Achieving a strategic sales focus contemporary issues and future challenges

Consequently, marketing cannot just support the sale ofproducts and services, but also need to help develop business relationships.Marketing has been found to be just as guilty as sales

Achieving a Strategic Sales Focus

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To Leslie Caroline, without whose support nothing would have been achieved.

n FOREWORD

Every entrepreneur will face tough times, but one of the greatest joys thatentrepreneurship can bring is the ability to make a real difference You canbuild a strong, well-bonded team around you and you can feel as though youare making a difference to some of the great modern challenges that peopleface Entrepreneurs are the masterminds of making the best of new technolo-gies and bringing them to new markets While they create new jobs for thosewho 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 onnew ventures, whether they are young or old, to consider the global marketswhere they could sell their products They should also consider using theGovernment’s support infrastructure for those selling abroad, as UKTI andthe British High Commission have helped so many entrepreneurs to date.Entrepreneurs create international opportunities for themselves and theirteams, which enrich their experience in business, as well as boosting sales.Acknowledging that the right infrastructure and opportunities exist totackle new markets is the basis for recognizing the importance of your salesteam Some small businesses with a thirst to succeed and a point to prove cansee this right away, and studying the leadership qualities within thesefirms isfast becoming a priority among the hungrier large businesses I hope that thisbook will act as a much-needed wake-up call for organizations that haveoverlooked 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 curryhouses by personally carrying it crate by crate into their restaurants, oftenquite literally selling it to them on their doorsteps I won myfirst customersthis way and this experience made clear to me the virtues of salesmanship,including the need to put the customer first in order to grow Particularlywhen selling through sales partners in India and elsewhere, relaying, reporting,and understanding customer feedback is essential when perfecting that com-pelling and bold brand

The experience of selling, and truly understanding the value of your product toyour customers, is something you should carry directly to the top rungs of theleadership 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’splace in the market, it is in danger of disappearing or falling out of favour

For me, the Cobra Beer brand is my most valuable asset My business, now ajoint venture with Molson Coors, is so valuable to my partners and I, not justbecause the customers love the taste, but also because the brand is afixture inthe market I am proud of the product, but the quality of the brand has takenjust as much work to perfect and has allowed me to take on the behemoths ofbeer in both pubs and supermarkets, and has seen Cobra stocked in almostevery single curry restaurant in the UK.

Being a businessperson is about creating opportunities for oneself Whenstarting out, after I had finished my studies at university, I considered anumber of options I had qualified as a Chartered Accountant, and taken adegree in law, but I knew that I could not commit my lifetime to either of thesecareer paths I craved blue skies and the limitless ability to make a difference.For anyone starting a business today, customer expectations are higher thanever 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 salesexecutives Perfecting the‘sell’ is an essential part of business strategy as it isthe 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 itinto their wider business strategy and the business’s broader impact on theworld, 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, DLviii FOREWORD

n PREFACE

The intention for this new text was to continue to explore many of the themesthat had been raised by the contributors to the successful Oxford Handbook ofStrategic Sales and Sales Management that was edited by Professor DavidCravens, Dr Kenneth Le Meunier-FitzHugh, and Professor Nigel Piercy andpublished in 2011 The Oxford Handbook of Strategic Sales and Sales Manage-ment is a compendium of collected works authored by leading academics inthe field of sales, which considers sales and sales practices However, afterspeaking to a number of academics, sales leaders, sales professionals, and salestraining organizations, and in the light of recent sales research, our focuschanged This book will now reflect on topics raised in recent academicliterature written on strategic sales and sales management, practitioner con-cerns, as well as considering many of the themes that were raised in TheOxford Handbook of Strategic Sales and Sales Management

There have been substantial changes in the status of sales in academicliterature in the lastfive years, with many leading journals regularly publishingarticles focused on the sales function In the US, some leading business schoolshave also developed research streams into the sales function and openedcentres of sales excellence These actions recognize the importance of thetopic, as both an academic subject and an area where insights need to bedeveloped to help to achieve a strategic sales focus The book is set within thecontext of the growing importance of the sales function within many organ-izations, as organizations quest for increasing returns on investment andimproved revenue streams Escalating selling costs require organizations to

be more focused on results and highlight the shifting of resources to the salesfunction 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 astrategic sales response from organizations, as well as for tactical effectiveness.Personal selling has always been an important part of organizational activ-ities, especially where the product offering is complex The key roles of thesales person are to be a change agent, a communicator, negotiator, and adeliverer of customer value as well as achieving sales To support the organ-ization, sales people are expected to deliver profitable revenue streams and toachieve this they have to adopt a range of behavioural, technological, andmanagerial forces that is dramatically and irrevocably changing the way inwhich sales people carry out their roles Sales remain the primary interfacebetween the selling organization and their customers However, more and

more organizations are also selling direct through the Internet to end usersand smaller customers This change frees up the time of the sales person toconcentrate on larger, more complex sales.

