As companies rethink their strategies based on recent lack luster numbers, a familiar song is echoing across every board room – focus on increasing the bottom line while managing cost for the near term, or take the long term view of sticking to the plan (operating within the guiding principles of mutual respect and trust, providing clients quality service and employees with professional development), while of course continuing to increase share holder value.
What is being fiercely discussed is how to allocate the sales forces to the various projects, maintain market share, increase revenue, and keep customers from jumping on to competing companies based strictly on cost cutting.
As I talk to many organizations and colleagues, I find that similar solutions are being proposed to address lack of sales, dwindling sales, no peripheral sales, or no sales at all. The major themes are as follow:
- Reintroducing Business Development Managers or BDM as “seller-doer” types.
- Revamping the entire incentive program, including the consultants’ objective and subjective evaluations as part of the bonus and incentive structure.
- Creation of a Key Accounts Management program- by simply refocusing the resources and strategies to the major accounts.
I will discuss all three models in the upcoming posts, and provide pros and cons to each. First, I want to shed some light on consultative model and what I have noticed as a melancholy in sales challenged firms.
Most companies these days use the consultative approach of creating client relationships. Consultants spend their time developing, building and maintaining relationships with client organizations. Some are embedded in the client organizations for the sole purpose of developing long lasting relationships, which would manifest into future contracts.
From the surface this seems to be a working model that has proven successful over the years. Where it gets off course is when the following happens:
- No clear definition of the relationship developed with the client. Often times, if it is one directional, it only benefits the client. Additionally, half of the time consultants spend at a site building and maintaining relationships goes un-accounted for, and therefore cannot be billed. Sales organizations are so eager to get be chosen by the client that they forgo the normal checks and balances necessary to mitigate against the what ifs, leaving themselves vulnerable.
- Most companies assign one or more consultant with no cross training in various domain expertise. This results in the sales organization not benefiting from any contracts outside of the consultant’s scope.
Significant pressures are impacting the traditional sales-consulting force system: Competitive intensity is rising, the macroeconomic trends are reducing the number of available customers, and the cost of sales consultants’ force effort is leading management to question their traditional ways of dealing with smaller customers. In addition, considerable pressure is being felt from customers for whom consulting is becoming an ever more important issue; they are affirmatively reducing their consultant bases and changing markedly the way they conduct their business activities.
Yet, paradoxically, these pressures under which consultant sales force and management now operate hold within them the opportunity for both success and failure. Pressure can set an organization on the way to ruin or light the path to improved performance.
I will identify and address what I call the Congruence Model, which every company must focus on, if the KAM program is to succeed. This will be the topic of next few posts. Enjoy.