Operational Excellence Transformations

The Need for Transformation of Sales Operating Model

As the new financial year begins for many companies, so do the challenges for meeting the targets for the new year. On one hand, the focus is on retaining and having more business from the existing customers, and on the other hand add new logos. 

We attempt to put forth a series of ideas in transforming the Business-to-Business (B2B) Sales Operating Model for improved outcomes. We focus on leveraging emerging methods, technologies, and tools that address changes in the B2B environment. In this first article, we focus on the need for transforming the B2B Sales Operating Model.

Sales is a core function in articulating, driving, and delivering the key outcomes:

  • The sales function is the beachhead for driving revenue and demand through the door
  • It is the face of the enterprise and sets the outcome expectations/promise in the marketplace
  • It is the foundation to becoming a trusted partner to the customers
  • The sales function is the eyes and ears for the business in understanding how customers use their products and services and gauging the overall customer experience. It funnels this feedback to various internal teams for product and service evolution.

Large technology companies and consulting firms pride themselves on their sales capabilities. In many organizations, CEOs typically emerge from the sales side of the organization. This shows the importance of the ability to sell in the marketplace and maintain a stronghold over the customers’ mindset on purchase decisions and their purse strings.

Agreed, when a company looks at sales holistically, every employee is a salesperson. All your customers, suppliers, and partners can be considered as your extended sales force. However, in our current context, we focus on formal sales function and limit our discussion on the forces of transformation impinging on it.

The sales process is usually looked at as a funnel, starting with creating awareness, then generating leads, and finally converting those leads into orders. Delivery teams take the engagement forward by delivering products and services – and ultimately customer value – while sales provide front face to customers in ensuring seamless experience throughout the lifecycle.

From the buyer’s perspective, decision making has become a complex and risk-filled process as the marketplace is getting more complicated and competitive at the same time. Product refresh lifecycles are much shorter now; non-industry players are disrupting proven industry models; rapid innovations, primarily driven by emerging technologies, are creating new opportunities. As a result, buyers are taking a very careful path before they open their purse strings towards solutions and long term relationships. Therefore, for companies in the enterprise sales [B2B] space, a sales function that provides the impetus to compete in the marketplace and ensure that the company remains relevant in the marketplace is critical. The sales process is a double-edged sword – while they generate revenue, there is also a risk of making ineffective and low-quality revenue deals that hurt the organization in the long run.

Given a specific technology and product offering, either differentiated or not-so differentiated, the key question or challenge for CEOs is how to go about building a sales function that works for success in the marketplace, to ensure relevance, success, profitability, and possibly dominance.

Added to these factors, we are seeing a shift in how enterprises are consuming services and products. Sales functions need to adopt a new rhythm to ensure the business continues to generate sustainable revenue streams.

Thanks to the information in the public domain, social media, and other resources on the internet, many buyers usually have an understanding (or perception) of products and services (what) that a sales team pitches. What buyers usually look forward to from the sales team is how those products and services make sense to their organization. 

And a way to articulate value and business case.

  • Changing customer expectations from ideas-based to showcase-based (or solution-based) buying
  • Cloud solutions are converting product offerings into utilities that don’t demand long term commitment or loyalty
  • From outsourcing resource capacities to engaging as product utilities
  • From individual relationships to marketplace networks
  • From commercial vendor relationships to preference to trusted partners; at the same time, increased appetite to go with niche players (usually boutique firms or startups) for emerging technologies
  • Rapid advances in technology and innovation resulting in digital engagement and open solution discovery

Organizations should continuously innovate their sales processes. Sales function should be built based on a deep understanding of the domain of the company as well as the characteristics that define the B2B buying and purchasing behaviors. While aligning to customer needs and priorities, sales function should also focus on advising customers on what’s right in the long run, preferably supported with data, analytics, and simulations of various future-state scenarios.

We see that increasingly, in a knowledge-driven economy, those companies that pursue consultative selling to its clients from a dominant position of know-how will emerge far more successful than companies that follow just a traditional operations model of selling. Success should be measured in terms of ability to create quality leads, turn them into orders much faster, and build trusted and lasting relationships with customers.

Our next post will deep dive into the current state of the sales process regarding current practices, challenges, and opportunities. We will then continue to expound our approach for sales transformation in subsequent posts.

A version of this was originally published on LinkedIn by Vish Ramdas and me on our company page.

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