A Sales Transformation Definition, First
Sales transformation is a business strategy that focuses on reshaping a sales organization to boost revenue generation. According to Wikipedia, it is a form of change management—realigning how assets and people are used to restructure an organization.
But let's be honest for a moment: regardless of how much you hear otherwise, people don’t like change.
Don’t believe me? Tell your sales team you’re restructuring their regions again. Wouldn’t go over so well, would it?
And how can we expect it to? Change is hard. Change admits failure (not true!). And for a business, change means downtime.
But sometimes change is the first step to turning your business around or giving it a big push towards success. Don’t tell your marketing or finance team, but when it comes to transforming a business, your sales organization matters more than any other department. You know this. A business lives, dies, or thrives on its sales performance.
And if you’ve ended up here, you’re likely facing at least one of many businesses challenges: strategy misalignment, below average sales performance, or elusive revenue goals. No matter the problem, the bottom line is you’ve recognized the need for a change in your sales organization.
Ultimately, a sales transformation initiative is meant to create meaningful change to gain meaningful results. But where do you start?
Sales Transformation Starts with the End
The best place to begin formulating your sales transformation initiative is at the end. Start where you want your organization to end up, meaning consider the results you’d like to achieve. Working back from these goals will help pinpoint what you should focus on during the sales transformation process.
Some worthwhile objectives to focus on are increasing revenue, producing revenue, and boosting revenue. Joking aside, while the driving motivator for a sales transformation initiative is to produce earnings, there are other benefits to mine from this type of change. What could be as great as generating income, you ask? How about:
- Improving customer relationships through improved customer experience
- Driving sales performance
- Interdepartmental alignment (e.g. align sales and marketing)
- Acquiring new business
- Reducing churn & turnover
- Optimizing sales operations
- Entering new markets
- Aligning operations and overall business strategy
Okay, maybe some of those aren’t as great as increasing revenue, but a good argument can be made that excelling in any of the areas listed above will result in wins for your business. With your goals in mind, we can move on to the how-to.
Six Sales Transformation Tactics That Are Actually Doable
There are countless resources out there on how to execute a sales transformation initiative, but often the suggestions in these guides are too broad, or require hiring an expensive consulting firm to implement. Sales transformation strategies should be company specific, so any that attempt to offer up a universal game plan are useless. So, tapping into our sales performance expertise, we’ve come up 6 practical actions you can use to shape and inform your sales transformation strategy.
1. Leverage your compensation plan: We say this a lot at Xactly, but your compensation plan is not simply the cost of doing business. A more apt description is that your comp plan is the operating system on which your sales organization runs. From incentives, to revenue, and operating cost projections, your compensation plan drives and supports each of these functions.
It follows, then, that if you’re looking to overhaul your sales organization, you start with your comp plan. This is a persuasive and tangible form of change for your sales, tying sales reps’ goals to overall business strategy in the most direct way—paychecks.
2. Pace out the changes: Sales doesn’t live in a vacuum. A change to your sales organization can produce a ripple effect across other departments. Marketing and finance will likely be affected by any changes made during the transformation—whether it be due to new lead rules for BDRs or new plan components to calculate. So, start small before you go big. It may make sense to focus on rehauling one or two components in your sales organization first, e.g. creating a new compensation plan or retraining your reps.
3. Reshape the customer experience: When was the last time you’ve evaluated your customer experience? Have you roleplayed with your sales team in the last quarter? Are they selling bullet points on a box or actually selling solutions? Your reps and what they say are part of this customer journey, so taking a closer look is worth your time.
It’s easy to get caught up in the big sweeping strategies, but sales transformation can sometimes be as straightforward as making sure reps are using tried and true techniques like “challenger” selling, a tactic that places the sales rep in a position to teach customers something they don’t already know. Remember, how you sell matters more than what you sell.
4. Pay reps what they’re worth (or not worth): Are you paying your best sales reps enough? Are you paying too much for poor performers? Without the proper benchmarking data, it’s difficult to know what you don’t know. For sales organizations, pay is intimately linked to performance. Pay too little and your best reps move on, taking their revenue generation with them. Pay too much and you’re operating in the red. Striking a balance isn’t just common sense. It’s good business practice.
Determining those rates is usually a combination of what worked in the past and shots in the dark. Your options are limited. You could make an educated guess using historical data. You could also use surveys to understand the market rates for compensation. Or best case scenario, you could use an empirical source like Xactly Insights™, which aggregates cross company and industry data directly from the source. Using this data, you can tweak for a healthier sales organization—dropping poor performers, incentivizing average reps to step up, and rewarding your best people.
5. Give sales and finance the right tools for the job: Even if you haven’t heard the term “shadow accounting” before, you’re likely to have experienced the practice out in the wild. Shadow accounting refers to those detailed commission records your sales reps keep to call out (often loudly and rightfully so) any discrepancy between what they’re expected to earn on a deal and actual payout.
In the age of paper and spreadsheets, this practice made sense. But with sales performance management software, like Xactly’s Incent™, which automates the compensation process, shadow accounting should be a thing of the past. For your finance department, Xactly means no spreadsheets, automated calculations, accurate payouts, and happy sales reps. For sales, Xactly provides real-time data on their objectives progress, commissions calculators, and ease-of-mind that they will be paid on time, every time. The transformation here comes from freeing up your sales team to focus on selling—not being secondhand accountants.
6. Dangle the carrot between your reps and specific goals: This may say sound a little abstract, but what we mean is use incentives to align sales behavior with your business goals. You’d be surprised how many business challenges are overcome with the right incentives in place. For instance: if your churn is high, reconfiguring your compensation plan to, uh, compensate for this shortcoming may be your best bet at keeping your hard-earned business. The same thinking applies to earning new business, acquiring customer marketing material, or upselling. Incentives can be more than a reward. Incentives can be a solution.
Resources to Put These Tactics into Practice
If you’re interested in implementing one or all of the above sales transformation tactics, below are some useful resources to help you do just that: