Sales Effectiveness is Critical to Loyalty
Perceived product or service quality counts for only 22 percent of customer loyalty success, value for the price is another 19 percent, and breadth of offering brings it to 61 percent. A full 39 percent of success depends on the effectiveness of salespeople and the added value they personally bring compared to customers. The bottom line? Despite what many salespeople may claim, companies lose more business due to inadequate sales efforts than to quality or price—which means boosting sales effectiveness is critical to success.
Going Beyond the Interview
Most salespeople are hired after interviews where they get the chance to sell their experience, capabilities and any other feature, function or benefit they can. Subjective criteria are usually used to evaluate their answers.
It is not surprising, then, that so many bad hiring decisions are made in a sales force. The unstructured interview is only slightly more predictive of on-the-job success than the 50- 50 chance you get with the flip of a coin. World-class sales forces do not leave their hiring decisions to chance.
Top sales forces...
- employ statistically validated, job-specific assessment tools.
- put candidates in a simulated selling environment to ‘test-drive’ their abilities.
- let the candidates ride with existing salespeople to glimpse behaviors in the real world.
- go the extra mile.
Xerox: Trials to Hire
Xerox’s global imaging division employs many of the recruiting and selection techniques that personify a world-class hiring effort. To maintain their 1,400-person sales force throughout North America, they:
- Implement a capabilities test.
- Send a candidate into the field to ride with one of their peers. (There is no better source than another sales rep to tell if this person is going to make it and be a team fit.)
- Have prospective sales team members meet with two or three sales managers, and ultimately the VP of sales or the president.
- Perform extensive reference checking to dig down to the third and the fourth-level person.
- Find employees willing to be customer service focused, spending time asking questions about how they like to be satisfied as a customer in their own lives.
Who’s Wooing Your Customers?
Do you know who tomorrow’s competition is? Success in your marketplace depends on competitive position, yet even the best competitors suffer higher rates of customer churn than desired. In fact:
- 60 percent of lost customers come as a surprise.
- 80 percent of deserting customers rated their vendor as good or very good.
- The most frequent cause of a major customer loss not only came as a surprise, it came from an unexpected source.
Staples: Generalists and Specialists
Traditional sales forces used to exist in product-centric worlds. Manufacturing, marketing and sales were aligned by products. Customers now demand that sales forces exist in their world. Their world is business issue-centric, not product-centric, and salespeople need a thorough understanding of the customers’ business issues to add value.
Organizing around customers creates many challenges for a sales force, but despite the inherent challenges, customers are now demanding that sales forces re-align to serve them.
Corporate Express, a division of Staples, addresses that by organizing its sales force around different customers’ needs. The company offers more than 100,000 products spanning several different lines such as supplies, furniture, information technology and others. To maximize efficiency, its salespeople who serve small and mid-sized customers operate as generalists. They target many different types of customers within geographaries.
But with its larger and more sophisticated and more valuable accounts, Corporate Express organizes its sales force around particular market segments like health care, education and government. In these segments, their buying processes and product needs warrant individualized attention that a generalist sales force cannot provide. Knowledge of hospital systems, educational institutions and government procurement processes is a major requirement of these customers, and Corporate Express has responded by structuring themselves to satisfy the market segments specific buying needs.