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Chapter 9: Corporate Strategies


Translating Market Strategy into Sales Results

Business experts portray many different, and often conflicting, elements of corporate success. Some focus on innovation; others, on human capital; still others, on product and service quality. Some even focus on focus. The list goes on and a good case can usually be made for each element. But unless a company can translate its value proposition into profitable sales results, not only will the funding that all of these elements of corporate success require never materialize, but the very existence of the organization will be threatened.

The translation of value proposition into bottom-line profitability is accomplished through a go-to-market strategy that encompasses a company's market, competitive, and product strategies. Together, these elements feed into the sales strategy. Its formulation and execution is the critical work that lies at the heart of a business. The go-to-market strategy cuts across departmental functions. It directly involves the product development, marketing, sales, service, and support functions; it indirectly involves almost every other function in the business.

As with any strategy (and assuming that the resources and skills are already in place), there are four prerequisites for the successful execution of a go-to-market strategy. There must be:

  1. A high level of understanding of, and agreement on, the business strategies in place to acquire, expand, and retain profitable customer relationships. Is everyone in the company united by a shared vision and a common effort?

  2. A successful transfer of business strategies to departmental and individual responsibilities that encompasses both quantitative and qualitative objectives. Does everyone in the company know what they, individually and as part of a group, must accomplish to successfully achieve the defined objectives?

  3. A monitoring and measurement capability that enables leadership to assess the performance of the departments and individuals as they progress toward their objectives. Can everyone monitor their progress toward the achievement of those objectives?

  4. A capacity to anticipate and correct the most frequently occurring issues and obstacles blocking the successful execution of the strategy. Can everyone learn from their mistakes and respond and adapt to changing conditions?

We see many go-to market strategies fail to generate profitable results precisely because one or more of these prerequisites are ignored. For example, we encountered a company in the insurance industry that fell prey to this trap when it abruptly changed its go-to-market strategy. The company had been targeting small, blue-collar companies, such as plumbing and roofing contractors, but as the business environment changed, management decided to sell to larger, white-collar businesses. The new go-to-market strategy was delivered to the 250-member salesforce. Instead of calling on roofing contractors, they were instructed to call on medical practices, IT consultants, and law offices. Unprepared to deal with this new prospect base, the sales-force's closing ratios quickly plummeted to below 4 percent. (Interestingly, the company decided to take the traditional sales-by-numbers approach to counter poor performance. The salespeople were pressured to make more calls and give more presentations to raise their results. This is a classic example of selling harder instead of smarter.)

This example again highlights a major limitation of the conventional sales process: It offers only one response to downturns in performance—do more of what you are already doing. That response does not enable a company to address fundamental problems, gaps, and disconnects in its go-to-market strategy. Worse, as salespeople put more time and effort into a system that isn't working, they burn through valuable prospects, and the negative performance cycle is often exacerbated.

The conventional sales process is what an information technology expert would call a legacy system. In the computer world, legacy systems are usually outdated networks that were originally developed for limited, local purposes. As holistic, organizationally integrated networks are developed, these systems must either be modified or replaced. The conventional sales process is a legacy system in that it offers the sales department a way to communicate internally, but it doesn't connect the sales function to the rest of the organization in any meaningful way. It does not offer a common language or the filters through which sales and the other functions in the business can communicate and respond. In this sense, it contributes to the "black box" view of sales.

The black box view of sales is an attitude that we frequently find among senior executives who do not have sales experience. To them, the workings of the sales department are largely a mystery. They can set goals and send them into the black box of the salesforce, and they can tell whether those goals have been reached—after the fact. But they can't effectively manage what happens between the two points. Sales are a black box that senior management hopes will deliver the required results.

What we need is a process that can make the black box transparent—that is, capable of connecting the sales function to the rest of the organization in strategic terms and creating a common language and process through which the go-to-market strategy is formulated, executed, and monitored.

This process should also allow management to pinpoint the source of performance shortfalls. As one senior vice president in a Fortune 100 company indicated, "The most frustrating things about poor sales results are not knowing where the problem originates within the organization and the finger pointing that results when you try to trace it." The defined sales process enables managers to pinpoint inefficiencies in their strategies and tactics.

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