I was shocked. Somewhere near the end of my conversation with Mike Marks for this week’s MDM Podcast, an unfiltered comment came out of his mouth. (Insert sarcasm emoji here.) We were discussing sales transformation, a topic we have worked together on for more than six years. MDM is partnering once again with Indian River Consulting Group for our 6th annual Sales Transformation Summit, June 13-15 in Denver. And Mike is leading our three-part, virtual MDM Sales Transformation Bootcamp that kicks off Apr. 28. Learn more about the bootcamp here.
Mike got unfiltered because we are both passionate about the massive returns distributors experience — not just financially, but strategically with deeper customer engagement and support, and internally to a more team-based culture. It really is transformative to see what happens when there’s a shift from an often-entrenched sales process to one more in tune with how buyers want to engage with suppliers today — especially after years of disruption to traditional purchasing behaviors. (Insert Amazon Business and other alternate channels here.)
The truth is, many distributors aren’t ready to upset the cart that brings the apples or the geese that lay … you get the point. After six years of hearing hundreds of distributors tell their stories in our annual conferences, workshops, webinars and case studies, there’s a common theme: “It’s broke, but not broke enough to fix it.” It’s kind of a reverse corollary to the first sentence of one of Jim Collins’s books: “Good is the enemy of great.” It’s time to fix it.
As Mike notes in our podcast conversation, the self-directed salesforce, selling themselves first, is highly inefficient. And it shows up in margin pressure. “You have competitors that have gone through this transformation,” he says. “They’ve actually lowered their costs, so they can lower their margin 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.”
Three Keys to Successful Sales Transformation
As we will discuss in our June conference, there are several levels to address when framing changes to any process, even productive ones showing signs of age or misalignment with current market conditions. You can’t start over; sales transformation is ultimately a change management process to take your team from Point A to B while in motion. There are proven methodologies, best practices and hacks to get there with the least amount of pain and disruption. (And there inevitably will be some of that.)
Here are the three phases of successful sales transformation we’ve identified and the core of our podcast discussion (and not coincidentally how we’ve structured our virtual bootcamp series this spring):
1) Benchmark your current state. Evaluate emerging hybrid sales models in distribution, where sales roles are becoming more specialized across outside, inside and customer service roles. There are several layers of research to benchmark your current state — customer insight, purchasing behavior of specific customer segments, industry research on digital sales channels. You find out where you are ahead or behind. “But where am I behind the most?” Marks asks. The most important part of the assessment, he says, is this: “What is the one thing I can do that is going to have the least disruption, but also move the needle and give me the most impact,” he says. “Because it’s a journey; what you want to do is start, and get the salespeople on board, so that you can get something on the scoreboard.”
2) Redesign the process. Based on your unique set of customer attributes, what is the optimum design of your sales process that maximizes customer retention, share-of-wallet, margin and growth? Create a clear picture of where you want to go, and include the salesforce in the design, so they know it’s about creating a viable business and supporting their success in the future. Then develop incremental steps to minimize the disruption that takes place in any type of change.
3) Execute the change. Change is hard, but there are ways to structure it to minimize negative impacts. Every company has organization blockers who don’t want to change. The most successful efforts create incremental change in the form of pilots and projects that help to drive the change without blowing the company up. And they reward a culture that learns, gets smarter and evaluates what’s working and what’s not, and keeps building on a series of productive failures and successes.
Many leaders have realized meaningful gains through investment in strategic pricing, analytics, digital and automation efficiencies. But not many have addressed the changed economics of the core distribution sales model. As Marks puts it, once they’ve gone through these other margin-improvement processes, “they realize the 800-pound gorilla in the room is the field sales cost, because it’s huge.”
More on the MDM Sales Transformation Bootcamp
From my perspective, “transformation” as a term is getting tire tracks on its back and losing meaning in the process. But it can be broken down into incremental steps that create intentional change and results. Like most things in life, there is no one system or approach to a better sales model. If you’d like to accelerate your team’s transition to a more productive sales process, consider sending one or more from your team to our bootcamp; we’ve boiled the steps — from six years of real-world results by distributors — into what we think are pretty digestible units: benchmark, redesign, execute the change. In each session we have distributors share their stories and answer questions on their challenges and successes. Please contact me with questions about our bootcamp, or see more details and register here.