SalesLab •|• Articles on marketing sales management innovation

Executives know that premium and value offerings are squeezing middle-of-the-road products and services in many industries. McKinsey research across 25 industries and product categories in Europe and North America shows the extent of this market polarization. Polarization plays out in diverse ways across different distribution channels, subsegments, and geographies; the strategies of individual companies and their channel partners will heavily influence how the phenomenon unfolds.

Source : The McKinsey Quarterly |

Marketers are struggling to keep up with an explosion of new customer segments, sales and service channels, media, marketing approaches, products, and brands. Many have responded to fragmenting opportunities by bolting on new brands, channels, and marketing programs, but doing so increases costs and complexity while reducing organizational agility. To deal with proliferation companies must instead become more sophisticated at prioritizing opportunities and allocating resources while increasing the consistency and coordination of their marketing execution. The need for profound changes in marketing strategy and execution also calls for new roles, responsibilities, processes, and capabilities inside the marketing organization.

Source : The McKinsey Quarterly |

As markets polarize and customer needs fragment, customer segment management is becoming increasingly important. Effective segment management often requires collaboration across functions, which is difficult to facilitate and reward in product-, service-, and geographically oriented organizations. A few marketers have responded by adopting common, actionable segmentations, integrating segment-level goal setting into the planning and performance-management processes, and establishing clear organizational accountability for results. This approach can yield dramatic changes in customer experience and significant financial gains. But it’s easier to talk about than execute—which is precisely why effective segment management is a powerful basis for sustainable competitive differentiation.

Source : The McKinsey Quarterly |

In today's marketing environment, the proliferation of segments, channels, and product categories is forcing companies to identify and prioritize opportunities at the points where these components intersect in order to stimulate growth. But because most companies still regard customer insights as an isolated research capability, they can't obtain or integrate the information they need. A customer insights network helps marketers look at the world through a number of lenses and to develop proprietary information about customers. It's also vital to embed customer insights in the organization’s key decisions by restructuring brand and sales planning, new product development, marketing investments, and other business planning processes.

Source : The McKinsey Quarterly |

Empathy, in this context, is the central ability to feel as other people do to sell them a product or service; a buyer who senses a salesperson's empathy will provide him with valuable feedback, which will in turn facilitate the sale. The authors define the second of the two qualities, ego drive, as the personal desire and need to make the sale--not because of the money to be gained but because the salesperson feels he has to. For sales reps with strong ego drives, every sale is a conquest that dramatically improves their self-perception. In the dynamic relationship between empathy and ego drive, each must work to reinforce the other. Why did the executives that Mayer and Greenberg studied continue to hire salespeople who did not have the ability to perform well? The companies were hindered in the preselection process by flaws in the prevailing forms of aptitude testing. Test takers could easily give answers they knew the test givers wanted to hear, in part because the tests sought to identify particular psychological traits rather than the personality type most capable of selling.

Source : Harvard Business Review | Price : 6 €

Increasingly sophisticated customer purchasing organizations, greater pricing transparency, and downstream consolidation have disrupted sales channels for industrial products. Suppliers can improve their performance by using some of the same tools that caused these disruptions to obtain information and insights about their customers, their distribution economics, and their competitors. Companies that gain this knowledge will be able to decide whether and how to restructure their channels, to select new partners, or simply to manage existing ones better. Fundamentally shifting from one form of distribution to another is rarely the right move. Instead, suppliers should subtly shift their emphasis by learning more about their economics, customers, and competitors.

Source : The McKinsey Quarterly |

In this article, the authors develop a systematic approach that companies can use not only to facilitate the sale but also to ensure the long-term account relationship. Their eight-step procedure shows how to open a contact, "separate the suspects from the prospects," develop a profile of a company's needs and key personnel, justify the purchase to the buyer, make the sales pitch, coordinate company resources, close the sale, and maintain the account. Before they can engage in strategic selling, most companies will have to revise the makeup of their sales forces according to the kind of sales they want to make, which may include different types of nonrecurring sales. To help solve these more complicated selling problems, the authors provide organizational guidelines for companies to use in their specific operations. Among these are creating a senior sales force to service a multitude of major accounts, assigning a field sales manager to one or two accounts for regional sales management, and having top executives take charge of the large sales.

