ABC Co. provides commercial loans and leases to a specialized industry segment. Their market strategy is for the sales force to be regarded by customers as “trusted advisor” a collaborative partner, who adds value (to justify their above-market rates). Their business metrics are reported to headquarters (and ultimately shareholders) quarterly
Consequently their compensation plan drives the sales force to try aggressively to close business in a quarter-to-quarter cycle, rather than on the customers’ timetable.
Progressively tougher targets and low base salary drive a high turnover rate in sales. Their hiring system recruits aggressive closer types, who typically lack the either the necessary financial acumen or industry knowledge, which are both critical success factors for every sales rep. New sales reps call on customers they hardly know and try to close business.
Training is provided to develop industry expertise. But, only a few sales reps bother to stay up-to-date on the rapidly changing developments in their customers’ industry after the training is over.
Training is provided to develop financial acumen. But, only a few sales reps bother to invest the time to learn the customers’ real financial state, and their broader needs beyond the immediate deal opportunity.
ABC’s organization is structured into four business units by product type, with some potential overlap. Each unit has its own sales force. Consequently, it is not uncommon for 2-3 different sales reps from ABC to call on the same customer. Due to poor communications, they often present conflicting information.
Existing business metrics and compensation plans dis-incent the sales reps from sharing customer information and cooperating on proposals/price to win business.
Many sales managers lack proficiency with the Customer Relationship Management (CRM) software application, so they do not use it to generate reports, or to manage weekly/monthly sales meetings.
Their sales reps know that no one is looking at their data in the CRM tool, so they don’t bother to keep it updated, or in some cases, fudge the entries.
The quality of data in the early and mid stages of the sales funnel/pipeline is so poor that sales forecasts of longer than 30 days are unreliable. Senior leaders deal quarterly with surprises.
Marketing wants to use data from the CRM to create programs for the field (that the sales force is clamoring for!), but the data is so poor that no worthwhile analysis can be done.
Training, by itself, no matter how good, has literally no chance of improving the performance of ABC’s sales force. In fact, it could conceivably be counterproductive. Ditto for a lean six sigma project.
Only a holistic performance improvement approach, such as HPT, has any chance of improving the business results. An approach that considers all the contributing factors at every level in the organization, and implements effective interventions is necessary.
Level 1 (Organization) – The strategy, goals, organizational structure and measures at the organization level
Level 2 ((Process) – The design, implementation and management of internal processes.
Level 3 (Job/Performer) – The behavior of individuals and groups.