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The sales learning curve
Mark Leslie1, Charles A Holloway
1Leslie Ventures, USA. mleslie@leslieventures.com
Harvard Business Review
|July 19, 2006
Summary
Launching a new product requires understanding the sales learning curve. Companies must learn customer acquisition and usage patterns before scaling sales teams to ensure profitability and avoid cash shortfalls.
Area of Science:
- Business Strategy
- Sales Management
- Organizational Learning
Background:
- New product launches often lead to premature sales force expansion, resulting in financial losses.
- Effective sales require organizational learning about customer acquisition and product usage, termed the sales learning curve.
Purpose of the Study:
- To introduce and define the concept of the sales learning curve for new product launches.
- To explain the phases and strategic implications of the sales learning curve.
Main Methods:
- Analogous to the manufacturing learning curve, progress is measured by sales yield.
- The sales learning curve progresses through three phases: initiation, transition, and execution.
Main Results:
- Sales yield increases as companies learn more about the sales process, indicating improved efficiency.
- Each phase of the sales learning curve necessitates distinct sales force structures and strategies.
Conclusions:
- Adapting strategies to the sales learning curve phases optimizes resource allocation and expectation setting.
- Understanding the sales learning curve helps reduce time and cost to profitability for new market entries.
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