I stopped counting and running ratios a few years back now, but at last count at least 50% of the B2B sales organisations I asked failed the value chain question. I find myself in workshops with heads of Sales, Marketing, Customer Service, Finance, Operations seeking clarity from the group in terms of identifying their customers by value chain segment and justifying their nominations. Most often, the group response is somewhat aligned featuring mild differences of opinion on segment identities , sequencing and/or terminology, but sometimes I heard lengthy verbal disagreements and intransigence.
It becomes important as part of the annual Sales and Marketing strategy review to go back to basics to define and articulate the value chain in which the organisation operates. Too often this step is ignored. The consequences manifest as muddled marketplace targeting, “silo-ism” between State, Regional or Divisional Sales units, suboptimisation of the synergy between Sales, Marketing and Customer Service resources.
“The value chain question” is actually a series of eight questions. Try running this by your key leaders of Sales, Marketing, Customer Service, Finance, Operations.
- What players make up our value chain environment?
- Who ultimately “consumes” our product/service in its form as we know it?
- Who starts our value chain ?
- Where are we in this picture?
- Who is/are our customer(s)?
- Who are not?
- How many parallel distribution channels exist within our value chain?
Wait a minute………….what is the difference between a distribution channel and a value chain? The clarity of answers to these questions is business critical. Yet too many businesses feature lack of uniformity across the key business leaders’ answers. Click here for a tool to assist.
Once you have nutted all that out (your value chain structure and strategy), then you should review the sales (team) strategy you employ within your value chain environment. How do the value chain segment choices you made impact on which segments you harness your Sales Team to engage with? How do you determine which segments to direct the Sales Team to employ a push sales strategy. A pull strategy? Both? When do you gear them to ply the “gentle” art of sales specification? Who do you transact with commercially and directly and who you commercially transact with indirectly? Click here for a tool to assist.