Monday, January 28, 2013

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.



2 comments:

  1. Hey David,

    Again, great outlined post. I really don't have much to comment here, you talked all the areas the article mentioned. I specially enjoyed the part you mentioned Buyers Perspective with a "real world" example. I would like to see how you think both the Sales of Omission and Commission could be solved though; in your solution you only tackled the problem as a whole and not the parts separately.

    Great Post!

    - Tulio

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  2. Hi David,

    I definitely have to agree with your understanding of the article. If this article serves any learning purpose, it should be to show the importance of adhering to the sales funnel model from class. I would, however, argue that it is better to err on the side of not ever talking to a client again after the sale then annoying them.

    You certainly got more out of that article than me...

    -Max

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