The pundits (including Barrett) are always reminding sales executives of the need to plan. However, a major miscalculation made by many organisations is viewing their sales operations as purely tactical functions. The result – at best, sales plans become little more than operational imperatives bumping along one quarter to the next with no strategic intent.
More and more, the high cost of selling, longer lead times and the multitude of choice that customers have – coupled with rampant (and often aggressive and diversifying) competition, diminishing product differentiation and the subsequent prices wars – is taking its toll on businesses. Not only are salespeople being pressured to produce more sales revenue, at better margins, with less resources, but corporate return on sales effort isn’t what it used to be!
So, what has been inhibiting sales from being truly strategic? One major answer is that the Sales Operations of business and its sales planning is often relegated to a tactical level becoming the poor servant of the Marketing Strategy, rather than being Strategic Player in its own right.
So What Has Gone Wrong?
Dr. Peter Finkelstein, Barrett’s Head of Sales Strategy, points out that in the late 1950′s marketing started its encroachment on the traditional role of sales – i.e. managing customer expectations. The theory then was that marketing was closest to the buyer, understood what buyers wanted better than sales, and could therefore give the company direction regarding the products and services it should make to satisfy buyer needs.
For decades the “mission” imposed on sales by marketing has been to sell the company’s products and services. Customer concerns, relationships, pre- and post-sales service, as important as these are, were merely tools and techniques used to achieve the sale. Few salespeople were viewed as being responsible for, or even capable of helping customers integrate their purchase and optimise real value. Sales was then (and still is today) seldom included in resourcing or crafting solutions, even though sales is the primary link between buyer and seller, and salespeople probably know more about the buyer’s requirements than any other member of the value chain.
Dr. Peter Finkelstein explains that sales, rather than being driven on a tactical (day-to-day) basis as an element of the marketing mix, should be viewed as an independent Primary Activity in the value chain, with its own, unique support structure and mission.
The failure on the part of sales leaders to develop their own sales strategies is rooted in both the one dimensional view of selling as a tactical activity and a degree of myopia in understanding the true role of sales, in the organisation’s value chain.
Selling is not merely a channel for marketing to reach its target! It is a primary activity that seeks out, creates and then harvests business opportunities offering fair value as an exchange! In reality, marketing (if it is to be truly effective) should be supporting the sales effort, rather than the other way around. In strategic selling terms the old supply-driven 4Ps of marketing (product, price, place & promotion) and has been replaced with a more customer-centric model – SIVA (Solutions, Information, Value and Access).
Dr. Peter Finkelstein cites that S.I.V.A. is a functional, customer-driven model that encourages sales to take a strategic view of the segments within the markets it targets. S.I.V.A. recognises that sales has a strategic role to play in sustainable competitive advantage. The S.I.V.A. model provides a demand/customer-centric alternative to the well-known, supply-side model of the 4P’s (product, price, place, promotion) of marketing, and clearly defines a more strategic role for sales – something that the 4P’s model has failed to do!
Companies in today’s customer-driven economy survive by producing goods that buyers are willing and able to pay for. Consequently, ascertaining buyer demand is vital for future viability and even existence as an on-going concern. But merely starting and ending the value chain with a customer focus and ignoring the middle portion (sales, logistics and operations) does only half the job.
In the Sales-Driven approach, consumer wants and needs are the drivers of all strategic selling decisions. No strategy is pursued until it passes the test of consumer acceptance. Every aspect of a sales segment offering, including the nature of the product itself, is driven by the needs of potential buyers. The starting point is always the buyer. The rationale for this approach is that there is no point spending funds developing products that people won’t buy.
For 40+ years Dr. Peter Finkelstein has worked with thousands of business around the world helping them develop and implement their sales strategies and achieve business transformation. This has given him firsthand experience of the challenges many industries and markets face, especially now that the world of business is changing so dramatically. He points out that the historically lopsided view of selling, as part of the marketing mix, has in many companies, become “conventional wisdom”.
This “conventional wisdom” is now a distinct danger to many organisations because it is not, in itself, helping them navigate their way successfully into the 21st Century. Dr. Peter Finkelstein says that what organisations need to do is to unshackle their sales operations from the underbelly of marketing and stand next to marketing as peers. He says that Sales Operations need to turn reactive tactical sales planning into proactive strategic sales thinking driving sales strategies which, in turn, allows organisations and their respective sales teams develop a sustainable competitive advantage and increase opportunities for incremental sales success and enhanced profit improvement.
It’s time for Sales Strategy.
Remember everybody lives by selling something.