Achieving a strategic sales focus contemporary issues and future challenges

OUP CORRECTED PROOF – FINAL, 11/5/2016, SPi Achieving a Strategic Sales Focus OUP CORRECTED PROOF – FINAL, 11/5/2016, SPi OUP CORRECTED PROOF – FINAL, 11/5/2016, SPi Achieving a Strategic Sales Focus Contemporary Issues and Future Challenges Kenneth Le Meunier-FitzHugh Tony Douglas Foreword by Lord Bilimoria of Chelsea, CBE, DL OUP CORRECTED PROOF – FINAL, 11/5/2016, SPi Great Clarendon Street, Oxford, OX2 6DP, United Kingdom Oxford University Press is a department of the University of Oxford It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries © Kenneth Le Meunier-FitzHugh and Tony Douglas 2016 The moral rights of the authors have been asserted First Edition published in 2016 Impression: All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by licence or under terms agreed with the appropriate reprographics rights organization Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this work in any other form and you must impose this same condition on any acquirer Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016, United States of America British Library Cataloguing in Publication Data Data available Library of Congress Control Number: 2015956026 ISBN 978–0–19–870663–2 (hbk) ISBN 978–0–19–870664–9 (pbk) Printed in Great Britain by Clays Ltd, St Ives plc Links to third party websites are provided by Oxford in good faith and for information only Oxford disclaims any responsibility for the materials contained in any third party website referenced in this work OUP CORRECTED PROOF – FINAL, 11/5/2016, SPi To Leslie Caroline, without whose support nothing would have been achieved —Ken To Ken for asking me to co-author this text He said it would be fun working together He was right And to Jane, who encouraged me to achieve this milestone —Tony OUP CORRECTED PROOF – FINAL, 11/5/2016, SPi OUP CORRECTED PROOF – FINAL, 11/5/2016, SPi n FOREWORD Every entrepreneur will face tough times, but one of the greatest joys that entrepreneurship can bring is the ability to make a real difference You can build a strong, well-bonded team around you and you can feel as though you are making a difference to some of the great modern challenges that people face Entrepreneurs are the masterminds of making the best of new technologies and bringing them to new markets While they create new jobs for those who can build, deliver, and sell new products, they can make a real difference Aside from innovation, global sales also help UK companies contribute to UK economic productivity I often encourage entrepreneurs setting out on new ventures, whether they are young or old, to consider the global markets where they could sell their products They should also consider using the Government’s support infrastructure for those selling abroad, as UKTI and the British High Commission have helped so many entrepreneurs to date Entrepreneurs create international opportunities for themselves and their teams, which enrich their experience in business, as well as boosting sales Acknowledging that the right infrastructure and opportunities exist to tackle new markets is the basis for recognizing the importance of your sales team Some small businesses with a thirst to succeed and a point to prove can see this right away, and studying the leadership qualities within these firms is fast becoming a priority among the hungrier large businesses I hope that this book will act as a much-needed wake-up call for organizations that have overlooked the demands that sales and marketing put on your creativity, your leadership, and in fact on the whole organization When I founded Cobra Beer in 1989, I pitched my product to Britain’s curry houses by personally carrying it crate by crate into their restaurants, often quite literally selling it to them on their doorsteps I won my first customers this way and this experience made clear to me the virtues of salesmanship, including the need to put the customer first in order to grow Particularly when selling through sales partners in India and elsewhere, relaying, reporting, and understanding customer feedback is essential when perfecting that compelling and bold brand The experience of selling, and truly understanding the value of your product to your customers, is something you should carry directly to the top rungs of the leadership team A brand should have advocates in the factory, in the high street, from the delivery van to the head office, for if people cannot justify a brand’s place in the market, it is in danger