Deciding When And What To Transition For Your Organization’s Digital Transformation
Early in my career, I managed a financial service contact center. As the contact center evolved, driven by new technologies and more complex go-to-market strategies, the roles of the branch staff and the contact center staff also changed. As part of this evolution, we had to drive interactions to the best channel for both customer and cost outcomes. We needed to identify our go-to-market strategy across all channels (e.g., branch, interactive voice response, web, phone, email), incent and educate our customers to use the best channel for their needs, and determine how to incent and skill our employees to support each of those channels.
We were in the early days of the digital transformation. As a leadership team, to facilitate this transformation, we decided to pay both the branch staff and the contact center staff SPIFs, and also allocate revenue credit for the same transaction, regardless of where it occurred. We believed we were doing the right thing, culturally, by bringing along each population, customers included, slowly to make the change. Although our intentions were good, the outcomes were not. No stakeholder was fully satisfied, and the inevitable change was delayed.
Over the years, I’ve continued this journey and worked with many clients to help them transition a portion of their customer base to self-service options or “alternative delivery” channels. We’ve had to figure out which customer group or segments the sales team should be focused on pursuing, expanding, and retaining, and the associated compensation strategy. I’ve realized that like most things in life, while it may initially hurt more, it’s ultimately faster and more effective to just “rip the bandage off” instead of slowly peeling the bandage back. With digital transformation, the “go slow” approach ultimately causes more pain and over a longer period of time.
The COVID-19 pandemic has accelerated the transition that many organizations were already making from traditional sales teams handling all revenue transactions to leveraging e-commerce or online stores for more transactional and lower-dollar deals. Not only have sales organizations determined they must focus higher-cost resources on larger revenue clients, but they’ve also increasingly realized that buyers and customers prefer to use self-service options.
When thinking about operationalizing and expediting this shift, aligning resources with the change, and compensating those resources, here are some things to consider:
- What does your organization’s account portfolio complexion look like? What is your average deal size, average sales cycle, and account attrition rate? If the organization has a significant portion of small deals, transitioning these deals may be more challenging due to the revenue impact to the sales team.
- What is the overall health of the pipeline? If there is not enough volume in the sales team’s pipeline, moving deals out of it could demotivate and frustrate the sales team and result in losing some high performers.
- What percentage of “smaller” deals correlate to, or over the long term result in, larger deals? Sales reps often tell themselves this story, but sometimes it’s actually true — especially in a software-as-a-service environment where the first deal is often the tip of the revenue iceberg. Determine if this is the case for the sales organization. What is the current spend of an account vs. the potential spend?
- What is your organization’s go-to-market strategy? Do you go to market directly, via a channel, or both? Who owns the customer relationship? Depending on the answer, additional complexity may have just been added to the equation.
- What skills do sales reps need to make the shift? If you are asking reps to focus on larger or more complex/strategic accounts, are they equipped to do so? This is the “order taker” to “consultative seller” shift — the organization may not be ready to make it without extensive sales enablement efforts.
- Can the organization effectively communicate the answers to “Why? How? When? What?” Although the sales team may not agree with or even like the answers to these questions, the organization’s ability to answer the questions clearly, honestly, transparently, and with integrity will determine how successful the shift will be.
Most people are creatures of habit and change is challenging. Asking your organization’s sales team and/or customers to behave in new ways is hard, but often necessary. In his famous book Who Moved My Cheese?, author Spencer Johnson proposed that things constantly change, so we must adapt, and what we are afraid of is never as bad as what we imagine.
So, rip off the bandage, accept the change, and realize the results!