The Problems with "Lumping"; Separate the Four Core Sales Functions
This post builds off a prior one, “We have a different sales structure here, the sales people just sell!”
Building a highly productive, modern sales organization requires increasing specialization - and frankly, it's a big reason salesforce.com has such an amazing sales organization. Though they take it to the extremes - you wouldn't believe the number of different kinds of sales groups, inside and out, that salesforce.com has :)
One of the biggest sources of lost productivity is the practice of lumping a mix of different responsibilities (such as raw web lead qualification, cold prospecting, closing, account management...) into one general "sales" role.
Issues contributed to by lumping
- Lack of focus: Salespeople juggle too many responsibilities, reducing their ability to get things done. Salespeople have a reputation for being ADD - how does adding more responsibilities help that? For example, qualifying web leads is a much lower value distraction for salespeople from managing current clients. And managing a large current client base is a distraction from closing new clients!
- Talent development: It's challenging to bring in raw talent and develop them with a progressive career path. This is unfortunate, because homegrown talent usually ends up being the best! (also see "Where do I hire great salespeople?")
- Metrics: It's harder to break out and keep track key metrics (inbound leads, qualification and conversion rates, customer success rates...)
- Problem-solving: When things aren't working, lumped responsibilities obscure what's happening and make it more difficult to isolate and fix issues with accountable follow through.
The four core functions / themes
Here are four basic themes (I say 'theme' because even each of these functions can be sub-divided even further as your organization gets bigger):
- "Inbound" Lead Qualification: Commonly called Market Response Reps, they qualify marketing leads coming inbound through the website or 800#. The sources of these leads are either marketing programs/SEO or organic word-of-mouth. Presentation: Inbound Lead Management Best Practices
- "Outbound" Prospecting/Cold Calling 2.0: Commonly called Sales Development Reps or New Business Development Reps, they prospect into lists of target accounts to develop incremental new sales opportunities that don't already exist, that require a lot of proactive work. These outbound reps qualify their new sales opportunities and then pass them to Account Executives to close. Presentation: Introduction to Cold Calling 2.0
- Account Executives: Quota-carrying closers, either inside or in the field. As a best practice, even when a company has an Account Management/Customer Success function, Account Executives should stay engaged with a new customer past the close and until they are deployed/launched. Also see "Sell To Success (The All-Natural Close)"
- Account Management / Customer Success: client deployment and success, ongoing client management and renewals. In today's world of frictionless karma, someone needs to be dedicated to making customers successful - and that is NOT the salesperson!
When to specialize?
I frequently hear "we're too small to specialize yet". Every company is so different, it's tough to generalize. One rule of thumb is: "sooner than you think"...even if you just have a handful of Account Executives. A second rule of thumb I like is the 80/20 rule - when your reps, as a group, are spending more than 20% of their time on a non-core function (web lead qualification, cold account prospecting, account management), break out that function into a new role. Yes, I said 20%!
Here are a couple examples. Regardless of how many Account Executives (AEs) you have, if you're getting a couple of hundred inbound leads per month you should have or planning to have an inside Market Response Rep qualifying them for the AEs. Or if you already have 3-4 AEs, rather than making your next hire another AE, consider an outbound Sales Development rep who can spend 100% of their time working to feed the AEs.
Questions? I'll answer in the comments
This is really just a first introduction to the topic - we could drill ad naseum into the mechanics, metrics, comp, career paths... (as I said, nauseum) of the different groups and how the relate to each other. If you have specific questions, post them in the comments and I'll do my best to answer them.
Puzzle pieces
Finally, as with every other idea in this blog... take this with a grain of salt. You'll have to pick and choose which puzzle pieces here are right for you, and how they fit into your business. My rule of thumb from experience is the 80/20 rule: 80% of the puzzle pieces here can should be plugged into your business, and 20% shouldn't or should be heavily customized.
8 comments:
Hmmmm….so much to think about. I like the overall concept but the challenges in implementation for a group of less than say - 20 reps - could be overwhelming.
Now, my view is tainted by the fact that we only work with technology companies but the average inside sales team ranges from 4 to 10 reps. There are exceptions of course but I am talking average.
