Cross Selling or Cross Purposes?

The article describes the case of TopTek, a mid level software company that has recently acquired another company, Rossburg Lee.  The case offers a unique perspective, following the conversations of the vice president of human resources, Anna Tucker, as she inquires about recent problems following the acquisition.  After acquiring Rossberg Lee, Top Tek hoped for increased sales and revenue; however, this was not the case.  Anna found that there were differences regarding the commission of a sale to the sales team and the consultants that follow-up on the sale.  Anna talked to consultants and sales reps left from both TopTek and Rossburg Lee only to find that there was a difference of opinion between the sales representatives and the consultants. While the sales representatives would make the initial sale to a client, the consultants would push the smaller sales necessary to maintain a relationship with the client.  Consultants would not received compensation for the sales they made after the initial sales, leaving the rewards to the sales representative that made the initial sale.  The consultants that Anna talked to did not understand why they were not compensated for their sales, but the sales representatives believed that their work focused on the big picture, leading them to believe that their work should be rewarded even after the sale has been made.  Anna also discovered that because the sales team was more focused on the big picture, they were neglecting the smaller sales to maintain relations with the client.
While these problems were apparent, Anna realized that the sales representatives and consultants had a very dynamic relationship that was necessary to make sales and maintain client relationships.  However, the system of compensation for the sales was not conducive to increased sales, meaning that the program needed to be reworked.  Anna suggested that the workforce needed to be reworked in addition to the compensation system, but these changes would need to allow for an increase in sales, making it a difficult task.
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• Sales compensation needs to be more balanced to account for the efforts of both the sales representatives and the consultants
• John brought up the issue of priorities dictated by the compensation.  Sales can decrease because the sales representatives or the consultants may prioritize other tasks before dealing with the larger issues if they are not rewarded for the work they would do.
• Sales representatives focus on the big-picture, while consultants have a more personal relationship with individual customers
• While Anna did find that the consultants believed the sales representatives were missing the small sales opportunities following the initial sale, it really is the sales representatives job to focus on the big picture of finding new customers and winning more sales.  
• Many of the problems TopTek faced after the acquisition stemmed from a lack of communication and understanding between the sales representatives and consultants  
• Anna suggests recruiting a new workforce because she realized that the integration of employees from TopTek and Rossberg Lee would take more than just training because they were so rooted in the old companies business customs.  It was the lack of communication and a lack of understanding that set the two sets of employees apart, so a new workforce would be needed to start on a clean slate.
• Consultants are not suited to make sales
• As seen by the conversation between Tricia, Charlie and Anna, an account representative made a wrong move that could have made problems with TopTek and the client.
• A comprehensive solution to incentivize the sales representatives and the consultants would be to allow partial compensation to both the sales representative who made the initial sale, but also the consultants that may make additional sales afterward. 

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Seller's Viewpoint

The sales representatives view their efforts to win a client the most important sale, while the consultants that follow-up the sale view their efforts to satisfy the client's needs and provide them with the best service as the most important aspect of the sale.  Both aspects of a sale are equally important, therefore, it is necessary to reward both groups with compensation.  The sales representatives, as Ron stated, have a hand in every sale following the initial sale because of their involvement in winning the client.  However, the consultants that make additional sales are responsible for those individual sales, more so than the sales representatives.  A percentage system for compensation may be a useful tool when determining what group is rewarded for each sale. 

