Sales Force Effectiveness Blog

Using Data to Drive Sales Decisions: Interview with Barry Somervell

Mike Drapeau — Sat, 25 Feb 2012 12:00:00 GMT

Barry Somervell is Senior Vice President of Sales and Business Development for the Nursing Care Division of Kindred Healthcare, based in Louisville, Kentucky. Kindred Healthcare, Inc. is a multi-billion dollar healthcare services company that operates hospitals, nursing centers and a contract rehabilitation services business across the United States.

We caught up with Barry the other day. He took some time to share with us his how he uses sales data to make informed decisions – an important dimension of Sales Performance Management.

Here is a recap of our questions and Barry's answers. Enjoy!

Q: How has the discipline of sales performance management helped you manage the sales function?

Barry: We are still evolving but the Sales Performance Management Approach is allowing us to manage people vs. using our managers to micromanage task accomplishment. Dedication to hiring and training to our ‘A’ player expectations provides a strong framework upon which we can have greater confidence in execution and some innovative thinking.

Q: How have you used sales performance management to connect the corporate and sales strategies to front line sales execution?

Barry: Transparency of the strategies, role clarity and team expectations provide a view to all of our stakeholders that did not always exist prior [to implementing sales performance management]. When all parties clearly understand the expectation more focus can be placed on execution of the plan.

Q: What role have dashboards played in helping you provide timely, relevant, and decisive information to the sales managers and executives?

Barry: Our dashboards are still evolving but the pipeline reports have been extremely helpful in understanding the expected benefit from the efforts and allowing us to better resource each salesperson to close their deals. Additionally, daily push feeds on progress against targets has heightened awareness and drive by our sales team.

Q: How have you connected the access to data and the reports you generate to decision-making at the executive level?

Barry: We recently went through a difficult expense reduction process and were able to make clear decisions regarding impact and alignment of resources to opportunities. Without the data it would have been a less effective “gut feel” decision making process.

Q: What role do leading indicators play in your sales performance management approach?

Barry: This area has been more difficult to get our arms wrapped around. Generally speaking we are making process changes to address our conversion rates from referral to admission. Our Opportunity Pipeline tracking that is just beginning should give us a clearer picture of what might be on the horizon.

Q: What type of trending, scenario analysis, or modeling techniques have you employed to support the sales reporting function?

Barry: Customer trending and measuring our customer share has provided significant insight to our salespeople around where to focus [their time]. Sometimes just showing someone how it’s possible is half the battle.

Q: What role has benchmarking played in helping you assess internal performance and compare yourself to external peer groups?

Barry: This is a future area of opportunity for us. We are currently spending more time measuring progress from our starting point and against our internal performance goals. We got some guidance early on in our process around where we were performing against “world class” that set in motion some of our process change so in that sense it’s been valuable to know what we needed to improve.

Q: What has been your greatest challenge in improving sales performance management?

Barry: Bringing consistency to the data aggregation has provided us the most challenge. We want to be a consistent contributor and having the baseline and improvement data to show that has been difficult to wrap our arms around.

Thank you Barry for your insights into the dimensions of Sales Performance Management.

Call to Action - If you are interested in learning about how to better leverage your own sales data without making large investments in proprietary software, click here to download the SPM assessment worksheet to assess your Sales Performance Management capability.

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Four Steps to Effective Sales Management Communication

Dan Perry — Fri, 24 Feb 2012 12:00:00 GMT

Over 74% of Sales Managers by their own admission tell us they have poor communication skills. Sales Managers consistently question how they can be better coaches. They ask questions around “How can my reps do what I tell them they need to do?” Or “What are the best ways to get a rep to perform better?” Some go to the extreme: “Why don’t sales reps listen to me?” or “How can I train them in half the time it takes?”

The cause is not communicating effectively. I observe sales managers (and their leaders) waste valuable time and energy repeating messages, prioritizing wrong activates and spending too much time on non-customer facing activities. The primary root problem of these behaviors is poor communication.

Ask yourself:

What impact are my communications having on my people?
How can I communicate more effectively?
What if I delivered a message to my team one time and it was understood and acted upon?
How can my regular communication techniques result in desired behavior changes the same day?
Is there a way to measure my communication effectiveness?

It’s worth the effort. Organizations that train and monitor their sales manager’s on effective communication show improvement in numerous metrics:

Increased Revenue by 5%
Lower Sales Turnover up to 22%
Reduced Average Sale Cycle Length by 12%
Increased in Average Sales Price (ASP) by 4%
Improved promotion rate of 15%
Increase time spent together with direct reports by 11%

With the hundreds of field observations and conversations our company has each year with sales reps and managers, some alarming trends are happening. Sales managers are rushing through conversations with their direct reports sacrificing coaching time. Directors are not providing their direct reports (Sales Managers) with the necessary coaching. Poor communication fundamentals are leading to confusing messages, lost productivity and ineffective actions leading to lost revenue.

Sales Leaders must improve their communication skills.

Four Steps to Effective Sales Management Communication

Define and develop a cadence for the fundamental methods of communication. The way you communicate is just as important as the how. Make sure you are using the appropriate methods and preforming these in a regular cadence.
Adhere to the Best Practices in the way you communicate. Sending your message is an important as receiving it. These best practices help ensure not only people will listen but take action on your coaching and feedback.
Avoid the most common poor communication techniques. Poor communication takes just a few forms. But it sucks the life out of your direct reports. Avoid these at all costs.
Effective Communication is ‘Up’ and ‘Down’ the organization. Both internally and externally, there are numerous people you must communicate with every day as a sales manager. The way you communicate also affects your ability to get the message across. Thus, I add a fourth method:
Tailor your message to your audience. Think about all the ways you communicate throughout and organization either internally or externally. The way you communicate and the how you communicate needs to change with each person.

Results are impressive for those who do it well. Check out Rosalba Agnello. Rosalba is a sales manager at HP in their ESSN division based in Milan, Italy. When I observed her sales meetings and one on one sales rep debriefings recently, I was impressed by the way she communicated. She practiced all 4 of the steps outlined above. She avoided the common mistakes most sales managers make in communicating and noticed her sales rep understood the coaching and feedback while immediately taking action. I checked her stank ranking against the other sales managers. Out of 900 sales managers worldwide, she was in the top 5 %. And she works in Italy, a country that is almost bankrupt and has felt the brunt of the economic downturn, especially in Europe. She is a great communicator.

Take a lesson from Rosalba and improve your communication. Work on your communication methods, cadence and messaging to your audience and direct reports. The metrics don’t lie, your performance will improve.

Want to learn more? Request a consultation from one of our principals. We will help you be successful. Or leave a comment. We love good dialogue, especially around communication.

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Account Segmentation’s 2 Outputs that Start Your Sales Strategy

Tony Albachiara — Thu, 23 Feb 2012 12:01:00 GMT

Crafting a Sales Strategy is Mission Critical to a Sales Leader's longevity in any given position. Research from the newly released e-book "Promoted to VP of Sales: The Year One Toolkit" clearly articulates the options a sales leader has when it comes to developing a Sales Strategy. These options are:

Skip it – it's a time consuming process and results are needed now.
Throw a strategy together quickly in hopes that it will land and bring you success.
Take the time to develop a sales strategy correctly, understanding that all else flows from there.

Sales Leaders, if you’re living day to day, thrashing around, focusing on the “flavor of the day” and wondering if you’ll become the next 19-month interim Sales Leader… STOP! You are in control of the final numbers and the ultimate outcome of the sales team. But it has to start with a clearly defined Sales Strategy. A Sales Strategy has three components:

Account Segmentation
Lead Management (Demand Generation & Lead Generation)
Sales Process

Each of these Sales Strategy components builds upon the one before it, and naturally flows downward through the Salesforce Assessment Framework. Start in the wrong place, or focus on the wrong component at the wrong time, and you’ll be "thrashing" around, wasting time, money, resources and ultimately falling short of your desired goals.

Sales Strategy Development must start with Account Segmentation

Account Segmentation will provide you with 2 outputs:

Total Available Market (TAM) that exists for your product/services. These analyses provide the high level understanding of the size of the potential market, which can be broken down by vertical markets. The Ideal Customer Profile (see below) along with company specific firmographic data (also see below) are used to build the TAM. (examples: revenue size, number of employees) The TAM delivery’s the output upon which you can now build your territory design framework.

Total Available Market (TAM) Report
Market Prioritization is an output/report that allows you to prioritize (based on firmographic criteria) the targets that match your Ideal Customer Profile within each region, market, and area. This section tells you who is the best fit to become your customer, with granularity down to the specific target name and geographic location. The Account Segmentation output is a list of potential accounts built off of the TAM that provides your Account Executives a way to prioritize on whom they should focus their most concerted efforts.

The collective output of information from Account Segmentation allows you to move to step #2 of the Sales Force Assessment framework – Lead Management. Lead Management will then be built off of the Ideal Customer Profile, wherein you can target potential clients with a variety of campaigns, depending on which best fits their profile. And you continue to move forward with the Salesforce Assessment Framework...

Build Your Sales Strategy the Right Way

Building a Sales Strategy is like building a house. You must start in the right place and lay the proper groundwork. Think about if you were to build a house without initially pouring the foundation. It might look great on move-in day, and you may live comfortably for a while, but after too long the floor starts to crumble beneath you. What happens then? You have to move out. Additional time and money are wasted because you didn’t build from the foundation – you got ahead of yourself because all you wanted to do was in move in to your new house. Do yourself a favor and don’t move in too soon. Build a foundation (Account Segmentation) and then move into a house that will stand for a long time.

Need more information or would like to discuss in greater detail - Click on the link below and find out how world-class sales organizations build Account Segmentation.

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The Transformation of a Sales Leader: A True Story from a Sales Consulting Project

Greg Alexander — Wed, 22 Feb 2012 12:00:00 GMT

Say hello to Mike. Mike is a Vice President of North American Sales at ABC Company. ABC Company is a $280 million software company that helps its customers keep track of their intellectual property. Mike joined the company 8 years ago as its 15^th rep and got promoted through the sales management ranks just about every two years. Today, he leads a team of 150 sellers and 22 sales managers.

Mike is 43 years old, has been married for 13 years, has an 8 year old son and a 6 year old daughter, and lives just outside D.C. Life has been good to Mike.

