There has to be a sales disciplinarian. They are charged with all the buttons, levers and switches of a sales assembly line.
Products and services cannot be sold by the same mind that created them
I have repurposed an Albert Einstein quote to fashionably accommodate my observation.
I will give my own experience in the hope that compelling anecdotes will prove what this short post cannot satisfy in hard data.
I will use as an example companies that renew client contracts annually. Because these companies engage their clients in longer term contracts there is a greater predictability to earnings and their models anticipate a (imperative) fee increase year over year..
Conflict occurs with each side’s well prepared determination: The provider must increase, at worst preserve, margin. The client would like to lower, or worst case maintain, their cost.
Two competing interests and two different systems:
Insperity & TriNet. These are PEO’s (Professional Employer Organizations) These are complex companies and I am not extending this parable to give an opinion of their state or well-being. In fact, they are both great companies that have sustained fantatic growth.
Renewals happen annually as a mechanism to introduce new medical pricing, suggest new contribution scenarios and offer the best opportunity for margin increase.
Insperity renews their clients on the anniversary of the client’s effective date.
This function used to be managed by the sales person. The top sales people have more clients and therefore renewing existing clients stopped or slowed them from bringing on new clients. Sales people have a compassion for clients once the sale is complete.
A renewal department was created around 2002 and client profitability increased dramatically. The renewal department was more patient with emphasizing the value the client had gained over the past year and was charged, and compensated for increasing client margins.
TriNet employs a different model. They renew clients quarterly with a different process, they use the TriNet Human Resources person who manages the account to renew and explain the new medical plans and possible contribution scenarios.
The profile and character of an HR or customer service person is not ideal for this job. One issue is they are already rather bandwidth constrained. Another is that because their role is the outsourced service person for the client company, they will likely act as an agent for the client and against their employer’s financial interests. Further, they have a very low pain tolerance. The counter party, the client’s delegate, is animated with a certain amount of theatrics. ”How can you do this to me/my company”+ ”There are other providers out there”. Customer service and front facing employees are overly receptive to this and they cave in; they become sympathetic and aligned with the client, rather than their employer.
I think the Insperity model is a better system. Their renewal specialists are compassionate but emotionally disengaged. Further, because their renewal department is a dedicated resource it does not interfere with the other client facing personal, such as service or Insperity staff assigned to the account.
The TriNet model I suspect will evolve. That is not to say that TriNet is doing it wrong, but that their top line growth has come at an expense – and IOU’s will get paid.
The takeaway is that for a sales process to function optimally, it must be an assembly line that works in proper sequence. The motion of the workers should be reduced to the extent possible. Each station must be articulated precisely to create share/stakeholder value.
The machinery malfunctions when a person charged with making ‘this’ also is responsible for doing ‘that’.
This is a vulnerability that prospects will quickly recognize, and in their due diligence and negotiation will capitalize on.
Free, subsidizing new clients or retaining existing clients below a desirable cost is rarely a successful strategy. Possibly it indicates that somewhere along the conveyer something is improperly aligned