Accepting the increasing importance of the sales role to the modern ization, we were surprised when our discussions with industry practitionersand specialists revealed that a lot of organizations were still unclear about theshape a future sales team should take, how it should be managed, and how itfits into their business model It has been established that buyers usually findout a lot of information about products/services that the organization offersfrom organizational websites and the Internet, so that customers do not need

organ-to be organ-told about the product features on every sales visit What they do need organ-to

be told about is how the products and services benefit their situation, solvetheir problems, and meet their needs This is not a new idea as it has beenreviewed in recent relationship management and solution-selling literatures.Customers are no longer interested in talking catalogues or process experts(e.g Ryals and Davies, 2010), as they need people who will listen to their needsand to develop long-term, profitable, partnering relationships So why do salespeople keep moving back into the safe territory of selling benefits and dis-cussing product features, when they know that it is not the most profitable orsuccessful sales technique? It may be that sales people frequently meet someform of confrontation, doubt about their motives, and even aggression fromthe customer Salespeople can feel beleaguered by the customers and thepressurized nature of the situation Unfortunately, salespeople may not justmeet confrontation when visiting customers, as they may alsofind themselveschallenged within their own organization This type of attitude towardssalespeople may explain why the salespeople slip back into known behaviours

to meet their targets, rather than being brave and resilient, developing theircontacts, and working with the rest of the organization to improve service

A focus on short-term targets can also be counterproductive in creatinglong-term sales relationships We all know that targets are important and thatmaking the sale is a fundamental part of the job However, with a lot oforganizations still relying on commission payments to reward sales sales-people’s behaviour may consequently be pushed towards short-termism,transactional selling, and possibly unethical behaviours The need to pushproducts, specifications, and process improvements to meet the organization’srequirements may become paramount These actions are reinforcing behav-iours that have already been identified as being unsuccessful in creating long-term relationships with the customer Another safe topic for salespeople todiscuss with their customers is processes This is where salespeople move thediscussion from product features and benefits, to processes, for example, how

to speed up delivery, how they can deal with one-off orders, or even how tohandle invoicing

x PREFACE

While these discussions are sometimes of benefit to the customer thesalesperson is still avoiding exploring those really difficult discussions aboutlong-term business objectives and establishing business partnerships to addvalue to both parties In the face of all of this complexity it is perhapsunderstandable for salespeople to retrench into safe behaviours, selling onfeatures and benefits, and working with known customers rather than pushingboundaries These revelations started us thinking that poor sales behavioursmay be a failure of leadership rather than a lack of skill, intelligence, or ability

on behalf of the sales person The sales leader is the person who can providethe sales team with guidance, space and time to develop, organize appropriatetraining, and work with the sales team to enable them to become great, as theyhone their skills and become confident account managers Because of thewider role and the importance of leadership in every aspect of managingsales we have selected to use the words ‘sales leaders’ as opposed to ‘salesmanagers’ when discussing this function We believe that it is no longersufficient just to manage a sales team, you also have to lead them to achievethe best results The most successful salespeople engage with their customersand become customer relationship managers, but without managerial supportand pioneering leadership they are unlikely to take this path

In this book we shall consider what makes a good sales organization in acompetitive environment We will also consider the role of the salesperson andsales leaders in different contexts Whicheverfield you are in it is likely thatyou will be working through intermediaries and therefore interacting withprofessional buyers, and the aim should be to generate longer, profitablerelationships for both parties These relationships may be created throughthe development of the service element of the offer, which is now the norm formany businesses Consequently, marketing cannot just support the sale ofproducts and services, but also need to help develop business relationships.Marketing has been found to be just as guilty as sales in focusing on productsand product specifications, and should now work with sales to develop theright types of value proposition, promotions, and communication messages togenerate a dialogue with customers Another consideration of this text will bethe internal cooperation of various parts of the organization, for example, howother functions can work in concert with the sales team to provide greatervalue for the customer We can hear many of you saying that this is really keyaccount management, but we would argue that key account managementshould go further than this and this is something that will be discussed inthe book

We do recognize that there are successful organizations that focus just ontransactional selling However, there are many excellent texts available thatreveal the five, six, or nine steps of selling and discuss the options formanaging this type of sales team and therefore this is not the focus of thebook Our aim is to move the debate on sales onto new ground and discuss

PREFACE xi

what has changed recently and even forecast what the future holds Buyingorganizations are getting bigger, more complex, and want more from theirsuppliers Supplying organizations are still struggling to adjust to thesechanges (alignment of buying processes and selling process) There is noreal clarity on what exactly a customer is and how their needs should bemet Not all customers are the same and they need different relationships andlevels of service.

We believe that the sales renaissance is evidenced by a number of changesthat have taken place in the marketplace, including the importance of buildingprofitable relationships, creating/delivering brand value, market-sensing, stra-tegic customer management, building internal and external relationships,global selling, and networking The role of sales in the delivery of organiza-tional strategic goals has never been more essential Some of the primarydrivers to change in the sales environment are rising customer expectations,the globalization of markets, greater customization leading to smaller viablesegments, technological forces (Internet, virtual sales office, electronic saleschannels), a shift to direct marketing, outsourcing of sales, and blending salesand marketing functions In response sales departments are being reinvented

to address the needs of the marketplace more closely through building a betterunderstanding of customers needs, networking with internal functional areas(e.g marketing and other customer-related functions like finance or R&D),creating sales organizational structures that are nimble and adaptable todifferent customer groups, embracing a wide range of technological tools tointeract with the customer, and developing an innovative approach to selling

To review these changes and challenges in the selling environment andpropose various solutions to effectively manage the sales function, this text will

be structured around four key themes The first section will explore thestrategic positioning of the sales function within the modern organization.The second section will examine the sales relationship with the customer andwill highlight how sales functions are responding to an increasingly complexenvironment The third section will consider sales management and recentdevelopments in thefield Finally, the fourth section will present new forms ofselling, evolving sales processes, and review the new distribution channels formodern sales organizations The chapters will be supported by a series of shortcase-study illustrations that have been written by sales leaders to eitherdescribe the changing nature of their organization in response to the market,

or the changes to their role and expectations of the sales team We hope thatyou enjoy engaging with the topics reviewed in this text

