Accountability and Cost of Coverage

Specialization increases efficiency in several ways. 

There are trade offs between a specialized rep focus and the general end to end model.  With end-to-end ownership, there is zero ambiguity about who is responsible for the customers in the reps territory.  As a result, we can measure performance simply by calculating the customers contribution.  Under this scenario the salesman can be held accountable by paying them for performance for their customers.

The salesman has both clarity of objectives (make profit dollars) and sufficient influence (total account control).  However, it is pretty rare to find a single individual sales rep that is really good at merchandising, estimating, relationship development and customer service, not to mention data entry, warehouse picking, and accounting.   Needless to say, the wholesaler-distributor that does not do at least some specialization would be out of business pretty quickly.

Specialization increases efficiency in several ways.  First it allows us to use the lowest-cost resource for a particular function.  Order processing is one example; the typical warehouse picker is paid less than the FSR, so it makes sense to outsource this function to that department.  Second, productivity almost always increases as tasks become narrower. By repeating the same activity over and over, we work at least 15% faster and make fewer errors(Sassons, 1996).  By reducing the number of distractions and amount of "task switching," productivity can be increased by 28% or more (Jackson 2008).  Studies show that it takes almost a half hour to "recover" from a phone call or text message interruption.

Specialization also supports investment in technology and training, since a smaller set of users can be more deeply immersed in the tools.  For example, CRM software implementations are often more successful at wholesale distribution companies that limit them to the telephone sales force because these reps use the same customer history screens hundreds of times a day.

After you have defined the roles for each position in your sales structure, the next question is: how many of each do I need?  By completing the role map in the fourth column below you will identify the performance drivers.  These are the activities that a rep should perform to be successful (as indicated by the metrics in the third column) in the roles (second column), which support the strategy (first column).  Building on this will provide an example of how a sales rep spends his time as seen in the last table.

ACTION POINT: The key to driving accountability within the context of a strategy is to identify the specific areas in which the benefits of specialization outweigh those of end-to-end ownership. Cost coverage is about identifying the performance-driving activities and determining an appropriate time allocation for each.