An optimized sales network is crucial to a company’s long-term success. On the front lines of the marketplace, sales teams are charged with maximizing profit while delivering the best possible value to customers. Firms rely squarely on them to generate revenue, yet how often do they analyze whether they’re operating at full potential?
Not often enough, according to Prof. Julián Villanueva, head of IESE’s Department of Marketing. “Companies will spend countless hours poring over financial statements, but few dedicate the same amount of energy to methodically assess the performance of their sales structure,” he notes.
This is where a marketing audit comes into play. According to Phillip Kotler — also known as the “father of modern marketing”— this mission-critical review is a “comprehensive, systematic, independent and periodic examination of a company’s marketing environment, objectives, strategies and activities.”
Recognizing this common oversight in global organizations, Prof. Villanueva, along with Profs. Francisco Iniesta and Juan Manuel de Toro, developed a five-step framework to help sales directors and general managers evaluate the effectiveness of their sales function:
- Sales strategy: A solid sales strategy underpins everything that follows. Robust market research and management discussions can point companies in the right direction by offering market insights and helping them define their target market, unique value proposition, pricing strategy, positioning, and go-to-market plan.
- Sales structure: Companies have limited resources to market their value proposition, so an efficient sales structure divided by product lines, territories and clients is key. Sales specialists need to be carefully selected, trained and armed with the right tools. Another critical component: the design and monitoring of the sales process. Lost productivity and poorly managed leads carry a hefty price tag: at least $1 trillion annually by some estimates.
- Policies and procedures: A fine-tuned sales network has several key ingredients: excellence in hiring, proper training, attractive incentives and remuneration packages, non-economic motivational schemes, close supervision, and regular performance appraisals to retain only the best talent.
- Sales execution: It all may look good on paper, but sales strategies are only successful when they are exceptionally executed. While the sales director defines the overall direction, experience confirms the crucial role of mid-level sales managers in developing the potential of individual salespeople.
- Measuring and monitoring results: If there’s a solid foundation for the first four bases, good results should follow. A sales scorecard with key performance indicators, or KPIs, will offer insights to assess the sales team’s performance and detect areas for improvement.
Without a doubt, companies elevate their ability to excel in fast-paced, competitive markets when they closely monitor the efficacy of their sales force. As Kotler observed, “The sales department is not the entire company, but the entire company should be the sales department.”
IESE’s “Strategic Sales Management” focused program is a three-day immersion designed to help sales directors, CMOs and senior decision-makers accelerate the performance of their sales force. The school’s campus in Madrid will host the next edition January 21-23, 2020.