How much does it cost to win a sale – more than yesterday?

What does it cost to win a sale?

The economics of selling. Bain published a particularly interesting article noting that historically companies in the B2B market – “consistently grew their revenue faster than their sales and marketing expenses.”

But that was then; this is now.  Over the last decade the game has begun to change.  Bain analyzed 200 large US-based companies between 2003-2011 – “over half of the companies had increasing sales and marketing expenses as a percentage of revenue.”  Profit margins are under increasing pressure.

Now, it is safe to say that no one single factor is the cause of this trend.  But one deserves particular attention.

Over the last several years customers’ expectations about their suppliers have become higher than in times past.  During the sales process vendors are expected to bring real expertise to the party versus just selling products.  They must help the customer develop new perspectives about the problems they face – not just spend time discovering the problems.  Likewise they need to help the customer expand their view of alternative solution strategies.

Companies have developed a number of strategies for addressing this need for increased expertise.  The challenge is – How do you add expertise and manage the cost curves so profit margins are not eroded?

Let’s focus on just one strategy for adding expertise and examine how it can be implemented more cost effectively.

To address the need for more expertise, some companies have added more specialists to their sales teams.  The specific type of specialist varies by industry but usually they provide technical/engineering expertise or product specialty knowledge or capabilities related to implementation management.  Let’s highlight some considerations for getting this right.

Investment. Whereas some companies have added specialists others who could benefit have hesitated.  Given the raising expectancy of customers, the time may he come to pull the trigger. It seems unlikely customers will flip-flop in regard to the type of support they will require from vendors – so now may be as good a time as any to do what is needed.

The notion that sales reps by themselves can provide the expertise is folly.  First, that strategy under estimates the level of expertise customers are and will be expecting.  Plus even if reps could develop the expertise – after a while selling time is eroded.

Training. To make all this work training needs to get in the game.  In the past rarely did technical specialists attend sales training with sales reps – considering this routine is now the better option. The payoffs are substantial: sales reps can pick up useful technical knowledge; specialists learn selling skills and most importantly the two groups take another step towards building a working relationship.  If you going to sell as a team, train as a team.

Utilization. One cannot deploy enough specialists to be everywhere – all the time – with everybody – and still retain the desired profit margins.  The formulation of then account strategy for each account should include a determination about who to use when with whom.  This requires a great working relationship between the sales rep and the technical specialist – which is not something that just comes naturally.

Interested in learning more about team selling?

If you found this post helpful, you might want to join the conversation and subscribe to the Sales Training Connection.

©2013 Sales Horizons, LLC

About Richard Ruff

For more than 30 years Dr. Richard Ruff and Dr. Janet Spirer - the founders of Sales Horizons - have worked with the Fortune 1000 - such as UPS, Canon USA, Smith & Nephew, Boston Scientific, Owens & Minor, Textron - to design and develop sales training programs. During his career Dick has authored numerous articles related to sales effectiveness and co-authored "Managing Major Sales", a book about sales management, "Parlez-Vous Business" which helps sales people integrate the language of business into the sales process, and "Getting Partnering Right" – a research based work on the best practices for forming strategic selling alliances. Dr. Ruff received his Ph.D. in Organizational Psychology from the University of Tennessee and a B.S. from Rennsselaer Polytechnic Institute.
This entry was posted in Sales Best Practices, Sales Strategy, Sales Training, Team Selling, Uncategorized and tagged , , , , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *