Business

The strategic sales organisation

Herman Alvaranga

Wednesday, March 14, 2018

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“The strategic sales organisation is an attempt to capture the range of changes which may transform the traditional sales organisation into a strategic force, impacting both on the ability to implement marketing strategy, but also providing leadership in the shaping of that strategy.”

— Hooley, Piercy (2017)

 

While the recognition of the strategic importance of marketing and its acceptance in the boardroom is well on the way, the sales and account management field is in the early stage of a shift in approach from tactical to strategic.

The processes and structures needed to enhance and sustain value delivery to customers through the new sales organisation will require careful evaluation and appraisal that extends to domains far beyond those traditionally associated with selling activities. Piercy and Lane (2009) have identified the following tools for practical application in the strategic sales organisation, which for convenience, I'll call the 5Is: involvement, intelligence, integration, internal marketing, and infrastructure. Let's take a few minutes to discuss our 5Is.

 

1. Involvement in strategic decision-making

As customer demands for superior seller relationships continue to evolve and escalate, a distinct new role is becoming critical in selling organisations — the strategic management of the relationship with the customer.

Involvement of the sales organisation in strategy has two aspects. The first strategic sales issue is concerned with developing a perspective on the sales organisation, which does not focus simply on the tactical management of transactional sales processes, but examines the relationships formed with different types of customers as the basis for long-term business development.

The second strategic sales issue is concerned with the role of sales and account management in interpreting the customer environment as a basis for strategic decisions. The shift in thinking required is from the tactical management of sales transactions to focus on the relationships formed in different ways with different types of customers as the basis for long-term business development (Olson et al, 2001).

 

2. Intelligence and knowledge to add value

One clear and repeated demand by corporate buyers is salespeople should demonstrate deep knowledge of the customer's business, such that they can identify needs and opportunities before the buyer does. The deployment of such superior knowledge and expertise is a defining characteristic of the world-class sales organisation in the buyer's eyes.

The buyer logic is straightforward: if the seller cannot bring added value to the relationship by identifying new opportunities for the buyer to gain competitive advantage in the end-use marketplace, then the seller is no more than a commodity supplier, and can be treated as such, and the product will be purchased on price and technical specification.

 

3. Integration across functional boundaries

Success in the new marketplace increasingly demands the integration of a company's entire set of capabilities into a seamless system that delivers superior customer value — what has been called elsewhere 'total integrated marketing' (Hulbert et al, 2003).

This logic is based on the observation that superior performing companies share a simple characteristic: they get their act together around the things that matter most to their customers and they make a totally integrated offer of superior value in customer terms.

Management attention must focus on the actual and potential contributions of functional units and departments, and third party suppliers in alliances and networks, in delivering superior value to customers and how to improve the integration of these activities.

Rather than managing only the interface with the customer, the reformed sales force must cope with a range of interfaces with internal functions and departments, and increasingly partner organisations, to deliver value seamlessly to customers.

 

4. Internal marketing

One role of the reformed sales organisation is likely to be 'selling' the customer to employees and managers, as a basis for understanding customer priorities and the importance of meeting them, as an activity that parallels conventional sales and marketing efforts.

 

5. Infrastructure for the new sales organisation

The role of the transforming sales organisation is unlikely to be implemented effectively through traditional sales force structures and processes. They were designed for a much simpler, more pleasant era. The old sales force must be redesigned to meet the new needs. New definitions of the sales task will require substantial shifts in the way that the sales organisation is managed.

Change in the infrastructure supporting the strategic sales organisation is likely to span organisation structure, performance measurement systems, competency creation systems, and motivation systems — all driven by the definition of the new task and role of the sales operation (Shapiro et al, 1998).

 

THE LAST WORD

My observation is that in companies were the head of sales is just one tier below the CEO, and they are provided the requisite structure, revenues have jumped.

Does this mean that the organisation should become sales driven? No. Neither should it be customer-led. Instead the marketing approach is resource-based, while the transformed sales force goes beyond selling solutions to known problems, and becomes a cadre of consultants with a deep understanding of their business and an even deeper understanding of their client's business.

So, where on the map is your sales organisation? Still discussing features and benefits, or creating exceptional value for your company?

 

Herman Alvaranga FCIM, MBA, is president the Caribbean School of Sales & Marketing (CSSM). For more insights on sales and marketing please visit his blog at www.cssm.edu.jm .

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