Factfile 21
Figure 9: Companies have traditionally relied on Field Sales Reps to cover most accounts and products
Source: M2B Canon, 2002.
Covering your customers to maximise opportunity and profitability
Technology advancements have created a whirlwind of activity between suppliers, buyers and end customers.
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The ability to gain 24x7 access to information, create robust customer information databases and enable real-time interaction with remote sales professionals has resulted in a mind-numbing flurry of productivity improvement projects.
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In turn, these advancements have created a much more sophisticated and less loyal customer. That once simple account that was content to see a sales representative (rep) a few times a year is now demanding access to multiple channels to learn about, shop for and purchase your products and/or services, including field reps, resellers, phone reps and web sites.
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If you don?t provide this access, most likely that customer will defect to a competitor, as technology has granted them greater power in the choice of what they buy with the ability to compare products, vendors and prices.
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To top it all off, economic pressures, for example reduced consumer spending, are forcing companies to take a good hard look at how they are allocating funds across the enterprise. More often than not, sales and marketing budgets are the first to hit the chopping block due their limited measurement systems and fuzzy returns on investment.
The old model is breaking down
Traditional responses to this change have resulted in cutting already lean sales and marketing budgets resulting in reduced customer coverage as sales headcount and territories shrink. The long-term outcome is a downward spiral: as revenues decrease from reduced coverage, more cost cutting is inevitable.
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Some companies will try across the board actions, such as reducing all budgets by 10%, hoping that individual managers will be able to weed out operational inefficiencies yet still meet targets. Unfortunately, that response, while valid in theory, in practice translates into business as usual, but 10% less of it.
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Other companies respond with targeted cost cutting, such as abandoning markets, products, or entire business units. Again, a rational idea, but often executed quickly without due diligence and hindsight shows tremendous lost opportunity.
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The more optimistic companies run headlong in the opposite direction, targeting funds toward costly e-business and CRM investments convinced that online sales and full-scale CRM implementations are the panacea, but end up disappointed in the returns.