How to Make the Most of Your SVP of Sales

Throughout 2011, Greg Buscetto, one of five senior vice presidents of sales and marketing at $13 billion pharmacy benefits manager Catamaran, took about a dozen trips to Atlanta from his company’s suburban Chicago headquarters to woo a potential $400 million client. Meeting with the target firm’s CEO, COO, CFO and other top managers, Buscetto explained how Catamaran is structured and how it administers prescription drug benefits. “He described everything from the technology to people resources to transition plans,” says Buscetto’s boss, Catamaran CEO Mark Thierer.

Overseeing a company’s sales efforts today requires much more than a friendly personality, a good golf handicap and familiarity with the merchandise. The modern head of sales—often called the senior vice president of sales or the chief sales officer (CSO)—is a strategic partner of the CEO, helping to set long-term corporate policy. That’s largely because this person is now selling packages, not products, and that means taking on broader responsibility and forging alliances across corporate divisions.

“It used to be that if you could really know your clients and lunch and golf [with] them, that was enough,” Thierer says. “That’s no longer the case. What Greg is selling is the company’s ability to deliver on all the promises we make.”

Redefining “Product”

For the sales chief, probably the most important change in the business model is that the corporate focus has gone “from product-centric to customer-centric,” says Vikas Taneja, the managing director who leads Boston Consulting Group’s marketing and sales practice in the Americas. Although this trend has been developing for at least a decade, it’s accelerated over the last three years or so.

Originally, the quintessential backslapping salesperson sold widgets. Then, he or she sold widgets plus service contracts. But now the “product” being sold might be the services of a 24-hour data center; or as at Catamaran, it’s the ability to negotiate drug prices rather than the drugs themselves. At Visit Indy, the official marketing organization for Indianapolis, Senior Vice President of Sales Michelle Travis is pitching an entire city, including the 12 downtown hotels that are connected by climate-controlled walkways and the car races at the Indianapolis Motor Speedway.

“Data analysis has gone from being a small piece of the senior sales position to the core job. There’s market-intelligence work, analyzing databases, focusing on vertical markets, micro-messaging to specific groups.”

In broadening the definition of what they sell, this trend inevitably broadened the sales chiefs’ turf. If 24-hour tech support is part of the package, the CSO needs some connection with the software group. With increased global competition, hanging onto existing customers is as important as attracting new ones, which means that sales now has to worry about loyalty programs that previously came under the marketing department’s purview. In addition, Greg Buscetto of Catamaran works with the finance staff to understand the cost of the goods and services they pitch.

The sales chief can delve into other departments without stepping on the departmental managers’ toes by forming alliances, says Suzanne Kounkel, a principal in Deloitte Consulting’s tech practice who advises clients on sales effectiveness.

Because of all these added responsibilities, the SVP of sales is now equipped to play a bigger role in helping the CEO set strategy. Travis, the Visit Indy SVP, is one of just three members of an elite sub-team of that organization’s eight-person executive team, along with CEO Leonard Hoops and the executive vice president, James Wallis. Among their recent efforts was analyzing whether to support a proposed municipal tax hike on car rentals and stadium tickets if the proceeds went to help fund Visit Indy—a task far beyond the old widget-selling role.

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.