Source : Harvard Business Review | Price : 6 €

Examples of consumer value propositions that resonate with customers are exceptionally difficult to find. When properly constructed, value propositions force suppliers to focus on what their offerings are really worth. Once companies become disciplined about understanding their customers, they can make smarter choices about where to allocate scarce resources. The authors illuminate the pitfalls of current approaches, then present a systematic method for developing value propositions that are meaningful to target customers and that focus suppliers' efforts on creating superior value. When managers construct a customer value proposition, they often simply list all the benefits their offering might deliver. But the relative simplicity of this all-benefits approach may have a major drawback: benefit assertion. In other words, managers may claim advantages for features their customers don't care about in the least. Other suppliers try to answer the question: Why should our firm purchase your offering instead of your competitor's? But without a detailed understanding of the customer's requirements and preferences, suppliers can end up stressing points of difference that deliver relatively little value to the target customer. The pitfall with this approach is value presumption: assuming that any favourable points of difference must be valuable for the customer. Drawing on the best practices of a handful of suppliers in business markets, the authors advocate a resonating focus approach. Suppliers can provide simple, yet powerfully captivating, consumer value propositions by making their offerings superior on the few elements that matter most to target customers, demonstrating and documenting the value of this superior performance, and communicating it in a way that conveys a sophisticated understanding of the customer's business priorities.

Source : Harvard Business Review | Price : 7 €

As B2B customers become increasingly demanding, price pressure on suppliers is mounting. An effective response for some companies has been to forge collaborative relationships with selected customers to develop tailored products, bundles of products and services, or proprietary solutions. But many expensive collaborative efforts fail when buyer and supplier can't identify new sources of value or when suppliers fail to establish the necessary internal coordination. To avoid these pitfalls, suppliers must improve the way they identify value, organize themselves, and approach their investments.

Source : The McKinsey Quarterly |

An overall theme is the degree to which the buy cycle has gotten out of sync with the sell cycle. Buyers have always had a buy cycle, starting at the point they perceive a need. Sellers have always had a sales cycle, starting at the point they spot a prospect. Traditionally, the two have dovetailed--either because the seller created the buyer's perception of need or because the buyer pursued a need by contacting a salesperson (often for product information). Now the buy cycle is often well underway before the seller is even aware there is a cycle--in part because of the information asymmetry created by the Internet. The implications for managing a sales organization are profound in that sales training must now address how reps handle an environment in which buyers have more knowledge than they do. The authors offer evidence that sales executives are taking--and should take--aggressive action to train and retain sales talent, manage the sales process, and use sales support technologies to meet the challenges of this new environment.

Source : Harvard Business Review | Price : 7 €

Sales and service interactions have become increasingly important sources of competitive differentiation for many entrenched suppliers. But incumbents often get stuck in the middle between low-cost competitors and high-end ones that provide distinctive service and sales support. Suppliers should rethink their approach to sales and service by segmenting customers according to their interaction requirements, building a "lean backbone" to meet shared needs, and establishing standard, affordable, and high-touch overlays to satisfy more exacting demands. Transforming the sales and service process is a major challenge that requires careful sequencing, focused skill building, and the enforcement of new forms of accountability.

Source : The McKinsey Quarterly |

When a company launches a new product into a new market, the temptation is to ramp up sales force capacity immediately to gain customers as quickly as possible. But hiring a full sales force too early just causes the firm to burn through cash and fail to meet revenue expectations. Before it can sell an innovative product efficiently, the entire organization needs to learn how customers will acquire and use it, a process the authors call the sales learning curve: The company--marketing, sales, product support, and product development--and its customers transfer knowledge and experience back and forth. As customers adopt the product, the firm modifies both the offering and the processes associated with making and selling it. The more a company learns about the sales process, the more efficient it becomes at selling, and the higher the sales yield. As the sales yield increases, the sales learning process unfolds in three distinct phases--initiation, transition, and execution. Each phase requires a different size--and kind--of sales force and represents a different stage in a company's production, marketing, and sales strategies. Adjusting those strategies as the firm progresses along the sales learning curve allows managers to plan resource allocation more accurately, set appropriate expectations, avoid disastrous cash shortfalls, and reduce both the time and money required to turn a profit.

