2016 Smart Manufacturing Summit: Solutions Exchange Takeaways and Best Practices

SALES IMPROVEMENT STRATEGIES:
USING OUTSIDE SALES REPS VS.
DIRECT REPRESENTATIVES

Type of outside rep needed
• An initial conclusion of the group was that if we were going to utilize outside reps it was better to hire those who were closer to what the existing direct reps were in the company. Also, they should be treated, managed and measured in a very similar manner to how the direct sales force is.
• Regarding what to look for in outside reps, the group agreed they did not want someone who was primarily going to sell on price. In the internet age, there is much less reason to have such a rep on the payroll.
• The ideal rep profi le would be someone with ”partner potential”, i.e., the ability to bring valuable business insights to and from the customer. In some cases, this might even mean a rep capable of finding new or expanded markets for the company’s core competencies.
• The ideal sales rep (whether internal or external) must be consultative in nature vs. product-sale focused. To do this, the rep must clearly understand the core reason the business exists, which is far broader than any need a product might fulfill.
• Before hiring a rep (among other desirable traits), we should test the rep’s knowledge/experience on what they would bring to the table. This includes not just industry knowledge, but more importantly, a consultative selling/problem-solving nature, as well as the ability to ask strategic, insightful, even market research-type questions.

Senior management’s role
• Before going further with sales force recruitment, selection and management, senior management must clearly lay out what a good customer looks like (as well as what it does not look like.) And within this context, what a good sale looks like (e.g. minimum margin levels, cost-to-deliver thresholds, etc.) This criteria should be as specific as possible.
• Beyond this, senior management should outline big-picture overarching goals, e.g. “to be at least first, second or third in all product categories”, etc.
• Beyond providing the requisite company, product & services training, ask a set of “Find Questions” early in the relationship with the prospective customer. Find Questions are specifically designed around the customer’s business and have as their purpose matching up possible strategic opportunities with the core capabilities of the company. Th is would be at least 10, usually more questions designed to open up a productive dialogue about the available opportunities.
• These questions drive the sales process to a more strategic (and generally more profitable) space than traditional discussions based upon product features and price. It is the responsibility of sales management to ensure these questions are being asked on customer visits and that intended results (also defined by sales management and marketing) are obtained.
• Key measurements and metrics need to be in place and reviewed with distribution reps, just as they are with the internal salesforce.

Compensation
• Most companies pay between 5%-6% of sales supported (at least initially) by some kind of draw, but no salary. And in some types of sales, it might also be appropriate to add in an annuity aspect to the rep’s compensation program for retained business.

Other: The Role of Marketing
• Marketing bears a signifi cant responsibility in demand creation in support of the company’s sales goals.
• Marketing & Sales Management must ensure that outside reps are not representing competing product lines.

Facilitator: Bob Grabill, Chairman, Chief Executive Network & Senior Executive Network, bgrabill@chiefexec.com

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