of disappearing or falling out of favour OUP CORRECTED PROOF – FINAL, 11/5/2016, SPi viii FOREWORD For me, the Cobra Beer brand is my most valuable asset My business, now a joint venture with Molson Coors, is so valuable to my partners and I, not just because the customers love the taste, but also because the brand is a fixture in the market I am proud of the product, but the quality of the brand has taken just as much work to perfect and has allowed me to take on the behemoths of beer in both pubs and supermarkets, and has seen Cobra stocked in almost every single curry restaurant in the UK Being a businessperson is about creating opportunities for oneself When starting out, after I had finished my studies at university, I considered a number of options I had qualified as a Chartered Accountant, and taken a degree in law, but I knew that I could not commit my lifetime to either of these career paths I craved blue skies and the limitless ability to make a difference For anyone starting a business today, customer expectations are higher than ever and new technologies help a good salesman meet these expectations, while making the whole business organization more transparent than ever My own experience tells me that this book, Achieving a Strategic Sales Focus: Contemporary Issues and Future Challenges, will not simply be of use to sales executives Perfecting the ‘sell’ is an essential part of business strategy as it is the crucial point at which profits are made or lost From retail to B2B, transactions are universal in business In today’s crowded business landscape it is essential that all businesses perfect their sales approach and integrate it into their wider business strategy and the business’s broader impact on the world, rather than treating sales efforts as a means to an end When trying to articulate what has been my inspiration as an entrepreneur, I often think of the last two lines of the Victorian poem, ‘Invictus’ (Henley, 1888), often thought of as the entrepreneurs’ creed: ‘I am the master of my fate; I am the captain of my soul’ Lord Bilimoria, CBE, DL OUP CORRECTED PROOF – FINAL, 11/5/2016, SPi n PREFACE The intention for this new text was to continue to explore many of the themes that had been raised by the contributors to the successful Oxford Handbook of Strategic Sales and Sales Management that was edited by Professor David Cravens, Dr Kenneth Le Meunier-FitzHugh, and Professor Nigel Piercy and published in 2011 The Oxford Handbook of Strategic Sales and Sales Management is a compendium of collected works authored by leading academics in the field of sales, which considers sales and sales practices However, after speaking to a number of academics, sales leaders, sales professionals, and sales training organizations, and in the light of recent sales research, our focus changed This book will now reflect on topics raised in recent academic literature written on strategic sales and sales management, practitioner concerns, as well as considering many of the themes that were raised in The Oxford Handbook of Strategic Sales and Sales Management There have been substantial changes in the status of sales in academic literature in the last five years, with many leading journals regularly publishing articles focused on the sales function In the US, some leading business schools have also developed research streams into the sales function and opened centres of sales excellence These actions recognize the importance of the topic, as both an academic subject and an area where insights need to be developed to help to achieve a strategic sales focus The book is set within the context of the growing importance of the sales function within many organizations, as organizations quest for increasing returns on investment and improved revenue streams Escalating selling costs require organizations to be more focused on results and highlight the shifting of resources to the sales function For example, sales organizations in the US spend over $250 billion on advertising, but over $1 trillion on sales-related expenses (Ahearne, Rapp, Hughes, and Jindal, 2010) Further, growing customer power requires a strategic sales response from organizations, as well as for tactical effectiveness Personal selling has always been an important part of organizational activities, especially where the product offering is complex The key roles of the sales person are to be a change agent, a communicator, negotiator, and a deliverer of customer value as well as achieving sales To support the organization, sales