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"Rethinking the Sales Force" by Neil Rackham and John DeVinc

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Najeeha Farooqi

on 11 August 2015

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Transcript of "Rethinking the Sales Force" by Neil Rackham and John DeVinc

"
Rethinking the Sales Force
" by Neil Rackham and John DeVincentis
Final Global Procurement Internship Presentation
Najeeha Farooqi
Summer 2015

VALUE
Formal Definition
(n). the regard that something is held to deserve; the importance, worth, or usefulness of something; can be monetary
How is "Value" defined at BNY?
Value according to "Sales Force"
Must directly benefit the customer
Consumers are placing that value on HOW the product is sold rather than the product itself
Value
=
Benefits
-
Costs
Reduce the Cost of Benefits Already Provided
Create Benefits
3 TYPES OF CUSTOMERS
Intrinsic Value Buyers
Understand the product, know how they want to use it, substitutable by competitive offerings, want a
favorable cost.
Extrinsic Value Buyers
Value is in how the product is used, interested in solutions and application. Strongly built relationships with the seller, want
customized solutions and advice
.
Strategic Value Buyers
A relationship of equals instead of buyers vs. sellers. Product is secondary to other forms of value supplier can bring. Want more than a suppliers advice and products, want to
leverage core competencies.
TRAVEL VENDOR PRESENTATIONS
STORAGE VENDOR PRESENTATIONS
RECEPTION SERVICES VENDOR PRESENTATIONS
2 Very Different Methods
"A cheaper, no hassle pie"
"A bigger pie"
"A balanced diet"
3 TYPES OF SELLING
Transactional Selling
Purchasers already have a full understanding of their needs
Intrinsic value buyers
Commodities/standardized products
Concerns around acquisition stage
Consultative Selling
buyers go into sale not knowing full details
Sales can add value through insight
Key: information
Ex: complex financial products, technology
Enterprise Selling
Appropriate for large and strategic business-business sale-- but still limited in use
Strategic interests of customer and supplier are aligned
Leveraging cross-functional capabilities
VALUE
...is reshaping purchase decisions
Purchasing is now

STRATEGIC
What's Driving the Shift in Value Orientation?
What Does
"New Purchasing"
Look Like?
Environmental Changes
New Purchasing Concepts
Due to regulation, globalization, and financial restructuring
Increased price sensitivity
Smarter, better-informed consumers--focus on reporting
New channels emerging
SUPPLIER SEGMENTATION is centered around 2 fundamental characteristics that practitioners believe should shape purchase decisions:
Sustainability and/or availability of comparable products

Strategic importance of supplier's product
Lifetime cost of ownership
Cost of purchasing promiscuity
movement to supplier reduction
Supplier Segmentation
Low
High
High
Strategic or cost importance of suppliers product
Difficulty of substitution of obtaining alternatives
Leverage Size
Partner
Shop
Manage Risk
So...What Does "
New Selling
" Look Like?

There is VALUE OPPORTUNITY in every mode of selling
These are known as
VALUE LEVERS
Examples of Value Levers:
Deliver "new news" about product or application
Provide insight into customer problems, issues, and needs
Act as a customer advocate, adviser, and customize
Facilitate acquisition transaction
Lower acquisition costs
Help customer reduce or hedge acquisition risk
Leverage cross-functional capability
Create solutions for customers leveraging full assets of company
Creatively leverage the assets of third parties
What About Relationship Selling?
Zone Indifference
Inferior price/performance
Price/performance parity
Superior price/performance
No selling mode is better than the other, instead sellers match customer to mode type
ENTERPRISE SELLING
CONSULTATIVE SELLING
TRANSACTIONAL SELLING
The Impact of Sales Process
Process
: any linked group of tasks, carried out by several groups or functions, that together create customer value

Process Applied: Case Studies
Transactional
HP Case Study: order@hp.com
Enterprise
IBM Case Study:
No worldwide strategy
So they designed a customer relationship management process
customer VALUE at the center of stratefy
Ex client: McDonalds
Partnering
- redesign of the boundaries between organizations
Consultative
No consistent method-- spotty record
Create boundaries to avoid tunnel vision
Emphasis on
individual process
: A linked group of tasks carried out by an individual or team without hand off to other individuals, groups, or functions
...but what does a
value
based process look like?
The Value Identification Process (VIP)
Segmentation
Creating the value hypothesis
Value Targeting
Value Actioning
Planning and executing the value approach
Identifying those customers where we can create value
Rethinking Channel Management
Channel Management
Ownership and Control
1.
Owned Channels
- totally controlled by manufacturer

2.
Tied Channels
- franchisees, owned by agents and carry manufactures products

3.
Shared Channels
-one company uses another distribution system to reach customers

4.
Arms-length Channels
- retailers, minimal formal control
Customer Targets
1.
Direct Channels
- focus on a set of identifiable customers

2.
Retail-Mass-Market Channels
- attracting customers to sites
"Changing the Sales Force"
"Sales"
4 Cautions
It takes longer than you think
There's no silver bullet
You can't hire your way to capability
You can't improve sales people without improving sales management
4 Change Levers
Clear vision of where and how to create value in the market
New structures to focus on value creation strategies
Capability building to enable value creation
Metrics and compensation aligned to value creation strategies
Final Thoughts and Questions
1. reduce costs of transaction by cutting out steps or substituting cheaper methods and channels
2. increase the conveneience and ease of acquisition for customers

Definition
: The process by which a supplier directs marketing activity by involving and motivating parties comprising its channel distribution
Hybrids
(go to customers)
(customers come to them)
"... I also think of
value
in terms of how I’m adding it to my internal stakeholders...You gain the value by building good relationships, possessing the necessary category expertise and by being able to successfully execute each step of the strategic sourcing process. You’ll then be viewed as a valued and strategic partner."

- Dennis Dinallo
"The role of Procurement is often a misunderstood function to various lines of businesses. The procurement process adds
value
to the Bank Of New York Mellon by identifying opportunities to negotiate favorable pricing for services, improve relationships with current vendors, identify redundancy of services and achieve the objective across every organization of savings and reducing costs"
-Michele Harrison

"What I’ve learned in working with one of our negotiators that the importance of
value
can be relative to the individual who is analyzing an investment in technology.

One way we look at
value
may be on a return of investment for a given expenditure for a product or service. If I can buy something for X dollars but over time it saves me more than twice what I paid for it, then we should probably place a high value on that investment.

Another way may not be in the price associated with a purchase but instead on the intrinsic
value
that our company places on a product or service. For example: IT security may not care about a return on investment, but if a particular product helps this company protect its data against foreign hacking, then the value may be much, much greater to that person. "

-Steven Ginsberg

"...
value
means working towards having a cohesive program that will provide the end users qualified candidates with an accomplished outcome"

- Camille Adams
"The
value
of our contingent labor program is offering a nimble program to support a diverse and risk averse organization. We provide the right skills, at the right price and time with rigor to minimize risk to BNY Mellon"
-Tara Simon
Corporate Services and Real Estate
Market Data
IT & Telecommunications
Professional Services/ Contingent Labor
Full transcript