24 April 2022
The selling model defines how you structure your sales efforts to achieve maximum efficiency and effectiveness and aligns with how your customer wants to purchase, your distribution model, and your demand creation method.
All firms work at developing revenue growth be it through retail sales, network marketing, franchising, online sales, account based selling, solution selling, or some other broad sales framework.
This is the combination of marketing and sales activities and processes. These all contribute to the Selling Effort.
The orchestration of these selling efforts into a coherent and well understood system is defined by a Sales Model.
The purpose of the sales model framework (depicted above) is to assist with...
- Designing a sales model from scratch.
- Adjusting the sales model to accommodate a new business strategy (things change).
- Understanding where other parts of the marketing strategy should integrate with, and contribute to, the selling strategy.
All organizations will have a selling model even if not documented/articulated. The process of doing so (trying to map out your extant selling model) is useful because it may highlight parts of the model that need a rethink. Many selling models have developed organically and may no longer fit the current business.
A key symptom of a selling model that needs updating is the existence of redundant selling processes, members of the team that no longer seem to fit, and the sales department and marketing department seem to be fighting different battles.
Customers have preconceived ideas about where and how they should purchase. Buying milk for example; people expect they should be able to drive around the corner for a carton of milk. This dictates an intensive distribution model. However, in B2B markets, possibly they have no preconceived idea and start looking on the internet. You can either go with the flow or buck these realities. However, before you improvise you must first master the piece - find out what customers want, how they behave, and why.
Understanding the typical process (and there could be many) by which your customers identify their needs, begin looking for solutions, and where they expect to find solutions provides information about how you should structure your selling model to maximize the quality of the customer experience (hence increasing your competitive advantage). If (for example) customers expect a high-touch sales experience, it's probably wise to provide sales people and customer service as part of your selling model.
This doesn't exclude the possibility that the market may be ready for a radical new approach (moving from a retail store selling model to an online sales model for example). But, this will require a process of re-education and you may need deep pockets to fund the transition time period.
It wasn't too long ago that bread and milk were delivered to your front gate everyday ready for you when you woke-up in the morning.
Demand creation method
There are essentially two broad approaches to demand creation. Inbound marketing and Outbound marketing.
Inbound marketing: the sales team is tasked with capturing enquiries, qualifying them, and closing sales. The sales enquiries are generated by both online and offline marketing.
Outbound marketing: the sales team is expected to identify leads and make approaches to ascertain interest. This could be achieved using outbound telemarketers (also known as appointment setters) trawling their way through lists of likely suspects, or the sales people themselves may use their own home-grown methods.
For many organizations a HYBRID sales model may be required, particularly organizations that have a combination of SOLUTION selling, transaction sales (components and spare parts), and a service business (technicians in vans driving around fixing things).
At the broadest level, there are two categories of distribution - direct to market where the organization sells direct to the customer and indirect distribution where the organization sells via intermediaries (wholesale and retail distributors, system integrators, agents, stockists etc.)
Organisations that have a high dependence on wholesalers and retailers (and other channels) have sales teams structured to manage the distributor relationship. Read more about distribution strategy here.
Indirect sales (channel marketing) is a very different beast to selling direct to end-users. Sales people who work with distributors (sometimes known as channel partners) are more akin to Account Managers. The skill set is more educational, mentoring, technical support, and promotional support based. Generally a carrot and stick approach is used depending on who has the power in the relationship (is the distributor lucky to have you, or are you lucky to have them?).
The close cousin of the Selling Model is the Place Strategy (as in the 4P's of Marketing). Read more about Place Strategy here.
The Sales Team structure
One of the most important parts of the Selling Model is the way in which the sales team is segmented into specialized groups. This is called sales team structure which supports the selling model.
Choosing the right structure is critical to maximizing sales productivity.
Sales teams are hugely expensive and getting more so. Developing the optimum selling model is the means by which a firm maximizes their return on this operational cost.
Here are some examples of sales team structures.
No sales people: Yes! It is possible to build a pure play digital marketing model that doesn't need sales reps AT ALL. Even customer service people can be almost eliminated. However, some business leaders are kidding themselves if they think there will not be some situations where a customer absolutely must speak to somebody about something (usually when something goes wrong). At that moment, whoever handles that interaction is providing some form of sales support. Don't confuse title with function, just because they aren't called a sales person (or it's many variants) doesn't mean a sales function isn't being performed. However, there are some digital marketing business models where the strategic decision has been made to discourage any interaction with a human being (to save cost). This is particularly true of technical support. There is a type of customer who no matter how much technical support they are provided with, they never join the dots ("is the computer plugged in?"). Some businesses choose to just ignore them because providing technical support A) doesn't help them B) encourages those who could probably work it out to take the easy way. Some businesses provide limited tech support by deliberately making it hard. Ever waited for hours on a telephone support line?