Kenneth Le Meunier-FitzHugh

Tony Douglas

September 2015

xii PREFACE

n ACKNOWLEDGEMENTS

We would like to acknowledge with gratitude the contributions of RebeccaBonnington, Thomas Faulkner, Mark Fowlestone, Mark Hollyoake, ChrisHudd, Leslie Caroline Le Meunier-FitzHugh, Craig Jackson, Frank Martin,Barbara McCrory, Paul Owen, Richard Reilly, and Benjamin Wong

n CONTENTS

PART I EXPLORING THE POSITIONING OF THE SALES FUNCTION

Opportunities of economic crises and market decline 4

How technologies are transforming sales organizations 8

2 The sales function’s position within the organization 14

PART II SALES’ RELATIONSHIP WITH THE CUSTOMER

3 Customer relationships and lifetime management 35

Relationship quality, customer retention, trust, and loyalty 43 Strategic implications of customer relationship management 46

4 Service-dominant logic and its impact on the selling organization 51

Service-dominant logic and the creation of customer value in exchange 52

PART III SALES MANAGEMENT

5 Managing the sales and marketing interface 67

Problems with the sales and marketing interface 67

The management role and integration facilitators 72

Sales leaders as agents and catalysts for change 84

Managing in the knowledge-based sales organization 91

7 Developing high-performance sales teams 100

Goals and rewards in enabling sustained sales performance 109

xvi CONTENTS

PART IV NEW FORMS OF SELLING

8 Key account management and global selling 119

Key account management, challenges, and bene fits 120

Managing the customer interface internationally 127 Global sales strategies and global account management 129 Inter-cultural understanding as a source of competitiveness

Structured approaches for opportunity identification and qualification 143 Internet selling, distribution, and the role of social media in

Developing sales strategies for growth in the modern sales organization 161

CONTENTS xvii

n LIST OF ILLUSTRATIONS

n LIST OF FIGURES

5.2 Sales and marketing responsibilities during the customer journey 81

Part I

Exploring the Positioning

of the Sales Function

1 The changing sales

environment

Introduction

The sales environment is continually evolving and is becoming more complexdriven by economic and social changes in the environment This increasingcomplexity in the market creates challenges for the sales practitioner as there is

a growing need for sales to be aware of these changes and to identify how theycan adapt both their structure and competences to be able to meet theemerging needs of the market (Guenzi and Geiger, 2011) Competencesare skill sets that may become distinctive when there is a fit between theinternal resources and opportunities in the environment (Prahalad andRamaswamy, 2004) The unique position of the organization in the market

is primarily based on the competences that the organization has developedthrough operating in their market, its brand position, its ability to innovate,and itsfinancial situation It is these competences that are likely to influencehow the sales operation formulates its strategy and how it is managed in thelonger term When sales leaders (we will use the term sales leader todescribe sales managers, VP sales, and sales directors, e.g anyone whomanages a sales operation) creatively merge distinctive competences theycreate capabilities (a distinctive set of processes that may be used to createcompetitive advantage) in value creation and profit generation that can lead

to operational and sales success (Newbert, 2008) Changes in the ment require sales to develop new competences to meet the challengespresented

environ-The key drivers of change for the sales function can be grouped into threemain areas: the development of the global marketplace, technological advance-ment, and changes in customer requirements (Jones, Brown, Zoltners, andWeitz, 2005) Changes in the global market are creating a more complexmarketplace, with demanding and well-informed customers, which are driv-ing sales organizations to focus on value-based selling These customer behav-ioural changes mean that sales and marketing departments cannot simplydrive growth through customer relationships by promoting features and price.They now need to consider customer motivations, needs, and wants In the lastten years there has also been a growth in service industries in post-industrialmarkets, both as discrete industries and as supporting industries for manu-facturing (Scott, 2004) This development has focused organizations on the

importance of competing on service quality and co-created value as lighted in the work of Vargo and Lusch (2004) The development of theconcept of service-dominant logic, where value is only obtained throughinteraction with the product/service implies that in the future there has to

high-be more attention given to the customer-value creation aspect of sales(Prahalad and Ramaswamy, 2004; Vargo and Lusch, 2008)

Behavioural and technological changes in the environment have led torising customer and consumer expectations, globalization and conversely thedemassification of domestic markets (increasing localization and customiza-tion), the development of direct marketing alternatives, the growth of out-sourcing (even of the sales function), and the inter-changeability of the salesand marketing functions To respond to these challenges in the market,organizations have to develop customer-focused strategies to design, tailor,and communicate their offer to the customer in a way that differentiates theselling organization from its competitors (Moorman, Rossman, and Zoltners,2007) The objective of this chapter is to review how sales organizations areaffected by the economic environment, globalization, and changes in custom-ers’ requirements thereby identifying the main challenges and opportunitiesfacing modern sales organizations

Opportunities of economic crises and market declineMany of today’s markets, especially in the more developed markets, may bedescribed as hyper-competitive Hyper-competition is based on the acceler-ation of competition around price, quality, market positioning to eitherprotect or to invade established product groups or markets (D’Avenir,1997) The rising number of competitors in each market, together with afinitenumber of customers, has increased the intensity of competition so that unlessorganizations constantly evolve and adapt they will be driven out of themarket (Nadkarni and Barr, 2008) Hyper-competition changes the competi-tive rules of the game, as only nimble organizations will survive This presentsopportunities for those organizations with the competences and sales acumen

to capitalize on new options and who can move more quickly than thecompetition

To survive in the increasingly competitive markets, many organizations(especially those in Fast Moving Consumer Goods—FMCG) have been forced

to either grow or specialize The result of this growth is the development offewer, but larger, selling organizations, which has been countered by thegrowth of larger buying organizations dominating the marketplace (Sudhirand Rao, 2006) Buyer concentration has resulted in selling organizationsfighting to gain product and market advantage, not only against the

