Discovering best practice for professional B2B selling & sales management

2015 Hiroshima

Report on the GSSI Conference 12-15 June 2015
By Roger Byatt, University of Portsmouth

First published in the International Journal of Sales Transformation Q4/2015 ISSN: 2058-7341
http://www.journalofsalestransformation.com/

The 9th Global Sales Science Institute conference was hosted this year by the Hiroshima University of Economics and was housed by them at their facility on Miyajima Island. The theme of the year was “Sales Force Skill Development: How Can We Improve Selling Ability?”.  Over 50 delegates from Asia, North America and Europe were treated to an intense and stimulating program of competitive papers and thought provoking special sessiondsc_0450s.

This report is based on the author’s notes and personal reflections of the conference.

The conference opened with a keynote speaker. Mr. Atsushi Iimuro, General Manager, Life Sciences, GE Healthcare spoke about the thorny question of how an organisation measures the effectiveness of different market interactions. Ge have the aim of maximising the lifetime value of their interactions with customers. The challenge was to work out which contacts yielded the best results. Through analysing feedback from customers, which includes a systematic quality score. What they found was that those who gave scores of 9 or 10 were Promoters of GE. Scores 7-8 were Passives while 1-6 were Detractors. From this 1-5 scales for Quality and Acceptance were developed.

The next step was to build that into a model to establish clear metrics of effectiveness. The formula arrived at was:

N (customers) x t (exposure time) x Quality Score x Acceptance = Effectiveness

He then gave two examples to show how this has impacted thinking at GE:

Catalogue: 1000 sent x 3 minutes exposure time x 1 x 3 = 9000NtQA score. This sounds high but, when tracked, resulted in no sales leads. This was compared to a seminar which scored thus:

300 customers x 15 minutes x 5 x 5 = 112,500NtQA

Although far fewer customers were impacted, lots of leads resulted.

GE then decided to focus on understanding the unmet needs of its customers as some 85% are repeat purchasers. This was done by listening to the Voice of the Customer using the Chatter platform to distil the VoC. They captured some 6000 comments a month and found that existing customers are very effective at finding new customers for GE. Researchers in Life Sciences talk to each other and share experiences. Therefore the sales force was retargeted. 21 key accounts were identified and 10 sales people were allocated top them. These accounts generated some 40% of sales. The remaining 60% came from about 40,000 other customers. This was not cost effective to cover directly and so a dealer network was established with some 346 offices.

This has allowed GE to develop its Life Sciences Academy (LiSA), which is both a learning tool for researchers and, through clever use of cookies, allows GE to capture their activities and more effectively interact with them and identify unmet needs.

The first competitive session focused on the theme of ‘Sales Education and Creativity’. It was started by Heidi Kock of Haaga-Helia University of Applied Sciences, Finland with “The Importance of Teaching Sales Skills to Other Audiences: The Case in Information Technology Education”. They carried out 57 interviews with IT sales specialists to directly inform the curriculum. What they found was that small organisations wanted a combination of technical knowledge and sales ability. Large companies required team selling skills. There was also a clear recognition of the need for people to be skilled at internal selling when so many products and services are a collaborative effort. This work has shown that IT students will need sales skill training.

How these skills can be developed in students was developed in the paper by Sami Kalliomaa of JAMK University of Applied Sciences, Finland. An interesting experiment in teaching methods was carried out. Students were split into two sections. One was taught sales skills using Problem Based Learning (PBL) utilising the Freinet learning circle method and the other by Case Based Learning (CBL) or ‘learning by doing’. Student feedback was then measured. It was clear that both methods achieved good student outcomes but the CBL was received better by the students and led to higher student satisfaction scores, which are important for many institutions nowadays.

How to inspire teams more effectively was the theme of the paper from David Shepherd of Georgia Southern University and Felicia Lassk of Northeastern University. They studied 142 sales teams in the USA. What they found was that Sales Managers, as had been previously proposed, do have a significant impact on the performance of sales teams. The study used the 16 item WLEIS scale, 12 item Rego creativity scale and the 9 item Cravens job performance scale. The most successful and creative teams had Sales Managers with good levels of Emotional Intelligence (EI). Thus companies should be testing, nurturing and developing people with EI and universities should be seeking to develop this ability in students.

