Business Model Triangle (Photo credit: Alex Osterwalder)
What do we mean by Sales Model and why is it important? And isn’t this all a little too intellectual? Why are we wasting time talking about theory while, out there, people are spending money with somebody else?
These are all good questions. If you are the sort of sales professional who can sell anything to anybody, make top dollar on every deal, do it differently every-time and still over achieve against your goals? Please tell us your secret before you leave to do it again.
if you’re not one of those guys, stay with us for a while. This article makes no judgement about right and wrong. But it does explain what the best sales model is, and the ways the decision directs other choices.
The Sales Model is just like a business model, only limited to sales operations. It’s organisation, strategy and processes. It might also include skills needed by the sales team and their compensation package. It’s influenced, at least should be, by the product and associated services, by the target customers, by the competition, and by the prices and costs involved.
That’s quite a lot of influences for what most people would consider a simple departmental issue. Why not send the sales people out to knock on doors and ask for some orders – that’s what everybody else does, isn’t it?
Well, actually they don’t, or at least the successful businesses don’t. They work out at least a skeleton strategy with value proposition, customer demographic, price and cost of sale targets, and sales process. A couple of examples will help show some of the differences. We can see how different sales models will apply in the same recruitment agent.
The business value proposition is all about human resourcing for the hotel and catering industries. Companies needing additional staff use our company to find and recruit the people they need. The service covers both senior management salaried staff and by the hour casual labour for kitchen porters, cleaners, and waiting staff for the restaurants. But the company uses different sales models depending on the staff to be provided.
Recruiting and staffing of by the hour temporary requirement is a minimal value add business. There’s a lot of competition so fees are low. Success is about having the right staff looking for work and luck catching the right manager on the phone at the right time. Sales is Inbound and Outbound telephone call based. Either the customer wants extra help or doesn’t. Either the agency has the right skill available or doesn’t. This type of business is really numbers game.
The other side of the business is entirely different – Executive Search as opposed to temporary staffing. Fees are much higher, and so is the involvement of sales. The sales function is led by an Account Director with an intimate understanding of the client, the industry and what’s required for the senior management roles. When the hotel is recruiting a new Hotel Manager, or Front of House Manager, or Head Waiter or Head Chef it needs a business partnership with the sales representative which starts with the initial introduction and continues through the complex process of specification, advertising and search, negotiation and start up.
This is one simple example of how sales models will differ between businesses and value propositions. There are many more, of course.
Just how the sales operation works in order to achieve the right mix of revenues and costs of sale is what we describe as the sales model with organisation, processes, and metrics.
If you’d like to get more insight and ideas about managing sales check out our eBook Succeeding in Sales Management