4 ACHIEVING A STRATEGIC SALES FOCUS

competition, but also against the increasing levels of buyer power in thechannel (Hingley, 2005; Jones et al., 2005) The concentration of buyers hasbeen particularly evident in the retail and food markets and examples of largeretailers controlling the pricing and supply of products are evident in thegrocery industry, for example Wal-Mart and Tesco (Gwynne, 2008) Theseorganizations demand that the sales agreements are configured in a way to

be advantageous to the buyer rather than the seller Where single buyers areable to purchase the entire output of a supplier organization (for example, insome areas of the automotive industry and food), the role of the value-addingsalesperson may be reduced to negotiating to protect the supplier or at worst,just collating orders (Gwynne, 2008) However, buyer concentration has alsooffered new opportunities for suppliers to establish closer relationships withtheir key customers, often forming partnerships and developing offerstogether Sales have to develop new skills in co-creating value with theircustomers, increasing the value added to the sale and customer satisfaction(Le Meunier-FitzHugh, Baumann, Palmer, and Wilson, 2011)

The recent world recession, caused largely by the banking crisis, has led tofalling productivity as many organizations attempted to cut their productioncosts and reduce the scope of their businesses (Kitching, Blackburn,Smallbone, and Dixon, 2009) It has been found that productivity tends tofall in the early stages of recession and then rises again as weaker organizationsclose down (Vaitilingam, 2009) This has put pressure on many sales organ-izations to fight for survival, leading to greater productivity being requiredfrom the sales team However, at the same time, the resources available to salesare being reduced in order to cut costs (Homburg, Muller, and Klarmann,2011), for example, reducing the size of sales teams The combination ofeconomic dips and the need for a leaner sales team has resulted in salesteams being asked to be multifunctional and engage in a range of sellingactivities from transactional to relational interactions, and from customermaintenance to new business development (DeCarlo and Lam, 2015) Toincrease or maintain productivity less time is available to spend with eachcustomer, but more has to be achieved and customer relationships have to bedeveloped to deliver customer value and profitability Sales people are beingasked to work smarter and develop new skills, but this may not offer theopportunity to specialize and increase the value of the sales function to theorganization

Increasingly competitive markets as well as technological and scientificdevelopments are shortening product life cycles, causing many suppliers toinvest heavily in new product development in an attempt to maintain theirposition in the market (Mundra, Gulati, and Gupta, 2013) The successfullaunch of new innovations to the market is driven, not only by selecting thebest innovation projects for the market, but also by how effectively theseprojects can be implemented (Rubera, Ordanini, and Calantone, 2012) The

THE CHANGING SALES ENVIRONMENT 5

implementation of new product launches is primarily the responsibility ofsales and marketing functions and this puts greater responsibility onto thesales function to understand what is happening in the marketplace (Ernst,Hoyer, and Rubsaamen, 2010) To generate appropriate innovation salespeopleare also required to develop competences in market-sensing (scanning, inter-preting, and learning) (Chen, 2005), but the reduced interaction time with thecustomer leaves far less opportunity to perform this market-sensing role.The changes in the economic environment are impacting on sales activities

as sales people are being asked to meet ever-expanding targets and developoffers to a fewer number of large buyers against increasingly aggressivecompetition, frequently with less time with the customer Salespeople arebeing asked to gauge how much customer orientation they should apply indifferent selling situations as the expenditure in terms of time and energy must

be cost effective (Homburg, Muller, and Klarmann, 2011) However, thesechanges also offer opportunities for the sales function to develop new com-petences, reposition their function within the organization and to take advan-tage of the challenges and opportunities presented by the environment

Globalization and internationalization of sales

Business is being dominated by the global market place Organizations havethe opportunity to both operate in, and sell to a variety of internationalmarkets, leveraging different costing structures and meeting a wide variety

of customer needs While the efficiencies and economies of scale developed byglobal organizations can provide competitive advantage for sellers, it is theopportunities offered by selling to international markets that have providedthe greatest incentives for changes in sales practices To successfully operate in

a global market, sales organizations are required to gain a greater ing of country environment variations (Cravens, 2011)

understand-Global sales organizations face considerable challenges in recruiting anddeveloping both account managers and salespeople (Zoltners, Sinha, andLorimer, 2008) New markets may require diversity in the selling team tocope with the various cultural, legal, and behavioural differences in variousmarkets Further, customers in overseas markets may require contact outsidethe normal working hours of the home territory, or where the salesperson isbased The salesperson may be called upon to interact and work with custom-ers far outside their comfort zone Of course diversity in the sales team willenable effective sales to different territories (Richard, Murthi, and Ismail,2007), but many salespeople may still be asked to link various globallydispersed business functions with the customers in different countries,which may subject them to different legal and cultural constraints (Lee, 2011)

6 ACHIEVING A STRATEGIC SALES FOCUS

Sales leaders will usually be asked to gain experience in other markets tohelp develop an international perspective and they may have to work with adiverse team in order to service different territories (Richard, Murthi, andIsmail, 2007) Salespeople have to develop an international perspective andlearn to be adaptive to new systems and requirements Other challenges tointernational sales management include deciding if a single sales team should

be employed globally or if individual country sales teams will be advantageous(Johnston and Marshall, 2013a) Some countries exhibit political instability,variation in gross national income, as well as cultural diversity, all of whichincrease the risk of selling in these environments

