Five Dimensions of a Sales Organisation
Last week we looked at the first of the five dimensions of a sales organisation-company results. Today we will look at a critical dimension which often does not get enough attention-customer results.
Why are your customer results important? Because their results can affect your results! May I tell you a very short story that I recall from a previous life?
Over two decades ago, before I became a business development consultant, a salesman I knew bragged over lunch with a colleague how skilful he was at closing sales. He had just tricked a businessman (from another city) into buying three years’ supply of a product all at once and he got full payment in cash! His only concern was that he could never face him again. Can you image what that purchase by an unsuspecting customer may have done to his small business?
Demonstrating values rather than products
That was then. We would love to believe that today’s sales people, especially those in B2B, have moved on and now focus on showing the economic value to the customer (EVC). Indeed, we expect that they, as part of a successful sales organisation have:
- Deep customer relations and customer trust.
- High customer retentions and low defection.
- A loyal customer base.
The risk in controlling reseller mark-ups
My own experience is that far too often sales organisations claim that they have excellent relations with their customers, but it is only superficial because their pricing policy shouts a different message. As Doyle and Stern (2006) remind, “A business is likely to be concerned to influence the mark-up taken by its resellers. After all, a business has four ways it can increase its total profit:
- Increasing its sales volume.
- Cutting its costs.
- Raising the price its products and services can command in the market.
- Raising its price to its resellers without them in turn raising the price to customers.”
But Doyle did not tell us that you may be controlling reseller prices at your own peril. I once knew a sales organisation that raised their price but their customers could not do likewise. Their biggest customer, faced with reduced margins and an unlikely reduction in sales if they carried a competing product in the same category, promptly split the business with a competitor. The supplier was perceived as not caring enough about the results of their customers and took a long time to regain trust and lost market share.
Trust is the key to relationships. It can’t be bought. It must be earned. And in the long run, helping your customers to achieve their desired result while you pursue yours may be your best competitive advantage.
Finally, I would like to thank my readers who have been contacting me to discuss the Dimensions of a Successful Sales Organisation. Can we look at Sales Activities next week as we continue this series of five articles?
Herman D. Alvaranga is president of the Caribbean School of Sales Management. Shrewd managers call us instead of looking outside the region for world-class sales and marketing consulting and sales force transformation.