Meyer's Management Models #62

Hunting & Farming Typology

How should I organize my sales process?

Key Definitions

All commercial organizations need to sell products and/or services to customers to survive. As even the best value propositions don’t sell themselves, firms need to organize a sales process to ensure that customers purchase what is on offer.

The process of acquiring new customers is often referred to as hunting, while the process of cultivating existing customers is referred to as farming. In most firms both processes are required, but the mix of acquisition and retention can differ widely. ?

Conceptual Model

The Hunting & Farming Typology gives an overview of the four generic types of sales processes, comparing them to four common ways of dealing with animals. Along the vertical axis a distinction is made between hunting (customer acquisition) and farming (customer retention), while along the horizontal axis a distinction is made between selling to big customers (large enough to be approached individually) and small ones (each so little they need to be approached as a group). Each of the four quadrants describes a fundamentally different way of running a sales process. By extension, each approach requires a different type of organization, performance management system, set of skills and culture.

Key Elements

The four generic types of sales processes are the following:

1. Whale Tracking. To take a stunning picture of a whale, you need to go out and track one down – this is also called outbound sales. It requires a thorough understanding of one or just a few specimens and a willingness to pursue each lead for a long time, with the intention of eventually catching the big prize. Success largely depends on the skill of the salespeople doing the hunting – they need tenacity, perseverance, and a risk-taking attitude. Sales performance is often motivated by giving significant bonuses and is supported by a culture valuing ‘scoring the deal’. ?
2. Fish Catching. While you need to go out to find a whale, the best way to catch a lot of fish is to let them swim into your net, which is also called inbound sales. This approach requires an understanding of where large schools of potential leads can be found and then luring them ever deeper into the ‘trap’. Success depends less on the individual salespeople and more on the structure of the sales funnel – together with marketing people an attractive setting needs to be created that tempts enough leads to willingly swim into the net and let themselves be caught. The supporting culture values ‘seduction and conversion’.
3. Horse Breeding. You can go out hunting for wild horses, but it usually makes more sense to breed with the ones you already have. In this approach, the intention is to keep the existing clients happy and gradually increase their size. This requires a thorough understanding of each magnificent beast’s unique character and a willingness to cater to their specific wishes. Success largely depends on the skill of the salespeople at building and maintaining long-term trusting relationships and adapting to each customer’s whims. The supporting culture values customer intimacy and relational continuity.
4. Bee Keeping. While you can pamper each individual horse, as beekeeper you need to focus on what will keep a whole swarm happy. This approach requires an understanding of the needs of the average bee and then shaping a hive that will satisfy their wishes and get them to constantly come back with a bit of honey. Here too, success depends less on the individual salespeople, but more on creating an attractive setting that tempts each customer to faithfully return to the ‘nest’. Ideally, each customer will feel at home, or even experience a sense of belonging. The supporting culture values building long term loyalty.

Key Insights

• Sales processes can be like hunting or farming. Sales activities can be focused on acquiring new customers (hunting) or nurturing existing ones (farming). Most organizations will engage in both activities but can have a hugely different mix between the two.
• Sales processes can be directed at big or small customers. ?Sales activities can be targeted towards individual big customers, that can be known individually, or designed to deal with larger numbers of difficult-to-know smaller customers.
• Sales processes come in four generic types. The Hunting & Farming Typology describes four distinct approaches to structuring the sales process, giving them names that show a parallel between ways of dealing with animals and selling to customers.
• Sales processes need to be supported by a sales organization. Each of the four types of sales processes requires a different team of salespeople, with different skills, a different performance management system and a different culture. It is possible to combine all four in one firm, yet they need to be organized differently and often separately, to avoid creating a stuck-in-the-middle mishmash of conflicting ways of working.
• Sales processes shouldn’t only focus on salespeople. Traditional salespeople tend to focus on whale tracking and horse breeding, because it makes them more important than the sales system. Yet enlightened sales managers take a broader perspective, looking for ways to move to the right and keep the ‘feet off the street’. Fish catching and beekeeping are often more efficient, less person-dependent and easier to automate.

If you are a subscriber to this newsletter, I'm the bee keeper trying to make sure that you LIKE it here and keep on coming back (maybe adding a COMMENT with your views on this topic). If you are reading Meyer's Management Models casually, or for the first time, I'm the fish catcher trying to lure you deeper into the funnel, and get you to SUBSCRIBE.

Please note again that my new book, Meyer's Management Models: 52 Inspiring Tools to Kick-Start Your Thinking, is on its way - the Dutch version is already available and can be easily purchased via Managementboek, while the English version will be out in October.

Next month's edition of Meyer's Management Models will be about the GUIDING STAR MATRIX, that offers an easy to use format for setting goals, either for you personally or for your organization. You can find all previously published models at https://www.c4sl.eu/publications/, where you can also download the blog as a pdf, download the model as a PowerPoint and subscribe to the newsletter.