I was talking recently to the CEO of a small software technology business and a member of the Inc. CEO Project about some of the issues he was dealing with inside his company. One of the big decisions that he was contemplating was to begin expanding the role of his sales force. Instead of focusing on new business sales, he wanted his salespeople to be able to follow customers and build a lasting relationship with them. These salespeople would be able to support and serve those customers and possibly upsell them in the future. While he was interested in higher levels of service, he also wanted to be able to upsell.
The CEO viewed the decision as logical because it was a way to get twice the value out of his employees while still serving customers. This CEO also believed he would get the most productivity from his employees and maximize sales opportunities.
After talking with him about the matter for some time, I said that this was not a good idea for both the company as well as his salespeople. It might actually end up costing his company.
Here’s how I arrived at this conclusion.
A Lose-Lose Scenario
It is hard to find good salespeople. This CEO was fortunate to have a superstar who made up about 60% of all his sales. Yet, the CEO thought about shifting his star salesperson to a service position with every sale. He will be responsible for these accounts in the future.
That meant that as he sold more and more accounts, he would need to spend more and more of his time servicing those clients and less time selling new business. This would eventually lead to everyone losing. Despite this being partially offset by ongoing sales opportunities which were usually smaller than original sales, it was still a loss-lose situation for everyone.
The Time Value Of Money
Consider this: A salesperson generates revenue of $5,000 per hour for a company that wins new business. They make more than $1,000 an hour when they are serving customers and scoring upsells. We can see that selling is more time-consuming for this individual. As they gain more clients over time they will spend more of their time supporting customers and service.
This is not the most efficient and valuable way to use this individual’s time. That doesn’t even begin to account for how they might feel if they are motivated by the commission they might earn by winning new business.
The company loses and the salesperson wins. The client could also lose if the salesperson is great at selling, but not at providing outstanding service.
It’s expensive to get cheap and free things
It is a problem that many businesses face. It makes perfect sense to use your sales team for client support, especially since retaining clients is important and decreasing churn.
This equation is not perfect. You can still hire individuals who love to build long-term relationships and are great at serving customers. These people can be paid a fraction of the price that top-sellers get. They are still highly valued employees but are much easier to find than the top-sellers.
Training the team is essential
My CEO friend wanted the ability of a salesperson to identify opportunities in existing customers. The customer success team didn’t enjoy selling, which made this difficult.
Two moves were made that helped. He changed the terminology of the customer support team to stop selling “helping” instead. The team wasn’t trying to sell anything, but rather, was trying to solve more problems for clients and friends. This helped the team to have a service mindset and was able to accomplish what they needed.
The team also learned from him what kind of problems they were able to solve. The team was able to identify opportunities and point them out when they were found. A salesperson could help them with the commercial negotiations if they were unable to do it. This was extremely efficient.
As your business grows, you will want to seperate sales from service. People should be placed in the positions they have the skills and talents to do the best job for the company.
It is important to remember not to make the error of moving salespeople in service just because it seems cheap, or free. This can easily become the most costly decision you make.
Publiated at Tue 17 August 2021, 11:08:23 (+0000).