presents: driving growth though distribution strategy and sales management students to start-ups...
Post on 21-Dec-2015
214 views
TRANSCRIPT
Presents:
Driving Growth Though Distribution Strategy and Sales Management
Students to Start-UpsEntrepreneurial Skills Workshop Series
Students to Start-UpsEntrepreneurial Skills Workshop Series
AgendaAgenda
• Distribution Channels– Examples– Channel selection– Channels management
• Sales Management – Sales priorities– Sales management model– Building sales capabilities– Sales productivity
• Case Studies
Strategic InnovatorsStrategic Innovators
It was not just what they sold but, how they sold it!
(reconfiguring the value chain to achieve lower costs and/or better service)
Distribution Channels - Examples Distribution Channels - Examples
• Field sales reps• Corporate resellers• Master or local distributors• Integrators• Value-added resellers• Manufacturer’s agents• Brokers• Franchises• Telemarketers• Inbound telesales agents
• Internet sites• Extranets• e-Marketplaces• Direct Mail• OEM’s• Retail• Kiosk’s • Strategic alliances• Agents (consultants,
affiliates, etc.)
Channel Continuum (illustrative) Channel Continuum (illustrative)
ValueAddOf Sale
Cost per Transaction
High
Low
HighLow
InternetInternet
Tele-marketing
Tele-marketing
RetailStoresRetailStores
Dis-tributors
Dis-tributors
VAR’sVAR’s
FieldSalesFieldSales
“Low Touch Channels”
“High Touch Channels”
Direct ChannelsIndirect Channels
Direct
Sales
Channel
Channel Selection…Channel Selection…
• Channel strategy must start with the customer– Who are our target customers, what do they need and how do
they want to do business with us ?– What drives them to make a purchase?– What kinds of experiences are they seeking from their vendors?– What has real value to them in the sales process – value their
willing to pay for?– What channels do they use today, and what channels are they
planning to migrate to over the next year?– What specific actions would cause them to increase significantly
their volume with your firm?
Channel Selection…Channel Selection…
• Channel strategy must be aligned with the maturity of the market– Do you need to develop a new market or fulfill needs within an
established market?– Are there dominate vendors or distribution channels already
established?– Are you targeting a narrow or broad market?– Do you have the funds necessary to build all the required services
(pre and post sales) to compete? Can you spread the costs over enough volume to be competitive?
– Do you have a narrow or broad product offering?– Who are the key purchase influencers?
Channel Selection…Channel Selection…
• How you sell has to fit with what you are selling– Are the channels selected the ones that customers actually use
to buy the things that you are selling?– Channels chosen must make economic sense, given what you
are selling– The channel selected must be well suited to the complexity of
your offering – You can not be everywhere at all times for every customer
• There is a trade off between market coverage and control
Sales Control vs. Coverage…Sales Control vs. Coverage…
Control Coverage
Goal
ChannelApproach
“We want to dominate and lead in our core customer base, to protect the brand, and control the relationship with the customer”
“We want to reach and serve new markets and customers, and to grow as fast as possible”
• Field sales force
• High-end partners, thoroughly trained, with binding contracts covering all aspects of the sales process
• Retail, mass merchants• Telesales• Distributors• Value-added resellers• Internet• Strategic alliances• 3rd party service agreements• Etc.
Source: “Go to Market Strategy” by Lawrence Friedman
Market Coverage Example 1Market Coverage Example 1
Large, enterprisecustomers
Mid-sized accounts
Small office / home office
Simple, “off the rack products
Mass-customized products
Markets
Products
Complex, unique solutions
Source: “Go to Market Strategy” by Lawrence Friedman
(unserved market)Mail order catalog
Corporate Resellers
VAR’s, Solution Partners
Direct, Field Sales Reps
Market Coverage Example 2Market Coverage Example 2
Large, enterprisecustomers
Mid-sized accounts
Small office / home office
Simple, “off the rack products
Mass-customized products
Markets
Products
Complex, unique solutions
Source: “Go to Market Strategy” by Lawrence Friedman
Direct, Field Sales Reps
Business partners+
Telechannels+
Web sites
Integrated Multi-Channel Model - Single ChannelIntegrated Multi-Channel Model - Single Channel
DirectField Sales
BusinessPartners
Tele-channels
DirectMail
LeadGeneration
Qualification
Internet
SalesTask
Channel
Bid &Proposal
Negotiation/Close Sales
Fulfillment CustomerSupport
Sales Cycle
Co
st
Source: “Go to Market Strategy” by Lawrence Friedman
Integrated Multi-Channel Model - Reduce Cost & Increase SalesIntegrated Multi-Channel Model - Reduce Cost & Increase Sales
DirectField Sales
BusinessPartners
Tele-channels
DirectMail
LeadGeneration
Qualification
Internet
SalesTask
Channel
Bid &Proposal
Negotiation/Close Sales
Fulfillment CustomerSupport
Sales Cycle
Co
st
Source: “Go to Market Strategy” by Lawrence Friedman
Integrated Multi-Channel Model – Example 1Integrated Multi-Channel Model – Example 1
DirectField Sales
BusinessPartners
Tele-channels
DirectMail
LeadGeneration
Qualification
Internet
SalesTask
Channel
Bid &Proposal
Negotiation/Close Sales
Fulfillment CustomerSupport
Sales Cycle
Co
st
Source: “Go to Market Strategy” by Lawrence Friedman
(Over $25,000)
(Under $25,000)
Integrated Multi-Channel Model – Example 2Integrated Multi-Channel Model – Example 2
DirectField Sales
BusinessPartners
Tele-channels
DirectMail
LeadGeneration
Qualification
Internet
SalesTask
Channel
Bid &Proposal
Negotiation/Close Sales
Fulfillment CustomerSupport
Sales Cycle
Co
st
Source: “Go to Market Strategy” by Lawrence Friedman
Sales support for key accounts
Partner Channel Development…Partner Channel Development…
1. Define the scope of the channel
2. Define partners’ role in the sales process
3. Develop robust and attractive channel policies
4. Build a strong base of partners
5. Build a strong channel support infrastructure
6. Measure and manage channel performance
Source: “The Channel Advantage” by Lawrence Friedman
What are you selling… to whom?What are you selling… to whom?
