can be interpreted differently and lead to
unwanted behaviors that were not foreseen when
the plan was designed
1
 Provide the sales force with a simple tool to use to
calculate their anticipated compensation
2
 Include sales management control provisions to
adjust for windfalls, which can set unrealistic
expectations and make the sale force
uncompetitive in the long run
 Include transition features in the sales force plan to
account for new salespeople, key account
changes or the launch of a new product
 Make sure the data collection process and tools
are in place to facilitate timely, accurate reporting
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Level of Pay
3
Fixed vs.
Variable
Performance
vs. Payout
4
Plan
Administration
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14. Critical levers for sales force effectiveness
In our experience, sales force effectiveness projects can quickly
accelerate sales growth and profits
Typical Benefits
 Analysis and benchmarking of the sales function status quo vs. best
practices in order to gain a clear view on the current situation
 Identification of specific, actionable opportunities to drive sales performance
improvements
 An assessment of the potential financial gains that can be captured through
sustainable improvements in the sales function
 Detailed activation plan that prioritizes ‘quick wins’ to minimize project
payback period and maximize ROI
 Objective, independent perspective on the key success requirements, risks
and internal change management issues to drive successful plan execution
and benefit realization
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15. Critical levers for sales force effectiveness
A Business Process Outsourcing (BPO) company, was struggling
with its sales force and needed to quickly turn around its
performance to ensure its survival
Company Situation
 A BPO organization was experiencing significant problems
with its sales force and its ability to generate revenue growth
and retain customers. Specific issues included:
– Declining market share
– Operationally and internally focused organization
– Mixed ability to articulate to customers its value
proposition
– Difficulty in cross-selling, up-selling, and targeted solution
selling
– Decentralized regional / country structure
 The revenue growth pressures, combined with a significant
debt load, put tremendous pressure on the company to turn
around its performance quickly, but also on a long-term
sustainable basis
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16. Critical levers for sales force effectiveness
Major workstreams centered around the design and implementation
of necessary and dramatic changes in the company’s sales approach
and organization
Major Workstreams
 Identified new opportunities to increase selling capacity without adding
resources
 Set up a Sales Transformation Office that defined work streams, mobilized
teams and pushed out across the organization the right sales priorities for
the business
 Designed a new sales organization that better aligned with the company’s
strategy and need to drive sustainable revenue growth
 Renewed focus on growing the pipeline and improving win rates on new
business / renewals
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17. Critical levers for sales force effectiveness
The company achieved early sales wins and established the
right foundation for long-term sales performance improvement
Results
 Benefits included:
– Increased senior management’s focus on the sales force and generating
revenue growth
– Grew the sales pipeline and increased the win rate for both existing and new
customers
– Brought on several new hires for key sales leadership roles
– Began to turn around the culture to be much more customer centric and
sales focused
– Generated momentum to complete sales force transformation
 Within three months of implementing the recommendations, the company
experienced significant, measurable sales improvements
– This included growth in the sales pipeline (up 50% y-o-y) and win rate (up
74% y-o-y)
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18. Closing statements
Closing statements:
 The recovery is providing
opportunities to reinvest in
sales capabilities and areas
that may have been
constrained during the
downturn
 Companies should approach
sales force effectiveness
improvement as a cultural
change to reinforce sales
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19. L.E.K. Contacts
Contact information
Chris Kenney
Managing Director
T: 312.913.6409
c.kenney@lek.com
L.E.K. Consulting
One N. Wacker Drive
Suite 3900
Chicago, IL 60638
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