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.
The glue that binds sales to marketing
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.
The Selling Model aims to harmonize marketing strategy/activities and sales strategy/activities so that both pull together as a team to generate revenue.
However, it needs to be said, that a selling model is a more practical device where as strategy (while vital) doesn't answer practical questions like "what makes the phone ring?", "who answers the phone?", "who writes-up the proposals?", or even "do we sell direct or should we appoint distributors?"
The Selling Model doesn't replace business strategy, it translates strategy into action.
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.
Lack of cohesion between sales and marketing is a common problem and is often driven by differing views on what is happening in the market (marketing tend to have a longer view, and sales people tend to think the last sales success or frustration is indicative of the whole market outlook).
One of the biggest disconnects in business is identifying a new potential growth segment, introducing the idea to the sales department, and after 6 to 12 months of little to no results - everyone thinks it was a bad idea. Often, there was no real change in organizational behavior that could justify that conclusion.
Translating business strategy decisions (like the decision to go-after a new market segment) that are made on the planning room white board into front-line selling action, is a sales management issue.
A sales model is an agreement about how all of the parts of the sales and marketing machine will mesh to achieve sales results.
Herding these cats is best achieved by agreeing the sales model through a formal process of analysis, review, brainstorming, and implementation.
Let's now tackle each of the key components of the Selling Model (customer journeys, demand creation method, distribution, and sales force structure)...
Customers have preconceived ideas and habits 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.
Strangely, newspapers are still delivered daily to your doorstep (or somewhere in your front yard, usually under the car) despite the rise of online editions.
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. Generating enquiries is normally through the implementation of communications (advertising, PR, influencer marketing etc.). Digital marketing is currently the most common means of achieving this.
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).
Since the marketing department is usually responsible for communications that drive inbound marketing or brand building to support the efforts of the sales team, the selling model is key to synchronizing these activities
Snap-on-tools: using a franchise model to sell tools to tradies at their place of work.
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 need to either support distribution channels or identify, nurture, and service customers as described by the selling model shapes the structure and size of the sales force.
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 (and there is a more detailed treatment of this topic here: Sales Organization Structure).
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 Lone Wolves structure has two key problems. Inefficiencies can occur when one steals another sales rep's customer or a segment of the market is neglected. The solution is to allocate 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 in 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. The internal sales job is often used as a development pathway toward becoming an external sales person. Although, it has been observed that highly effective internal sales people (who are often detailed minded, task driven, and happy performing clerical functions) don't make good field sales people who tend to be more people and relationship focused.
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, scientific instruments, medical devices, test and measurement equipment - 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. Of course, technical sales people aren't just there to educate. Through being face-to-face during the demonstration they have the opportunity to identify true needs, identify the features that pique interest, and influence and guide customers to a sale.
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 specification 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.
Franchise Management: Franchising is a special case because you sometimes have TWO selling models. The first selling model is your own decision to utilize franchising as a distribution strategy. Franchising is the development of a business model with franchise network support activities like centralized marketing (demand creation) and supply of product, raw material, IT systems, training, and operations manuals. You would have your own sales processes and sales team to support the franchisees and to sign-up new franchisees. The second selling model is the one you have developed as part of the business model that guides how franchisees run their individually owned businesses.
Selling model for large capital purchases
In B2B Selling (particularly very large sales value and long lead times) sales people specialize in various stages of the pipeline. For example, here is a generalized sales team structure for a major infrastructure engineering firm.
Business Development Manager: Identifies potential clients and assesses their potential interest and/or need. The Business Development Manager builds relationships, impresses the prospect with the capabilities of the firm, confirms their capacity to fund the project, and helps the potential customer to understand the value proposition of a major investment. Once the potential customer is ready to start seriously investigating the project feasibility, the Business Development Manager introduces the next specialist in the sales pipeline - the Project Consultant.
Project Consultant: The project consultant's job is to shift the opportunity from concept to reality by assisting potential customers to develop a business case for the major project. The Project Consultant provides technical expertise and financial modelling and often presents the business case to the potential customer's senior executives. The Project Consultant's job is to get the potential customer to formally issue a request for proposal. The project consultant is often used by the potential customer to write the tender specification (or assist). In this way, the project consultant can steer the specification toward the capabilities of the firm they represent.
Sales Engineer / Bid Team: Specialists who prepare a formal proposal (bid). Bid teams on large projects usually consist of many people. Often original design is required before the bid can be costed. On large infrastructure projects and/or defence fighting platform bids, developing a proposal can take months to years. And here we see the value of structuring sales teams based on sales pipeline stages; the type of people and skill sets required to be effective at different stages in the pipeline vary considerably. Specialization improves effectiveness.
Sales Executive: Once the bid has been submitted, a specialist project closer is brought in to "kick the deal over the line". The project closer has multiple skill sets and must be skilled at negotiation, finding information about how the bid is progressing (that normally would be kept confidential), identifying people who can influence the outcome, and able to manage the complexity of contractual terms. Similar to other stages in the pipeline, the closing team would consist of multiple people.
Contract Manager: Once the deal has been won, the sales team hand the project over to an engineering team to deliver the project. Rarely will the pre-sales team (all of the roles described above) have involvement in project delivery.