This year has been another challenging year for most B2B sales organisations. In our work we have seen several patterns emerge which have risen to the top of the ‘issues’ list. See how many of them your sales organisation is dealing with (hopefully not every one!).
Sluggish Sales Growth
Still the major issue for many businesses. This problem has several forms, inability to raise retail prices, demand not picking up, and extreme volatility in the sale pipeline are the three most common symptoms. The softness in sales numbers has encouraged some Sales Directors to use Sales Promotions to increase demand – to in effect buy business through cutting prices, increasing discounts, putting packages together etc. The danger with this approach is of course creating a new (lower) market price which is difficult to then move away from if demand doesn’t pick up
Rising Sales Costs
Regardless of what is happening to your top line sales costs will rise, usually at a faster rate than inflation. The Internet was supposed to reduce sales costs but unless you are completely on-line it has added to them, because the web has become either an additional sales channel or a straight marketing cost.
Continuing Creeping Commoditisation
Value chains continue to commoditise, especially at the lower end. Unless salespeople can move up the value chain to a place of greater value add, they become very expensive communication conduits of price and delivery information.
Increasing Transparency Being Demanded
If your margins rely on opaqueness you will struggle to maintain them. If a cost plus margin is added with no demonstrable value add customers start to ask questions. Open book pricing, and co-creating value is where real partnerships can be built.
Any sales organisation worth its salt soon wrestles with the problem of key account management (KAM). Many invest money in KAM training, which is often little more than “advanced sales training”. As long as KAM training is seen only as ‘development’ for senior sales people, it is likely to fail. Five important dynamics contribute to this failure:
- Poor targeting. KAM involves a lot of work and by definition, not every account can be a key account. First and foremost, it is a resource prioritisation exercise. Having clear criteria for accounts to be on the list is a sine qua non.
- Key to both partners. Do your customers see the relationship as key? Looking through their eyes is highly illuminative. Our biggest account may still be an insignificant part of our customer’s business operations and all the effort in the world on our part is likely to be met with indifference on theirs.
- It’s an organisational NOT individual activity. KAM invariably involves alignment of internal processes and teams to follow a plan. KAM is therefore a team development exercise NOT solely an individual one – paying attention to internal co-ordination is a more significant challenge than training the KAM.
- Salesperson or Facilitator? The co-ordination of longer term programmes places the key account manager in the role of change agent, facilitator, internal champion. These skills are often missed in KAM training, which has a heavy customer orientated perspective.
- Wrong Measurement. KAM initiatives are often stillborn because measurement is short term and based on existing sales targeting. Defining a staged plan with clear milestones is often vital in key account development, which in the short term brings no immediate revenue gain. Having the skill to make a good plan and the discipline to execute and measure progress against plan is indispensible.
Good KAM development is therefore a mix of training and organisational development.