A little over a year ago, Mike was given an aggressive revenue target for 2011. The number was much bigger than he was expecting. He doubted he could achieve the target and for the first time, he was concerned he may lose his job if he missed.

You see, the stakes had gone up recently. The company invested heavily in a new product and the board’s expectations for growth were very high. The CEO, Mike’s boss and an engineer by trade, convinced the board to over invest in development for the last two years. The product was “done” and it was time to sell it. Giddy up Mikey, as they call him.

Mike decided his best bet was to argue for a reduced goal. He gathered his sales ops director and spent hours poring over historical revenue production during previous product launch periods. He augmented this proprietary data with reports from Gartner and Forrester about the available market for this product. With a beautiful power point deck loaded, Mike walked into the CEO’s office and pleaded for relief. None came. The CEO’s comments “You need to start doing things differently Mike.” What happened to Mikey? The CEO was all business these days.

After LinkedIn reminded Mike there are many out-of-work sales leaders, he decided he needed to find a way to hit the number. Mike began looking for help. This made matters worse. With every Google search, a new list of sales consulting firms, sales training companies, and software providers appeared, all claiming to have the silver bullet. Mike started realizing that he knew a lot about his industry, company, and product, but he had not kept pace with the latest from the sales improvement industry. “What is all this stuff?” Maybe the CEO was right. There is a different way to lead a sales force these days.

He spoke with a half dozen firms and decided to proceed with caution. There are lots of smooth talking gurus out there. Mike hired a boutique sales consulting firm to perform a small assessment. He has second thoughts but realizes he needs to do something different and this may tell him what. This allows Mike to experience this new world cautiously.

About a month into the project, Mike does not like what he is seeing and hearing. The sales consultants launched a customer and prospect survey and the results were not flattering. “No value in the relationship, really?” The sales consultants conducted an expert panel with the 15 top reps. The superstars did things very differently than the rest of the sales force. “How did this happen?” The sales consultants interviewed the board, the CEO and all of his direct reports. There were now 7 different definitions of “best-in-class sales performance”. The sales consulting firm performed a mystery shop of the company and its top three competitors. Posing as a hot prospect, the sales consulting firm documented the engagement process of each and it appears one of the competitors had better talent. “Are my guys really that bad?” The sales consultants went on calls with the reps. “Why is no one using the sales methodology?”

Mike was now terrified. He confronts for the first time in 8 years that he might not be very good at his job. He comes face to face with his lack of sales effectiveness knowledge. Mike’s success has been the result of combining hard work with a great product in a growing market. Not the result of his expertise. “What is going to happen when the CEO and board sees the consultants findings? They paid for the project and are awaiting the deliverable.“

Joe is the sales consultant assigned to the project from the sales consulting firm. Prior to joining the firm, he was a vice president of sales twice, both times in the software industry for companies of comparable sizes as ABC Company. Joe spent lots of time in front of CEOs and boards. In fact, he was a client of the firm’s before joining after the buyout. You might say he was a lot like Mike.

Joe recommends to Mike a small change to the call plans the reps were using with prospects. Joe made a dozen sales calls with Mike’s reps and noticed the call plans were not being used. The change was basic and involved focusing the first 20 minutes of a sales call on the buyer’s needs versus qualifying if the prospect has budget. Joe wanted Mike to move from focusing on the problems to focusing on the solutions. He felt that small victories would create a buzz in the field that the sales effectiveness program was going to be good for all. Mike agreed and issued the change immediately.

Within a week, Chatter posts on SFDC doubled in number and were almost universally positive. Mike decided to point a few at the CEO and get his reaction. To his surprise, the CEO started replying to the posts. Mike had created an environment where reps, the head of sales, and the CEO were sharing success stories from sales calls in real time from smart phones. Mike started having fun again.

After the sales consultants presented the assessment findings to the CEO and board, Mike decided to implement several of the recommendations. There were many, with an anticipated implementation plan of one year. He felt confident after the first small project. The field was familiar with the sales consulting firm. The executive team agreed with the need for the work and committed the funding. The customers and prospects viewed the work as a direct response to their input and customer satisfaction was rising. There was a new energy in the sales department and Mike wanted to keep it going.

This brings us to today. Our courageous sales leader made the number, by the skin of his teeth. Good for him. Mike just got his 2011 bonus check last week. As we finished off a bottle of Silver Oak, Mike’s wife showed me the Brazilian rose gold heart necklace he bought her for Valentine’s Day. It looked beautiful on her. The thoughtful gesture reminded Elle why he works so hard.

As I walked to the car, Mike started sharing with me his plans for 2012. I suggested he let the dust settle a little bit, that maybe another change initiative on top of the one just completed was too much. He called BS on me and said “Making the number was great. The bonus check was nice and Elle loved the necklace. But, the best part was acquiring all these new capabilities. I feel like a real sales leader now. My meetings with my boss are entirely different. He really trusts me. I own the field. There is almost no push back on anything anymore. Just imagine what we might be able to do next. Let’s get the teams together and road map 2012.”

They don’t all go this way. But when they do, they sure are fun.

Thanks Mike. Here’s to all the Mikes in the world who are brave enough to change.