Source : Harvard Business Review | Price : 6 €

Firms must consider and alter four factors over time: the differing roles that internal salespeople and external selling partners should play, the size of the sales force, its degree of specialization, and how salespeople apportion their efforts among different customers, products, and activities. These variables are critical because they determine how quickly sales forces respond to market opportunities, influence sales reps' performance, and affect companies' revenues, costs, and profitability. In this article, the authors use time-series data and cases to explain how, at each stage, firms can best tackle the relevant issues and get the most out of their sales forces. During start-up, smart companies focus on how big their sales staff should be and on whether they can depend on selling partners. In the growth phase, they concentrate on getting the sales force's degree of specialization and size right. When businesses hit maturity, companies should better allocate existing resources and hire more general-purpose salespeople. Finally, as organizations go into decline, wise sales leaders reduce sales force size and use partners to keep the business afloat for as long as possible.

Source : Harvard Business Review | Price : 6 €

Today's proliferating marketing environment frequently requires a transformation of a company's broad-based marketing and sales elements. Carrying off change of this magnitude at a brisk pace is difficult because of several challenges posed by sales and marketing: organizational diversity and complexity, uncertain competitor and customer responses, and the challenge of balancing creativity. To overcome these issues, executives need to pay attention to the marketing- and sales-specific subtleties around several critical levers for change. The key levers to emphasize are leadership and clarity of purpose, capability building, adopting new ways of working, changing mindsets and behaviour, and designing the transformation.

Source : The McKinsey Quarterly |

Sales departments tend to believe that marketers are out of touch with what's really going on in the marketplace. Marketing people, in turn, believe the sales force is myopic--too focused on individual customer experiences, insufficiently aware of the larger market, and blind to the future. In short, each group undervalues the other's contributions. Both stumble (and organizational performance suffers) when they are out of sync. Yet, few firms seem to make serious overtures toward analyzing and enhancing the relationship between these two critical functions. Curious about the misalignment between Sales and Marketing, the authors interviewed pairs of chief marketing officers and sales vice-presidents to capture their perspectives. They looked in depth at the relationship between Sales and Marketing in a variety of companies in different industries. Their goal was to identify best practices that could enhance the joint performance and increase the contributions of these two functions. Among their findings: the marketing function takes different forms in different companies at different product life cycle stages. Marketing's increasing influence in each phase of an organization's growth profoundly affects its relationship with Sales; and the strains between Sales and Marketing fall into two main categories: economic (a single budget is typically divided between Sales and Marketing, and not always evenly) and cultural (the two functions attract very different types of people who achieve success by spending their time in very different ways). In this article, the authors describe the four types of relationships Sales and Marketing typically exhibit. They provide a diagnostic to help readers assess their companies' level of integration, and they offer recommendations for more closely aligning the two functions.

Source : Harvard Business Review | Price : 7 €

"The development of virtual simulations as a training for real situations. These are scenarios using Autonomous Virtual Agents (AVA) or, in other words, computer-generated characters, programmed to play roles and interact in given and real situations, in a professional environment. How does it work? After getting a theoretical course on a given theme, the learner “dives, as though in a flight simulator” into a universe where realistic, animated, 3-D characters (CV, personality, professional role, etc.) illustrate the course by a practical case. Using a simple interface, the learner directs the scene in order to achieve his learning objective. At the end of the simulation, a detailed analysis – a sort of skills assessment – is calculated. It’s a real multimedia production, where the knowledge base – which can be adapted to any company’s objectives and culture – is staged in the form of a script. The market targeted is that of behavioural training in a business environment. Themes tackled are diverse and numerous, including commercial negotiation, management, recruitment, team leadership, crisis management, phoning, annual performance reviews, etc."

Source : ECO |

Neuromarketing, in one form or another, is now one of the hottest new tools of its trade. At the most basic levels, companies are starting to sift through the piles of psychological literature that have been steadily growing since the 1990s' boom in brain-imaging technology. Surprisingly few businesses have kept tabs on the studies - until now.

The Three Brain Theory is something absolutely fantastic. It is a new way to look at why people do what they do, how they do it, why they do it, at different levels of interpretation of their behavior, and what they're going to say about it. Once you understand the 3 brain theory it will change your life and the way you look at advertising and product management, leadership, reward, recognition, loyalty.