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Manage the Risk of Your Sales Model Now

The pandemic is a giant tipping point that has accelerated the rate of change. The cost of not adapting your current sales model could be a slow death.
Manage the risk of your sales model now

Here’s how Mike Marks of Indian River Consulting Group defines the core issue of not addressing the risk created by the inefficiencies of most current distributor sales models: “It shows up as margin pressure. Because you have competitors that have gone through this transformation, they’ve actually lowered their costs so they can lower the margin they need and still make the same net profit. And so everybody’s bumping up against that and they end up being the guy holding the knife in a gunfight.”

Mike is leading our three-part virtual Sales Transformation Bootcamp (register now), with the first session in two weeks, April 28.

Just as there has been a growing gap between early and late adopters of digital technologies, there’s a similar leader gap that’s developed in distributor sales and go-to-market models. Many organizations are handcuffed by their current sales structure and processes, while others are taking the opportunity of a disruptive marketplace to make incremental changes and lower their selling costs. They are seeing real results at the top and bottom lines.

There are three main areas where these gaps are focused:

  • Data analytics skills.
  • Business process design.
  • Change management.

As we get ready for our bootcamp series, I’ve been having many conversations about these gaps and methods to kickstart the process. I have not heard anyone say that their sales process is in a very healthy state in 2022. Sales are great, but the engine is not running as smoothly as it used to. The core outside sales model was kicked in the gut two years ago, and customers have moved on, while many distributors have not.

That assessment is based on multiple surveys and research interviews MDM has conducted over the past two years of the pandemic cycles. And while we are awash in a lot of buzzwords about AI, ML and digital, I’m concerned that the important work on redesigning sales process, with the three capabilities mentioned above, is either being ignored or pushed off in favor of shinier objects that are easier to implement in the short-term.

I’m not saying digital isn’t important; it’s a critical component as support for sales transformation work, such as an effective CRM for elevating customer engagement and service, or AI/ML analytics for improving both customer experience and sales efficiencies. There are many other examples. But you have to consider what’s more important to address first; some are throwing great technology at broken or inefficient processes.

Core Processes Needed in Any Go-to-Market Pivot

I want to share one of the “money” slides Mike will talk through in our first bootcamp session on Apr. 28. It is at the heart of how leaders can get their team — including sales reps — on the same page for how and where to start making changes to improve the performance of the sales engine. In most distributors, the field sales representative is responsible for all five of these processes, and they decide how much effort is given to each one. Unbundling (and measuring) them creates opportunities to lower cost and improve performance.

  1. There must be a process to identify and engage new customers through digital marketing. (Marketing will own the front end of the pipeline.)
  2. There must be a process to capture new customers that will be driven by field sales hunters. (This is market making at the land-and-expand stage of the pipeline with provided resources.)
  3. There must be a process to expand your share of wallet with existing customers. (Marketing and AI formulate targeted value propositions for the customer facing sales team.)
  4. There must be a process to serve existing customers centrally. (Market serving that provides maximum retention at the lowest possible recurring cost, meaning little field sales involvement.)
  5. There must be strong digital engagement processes to maintain ongoing customer involvement. (This becomes the foundation for the future.)

As Mike will detail in our first session, each of these must be considered on a phased implementation basis — planned, incremental steps. I hope you can join us for our Sales Transformation Bootcamp virtual series, or have members of your team attend. We’ve focused the three sessions on benchmarking your current state and best practices today, redesigning the process, and how to make the change. You and your team will gain proven risk reduction strategies that will strengthen your competitive position in the marketplace.

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