Modern sales organisations are in a state of flux. The convergence of new technologies, increasing stakeholder demands and volatility in the market place, amongst others, are recognised as posing a number of dilemmas to sales leaders. There are two key areas - Leading the business – looking at growing the business and Leading the people – engaging individuals and enabling performance.
This blog will focus on the dilemmas associated to Leading the Business.
There are 5 main paradoxes sales leaders face today and they are:
- Focusing on top line growth Vs. profitability
These two dimensions are intrinsically linked, the approaches and day-to-day decisions sales leaders make can ultimately be driven by an emphasis on top versus bottom line.
Companies often find themselves following growth strategies, which may end up being very unprofitable. An example, a firm looks to grow the business by developing an aggressive campaign of customer acquisition in a completely new segment of the market, which can be costly due to lack of knowledge of the market.
Finding a balance as to when and how much to invest in growth depends on the organisation’s objectives and strategy. This is something that senior management need to decide and communicate effectively to the sales team.
- Growing with existing Vs. new customers and products/services
It is widely recognised that the approaches, skills and tactics to engage in business development with new customers are different in nature from those required to further establish and develop opportunities with current customers.
Often, there is a tendency to focus on existing customers to remain in the comfort zone, given that it is known how they operate, their routines and processes. However, some salespeople, by nature, enjoy the challenge of acquiring new customer more than retaining them. An implication is sales leaders may promote the growth in existing relationships when the salesforce is intrinsically motivated to follow the path of growing through new customer acquisition.
- Focusing on smaller but more secure Vs. larger but less secure deals
Interest into how sales professionals identify and qualify opportunities has grown over the years. A major trend is being more selective in deciding which sales opportunities to pursue and over-resourcing those, instead of chasing every possible deal.
The complexities, risks and rewards associated with the appropriate design of sales opportunity selection and management are significant and, despite this interest, there is still a lack of an established best practice. When and how to qualify opportunities and the appropriate resourcing models for both large and smaller deal is definitely a paradoxical area.
- Focus on efficiency Vs. effectiveness
Efficiency emphasises predictability, repeatability and adherence to establish processes with a short-term orientation. There is a major emphasis in doing things at a low cost. Performance in efficiency models, sometimes known as working ‘harder’, is created by incentive payments, activity management and close reporting.
Effectiveness, instead, refers to relevance, alignment and coordination, often over a medium to long-term period. The focus is on doing the right things to achieve the intended goals. Performance in effectiveness models, also known as ‘working smarter’, is enhanced by strategic views, coaching and the utilisation of advanced frameworks and models.
Sales leaders should encourage salespeople to find the right balance between effectiveness and efficiency of business meetings and increase the chances of creating new opportunities.
- Promoting change Vs. promoting stability
Sales leaders shape their organisations in the way they deal with change. Though wide recognition exists about change being ubiquitous, there is a need for stability in certain areas and dimensions of organisational life.
The activities and decisions that drive performance in a sales organisation in mature and established contexts are often well understood; however, the practices that make a significant positive difference in volatile and emerging contexts may not be that well documented.
As a trend, given the increase in solution selling, the extent of buyer-supplier co-creation of value, and progressively more competent sales forces, it is expected that flexible sales approaches will be preferred over tightly standardised selling processes in most industries.
Through our Sales Directors Programme and on-going dialogue with members of the Key Account Management Best Practice Forum, as well as through our research with companies undergoing transformations in their sales and customer management organisations, we’ve developed a range of tools to help organisations and leaders work with these dilemmas.
Find out more about our work in our Open Executive Development Programmes and in Cranfield’s Key Account Management Best Practice Forum, the tools we have developed and how we are contributing to redefine current understanding and practice in Key Account Management and Strategic Sales.
- Crafting a Value-Creating Strategy
- Sales Leadership Paradoxes