Archive for March, 2011

When the CEO Can’t Do It All

Are you interested in “maximizing your sales revenue”?

Ultimately, the CEO always has responsibility for making certain that sales revenue is at its’ maximum level.

In very large organizations the day to day sales revenue responsibilities are often handled by a Sales and Marketing Manager and in some cases there are separate managers responsible for sales, marketing, business development and customer satisfaction.

In smaller flatter organizations the CEO or owner may be managing all these departments in addition to running the business day to day. Often they don’t feel there is enough work for a full time manager and many times delaying hiring a manger is simply a financial decision. In this situation, the owner often counts on his employees to mange themselves day to day and relies on activity reports or hallway conversations to learn what is going on. This condition lends itself perfectly to the concept of having a Virtual Revenue Officer (VRO).

The VRO is a (often outsourced) “part time” professional resource that can relieve the owner of direct responsibility for maximizing sales so that he or she can concentrate on running the business operation without investing in a full time executive position. Often this is an interim step that allows a company to build a revenue stream to the point where it makes sense to hire a professional manager.

The VRO can be utilized to simply manage the sales force, or can also assist with management of the marketing process, business development and/or customer service. The VRO, assisted with information technology tools and many elements of the new social media, should also be capable of “aligning” the sales, marketing and customer service organizations so that they are all focused on building the business and maximizing sales revenue.

If you don’t have a sales and/or marketing manager, you can make a preliminary judgment about whether a Virtual Revenue Officer might be of value by answering the following questions. If you answer yes to any of the questions, you may want to consider the concept of a VRO.

  • Has your revenue growth slowed over the last year or more?
  • Do you feel that your sales force is not optimized?
  • Are you losing sales opportunities you should be winning?
  • Is the time you spend managing the sales team keeping you from other more important management duties?
  • Is your sales and marketing effort aligned to the company’s objectives?
  • Do you know what your (marketing) costs are per lead generated and converted?
  • Are your customers showing signs of dissatisfaction?
  • Are you able to provide training and coaching to your customer facing personnel?
  • Could you use some part-time sales and marketing management assistance?

The VRO can provide management assistance for a fraction of the cost of a full time senior manager.  The table below lists some of the services the VRO should be able to provide. 

   
Sales         Marketing         Customer Service
Process Management         Market Assessment         Customer Experience
Skills Evaluation         Marketing Plan         Customer Svc Programs
Measurement         Brand Management         Customer Feedback
Acct Planning         Lead Management         Training/Coaching
Training/Coaching         Outsourced Services         Account Retention
Alignment         Alignment         Alignment

Again, if you are interested in “maximizing your sales revenue”, but have a limited budget you might look into the concept of a Virtual Revenue Officer.

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Many CEOS Want Better Sales Forces?

If I ask your CEO if he is happy with sales performance, what would his answer be?

In a recent BLOG at Forrester.com (http://bit.ly/fWTvsO) written by George Colony (CEO), he explained that he has been interviewing CEOs to learn if they are satisfied that their sales force is advancing their strategy.  Their answer has been a resounding “No!” They give it a C- grade.

Here are the problems, according to the CEOs he talked with:

1) “Speed.” The sales force is always 12 to 18 months behind strategy.

2) “Calling too low.” Sales reps aren’t getting to power.

3) “The sales force can’t tell the story.” The focus is on price and not on the full value and quality of products.

4) “We have the wrong people.” Not smart enough not tuned in to the market.

Mr. Colony suspicion is that speed may be the driver of this situation. Technology change is running at unprecedented levels — and sales forces are not keeping up. There is turbulence ahead for many sales organizations.

Perhaps speed may be the culprit, but my initial reaction is that the angst the CEO is voicing is really more concerned with the fact that the organization is not maximizing sales revenue and the sales force issue is really just an underlying symptom. Perhaps it is not simply a sales force issue.

Maximizing sales revenue requires three key elements to be managed including:

        Sales Force Optimization

        Marketing Alignment

        Customer Intimacy

Often, each of these elements is managed by a different person (could be the CEO in small companies) who rarely communicates or attempts to understand his/her participation in the larger strategic picture with the other organizations objectives. Often these teams are at odds with each other and sometimes blame the others for their lack of success.

In the near future, you will begin hearing more and more about a position known as the Chief Revenue Officer (CRO). This position is the person responsible to work with all three of these elements to maximize sales revenue.

The CRO will need to understand and communicate the CEO’s corporate strategy and then to provide continuing coaching to make certain that the sales organization is optimized and aligned with marketing and customer service, all of which own the total sales revenue objective.

Alignment has proven very valuable in the organizations that have done the hard work of going through the process. A recent report by the Aberdeen Group has demonstrated this success in which many aligned companies are seeing increases in sales revenue approaching 50%.

 http://www.sitecore.net/en/Resources/whitepapers/Aberdeen-Group-Sales-and-Marketing-Alignment.aspx

Additionally, the CRO position can often be outsourced and used to focus solely on the hard work of aligning the teams with each other to achieve revenue maximization. The CRO always reports directly to the CEO and the CEO will be expected to participate in developing and communicating the corporate strategy.

The CEO also needs to understand that the buyers are in control today and their buying processes have changed dramatically in the last three years. Many times buyers are getting strategic information about your company without your sales force ever being engaged. Marketing, carefully managed can make sure that the buyer is getting the appropriate information and help the sales organization get engaged much earlier in the buying cycle.

So, I would encourage these CEOs to take a broader view of why they are unhappy with the sales force.  If they choose not to, Mr. Colony’s next check on how the CEOs feel may be even gloomier.