Traditional Sales Directors – a dying breed.?
DOES YOUR BUSINESS REALLY NEED A SALES DIRECTOR
Traditionally, the process of obtaining sales in many businesses was a mechanical exercise which required a costly and cumbersome layered management structure with Sales Directors sitting at the apex of a large pyramid and treated as important members of the board.
Often they owe their position to earlier sales prowess in the field or to being in the right place at the right time and thus “making their mark”.
Frequently as a company grows and attracts enquiries and website visitors, Sales Directors can effectively “Hoover Up” the best leads for themselves and their chosen favourites and thus appear to be delivering stellar performance whilst basking in the reflected glory of others.
Since no one else in the company tends to look at what business would have come in any way, it is easier for companies to go on paying these people huge salaries and bonuses for producing holograms and mirages rather than analysing what individual sales people actually produce which in many cases is little more than pontification , self aggrandisement and self justification.
Lack of profitability / indifferent ROI
Figures from the Management Consultancy Group PLC show that sales forces are only 10% productive and only 1 salesperson in 250 consistently reaches their targets each month or commission reporting period.
This means that each salesperson is working 1/2 day a week and the rest of the time is driving, eating, drinking, schmoozing, sitting in waiting rooms ,writing proposals, attending sales meetings with their managers, being counselled, making appointments, doing paperwork, researching or surfing the net, being trained, on Away Days, being motivated, learning sales tracks etc..
In charge of all this is the Sales Director who supposedly formulates sales strategy yet is responsible for orchestration of sales activity to eventually produce lacklustre performance in terms of both profitability and ROI.
Other Directors Pulling their Weight/Sales Directors “asleep on the job”..??
A Finance Director or Managing Director who allowed their remits to produce at this level would be dismissed and a Chief Executive who performed at this sort of level would soon be given full marching orders by the Institutional Shareholders yet Sales Directors are allowed to get away with it year after year whilst still drawing their full salary and earning bonuses to boot.
The New Sales Paradigm
Today’s salespeople have to be good at relationship building, probably need to be marketing savvy, learn SPIN,PSS and NLP and need to have the skills to be self directed and psychologically self contained.
Selected and trained properly they can and should manage themselves and be both measurable and self directed.
This is a trend occurring in many other professions with nurse practitioners taking over the work load of doctors, administrators operating in self managed teams and non core functions such as law, HR, audit, cleaning, facilities management, leasing of company cars, marketing fulfilment, advertising, printing, call centres, software maintenance, computer hardware maintenance and insurance all being outsourced to external providers.
Salespeople should manage themselves, concentrate on profitable sales and report to the board with Finance Directors taking control through the use of performance dashboards with the facility to drill down to an individual salesperson.
Sales Directors need be cost and ROI justified.
Financial, Commercial or Marketing Directors can in many companies assume the above role and supercede the Sales Director.
The New Norm
Today’s sales operation has to earn its keep in what is likely to be a decade of austerity for all businesses, especially those businesses that are not in export or counter cyclical markets.
Businesses need to be stripped of unnecessary costs and become more lean (less hierarchical), mean, agile and adaptable with the ability to scale up and down at will.
More and more sales can and do come through the new channels which include the web, mobile telephone applications, tablets, PDA,s, Mesh Technology and b2b applications of Social Media such as Linked In and Twitter.
Some sales directors can be trained to utilise and manage new and fast evolving marketing technology that facilitates the sales process, but this is expensive.
In order to be truly cost effective, sales persons must justify their existence by bringing in much larger ticket and complex sales than was the case before.
Command and Control is not the way to manage this new breed of self directed salesperson although traditional UK management styles may well need to alter to accommodate the new realities which could well include larger salaries and benefits resulting from the reallocation of what was once all or part of the Sales Director’s package amongst the Directors who remain.
Outsourced Sales and Sales Optimisation
At Transaction Focus we can either gradually replace all or part of your sales operation within a flat, cost efficient structure with no Sales Director and no sales managers of any kind.
Alternatively, we can optimise sales performance through OODA Loop, TOC, Eastern Methodologies such as Hoshin Planning and Kaizen and then build on it through Value Stream Mapping, Training, Benchmarking, Psychological conditioning, Refined bid processes, NLP,Six Sigma/Lean, Time and attendance software, Geomapping and Geofencing technologies.
Article by JOHN A GELMINI,MBA,BSc(Econ)(2.1) a former Sales Director and line manager with international experience and a pedigree in b2b/b2c/b2NGO who now works with Transaction Focus in these areas as well as performance improvement, operational excellence and customer service optimisation.