Branch or Centralised Sales Control?

I was talking with Mark Simonsen from The Rental Journal Podcast yesterday. He has interviewed so many people from the equipment rental industry, that he has amassed a fascinating pool of opinions on all manner of topics. Many are tacitly agreed, such as how much stand downs suck, and the fact that every single rental company is dropping rates but us.

An interesting old chestnut that came out of the discussion was, who should sales people within rental organisations report to? Branch Managers, or Sales Managers?

People tend to have fairly firm views on the topic. Some driven by whether or not they have actually worked in sales themselves, some, by more pragmatic, customer service focussed arguments.

There is obviously also a fairly broadly known legacy issue in rental surrounding how much the sales function is valued in the first place. Two quotes from two very prominent leaders in the industry spring to mind:

1. You can fit the good sales people in the rental industry in the back of a cab.
2. The only way to make money out of a sales person is to sell their car.

Both funny. Both a bit mean. Let's look at the facts of the argument.

Equipment rental is a service business. Look after your staff, they look after your customers, and the rest is just asset management. Sprinkle in a bit of innovation, and you probably have a pretty good formula for success. The customer touch-points are similarly pretty simple; Sales, Operations, Maintenance and Administration. There are two or three key behaviours that drive customer loyalty within each, and every person in a rental company either works within, or manages across these four touch-points.

Survey your customers on how well you perform on these deliverables, and survey your staff on how happy they are within the touch-points that deliver those outcomes, and bobs your uncle, you have sticky staff and customers and away you shall go.

Get a smart CFO who understands sales, and an Asset Manager that respects customer outcomes, and who knows, you may even bank some profit along the way to feed your capex hungry beast.

So, with this in mind, let's return to the question at hand. Who should sales people in equipment rental companies report to?

Advocates for centralised sales control have a simple case; sales people should report to people who fundamentally understand sales people. The contrarian view is that rental is a customer service game, and control of all touch-points should remain as close to the customer on the ground as possible.

A centralised model ensures customer messaging is consistent across the branch network, and that sales people are less prone to be drawn into operational tasks and used as extra labour or transport. The Branch based sales model ensures the ground team culture is less prone to an "us and them," rivalry between sales and operations in particular. Another powerful point in favour of branch control, is that it tends promote accountability for revenue numbers back to branch land.

It could also be argued that branch based sales structures are more responsive to customer needs, with Branch Managers not having to negotiate with Sales Managers on the appropriate allocation of the sales teams time. A centralised model on the other hand has been proven to ensure sales people spend much more of their time dedicated to the actual function of selling.

For what its worth, I have worked in and around both structures, and in operational and sales functions. I have seen the merits and shortcomings of both arguments. At this stage of my career, I stand 51% in favour of the centralised model.

I am, as always, very keen on others opinion on this topic, both from within, and outside the industry. Comments more than welcome.

Thanks again Mark, for getting my brain spinning on such topics.