Case: Cross Selling or Cross Purposes? (HBR Case)

TopTek recently acquired a consulting firm, Rossberg Lee. Nine months later, the honeymoon period is over, and the two components of the original companies are seeing troubling contrasts in methods as far as commission or account generation go. 

Company Structure Analysis:

1. Sales Force
1. Existed within TopTek and are responsible for generating the new accounts.
1. Every new account generated is a long-time commission that the sales person receives.
2. Lack the technical knowledge or day-to-day contact with the company account to keep the account or to expand on the account.
2. Ron Murphy is head of sales.
1. He swears by the relentless nature of his sales force.
2. Albert Washington, named Prince Albert, is apparently their best salesperson.
2. Solutions Division
1. Peter Lee of Rossberg Lee.
1. Excited about new prospects 
2. Created 'Solutions' for business
1. A package of products and services for the business with different customization and pricing needs.
3. His underlings are calling directly to clients and harassing them about new things to sell.

Sins of Commission: 

Sales personnel get commission on an account forever. This leads to a lot of new account generation, absolutely, but leaves little TLC (read: tender love and care) for the accounts already existent. 

Sins of Omission:

 On top of the lack of TLC for companies from the lack of attention sales gives them, other divisions of labor for the company 'selling' packages or bundles they have to do begrudgingly don't see a single ounce of commission, but still have to work on bonuses. 

The Princes of Sales: The sales department, headed by Ron Murphy, has the numbers, has the drive, sells the product, but doesn't sell the solutions! He blames the misfortune of the solutions department for their lack of figures even going as far as to say they are incompetent sellers.

Searching for What Works:

 The theory holds up to scrutiny, so what is the solution?

A Productive Pairing:

 The mythological beast of a perfect compensation system is best mimicked, as the case study suggests, by a company TopTek had successfully helped and is their most touted success, Trigestis. Their sales person is not an overzealous brochure-tosser, and their solutions person is not overly droll with technical solutions but listens to the costumer about their concerns.

Buyer's Perspective:

I would be completely frustrated out of my wits with TopTek and their gods-forsaken merger with that solutions firm Rossberg Lee!

     "Ever since then, I buy a product and all they can do is harass me about adding a services package ON TOP of the product. Is that not what I paid for? Am I not already receiving their product in its final form? Why are they so dead set on giving me all these added features I don't want. Is the product broken? I'm so confused.... maybe there's another company that sells a complete product bundle...."  

                                                        -- Typical Costumer after the Merger

Solution:

 As with all relationships, there needs to be a proper division of labor and communication. If you are sales, it is your job to sell the initial package and provide a small level of technical knowledge. If you are a solutions consultant, you need to be able to continually provide the proper technical feedback as well as have a bit of knowledge and charisma to sell a proper upgrade or solution SHOULD THE NEED ARISE. 

A happy mix of both, without overstepping roles.

The Sales Learning Curve

The Sales Curve, Mark Leslie and Charles Halloway

-What do salespeople do? -Ask Mark and Charles

-They sell things to costumers, of course! -Everybody, Ever.

-Yes, but how?

-By... selling them to the target market?

Outside of the obvious reason being that he is a straw man, EE represents the uninformed members of a company that view sales as some amorphous blob capable of accruing money through selling of a product or service to the costumer, and if they good, great. It's when they under perform that everyone starts to panic.

To first understand how performance comes into the question, the role of sales has to be understood.

First and foremost, the sales team is the voice of the costumer when talking to the company as well as being the voice of the company when talking to the costumer. They are the boundary personnel of the company next to costumer support. If they are not heard on either side, or do not communicate with either side, serious issues can arise.

The Sales Force has the daunting task of having to sell a product, interpret costumer reception of the product, and report back. This is a closed loop feedback system and in Controls Engineering, its the best way to control a system. A lot of things happen during the different stages of the product life. First the product exists or is about to be made or is in a sell-able condition, and the company hires a sales force. The sales team then starts to learn about the product, see who wants it, and attempt to sell to them. If the product is good but lacking in the features costumers want, they'll be the first to hear about it. As soon as they do they can report the flaws in the product or the features most desired by the costumers. 

Examples of this were seen in the Scalix-Linux email client.

1. Client was made.
2. Sales force was hired.
1. Price was too high
2. Features were undesireable/missing
3. Target group was not ideal (CIOs)
3. Sales Force was trained to target smaller companies and early adopters to build a loyalty
4. Rebuilt the product to match costumer needs throughout the years.
5. PROFIT.

All that thanks to the sales force. GG.

Airwide International: A Case Study

Airwide International Sales Strategy Analysis

Airwide International attempts to stay afloat the only way it knows how: scrambling and taking every lead it can churn up and taking overcompensating for it.

Sales Force - Costumer Value Propositions

Wei relates that his sales force is trying their hardest in procuring bids and are surprised by their inability to   complete them.

1. Lei Jiang - Airwide internationals 'best seller' is attempting the fallacy of being all benefits - or  only providing a list of benefits the product has or is thought to be-  to the costumer talking at length about the benefits of the air conditioning system. This makes the costumer believe that they are going to be paying for a luxury cost item when in reality the seller thinks that they are providing the costumer with an immutable list of why the product is just for them.
2. Mr Chen Weimin - Another reputable vendor meets with an old contract to renegotiate the terms and it seems to be "in the bag", "a sure thing", etc. However, when he meets with the purchasing manager it is not the old friend he has known, it is a new purchasing manager. The manager isn't the only thing to have changed; the entire position is a different version of its former self. The purchasing manager now needs the approval of others to provide Airwide with the bid contract. 
1. In the meeting with the new purchasing manager, Chen gives only favorable points of parity, stating that switching to a new system would be more costly than just sticking with Airwide. He also does not address the lack of familiarity with the the product the current purchasing manager has.
1. Airwide has not remained current and has neglected the adoption of making their existence known on the internet. Instead, they attempt to keep their sales alive by just maintaining their old practices of chasing down leads in the manner to which they have been accustomed to since 1975. The sales manager makes no mention of the new emerging car air conditioning market or how the company might want to make it in that market. It may be that air conditioning sales are seeing a drop in the residential portion due to this emerging technology.

Airwide international is not a failing company, its practices are past successes that are now simply anachronistic with the current environment that is the sales force. Taking fewer bids, making their online presence, and addressing  better sales tactics and new technologies sooner and they will turn around their losses.