I simply had a phone conversation with a shopper who had a familiar story to tell. He had engineered his business on the model of an entrepreneurial sales force. Offer them a territory, pay them straight commission, and tell them they are in business for themselves, liberal to develop the customers they selected with the products they wanted.
And for a pair decades it had worked well. The business grew and expanded. A lot of entrepreneurial sales people were added, and the model was duplicated repeatedly again.
So way so good. However then the growth in sales began to slow down. Three flat or declining years during a row has caused this company president to question the standing quo. Not only is business flat, but he's unable to get his sales force to push the lines that he wants to push, he is unable to induce them to use some of the new technology that the corporate needs them to use, and he's unable to induce them to prospect for brand new customers. Now he is faced with an experienced sales force, who for the most half, are unmanageable.
The culpit? A sales model that was engineered on the concept of the entrepreneurial salesperson. There was a time when this model was effective, however in these days's competitive economy, there are serious difficulties with the entrepreneurial model.
This model works best when the market is growing. As long as there's a lot of and additional business out there available, the focus of most companies is to grab as abundant as they will, without caring an entire ton as to which customers and that product make up the business. Using a group of entrepreneurial salespeople reduces the strain on sales management so that the corporate's executives can focus on building the infrastructure necessary to stay up with the consistent growth.
As we tend to all grasp, this was the case for most of the previous decade. By shifting the responsibility for sales management unto the salespeople, but, you offer up a lot of of your management influence. In effect, you cede management of the sales force to the salespeople. And they generally build selections that are in their own self interest, not yours. The very concept of an entrepreneurial salesperson is that he/she can manage himself. By definition, you abdicate your managerial role and cede management to the salesperson.
Is it any marvel that you cannot direct the salesperson?
So long as business was consistently growing, this wasn't an issue. However now it's a concern. Most distributors have experienced a reduction in sales volume over the last few years. Several have come back to the conclusion that they need to initiate vital changes in their sales organizations if they're going to be profitable and growing.
Currently, rather than simply a lot of business, progressive distributors need to expand the business in target accounts, emphasize key product lines, and acquire new accounts. In different words, they need to direct the sales force a lot of exactly, to focus them on the behaviors that any the corporate's strategic objectives.
At just the time that they wish to a lot of precisely focus the sales force, they're faced with a cluster of experienced salespeople who became satisfied and content.
These sales individuals would rather not move out of their comfort zones of established customers and established products. They need no desire to try and do the hard work of prospecting for new accounts. And many are content with the diminished incomes of the past few years.
The culprit during this tough situation is the entrepreneurial model. This is often not to mention that there aren't any entrepreneurial salespeople. Certainly a sure proportion of every massive group of sales folks can flip out to be highly motivated, constantly improving, driven to succeed and willing to just accept your direction. From my expertise, this is about one amongst twenty sales people. The chances of your entire cluster fitting this mould are slight. The problem is not the occasional exception to the rule; the difficulty is that the model that now not supports your strategic interests.