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Indirect Channel Management: What’s in Your Pipeline?

Drew Zarges — Tue, 21 Feb 2012 12:01:00 GMT

When the sales manager goes in front of his boss, one of the first questions he’ll have to address is “What’s in your pipeline?” Pipeline Management is a fundamental best practice in predicting future revenue and profitability. It also helps management assess the effectiveness of products, sales reps, and current marketing and sales campaigns. While Pipeline Measurement is common for any World Class direct sales force, channel partners are absent from the equation. 74% of vendors who receive over 40% of their revenue from partners have no pipeline tracking for this group.

“My channel partners don’t share that data with me,” One CM explained to us, “their reps don’t have the time or resources to track their sales opportunities”. He’s right. Most Channel Partners don’t track their opportunities because they see no benefit. As a Channel Manager, your job is to make it worthwhile to your channel partner.

One of the best solutions we’ve seen for Indirect Channel Management forecasting is Deal Registration. Deal Registration occurs when a Partner notifies the supplier of a lead and receives priority to close that lead within a set amount of time. The supplier is notified of a potential opportunity, and in exchange grants exclusivity for limited time to the Partner. The Partner doesn’t have to compete with other channel partners on the deal, who would inevitably hone in and turn the opportunity into a pricing war. With a well-executed deal registration model, Channel Managers get a much better view of their pipeline, and eradicate much of the channel conflict that comes with overlapping territories. Also, the Vendor can provide resources to increase the Win rate, such as Sales Engineers or Marketing Materials.

Key Takeaway: An effective Deal Registration program is a win-win for any Vendor with a large amount of revenue deriving from partners. The Partner gets more revenue from increased closed rates, and the Vendor get more transparency.

Here’s the criteria to look for when choosing Partners for Deal Registration rollout:

They are in the top of your 10% of Partners.
You represent over 35% of their revenue.
They are competing against other partners and need/want exclusivity.
You have a valuable and trustworthy relationship

Channel Managers, have you implemented a Deal Registration program with your vendors? What were effects? I’d be interested to hear your thoughts in the comments below.

If you’re not sure about who would be best to participate in a Deal Registration program, you may need to look for some new channel partners. Join the webinar I’ll be hosting on March 8^th to find out how to gain partners and access new partners.

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Sales Engineering: Evolve Your Sales Process

John Kenney — Mon, 20 Feb 2012 12:00:00 GMT

Last week we interviewed a group of pre-sales engineers about the role they play in the sales process. This was part of an effort to re-design the process for a B2B technology solutions provider. Two messages became crystal clear:

There is no defined selling role for the sales engineer (SE)
They are engaged too late in the sales cycle to make a difference

These two findings were especially significant because both sales managers and sales reps indicated that SEs are a scarce and valuable resource. In fact, one manager said that his biggest fear was not losing deals to the competition, it was losing SEs. There are always more deals to go after, but talented pre-sales people are extraordinarily difficult to replace.

Does this sound familiar? Your organization may not use engineers as part of your selling process, but there is a good chance that your sales rep is teamed with vital pre-sales resources that are not deeply integrated into the process. Using our example of the SE, consider the impact of your underutilized support resources.

Questions to ask to determine if your presales resources are being leveraged correctly:

1. Does my sales process describe when, how, and why pre-sales resources are engaged in the deal? The purpose of a sales process is to enable and assist the customer to move through the buying process. World-class sales processes include specific actions to execute at each stage and job aids to accomplish the task. These processes are typically built for sales reps and sales managers. Pre-sales resources are often an after-thought, if thought about at all.

2. Are there specific tools and Job Aids that enable my pre-sales resources to succeed in driving the sales? SEs generally employ home-grown diagnostic tools. They have the skills to apply them effectively to comprehend a myriad of technical challenges. SEs often have powerful resources to configure a valid solution architecture that will solve the customer’s problem. The “Engineering” part of the SE title is covered. But the “Sales” part of SE is not. They need sales tools too.

3. When are your pre-sales resources engaged? In our interviews we asked, “What would increase your effectiveness in the sales process?” The SEs unanimously declared that they needed to be engaged early in the buying process. This is the time to be creative and influence the solution requirements. Innovative ideas flourish and there is opportunity to expand the deal with up-sell and cross-sell solutions.

Early in their buying process prospects are open to suggestions and are willing to consider new ideas. However, once the prospect has moved past the early stages of “Recognize Needs” and “Identify Requirements,” the opportunity for exploring and trusted advising is gone. When the buying process has advanced to the “Evaluate Solutions” stage, it is too late for the SE to do anything more than explain the product specifications and capabilities.

The experts on sales engineering at Sales Engineering.com http://www.salesengineering.com/ note that “SEs can directly impact cost of sales and revenue by improving funnel quality, solution closure time, deal sizes, and solution win rate.” Aside from improving their technical skills, how can you increase their impact on the sales process?

Improve the impact presales resources have on your sales campaigns:

Define and enrich the pre-sales role. Update your sales process to include specific actions and job aids for sales engineers. It is not enough to simply list an action “Request SE support resource” for the sales rep. Include specific tasks for the SE that advance the sales cycle. Depending upon your solution set, these could include presenting a non-technical concept framework to the decision maker. The best source for specific actions is to research past successes where the SE played a vital role in the early stages. Those are the actions to replicate.

