Situation: A company has customers scattered around world. When the company was small, the CEO was very involved at all levels of sales and customer relations. Now that the company is larger, the CEO is more strategic but misses client contact, particularly for gathering market intelligence and understanding. The CEO does go on regular sales calls with reps but is getting push-back from the Sales VP. What is the CEO’s role in sales?
Advice from the CEOs:
Make an effort to understand the push-back coming from the Sales VP. Probe – where is the resistance coming from? What is the basis of the resistance? Is it personal or functional? Keep probing until the roots of resistance are clear, and then deal with these.
As CEO, insist on continuing customer contact. This is essential to your role and your understanding of your market.
Sit down and discuss this with the Executive Team. Go over your travel schedule and your objective in meeting with customers. Where appropriate meeting opportunities exist, let them know that you want to be included. Follow-up and repeat the message if they do not schedule you for calls.
How does the sales rep position this with a client? Let the customer know that the CEO will be visiting the area and would like to meet you. Here are the broad objectives and the benefit to you. Knowing that the CEO is interested in meeting with the client can be a powerful way to deepen the relationship with the client.
Having the CEO accompany the local representative on the first meeting with a customer sends the wrong message. Let the representative establish the relationship first. Then bring in the CEO to deepen and strengthen the relationship when the opportunity is right.
Situation: A company’s Sales Manager is likely to retire in the next two years, but has no strict timeline. This individual is the chief rain-maker and has been for many years. The subject of replacing this individual has been sensitive when mentioned in the past. How do you replace a Sales Manager and how do you manage the transition?
Advice from the CEOs:
Have a frank conversation with the current Sales Manager. For the company to thrive it is necessary to start selecting and training an individual to take his place when he retires. Have him help develop the recruitment and transition plan. Also involve your Customer Service Manager.
o Hire a person like the current Sales Manager and allow for up to two years for the new individual to get up to speed.
o Find someone who is currently associated with one of your key customers and who has contacts.
o Adjust your compensation scheme to focus on growth and customer diversification with enhanced commissions for bringing in these accounts.
To ease the transition, start to build a different customer relations structure – one where the CEO has more engagement with key customers.
An alternative to replacing the Sales Manager is to create a different organizational structure. For example, hire a COO who will eventually take over business development as well. Think longer term about to how you want the management structure to grow. Build your future vision of the company into this process.
Situation: A company has a long-term relationship with a Japanese distributor that is also an investor in the company. Due to time zone differences and language difficulties, communications are very difficult. This leads to significant cost overruns for the company. How do you satisfy a difficult foreign customer?
Advice from the CEOs:
In working with a difficult partner, it is critical to set expectations, establish ground rules and repeat these at the beginning of each conversation or teleconference until it is clear that both sides understand each other. Even at this point, these should be repeated and reinforced any time a new individual is participating in the conversation.
Do you want us to give you (a) our honest answer, or (b) do you want us to tell you what we think you want to hear? – They would be foolish to choose (b).
Preface each critical response with this choice to reinforce the agreement at the beginning of the meeting.
In a situation where you are losing money under a fixed price contract, you may have to have a “Come to Jesus” meeting. During this conversation, you want to understand and establish:
Whether this relationship is profitable for both of us, and
Whether this project is doable by each of us.
Usually this will result in a radical shift in the model.
If it does not they it is better for both if you part ways. You are unlikely to reconcile the situation.
The bottom line is to establish, mutually, whether you can satisfy your partner through your efforts. This is critical to your future with this customer.
If you cannot find an acceptable solution you must abandon the effort.
It makes no sense to take on business that is not profitable to you, even if the revenue is important to plan achievement.
At the current rate, you will not make up the loss in profitability through additional volume.
Situation: A company has an opportunity to form a marketing partnership with another firm. The primary potential benefit to the company from this partnership is gaining access to new customers. On the other hand, partnerships may bring complications. What is your experience with marketing partnerships, both positive and negative?
Advice from the CEOs:
Marketing partnerships can certainly work, provided that both parties see benefit to the relationship, and both are committed to make it work.
Be sure to clearly define boundaries with the partner.
If either company can perform a particular service, whose customers are who’s?
Is there alignment throughout the partner’s organization regarding the partnership? Or are their conflicting priorities within different branches of that organization? Test the waters ahead of time and assess how these will potentially impact the partnership.
There are potential pitfalls:
What is the in-house/outsource attitude of the partner? If there are strong voices for in-house production or service provision, these will not be supportive of the partnership.
Watch the quality of the partnership over time.
Successful partnerships are based as much on friendly cordial relations as on business priorities. Are your business cultures and ethics compatible?
Who is the champion for the partnership on the other side? What will happen if the champion leaves? Is there a back up champion?
Build an exit strategy into the partnership that will allow you to leave gracefully and mitigate financial or good will consequences if the partnership sours.