Excellent article from The McKinsey Quarterly,

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Courageous companies can use the downturn to make their sales operations not only less expensive but also more effective.

MARCH 2009 • Anupam Agarwal, Eric Harmon, and Michael Viertler

In This Article

• Exhibit 1: Understanding the needs of customers and the economic value those needs represent requires an analysis of more than just gross margins.
• Sidebar: Managing sales force change in tough times
• Exhibit 2: An IT service provider encouraged its sales reps to use a standard operating model, including centralized support for preparing bids and conducting postmortems.
• Exhibit 3: Inefficient postsales processes diminish the quality of customer service and drive up costs.

Yet extraordinary economic times force companies to take every opportunity to cut costs and arrest declining revenues and margins. Unfortunately, fear and the belief that it isn’t possible to be both fast and precise often result in two common mistakes: trimming only back-office staff and functions or instituting across-the-board cost cuts that include frontline sales reps. While both mistakes are understandable, they’re likely to yield disappointing results.

Reducing back-office sales staff and functions in the belief that this will hurt revenues less than reducing the number of frontline sales reps may have worked in the past, but greater complexity has made support functions essential to effectiveness. Also, not all sales efforts are equal, especially in a downturn. It’s crucial to determine where cuts will hurt customer perceptions and adversely affect their buying behavior; otherwise, important investments will be eliminated   Full Report is a for fee report from The McKinsey Quarterly.

March 17, 2009 Filed under: Musings by teresa