The Machine (Book Summary)

The Machine: A Radical Approach to the Design of the Sales Function by Justin Roff-Marsh

Introduction

• The majority of a salesperson’s day is dedicated to customer service and administrative activities, to solution design and proposal generation, and to prospecting and fulfillment-related tasks.
• Most sales opportunities spring into existence in spite of (not because of) salespeople’s prospecting activities.
• Salespeople spend so little time selling because they have so many responsibilities competing for their limited time, because each salesperson is a self-contained sales function.

Part 1 The Case for Change and a New Model

Chapter 1 After the Revolution

• The BDC frees the BDM of the requirement to do anything other than face-to-face business-development meetings. In addition to appointment scheduling, the BDC performs all of the clerical tasks associated with the management of sales opportunities: data entry, reporting, literature fulfillment, expense tracking, and calendar management.
• The Project Leader works closely with the BDM. She introduces him to clients early in each engagement to discover their requirements and to conceptualize and design solutions.
• The Project Leader represents both engineering and production
• After the sale, the Project Leader is responsible for managing the relationship between production and the client.
• You cannot improve the performance of sales by focusing solely on the sales function.

Chapter 2 Four Key Principles

• The traditional model always has and perhaps always will make sense in make-to-stock environments (ex: fast moving consumer goods; food; etc.)
• Make-to-order and particularly in engineer-to-order environments, the requirement for tight integration between sales, engineering, and production renders the traditional model dangerously inappropriate. These environments include business services (consulting, legal, and finance), design-and-construct building, and enterprise software.
• In truly complex environments, the division of labor is not just possible; it’s essential.
• Salespeople contribute little to retention, relative to production and new product development — even though retention is their responsibility.
• The lessons from manufacturing can be generalized into four fundamental principles:
  • 1. Scheduling should be centralized.
  • 2. Workflows should be standardized.
  • 3. Resources should be specialized.
  • 4. Management should be formalized
• If we are entertaining the idea of applying division of labor to sales, we must first acknowledge that the very first activity for which the salesperson relinquishes responsibility will be scheduling.
• When it comes to dividing activities, it tends to make sense to make divisions along three axes:
  • 1. Location. You should split field and inside activities — meaning that people work inside or outside but never a mix.
  • 2. Work type. You should split activities that are different enough to impose a switching cost. For example, creative activities do not mix well with more transactional ones.
  • 3. Cadence. You should split long and short lead-time activities. For example, in a technology environment, you should not mix true development work with break-fix tasks.

Chapter 3 Reimagining the Sales Function

• The BDC pushes work to the BDM.
• Our BDC must perform all scheduling.
• The BDC should operate in close proximity to the business functions with which sales must integrate.
• The executive assistant maintains an awareness of all the initiatives on which the executive is working (and their relative importance) and plans the executive’s time so as to maximize the yield on their limited capacity.
• The BDM needs only to update their BDC with one of four possible next steps. They will recommend:
  • 1. abandoning the opportunity,
  • 2. repeating the activity just performed
  • 3. scheduling the next activity in sequence
  • 4. scheduling an activity further downstream in the workflow.
• We now have a project plan (our standard workflow for originating and prosecuting sales opportunities), a project manager (our BDC), and a resource pool containing a single resource (our BDM).
• Think of the campaign coordinator as a member of the marketing department who’s on permanent loan to sales. Your campaign coordinator must understand promotional processes and must have good connections to people in your marketing department.
• It’s the BDM’s job to sell the next critical activity in the workflow.
• At the point at which the client wishes to discuss (in concrete terms) their requirements, the BDM introduces the project leader. The project leader takes responsibility for requirement discovery and for solution design (in many cases, these will occur in the form of a formal solution-design workshop).
• The project leader is responsible for the technical component of the engagement, and the salesperson tends to the commercial component.
• The project leader replaces the BDM as the primary point of contact for both production and the client.
• Salespeople must avoid taking ownership of customer service cases
• The CSR is the person responsible for resolving the issue
• our BDC has inherited a resource pool consisting of three resources (salesperson, project leader, and CSR).
• If customers have a choice between dealing with a single generalist and multiple specialists, they would rather speak with specialists.

Chapter 4 The Death of Field Sales

• You’ll probably conclude that your salesperson is not really a field salesperson at all. They are an inside salesperson who performs occasional field activities.
• Make sure that you’ve fully exploited the potential of inside sales before you add (traditional) salespeople.
• A field specialist is a person who supports inside sales by performing discrete field activities.
• The inside-out model. This model is a blend of customer service, inside sales (supported by the campaign coordinator and field specialists), and business development (supported by project leaders).

Chapter 5 The Machine within the Machine

• If, for example, a particular function is particularly difficult or expensive to scale, it may make sense to maintain this function as the organization constraint.

Chapter 6 One Big Idea, Many Possible Applications

• SPE, as we’ve discussed, consists of a central idea (the division of labor) and four key principles.
• If you sell via intermediaries (resellers, manufacturers’ representatives, agents, or distributors), it’s important to recognize that the inside-out model is not appropriate for your situation.
• If a small business doesn’t have a clear demarcation between sales and production, there’s no point building plans that presuppose one.
• As we push toward the division of labor, the very first specialist must be the scheduler.
• A model that senior team members were not excited about was a model that simply wouldn’t survive contact with reality.
• Inside salespeople can easily have thirty meaningful selling conversations a day and field salespeople will top-out at four.
• Without tight supervision, salespeople who perform a mix of inside and outside work will end up performing just a handful of meaningful selling conversations when they’re inside.

Chapter 7 The End of Commissions, Bonuses, and Other Artificial Management Stimulants

• There is no place for commissions in a reengineered sales environment
• Your salespeople cannot be both autonomous agents and team members
• Absent the opportunity to earn a commission, salespeople will still sell because they are salespeople.

Part 2 Putting It All Together

Chapter 8 Formulating a Plan

• In many — nearly all — cases, you’ll want to add one or more research analysts to your promotions team. These people are responsible for doing the online and telephone research required to compile lists for your campaign coordinator.
• For the nature of these activities, you can divide field visits into three categories:
  • 1. purely technical visits or technical sales visits (e.g., demonstrations, technical requirement discovery, or troubleshooting),
  • 2. transactional sales (e.g., dropping by to take an order),
  • 3. enterprise sales (e.g., running solution-design workshops, presenting to groups of decision makers).
• In many cases, you’re better off with a technical person with solid people skills than you are with a pure salesperson.
• Field specialists perform discrete tasks that are allocated to them by inside salespeople and sometimes by customer service representatives.
• You want to have a dedicated field scheduler who receives visit requests from the inside sales and customer service teams and then plans the field specialists’ routes for them.
• It’s critical that project leaders partner with BDMs to prosecute opportunities on the far side of the complexity threshold.
• If you genuinely need project leaders, you’ll certainly need between two and four for each of your BDMs.
• My general advice where sales offices are concerned is that you don’t need them.
• Seven steps in a successful transition to SPE.
  • Step 1: Appoint a Project Champion
  • Step 2: Sell the New Direction
  • Step 3: Take Control of Sales Activity Volume
  • Step 4: Fix Customer Service
  • Step 5: Build Inside Sales and Promotions
  • Step 6: Reconfigure Field Representatives
  • Step 7: Build the Business-Development Function

Chapter 9 How to Convert Opportunities into Sales

• We do not want the salesperson involved in the creation of any documentation, and we should also have a good idea about who will be responsible for the proposals for simple transactions (the customer service team) and complex transactions (the project leader).

Chapter 10 How to Generate Sales Opportunities

• in the long run, if you are not currently either a product or a thought leader, it’s easier to become one than it is to attempt to compensate with acts of promotional gallantry.
• I’m using the word promotion to refer to the origination of sales opportunities. You know from the previous chapter that a sales opportunity is a potential deal that a salesperson is working on. Therefore, promotion is the process of identifying prospects and allocating them to salespeople.
• A prospect can be either an existing customer (who has the potential to buy more) or a potential customer.
• Campaigns refer to both the communication and the cohort of prospects who are being communicated with.
• Our silent revolutionaries have a person called a campaign coordinator, who is technically a member of the marketing team but who is on permanent loan to sales.
• All promotional campaigns have three fundamental ingredients:
  • 1. an offer, the basic proposition the campaign presents
  • 2. an audience, the set of individuals to which the campaign is targeted
  • 3. communication, how the offer communicated — the creative execution
• Never offer a discount without imposing a condition or two:
  • It should be valid only for first-time purchases of particular service lines.
  • It should be valid only if delivery is between certain dates (to take advantage of a temporary hole in your production schedule).
  • It should be valid only if the customer allows six weeks for delivery.

Chapter 11 Technology: Why CRM Sucks!

• Customers expect a single conversation with your organization (though this is about information continuity with specialists, not a generalist ‘single point of contact’
• In a complex-sale environment, the automation of the opportunity-management process is the responsibility of a business-development coordinator — not of the CRM.

Chapter 12 Managing the Sales Function

• If you have a sales manager who is mature enough to rule their team like a tyrant and to interface with other departments like a diplomat, this individual is a rare find indeed and should probably be on the fast track to the executive suite!
• Specifically, we need to consider whether customer service, marketing, and project leadership are to be considered part of the sales function. My short answers for each of these are, respectively, sometimes, mostly, and never.
• Customer service should be regarded as part of operations, not part of sales. The processing of repeat transactions, the generation of quotes, and the resolution of issues are all operational activities.
• Promotions should always be a part of sales and that marcoms may or may not be, depending on the size of that function.
• In a larger organization, the promotions team might contain a number of specialists (e.g., campaign coordinators, research analysts, event coordinators, data analysts), and this team would likely commission all necessary inputs from the marketing department (marcoms).
• Project leaders must be neither a part of sales nor a part of production.
• Accordingly, project leaders can belong to your engineering function if you have one; and if you don’t, project leadership should be a department of its own (assuming you need it, of course).
• Your internal sales supervisor should be responsible for the following metrics:
  • for customer service, on-time case completion (relative to targets for each case type)
  • for the campaign coordinator, opportunity queue sizes (relative to optimal)
  • for inside sales, throughput (daily or weekly sales)
  • for the business-development coordinator, the business-development manager’s (BDM’s) number of forward-booked days (utilization).
• Sales cannot continue to function effectively for any reasonable period without the tight integration of NPD and promotions
• Sales management needs to know the allowable acquisition cost — the maximum that can be spent on promotion in order to win a new account.
• Activity alone doesn’t guarantee you sales, but an absence of activity is a guarantee of an absence of sales.
• The sales manager should treat activity as a necessary condition. Each salesperson must perform a fixed volume of sales activity, day in and day out.
• Activity volume is a necessary condition, not the goal.
• Day-to-day sales training should be similar in design to athletic or military training, as opposed to classroom-style instruction. In addition, this day-to-day training should be the responsibility of your sales manager. Sales drills should consist primarily of role-playing exercises.
• The truth is that most sales managers meet with their teams infrequently, deliver no training, and spend most of their time on their own sales calls.
• Because sales management is a supervisory (line-management) role, the manager should be colocated with — and work closely with — their team.
• Uncertainty and sample size conspire to make a statistical approach to forecasting impractical.
• Obsess over your volume of meaningful selling interactions, and everything else will look after itself.