Death of a SaleSman 2.0

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					                              Death of a SaleSman 2.0
                       (2 OF A 2-PART SERIES ON BRANDING AND THE SALES-DRIVEN ORGANIZATION)

                                                      by Mar tin E. Thoma




                     M
                                 any businesses I consult with share a common malady with Jim’s Industrial Pumps,
                                 Inc. (see Death of a Salesman 1.0 for a discussion of Jim and his company).
opinion/analysis


                     This corporate disease is a cultural and organizational artifact of being quite successful (in
                     selling). Most small and medium-sized businesses start out this way, being quite successful
                     with sales. After all, they rarely survive long
                     without developing that skill.


                     The condition I’ve identified might be called
                     “sales-itis.” These companies essentially are
                     built and revolve around the sales function;
                     I call them “Sales-Driven Organizations”—
                     SDOs for short.


                     These companies approach their business
                     from a completely sales-oriented mindset.
                     Their philosophy is: “There are buyers out
                     there for anything we make. It’s just a matter
                     of finding them and selling them.”


                     And the way you find and sell is to launch an opportunity-seeking, revenue-guided missile:
                     a salesman. (By the way, I’m using salesman in the generic to refer to reps of either gender.
                     Please don’t be offended; it just works a lot better with my Willie Loman theme!)




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                   The answer to any revenue shortfall or growth goal is to increase sales staff, increase sales
                   incentives, and increase sales quotas. If you’re not making your targets, beat the hell out of
                   your sales force until they produce the results you want. If that doesn’t work, change their
                   compensation structure.


                   The ingrained mindset—and the hidden danger—is that because everything in the SDO is
                   directly measurable—commissions, cost of sales, revenue per salesperson—other important
                   revenue-expansive activities are easily ignored. At least as long as sales are rising at an
                   acceptable rate.


                   So what’s wrong with sales driving the ship if it’s driving revenue growth, you ask. The SDO
                   develops quite a few habits and coping skills that serve the immediate needs but ultimately
opinion/analysis


                   undermine the sustainability of the company. A few examples I’ve witnessed:


                   SaleSmen CReate theIR oWn SaleS toolS
                   Because every salesman creates his own sales materials, you get dozens or hundreds
                   of different looks, presentations and sales arguments. We completed an audit of a large
                   regional bank’s trust department and inventoried more than 300 unique sales elements.
                   Hardly any appeared to come from the same company. We repackaged the sales system,
                   created a common thematic and visual identity, and boiled the whole system down into
                   roughly three dozen unique sales pieces, neatly organized into three selling phases. It was
                   still an SDO, but it had at least deployed a common message platform.


                   SaleSmen CReate the “BRanD StoRY”
                   The brand is everything known, thought, perceived and experienced about your company,
                   product or service. When the only significant communication channel to customers and
                   prospective customers is the sales team, every customer gets a different story. That story
                   may be colored by that sales rep’s particular bias, monthly sales quota or comfort zone
                   with the product categories he or she likes best or feels most confident with. The company
                   seeking to broaden its product line or delve into more technical or specialized services may
                   find itself locked out—essentially by a sales force that has told too narrow a brand story.


                   QUalIfIeD PRoSPeCtS Can’t fInD the ComPanY
                   The SDO focuses purely on finding customers versus helping qualified customers find it. It’s
                   the difference between a warm referral and a cold call. If psychic energy could be monetized,
                   there’d be a lot less cold-calling and much more referral development and marketing air-cover
                   provided to the sales organization.

                                                                                     Live     Yo u r     Brand.
                   A West Coast bottled water startup set the industry abuzz when it hired 40 sales reps and put
                   them on the street. They saw a rapid uptake in the first couple of years—until they picked
                   all the low-hanging fruit. But what happens when those customers who just said yes to get a
                   salesman off their doorstep tire of
                   the monthly invoice? Some sales
                   stick, but it’s a costly method for
                   securing customers who can easily
                   drop the service a few
                   months later.


                   Branding and marketing are
                   focused on helping qualified,
opinion/analysis


                   needy customers find you—with an
                   established predisposition to buy.
                   This is an expensive proposition. But anyone who says marketing is expensive hasn’t really
                   studied his total cost of customer acquisition, especially when selling to unfamiliar, aloof,
                   disinterested, disengaged prospects. When sales is focused on buyers with identified needs
                   and a favorable predisposition to your company, the cost of sales goes down.


                   You might say that sales moves individuals to buy while marketing moves whole groups of
                   individuals to buy. They need to work together in synergy.