people are expected to deliver profitable revenue streams and to achieve this they have to adopt a range of behavioural, technological, and managerial forces that is dramatically and irrevocably changing the way in which sales people carry out their roles Sales remain the primary interface between the selling organization and their customers However, more and OUP CORRECTED PROOF – FINAL, 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advertising 100 US sales organizations spending ix, ‘Apprentice’, ‘The’ (TV show) 23 behavioural variation x–xi, 6–7 bidirectional dialogue 53–4 sales and marketing interface 71–2 brand value, satisfaction and management 3, 42, 67, 73 business -to-business (B2B) customers 10–12, 21, 28, 40, 44, 126, 135 goals and rewards for sales teams 109 markets 51, 125 Carpenter, G S 61 Carson, D 23 ‘challenger’ selling 154 ‘champions’ 162–3 Ill 10.1 Christenson, C M 54 co-creation of value, see value, co-creation commission-only sales representatives x, 103–4 commoditization of product/service offer 41 comparison sites, internet competition orientation 17–18 country environment variations Cravens, David ix cultural variations 6–7 customer advocates 156 orientation 6, 36–7, 161 Fig 10.2 and sales teams 105 portfolios 28 of buying organizations 35 and strategic leadership 87 profitability 36–7 -related capabilities 12 relations lifetime management 35–50 long-term x orientation 36–7 processes x prospective 38–9 strategic 37–8 tactical 39 relationship management (CRM) 8, 28, 35–6, 39 implications 46–9, 48, 50 and strategic leadership 87 systems, software and technologies 23, 47, 49, 50, 137–44, 146–7, 152, 155 solutions, complex 55–7 -value creation 4, 16–17, 19 defined 40–3, 42 Ill 3.1 and intimacy 45 the market offer, and sales and marketing integration 73–4 and sales competencies 96–7 and S-D logic 52–4, 53 Fig 4.1 customers 158–61, 159 Fig 10.1, 161 Fig 10.2 expectations 10–12 information and learning 58–63, 59 Ill 4.1 Internet 8–9 intimacy and value 45 ‘journey’ 79–81, 81 Fig 5.2, 143 lifetime value (CLV) 42–3 needs and value 12 new requirements retention 43–6 segmentation methods 102, 164 selection and segmentation 37–40, 38 Fig 3.1 types 37 customization 21, 27, 28, 55, 102 and online ordering 142 data collection, and the sales and marketing interface 78–9 decision-making units (DMUs) 56–7 DHL Worldwide 122 Di Mascio, R 107 Dragons Den (TV show) 23 Drucker, P 69 economic crises, and market decline opportunities 4–6 electronic data interchange (EDI) systems 142 electronic sales channels environment complexity and evolution of sales 3–13 ethics in selling 14, 24–7, 25 Ill 2.1, 108–9 guidelines and training 26, 108 OUP CORRECTED PROOF – FINAL, 11/5/2016, SPi 190 INDEX ethics in selling (cont.) paradigms and sales teams 108 sales leaders 26 trust with all stakeholders 26–7 European airlines 25 Ill 2.1 Evans, K R 36 Facebook 144, 148 fair practice codes 108 Ferrell, L 18 follow-up information, and feedback food and drinks industry (SMEs) 23–4, 24 Fig 2.2 forecasting sales 103 Gebhardt, G F 61 Georges, L 125 Gilmore, A 23 global supply chains 126 globalization and internationalization 3–4, 6–8 globalized markets 119 Google 148 Gopalakrishna, S 36 Grant, K 23 Green marketing 27 Guenzi, P 125 Hampden-Turner, C 130 Heiman, S E 45 Hofstede, G 130 Homburg, C 19 Houston, M B 36 Hunter, G K 60 hyper-competition information, see market, information, and intelligence Ingram, T N 107 innovation 3, 5–6, 11 Intel 25 Ill 2.1 intelligence, see market, information, and intelligence inter-functional synergy 17 international sales theory 133 international/global selling 126–36 compensation system employed 130–1 core markets 132 Ill 8.2 cultural background of the sales management team 120 direct to retail 132 Ill 8.2 inter-cultural understanding as source of competitiveness and differentiation 134–5 international distribution 131 local sales teams 127, 130, 131 managed markets 132 Ill 8.2 managing the customer interface 127–9, Ill 8.1 market intelligence 134 sales management 119 sales strategies and account management 129–33, 132 Ill 8.2 small markets 132 Ill 8.2 and SMEs 127 Internet 7, 8, 156 comparison sites customers 8–9 product information x, 9–10 selling x, 126 Jensen, O 19 job rotation 75, 75 Fig 5.1 Jobber, D 112 ‘journey’, customer 79–81, 81 Fig 5.2, 143 just-in-time (JIT) delivery systems 142 key account management (KAM) 119–25, 135–6, 154 account teams 122, 124 challenges and benefits 120–2 classification of 120, 121 implementation 120–1, 121 Fig 8.1, 125 internal-customer relationships 124 liaison functions 124–5 loyalty 121 organization-based programmes 125 proactive programmes 125 reactive programmes 125 and sales technology 139, 140 solution selling 123 strategic 122–5 knowledge-based sales organizations 91–6, 93–4 Ill 6.1, 95 Fig 6.1 knowledge management 60 customer sharing 152 sharing competences 60–1 systems 152 and value co-creation 61, 63, 64 Koerner, L 165 Kraus, F 107 Krohmer, H 19 Lane, N 28 Laskk, F G 107 OUP CORRECTED PROOF – FINAL, 11/5/2016, SPi INDEX 191 Le Meunier-FitzHugh, Dr K ix, 21 leadership, strategic 84–99, 93–4 Ill 6.1, 95 Fig 6.1 as agents and catalysts for change 84–7 analytics and behaviours 88 appropriate style 85 competences for/in sales 96–8, 97 Fig 6.2 customer portfolios and CRM systems 87 customer relationship strategy 88–9 and dedicated sales teams 96 generalist/specialist salespeople 90 and knowledge-based sales organizations 91–6, 93–4 Ill 6.1, 95 Fig 6.1 managing change and restructure 92 regional allocations 90 reward structures 86 self-management 96 size of sales team 90–1 strategies for growth 87–9 structure of the sales function 89–91 training 85, 86 learning organizations 61–2, 63, 64, 79 legal variations 6–7 Levitt, T 69 life-cycle cost of exchange 56 LinkedIn 144, 145, 148 LinkedIn Sales Navigator 145 Liu, C T 44 loyalty and customer trust 42, 43–6 and international sales management 121 and key account management (KAM) 121 Lukas, B A 18 Lusch, R F 4, 51, 52, 63 Mallin, M L 109 market information and intelligence 60, 74, 151 and international/global selling 134 and sales and marketing interface 78–9 orientation 16–19, 30 and competition orientation 17–18 and customer orientation 17 inter-functional coordination 18 and learning 61–2, 63, 64 research 19 -sensing 6, 28, 60, 62, 70 in international/global selling 129 marketing and sales interface, managing, see sales, and marketing interface, managing relations with sales, see sales, relations with marketing McDonald, M 123 mergers and acquisitions 126 Miller, R B 45 multinationals, and sales technology systems 141 Multiply 48 Ill 3.2 Murphy, P E 130 networking 155–8 Noble, C H 18 organizational culture 85 ‘organizational drag’ 165–6 organizational learning 61–2, 63, 64, 79 organizational orientation 14–19, 15 Fig 2.1 Oxford Handbook of Strategic Sales, The ix, 167 Palmatier, R W 36 Pardo, C 125 PayPal 145 performance-facilitating behaviour, and sales teams 106 Perreault, W D 60 Piercy, N F ix, 21, 28 presentation and negotiation, in sales teams 112–14 product knowledge and services, and sales teams 113 product life cycles 5–6 product orientation 15 production-orientated organizations 15 productivity of sales teams Pullins, E B 109 quantity and quality outcome performance, and sales teams 106 Raynor, M E 54 relationship marketing 36–7, 55 relationship orientation 39–40 relationship quality 43–6 relationship selling 37, 39–40, 46 rewards and bonuses x, 94, 109, 110, 136 alignment, sales and marketing interface 75 Fig 5.1, 76, 81 in sustained sales performance 109–12, 111 Ill 7.1 Ryals, L 123 sales and marketing collaboration 154 interface, managing xi, 67–83 achieving collaboration 78–9 OUP CORRECTED PROOF – FINAL, 11/5/2016, SPi 192 INDEX sales (cont.) bidirectional communications 71–2 cross-functional meetings 73–4, 75 Fig 5.1 cross-functional project teams 74, 75 Fig 5.1 cross-functional training 74–5, 75 Fig 5.1 customer value and the market offer 73–4 data collection 78–9 increased revenues 70 integration facilitators and mechanisms 72–8, 75 Fig 5.1, 77–8 Ill 5.1 internal communication 71–2 job rotation 75, 75 Fig 5.1 managing new customer lead generation 79–81, 81 Fig 5.2, 82–3 market intelligence 78–9 organizational learning 79 problem management 67–8 rewards alignment 75 Fig 5.1, 76 summarizing the interaction 67–83 forecasting 103 function positions, within organizations 14–31 leaders xi, 146, 150, 156–7, 163–4 organizations, new directions xi, 149–67 account managers/customer managers 151 challenge of selling 154 customer advocates 156 customer knowledge sharing 152 customer segmentation 164 customers 158–61, 159 Fig 10.1, 161 Fig 10.2 flexible sales forces and learning 149–52 Internet 156 knowledge systems 152 locations 149–50 market information 151 networking 155–8 ‘organizational drag’ 165–6 partner-type relationships 152 sales and customer interface 153–5 sales and marketing collaboration 154 sales leaders 163–4 social capital 156–7 social networking 156 strategies for growth 161–6, 162–3 Ill 10.1, 165 Fig 10.3 technology role 154 territories 150 training