MODERN SALES
to be able to afford the resources to
invest in them all.
Box 4 represents the worst scenario
— low attractiveness and low
strengths. Clearly, we should not
waste our valuable resources here,
other than on the basis of necessity.
If all of this sounds rather like a
blinding glimpse of the obvious, it
should be noted that few companies
even bother with this kind of
analysis, with the result that the
sales force tries to be ‘all things to
all men’. The result is a massive
misuse of resources.
A classic example of this is debtor
control. There is nothing wrong
with the Chief Executive specifying
45 debtor days as a target, but to
apply this even-handedly across all
market segments is the height of
stupidity. Some markets could be
persuaded to pay in 35 days (Box
3). Box 4 could be persuaded to
pay even sooner, whilst in Boxes 1
and 2, credit could perhaps be used
as a competitive marketing tool.
Again, however, the effi¬cient and
even-handed application by the sales
force to all customers of this debtor
control nostrum merely hastens the
company’s demise.
By the same rule, trying to increase
market share in a mature or
declining market ( Boxes 3 and 4)
can be the height of folly, whilst
milking products in Box 2 for profit
seri¬ously damages the company’s
medium- to long-term prospects.
It can be seen from these brief
examples that poor marketing can
seriously damage a company’s
health, especially when an excellent
sales force implements the
misguided policies efficiently.
Other Problems Affecting
Sales Force Productivity
There are yet further problems
which are related to the apparently
endemic desire that companies
have to separate marketing and
sales organizationally. All this leads
to is the splendid isolation of the
marketing department who have no
control over the implementa¬tion
of their policies. The sales force
is often judged on volume, relates
to today’s products and markets,
and deals with individual problems,
customers, and so on. The marketing
department deals with profit, future
trends and portfolios (or groups)
of products and markets. Both jobs
are highly professional and require
special knowledge and skills. Yet,
whilst personal selling is obviously
a key part of the marketing mix,
its physical and organizational
separation from marketing merely
exacerbates whatever problems the
company has.
This problem is closely related to
the tendency some companies still
have to organize themselves around
products rather than markets.
Whilst this can be condoned in
some situations, generally speaking
it makes sense to focus the sales
force on customer groups, rather
than organizing them geographically
and giving them every customer
within that territory.
The rule should be: organize around
customer groups where practicable;
and put marketing as close to
opera¬tions as possible, with both
sales and marketing functions
reporting to one director, whose
main function is to ensure that what
is planned is actually implemented
by the sales force.
Finally, it is worth pointing out
that 60% of plans fail to achieve
their targets. Across the top 50
corporations of America, we
estimate that the total lost profits
from poor implementation to be
well over $50 billion. Add to this the
thousands of companies further
down the ranking and other global
regions and it can be seen that fixing
this problem could be a massive
goldmine.
Malcolm H.B. McDonald, author of 44
books, is a Professor of Marketing at
six of the world’s top Business Schools.
His extensive industrial experience
includes a number of years as Marketing
Director of Canada Dry. He spends
much of his time working globally with
the operating boards of the world’s
biggest multinational companies. He
is Chairman of six SMEs. In 2006, he
was listed by the Times as one of the
country’s top ten consultants.
July 2016
ModernBusiness
31