Magazine article Marketing

Outsourcing: The Salesforce of Tomorrow

Magazine article Marketing

Outsourcing: The Salesforce of Tomorrow

Article excerpt

Moving from fixed to variable sales costs

The sales director's overhead is often a large cost which continues to be under pressure. Salesforces have declined over the years as the move by major multiples to central distribution has reduced the need for direct contact of branches and offices.

Today the 80:20 sales:customer ratio can be applied to most categories.

We encourage clients to invest heavily in those few key customers who account for so much of their business - get the best business managers and resource them well with trade marketing or category teams. Then review how to handle the remaining business which is available from a wide source:

* What contact must be maintained, eg for order taking?

* Who would be nice to contact?

* How could we grow if we contacted more?

Examine the roles of the current sales resource - put the tasks they carry out in order of skill. Probably you will find that you can draw a line quite high up that skill list, below which you do not need a highly paid career salesperson ([pounds]45-[pounds]50k true cost) to carry out the tasks. CPM encourages clients to outsource the lower skill elements of the sales role. In doing so, the client can achieve tour key objectives:

1 Retain and probably increase commitment - the new team wants to carry out the role rather than seeing it as an unattractive part of their job.

2 Increase flexibility to match resource to the needs of the market, the customer, the seasons - and the budget.

3 Reduce headcount

4 Reduce costs by matching the sales skills and rewards to the task in hand. Invest savings in the top-level box, take them through to profit, or, importantly, use to increase contact into potentially more profitable areas of activity.

But, finally, clients should not forget the growing need to resource the senior sales people with a team to visit the branches and offices of major clients to communicate and ensure correct execution at ground level of that which is negotiated centrally.

RELATED ARTICLE: Case study: The Jacob's Bakery

One obvious and widely adopted use of Field Marketing involves the re-engineering of the sales resource to meet the changing needs of the marketplace.

The Jacob's Bakery Limited has opted to contract out all but its most highly skilled sales functions to CPM International. In addition to achieving a significant sales cost reduction, Jacob's enjoys greater sales coverage, improved flexibility and a new impetus into the retail and food service sales effort. …

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