the sales learning curve
TRANSCRIPT
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Aman ChopraAkansha Singh
Anubhav Rawat
Neha Chowdhury
Prateek Malpani
THE SALES LEARNING CURVE
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What is the need of a sales learning curve
Twenty-five years ago the principal risk increating a new company or a new product is,underlying this was the belief that if we buildit, they will come.
The old assertion has become the newquestion: When we build it, will anyonecome?
Not estimating or analyzing the audienceusually results in an overinvestment in sales,disappointing revenues and excessiveconsumption of cash.
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What is a Sales learning Curve
When a company launches a new product, the temptation is to immediately
ramp up sales force capacity to acquire customers as quickly as possible.
A large sales staff hinders more than it helps a company climb the curve.
Instead the firm should focus first on organizing itself so it can learn from
customers and respond to them.
Hence entire organization needs to learn how customers will acquire and useit, a process we call the sales learning curve.
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Sales learning Curvefor a new market enterant
Sales learning Curve fora follow on product,
existing market
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SLC Process
The sales learning process unfolds in three phaseseach requiring a different size
sales force with different skills:
1. Initiation:
Youve beta-tested the product and have few potential customers. Hire three to four
salespeople to learn how customers will use the product and to support other parts
of the company in refining the offering as well as marketing and selling strategies.
Look for salespeople who: Communicate well with teams from other functions
Tolerate ambiguity
Have a deep interest in product technology
Can bring customers together with various functional teams in your firm
Can develop their own sales models and collateral materials
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SLC Process Cont.
2. Transition:
Youve acquired a critical mass of customers, and sales are accelerating. Keep your
initial sales team focused on learning.
Add sales reps who can operate effectively within an evolving sales model but who
dont necessarily have the analytical and communication skills the initial team
required.
3. Execution:
Now bring in traditional salespeopleand arm them with a territory, sales plan, price
book, and marketing materials to take orders.
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Experiencing the ESLC in a Startup Company -- Scalix Corporation
Scalixdeveloped a product using as its core HPsOpenMail system and jumped into the go-to-market
stage
Scalixs initial strategy was simple: recruit a high-
powered enterprise-sales veteran and sell direct toCIOs at large enterprises. They rapidly extended and
expanded the enthusiasm and interest for the Scalix
product at the CIO-level.
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Problems faced by Scalix
Scalix discovered a number of unanticipated problems.
1) It became evident that the CIO was not the decision-maker for
these companies email vendor.2) Scalix discovered that many large companies needed to get
more comfortable with Linux before they would run email on it.
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Steps taken as per SLC to correct its course of action
In mid 2004, it overhauled its go-to-market strategy to hit the
Linux evangelist and early adopter community first, with a
particular emphasis on smaller targets in the higher education
and public sectors, segments where Linux adoption wasstrongest
These adjustments are typical of a company learning and
changing as it interacts with real customers using the companys
product to do real work.
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Problems
Company had expected the product to be mature andready for prime time, but in actuality there were productstability and functionality issues that had to be dealt with.
Frustration for sales people used to selling mature products.
Sales force exposed to early product issues, no significantadditional revenue opportunity to compensate for this.
Experienced sales reps rebelled against new product andcommission structure.
Concerns that new product would be threat to hardwarevendors.
Low revenue - Product abandoned
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New Product strategy
Product Development
Marketing
Sales