Challenges confronting the modern sales organization cross multiple lines; sometimes they’re externally driven, sometimes internally driven, and other times the result of both inside and outside influences. External “macro” challenges include those market forces, such as changes in industry structure, global prices, demand, regulations, and the like, that impact the way organizations sell and conduct business. For example, consolidation in an industry resulting from merger and acquisition activity reduces the number of customers available to suppliers, thus forcing a reassessment of sales strategies. One organization in our study had their customer base reduced from nearly a dozen to just three as a result of mergers and acquisitions. In addition, a decline in global prices may require suppliers to differentiate themselves in new and unique ways. World prices for paper and other forestry products, for example, have been pushed so low that manufacturers now have to create new and innovative value-added services to set them apart from competitors.
Organizations also face external challenges that are derived from changes in the buying behavior of their customers. These more “micro” trends, such as a more demanding and knowledgeable customer base, impact the way sales organizations interact with customers. Because customers are savvier and more knowledgeable about pricing and product features, salespeople need to rethink their approach to selling. Such challenges increase over time as suppliers continue to advance their capabilities (in search of differentiation), which ultimately increases the expectations of customers and encourages competitive response, thus eliminating the differentiation and resulting in the need for a new product or service innovation. It’s a never-ending cycle.
Finally, there are those challenges internal to the sales organization that companies must confront, such as internal pressures to reduce costs, turnover, and mergers and acquisitions to name a few. These challenges are not necessarily “bad,” and with the right strategy in place they provide organizations with real opportunities for improvement and growth.
Although each organization we interviewed operates in a different industry with individual circumstances (e.g., some were fragmented, some consolidated), all organizations in the study were facing similar challenges with regard to the markets they operated in. These challenges for many were the key drivers in deciding what strategies to pursue and how to operate their sales organizations.
Globalization, mergers and acquisitions, declining prices, and stiffer competition are just a few of the challenges faced by businesses today, and the organizations we studied are no different. Some trends are newer on the scene, such as recent advancements in sales technology, new channels to market including e-commerce, and more knowledgeable customers resulting from information available on the Internet, while others, such as globalization and price pressures, have been around for a while. In response, organizations are pursuing both new and old strategies. This book examines the best practices of sales organizations in developing and implementing these strategies in light of the challenges discussed in the following sections.