Customer Fragmentation
Value Proposition Complexity
High
Low
HighLow
CallEfficiencyDominates
CallEffectiveness
Dominates
Sales efficiency & effectiveness…Sales efficiency & effectiveness…
Definition
TypicalPerformanceLevers
DrivingMechanisms
SampleMeasures
Sales Efficiency Sales Effectiveness
How to get in front of the right customers, for the right amount of time, at a minimum cost
• Territory design / coverage• Activity reporting systems• Compensation systems• Sales support
• Systems• Structures
• Coverage• Call rates• Cost per call
Once there, how to maximize sales potential
• Selling skills• Account strategy• Application knowledge• Effectiveness models
• Recruiting• Training• Coaching
• Sustainable margins• Repeat business
Source: Huthwaite, Inc. 1988
Setting objectives / priorities…Setting objectives / priorities…
CurrentBusiness
NewCustomers
More FromCurrent
Customers
More of current product use?Cross sell other products?Higher prices / better product mix?Eliminate unprofitable accounts?
What kind of customer? - Size - Type of business - Attitude / usageWhere? What geography?What products / services?
Requires different sales skills…Requires different sales skills…
“Hunters”CurrentBusiness
NewCustomers
More FromCurrent
Customers
“Farmers”
Sales management modelSales management model
Strategy/Mission
SalesSupport
SalesForce
Deploy-ment
IndividualSellingSkills
Coaching & Super-
visionRecruiting& Training
Infor-mation
Resources
Motivation& Compen-
sation
Sales Strategy
EffectivenessEfficiency
Capability Building
What is the value proposition and the role of the sales force in its delivery?
Is the sales force (and channels) organized for optimal coverage of selected markets?
Does the sales force have adequate coaching & supervision?
Does the recruiting and training match selling skill requirements?
What critical selling skills are required for the sales role in the value proposition?
Is support adequate to maximize the selling effort?
Does the incentive compensation plan meet management’s objectives and pay the sales force fairly?
Are information systems being fully utilized to support the selling effort?
Building your sales capabilities…Building your sales capabilities…
Motivate & support sales force
Develop skills for effective selling
Organize for efficient coverage
Develop sound selling strategy
Clear segmentation
Explicit objectives, goals and priorities
Winning selling proposition
Realistic time frame/expectations
Right structure
Right size
Territory / account
Assignments for adequate coverage
Define necessary skills
Develop training, recruiting and coaching programs for:
• Product knowledge• Buying process• Sales methodology• Planning & execution
Align measurement and reward systems:
• Compensation• Recognition
Provide necessary organization support (systems, etc.)
Example sales productivity model…Example sales productivity model…
Sales Force Productivity
Profit contributionper $ direct selling cost
= $4
Selling Margin
40% profit contribution margin
Selling Rate
Revenue hr. actual selling time
= $1000
Sales Force Utilization
Hrs actual selling timeper day per rep
= 5
Direct Selling Cost
$500 / day per rep
Effectiveness
Profit contributionhr. actual selling time
= $400
Efficiency
Direct selling costHr. actual selling time
= $100
●—●
●—●X
• Compensation plans• Sales tools• Value proposition
• Skills assessment• Territory / opportunity planning• Partnerships
• Reduced overhead costs • Centralized sales admin• Sales force automation
Case study #3Case study #3
5 Year Old S. CA Professional Services Firm5 Year Old S. CA Professional Services Firm
Additional ResourcesAdditional Resources
BooksThe Channel Advantage, Lawrence G. Freedman, Timothy R. Furey
Go To Market Strategy, Lawrence G. Freedman
PeopleUCI Center for Entrepreneurship and Innovation [email protected]
SCORE Orange County www.score114.org
UPCOMING WORKSHOPS
April 4th Nuts & Bolts of Business Structure and Licensing
April 18th Refine Your Unique Value Proposition
Students to Start-UpsEntrepreneurial Skills Workshop Series
Students to Start-UpsEntrepreneurial Skills Workshop Series