Update or add Sales Aids. Include fields for input from the SE in the job aids your reps and managers use. Or create unique sales aids for the SE. Provide worksheets, templates and guidance to identify specific actions at each stage of the sale.

Integrate SEs in the sales process workflow. Identify the SE tasks and tools in the CRM sales process flow so that the SE has clear direction and integration into each opportunity. Better yet, incorporate their tools directly in the CRM system with embedded forms, links and mouse-over instructions. Their expected contributions are now clear to the sales rep, and they will work better as a team.

Engage early in the sales process. With clearly identified tasks and tools, the next step is to update the sales process to indicate the engagement points for the SE. Train the sales reps and SEs on the new expectations and provide the managers with insight through CRM reporting.

Hold them accountable. The sales manager and SE manager now have the ability to coach the selling team through the process. Use weekly reviews and informal touch-points to ensure that the reps and SEs follow the game plan.

Support resources are essential players on every successful selling team. But their roles and engagement are often poorly defined. If you have more ideas on the subject, please make a comment below. Act now on the suggestions above to boost the profit-generating performance of your sales process and maximize your investment in support resources.

Take action now to upgrade the performance of your sales teams. Click on the link below and find out how world-class sales organizations put distance between themselves and the competition.

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‘A’ Player Marketing Leaders - Transitioning to Inbound Marketing

Vince Koehler — Sun, 19 Feb 2012 12:01:00 GMT

Marketing leaders are rapidly shifting investment to Inbound Marketing. ‘A’ Player marketing leaders must lead their teams in making the transition into the inbound discipline.

Outbound Marketing is defined as traditional marketing such as advertising, tradeshows, online banner ads, etc. --- essentially purchased exposure. Inbound Marketing by contrast is ‘earned exposure’ where prospects value content and find you. Examples of Inbound Marketing include; content marketing, search engines (SEO and PPC), social media, and blogs.

Top benefits of Inbound Marketing:

Lower Cost of Acquisition
Strong Alignment to Buying Process
Establish Thought Leadership
Transition to Return on Marketing Investment (ROMI)

Success with Inbound Marketing - Shifting Dollars

B2B and B2C success with Inbound Marketing has resulted in shifting marketing spend. This Infographic provides powerful insight into the transition:

Shift to Inbound Marketing – Increased Efficiency & Effectiveness

Not only is Inbound Marketing more effective in generating leads, it’s also a more efficient. According to eMarketer, the acquisition cost is significantly lower.

Making the Transition

Enhanced Writing Capabilities – Marketing teams can write brochure content in their sleep. But ask them to write a blog or white paper and they act like you asked them to launch a rocket to Mars. Why? Partly because legal obstacles have neutered them. Mainly because their habitual writing style is entrenched in a distant 3^rd person manner. Strong points of view are not common among feature/benefit company information. Thought leadership on a topic is not considered. Marketing teams strain to write white papers, blogs and awareness-level content because they’ve largely never done it.

Solutions:

New skill acquisition --- marketing teams have to pedal faster to keep up. Evolve or become irrelevant. Your team should become students of Content Marketing and Inbound Marketing thought leadership content.
Invest in your writing staff – Don’t add a new writer without subject expertise and expect results. New writers require painful paint-by-number direction. Be prepared to invest long-term and the investment will pay off.
Leverage subject matter experts – Product Marketing is capable of authoring high value content. However, they are almost always understaffed. Add product marketing manager(s) with job descriptions allocating a percentage of their time for writing. This is a short-cut to remarkable content.

Team Augmentation – Marketing teams may not have key roles and experience to execute inbound marketing. Consultants fill the gap. Select a consultant with a proven track record of success implementing Inbound Marketing and Lead Generation.

Solutions:

Invest in Lead Generation – Inbound Marketing will generate an infusion of leads. Best-in-class practices are required to successfully transition inquiries into sales ready leads. A sound lead management process is a requirement for successful Inbound Marketing. Leveraging nurturing and 1-to-1 nurturing through Lead Development Reps will provide you with world class lead conversion capabilities.
Inbound Marketing Specialists – Experts or consultants are required to provide technical expertise in marketing automation configuration, nurture campaign set-up, search engine optimization, search pay-per-click, social media and blog configuration.

Marketing Org Structure – Marketing objectives have evolved significantly from soft to hard metrics in the past five years. But has your structure evolved to support your new objectives? The answer is almost always NO. Don’t burden yourself with out of date structures that struggle to perform. Structure your team to perform.

Solutions:

Align to Objectives – Conduct an assessment of team capabilities by function. Perform a gap analysis on how the functions align to objectives. Map success metrics to those responsible in the organization implementing. For each objective, does it map to a single person responsible with a supporting team, or a hodge-podge of individuals in different sub-departments? Does it map to a person prioritized to achieve the objective? Is your team focused on what your CEO/President cares about most?
Restructure by Strategic Objectives – Modernize your marketing organization by identifying the functional requirements of your team needed to achieve your objectives. Develop departments based on priority areas of focus. The end result is a shift from a traditional structure (Marcom, Program, Web, Advertising, PR, Tradeshow and Events, etc.) with a tactical focus to a strategic structure with clear priorities inherent in the structure (Demand Generation, Lead Management, Field Marketing, Thought Leadership, etc.).

