The Hunter-Farmer Puzzle: Solve It and Accelerate SalesDecember 3, 2012
Middle market companies often get it wrong. Large companies tend to get it right. For small companies it is not a relevant question because everyone wears lots of hats anyway. And that is how middle market companies can end up with the wrong answer to the question: how to optimize sales in a B2B market. In other words, how do you generate the highest revenues at the lowest cost?
As small companies grow they usually continue to do what has been successful for them in the past, which makes sense. Small companies rightly focus on keeping the customers they already have, with a dedication to customer service. Often this means that the “salesperson” stays very close to the customer to make sure he/she stays happy. Compensation plans are often based on total sales with no distinction for new sales. And salespeople who are charged with customer service duties, at least in part, tend to like that aspect of the job, especially as it is a lot less difficult to sell an add-on order to an existing customer than it is to a new name account. However, many “thoroughbred” sales professionals will say that isn’t even selling. It is part of account management. A focus on account management may be exactly right, of course, but if that is the singular focus is it consistent with maximizing growth?
Hunter vs. Farmer
The theory is that there are two types of sales people. Hunters are aggressive go-getters. They live for the thrill of the chase. Closing the deal is the equivalent of the kill (see note 1). They can be completely charming but the truth is that is a front. If the customer has a problem they will scream for it to be fixed immediately – but they don’t want to be the people fixing it. They are tough to manage and they are very demanding of the whole company, usually disliked by internal service departments and almost viewed as the enemy by the accounting department.
Farmers are caring people. When the customer has a problem they are upset and will personally do what it takes to make the customer happy. This builds a close relationship with the customer. They can just drop-in to visit and perhaps go to lunch. Conversations are friendly and if the customer has a need the farmer takes the order. When I hear a sales executive say “it is strange that Fred struggles to win new business because everyone in the industry likes him” I know that Fred is a farmer not a hunter.
So do we need hunters or farmers?
The answer is ……. it depends. Sorry, but the hunter-farmer puzzle is tough. Back to large companies. They have thousands of people so they have the resources to say yes to both, with outside salespeople, inside sales, account management teams, customer service departments, onboarding, customer training, etc. etc. Managing all of that for maximum effectiveness and efficiency can be very complex, but that is not the middle market world.
Let’s choose two extremes. The first is a company that sells a product that is easy to install and use and until the customer needs another unit there are no daily/weekly/monthly needs. In this scenario we need a hunter. The salesperson stays minimally in touch to ensure he is ready to pounce when the customer is getting close to needing another unit, but that is about it.
The second extreme is one where the sale includes a very high degree of personal service from a specific person, regardless of whether there is also a product that forms part of the solution. The customer is a “client” who buys because of the trust he/she has in the individual service provider who can’t then hand off the relationship to someone else and check in once a year. In this scenario we need a farmer who manages the account.
The problem is that most companies have relationships with customers that are somewhere in the middle. And not all customer relationships are the same either. A large “strategic” account may need constant attention whereas a small, marginal customer probably does not need much attention and it would not be profitable to offer it anyway. The right answer is to ensure that the selling company’s sales and account management processes map across harmoniously with the customer’s buying process and service needs. It could well be that you need both hunters and farmers, and maybe small accounts are handled solely online and/or by phone by customer service reps. The number of hunters and farmers the company needs can be determined by careful analysis and the size and shape of the available market. Obviously, this is only a start as many management issues then also need to be addressed: sales organization leadership and structure, compensation plans (different for hunters vs. farmers); recruiting; training; customer segmentation; the hand-off from direct sales to account management (how and when to do it); territory plans; channel partners; marketing/messaging; lead generation and allocation; etc. etc.
A hybrid model is almost always the wrong answer
Some companies decide to hedge their bets by asking individual salespeople to be both a hunter and a farmer: this is a hybrid model. Yes, there are a few, truly remarkable individuals who are good as both hunter and farmer. That doesn’t mean they like each equally but they can succeed at both. One finds this person in a small company – he/she is the owner/founder. Maybe the company has already bi-furcated the roles with one founder being the hunter and the other founder doing account management/service. How does this map across to organizing sales in a middle market company? It doesn’t. If the company has a hybrid model in which sales people have to bring in new accounts while at the same time servicing existing customers, I can guarantee you have a huge problem. Sales may continue to grow but whatever the rate of growth, it is much lower than it could be. Proven, successful hunters are so rare that to tie them up with account management duties is a waste (see note 2). Worse than that, they are not good at it. On the other hand, to give strong account managers challenging new account acquisition targets is an exercise in futility. They may bring in some new business, of course, but in all likelihood they will focus on their existing customers hoping to make quota with add-on sales. Which is what they should do, so why not let them? By the way, whenever we encounter a hybrid model and look at how much time account manager-types actually spend as hunters we invariably find it is extremely low. They will have no end of excuses as to why they didn’t have time to hunt. On the other hand, hunters don’t deal in excuses; they are out there smelling blood!
The other problem with tasking farmers with also being hunters, even with training, is that their failure will lead to high turnover. In a good economy they will quit when they realize their commission is going to be slim to none. In a bad economy they will hang around, trying to live off their base pay until the company puts them out of their misery and lets them go. Meanwhile how many qualified leads, expensively obtained, have been wasted?
Sales professionals who hunt aren’t simple Neanderthals; they are engaged in a complex selling process. Farmers do much more than take orders and solve problems. However, there is a clear difference.
So what is the answer?
The objective is not to do what is internally easy for the selling company, or perpetuates the old ways, or is comfortable for the team you have. The “right answer” is determined by mapping what you do with the target market’s companies’ processes and after sale needs. When we chart out the customers’ processes we find key insights that guide the answer. Perhaps the selling company needs hunters and perhaps it needs farmers. It may need both, from different teams, to meet the needs of its customers. However, having a hybrid approach that requires individual salespeople to be both hunters and farmers is a mistake. Accordingly, the best way to meet customer needs is not a matter of philosophy or opinion based on “this is how we have always done things,” but derives from careful, objective analysis. What matters is not how “we” (the selling company) like to work but what is required to win and retain customers. And to make that “right answer” a success you need to build detailed operational plans that ensure excellent execution.
Note 1- As in big game hunting, the sales process can be lengthy and involved. The skilled hunter does not skip steps. Although he may live for the kill, he knows that to get there he must engage in building rapport, consultative/solution selling, and quarterbacking team members from other company departments to assist in the selling process. The selling process and selling skills by sales stage are the subjects of a future blog.
Note 2 – This blog does not address the issue of prospecting. I have heard CEOs say that we need strong hunters who are good at finding prospects. Well, if they have no other choice that is exactly what the hunters will do. However, this is another way to waste the time of a precious and expensive resource. The marketing department should be delivering warm qualified leads. If they are not, fix that problem. This is not to say that in addition to qualified leads a hunter shouldn’t have a target list of major or strategic accounts. Identifying and selling to strategic accounts is the subject of a future blog.