How to Make the Most of Your SVP of Sales

Margin Mania

Another change in the business model, partly due to the weak economy, is more of a focus on margins rather than revenue, experts say. “That is requiring our senior vice presidents to become much more financially literate,” Thierer says. “They have to know the cost of goods, and what the service costs.” Moreover, says Michael Lorelli, CEO of Water-Jel Technologies (a privately held company based in New Jersey that makes burn-care products), his VP of sales, Paul Slot, “needs to think through what he can do proactively to shift the mix to higher-margin products.”

The evolving sales role has also altered the executive structure at companies like Catamaran, which has an SVP of sales for each division rather than one centralized CSO. Catamaran divides the responsibility because each division’s market—managed care, large companies, small companies, federal programs like Medicaid and state employees—has starkly different requirements.

Mark Lubkeman, a managing director at BCG and a worldwide topic leader for sales/channels, says some companies may now want to merge their divisional CSOs. Alternatively, they can maintain their multiple sales chiefs, he says, if they “have a clear strategy for serving customers and clear objectives for cross-selling.” In determining whether a company-wide CSO is needed, he says, a CEO needs to ask, “Am I comfortable that I am bringing and integrating the full range of products and solutions to my customers?”

As with virtually every managerial role in every industry, sales SVPs need to be proficient in a lot more technology than in previous decades. Catamaran’s SVPs train their sales reps in the newest mobile apps. “Data analysis has gone from being a small piece of the job to the core job,” says Hoops of Visit Indy. “There’s market intelligence work, analyzing databases, focusing on vertical markets and micro-messaging to specific groups.”

Perhaps most important, technology enables the sales chief to be more effective in targeting specific new markets. For instance, Hoops says, tourist and convention bureaus like his are increasingly combining low and high tech, by hiring “reader-board” service companies to go to hotels in competing cities and scout the announcement boards that list which conventions are having meetings in which hotel rooms. (For Indianapolis, that might mean going to Chicago, Denver, Minneapolis or St. Louis.) That’s the low-tech part. Then, the sales chief massages the data on those out-of-state conventions—along with her own city’s amenities and convention history—to figure out which of Indianapolis’s attractions might appeal to which target group. If a religious association or medical organization isn’t particularly interested in the Indy 500 race, Hoops says, Travis will emphasize instead “the overall layout of how the downtown is set up and that you don’t have to shuttle anyone from hotels in the suburbs.”

According to Lorelli of Water-Jel, as the sales position acquires increasing strategic importance, more CEOs are taking a turn at the job themselves by going out on the road with their CSOs. Lorelli says he joins Paul Slot on visits to each of his top 20 customers once or twice a year.

That effort reinforces the necessity for a new model of sales chief. What CEO wants to spend 24-7 in airplanes and hotels with a half-drunk backslapper? “You need an open-minded and self-confident vice president of sales, who’s willing to take advantage of the blank-check offer from the CEO,” Lorelli says. In other words, the kind of managerial peer with whom any CEO would want to travel.