                   SaleSmen WaSte effoRt
                   I’ve taken dozens of calls from salesmen who start with, “I don’t know if you’ve heard of
                   Voicetel, but I’d like to come by for 15 minutes and introduce our firm to you.”


                   No, I have not heard of you, I don’t have a need for you, I don’t want to be wasting my time on
                   the phone with you, much less give you 15 minutes of my day.


                   Not one of these reps has ever secured a meeting—and those are the ones who got through.
                   Our office manager screened out hundreds for every one that got through.


                   The sales-driven organization believes that with enough shoe-leather it can jump directly to
                   market share. It thinks it doesn’t need awareness, it doesn’t need positive associations, it
                   doesn’t need any predisposition to do business in order to win a new customer. Just bang on
                   enough doors, accumulate enough frequent flyer points, make enough calls and you can get
                   to the numbers needed to make your business work.

                                                                                    Live      Yo u r    Brand.
                   The biggest danger here is that it works just often enough to keep the SDO going. It’s like the
                   slots in Las Vegas. An occasional jackpot makes you forget all the lost quarters.
                   In the early days of VoIP (Voice over Internet Protocol—or phoning via the Internet), we
                   consulted a Taiwanese manufacturer that wanted to establish a beachhead in the big, rich
                   U.S. market. Focusing primarily on public relations, we sought to get their name out in the
                   market and lay foundations for credibility. Our recommendation was to start six months prior
                   to opening their Dallas sales office/demo center to get awareness growing. “No, we have to
                   get our sales organization built, and when we get a few sales, we’ll announce and then start
                   ramping up. We want to get some positive cash flow in U.S. too, and we’ll fund PR from that.”


                   Meanwhile, Avaya, Lucent, Cisco, Nortel and all the other huge, entrenched telecom
                   manufacturers were buying pages of ads and flooding the trades with new product
opinion/analysis


                   announcements. This company never got traction in the U.S. and eventually retreated to
                   focus solely on Asia and Australia. A great example of trying to skirt marketing and jump
                   straight to sales.


                   SaleS RUleS the RooSt
                   In the SDO, sales rule—so sales leaders get promoted right out of the sales organization until
                   they’re running the entire company. For a number of years we worked for a large international
                   technology provider to the financial services industry. This was a billion-dollar company
                   owned by a medium-sized phone company. You might have thought the hyper-competitive
                   world of wireless would have taught
                   the value of building a brand and
                   marketing it. It had not. Or perhaps the
                   sales success to date had convinced
                   management it could continue to grow
                   by “selling harder.”


                   The salesmen ruled the roost. They
                   held many of the senior management
                   positions and ran their departments
                   like fiefdoms. An internally
                   competitive, “smarter-than-thou”
                   culture pervaded.


                   The company invested one-fourth of one percent of its revenues in marketing. Much smaller,
                   younger competitors were outspending it by a factor of 5 or 10—not that hard with no more

                                                                                   Live      Yo u r    Brand.
                   than a commitment to reinvest in marketing at an industry-average rate. The sales team was
                   beginning to complain bitterly that they were not even getting invited to some pitches—
                   unheard of in the company’s earlier history—and that they were getting beaten regularly
                   on price.


                   About this time, management stopped buying smaller technology companies and sold the
                   whole thing to a financial conglomerate. Maybe the new owners will support their sales
                   efforts with stronger brand-building programs.


                   So What’S a SaleS-DRIVen oRGanIZatIon to Do?
                   It must be apparent that the SDO is most likely going to remain an SDO until it starts losing
                   at its own game. That’s human nature; a guy might not really be capable of changing his ways
                   until his wife walks out of the house. The regrettable thing in both cases is what’s been lost by
opinion/analysis


                   not reading the writing on the wall—tremendous momentum, years of relationship building,
                   immeasurable equity in the relationship bank account.


                   For the company and its market, that bank account is brand equity. It’s a complex bundle
                   of intangibles that raises barriers to competition, increases immunity to price-cutting and
                   predisposes customers and prospects to do business with you.


                   When the Sales-Driven Organization realizes that these intangibles cannot be earned solely
                   through selling, but must be reinforced and shaped with smart, focused brand development
                   strategies, marketing communications programs and effective public relations—then the SDO
                   is on its way to delivering its sales team the thing it needs more than anything else in the
                   world: an unfair competitive advantage in opening opportunities and closing deals.


                   martin thoma is a principal with thoma thoma, a brand growth consultancy serving
                   clients throughout the United States. he is co-creator of the Brand navigator System™, a
                   comprehensive program for discerning, defining and articulating brand power. Reach him at
                   martin@thomathoma.com or Skype martinethoma.




                                                                                    Live      Yo u r    Brand.