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Sales Management and Comparative Advantage
Blog / Sales Management / Mar 6, 2018 / Posted by Nikolaus Kimla / 4362

Sales Management and Comparative Advantage


There is an economic principle called comparative advantage which can be a tremendous benefit to sales management.

In economics, the term is used to describe the ability of a party to produce a particular good or service at a lower cost than another party, and take advantage of that fact in trade. For example one country with an advantage in producing beef at lower cost than another country can trade with another country that, say, produces dairy products at a lower cost than the first country. Both obviously benefit from this arrangement.

Comparative advantage has an application within the realm of sales management, however: optimizing a sales force based on differing strengths of salespeople.

Why would such a principle be needed? Because today, it’s a hotly competitive environment. We all need to be getting better. For that reason millions are spent on sales training—according to one report, each company spends an average of close to a million sales training dollars per year. This is all done simply in an effort to make a sales team more competitive.

Train by Weakness…or by Strength?

Good salespeople are never easy to find. For that reason when one is located, a sales manager’s instinct might be to focus on that person’s weaknesses so as to strengthen them. While there’s certainly nothing wrong with that, there is another approach that is actually far more effective: isolating that person’s strengths and placing that person where they’ll do the most good.

There are many sound reasons for this approach, but the primary one is very simple: you’ll find that when someone is great at something, they truly love doing it. And reversely, when someone loves doing something, they are generally very good at it.

Optimizing the sales force on each salesperson’s different strengths is how you utilize comparative advantage in sales management. There is one drawback, though, that must be dealt with: how do you tell the difference between a weakness and simply a laziness? Someone might be good at something, but just be lazy. For example, someone says, “I can’t call anyone.” That’s just a laziness, not a weakness. On the other hand, when someone says, “I’m really not the best person for cold calling. I’ve made hundreds of calls, but I really hate it.” You know, then, that this would be a weakness. This would not be your SDR.

I’m not in any way implying that training should be left out—not by any means. No matter how expert someone becomes at something, training will always be required. For example, take a virtuoso violinist in a top orchestra; how often does she practice? How many hours per day? The same is true for a salesperson; training will always be needed.

Today, sales isn’t just one job. There are many roles, and they are all vital within the sales process. Each one is a specialist. One will be excellent at being a “hunter”—that is, finding and bringing in new opportunities. Another might excel at being a “farmer,” which would be the nurturing of leads and readying them to be closed. And of course there are the closers, who excel at bringing deals through the door.

Applying Comparative Advantage

Taking a step back, a sales manager will see in applying the above method of operation that every time a new person is added to the sales force, the overall dynamic of the sales force changes. For example, a new rep is added on and, after a short time, the sales manager can see that the new rep excels at closing. The sales manager then puts that rep onto closing deals that others have found and nurtured. What does that mean for the rest of the team? It means that other reps who are weaker on closing that have had to do so simply for the lack of a strong closer can be placed where they are stronger, and the closing can be left to the new rep. It can even mean that the sales manager, who has had to step in numerous times for closes, can revert back to being more of a sales manager, and mentoring and coaching.

CRM Solution Requirement

For the full application of comparative advantage in sales management, a flexible, intuitive and highly visual CRM solution, such as Pipeliner CRM, is required. A sales manager needs to be able to look over the sales pipeline of the sales force and rapidly assess which reps are stronger and at what stages of the sales process.

Pipeliner CRM has numerous features through which comparative advantage can be applied. Its totally unique Archive feature will show in which stage the most deals are lost, and who loses them. Pipeliner’s flexible, powerful reporting will clearly show which reps excel in which area of the sales process. There are many more features which can be applied.

Without such a CRM application, analysis will be based mostly on instinct and guesswork. While those are fine qualities, especially for a sales manager, they won’t allow that manager to operate with the precision needed in today’s highly competitive market and sales environment.

A company today needs the strongest sales force possible. For sales management, the application of comparative advantage can go a long way in bringing that about.

Pipeliner CRM totally empowers comparative advantage in sales management. Get your free trial of Pipeliner CRM now.

About Author

CEO and partner of and the uptime ITechnologies, which I founded in 1994 and has since played a significant role in the development of the IT-environment. pipeliner is the most innovative sales CRM management solution on the market. Pipeliner was designed by sales professionals for sales professionals and helps close the gap between the requirements of C-level executives for transparency and the day-to-day operational needs of field and inside sales. I am also the founder and Initiator of the independent economic platform GO-AHEAD!, which orientates itself on the principles of a free marketplace in terms of liberal and social responsibility. Connecting people, the trust of business leadership in terms of values such as freedom, self-responsibility, and entrepreneurial spirit, and strengthening their awareness in order to create a dynamic boost within the economy triggered through spontaneity, all stand for the initial ideas surrounding GO-AHEAD! I studied in Los Angeles and Vienna and received my Masters's Degree in 1994. I am married and have 3 children My Specialties are in: Sales Management, Sales CRM Software, CRM Cloud Solutions, SAAS, Business Strategy, Software Development, "Pipeline Management", Social responsibility, outbound sales, b2b sales, inside sales, sales strategy, lead generation, sales process, entrepreneurship, coaching, mentoring, speaker, opportunity management, lead management, Austrian School of Economics

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