Many distribution CEOs, CFOs and sales leaders have restructured their sales organizations in response to the sales challenges brought on by the pandemic. They have reduced marketing expenses, operational costs, experienced a reduction in sales expense and overhead across the organization, and now they are forced to strategically retool sales.
Reorganizing and retooling your distribution sales team for the market of today is difficult and emotional — in good times. If we want to make sure we have the right people, in the right roles, with the right skills for today, what do we need to do?
What we must consider includes:
- What does our sales team need to look like today — and tomorrow — based on what buyers are saying?
- Do we have the right people and are they in the right roles?
- Who on the sales team needs training and coaching?
In this post, we will discuss a data-driven way to answer these questions to maximize your distribution sales team’s sales effectiveness and performance.
Pareto Principle at work
Over the years, I’ve noticed that the Pareto Principle definitely applies to distribution sales team results. The Pareto Principle, also known as the 80/20 rule, advises that 80% of any output will be generated by only 20% of the total input utilized. Therefore, as applied to sales organizations, 20% of sales reps produce 80% of the business. Those sales people in that 20% also are more likely to get more promotions, perks, choice-of-territory and (of course) income.
Your top 20% of sales performers typically deliver:
- Higher profit margin per sale
- Greater new product sales
- Higher new customer acquisition revenue
- Have a greater share of wallet by customer
- Have at least 2X customer retention rates
- More referrals
- Higher customer satisfaction scores
As distribution sales teams retool, right-size and reorganize, how do we identify those top performers, those on your current team that can be top performers, and those that should move into another non-selling roles? Disconcertingly, it follows that 80% of a current sales team brings in only 20% of sales, so what does that mean for your return by sales person? It means, odds are, you probably have people in sales roles today who should not be in sales roles. And it is costing you.
When your business is busy, those sales associates not skilled in sales or the right mindset for sales are often hidden by sales transactions. But as Warren Buffet says, “Everyone can see who was swimming naked when the tide goes out.” For many businesses, the tide went out quickly and is remaining out. Or, the tide went out like it always does before the huge tidal wave hits the shoreline, and now you are busier than ever.
Assess your team
So, how do we take a data-driven strategic approach to reorganizing our distribution sales teams that ensures we have the right sales person, in the right sales roles for today and tomorrow? What should we consider when right-sizing our sales teams to the market of today and tomorrow?
Here are a few suggestions:
Assess the sales skills, beliefs and motivations of your current team:
- Who are your top sales performers in revenue, skills, beliefs and pipeline?
- Who could be top performers with training, new sales tools and coaching?
- What sales roles are critical to your success today?
- Who on your team is best suited for each role?
- Who on your team is best suited for non-sales roles?
Identify the ideal sales roles and sales process. This is a crucial step. To develop a role description, use these questions as a guide:
- How are buyers buying today?
- What sales role and sales process best serves buyers today?
- What resistance and objections will the sales person encounter, and how must they be trained and what mindset will they need?
- What sales skills should the sales person have for this role?
- What’s the competitive landscape they will confront?
- What kind of support, supervision, coaching will they get from management?
- What competencies do your top 20% of sellers have in this role today?
Find the right people
Search for the ideal candidate by sales role, based on assessment data. Describe the role with leading and lagging indicators and measures of success. Look at your team’s current sales skills, motivations, sales mindset, profit and revenue by sales person. Review past performance reviews and assess the quality of their sales pipeline.
When companies retool and reorganize their sales teams, they often make the mistake of running a sales and profit report by sales rep and making decisions based on this data alone. Something else we must also consider, if you were to open a new territory, new market, lead the launch of a new product or service, whom on your team would you pick to do it? (By the way, that person you just picked is your top performer, in most cases.) Retooling and reorganizing your sales team today is much more than drawing a line on a ‘sales by descending’ Excel report.
Market-leading sales teams will use this time to better define how their buyers buy. Why they buy, why they don’t buy, and the best terms of trade for each market vertical and customer. Market leaders, and future market leaders, will use this time to strategically pivot into what their buyers are asking for and use data insights to share and design buyer-centric sales processes.
Questions to ask
Before you retool your sales organization, there are some questions I ask you to consider:
- What are the right sales roles for the market of today and tomorrow?
- What percentage of my sales team should be inside sales? Outside sales? Product support/sales engineers?
- Who on my sales team best fits these roles?
- Who on my sales team has high skills but is in the wrong role today?
- Who on my team, once trained, will figure it out and apply the training quickly?
- How many sales people need to be liked by their customers?
- Are they rejection-proof?
- Are they comfortable talking about money?
- Do they know how to sell?
- Will they sell? (Do they have a sales mindset?)
- Can they work remotely?
- Do they understand how to use a CRM and what it is for?
- Is the sales team comfortable leveraging your sales tech stack and video-based meeting tools?
- Do they have the skills and mindset you have seen in your top 20% of performers in that role?
Remember, it’s the talent on your sales team that will determine your success when hitting quotas and achieving your company’s future goals. Identifying top performers and having them in the right roles is the difference between your company’s victory or failure in competitive markets and challenging times.
Mark Roberts is a senior-level sales and marketing leader with more than 35 years’ experience driving profitable sales growth in market-leading organizations. He has led sales and training at companies like Timken, VMI, Gardner Denver, Mobility Works and Frito-Lay. He is the founder of OTB Solutions, LLC and business development blog, nosmokeandmirrors.com.