Sunday, January 12, 2014

Environment Forced Challenges

Smith, Global Practice Leader at The Gallup Organization, was in India recently for a series of speeches on `How to build a world-class sales force.' As product responses become increasingly quicker what with improved manufacturing and R&D systems, it's the quality of sales forces that holds the key for many companies, he says. In this part of the interview, Smith talks about the different sales talents required across industries and countries, as also the impact of technology.
Do you think certain industries require a certain kind of sales people?
Let's take the aspect of building relationships with people. In some industries, you may be calling on a customer who buys millions and millions of dollars from you and has the potential to be a customer for years and years. For that customer, I have got to be able to develop a long-lasting relationship, which is going to stand the test of time. In other sales industries, I may see the customers only once — I may see them only for 30 minutes, it's more important in that setting for me to have a theme of talent that helps me build relationships instantaneously with people. Those are two different, very different, ways of going about it. In many cases, people who build instantaneous relationships are as good over the long haul too, but they would much rather meet a new person every 10 or 20 minutes.
Any examples that you could think of?
One of the companies that we work with is called the Marriott Vacation Club. They sell timeshares. And they are probably better at it then anybody else in the world, and they have a great product. Their sale works this way: they bring prospects down to their property for a week, they have a nice team, and then they come in and meet the salesperson. That salesperson has 20 minutes with them, and would probably never see that person again. Let's contrast that, going back to that medical device company I mentioned earlier. I am now a medical device salesperson, and I am calling on the same orthopaedic surgeon for the next 10 years.
So, those examples are very, very real. In some cases, quite frankly, a sales force is selling pretty much the same solution to every customer. I may be asking them individual questions, but in fact when I reach for my bag, all I have got is this to sell. Other companies, it depends much, much more on tailoring a specific need to a client. Really figuring out what is going to make sense for them. The capability of being able to listen to what a customer wants and make sure that I am crafting what they want, in response — in some sales roles is critical; in other sales roles, it's not nearly as critical. It's more important to understand what we have to sell.
It's kind of like sports. There's such a thing as a good athlete. But a good cricket player need not automatically be a good rugby player. And it is important for an athlete to find the right sport, and, in some cases, even the right position on the team to play best. Same thing is true in sales. You may be a very talented salesperson, but it's important for you to find a sales role where you get to use those talents to the maximum. What we found is that the idea that a good salesperson can sell anything is a myth.
Do you see any difference in the sales personnel in the various countries, or in the way they sell?
I believe that the cultural difference that many countries think they have are more exaggerated than they really are. In other words, the characteristics that happen to make a really good salesperson within an industry in the US, also characterise what a good salesperson is in Japan or in South America. It's true that in some cultures it is harder to pick out some characteristics. For example, the characteristic of not taking no for an answer. In some cultures, it's okay to argue with the customer or to be more aggressive. In other cultures, the salesperson may be more reluctant to do that. But internally we find that same characteristic: the willingness to ask, the willingness to push. Outward manifestations might be different.
How about differences in training, perceptions and the way they think?
I think more of what we have found is misconceptions about how sales people actually get their job done. If you go to South America, what you would hear from sales managers is this: It's all about relationships here. If you know the customer, you don't need to sell anything. When we look beneath the surface, however, we find that there are lots of sales people who have good relationships with the customers but still don't sell anything. And actually, what's more important is not just getting to see the customer and getting him to like it but getting him to say `yes.' In some cases, people place so much value on the relationship, they don't even want to risk it by asking the customer. And sometimes, it takes a little while to get a management team that has been thinking that way for long to say: `Hey! Relationships are important. But it's not all about relationships.' So, some myths are more common in one country than another country.
Relationships are important. But what's the role of technology in helping salespeople win over customers?
Not one of us would want to be caught without a mobile phone, or PDA or e-mail. But as these tools have been introduced, customers' expectations have shot way up about getting back to them. Before, if your customer called you and you called back three days later, that was okay. Now, we live in a 24x7 world: you send me an e-mail, and you expect me to answer back. Although it's very advantageous, it has also placed us all in a much more hyper-competitive environment. Those tools are helpful, but your competitors have the same tools too. And they certainly don't replace that one-on-one or face-to-face contact with the customer.