The Sales Learning Curve

The HBS article outlines the life cycle of selling a new product and launching additional products of existing product lines.  The article also analyzes several cases and what those did wrong when selling a new product as well as what they could have done to avoid the problems that they encountered.  The first case discussed the sale strategy of the software company Scalix.  The company began selling their email software to large corporations, but the company over estimated the marketability of their new product. Scalix expanded its sales force too quickly, over reaching its budget.  The company had predicted that their product would be easy to sell with its low cost; however, the sales team were not selling to the right people and therefore were not making the profit and sales quotas they had anticipated. Due to their rapid sales expansion, the company lost money.  Veritas, another software company made the mistake of marketing a new product line that was not ready for sale.  This mistake can also cause a company to lose money and in the case of Veritas, abandon the product completely.  
These examples can be applied to future ventures, providing a number of lessons learned to start-up companies and new product launches.  The article continues to emphasize the need for businesses to determine the number of sales representatives necessary to maintain a products growth in the market based on the three phases of a a products life cycle.  It is necessary to start slow when selling the product and once it has achieved traction in the market, sales can begin to "ramp up."

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• Aggressively marketing and selling unfinished products too quickly will result in the potential failure of the product.
• In the case of Veritas, the company has a large and well planted base for its other product lines; but with the introduction of a new product line, the company expanded too quickly which ended in failure
• Rapid sales expansion too early after the introduction of a new product or beginning a start up company.
• Expanding too quickly will drain a company of sales and marketing finances without the proper customer backing already in place.
• The time that a product can bring revenue decreases when there is already a market for a previous product in a line.
• With a set buyer in mind, they are more familiar with the product therefore an addition to an already established product line would sell faster than a new product

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Buyer's Viewpoint

A buyer interested in a new product is not initially as familiar with the product as the company.  A company can make the mistake of rapidly expanding the sales of a new product because they are under the impression that a customer is more interested then they actually are, causing a company to over reach.  The buyer needs time to learn about a new product, compare it to competitors, and determine if the product is reliable.  This process takes time, which means that a company needs to sell the product under these time constraints. 

Seller's Viewpoint

From the sellers viewpoint the company needs to expand its sales based on the customers interest. Thus, it is in the sellers best interest to understand and research the possible customer.

Airwide International

Airwide International, while a highly competitive company in the industry of air conditioning, and refrigeration, was unable to maintain the presence they had cultivated for over 30 years. It was imperative that the company close the sales they had initiated, and maintain the customers they had been partners with for years. It is clear from the dialogue that there was improper change management and steady communication errors from upper management. The industry was changing faster than Airwide was able to keep up. With proper change management, Airwide could have seen the changing customer needs; however, due to Airwide's narrow-minded view of the industry as a whole, the company did not adapt to changing customer needs. Additionally, the sales force received limited communication from upper management, which led to overworked sales representatives and declines in sales and customer retention. The company took on a limited scope of the industry by trying to make up for their sales decline with more sales oriented staff, limiting the importance of changing customer needs.
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• Airwide's focus was far to narrow, rather than viewing the industry as a whole, the company made a push for immediate sales increases rather than customer needs.
• Improper management lead to the companies decline
• Sales driven motivation deterred higher management from focusing on customer current customer relations
• Flexible management and sales representatives need to adapt to the changing industry and customer needs
• The company needs to focus on beating the competition, but in order to achieve this they must meet customer needs better than the competition
• Breakdown in communication between upper management and lower sales representatives led to the inability to achieve changing customer needs
• By not relaying customer needs to sales representatives, the company fell behind in trying to maintain the customer needs
• Maintaining existing customers by meeting their changing needs can, at times, be more important than gathering new customers

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Buyer's Viewpoint
In the case of Airwide International, the buyer is interested in the best services, especially when these services can cost upwards of 5 million dollars. When Airwide fell behind in sales, gathering new customers became a priority (as seen be the increased incentives for the best sales representative), leaving existing customers behind. Their attention focused on finding a service that would meet their needs, leading to these companies leaving Airwide International. Airwide seemed to become more depersonalized, which can eventually lead to pushing customers away.

Seller's Viewpoint
From the sellers point of view, their instruction was to find the most customers interested in their services and close these deals as soon and as often as possible. Customer needs were not communicated, and the sales forces became detached from the customer. Continued incentives only pushed the situation further by making the sales force less personalized and more focused on short-term sales instead of maintaining long-term industry goals by focusing on changes in customer needs.