The internationalization of markets used to be considered as the domain oflarge, multinational corporations, but in today’s global society even smalldomestic organizations are able to conduct their business overseas Develop-ments in international communications and global infrastructure haveresulted in the growth of independent distributor relationships, trade shows,and increasing trade through the Internet, all of which supports small andmedium-sized enterprises (SMEs) operating internationally Of course theability to communicate internationally has been one of the key factors inopening up new overseas markets (Lituchy and Barra, 2008) Consumerdemand can be built for a product internationally, through global marketingcommunications, whether or not the manufacturer originally intended to sellthat product outside the home country Even more significant for the salesfunction is the removal of trade barriers, as during the pastfifty years drasticreductions have been made in trade barriers in both commodities and com-ponents (Conconi, Legros, and Newman, 2012) As home markets for manyorganizations have become saturated by competing offers, export marketshave offered the possibility of expansion, facilitated by the ever-expandingnetwork of international carriers that allow goods and service free movement

in and out of different territories These changes in the environment have led

to dramatic transformations in the way in which the sales team is structuredand managed

The development of global markets and customers, together with the spread

of international competition has led to increasing complexity in customermanagement (Cravens, Piercy, and Low, 2006; Hughes, 2006) However,global markets also offer the option of leveraging the differences in overseasmarkets and increasing sales byfinding new customers rather than fighting formarket share from competitors Further, sales functions that work withinculturally diverse organizations can gain competitive advantage as they havethe ability to develop more effective marketing, leading to better promotions,product innovations, more creative selling, and effective entry into newmarkets In high growth global markets organizations have the opportunity

to attract new customers rather than winning them from their competitors intheir domestic market (Andrevski, Richard, Shaw, and Ferrier, 2011: 17)

THE CHANGING SALES ENVIRONMENT 7

It should not be assumed that the growth of globalized markets has led tomarket homogenization, as the growth of localized production centres aroundlocal resources, skills, and capabilities is likely to lead to increasing diversity atthe global level Many multinational organizations have developed their ability

to manage multinational communication skills, interactive global sales tems, for example international customer relationship management (CRM),with effective supply chains and product development management (Cravens,Piercy, and Low, 2006), which allow them to respond to the needs of individ-ual global markets Consequently, organizations and sales people who are notwilling to consider operating internationally are likely to be making a costlymistake To respond to the challenge of international markets, sales shoulddevelop both skills and competences that are significantly different from thosethat are used to manage the domestic market (Johnston and Marshall, 2013a).New strategies to manage the customer portfolio and changes to the salesinfrastructure are both likely to be required when operating overseas (Piercyand Lane, 2011) (The challenges and opportunities of global selling areexplored in more depth in Chapter 7)

sys-How technologies are transforming sales

organizations

Technology is changing almost every aspect of personal selling, with laptopsand tablets giving access to databases, complete customer records, competitoractivity, and CRM systems, enabling the salesperson to be more connectedthan ever before It is the case that US companies invest more into their salesteam than they do on advertising (Zoltners, Sinha, and Lorimer, 2009;Ahearne, Rapp, Hughes, and Jindal, 2010) However, it has been argued thatdue to these changes and the development of the Internet, sales methodologyhas become obsolete and put considerable additional pressure onto the salesfunction (Stevens, 2014) A considerable amount of this expenditure is beingmade into sales information technology and training-related areas (Hunter,2011) Sales technology has allowed sales functions to link sales strategy,processes, and people to either facilitate or enhance the performance of salestasks (Hunter and Perreault, 2007) and changed the sales landscape throughincreasing automation, virtual sales offices, and electronic sales channels(Johnston and Marshall, 2013b; Holloway, Deitz, and Hansen, 2013).The development of sales technology is complemented by the use of smartphones that allow voice communications, instant access to messages and theInternet The Internet has also taken possible interaction possibilities betweencustomers, the salesperson, and the organization to a new level (Stevens, 2014)

8 ACHIEVING A STRATEGIC SALES FOCUS

Up-to-date information, questions, and complaints can be handled morequickly, while follow-up information and feedback provides more information

to and about the customer (Hunter, 2011) Organizations are still learninghow they can incorporate new technology and this new information into theirsystems to provide opportunities to sell smarter One of the major changescreated by technology has been that sales people no longer have to place orprocess orders on behalf of their customers, as this mundane task can now beperformed by the customers themselves through the Web (Moncrief andMarshall, 2005; Craighead, Patterson, Roth, and Segars, 2006)

In many cases buyers are searching for information about products andservices online before speaking to the salesperson With the use of the Internetcustomers are not only getting product information at the same time as thesalesperson, but they have similar information on competitors’ activities,which means that the balance of knowledge is increasingly moving from thesalesperson to the customer (Stevens, 2014) Additionally, customers are able

to access not only information from the supplier organization, but also fromindependently operated comparison sites, which may be viewed as moretrustworthy than the official website (Brown, Broderick, and Lee, 2007).Therefore, the contemporary salesperson may have to manage a situationwhere the customer has already formed their opinions of the sales offerbased on Internet information, weblogs, and discussion forums The sales-person can be faced with clarifying misunderstandings and repositioning theoffer in a more advantageous light since some Internet information may beinaccurate (Hunter, 2011) The danger of this is that this process can cost theorganization considerable time and effort for very little gain Customers arefrequently pre-researching products on offer before contacting the organiza-tion or attending trade shows Consequently, the salesperson may find thattheir role is more one of reassurance and selling associated products than one

of interacting with the customer over their core purchases

Supplier organizations have to understand their customers’ position andhow they can provide the support to enable the customer to present their offercorrectly to the consumer (end user) Major retailers are continuing toemphasize that their suppliers should understand their position, conditions,and ambitions in the marketplace, and further that suppliers should providethe consumer market insight required to help retailers to achieve their aspir-ations Relatedly, many retail consumers are searching the Internet for productinformation before visiting the store, and frequently come into the storepremises pre-armed with information and questions, or in order to look atthe actual product or evaluate the service Consequently, retailers are askingtheir suppliers to ensure that they are kept up-to-date with information andoffers available on suppliers’ websites This is an opportunity for the modernsales team to utilize technology and new media to keep their customersinformed by including them in blogs, tweets, and other media updates

