Resources I was recently directed to a copy of a 2006 Harvard Business Review article entitled: ‘The Sales Learning Curve’ by Mark Leslie and Charles Holloway. The concept presented is how and when you should ramp up the sales force during new product launches using a concept called the ‘Sales Learning Curve’. The model is useful to develop thoughtful launch strategies, plan resource allocation more accurately, set appropriate expectations, avoid disastrous shortfall and reduce both the time and money required to achieve a profit.
In summary, when your company launches a new product the paper suggests you need to provide your company time to climb the sales learning curve (SLC) to find out how early customers acquire and use your offering and then modify your sales and product tactics based on what you have learned. The idea is to match your sales force size and skills to where you are situated on the SLC. So instead of starting with a large sales force, a company is better served by hiring a small team of sales staff with the right competencies to lead the company through an iterative learning process that includes the continuous discovery and solution of issues problems before moving into full blown launch with a full sales force complement. The counter would be to hire a full sales force too fast, which would just lead the company to burn through cash and fail to meet revenue expectations.
A similar concept called the manufacturing learning curve (MLC) is already used in the manufacturing sector where the costs of produce the early units of a new product are typically high, but over time, the production costs start to fall as the production process is optimized through learning and when volume increases start to make economic impact. However the SLC concept does provide a useful lens through which to consider when to ramp up sales teams as a company goes through field testing to full market adoption and as employees transfer knowledge back and forth between the field and across all departments.
But as I reviewed the article I started to ask myself. ‘What if the Sales Learning Curve’ could be made steeper and shorter? The SLC tracks sales yield over time and if you can shorten the curve you reduce the time it takes to reach targeted sales quota levels. The shape of the SLC is not only impacted by how quickly sales people learn but also by how quickly the whole organization learns – product, marketing and sales. The point here is that an organization can either accept the status quo in that ‘it takes as long as it takes’ or it can expedite and facilitate the knowledge capture and dissemination process to ensure that:
- Early feedback is captured back from the field in a system of record that proves insight that becomes useful and applicable for the organization as a whole, thereby allowing the company to take rapid and effective corrective action.
- Marketing and communications are able to rapidly adjust and refine their go to market bill of materials. Agility is the key here as well as the access to the market insight marketing required to increase the level of responsiveness to market needs.
- Sales and channel field experiences and packaged best practices are shared in a manner that raises the competency levels of the whole workforce.
- The on boarding cycles of sales teams and therefore the time to achieve full sales quota is shortened by providing them with the timely and up to date knowledge for them to be successful.
Since the publication of this article, knowledge automation systems such as StreetSmarts® have made significant strides to address the organizational challenges of trying to reduce the costs and times to achieve full sales yield for new product and service launches.
