The strategic sales organisation

"Strategy" is generally viewed as the exclusive domain of executive management. And whilst that may be true for the corporation as a whole, the sales organisation is an entity in its own right with its own unique resources, competition and environmental forces - both internal and external - and should have its own strategy, its own plans and, whilst these are always in support of the organisation's direction as a whole, its own unique vision.

For sales managers to reinvent their sales operations and become meaningfully strategic they first have to understand that historically sales and the salespeople in them are trained and think operationally - i.e. most sales operations grow by getting operationally stronger; by getting better at "how to sell" and not in "what to sell" or "who to sell to". Therefore, after creating a vision the first (giant) step in becoming a strategic sales operation means that instead of focusing on how the organisation can improve a product or service, an administrative or debt-collecting activity, or even its sales productivity, it should focus on what it needs to do to improve the customers' situation.

To compete effectively companies have become brilliant in lowering costs, improving quality, and offering on-time delivery. But in the rush to improve processes and delivery excellence too many companies have overlooked what else they can offer customers today and in the future, to meet their anticipated and changing needs. One only has to compare how sales operations are run today and make a quick comparison with what they did a decade ago to see how little sales have changed. Amongst other things much of the sales training that is undertaken - at great expense - continues to focus on teaching salespeople to sell more of what the company does with little investment made in teaching salespeople to understand what the customers really want to buy.

A few sectors have learned the lesson, reshaped their sales strategy and perform relatively well. One of these is the automotive manufacturing sector. Motor vehicle manufacturers win by out-thinking their rivals, not by out-muscling competitors with brute strength. Regrettably the retail arm of the automotive sector has yet to develop the sophistication that the manufacturers have. As a result, whilst manufacturers proactively address buyer expectations, their retail delivery mechanism competes head to head with their rivals using size and discount as their only differentiator.

An industry that has not learned the lessons of selling strategically and which now continues to suffer from intense competition - where one brutish rival faces off against another using size, price and deep discounting to win business - and that finds its margins being continually hard-pressed, is the IT sector. Whilst this sector talks about selling solutions and addressing customers' ever-changing needs, in the end each of the many players in the sector provide a stock product or service and are hardly interested in adapting to the needs of their buyers. Their approach is based on the sales philosophy of "you buy what we sell" as opposed to the more strategic approach of "we'll get you what you want".

Those sales organisations that invest in teaching salespeople to identify what their customers want and then encouraging the flexibility in their own operations that is needed to be better positioned are winning deals in every sector and, winning them at handsome margins.

The key to success in today's strategic sales environment is to develop solutions that have no competitors. And whilst one may believe that this is hardly possible, there are companies that have, and continue to develop, non-competitive products and services and play the game differently. These companies have sales operations that focus on how to outsmart, not out-muscle rivals. They invest in better customer and business intelligence analytical systems so that they can find better ways to identify what their customers will need and are prepared to buy. They invest in introducing flexibility into the company by including everyone in the sales process. These companies are the leaders in their sector. They don't have production, finance, administration, transport or customer service departments. All of these are mere extensions of the sales operation. Selling is the heart of their business, not an appendage!

More than 20 years ago, when Raymond Ackerman started Pick 'n Pay. His vision then epitomised the philosophy of developing a non-competitive offering in a competitive market space by providing consumers with an easy, pleasant shopping experience where low food prices were more easily attainable. At that time Greatermans, OK and Checkers - the competitors, provided shoppers with a harrowing experience - high prices, dimly lit, narrow isles and limited range. Spar, too, managed to change the rules of the game, offering limited options at higher prices, but providing consumers with neighbourhood stores that remained open for longer and, where personal attention of the manager was an inherent ingredient in the shopping experience.

Today both Pick 'n Pay and Spar appear to have lost that vision. They have slid back into the "do what my rivals do, only better" syndrome. A situation that finds these two groups in intense competition without any meaningful difference - other than superficial loyalties of fickle consumers - as a competitive advantage.

Nedbank on the other hand, which operates in probably the most competitive market - the financial sector - has a vision of serving high nett worth companies and individuals. A vision that has driven their strategy for decades. As a result they have managed to remain differentiated to such an extent that it is premium priced and continues to deliver exceptional margins and return on investment for shareholders. Why? Simply because the company has identified the market it wants to serve and has imbued this sales philosophy into the fabric of its culture.

Every industry has its leaders and followers. The leaders shape the rules of the game and competitors copy their strategy. Hence, followers usually get caught up in trying to fix an imitation strategy. Nedbank was the first of the large banks to niché, the first to launch personal banking relationship managers, the first to offer flexible banking services, the first to make extensive use of IT as a delivery mechanism, and it continues - in the face of fast running copycats - to do things differently. As Netscape (the diminishing Internet web browser) can attest, following a copycat strategy is counterproductive - there is no light at the end of that tunnel. It is a continuous fight for a few percentage points of market share.

Developing a winning sales strategy is easy if the company is prepared to invest in writing the rules of the game. But to do that the sales philosophy has to be based on more than just "selling what the company makes". It has to be based on delivering to the buyer what he wants. And that courage and a vision.