Hiring great candidates, coaching them effectively and collecting metrics that will allow them to make meaningful decisions is a major challenge for every IS Manager. Multiply that X 4 and ouch!
But, as you said, lots to think about. I look forward to following the post.
GREAT point Trish about the IS (Information Systems) requirement. Pre-salesforce.com and other web-based CRM systems, it might have been to painful to meaningful break out different functions. Now, the easy part is breaking out the different sales functions within the CRM system, and the bottleneck is managers’ lack of experience and expertise in operationally managing the different functions. Pretty much every sales team I’ve seen on salesforce.com that had even 3-4 people needed would benefit greatly from specialization with a next hire.
Great post, Aaron. I’m still digesting. I’ve sent this around to some executives and sales management types to get their opinion. Do you have case studies that support these conclusions?
As a sales rep in a fairly short sales cycle, I see some challenges in doing the hand offs. But, I also think there’s amazing strength in team selling, which I’ve only ever done ad-hoc. I definitely see the value of having closers stay focussed on closing and relationship builders being focussed as account managers. Good qualifiers are hard to come by since there’s hard questions to be asked and many people don’t have the ability to ask them with permission and tact. So I definitely see how the qualifiers have a unique, but usually undervalued sales skill too. Lead nurturing is a tough skill too, that requires the ability to identify what part or attribute of a product solves which prospect’s problems. Then, there’s the unique people that can cold call all day and keep trucking despite rejection after rejection. That’s certainly a skill that way too many salespeople don’t have.
Every sales rep has different skills and motivations (it’s not always $) and I can see how different salespeople would excel in different roles.
When all of these roles are munged up, it seems that only the reps with all of the right skills and the right motivation will be top performers. But, by splitting up roles, I can see how a lot of different people can contribute by leveraging their unique skills and motivations.
I can also see how this really creates teamwork and a relentless focus on customer needs, as it’s mandatory for reps to really be a team and really only pass people through the pipeline that are going to be good prospects and ultimately, great clients.
Thanks for starting this conversation. I look forward to other people’s perspectives.
I tend to agree with you on this, but there is a downside.
When you hand a prospect off across four different “sales” people in their lifecycle, you lose a ton of customer knowledge in each step in the process which costs you money. In addition, the customer gets irritated with having to RE-educate each new sales person along the way.
Bh.
@ Peter -
Glad the mental wheels are turning!
@ Brian -
I understand what you’re staying about re-educating the customer. However, 80%+ of the time, when a single salesperson is handling all (or most of) the functions, customers are MORE upset, for a variety of reasons. Salespeople don’t follow up on all their leads, frequently drop the ball, and don’t give current customers the amount of focus and attention desired. It’s just impossible for a salesperson to stay organized enough to satisfy everyone (prospects, their sales manager and customers).
It’s very doable to create smooth handoffs between the functions. It just takes commitment, common sense CRM design and usage, a focus on process, training, etc. Happy to discuss anytime.
@ Everyone
Also, as a final note, the smaller your customer lifetime value (the closer you get to B2C values), the more careful you have to be in considering your execution. Edge cases in the grey area are tricky. So it’s up to your judgment how to best take this ideas for use in your own company…and decide how much of the process is automated versus human-directed. But remember, there are still a LOT of customers who want to interact with humans!!
It is genuinely challenging to find great young sales talent out there. Great sales people are developed over many years of experience and learning from senior salesman, just as in so many other positions. The key to training internally is not just power point presentations that slam you with loads of information. You must teach, try, and implement. Mock calls are great to use. A couple other valuable tips can be learned here if you’re in the Los Angeles Area… http://www.OneCoach.com/
Separating the core functions should increase gross profit or it doesn't make sense.
The real payoff is replacing a human role with technology to achieve greater productivity and profitability.
It is clear that each one of these roles has completely different skill requirements- although my personal belief is that anyone actively cold calling in 2008 is wasting their time, effort, resources and starting a relationship by ticking off the customer.
Nice article.
Agree we must build a "modern sales force".
Keep up the good work.
Nick
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