programmes 151 trust in network interactions 157 value proposition adjustments 150–1 orientation 15–16 paradigms, changing 21–2 relations with marketing 19–21, 31 Brand-focused Professionals 20 Ivory Tower 19–20 Marketing-driven Devil’s Advocacy 20 physical location 20–1 Sales-driven Symbiosis 20 Sales Rules 20 roles ix team development 100–15 adaptive selling behaviour 106 basic salary and incentive payments 109 bonuses 110 challenges to motivating 101 Fig 7.1, 101–6, 105 Fig 7.2 customer-oriented behaviour 105 customer segmentation methods 102 emotional intelligence 107, 114–15 ethical guidelines 108 ethical paradigms 108 ethics 108–9 fixed salaries 109–10 four variables of sales activity 102–3 mentors/local coaching 108 ‘order management’ 110 outsourced teams 103–4 performance-facilitating behaviour 106 presentation and negotiation 112–14 price concerns 114 product knowledge and services 113 quantity and quality outcome performance 106 rewards and goals in sustained sales performance 109–12, 111 Ill 7.1 role models 107 sales forecasting 103 selling behaviour x–xi, 106 targets x, 102, 105 territories allocation 102, 103, 115 training 107–9 teams x business-to-business (B2B) customers 109 cultural background of 120 and customer orientation 105 in international/global selling 127, 130, 131 local 127, 130, 131 outsourced 103–4 productivity OUP CORRECTED PROOF – FINAL, 11/5/2016, SPi INDEX 193 selling behaviour x–xi, 106 and strategic leadership 90–1, 95 technology systems, see sales force automation (SFA) systems and technology; customer relationship management (CRM) training, see training sales force automation (SFA) systems and technology 138–44, 146, 149, 152, 155 Scheer, L K 36 service-dominant (S-D) logic and its impact 4, 12, 51–64 and customer value creation 52–4, 53 Fig 4.1 service selling 51 Sherry, J F 61 Singapore 131 small and medium size enterprises (SMEs) 22–4, 24 Fig 2.2 and international/global selling 127 and sales technology systems 141 social capital 156–7 social media impact 144–8, 147 Fig 9.1 sales leader role 146 word-of-mouth (WOM) growth 144 social networking 156 social relations marketing 40 solution selling x, 21, 22, 37, 52 and key account management (KAM) 123 and online ordering 142 speed to market 142 strategic partnership 37 strategic sales function growth 27–30, 29 Ill 2.2 customer relationship management 28 customer value 28 Sugar, Lord Alan 23 supply chain, and sales 100 supply networks, and value co-creation 53–4, 55–6 teams, see sales, team development; sales, teams technology impact 137–44, 139–40 Ill 9.1 electronic ordering and delivery systems 142 loss of personal interaction 143 managing communications and customer information 141–3 market information 138–9 online marketing/e-marketing 142, 143 online selling and distribution 144–6 online sources of information 142 opportunity identification and qualification 143–4 resource allocation and utilization 137–41 speed to market 142 ‘technostress’ 138 training and integration 138 technology transformation 3, 8–10 ‘technostress’ 138 territories 150 allocation of 102, 103, 115 Tesco trade barriers 7, 127 training 107–9 emotional intelligence 107, 114–15 programmes 151 for strategic leadership 85, 86 and technology impact 138 see also sales, team development, training transactional selling xi TripAdvisor 144 Trompenaars, F 130 trust and customer loyalty 42, 43–6, 157 in network interactions 157 Tuleja, T 45 Twitter 144, 145, 148 United States of America (USA) 131 sales related expenses ix, value -based selling 41 co-creation 21–2, 51, 160 in exchange 52–7, 56 Fig 4.2 and key account management (KAM) 123 knowledge sharing competences 61, 63, 64 supply networks 53–4, 55–6 through insight 59 Ill 4.1 in exchange, understanding the proposition 57–8 -in-use 56 proposition 41 Vargo, S L 4, 51, 52, 63 virtual sales office Volkswagen 25 Ill 2.1 Wal-Mart Weibo 144 word-of-mouth (WOW) growth 144 Wotruba, T R 37 YouTube 144 ... leading academics in the field of sales, which considers sales and sales practices However, after speaking to a number of academics, sales leaders, sales professionals, and sales training organizations,... and marketing interface 67 Summarizing sales and marketing interaction 69 Internal communication 71 The management role and integration facilitators 72 Achieving sales and marketing collaboration... profitable revenue streams and to achieve this they have to adopt a range of behavioural, technological, and managerial forces that is dramatically and irrevocably changing the way in which sales