December 2013 | Marketing
Over a decade ago, an executive in the pharmaceutical industry attended Wharton’s Leading the Effective Sales Force. He learned to use the program’s unique resource allocation tool during his week on campus and continued with it when he got back to his company’s medical diagnostics group. But he wanted more buy-in from senior management to make some large allocation changes.
“That is when he contacted me,” recalls Lisa Cain, designer of the web-based tool. “I came in and helped him and his team analyze their data and make the case for change. Our efforts really paid off. Then, about four years ago, he contacted me again. He was with a new organization and although he was still using the general allocation concepts, he wasn’t as familiar with the details. He asked me to help his new team and bring a new set of eyes to examine their data. We saw that reorganizing the sales force and adding more regions would work much better. And, most importantly, we were able to effectively make the case that the changes would justify the necessary additional investment.”
Cain, who also works with MBA students as West Coast Coordinator of Wharton’s Global Consulting Practicum, shares that, as a company outsider, she was able to ask questions and help frame the discussion. “Theirs was not an uncommon situation. They had a new product line to sell, and they had the option of either leveraging the people already in the field or creating a new, dedicated sales force. Instead of making the decision based on a hunch, or even what worked in the past, using the resource allocation tool creates a different conversation. You are able to see where you will get the biggest return. It’s about being explicit about your assumptions and pressure testing them with the model. Once you go through this process, you don’t need to rely on what you think might be best — you have a clearer picture of what each option would look like.”
Before the Leading the Effective Sales Force program begins, participants are asked to collect and submit sales force data. Then during their week together they work in small groups on the specific issues they identified. The exercise gets them familiar with the online allocation tool and helps them find practical solutions that can increase revenue and profit even before the program ends.
Len Lodish, Wharton marketing professor and faculty director of the program, says that seeing these results helps participants realize the value of the allocation tool. “The software gives them an idea of what the marginal impact on profit is of adding or subtracting resources from the sales force, so that they can see whether their sales force size is appropriate.
“Participants are amazed at the results, and the realizations that they’re able to achieve are astounding. But it’s not just a classroom exercise. They take the software with them, and because it’s web-based, they can use it forever.”
The allocation tool also helps make it clear that old models aren’t effective — a key consideration for sales force leaders who often rely on “the way we’ve always done it” as they attempt to get greater sales from the same resources. “Many decisions are based not on what’s best,” says Lodish, “but on factors like allegiance and past preferences. When you start from zero, you have the freedom to ask ‘where should I put people?’ You get a more pure result.”
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