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Sales Structure, Processes & Metrics for Selling MS & MPS

4 Feb, 2014 By: Tom Callinan, Strategy Development

Many dealers do not give a lot of thought to sales operations, defined as a set of business activities and processes that help a sales organization run effectively and in support of business strategies and objectives. Yet as a business or sales leader if you truly took the time to think through your sales structure, how your sales professionals are deployed, and the metrics that were important to profitable growth above industry normal, would you boil the solution down to activity? I chose that single noun because it seems to be the most emphasized aspect of many a dealer’s sales operations.

I take a different perspective on leading a professional sales team. The first assumption I have is that each team member is there to work, so if I need to tell them they need to find prospects, they will not be a member of my team as that is the beginning of the sales process. But shame on me if I have the sales team pointed in the wrong direction, or more appropriately, at the wrong accounts to develop. And shame on me if I don’t take into account the way a company buys a product or service and the productivity of the sales team that I am asking to sell the product.

Customer segmentation is the foundation of most sales operations: Who are the best prospects for our product or service? Let’s take a look at how important this is for the progressive dealer of today.  In my opinion, the optimal target market for the traditional dealership, defined as working in a local geography, would be companies with 3 – 25 MFDs, or say 50 - 500 knowledge workers. These companies buy locally, probably don’t have sophisticated purchasing organizations, and probably don’t have complex contracts in place that have their entire fleet locked up. I can get in, develop a business case for a beachhead placement, and then expand the relationship. 

The optimal customer for MPS is 250–1000 knowledge workers, or a slight overlap with the MFD target market given that there will be far fewer companies in the 250–500 range then there are in the 50–250 range.  The optimal target for managed services is the companies with between 25–100 knowledge workers, with that 25–50 being a sweet spot as they have pain and almost assuredly have no IT staff.

Yet many dealers want their traditional equipment sales professionals to “sell everything.” There are numerous reasons I hear for this including the dealer not wanting to, and I am choosing my own verb to describe what I hear, alienate their current sales force or they don’t want to incur the additional expense. Yet if I simply took the time to define the perfect prospect for the three offerings it is clear that I am missing a large portion of the target market if I have the same sales professional as the lead business development person for all three offerings. 

Take this a step further and let’s say you’re a larger dealership with a strong major account team that only calls on companies with 10 or more MFDs; you’ve effectively taken your top sales team out of the managed services business, a growth area for your company. On the other hand, you could be a medium sized dealer that has primarily smaller customers and you wonder why you’ve never gained traction in MPS? You don’t have the correct customer type and you didn’t invest in new sales professionals to target the correct customer!

Defined authority levels

Let’s move onto the next decision area for sales coverage: how does a company buy my product or service?  When I ask a sales professional who buys what they sell they almost unanimously respond with the same rote answer: The “C” level. Many a dealer has spent tens of thousands of dollars hiring “experts” to train their sales professional on “getting to the C level.” Yet does the C level really buy what you are selling?

We sell B2B and for businesses one thing drives buying authority: Risk. Not dollar value as many companies spend a significant amount on commodities; whose price is transparent and published minute by minute on some exchange, so there is zero risk in acquiring these inputs to their product.  Risk is the determinant of buying authority. If you think that through then for what we sell it really comes down to company size.

In a sub $15 million company it’s probably the business owner; in a sub $30 million company it’s either the business owner or a strong finance leader; in a sub $100 million company it’s the finance leader or IT leader, and larger than that it is probably the IT leader or the second in charge in IT. Your sales professional also determines how risky your product or service is to the company. If all they do is try to “upgrade” the in place MFD then there isn’t a lot of risk and they’ll be pushed down to the lowest level that can make the decision. If they are able to uncover business issues with the current approach to document workflow they get an audience with a higher level person, probably above the current vendors contact but still within the previously defined authority levels.

Take this back to the optimal targets for our products and services and you see that the traditional copier business spans from business owner to IT director, MPS is focused primarily on IT with some lower end overlap into finance, and MS is almost always on the business owner. So again we see that there isn’t a solid overlap that indicates we need to have different sales forces to be highly successful in each of these businesses.

Understand sales productivity

The final focus area for this article is productivity. In my opinion, after you have your sales structure set correctly the number one metric a sales leader should understand is sales productivity, or revenue per sales professional. If your traditional MFD sales team doesn’t have productivity of $500 to $600 thousand per year, you have a problem that needs to be addressed. I find many dealers launching new programs, like MPS or MS, through a sales force with $300 thousand productivity. My interpretation of this is that we have a highly unsuccessful sales team in our core business and yet we think they are going to be able to sell a new product or service offering? That description of “highly unsuccessful team” is not a personal attack on any sales profession or group of sales professionals as I’ve already detailed two key areas of success that may not have been practiced: Segmentation and the correct contact person.  But it would be a valid description of a sales team with this low productivity.

The leadership of a dealership with$300 thousand sales productivity needs to understand and fix that issue first. On the other hand, I’ve worked with dealerships that have extremely high productivity and wonder why their sales professionals aren’t selling the new product or service. Well besides the aforementioned target and contact issues, they’re too busy!

For a deeper understanding visit the ITEX Expo at the Las Vegas Rio, March 11-13. I’ll present this information in detail with co-presenter Trevor Akervik, Managed Service Director for Marco, Inc., on March 12 in the Power Hour session titled: S3: The Sales Structure, Processes & Metrics for Selling MS & MPS in a Traditional Copier Company

Two sales process experts will define a clear go-to-market strategy for the traditional copier dealer to successfully sell both managed services & managed print services to their existing accounts. Learn how to deploy this strategy to differentiate yourself from other copier dealers and gain new business.

In addition, for a deep dive on sales, I will present the session: Structuring and Measuring Your Sales Force When You’re in Multiple Business Models, with co-presenter Jeff Boate, President, perryProTech, within the Executive Leadership Workshop on March 11. This half-day workshop addresses 4 critical quadrants from industry experts with regard to your business model and performance, identifying, hiring and retaining company leaders, and next level strategies for employing fully integrated marketing across all media platforms. Don’t miss this strategic workshop that’s intended to ignite revenue and profit in 2014; followed by a VIP Reception to relax and network at.

Tom Callinan is the president and managing principal of Strategy Development, a management consulting firm. From 1998-2005, Callinan was an executive with IKON Office Solutions (acquired by Ricoh), most recently vice president and general manager of IKON's largest business unit with revenue of  $1.4 billion. Prior to IKON, Callinan was the founder and CEO of Copifax, Inc., a copier dealership that was recognized with numerous awards including inclusion on the INC 500 list of fastest growing private US companies. Copifax was acquired by IKON in 1997. Callinan graduated with high honors from The Wharton School, University of Pennsylvania.  Visit http://www.strategydevelopment.com for info.

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