THE CHANGING SALES ENVIRONMENT 9

Additionally, retail suppliers can customize solutions to their customerssupported by relevant consumer information Failure to do this may result

in loss of relevance to the customer and a fall in market share (Christ andAnderson, 2011)

As a result, many organizations are now reserving direct person-to-personinteraction between the salesperson and customer only for complex purchases,those of significant size or for new offers to the market This has led to somedownsizing of sales teams, but also has led to more skilled sales teams(Zoltners, Sinha, and Lorimer, 2009) Of course all these technologies arealso available to the customer and consumer, so that it is unlikely that thesalesperson will ever be presenting their offer to an uninformed recipient, butalso they cannot assume that the customers all have the same knowledge Thisrequires the sales team to rely on their more old-fashioned skill of listening tothe customer to identify their level of knowledge and required engagementwith the offer The result is a revolution in sales, sales management, andcustomer interaction that has done more than just change the sales function,

it has impacted upon the whole sales organization (Cravens, 2011)

The development of the Internet and its ability to convey vast quantities ofinformation has made it an integral part of the selling environment Forgeneration Y salespeople and buyers, the Internet is simply a ‘given’ andthey will not be able to imagine how business was conducted before it wasdeveloped Nearly every selling organization of any size has developed apersonalized website to enable them to engage with their customers, provideinformation, and sell their products (Hunter, 2011) The website could beviewed by a sales team with some concern, especially if the organization isdeveloping their direct sales operation Although technology has createdopportunities for identifying new channels, it has also added to the complexity

of the organizations’ interaction with the marketplace However, on the whole,direct communications with customers and the organizational website canenhance customer satisfaction and loyalty, and has become a tool for accountmanagers that enables them to manage and work with their customers

Changing customer expectations

What is a customer? For this discussion we are adopting a broad definition ofthe term customer Business-to-business (B2B) customers come in all shapesand sizes, from individual retail buyers, to multi-group, multinational purchas-ing teams Customers, or buyers for customer organizations, generally have acommon purpose, which is to purchase the required items/stock at the bestquality for the agreed price However, customers increasingly want to know howthe seller’s offer is superior to the competition’s, so the salesperson will need

10 ACHIEVING A STRATEGIC SALES FOCUS

comprehensive competitor information as well as customer information andproduct knowledge (Hughes, Le Bon, and Rapp, 2013) Buyers are also theproblem-solvers or facilitators for their organizations, as they provide therequired resources in the right quantities and at the right time for usage.Their ability or competence can result in the business becoming moresuccessful and profitable Customers may view their suppliers’ salespeople

as either allies or as the opposition, but either of these perspectives can makethe relationship work, as the sales team can learn to work in either adversity

or partnership Salespeople and buyers, customers and sellers face a omy in that one has to sell at a profit and the other has to buy at a price thatallows them to make a profit This simple truth is influenced by otherconsiderations and drivers, for example the additional value that may becreated through the exchange, the optimum length of the exchange relation-ship, possible future developments and the changing requirements/objectives

dichot-of each organization

Many customers require products and services to be supplied quickly,cheaply, and delivered in the way that is appropriate to their needs Thecompetitive advantage of purchasing through particular organizations needs

to be constantly reviewed and reinvented so that selling organizations areleveraging their core knowledge, competences, and extended networks tocontinuously update the offer, and buyers are continuously adjusting pur-chases to meet their changing needs (Homburg, Muller, and Klarmann,2011) The result of the increasing competition is organizations have tocontinuously evolve an increasing range of products and services to providegreater customer choice (Johnston and Peters, 2011) As a result the expect-ations of customers are continually being driven up by the availability of awide range of competing offers, access to comparative information, and theneed to spend resources wisely (Piercy and Lane, 2011) The rapid dissemin-ation of innovation and the development of new processes that allow cus-tomization of the sales offer culminates in a rapidly changing salesenvironment at the customer interface, which is putting increasing pressure

on the salesperson (Jones et al., 2005) Further, the sales team may needassistance in developing routines and practices leading to new competences

in learning in order to respond to the changing environment (Johnston andPeters, 2011) Sales personnel are at the interface with the customer and are in

a strong position to enact the changes that need to occur to enable theorganization to respond to their customers (Chonko and Jones, 2005;Jaramillo, Grisaffe, Chonko, and Roberts, 2009)

