Delivering for Best-in-Class Wholesaler-Distributors
June 29, 2016  |  ByMark Dancer, NAW Institute for Distribution Excellence Fellow
NAW-3 Benefits of Adopting CRM for Sales Leaders

Our interviews with principals and sales executives for my book, Getting the Most Out of CRM, identified three primary benefits of CRM for sales leaders, each of which helps to stretch the sales leader from tactical execution to strategic contribution:

1. Improving sales forecasts: In many distribution sales organizations, a salesperson’s goals are determined by top-down allocation of the overall sales and margin objectives, allocated with a consideration given to prior year growth for each salesperson. CRM can help to improve forecasting by providing a bottom-up development of potential growth and margin objectives and by enabling new sales analytics. From our interviews, we learned of several practical analyses enabled by CRM, including comparing sales and margin by size of customer accounts, examining churn of lost and new accounts, and calculating discounts and price concessions by customer market and segment.

2. Forcing use of CRM: Sales leaders can require that all decisions be made with customer data and that all customer data come from CRM. Situations for applying this principle, as suggested by wholesaler-distributors, include routine management meetings, annual sales meetings, and team sales meetings and coaching led by sales managers. Several interviews offered a cautionary note for leaders: be careful to limit your incursions into ongoing selling and sales management efforts. CRM gives leaders new abilities to keep their fingers on the pulse of the business, dipping into any account or sales opportunity that they desire. One wholesaler-distributor described unintended consequences, “I found that the comments I posted caused salespeople and sales managers to say things they thought I wanted to hear and to do things they thought I wanted them to do. This was not my intent, and it took time away from productive selling eff orts. Over time, I learned to comment only where I could make a difference.”

3. Optimizing sales force size and territory design: Another area where improved analytics, enabled by data collected and presented in CRM, can have an effect is in optimizing the size of a sales force and balancing sales territories across salespeople. One wholesaler-distributor described the situation, “We were getting ready to expand our sales in a new state, but I don’t really have any idea how many salespeople I should have. Using CRM data, I was able to examine sales by size of metro areas and then estimate potential in new cities, making adjustments for the mix of customers by industry.” Other wholesaler-distributors felt that the value of CRM for sizing and territory design was high in existing markets. “Once we had CRM, we started looking at the reasons why one salesperson performed better than another. Sometimes, it was about the salesperson’s knowledge or selling skills. But we also discovered that our territories were out of balance. Some had too much opportunity, and others had too little. We reassigned boundaries so that all territories could be worked effectively and sales went up almost immediately.”

Compensation design is another area that came up occasionally as we discussed how CRM was used by sales leaders to improve sales effectiveness. The reasons are similar to the examples above—CRM makes customer data easily available, with differences by salesperson, account, territory, and so on. Sales leaders can use this data to assess whether an incentive plan truly pays for sales performance and to make appropriate adjustments to pay, mix, goals, commissions, and bonus structures. This can be done without CRM, of course, but as CRM helps wholesaler-distributors manage by the numbers, the likelihood that the analysis will be done increases. We suspect that we have only touched the surface of how CRM will improve leader actions to improve sales effectiveness.

Adapted from Getting the Most Out of CRM: Best Practices for Wholesaler-Distributors

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Mark Dancer, NAW Institute for Distribution Excellence Fellow

Mark Dancer, NAW Institute for Distribution Excellence Fellow

Mark Dancer founded the Network for Business Innovation to drive awareness, advocacy and excellence for B2B innovation, and to enable an exchange of ideas between leaders on business transformation, technology adoption, social impact and community engagement. For more than 30 years, Mark has worked with leading companies to achieve go-to-market excellence across a wide range of industries in developed and emerging markets.

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