In summary – The key take-away for ‘A’ Player marketing leaders is that Inbound Marketing requires considerable re-invention. It’s an exciting transition that requires new capability acquisition, structural changes and embracing experts who have been there before.

This article skims the surface of Inbound Marketing. Your thought leadership comments are welcome.

Ready to be world class in Inbound Marketing?

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How to Make the Base Variable Mix of Your Sales Compensation Plan Rock

Ryan Tognazzini — Sat, 18 Feb 2012 12:00:00 GMT

If you are wondering whether or not your sales compensation plans have the right base-variable mix, this article will provide you with answers. Recently, I wrote about the value of role clarity in sales incentive plans. It’s just as important to know what you are paying for as how you pay for it. Now that we’ve learned how to identify the what, let’s examine the how.

The matrix below outlines three different sales roles, the best practice base-variable mix and the recommended performance measures for the variable component. Before diving into the recommendations, let’s first define the components of the matrix.

Definitions:

Direct Seller –a traditional sales representative. They are the single point of contact throughout the sale and are responsible for managing the end-to-end aspects of your sales process.

Channel Seller –an indirect seller. He or she works with your third party channel organizations and acts as a subject matter expert (SME) to help influence the sale. Often, he or she isn’t closing the deal, but is an integral part of converting opportunities to orders.

Influence Seller –typically sells to the end user of the product or service, but often does not interact with the ultimate decision maker. Their role is to get the user buyer excited about the product so they tell the decision maker (i.e. purchasing, contracts, executives) to negotiate an order.

Base-Variable Mix –the percent of base and variable pay out of the total. For instance, a direct rep that has a target compensation of $100K would have $60K of base pay and $40K in target variable pay available.

Peak Performance Multiple – the multiple paid on variable pay for top performers. Using the prior example of $40K in variable, the top direct rep should have the ability to make a 3.5-4x, or $140-160K in variable pay.

Performance Measures – components that make up the variable portion of the sales incentive plan. The influencer role should be paid partly on sales results (i.e. revenue) and partly on management by objectives (MBOs).

Recommendations

The variable pay should match the rep’s value in the sale. As their influence on closing the sale increases, so should the variable incentive. For example, the direct seller has 40% of his or her plan leveraged while the influencer only has 20%.
Peak performance multiples should also diminish as influence increases. The direct sales rep should be able to make 3.5-4 times the variable target, while the influencer should only make about 2.5 times. This is directly proportional to the rep’s ability to close the sale.
Performance measures for direct reps should be primarily directed towards production measures like revenue, gross margin and cross/up sells. As you move towards the influencer rep, the focus on revenue exists, but so do MBOs like number of new accounts opened, customer retention and number of demos.

Call to Action

Identify the role your sales rep’s play in your organization (direct, channel, influencer)
Compare your current base-variable mix with the enclosed matrix (60/40, 75/25, etc.)
Determine what multiple your peak performer(s) made on their variable last year (1x, 2x, 4x)
Assess if the performance measures you pay for are aligned (revenue, margin, retention)

Now that you have assessed your sales compensation plans, ask yourself the burning question: Do I have a problem?

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Fundamentals of B2B Lead Generation Programs within Key Accounts

John Staples — Fri, 17 Feb 2012 12:01:00 GMT

Lead Generation is broken down into 2 phases: Demand Generation and Lead Management.

Lead Generation is the process of turning inquiries, through nurturing, into sales qualified leads. Each Key Account within your portfolio should have a program that allows complete visibility to the entire sales funnel, producing a steady flow of qualified leads to the Key Account Team. The program is then measured by the return on key account marketing spend.

Our focus within Key Account Management is building awareness and interest among the targeted buyers and users. A multi-touch campaign approach is implemented to generate interactions and inquiries. The Inquiries are then nurtured and developed from the early stages of the buying process. The inquiries are then developed by offering resources and next steps that are in a natural alignment with the buying process, essentially “pulling” the prospect along while providing a helpful resource approach.

Simply put; lead nurturing is about keeping conversations going overtime, building relationships and allowing the creation of interest in the products and/or services while bringing the leads to sales-ready status. Lead nurturing is exceptionally effective in articulating your value proposition to maintain, in a subtle and consistent manner, a stream of relevant information that is important to the key accounts.

Top Five most significant findings from a recent case study:

Nurtured leads delivered 47% higher average order values
Lead to opportunity conversion rate is 38%
Quantity of Leads created increased by 25%
Quantity of Opportunities increased by 34%
Lead Quality increased by 31%

Can you afford not to nurture your key accounts? Most company’s focus their marketing spend on prospects and neglect their Key Accounts. Let’s remember these are the accounts that supply the greatest percent of revenue to the company and/or provide the greatest potential for account development. Losing or failing to penetrate one of your key accounts can be a recipe for termination for most sales organizations.

Implementing a Demand Generation program within your key accounts provides the opportunity to defend, cross-sell and up-sell within these accounts by keeping you relevant and top of mind.

