A White Paper by Scott Andrews,
Founding Director of ARRiiVE TM
How Well Prepared Are You To Face Your Company's
Board of Directors?
Does that headline make you nervous? How well can you forecast future sales?
90% of
organizations in our targeted industries are not structured to
systematically form proper relationships with their customer. Without that structure, and without a process
for defining dominant buying motives, you won't hit your numbers. How does your organization look?
If
you don't map to your customer, you won't have the critical relationships in
place to ensure sales success.
"Team structure is
the most critical component to sustaining sales success." --
Richard Boren, former VP of Sales at Instantis, Verio, and MicroAge
Be smarter.
Get structured now.
If
you knew there was a business structure model where you could match your company's
sales team and other critical personnel with your customer's key people and thereby improve your
relationships and
quality of customer experience with your company, how quickly would you take
action? Would you take action now?Yes?
Then you're in the right place! Read on to learn about this
problem/solution.1. Understanding The
Challenge
Today's sales organization:
Salesperson to CustomerThe Direct
One-To-Many Model is the standard sales model used in
most organizations across the world. The challenge
most organizations face is, in fact, systemic. |
| The typical organizational sales structure utilized in
common practice is known as the
Direct Sales (one-to-many) Model. This results in several challenges:
including (a) the ability of the salesperson is paramount to success with
a customer, (b) senior management may or may not be notified of urgent
factors in growing or retaining business with the customer, (c) if the
salesperson leaves the company, the customer may leave too.
Worse yet, companies who have built solid
relationships across functions of each peer-to-peer company stand more
likely to win large major account RFP (request-for-proposal) bidding wars. If one of your top
prospects or account growth opportunities is currently in an RFP battle,
you might be nodding (and frowning) as you read this.
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The Direct Sales Model leads to
dysfunction, chaos, and inability for leaders to recognize threats and
opportunities. It also results in blown sales opportunities (and missed
forecasts).
Organizations who are utilizing the Direct (one-to-many)
Sales Model are leaving a lot of responsibility up to the salesperson. In
our experience, many salespeople do not handle the responsibility well.
Account relationships must be maintained in order to nurture company cash
cows, or the company runs the risk of those cows turning into butcher
fodder (column fodder in the case of the RFP bidding war). Worse yet,
when the salesperson leaves a firm, the relationship and all the history
often disappears with them, thus leaving the organization's ability to
remain proactive minimalized. The
success of the organization's selling opportunities requires more sets of eyes,
ears, brains and heart in order to gain true insight into the customer's needs. If
an organization must know its customer better in order to sell more, then
its leaders ought to consider implementing a more modern, collaborative
structure. |
2.
The Internal "Diamond" Mechanics of Organizations:
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There are many other forces at work within
the sales environment which influence how organizations interact with outside
organizations. These are forces are described as the internal
"Diamond" mechanics of sales account management structure.
You will notice Sales, Operations, Management, and
Administrative Teams are all considered critical to customer relationships
in the "diamond" model.
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Figure 2. Visual
Representation of Internal Company "Diamond" |
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3.
Examination of the Direct Model (Herein Lies The Structural Problem):
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When we examine the traditional direct
selling model, the sales person is responsible for selling the account.
The salesperson usually gets locked in with a buyer for
RFP responses, and occasionally meets with other account contacts. But
there are many other forces at work within the sales environment. These forces are NOT taken into account in the Direct Selling Model, where
the salesperson (one) is focused on the client contacts (the many). As you
can see, this model may leave critical relationships hanging in the wind. And that
means it is only a matter of time before your salesperson reports that you
lost the account (or Proposal).
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Figure 3. One-to-Many
Direct Selling Model |
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4.
Business Problems Related to Poor Team Structure:
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When we recognize what happens when we are
relying solely on a salesperson to customer relationship, we start to see
the compounding nature of retaining and growing our most important assets: our
customers! It is six times harder to get a
new prospect to be a customer than to grow business from existing
customers.
Therefore, if we are not properly aligned with our
customers, we are likely missing out on opportunities and also at risk to
losing to a competitor's solutions.
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| Figure 4. Expanding
Understanding Of Business Issues At Risk |
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CEO/CFO positions have been replaced
because of problems that grow from this basic structural misalignment,
such as failing to hit forecasts, posting a loss, or failing to
capitalize on new market opportunities. As a result, this
structure may affect the entire organization's success. |
5.
A Visual
Representation of The Sales-Diamond Model:
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It was when I examined my past and reviewed all of my largest
major account wins (and losses) that I noticed what was present when I won
large deals: tiered, peer-to-peer relationships!
It seems so obvious, but it really is up to the smart
salesperson to manage this. If managers manage this process, the
salespeople may likely rebel against management and mask behavior in order
to "appear" cooperative. So, this concept must be brought in by
a third party in
order to be grasped completely by the sales team and other parts of the
organization. The
key to prospecting or account management is to create strong, peer-to-peer
relationships. |
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Figure 5. The
Sales-Diamond Model Resolves Structural Problems |
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| It is often the most successful organizations
that build the most collaborative structures. IBM, Kodak, GE,
Xerox, and HP all have been know to implement similar selling
models in their approach to growing accounts. |
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6. The
Sales-Diamond Model: Basis For Structure Change
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The actual reality is that the salesperson
will still retain lines to other contacts. It is just paramount that the
organization has peer-to-peer relationships also established in order for
the account to be properly managed.
The senior managers may also know finance personnel, or
operations managers, but I've noticed that senior managers typically want
a peer-level contact to talk to, in case serious business issues ever
threaten their satisfaction. It is best to establish these relationships
BEFORE they are needed; otherwise, trust isn't established. Without trust,
there's no love, so build the love first. |
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Figure 6. Understanding
How The Sales-Diamond Solves Structural Problems
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Summary: With
The Sales-Diamond, Higher Success Can Be Forecasted
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Success Plan |
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Utilizing The Sales- DiamondTM
ACTION: CROSS-TRAINING ALL DEPARTMENTS FOR SALES
SAVVY
It is important that all departments and positions in
the sales-map be on-board with the program in how they are assigned to
each account. It is also important to establish a customer management
protocol in order to implement the model. Once these protocols are in
place, the account will run smoothly for a number of years, until any
(or all) of the relationships are disturbed.
When EDS used to give me a forecast that they were
adding 200 new computers, I knew I could bank on $2,000MMC (monthly
maintenance) coming from that order. This is a forecast I could put at
95%, the only question would be which month EDS would submit the order,
which was 95% accurate. Not a bad forecasting model. Certainly better
than most I've seen used in the field.
For example, when I once managed EDS at Blue Shield of
California, the account had weathered several changes in operations
staff, sales management, and company transitions. It wasn't until the
Senior Management at my firm decided to pull operations from the
account, and allow the Director of Operations to miss three straight
meetings with the customer, when the customer cancelled their agreement.
I couldn't blame them. However, I held the account through many challenges
over a period of four years. EDS Blue Shield accounted for
approximately 20% of my sales business during that time. Time
and time again, my team has found that in examining the structure
utilized by successful salespeople, inevitably they created a team
approach that resembles the sales diamond. It just makes sense to us to
formalize the process to help every salesperson become more successful. |
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Imagine:
creating a sales team that thrives through large-account wins, retains
continuity even when top salespeople leave, and enables your firm to
discover new
opportunities through better team structure. |
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