[EDITOR'S NOTE: Occasionally, we get asked a question from our Vistage Connect executive community that we hand off to one of our resident experts. Today, sales expert and CBSNews.com blogger Tom Searcy tackles a recent virtual query from a CEO wanting to know what to do next when he's forced to split his sales team to sell new products...]
Market evolution has been one of the most painful business lessons in recent years.
Older business models like publishing houses and record labels have floundered badly in the face of new technology, and once-gigantic brands like Blockbuster and Borders have struggled desperately to compete with “new media” providers like Netflix and Amazon — not always successfully.
The lesson is this: If you’re not upgrading and diversifying what you sell, you’re running the risk of becoming obsolete. Maybe not this year, but certainly soon enough. It’s frustrating and difficult to know exactly when it may happen, but rest assured — it will happen. And that’s one of the biggest reasons to tackle diversifying at an early stage.
One of the toughest parts of diversifying for modest-sized businesses is growing and evolving your sales team to deal with the new market. You want to keep maximizing revenue from your existing primary business, of course — but you want to begin a successful transition to the new market, at the same time.
What are the action steps you could take to address this challenge? Your basic options are:
- Keep the existing team working on the old market, and bring in new people to work the new market. Risks: This may alienate the existing team, your veterans, who may feel left out of the new opportunities and resent the new hires.
- Strategically split the old and the new territories; bring new people in and retain previous talent, working together on the old and the new. Risks: Similarly, this may bother the old team, since this would essentially “split” their territories. It also takes the older team out of its likely comfort zone.
And, throughout all of this, it’s important to remember your biggest goal: Keeping the sales team focused on selling as much of the old stuff as possible while prospecting and developing sales for the new product.
Difficulties aside, businesses facing this challenge have an opportunity to redesign their sales model altogether. Typically, when a company embraces a new market like this, the new market represents an evolution over the old: A more technologically advanced market, with greater communications and mobility.
It’s a shift to a different value model. Specifically, that value model is about productivity and communication maximization in a more mobile and open environment. Business leaders facing this situation might want to consider moving from a territorial-based sales model to a market vertical or business solution-centric model for organizing their sales force.
Through re-organizing your sales force, you also have some flexibility to add newer resources to the team without alienating the other members. Your market has shifted and your strategy should shift with it: The solution is moving away from a territorial model and to a new system.
But we’re still left with the problem — bring the old team along, or start new? Consider that your sales team may be more capable than you suspect of making this transition. All the same, you probably should consider a more selective approach to your sales people — choosing those who can truly make the transition to the new solution model and moving them there quickly. Allow the others to expand their sphere of accounts to incorporate the old accounts vacated by those reps who have moved on first.
You undoubtedly value your salespeople and know that they each bring merit and relationships with clients to your business. However, they are not all created equal, and it’s very possible that now is the time to reorganize, recognizing that not all will chose to stay in the new structure.
Tom Searcy has established himself as the foremost expert in large account sales. As an author, speaker, consultant and founder of Hunt Big Sales, Tom has helped his clients generate business in excess of $5 billion. Leading four companies through tremendous growth from under $15 million to as much as $200 million, Tom has perfected the process for consistently landing large accounts, which he has documented in his books, Whale Hunting: How to Land Big Sales and Transform Your Company (co-authored by Barbara Weaver Smith) and RFPs Suck! How to Master the RFP System Once and for All to Win Big Business.
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