Risk Management in Sales Management
Part2 : What’s the cost of …
Published on April 24, 2015
By Rudy Vanheygen
Consultant, coach & trainer for leaders, managers & staff behaviour and communication , author
Sometimes it is difficult to calculate the Return On Investment (ROI) of the outcome of a decision. The alternative is to calculate the CONI or Cost of Non-Investment. In other words, if you take the wrong decision, what is the consequence or result of it? Here are some of the essential, often painful questions.
What’s the cost of …
The wrong man on the right place?
Geographic sales areas can be a logic decision; but is the sales person the right one to connect with the clients of this area? What happens if a sales person is facing customers that are doing business in a different way? How much opportunities are missed if a ‘’farmer’- sales person is trying to develop a new market? Or how many customers might you lose if a ‘hunter’ is managing an existing client portfolio?
The right man on the wrong place?
A good and efficient salesperson is working in a market with very few opportunities to develop the business? How long will he/she be motivated? How long will a new salesperson or even a ‘close to retirement’ sales person keep the pace in a battlefield of hostile competition?
People working the wrong method?
Sales people develop their specific working method? And marketing is creating new approaches. To what extend is the sales team trained to put the new approach into practice? Do we expect them to adapt automatically? Or do we confuse logic with obvious? Do they understand why? And do they know how?
People working with the wrong attitude?
Each sales person has his/her own auto motivation. A high customer-orientation is good for the customer; but do they also take the business interest into consideration? A strong fighter will probably reach the objectives with regularity. But what about customer loyalty? What about cross-selling and enriching the portfolio?
A slow turnaround?
Change is always a hard thing to manage. But when the sales strategy changes, the risk increase considerably. Switching from product sales to service sales or to solution sales is a hard thing to do. How much sales will you miss when this turnaround takes 6 months or more? Apart from the turnover slowing down, what else will you lose? Motivation? Top talent? Clients? Your credibility and that of the new strategy?
A misfit integration?
An even greater difficulty is the integration of two sales teams after a merge. Each team has its own culture, rules and habits. What happens if you can’t create a coherent team? How many will be de-motivated? How many will leave? And what about the team spirit and the cooperation? What will it cost you in turnover?
Inconsistent management?
It is normal for a manager to reconsider and make changes. It is also logic that sometimes a tougher approach is required, as is a softer. Sometimes business is the main topic of the communication, sometimes it is the team and the people.
Are the messages well communicated? And are they well founded? If not, the sales team will ask themselves a lot of questions. All power and commitment will slowly evaporate, because the sales people don’t understand the what and how and why anymore. How consistent and coherent is your management style?
There are many more questions to ask. This is a start and it will help you finding a new way to look at situations and consider the ROI as well as the CONI.
Share your thoughts and experiences. Together we can find the answers and create pragmatic solutions.
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Monia Elhedi – Instructor Certified Professional Trainer Translator Interpreter Mentor
Excellent post for managers, leaders and entrepreneurs and their working teams to learn from. I particularly find the Misfit Integration part very interesting.
I believe it is the responsibility of the team in charge of BCM ( Business Continuity Management ) as well as the BIA( Business Impact Analysis) to consider such point and have not only team members in charge of sales but other segments/sectors as well to be prepared for such situations as Merger.
A needs analysis based on the training objective has to be carried out .Some component parts of it should include questions or statement about the predisposition to accept change and be accommodating in terms of dealing with team members with a different company culture background as well as a different attitude.
Communication skills and other cultures’ awareness are of paramount importance in such matters. Mergers have become a common phenomena in strategic management, especially in the current global economic situations and companies ‘ team members should be psychologically and culturally well prepared for them.