The basic idea of sales excellence is that companies achieve a higher turnover and higher profits by means of better customer care and greater efficiency in sales and service. The companies should seek to obtain a larger share of valuable customers purchasing volume, ideally raising that share to 100% and to establish good, long-term relationships with those customers.
The value of customers is measured in contribution margin or net profits. There is no doubt that sales excellence results in greater profitability. If a company fulfills the described criteria of sales excellence in this article this should lead to an increased customer satisfaction.
However, customer satisfaction alone does not lead to business success – only when customers become loyal this will have a direct impact on sales and to a certain extent on the prices that can be achieved. Where customer loyalty exists, customer care usually is more convenient and sales generally increases due to repeat purchases, cross- or upselling and recommendations. Sales is thus increased and costs reduced, and this leads to greater profitability. But how can companies achieve sales excellence?
The key features of the sales excellence described in this article include three main areas:
- Sales policy based on clear objectives
- Professional sales management
- Measurement and management of customer satisfaction and loyalty
In the first part, the sales policy, companies should check whether their market activities have sufficient customer focus. Have valuable customers (measured in terms of contribution margin, not sales) been systematically analysed and addressed? How much market knowledge does the company have and how international are its sales policies? Are they lasting, strategic competitive advantages (e.g. digital sales approaches)? Is the superior sales service decisive to the customer´s purchasing decision; can it actually be perceived and is it difficult for the competition to match? Are there clear ideas regarding the use of company-own or external sales organizations? If a third-party sales is chosen, are there clear criteria for the choice of that sales partner? Is there a clear task profile for sales organizations owned by the company or run by third parties? How is customer care handled? Where do priorities lie? Does the company work with a sales score card? Is compliance a key element of the sales policy and a clear guideline for the sales staff?
Professional Sales Management
The professionalism of sales management will be determined by the organization itself, processes and instruments used as well as leadership. Within an organization there should be a clear regulation of contacts with customers and customers should be aware of this. How much leeway employees have in their dealings with customers. Are there clear guidelines? How are responsibility and the amount of leeway handled in practice?
The core customer-related processes (quotation, quotation monitoring, contract negotiations, confirmation of orders, contract and project management, customer care/technical assistance and complaint management) should be reliable, free of errors and fast. Are these processes regularly checked. Finally, the cooperation between sales and other departments and between headquarters and foreign operations or within the sales organization should be discussed.
Instruments are divided into those providing information, those for controlling sales, and those related to customer care. Information instruments include those which offer customer information (ABC Analysis, customer value assessment, lost order analysis), information on markets and competitors (market volumes, market growth, market share, sales activities of competitors) and cost/profitability information (customer break-even analysis, customer lifetime values, recalculation of major projects, calculation of process costs for core customer-related processes).
It is also important that the sales department has access to the information and that the information is comprehensible to the sales team. Sales management instruments deal on the one hand side with sales planning and on the other with conducting analyses of deviations within the company, well-functioning sales planning should be clearly defined and quantified, have plausible objectives, clear assumptions of responsibility for results of the sales operation and its personnel, a clear breakdown of objectives with respect to customers and clear definition of sales management actions in pursuit of the objectives. Deviation analyses should be carried out regularly and carefully. Following the deviation analysis, any measures found to be appropriate should be introduced as rapidly as possible. In case of instruments related to customer care checklists for sales talks in person or on the phone should be available or advice should be available on how to present benefits of solutions to the customer in particular if the customer has objections.
Furthermore, plans should exist on how to support the valuable customers over the course of time. As part of personnel management activities, the conduct of sales managers toward staff members is important (the extent to which the conduct is of an exemplary character, “open door” policy, allowance of freedom of choice for autonomous action, annual talks for agreeing on targets). Other issues to be considered are the incentive situation and the human resources development (professional/personal training for all staff members, existence of job qualification profiles for all sales members, implementation of appropriate steps to overcome insular thinking along departmental lines). With regard to corporate culture, it is important to establish a strong attachment of the sales staff to the company, the sales staff has to have a strong identification with the goals and values and the sales department need to have a high standing within the company.
Measurement and Management of Customer Satisfaction and Loyalty
The third part of the sales excellence includes the measurement of customer satisfaction and loyalty as well as implementing the appropriate steps for improvement. The company should have clear guidelines on the content, the target group definitions, the data collection methods and the data analyses to be conducted. Customer satisfaction surveys should be carried out at regular intervals so that changes can be seen over time. Communication inside the company is crucial for the acceptance of the improvement steps to be taken. Customer satisfaction surveys should give an answer to the following questions:
- What are the main driving factors from the point of view of the customer? (for example, on-time delivery, technical consultation)
- How well does the company fulfil these criteria from the customer´s poinz of view?
- How is the company rated in comparison with its best competitors?
In addition, all customer satisfaction surveys should investigate the overall satisfaction and the customer loyalty. Loyalty can be measured as the willing of the customer to recommend the company and the willingness of the customer to continue buying from the company.
A comprehensive approach to sales is a key success factor for every company as it is the core to gain competitiveness and to grow the business successfully.