Avoid These Five Common Mistakes in Designing Your Sales Force for Growth

Ty Curry

In a recent article, "Sales Force Effectiveness: An Idea Whose Time Has Come," best-selling author Neil Rackham says that organic growth is "the new mantra for business success." Yet many companies are struggling to deliver on sales growth expectations.

Sales is a complex function, and many factors can contribute to subpar performance, including sales strategy, sales coverage, sales process execution and salesperson competency and motivation. Rather than trying to address all drivers of sales force effectiveness, this article will focus on sales force design and illustrates five common and avoidable mistakes we frequently see.

All five of these mistakes were evident in the case of a Fortune 500 company ZS Associates worked with extensively over the past few years. Company performance was suffering: Sales growth was falling far short of expectations, major customers were defecting to competitors and the cost of sales was too high.

Fundamentally, the company was not getting the right salespeople to do the right things in front of the right customers cost-effectively. Some salespeople were chasing low-value opportunities, and nearly all were heavily engaged in customer-servicing activities instead of selling. Others were poorly equipped to manage the company’s most important customers, lacked the bandwidth to provide effective coverage, or both.

The mistakes this company was making and that we frequently encounter in sales force design were:

1. Role pollution.

When salespeople are involved in customer service and support work, they’re not selling. Yet too often, salespeople spend too much time on activities that are not core to selling, such as chasing down information for customers, implementing installations or addressing technical issues.

While these activities are critical, the reality is that the company can and should have other, more appropriate resources to address these issues so that salespeople can focus on selling. Role pollution reduces both the capacity and accountability of the sales force and can be a significant drain on productivity.

2. Chasing limited opportunities.

Many field salespeople spend too much time on customers that have limited sales potential. Often salespeople lack insight into the addressable opportunity at the customer level, but even with good information, they may gravitate toward smaller customers for a variety of reasons.

No matter the reason, this sales force design mistake tends to run hand in hand with poor use of alternate channels, such as inside sales that can provide much more cost-effective coverage of smaller customers and prospects, which in turn allows field sales personnel to focus on more valuable opportunities. Chasing small customers results in inflated costs of sales and missed opportunities for meaningful growth.

3. Fragmented key account management.

When a company is undisciplined in its key account management approach, it is essentially walking away from growth opportunities with its most valuable customers. One issue might be trying to treat too many customers as key or strategic, resulting in inflated cost of sales or diluted impact, as expensive strategic programs and resources are spread too thin or misdirected.

Another issue could be poorly coordinated sales and support efforts across lines of business, resulting in missed chances to sell across the portfolio. Having the wrong people in these strategic account roles often exacerbates these issues.

4. Flawed sales resource decisions.

Companies can leverage a wealth of data and sophisticated analytical techniques to optimize sales resource decisions, but many rely on intuition or simplistic financial ratios that ignore critical information. Such approaches generally fail to assess and consider sales potential at the account level or the effort required to execute the sales process for different customer segments. They are rarely linked explicitly to customer coverage or to sales and profit implications of different sales resource levels.

Companies that fail to use sound analytical approaches will often under- or overinvest in their sales forces and focus selling efforts on the wrong customers or lines of business.

5. Poorly designed sales territories.

The amount of work needed to cover target customers and prospects in a territory is often far more than one salesperson can accomplish. While it may look like these customers are covered on paper, they are not really covered appropriately, resulting in poor penetration, untapped customer opportunities and lost growth.

This mistake is exacerbated when other territories do not have enough good customers and prospects to call on. In these cases, valuable and expensive sales resources are wasted, as salespeople spend time chasing unprofitable opportunities, and sales growth suffers.

When we started working with the company described above, it was suffering from all of these problems. Salespeople were spending too much time on service and support of existing customers and in pursuit of small accounts.

In addition, the company lacked a robust key account management program and was not using the best analytical approaches to identify sales opportunities and align resources. Not surprisingly, some salespeople had too many customers and prospects while others couldn’t find enough profitable targets to pursue.

Through a transformation that took several months, the company put in place a process that developed deep customer insights to understand opportunities across different segments of customers and redesigned its sales structure to align the right sales channels and resources with these distinct segments. The company implemented a key account management program, matching the most talented salespeople with the most valuable customers, and gave key account managers the appropriate level of resources to meet complex purchasing needs.

The company also installed an inside sales organization, so its field sales force spent less time on smaller customers. The company also implemented a rigorous analytical process to size its different sales teams and redesign sales territories to optimize coverage and efficiency.

The results were striking. Within a year, customer satisfaction increased and the company had a higher share of wallet with its most strategic accounts, even with accounts that the competition had traditionally dominated.

Financially, the company beat its overall market share growth goals and increased revenues tens of millions of dollars over plan.

Of course, getting sales force design right is complex, and while critical, it may not by itself be sufficient to drive organic growth. In addition to sales force redesign, this company’s transformation included reassessment of its value proposition, reevaluation of its sales talent, deployment of new value-based selling tools and processes, changes to its incentive plan and disciplined performance management.

The sales transformation journey can be arduous, but the reward is worth it. By avoiding the five common mistakes detailed above, you can give yourself a big head start in designing your sales force for growth.

About the Author: Ty Curry, Managing Principal

Ty Curry

Ty has advised more than 50 companies on go-to-market strategy and sales force effectiveness. He has specialized expertise in sales force design and he focuses on helping clients improve sales productivity from strategy to execution. His clients have included companies in high tech, media and publishing, energy, transportation, consumer goods and life sciences.