THE SALES LEARNING CURVE

Aman Chopra Akansha Singh Anubhav Rawat Neha Chowdhury Prateek Malpani

What is the need of a sales learning curve

Twenty-five years ago the principal risk in creating a new company or a new product is, underlying this was the belief that if we build it, they will come. The old assertion has become the new question: When we build it, will anyone come? Not estimating or analyzing the audience usually results in an overinvestment in sales, disappointing revenues and excessive consumption of cash.

What is a Sales learning Curve

When a company launches a new product, the temptation is to immediately ramp up sales force capacity to acquire customers as quickly as possible.

A large sales staff hinders more than it helps a company climb the curve. Instead the firm should focus first on organizing itself so it can learn from customers and respond to them.

Hence entire organization needs to learn how customers will acquire and use it, a process we call the sales learning curve.

Who follows a sales learning curve?

Start-ups

Existing companies launching new products

 Sales learning Curve for a new market enterant

Sales learning Curve for a follow on product, existing market

Sales Force planning for launch

1. The initiation phase 2. The transition phase 3. The execution phase

SLC Process
The sales learning process unfolds in three phaseseach requiring a different size sales force with different skills: 1. Initiation: Youve beta-tested the product and have few potential customers. Hire three to four salespeople to learn how customers will use the product and to support other parts of the company in refining the offering as well as marketing and selling strategies. Look for salespeople who: Communicate well with teams from other functions Tolerate ambiguity Have a deep interest in product technology Can bring customers together with various functional teams in your firm Can develop their own sales models and collateral materials

SLC Process Cont.

2. Transition: Youve acquired a critical mass of customers, and sales are accelerating. Keep your initial sales team focused on learning. Add sales reps who can operate effectively within an evolving sales model but who dont necessarily have the analytical and communication skills the initial team required. 3. Execution: Now bring in traditional salespeopleand arm them with a territory, sales plan, price book, and marketing materials to take orders.

Experiencing the ESLC in a Startup Company -- Scalix Corporation

Scalix developed a product using as its core HPs OpenMail system and jumped into the go-to-market stage Scalixs initial strategy was simple: recruit a highpowered enterprise-sales veteran and sell direct to CIOs at large enterprises. They rapidly extended and expanded the enthusiasm and interest for the Scalix product at the CIO-level.

Problems faced by Scalix

Scalix discovered a number of unanticipated problems. 1) It became evident that the CIO was not the decision-maker for these companies email vendor. 2) Scalix discovered that many large companies needed to get more comfortable with Linux before they would run email on it.

Steps taken as per SLC to correct its course of action

In mid 2004, it overhauled its go-to-market strategy to hit the Linux evangelist and early adopter community first, with a particular emphasis on smaller targets in the higher education and public sectors, segments where Linux adoption was strongest These adjustments are typical of a company learning and changing as it interacts with real customers using the companys product to do real work.

Experiencing the SLC in Veritas

Veritas Software, a large software company with three major product categories Created Software Appliance -a complete set of software preconfigured to run on hardware . This would offer the cost advantages of buying commodity hardware from their existing vendors and a complete plug and play software package from Veritas. Recruited an overlap sales force that worked closely with the regular sales force. Commissioned them both on the new product

Problems
Company had expected the product to be mature and ready for prime time, but in actuality there were product stability and functionality issues that had to be dealt with. Frustration for sales people used to selling mature products. Sales force exposed to early product issues, no significant additional revenue opportunity to compensate for this. Experienced sales reps rebelled against new product and commission structure. Concerns that new product would be threat to hardware vendors. Low revenue - Product abandoned

Target points
Awareness amongst customers Delivery of a robust product that leads to customer satisfaction Identification and resolution of service issues Development of a repeatable sales model Appropriate market positioning relative to competitors Design of effective sales incentives
Develop a sales model Work upon a sales pitch

New Product strategy

Product Development Marketing Sales