In our experience some of the most effective approaches are:

Bring in a peer of the client to talk about a recent launch of your product and their success. Having a reference or testimonial to explain the value is far more powerful than having them listen to you again
Develop a custom webinar specifically for that key account focused on educating that customer on the “what if approach”
Customizing the marketing content for that key account based on the area of greatest need and interest

Key Takeaway: If you’re not nurturing your key accounts to increase wallet share, you can bet your competitors are doing this. Download our our white paper to learn more about growing revenue from key accounts.

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The Pros and Cons of Geographic Sales Territories

Bryce Record — Thu, 16 Feb 2012 12:00:00 GMT

By now it has been clearly documented that well defined and precisely aligned Sales Territories can greatly benefit the overall productivity of a Sales Team. Assigning boundaries (literal or figurative) to a group of sales professionals creates structure and results in a stronger bottom line at the end of the year.

We’ve taken you through how to design sales territories, now it’s time to figure out…

How do I get the most of out of my sales territories?

There are a variety of ways to optimize, balance, and align sales territories. The real question lies in how to select the right structure that will offer your Sales Team the most advantages and allow them to secure the most revenue each and every quarter.

Below are a few ways to increase the effectiveness of your Sales Territories:

Utilizing effective Sales Territory Software can help in this process (we’ve touched on this before).
Organizing your Sales Team by Geographic Sales Territories
Organizing your Sales Team by Vertical (or Industry) Sales Territories
Organizing your Sales Team with Sales Territories determined by Company Size

All of these sales strategies have their place, and each has the potential to benefit your company.

In this article, we will focus our attention on Geographic Sales Territories and how they can help (or hurt) your organization.

The Advantages of Geographic Sales Territories

Decrease Travel and Increase Selling Time. By assuring that all of your Sales Reps’ opportunities are centered in one general area (be that a single block of offices in New York City or a collection of five states in the Midwest) you allow them to manage their time better. Instead of spending unproductive hours in the car or on airplanes, they can maximize their time selling and landing new accounts.
Reduce Conflict Amongst the Sales Team. If you happen to have a couple of ambitious, feisty sales professionals on your Sales Team, you may run into problems on occasion centered on which team member an account actually belongs to. Geographic Sales Territories can alleviate some of this tension. For instance, an account is either in Texas – or it’s not. It’s either in the Empire State Building – or it’s not. Aligning sales territories this way decreases the potential for this type of conflict.
Strong Local Knowledge and Decreased Language Barriers. Many of today’s global territories are limited due to cultural and language barriers. These are obstacles that should not be overlooked, as they can have very real effects on the overall productivity of your company. If your global organization strategically places Sales Reps within his or her native country’s Sales Territory, these language and cultural barriers will be removed. This allows for more efficient and effective selling to occur.

The Disadvantages of Geographic Sales Territories

Limiting Growth from Ambitious Sales Professionals. One of the major risks of Geographic Sales Territories is that you may unintentionally pigeonhole an ambitious sales rep into a territory that isn’t extremely active. If he weren’t held back by the geographical constraints, he may go out and obtain new accounts in different regions. With the Geographic Sales Territories he is unable to do this.
Lack of specialization. When Sales Professionals are assigned to Geographic-based Sales Territories, they are essentially bound to the accounts present in those territories. These accounts will likely include hundreds of companies and span dozens of industries. This means that Sales Reps must acquire and maintain knowledge about a wide array of topics. While this can work out just fine, it also prevents your Sales Team from becoming proficient in any one particular topic or industry.

Examine the Advantages and Disadvantages for Geographic Sales Territories carefully. Can you see your organization capitalizing on any of the advantages? Or can you foresee your company falling into the trap of the disadvantages? Use this information to make an informed decision about how to best define and align your sales territories and maximize your production as an organization.

Still not sure what to do with your Sales Territories? Download our document on Territory Design Solutions to figure out your next step.

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Is Your Sales Training Focused on the Wrong Problem?

Matt Sharrers — Wed, 15 Feb 2012 12:01:00 GMT

During the research for our most recent book, over 300 VPs of Sales shared their frustrations with sales training. And these were leaders that had prescribed to best practices of sales training. The biggest complaint I heard : “We have invested in sales training yet quota attainment has not moved.” The problem: The sales leadership team is trying to solve the wrong problem in the wrong order.

The impact of this mistake is the sales force turns over because they cannot be successful and maximize their comp plans. The environment is negative. People walk the halls staring at the tops of their shoes. As a result of this, the head of sales loses his job and the CEO gives it a go with somebody else.

Last year, 83% of the sales force assessments our firm conducted revealed that sales training by itself would not have a material impact on moving the number. Sales training conducted in the right order with other sales force improvements can definitely move the number.

2 Step Solution

#1 - Observation and Validation —Before you can solve a problem (sales force productivity), you must have problem clarity. To achieve problem clarity, there are two types of activities sales leadership should focus on:

Observation—this is direct observation of a sales person.

Ride Alongs—nothing better than watching sales calls
Training Meetings- “real plays” where sales people execute sales calls with each other
Panel—bringing together a group of top performers to understand what is happening and share thoughts from different vantage points

Validation –this is activity focused on validating what you saw.