An increasing difficulty with this new customer focus is that many ers are demanding more immediate satisfaction when the salesperson firstmakes contact So much so that thefirst sales call may not be seen as a scopingexercise, where initial capabilities and needs are explored, but customers mayexpect that the initial groundwork and research has already been done so that

custom-THE CHANGING SALES ENVIRONMENT 11

a customized solution is already prepared for them (Lee, 2011) Further, thecustomer may expect that the salesperson is fully aware of competitors’ offersand be able to explain how their offer is superior Within business-to-business(B2B) interactions the advent of economically oriented buying committees hasreduced the effectiveness of relationship selling and replaced it with a require-ment for evidence or demonstrable types of financial value (Moorman,Rossman, and Zoltners, 2007) The increasing sophistication of the buyer isgrowing rapidly and adding to the complexity of the marketplace for the seller.Sales people have traditionally taken the offer to the customer andpersuaded them to stock the item immediately While there is still a rolefor this transactional type of persuasive selling, increasingly sales people arebeing asked to engage in a dialogue with the customer, understand theirneeds, and develop a longer-term relationship that can deliver lifetime valuefor the selling organization (Johnston and Marshall, 2013a, 2013b) Cur-rently, everything is about the customer—customer needs, customer value,and customization—and this has resulted in a great deal of discussion aboutservice-dominated selling and customer relationships As a result, manyorganizations are expecting far more from their sales people The salespersondoes not only have to sell, they also have to be the customer relationshipmanager, market intelligence gatherer, and the face of the organization todeliver the objectives of the organization.

Customers are expecting to be fully serviced by their supplier organizations,which has meant that many organizations are struggling to develop thecustomer-related capabilities to enable them to perform successfully Solutionselling, challenger selling and the development of service-dominant logic ofmarketing (Vargo and Lusch, 2004) are some of the responses to these newchallenges in sales With fewer new customers available in mature markets,one way of extending sales is to develop new products and services for existingcustomers The result is that the range of products and services offered to themarket is constantly changing, but it is up to the salesperson to understandthese changes and to convey the benefits of the new offers to the customer Toachieve this successfully sales people need to understand not only what thecustomer will value, but also how the end users will be able to benefit from theoffer Sales people should be able to‘walk in the shoes’ of their customers andhave a clear idea about the benefits that their interactions will deliver to thatcustomer

capabilities to create and maintain their competitive advantage Throughoutthe chapter we have tried to highlight how the market is changing and thechallenges and opportunities that these changes are presenting to the salesteam However, many organizations still believe that continuing to operatewith their existing sales processes will deliver the same successful results Byhighlighting the changes in economic conditions, the development of theglobal village, and how customers need to be more informed to be able toperform in their market, we identify how the modern selling organization willhave to change to interact successfully with their customers in the future.The one functional group that organizations have to manage their inter-actions with their customers is the sales team As a result selling organizationshave to ensure that the sales team is able to understand the current marketconditions and their role in delivering the organization’s objectives To achievethis, the sales team needs the right tools and information, and more import-antly the right skill set and competences to be able to create the right customervalue Consequently, organizations should select, train, and develop their salespeople to be able to take advantage of the opportunities in the environmentand to ensure that there is a goodfit between customers and organizationalneeds Sales should be able to maintain the professionalism that is required

to optimize their position as the conduit between the selling organization andtheir customers

THE CHANGING SALES ENVIRONMENT 13

2 The sales function’s position

within the organization

Introduction

This chapter will consider how salesfits within the sales organization and howthey can contribute to the organization’s response to some of the changes andchallenges happening in the marketplace that were identified in Chapter 1.Within many sales organizations the actual sales function is somehow heldapart from the day-to-day operations The sales team is charged with achiev-ing certain targets to deliver the organizations objectives in terms of profits,market share, or turnover, but it is likely that the sales team is not used as astrategic resource This situation is observed in SMEs as well as in multi-national enterprises (MNEs), and can have severe implications for the lon-gevity of the business in terms of its ability to compete on a global stage.The nature of sales is changing and there are additional pressures onorganizations to operate innovatively to maintain their market position and

to achieve this there has been the development of a number of‘orientations’that shape their culture and provide a strategic focus However, there havebeen a number of examples of organizations taking advantage of their dom-inant market position, and at a time when organizations are being asked tooperate ethically and with social responsibility, this is definitely a cause forconcern Of course, a more ethical perspective is affecting how organizationsare interacting with their customers The need for organizations to operatemore ethically is impacting on the recruitment and training of sales people asnever before as they operate at the customer interface Consequently, sales-people are judged not only on their personal performance, but also on the waythat they conduct their business We will review the current position of saleswithin the organization and identify some of the new sales capabilities andcompetences that are required to operate successfully in the market

Organizational orientations

The word‘orientation’ in a business context covers a range of dimensions orconcepts, depending on the business’ purpose Overall ‘orientation’ in this

context encapsulates the overall direction, or underlying philosophy, that theorganization is adopting For example an organization may refer to itself asbeing sales orientated, marketing orientated or production orientated, or tohaving an employee or a customer orientation (see Figure 2.1) Differentbusinesses apply different orientations, depending on their individual goalsand strategies (Wicks, 2015) These different orientations guide the behavioursand actions of the sales team, for example, customer-orientated behaviour,team-selling behaviour, or performance-facilitating behaviour (Ahearne andLam, 2012).

