Like the product lifecycle, where products shift from introduction, growth, maturity, and decline, your sales organisation is affected by stages too. Being in the wrong stage for too long or taking the wrong action can impede the success of a sales organisation’s endeavours and create unnecessary challenges in the business.
Having examined hundreds of sales organisations through our sales and marketing business reviews, we have determined that the response to these challenges is intrinsically linked to the difficulties encountered during their developmental phase.
There are five distinctive phases that your sales organisation will work through. Whether a sales organisation is in the “Build,” “Compete,” “Maintain,” “Extend,” or “Cull” phase determines its actions and priorities.
During the Build phase, the sales organisation begins to solidify its position. Upon achieving success, the organisation will advance to the high growth Compete stage, followed by the Maintain stage, which relies on consistent and predictable success. Either the sales organisation will continue to achieve its previous achievements and grow in duration, or it will encounter a decline and be compelled to enter the Cull phase, wherein it becomes necessary to downsize.
Naturally, surpassing the monthly, quarterly, or annual revenue target remains the foremost sales challenge. Nevertheless, the sales obstacles that impede an organisation’s ability to increase revenue differ according to the stage of the sales organisation.
This is due to the market characteristics of each stage being “push” or “pull.” For instance, a small group of sellers must initiate contact with new accounts and describe the benefits of their solution during the “Build” phase. In contrast, a market position attracts a well-known company to new sales opportunities in the “Maintain” stage. A review of the various challenges faced by sales organisations during the Build, Compete, Maintain, Extend, and Cull phases follows.
Difficulties of the Build or Construction Phase
At the Build stage, the greatest sales obstacle is generating adequate sales coverage to propel the product to market. Recruiting, training, and constructing a critical mass of competent salespeople capable of penetrating new accounts requires time. The initial determination of the sales model occurs at this stage, specifying whether the sales organisation will employ direct sales through outside field salespeople, internal salespeople conducting transactions over the phone, or channel partners.
During the Build phase, marketers continuously adapt their message to be more effective when salespeople are in front of customers. They gain knowledge from each sales cycle to establish a sales process that can be replicated. Your sales organisation is evolving both on a marketing and sales level.
Obstacles Encountered in the Compete Phase
The challenge of the Compete stage is to scale the sales organisation rapidly to effectively compete with more established firms in existing markets or capture the greatest possible market share in new greenfield markets. The sales organisation develops a collective intuition regarding where it is most likely to lose business and where it can secure new customers.
Organisation volatility will ensue if these qualities are not ingrained in the newly hired sales personnel. Younger salespeople will pursue opportunities they cannot close, resulting in the waste of valuable pre-sales resources. They will likely be let go or depart voluntarily if they fail to meet quota requirements, as their business pipeline is insufficient to generate commission. Organisation volatility occurs due to the constant influx of new and underperforming sales personnel.
Sales leaders and senior executives are very concerned about expansion and scale. In this phase, your sales organisation’s current hiring rate can result in a significant influx of personnel, which presents you with the challenges of selecting suitable candidates, ensuring their rapid integration, and retaining them. They will likely be lost if we do not bring them up to speed as soon as possible.
Difficulties Presented by the Maintain Phase
As the sales process transitions from the late Compete stage to the Maintain stage, it undergoes a substantial transformation. The emphasis transfers from scaling the organisation to maximising sales productivity by reducing cost and increasing the average sales price. This may lead to a revenue shift from external sales to internal sales or partner and distributor channels, which are less expensive.
An additional obstacle pertains to revenue stability and the sales force’s magnitude. Given the completion of the coverage territory model and the full staffing of your sales organisation, the challenge is to identify additional revenue streams to meet the annual growth target.
Given the history of multiple territorial divisions, the solution can be found in the concept of specialisation. National accounts are segregated, the sales force is segmented by the company’s size to be contacted, and industry vertical sales specialists are established to cover sectors such as finance, government, retail, distribution, healthcare, and more.
You must strike a balance between productivity and capacity. Sales leadership needs to increase the leverage of your sales model. Your sales organisation must move as quickly as possible in order to distinguish itself from the competition. As a business, you must now consider: “What are the sales per employee?” What is the per-rep cost? Which commissionable expenses do we bear? Each of these questions is relevant in influencing productivity and cost reduction improvements.
Difficulties Presented by the Cull Phase
During the Cull phase, your sales organisation is surpassed by rivals whose products are superior in quality. In what manner can a sales force that is demoralised and marginalised rejuvenate itself? A cull the herd is the Darwinian response, which entails eliminating underachievers and those with disenfranchised attitudes.
Eliminating the sense of entitlement is essential to rekindling the competitive spirit. Moreover, critical existing accounts whose operational revenue is crucial to your sales organisation’s survival are assigned to “Revenue Care” programmes, which grant them specialised account oversight, customer assistance, and access at the executive level.
“An additional change we are implementing is encouraging some of our more seasoned and knowledgeable salespeople, who are well-versed in the industry and its solutions, to adopt slightly more provocative approaches. We require them to add more worth to the sales process. Your older, successful sales team is somewhat set in its methods. “The times and the business environment require that we alter this model.”
The difficulties encountered by your sales organisation are proportional to their level of development. The sales leader holds a critical position within an organisation due to their responsibility for developing and implementing the sales strategy that guarantees achievement.
If you would like to discuss how your sales organisation can effectively operate in the right stage, please reach out to us.
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