Mobile phones have undergone a change in the way they have been marketed over the years. The retail model now rules.
Sometimes, they get in the way. If we measured average customer engagement in the banking industry 10 years ago, it was close to about 10 per cent. Now, it's under three per cent. Because, instead of going in and talking to a teller, you go and talk to an ATM machine. Very convenient! But no one wants to refer you to an ATM machine: `Had a great time with that machine! You'll love it, go ahead!" It's convenient, but it doesn't do much in terms of creating customer engagement. So, one of the challenges companies have is keeping that contact alive in an environment where we are seeing less of it.
But giving in to the pressures of cost-cutting and notions of efficiency, they seem to be moving away from this concept. How badly will it hurt the industries?
Several years ago in the US, there was a lot of talk about changing the healthcare system, and attacking the costs of healthcare. In response to just the threat of that, many pharmaceutical companies cut way back on their sales forces — they used to spend a lot of money on them. Very quickly, the companies that did that lost share. They had to re-scramble. And they realised very quickly that even though, on the one hand, there may be cost-pressures to do something, by succumbing to those, you are actually committing suicide. No company has ever hired a sales force because they want one. They have one because they have to have it. Every industry is slightly different, but after 10 years in the banking industry, we are seeing lots of banks now enhance the number of private bankers they have, culling out the customers they want to develop relationships with.
It's a constantly changing environment. Thirty years ago, the way you sold vacuum cleaners in the US was door-to-door. There are no more, or very few, door-to-door sales people. The way you sold encyclopaedias was door-to-door. Now, for a few hundred dollars I can buy an encyclopaedia on CD-ROM. It's much better, quicker and even cheaper. So, you don't have many encyclopaedia salesmen now. So, some industries change when it's really not practical to have a sales force. But many other industries pop up that really depend on a sales force. For every industry that doesn't need a sales force there are two others that take its place. A lot of this has to do with just the pace of change. When cellphones were first introduced, there were really active, high-paid sales people going around. Now it's almost like a retail kiosk (model).
You have met a lot of sales people over the years. What's their perception of the profession?
If you went to a third-grade class and asked `what do you want to be when you grow up?' the answers would be `doctor,' `lawyer,' `nurse,' or fireman. Nobody says `I am going to be a salesman.' Or very few people. It's interesting because it's not one of things many of us think about doing until actually in the process of having to look for a job. And that hasn't changed much. Even lots of people going to school would think about going into marketing, but not sales. A lot of people who complete their MBA — very ambitious people — end up working for the major stock brokerage houses as stockbrokers or investment bankers. And those are just fancy words for sales people. It's a career in which many people end up by accident. And that's one of the problems. Because we might have accidentally ended up in very wrong sales roles.
How do you see the inter-relationship between sales and the broader marketing role?
Normally, when we think about broader marketing, we think about consumer products. But about 70 per cent of the gross domestic product for any country is business-to-business transactions. Very few of those kinds of companies can rely on television or print advertising because they have a much more targeted market class. Most of those have to rely very largely on the quality of its sales force. And for companies like that, their sales force is actually 80 per cent of their marketing. In consumer goods, sure, there's a bigger role for advertising in terms of creating customer demand. But even those cases usually rely on a sales force to make sure that the distribution channels are mapped and the product is properly positioned in the stores. While it changes from company to company, for many companies sales is the principal marketing activity.
And will it remain so?
I think so.
What are the future projects you would like to work on?
The reception to Discover you Sales Strengths has been really good. People are already asking us about a similar book for sales managers. And the other area in which I am really interested in, personally, is making the concepts about customer engagement much more well-known. People who draw up marketing plans need to pay much more attention to customer engagement score than market share. Your market share may go up for a couple of years because you have got a great product and your competitors don't. But if your customer engagement scores are not going up, that's business you are going to lose very quickly.
The likely success of any marketing or sales plan, in many cases, hinges on how strong your customer engagement scores are. If you don't have a clear picture of what that looks like, you can and will spend a lot of time on plans that will not pay off for you. I personally believe there's an important educational role to help people see just how important that bit of data is. Even when you are acquiring companies, you can use this data to know if you are getting what you are paying for.