An organization’s strategic orientation influences both internal workingrelationships and overall performance (e.g Slater and Narver, 2000; Biemansand Brenčič, 2007) The orientation of business has changed over time inresponse to different environments In the nineteenth and early twentiethcenturies businesses were generally speaking production or product orien-tated Production-orientated organizations were driven to increase output andreduce costs through mass production and the generation of‘economies ofscale’ The aim was to maximize profits by supplying demand as cheaply aspossible As markets became more mature in the twentieth century there wasgreater competition and organizations became more product orientated, byfocuses on producing products with the features and quality that the marketdemanded By producing a superior product or service, an organization would

be able to beat the competition and capture market share An alternative to aproduct orientation at this time was to adopt a sales orientation, whichdeveloped alongside the massification of markets (rapid market growth driven

by economic growth and consumer demand) Sales-orientated organizationsfocus on selling the produced items to their target market in the greatestpossible numbers (Wicks, 2015) This type of organization may have a similaroperation to the product- or production-orientated organization, but now the

Production

orientation

Product orientation

Selling orientation

Marketing orientation

Service orientation

Figure 2.1 Orientation timeline

THE SALES FUNCTION’S POSITION WITHIN THE ORGANIZATION 15

driver or focus is on achieving sales and every part of the organization is aimed

at increasing sales

Over the past twenty-five years there has been a move to adopt a marketorientation A market orientation is said to put the customer at the centre oftheir business activities This is a significant change from previous orienta-tions, as a market orientation is not internally focused, but is externallyfocused This orientation can be particularly successful in overcrowded,mature markets, where an organization does not have the luxury of being amonopoly producer A market orientation has proved to be a critical factor inimproving performance outcomes in highly competitive markets (Narver andSlater, 1990; Jaworski and Kohli, 1993) When customers are able to selectfrom a large range of items, and are able to research what is available fairlyquickly, it is imperative that the organization offers exactly what their cus-tomers are looking for or they will buy from the competitors that do

A successfully market-orientated organization will focus all of its operations

on satisfying the customer This external orientation is every employee’s focuswithin the organization, as if they do not meet the needs of the customer andreact to external realities of their market, they will not remain in business verylong (Capon, 2011) Consequently, an organization may adopt a number oforientations, or focuses, that reflect various levels of importance of certainfunctions, for example, a production, sales,finance, employee, technology, orservice orientation, but it is likely that a market orientation will provide thegreatest benefit to the majority of organizations in the long run

Market orientation is one of the most compelling pillars of modern keting thought, suggesting that through reviewing market conditions andcustomer requirements, organizations are able to develop offers that aremore valued by their customers (Hodgkinson, Hughes, and Hughes, 2012).The links between market orientation and business performance has createdcontinuing debate and a variety of research avenues have been explored (e.g.Hult, Ketchen, and Slater, 2002; Moll, Montana, Guzman, and Parellada,2007) Recent studies have identified positive relationships between marketorientation and business performance in disadvantaged regions and emergingeconomies (Gonzalez-Benito, Gonzalez-Benito, and Munoz-Gallego, 2009;Gaur, Vasudevan, and Gaur, 2011) as well as mature markets

mar-The culture of market orientation is a ‘commitment to the core culturalvalue of continuous creation of customer value’ (Taghian, 2010: 826) Cus-tomer value is created through the features, functions, and benefits of the offerthat satisfy customer needs better than its nearest competitors (Narver andSlater, 1990; Inglis, 2008) Customer value is also created through the inter-actions between the organization and the customer These attributes andbenefits of the offer and their interaction are usually highlighted and commu-nicated to customers through the sales and marketing functions As a resultsales requires a comprehensive understanding of what the customer’s value

16 ACHIEVING A STRATEGIC SALES FOCUS

about their product or services Sales should also have the ability to nicate what customers’ value to the rest of the organization so that theorganization’s resources can be configured to respond to the customer’sdemand (e.g Jaworski and Kohli, 1993; Moll et al., 2007) Sales also need to

commu-be able to communicate the offer’s value to the customer Benefits of marketorientation include enhanced innovation, better customer relationships, andsuperior customer equity/profitability (Inglis, 2008)

Market-orientated organizations may be able to build customer valuethrough inter-functional synergy, the generation and organization-wide dis-semination of market intelligence, and the development of dynamic capabil-ities to improve the offering to customers (Hodgkinson et al., 2012; Hughes, LeBon, and Malshe, 2012) It has been identified that these positive outcomesfrom a market orientation are generated through the development of the threecomponents of market orientation (customer orientation, competitor orien-tation, and inter-functional coordination) Customer orientation is linked

to creating superior value for customers (e.g Narver and Slater, 1990)

A customer orientation encourages sales to explore and share views with thecustomer to exchange ideas/information to help identify and create customervalue While a customer orientation is seen as part of a market orientation,recent evidence suggests that it should be given more emphasis as meetingcustomer requirements become more critical in securing sales However, acustomer orientation is usually contingent of the market condition and theselling situation and taking a solely customer centric view may not always beappropriate (Homburg, Muller, and Klarmann, 2011) Further, a customerorientation requires considerably more expenditure on sales resources andadditional effort and competences from the salesperson to be successful, whichmay be beyond the ability of many organizations to fund (Guenzi and Geiger,2011) However, customer orientation has been found to be related to higherlevels of value creation in the offer (Kennedy, Goolsby, and Arnould, 2003),especially when the customer information is shared throughout the organiza-tion and the sales function is integrated into the organizations’ processes.Moreover, new market opportunities can be identified when there is a clearcustomer focus and shared market information (Moll, Montaña, Guzmán, andParellada, 2007)

Competitor orientation relates to an organization’s ability to monitor andlearn from competitors (Grewal and Tansuhaj, 2001) It is related to evaluatingthe long-term capabilities and strategies of current and potential competitors(Narver and Slater, 1990) Moll et al (2007) highlight the importance ofawareness of market changes through trade fairs, sales networks, and cus-tomer communication Commonly, much of competitor information comesfrom sales as they work at the interface between the organization and themarket (Le Meunier-FitzHugh and Piercy, 2006) Competitor orientationemphasizes the importance of ensuring that the organization’s offer is superior

THE SALES FUNCTION’S POSITION WITHIN THE ORGANIZATION 17