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Common Questions and Answers
A high performing salesperson departed his customer’s office with an agreement on a set of actions supported by a large order. It was a great day because the order provided the salesperson quota attainment for the year. When arriving at the regional sales office, the salesperson waved the order like a victory flag hoping to capture the attention of functional managers. It was clearly accomplished.
The finance manager curiously asked the salesperson how much he had to “invest” to get the customer agreement and order. The salesperson said two hundred thousand dollars. The next question from the finance manager referred to the size of the order. The sales rep replied with enthusiasm, “one million dollars!” Waiting for a smile and a soft congrats from the finance manager, the salesperson instead got a frown. “Our KPI measures ROI on “incremental” volume. How much incremental revenue will we get from that investment?” “I’m not sure” uttered the salesperson, “but its a million dollar order!”
Next, the salesperson with less enthusiasm, met up with the marketing manager. The marketing manager asked about the type of promotional event the salesperson committed to with the customer. The sales rep replied, “A price discount allowing customers to buy our product under $1.00.” The marketing manager remarked with annoyance, “We don’t like to deep discount our product because we promote price/value and advertise the quality and integrity of the product. Your promotion strategy and decision could hurt our brand equity”.
The salesperson nervously walked into the supply chain manager’s office requesting to ship the order received from the customer next week. Reluctantly and loudly the Supply Chain manager replied “Are you kidding me? The earliest we can ship an order of this size is in three weeks. We have to produce it, pack it and stage it for delivery and right now, we have priority shipments to get out the door.”
The final stop for the salesperson, before heading to his boss’s office, was with the production manager. Unfortunately, the news was not good. The salesperson learned that an order of this size needed at least three weeks to produce and a week to pass quality assurance. The product also needed accurate forecasts sent to demand planning weeks ago.
What is the salesperson going to tell the customer? It is not going to be a good conversation.
The victory flag the salesperson was waving earlier now sits at half mass. He never made it to his boss’s office. The salesperson had made significant promises to the customer. It was a win for the customer but was it for the organization?
Unfortunately, this is a common occurrence. Salespeople strive to attain sales revenue quotas and do it by obtaining orders from their customers. They are trained to sell. They are taught customer satisfaction. When selling value, they close the sale. However, not every order meets internal function requirements and KPI’s.
Sales organizations’ adopting an internal networking practice and process proactively allows salespeople to build customer propositions that result in a win-win. It begins with salespeople gaining knowledge beyond the organization’s sales process, customer needs, the traditional product features and benefits, selling value and how to close the sale. As important as these matters are, salespeople can gain significant and relevant organizational knowledge by learning more about how other functions work, operate and measure success. Understanding how each function within the organization impacts sales is a necessity. Equally, sales needs to understand how their decisions impact other functions within the organization.
How does a salesperson gain this knowledge? They simply set up short, informal meetings with knowledgeable people from each of the key functions of the organization. This task is not typically part of an on-boarding program however it lends learning value. The meetings allow a salesperson to understand how each function works, how decisions are made, and how performance is measured. Most important, salespeople learn how each function could support and impact sales and how good sales decisions can impact them. Salespeople benefit from this knowledge because when they make sales related decisions, the decisions are in the best interest of the organization, not just sales. Too many times a sales decision is made because the sales revenue is appealing and contributes to a sales quota. What is frequently overlooked is the value the decision provides the total organization.
Let’s take a tour through some of the functions that generally impact sales and their customers. Marketing owns brand equity. They protect brand integrity by promoting products in a certain way to create awareness and appeal to consumers. Sales needs to align customer promotional programs to the brand message. Finance measures return on investment spending. Sales needs to know the financial thresholds of the organization and follow them when making customer spending decisions. Supply Chain is concerned about on time delivery and finding efficient ways to deliver products to customers. Salespeople need to respect delivery schedules. Production relies on accurate sales forecasts, lead time, and inventory control for production scheduling and meeting demand. Salespeople need to provide accurate and lead time forecasts.
The knowledge gained by the salesperson taking this initiative is invaluable. The benefits are many. First, rapport is established internally, leading to trust, credibility and reliability of the salesperson. Second, it provides a negotiation platform with customers. Third, it guides the salesperson to prepare for customer proposals knowing the boundaries of functional decision making. In many instances, sales leaders encourage salespeople to take the tour, learn and seek support before presenting a proposal to a customer.
Each of the short, functional meetings a salesperson has capitalized on builds a foundation for good sales decision making and provides the entire organization with a healthy and profitable customer proposition. The benefit of this knowledge is the understanding that each function of the organization operates independently and collectively. When salespeople respect it, they have embedded themselves into a stream of reliable and trustworthy resources. The victory flag can be once again raised proudly.
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