The most avoidable negative business activity you can find yourself sorting out is sales channel conflict. This is the time when various salesmen (or channels) start engaging with and selling to the same clients. It causes problems – the clients don’t understand why different parts of your organisation don’t seem to coordinate with each other and, internally, you have conflict over client ownership and, possibly if sales are concluded, with commission distribution. Worst of all, this cannibalism is avoidable.
Sales channel conflict – shooting yourself in the foot
It’s hard to imagine that this could actually happen? But it does frequently. Sales people, by their very nature, are aggressive and single-minded, and will go after the easiest targets that present themselves. Does it matter that those sales have already been allocated to one of their colleagues? Not really. Unless this is policed quite strictly by the Sales Director then you are likely to witness chaos.
This whole situation can be made worse if part of your sales is conducted indirectly by the channel. If you think it was bad before, then you should see channel partners fight with each other to make sales on your behalf. I have witnessed some very brutal scenes and, as the vendor, you have to stand back on not pick favourites (although you will have some). You might even have to incentivise the loser to keep them in the game.
Lastly, mixing outsourced telesales and internal sales is slightly easier but still problematic at times. The outsourced company are working on your behalf and being paid by you. This gives you a modicum of influence over them.
Rule are boring but necessary
How do you try to avoid this situation? One of the easiest is to have clear rules in place. These rules cover who owns which customers, who takes the lead in which type of sale, how new leads are distributed and to whom. It also might cover how long one sales person (or channel) can access a lead for before it is taken from them and reallocated to another channel. The last one is particularly pertinent in indirect, channel sales.
The one problem with rules is that they are pretty boring and can be quite complicated.
Modern systems make things easier
If you use a modern sales IT system, then you can set up and apply sales rules for individuals, groups, customers, geographies and products. They’re also not prohibitively expensive (and there are well-known SaaS versions – such as SalesForce.com). What using a system like this gives is consistency and transparency. Everyone works under the same rules and they are applied systematically and objectively for all.
There can be no favouritism and leads / sales opportunities are progressed via the system.
There are some other aspects of using a sales system – the system can be set up to ensure that salesmen use it frequently. However, this doesn’t always work out in the way that you might imagine. We can tall you about these later.
Reallocation – the elephant in the room
This is one that doesn’t happen very often but it probably should.
It’s when a lead has been allocated to one salesman but doesn’t get moved forward properly or effectively. And then it is taken back and reallocated to someone else. It isn’t great because the customer will suddenly find that they are dealing with someone else which might confuse them. However, if you’ve got this right, then the new salesman will actually take the opportunity forward much more efficiently.
Where reallocation becomes tricky is when you are taking and reallocating leads from one channel partner to another.
Sales competition can mean discounts
When salespeople compete to win business, they can be drawn into offering greater and greater discounts. This is very damaging when they are from the same company and they’re competing against each other. That’s one very good reason why you have sales allocation rules and ensure they are reasonably strictly adhered to.