Two special sessions looked at initiatives to increase the skills of students. The first, a paper by Roger Byatt & Florin Vladica of the University of Portsmouth, Edbyatt Bradford of Market2Win and Dorothy Byatt of the University of Southampton. They had used two business simulations to try and enhance students’ ability to make connections between different parts of their course and to enhance strategic understanding and thinking. One, Market2Win focused on strategic marketing and SAM2Win on Strategic Account Management. Student reactions were surveyed in the University of Portsmouth and six other universities that used one or more of the programs. These showed that students perceived that they had gained or enhanced important skills and their confidence had improved. When UK Government data was examined to see whether the employment prospects of students from courses using the simulations had improved there was evidence of a positive change, although it could not be established that there was a direct causal relationship. The second, by Liisa Kairisto-Mertanen & Sirpi Hänti of Turku University of Applied Sciences Finland,Ellen Bolman Pullins of University of Toledo, Deva Rangarajan of Vlerick Business School Belgium, Arndt Borgmeier of Aalen University of Applied Sciences Germany and Karl Pinczolits of Fachhochschule Wiener Neeustadt Austria looked at the experiences with the sales co mpetitions for students that have been held for some time in the USA and more recently in Europe. They found that students responded well to them and they increased performance and employability, with several employers on both continents seeing them as fertile recruiting grounds. Being an international competition with cultural differences between countries it was seen as especially good preparation for recruitment and careers in international sales.

The next session focused on the tension that exists between sales and marketing in many organisations.

Deva Rangarajan, Robert Boule & Bert Paesbrugghe of Vlerick Business School, Belgium and Bert Weijters from the University of Gent, Belgium presented Sales and Operation Integration:  The Role of Collaboration and Alignment. Their succinct summary was “Kraljic Matrix meets Sales”. Carrying out a survey of 92 respondents in organisations across the globe the team found that in organisations where there is clear collaboration between sales and operations then there is a clear alignment of objectives which leads to increased performance. There is also a reduction in conflict in these organisations. This reinforces existing literature and emphasises the need both for adaptive selling approaches and cross functional collaboration.GSSI in action

The conflict between sales and marketing was the theme of the paper from George J. Avlonitis & Konstantinos Lionakis of Athens University of Economics & Business, Greece. This won the best paper award at the conference. A growing body of literature suggests that “poor alignment between these two functions is associated with inconsistencies between Marketing tactics, Sales management processes and Sales force activities (e.g. Strahle et al. 1996). However, the M-S relationship is characterized, mainly, by a lack of cohesion, distrust, dissatisfaction and conflict (Dewsnap and Jobber 2000, 2002)”. Using data from both sales and marketing functions in 132 consumer packaged goods companies out of 409 identified the team found that Sales and Marketing respondents in 1 in 5 cases had different views about the organisation’s strategy and this was a clear source of conflict between the teams. Where firms had a clear market orientation then Sales and Marketing had a more effective relationship and this led to increased performance. T%he researchers recommend that companies who want to maximise performance should have a common training programme for sales and marketing personnel and that there should be regular meetings between the teams to talk, share ideas and debate strategy. Furthermore Sales and Marketing Managers should spend time in the field with each other’s teams to increase understanding.

This theme was picked up and reinforced by Ravi Sohi of the University of Nebraska-Lincoln and Avinashe Malshe of the University of St. Thomas in their paper “Sales and Marketing: Two Coins or Two Sides of the Same Coin?”. They carried out qualitative research with 56 firms using the Rouzies framework to examine areas of conflict/integration. One of the interesting findings is that sales & marketing people often require different types of language and input. Thus you can have conflict at a conceptual level. To generate buy in from sales an objective and rational case needs to be made, which marketing people are sometimes poor at. Furthermore giving sales people a voice when creating strategy increases acceptance and cohesion. However, these cross functional teams tend to be temporary whereas the research indicates that permanent hybrid teams, with encouragement to break down silos through informal relationships at all levels will yield greater results.

The overarching theme for the second day was “Managing the Sales Process and Key Accounts”. Pia Hautamaki of Haaga-Helia University of Applied Sciences in Finland asked ‘How Does Complexity Impact Salesperson Ability to Get the Appointment?’ and presented a challenge to managers to think carefully about whether they are using all the right communication tools and activities. It was argued that the business environment is getting more complex. At the same time businesses need to win new customers to grow, expand or survive. Therefore the big challenge is: ‘How do buyers meet new sellers?’. Literature suggests there is more information available to buyers than ever and they engage in considerable pre-screening so that most of the decision is made by the time of any meeting. The research undertaken showed that business buyers only meet salespeople when they have a problem to solve. Generally they do not answer calls from numbers they do not recognize. This presents a sales professional with a real challenge when trying to reach someone with whom they do not have a relationship already. Business buyers told the researchers that they pre-screen by searching for sales people and approaching them. They use the internet to identify contacts who appear to have knowledge that may help them solve their problem. The buyers try to prepare well before meetings and expect the same from sales people. A general pitch will get nowhere. This means that Sales Managers should ensure new recruits can engage in digital channels and are contributing in the right places so they are seen as an advisor with real expertise.

