Turn The Channel
Did you hear about the layoffs today? Yes, those layoffs – and those were on top of the layoffs yesterday! What has really been shocking me recently aren’t the numbers, 35,000 announced one day, while 20,000 were announced the day before. No, what has captured my attention is the huge percentage of sales professionals involved in those numbers. What is going on here? Don’t we need to sell our way out of this mess?
Evidently not.
At first I was surprised by the bloodletting within the business development ranks. Clients of mine were cutting loose their sales folks at the same time we were working to improve the effectiveness of the workforce. However, there is some sanity behind this apparent madness. While I am not a fan of the concept of downsizing, there are many organizations that have the wrong coverage model with too many expensive sales execs deployed to visit the wrong segment of accounts.
Many businesses could reduce their cost of sales by deploying less costly channels against segments that don’t demand high-powered sales teams. Serving the lower end of the SMB may be fine with a tele-channel. Serving the long-tail segment of accounts - small spenders, infrequent spenders, and those in low-density territories – may be best served over a web channel. That segment in the middle with a low spend but a reasonable potential should be targeted by a marketing channel to soften and identify likely prospects.
If you are concerned that your SG&A is going to put you at risk during this next downturn you may want to examine your coverage model. This begins with a revisit of your segments. Many organizations that I work with are strictly geography based – use a red marker on the map, carve up the territories to even out the load, and you have yourself a coverage plan. But this is a bad strategy in many situations. This will ensure that every sales rep has a portion of dog accounts that they are required to visit. Worse, those accounts that are easy to reach or are friendly to sales visits will get an unjust amount of love and attention, even if they don’t produce the goods.
Just because an account is harder to penetrate does not mean it does not warrant attention. Unfortunately the geography only based coverage model guarantees that those accounts get way less love than the friendly ones.
This is why segmentation is so critical. Give the accounts that will yield riches from face to face visits to your expensive field force. But give the dogs to the channel that is better with raising pets. Some of the dogs need campaign nurturing. Some of them just need a phone call when they are ready. Others will find you if you make sure they know your URL and it is easy to work with.
Once you strip away all those canine accounts, the territories could get a bit bigger – less red lines dissecting the map. Don’t fill the open recs and don’t panic when Fred retires in March (just make sure he has his contacts up to date). You will be able to get by with less reps if you think this through.
Don’t forget to feed the puppies.