Pramod Thomas | Mar 14, 2018 | 0
Strategic role of sales
By Michael Stops*
The success of a manufacturing operation rises and falls with the balanced interaction of its three strategic functional areas: Development, Production, Sales. All the three areas are vital. But each of them is following its own characteristics:
A development department thrives on the creativity of its players. Their ideas are indeed triggered by the current technical requirements in the market, but usually develop a great momentum of its own that likely dissolves from the practical constraints. This must probably be so in order to enable and promote value-added creativity. However, there is a big danger that with all the enthusiasm for the own creative ideas finally problems are solved which in reality the customer does not have in his applications, at least not have the focus on and which they are not willing to spend money for; In easy words: “nice to have” ….
Strikingly, A development department will address sales, saying: Here I have fantastic ideas for you. Now go and search for customers.
Production areas are traditionally conservative. They would wish for producing the same product, unchanged for years in steadily and smoothly increasing numbers. So they can optimise their processes and produce cost optimized and effective.
Strikingly: A production tends to address sales, saying: Here is the product that I hand over to you in top quality and at top conditions. Now go and sell it.
Of course, these theses are expressed in exaggerate phrases. Nevertheless, they are rooted in place and deep in the minds of the players. This became obvious to me during my long-suffering experience as a sales director. While the engineers of a company may be trained and equipped with much advanced technology expertise, they still lack the expertise how to have this leading-edge technology sold profitably and on the long term.
The above-mentioned theses directly lead to the function of sales as a strategic field which is essential for the long term success of a company:
Strategic steering function
Sales has to take over the strategic steering function, so that development and production departments stay focused to realise the real customer needs and requirements and to put them in the best adapted product at the required quality and the best cost.
“Real needs and requirements” means these products/features or services which the customer considers as value adding and for which the customer is willing to spend money. Of course, it is the primary task of all salesmen and -women to maintain customer contacts to elicit the real customer needs as describes above. Out of that knowledge Sales has formulate then the tasks for the own organization and has also to ensure its realization and implementation. Not to forget, it is also business of sales to observe market trends and the competitive environment and to respect these gathered information for the development of own solutions and strategies.
But also, sales have its peculiarities: Salesmen are in danger of indulging the customer benefits as the sole savior. By that they are at risk to ignore the needs and capabilities of the own organisation. But a “customer” never is homogeneous in its attitudes and requirements. That means that different areas of a customer with its different acting people will have different, even time-varying requirements. Following that there is a remarkable risk that the guiding and controlling function of a sales department cannot be described as approximately straight line with slight curves, but rather as a sharp serpentine in the high mountains which the sports car of development is at risk to get lost and the truck of production cannot follow.
Conclusion: The three areas of development-production-sales have to communicate intensively and to discipline each other. When this happens in a well-balanced way the whole company will be sure to position itself in the market successfully and sustainably in the long term.
Necessity and importance of production and development was and is never up for debate. But the function of sales is even today in many companies still considered as a necessary evil. The strategic function of sales then is just not yet recognized as an essential one and as a value-adding core function. That is a mistake.
The “Technical Sales”, that is selling and distribution of explanation requiring technical products is a very complex function asking for multiple skills from the selling people. Sellers need not only product-related technical expertise but many more competences and not only social ones. Knowledge of the rules of the industrial buying process with its various marketing tools are required as well as contacting and interacting with people with different cultural background, who are involved in the sometimes very different organisational customer structures. All these have to be identified and combined and successfully implemented in the own selling strategies.
The tasks of sales both in terms of strategy, as also in terms of its basic tasks in a customer contact gain even more importance the more comparable competitive products become. Best example for that is the automotive industry, with its standards to have more than one supplier for their high volume parts. In that case the products of different suppliers are looking totally the same. All products must have proven their suitability in various test methods. The producer then often can only be identified by the company stamp on the part – if permitted by the OEM customer.
Then it turns out, whether sales succeeded to manage to putting together a tailor-made overall package which the customer considers as valuable and necessary and for which he is willing to buy – ideally even at a slightly higher price compared to the competition.
I am not alone with my thesis concerning the strategic function of sales. They are generally recognized by Germany Universities which newly developed programs of “Sales Engineering” as specified courses. They were created during the transition from German Diploma to the European Bachelor and Master programs and they are enjoying increasing popularity. However, until the new, young and specifically trained sales specialists will be available for the companies in sufficient numbers and until they started their work and collected their own experience, some more time will elapse.
There is a considerable need to catch up!
As in most other cases, it is relatively easy to describe, what to do, and how the interdependencies are defined. For this there are manifold, partly highly scientific papers published. But, the description of the “WHAT” is fairly simple. Much more difficult is to describe how these so plausible sounding theories can be put into practice.
The real problem to solve is the “HOW”!
But about the “how” there is only little useful literature. And that is not surprising. It is due to the complexity of the tasks of sales combined with their highly individual expression. There are no general rules and recipes available.
Various consultants spread instructions – partially like dogmas – such as: “A good sales person is not talking about the price …” That is simply nonsense.
Each selling task is to be seen as an individual case depending on ‘objective’ products combined with the characters of the acting people, both buyer and seller, and also on their specific position in their organizations. Each project must always be considered individually. Therefore solutions and activities for sales are always based on the experience, the personality and sensitivity of the sales staff.
MST-Vertriebsconsulting has set itself the task to train the sales staff of its clients and advise them individually with the aim to put them in the situation to withstand even perfectly trained buyers confidentially and successfully in order to reach the company targets better and more effectively.
The company offers its customers consulting and support, based on a long-term and multi-faceted experience, gained both in large as well as small organizations and companies.
*Michael Stops is with MST-Vertriebsconsulting. He can be contacted through [email protected]