This theme was picked up by John Wilkinson of the University of South Australia whose exploratory study of professional services firms showed that these services often bypass the conventional purchasing function in organisations. Instead professional services firms tend to directly approach relevant senior staff, such as the Chief Financial Officer. They need to then see a benefit in using the firm and the decision to engage them depends more on perceived trust and expertise than price.

Felix Weispfenning of Coburg University of Applied Sciences in Germany carried out a meta-analysis into the effectiveness of sales leadership. What he found might make one think about recruitment. It found a correlation between a leadership style that was person-oriented and reduced staff turnover and increased performance. However it also showed that sales managers feel more comfortable operating in a task oriented manner.

Stefan Wengler of Hof University in Germany then looked at “Breeding the Key Account Manager of Tomorrow”. His research identified the following key requirements for an effective key account manager:

  • To understand customer requirements in depth
  • To be able to customise company products

Training of sales people is often on the job, and this was contrasted with that of buyers, who are increasingly professionalised and very well trained. This means many sales people unprepared to operate in this climate. At the same time market dynamics are also increasing. There is: intensifying competition, customisation demands are growing, more suppliers exist in most markets but there are fewer buyers. In an era of globalisation sales people are also not well prepared for cultural differences. He then presented a challenge to educators and companies:

  • Training content and methods need to be revised in order to better prepare students and novice sales people.
  • Educators need to understand and more closely match teaching to the training needs of business.
  • Companies need to allow more and better resources for training and coaching.

J.Andy Wood of James Madison University reminded delegates that sales people need to believe in what they are doing. He found he was getting orders very quickly in the building industry. He believed that was because he was trusted but trust, in literature, is said to build over time and that could not explain the first call success rate. Citing work going on in neuroscience and neuro marketing, and based on ideas by Paul Ekman regarding evolutionary stable signalling and micro signals, he proposes that there is a signalling system that relates to trust and is relevant to sales. This means that if sales people do not believe in what they are selling then it will show.

Felix Weispfenning then showed delegates that different parts of a business can have different ideas about what makes effective leadership. His research showed that technical areas of business are more in favour of transformational leadership styles than sales and marketing. Thus sales and marketing managers need to understand and adapt their approach if they want to impact other business functions. Doing this will also make more effective use of resources and enhance understanding.

Lenita Davis of the University of Alabama, Ellen Bolman Pullins of the University of Toledo and Andrea Dixon of Baylor University reported on an ongoing study into marketing and sales channels. They argued that “Given new technologies empowering customers/consumers and the high level of dynamism in global markets, we need a robust framework for understanding how the sales channel structure frames the selling function or impacts the salesperson’s role in the modern business world.” The latest output from this work is a new fragmentation framework for sales channels. “The traditional sales process includes: prospecting, pre-approach, questioning, needs assessment, presentation, overcoming objections, gaining commitment and follow-up (Rich, Spiro & Stanton 2002). Considering fragmentation theory, the sales process is transformed to (1) connecting with individuals, organizations and their ecosystems, (2) understanding via questioning and information search, (3) sharing information and resources, (4) providing innovative solutions that create value, (5) episodic closure of value creation and logistics. The process is transformed to reflect the quantity of relevant information available to buyers and sellers.” Which builds on many of the themes that have been appearing in literature and the arguments of people like Neil Rackham.

Joëljoel-le-bon Le Bon of the University of Houston looked at the role sales people can play in getting bills paid. He presented research from 553 business customers which showed that trade credit, which attracting customers, is one of the largest items on any balance sheet. The research showed that key account managers have relationships at multiple levels in companies. These can be used to affect accountants invoice evaluation and to accelerate payment. Given the cost to business of late payments, the potential for sales people to act as ombudsmen provides a line of enquiry that is being pursued.

The final session comprised a series of papers which sought to revise our thinking about established topics. In the first of these Uwe Jaeger from Hochschule der Medien Stuttgart in Germany examined the theme of co-creation in sales, taking the printing industry as his point of study. Based on responses from 13 out of 26 identified companies there was considerable evidence of co-creation activity, which supports the idea that this activity is prevalent in “Knowledge Intensive Business services (KIBS)”. This is despite the obstacles posed by, for example, intellectual property rights issues.

