CHAPTER 2 CHAPTER 2 The Changing World of Sales

“I always regarded the first day of practice as the beginning of a championship season. On my team, those who showed up in shape, ready to play and give an all out effort, understood this principle” Bill Russel, Boston Celtics, NBA Hall of Fame

1 2 The Changing World of Sales Sales people today must be:  Flexible  Agile  Learning-oriented

Figure 2.1 A Framework for Change in the Sales Force Globalization Roar of Technological Innovation Intensified Competition Customer Expectations Change Forces Is Our Sales Force Current? How the Sales Organization Is Positioned For Change Organization Culture/Climate Organization Structure Market Orientation Leadership Support Learning Is Organization And Individual Performance Satisfactory? How Individual Salespeople Respond to Change

1 2 Key Change Forces Globalization Intensified competition Inflated customer expectations Technological innovation

1 2 Competing in a Global Economy The cumulative effect of globalization  More players  More products  New technology  Global markets

1 2 Intensified Competition Competitive advantage Sustainable competitive advantage Real competitive advantage

1 2 Customer Expectations are Ever-changing Market turbulence  The rate of change in the composition of customers and their preferences Salespeople must:  Learn new products  Learn new sales techniques  Learn new sales strategies  Un-learn old; that which is no longer viable

1 2 Knowledge Updating Habits of Successful Salespeople Finding the right customers Seeking out and listening to customers’ customers Cultivating resources in their own organizations Keeping an eye on their own and their customers’ bottom lines Anticipating problems Adopting a long-term view Reviewing each sales call after-the-fact

Figure 2.2 The Salesperson as a Knowledge Manager: Expanding the Funnel of Value Support Existing Sales Drivers Knowledge Management Increased product innovation and/or efficiency Support New Sales Drivers Knowledge Management Work with others in the organization to learn about customer needs and wants Create New Value Propositions Knowledge Management Knowledge as product

1 2 Technological Innovation Technological turbulence is the rate of technological change in an industry What impact (positive and negative) has new emerging technologies had on salespeople?

Table 2.1 The Role of the Salesperson as Knowledge Manager

1 2 Five Key Organizational Characteristics Organizational culture/climate Organizational structure Market orientation Leadership support Learning

1 2 Organizational Culture/Climate Culture is the deeply rooted set of values and beliefs that provide norms for behavior in a sales organization Climate refers to how salespeople are managed and how effectively they can work with colleagues on day-to-day sales activities

1 2 Organizational Structure Formalization Centralization Departmentalization

1 2 Market Orientation Market-oriented firms focus on the continuous creation of superior customer value

1 2 Leadership Support Leadership support is the degree of support and consideration a sales force receives from leaders

1 2 Learning involves the identification of gaps in knowledge, which can shed light on how planned and actual performance differs Learning

1 2 How Salespeople Respond To Change Many salespeople become complacent Many salespeople engage in some ineffective (obsolete) activities

1 2 Sales Force Obsolescence Sales force obsolescence is a reduction in work effectiveness that occurs when salespeople fall behind in job-related skills and knowledge

1 2 Symptoms of Sales Force Obsolescence Salespeople feel less useful in their attempts to educate customers about new products Salespeople feel that customers often obtain information on the latest developments from other means Salespeople find that customers are likely to be more receptive to them if they provide custom design possibilities for specific applications Salespeople find that many customers no longer require them to place orders or to provide general information

1 2 Symptoms of Sales Force Obsolescence (cont’d) Increasingly, salespeople find that much of what is purchased is taking on the characteristics of commodities The cost of personal sales calls has increased dramatically Salespeople find that their perceived value has been reduced among many of their large customers Many customers claim that they are seeing more salespeople than ever before

Figure 2.3 A Dual Sales Approach: Knowledge and Process Preparation Attention Completion and Partnering Choice (What is Done/What Result) Choice (What is Done/What Result) Thought (How Can I Improve?) Thought (How Can I Improve?) Intelligence (What Is Known) Intelligence (What Is Known) Examination, Prescription, Conviction and Motivation Choice (What is Done/What Result) Thought (How Can I Improve?) Intelligence (What Is Known) Choice (What is Done/What Result) Thought (How Can I Improve?) Intelligence (What Is Known)

Figure 2.4 Four Areas of Learning The Integrated Salesperson / CRM Manager Customer Orientation Around customer value/needs Customer Innovation Role of accurate, timely information to change thinking from a stand-alone activity to an on-going process Customer Insight Approaches, processes and information systems need to closely link strategy and actions Customer Interface Tools/applications to maximize the value of every customer contact

Table 2.3 Behavior-Based and Outcome-Based Sales Performance Measures

1 2 Effectively Implementing Change Strategic Positioning  The performance of different or similar sales activities that are carried out in different ways Operational Effectiveness  Performing similar activities better than competitors can perform them Implementation

Sales Team Approaches Selling Team LeaderPartnering RoleInitiator Seller Internal Coordinator Customer Service Rep Extended Selling Team Marketing Role Sales Role Production Role Coordinator Resource Approver Implementer

1 2 A Growing Reliance on Sales Teams Sales teams are positioned to:  Detect changes in the business environment  Gain knowledge about customers  Improve team members’ collective understanding of various customer situations  Analyze results of past actions

1 2 The Key To Selling In A Rapidly Changing Business Environment Agility Selling An agile sales force is:  One that is quick to see opportunities  Shrewd in developing short-cycle strategies  Able to meet customers' individual needs  Capable, flexible and fast at learning and unlearning  As innovative as possible

1 2 “Street Smarts” Contextual Intelligence  Adaptation  Environment selection  Environmental shaping Street-smarts combined with agility selling can lead to improvements in sales performance

The Four Os of Agility Selling ObserveOrientOptOrchestrate IntelligenceManeuver Management Business Intelligence Market Intelligence Competitive Intelligence Vision for Disruption Capability for Disruption Tactics for Disruption Experience/Knowledge Base