Seth Brandt, the director of sales for technology firm Lighthouse Corp., is switching its selling model to be more team-based. Now organized by industry verticals, each team is composed of an outside salesperson, an inside salesperson, an account manager responsible for client service and a technical consultant. Because of the new structure, Brandt feels it's important that each account team gel, and wants each member to be actively involved in hiring for open spots on their team.

One of his teams, however, is divided over whether to hire one particular person for its account manager position. Brandt interviewed the contender, Anne Cochran, and had a great first impression. She seemed to have the soft skills necessary to manage customers, although she was young and had less than four years of client-management experience. The technical consultant on the team seems to think she'll be a good match with the other personalities and a quick learner. The outside and inside sales reps, however, have concerns that her inexperience could cost them accounts that they have worked hard to secure. They like her well enough but, they argue, with the team-selling model just starting, they believe ramp-up time is critical, and don't want her inexperience to drag down the rest of them. Brandt ultimately has the final say, but the decision to hire her is split down the middle.

Question: Whose opinions should Brandt weigh more, the sales reps' or the technical consultant's? Is there a way to break the deadlock without causing resentment? Send your solutions to jchang@salesandmarketing.com.

January/February Recap

Duff Spellman is facing shrinking budgets at Otto Inc. Faced with a 30 percent cutback, he's unsure where to slash the funds. His salespeople argue that they need the money, mostly for client entertainment, to woo prospects and network with decision makers. The marketers say they need to continue the events they hold every year, which are few in number, but popular with clients and prospects. He sees why both sides need the money, but is unsure of where to make the cuts.

January/February Winner

Aaron H. Pratt
Marketing and Communications Manager, Microboards Technology, Chanhassen, Minn.

Before Spellman does any cutting he needs to spend some time analyzing his past spending and its impact on revenue. If Otto Inc. had a down year last year, there's a good chance that part of the blame may lie with the sales and marketing budget not being used well in the first place.

The key to making good spending decisions is using the remaining money where it will have an impact—and that means there must be measurability. Spellman needs to demand metrics from both organizations so that the marketing events' costs are reflected in marked gains in brand equity and lead generation, while the sales perks' costs are reflected in gains in individual account performance.

Too often, in good times we fail to collect the data we will later need to make hard decisions during a budget cut—and that means we have to guess which cuts are going to hurt the least. After Spellman has sat down with each account manager and reviewed how his expense reports compare with account and territory performance, he is going to have to figure out how to help marketing cut the rest of the fat. Key to this will be how to present the cuts to the customers; perhaps it's time to shake up the traditional events anyway. A good vice president of sales will find a way to spin the new reduced-budget marketing events as a positive for customers.

Other Responses

As always, S&MM received a number of e-mails from students at the University of Akron's Fisher Institute for Professional Selling in Ohio. We thought we'd share a few of their responses. See how your solution compares with those of the sales executives of the future:

Take Pride in Service

I personally believe that long-term relationships are not made by throwing money at decision makers and business owners, but by providing the best service possible. If a customer is going to leave for such a petty reason, then he is not a loyal customer and he would have left for much less than not being entertained. Spellman could cut all of the entertainment expenses and pride his business on service alone. He could also explain to the discouraged sales force that either the entertainment has to go, or some of the employees have to go. Spellman could focus entertainment expenses only for the accounts that generate the most revenue. There is no sense in wining and dining a transactional customer.

Matthew Malek

Give the Budget to Sales

Spellman should cut costs in the marketing budget because marketing is not as important as building relationships with the customers, which is what the salespeople do. If Otto Inc. sells big-ticket items with a long sales cycle, the salespeople influence the customer's decision to purchase. If a customer is going to spend an enormous amount of money for a company's product, he wants to feel as if the company is investing in him and working for his business. Maybe instead of having events three times a year, Otto should cut the number down to just one and work on creative and alternative ways to gain prospects.

Spellman should try to make the marketers view the budget cut as a positive instead of a negative change. He could tell them that he is challenging them to improve their creative skills by having them come up with new ways to prospect. He might want to offer an incentive for coming up with the quickest and most cost efficient way to prospect. The new ideas that the marketers come up with could be better than holding three events—and cheaper, which allows them to stay in the new budget.

Candace Johnson

Use the 80/20 Rule

If Spellman applies some fundamental selling concepts to his thought process, he can make a choice that will continue to supply his company with clients. Remember that 80 percent of the business comes from only 20 percent of customers. By targeting these clients, Spellman can still offer lavish entertainment to them. As for the rest of their customers and prospects, they could be allotted a more limited amount of funding and be treated to less pricey entertainment, such as a round of golf.

Michael Ruhlin

Classify Customers

Spellman should classify his customers and prospects as A, B or C accounts. This classification system will help his sales force identify which customers to wine and dine most often. The marketers must also make budget cuts by choosing which two of the three customer events add the most value to the organization. If Otto Inc. continues to hold its national customer conference, it should do so at a less pricey resort. If the industry trade shows remain, limit the number of pricey giveaways. By implementing this solution, both the sales and marketing teams have compromised and Spellman is successful at controlling costs.

Dustin Campbell

Use Events to Say Thanks

To determine where Spellman should make budget cuts, he needs to look at the sales figures. In what part of the year are the most sales made—after big events that marketing puts on, or after salespeople wine and dine customers? If both figures are about the same, then Spellman needs to take a little money from both sales and marketing.

In this case, maybe the marketers can put on two events instead of three, one in the first half of the year and one in the second half. In addition, salespeople could stop entertaining customers after they've closed the deal, instead using the golf tournament or the customer conference as their way to say thanks for the business. This way, each group is cutting back, but both are getting their jobs done.

Ashley Barta

Focus your Attention

Because Spellman believes that customer entertainment and the marketing events are invaluable, he needs to focus on a smaller number of customers, especially if he wants to maintain the same quality of customer entertainment. The sales team should be rationed a certain number of entertainment options, which they can determine how to utilize. Likewise, the marketers should be given a limited number of invitations to the events and decide whose presence is most valuable.

Amy Kroeger

Find Affordable Leads

Spellman should concentrate on those events that have solidified customer relationships in the past. He needs to take a hard look at his customer base and see which are most profitable, and establish a strict budget for sales and marketing, but leave it up to the respective department to determine how to spend the money. He also has to look into more affordable ways to establish sales leads. If his company has built beneficial, win-win relationships, he can rest assured that a few less dinners won't jeopardize a successful business relationship.

Joe Yax