Gabriele Hildmann from Innovation Platform in Germany and Ulrich Vossebein from Technische Hochschule Mittelhessen in Germany then looked at an industry, energy, which has traditionally been seen as a commodity. They found that it is a sector undergoing, and expecting more, transformation in the sales area. 63% of respondents foresaw changes caused by competitors. While this was not unexpected, 41% saw changes being brought about by customers and this result was more surprising. Respondents saw customer expectations undergoing change and this would have a very significant impact on the importance of accurately identifying customers’ needs. More work will now be carried out into this area. It is hoped to identify the impact of this on sales organisation, skills and training plans for the energy sector.

Masayuki Takigawa, Takashi Kawashima, Kazuhiro Noborisaka, Toshihiro Ueda, Shinji Honge, Kotaro Mukai, Hozumi Waki, and Kwansei Gakuin, all of the University Institute of Business & Accounting in Japan examined the way that Japanese sales people (Eigyo) create customer value in order to better understand the relationships between sales styles and the value created. Their study was undertaken in Japan and was based around Shimaguchi’s sales styles. What they found was that there were “five values generated by the selling operation:

  • The information value: Appropriate information provided by sales person reduces the risk of decision-making
  • The advice value: The sales people help the customer to have a right purchase plan by his/her appropriate advice when the customer doesn’t have a definite intention about the purchase.
  • The operation cost reduction value: Dealings are a cooperation of the seller and the purchaser. In this case, sales people reduce his/her work load and they increase the customer value.
  • The labour offer value: Sales person often do labour not related his/her own product. (For instance, an arrangement of the sport/concert ticket, communication to the other departments in the customer, and so on).
  • The development support value: When a sales person knows that his/her product cannot fill a customer needs, he/her negotiates to generate solution of the customer needs with the development group in his/her company from the view point of the customer. That invents a customer value by proceeding with the development process.”

This value creation theme was examined in the context of the initial sales meeting by Timo Kaski, Hautamäki Pia, Heidi Kock & Anni Piispanen all of the Haaga-Helia University of Applied Sciences in Finland and Ellen Bolman Pullins from the University of Toledo who interviewed both buyers and sellers about their experiences and expectations. They found that “there were several main themes developed by the analysis process. Some themes seemed to carry across both buyers and sellers (confirmed), some were present in both, but viewed differently, while others were only apparent for one group (disconfirmed). The themes are:

  • Professionalism (confirmed), Follow Up and Attention to Detail (partially disconfirmed)
  • Needs Identification, Understanding and Adapting the Solution to Needs (partially disconfirmed)
  • Relationship Aspects (partially disconfirmed)
  • Benefit Selling (Only sellers identified and likely represents something customers don’t need)
  • Under-promising and over-delivering (Only sellers identified but could be an opportunity to delight)”

In a world where there is a continuing emphasis on ‘efficiency’ the paper from Jobst Görne of Aalen University, Germany looked at how B2B sales effort can be targeted more effectively. This was prompted by the move in B2C sales to qualify and prioritise the most promising leads while B2B sales often rely on simple ABC lists based, for example, on current turnover. This has the benefit of simplicity but does not help prioritisation and efficient use of scarce sales resource. The study was based on engineering. To work, the research needed to be able to produce something that is useful but based on easily accessible information. What was found was that “customer rankings can be established based on few accessible information, giving support and information for different sales management decisions:

  • Turnover lists give information about the amount of day to day work and financial aspects such as cash flow
  • Contribution lists give information about the profitability and basic risk aspects of all customers
  • Turnover growth and contribution growth lists give information about which customers should be targeted for acquisition possibilities in the short and medium term
  • Future turnover and future contribution lists give indication of the possible development of customer needs and possible future contributions. They are a bit more difficult to establish and include more uncertainty, but give the most valuable information for steering a company’s acquisition activities.

All possible lists are important and serve different functions in sales and financial management. They have to be handled carefully, as some of the information is based upon assumptions.”

The conference proved a stimulating environment for networking as well as producing useful and actionable insights. In this report it has only been possible to produce a summary of each paper and the listener’s own impressions. If any reader wants to know more about a particular topic they are advised to contacts the listed presenters directly.

At the conference a call was also made for researchers interested in participating in a study among global Fortune 500 sales organisations in order to understand the impact of globalisation on sales practices and technologies and the extent to which sales practices – such as sales talent acquisition, sales talent development and sales technology tools – are global versus regional among the largest sales organizations in the world. The goal is to present the findings at GSSI 2016 and to publish in a refereed journal. Interested scholars are invited to contact Andrea Dixon at Baylor University, USA or Michael Rodriguez at Elon University, USA by the start of the 2015/16 academic year.