A collection of lone wolves: The simplest way to organize a sales team is to not structure them at all, it's every person for themselves. Sales people do their own sales prospecting, develop their own customer base, and qualify and close sales leads themselves. This is the typical sales model employed by car dealerships. Somebody walks on to the car yard and a sales representative approaches them to see if they need any help. The more successful sales reps will have been in the industry many years and generate repeat business through staying in-touch with past customers anticipating when they may be ready to update their car. Further, they will have developed extensive referral networks.
Lone wolves with sales territories: The selling-scape is divided-up and each sales rep is allocated their "patch" or "turf". Sales territories can be divided by geography, industry, account size, products or product groups, or simply assigned specific customers. In some companies, reps are structured to look after key accounts, small accounts, distributors, export sales, and maybe in-bound telephone sales. Sometimes firms see advantage is separating the hunters from the farmers, assigning specialists to find new customers and assigning specialists to look after existing accounts (account management).
External sales teamed paired with internal sales: Another popular model is to build two-person teams consisting of a senior salesperson who is constantly on-the-road partnered with a junior salesperson who is desk-bound. The internal sales person takes care of all administrative tasks. Driving between appointments the external sales rep calls in and briefs their support person with outcomes from the sales call and assigns follow-up actions. Customers are encouraged to contact the internal sales person if they need anything (pricing, following-up on delivery, sales information etc. or if they wish to make an appointment to see their sales representative). The internal sales person assembles sales quotes and e-mails them to customers at the instruction of the external sales person they support. The advantage of this model is that it maximises face-to-face selling time by removing low-value (although necessary) tasks from the field sales person. The internal sales person also contacts customers and sales prospects according to a prescribed schedule to maintain contact, check their pulse (are they still alive?), and promote new products/services. Thus, the internal sales person sets appointments for the external salesperson focused on both customer retention, up-selling, and new business. Typically, this two-person team is paid an incentive for hitting or exceeding targets and share the commission usually on a 70/30 split biased toward the more senior external sales person.
HCF (Hook 'em, Clean 'em, and Fry 'em): The sales team is divided into two main structures. A field sales team (also known as External Sales) and an internal sales team (also known as customer service). The external sales person is allocated a territory. The external field sales person is (in effect) responsible for selling the capabilities of the internal (customer service) sales team, but in practice is selling the ability of the organization to rapidly supply a large catalogue of equipment, spare-parts, accessories, and consumables. The customer service team are often highly trained in the technical aspects of the equipment they sell and the industry they serve thus becoming a useful technical resource for the customer and are able to guide the selection of products. If backed-up by inventory and logistics that can rapidly fulfill orders - the HCF sales model can be highly effective. The field salesperson isn't trying to kick sales over the line but secure new customer accounts (Hook 'em) thus "making the phone ring". The internal sales team do the actual sales closing (Clean 'em, and Fry 'em).
Solution selling team: Companies that sell "solutions", that is products or services that are typically designed from a customer's specification, require a different approach. Depending on the value of the typical transaction and complexity, sales teams selling solutions might consist of a few people to large teams. In very large Defence fighting platform projects or engineering infrastructure projects, sales teams are assembled from specialists to suit each opportunity. However, even with smaller projects such as selling software solutions, a team of specialists is often involved. Solution selling requires a strategic approach and the management of a number of relationships between the vendor and the potential customer. Many of the specialists in the selling team are not strictly regarded as "sales people" (such as designers, engineers, estimators etc.) however, they all understand they are contributing to the sales process.
Technical selling: There rarely exists a sales person that isn't required to explain a product/service to potential buyers however in technical selling and specification selling it is essential. Technical selling is needed when products or services require more than common knowledge to appreciate their specifications. A car salesperson explaining the unique features of a motor vehicle is not technical selling (because we all know how to drive and are familiar with [except my Mother] complex dashboard functions). However, the functions of a motor vehicle are probably a good analogy for technical selling. Products like microprocessors, PLC's, sensors and other automation components, electric motors, VSD drives, hydraulic systems - shall I go on? - all need demonstration or explaining in order to promote them. It's true, you can publish detailed information on the internet (tech data sheets) and some companies provide brilliant videos. However, sometimes it's just easier to ask an expert.
Specification selling: Engineers and other designers (architects being a notable example) can greatly influence the sale of products by specifying them when designing. Specification selling therefore is the process of finding these people and educating them on new products and providing them with all of the necessary information so they confidently write them into the specification. Many organisations will provide CAD files (CAD Models) that can be added when designing. Such models will include dimensions, weights, colour options and even rendering to enable the proper visualization when creating 3D views. These files will also provide specification text for incorporating in the accompanying documentation.
Channel Management: Organizations that sell through distributors have sales people who manage (or service) these relationships with the aim of maximizing their performance. Tasks may include identifying and appointing new distributors, conducting annual reviews and joint business planning, attending to requests for promotional support, expediting orders and other problem solving, joint customer visits, technical training and so on. Large organizations managing many distributor relationships may split these tasks up amongst specialists.
There are many variants to the way sales teams can be structured. The above list is by no means exhaustive. The value of mapping out your selling model is to identify ways to improve it (better sales team structure) but also to ensure that MARKETING activities are aligned with the primary role of the SALES FORCE.