Data—if you notice a rep or two are struggling with late stage opportunities and your pipeline reveals deals stalling/fading late stage, you have validated your observation
Rep Survey- a simple way to understand if what you see in 1 group is happening consistently. Allows you to quickly aggregate observation data across a wide group
Customer Survey—is the customer valuing what your sales force is doing and the manner in which it is done? Perhaps the pipeline problem is not a sales training problem, but a go to market problem? Maybe the customer wants to be called on virtually vs. face to face yet your model has not evolved.

#2 - Sequencing- Poorly ordered sales training programs that cancel each other out. The impact of incorrectly sequenced initiatives is change fatigue and lack of results. For example, if a sales leader spends time and money on training a sales process yet the sales force is starving for leads or does not have properly balanced territories, will the desired impact be felt? No. This is an example of not addressing the root cause.

How many of you have seen a CRM implementation touted as the save all? The impact of installing technology before determining the proper process is automating chaos. The three keys of a new initiative is Process, Technology, People. Determine your process first, then install the technology to automate the proper process and then put this new capability in the hands of ‘A’ players.

Call to Action- Focus on problem clarity and the sequencing of your efforts. Click here to see if you are out of sequence. You may find, as many VPs of Sales have, that your problem does not lie with sales training as much as it does the performance conditions. What have you done to solve the right problem in the right order?

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5 Reasons Sales Executives Mistakenly Dismiss Inside Sales

Scott Gruher — Tue, 14 Feb 2012 12:00:00 GMT

I hear it all the time, rationalizing why Inside Sales will never work as part of our Go to Market Strategy.

The Top 5 Reason Provided:

This is a relationship business – have you heard of match.com? People form relationships virtually in 2012. Also, building a relationship does not necessarily equate to revenue growth. You have to prove your solution will drive a tangible business result for your customers. This can be done virtually.
Our customers demand face to face interactions – I would agree that some customers do require face to face contact. How did you come to this conclusion? What percentage of your customer base requires this? Why do they require it? Can Inside Sales work on certain activities or within a customer segment that requires less direct contact?
We tried Inside Sales before and it failed – this typically means they took a failing direct rep, gave them a phone and a pay cut and told them to dial for dollars. Not a recipe for success.
Our business is too complex – some of the most complex sales you can imagine are executed virtually. Virtual meeting tools have bridged the visual gap the phone created. Face to face interactions do not necessarily mean that process complexity is mitigated.
We have always had a direct sales force – this is purely a change management issues. Moving responsibilities to Inside Sales does require a certain level of disruption and that disruption is not digestible for some organizations.

Why do organizations resist Inside Sales? Fear of job security and change. Many Sales Leaders look at Inside Sales as a less strategic/transactional role. Moving to Inside Sales is admitting that they failed as a leader with the direct resources and they are now commoditizing their offering. Thinking this way is a mistake.

What do Sales Leaders do instead of utilizing Inside Sales?

Blindly add more outside sales resources – more resources will get us a better return

Result – higher sales expense ratio

Manage ancillary expenses (travel, meeting, training

Lower morale, less development, a decrease in customer interactions

Training – event based training that is not properly reinforced

Very low ROI

The fact of the matter is that Inside Sales is more efficient and can be more effective. Why? Inside Sales reps are typically paid less and have substantially smaller travel and expense needs. They also benefit from being able to execute more touches in less time. This level of activity drives more results and hones an Inside Sales Rep’s skills faster than that of an Outside Rep.

Before you disregard Inside Sales as irrelevant to your business, ensure you have fully vetted the opportunity. Ask you customers how they want to buy. Benchmark top quartile peers. Inside Sales is far and away the fastest growing role sales organizations are using to drive their Go to Market Strategy.

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3 sure-fire ways to keep Sales Managers involved in new hire success

George de los Reyes — Mon, 13 Feb 2012 15:14:00 GMT

I recently facilitated a 30 minute webinar in our sales force effectivness webinar series. The theme of the webinar was “How to On-board New Sales Talent in 5 Easy Steps”. We had great participation and a host of excellent questions at the end of the presentation. I wanted to share some the Q&A with you in this blog post.

One of the five key steps to onboarding success is ensuring sales manager’s accountability. In other words, hiring managers should share responsibility for the success of their new hire. One of the participants submitted the following question on this subject…

How do you ensure that front line managers are following through with their coaching to help the reps acclimate?

Answer: The key metric to measure the success of your onboarding program is Ramp Time to Full Productivity. This metric is defined as the time it takes for a new employee to retire quota at a rate that exceeds 100% of their goal (usually measured in months). In 2011 , the B2B benchmark was 6.7 months.

One sure way to ensure front line managers are following through with their coaching/onboarding is to track ramp time to full productivity as a metric on their scorecard. For example, if twenty weeks is the number in your company, the sales manager achieves a percent of their variable income for new hires at productivity under the required time. Pretty straight forward and very effective.

Another method to assure sales manager involvement is tracking new hire batting averages. How many of the Sales Manager’s new hires are above the company tenured performance category for people less than one year? Sales Managers should be expected to have new hires at or above the average productivity for reps in the Year 1 tenure category.

Finally, implement the best practice of 30/60/90/180 reviews conducted by the Sales Manager’s boss, and not the HR department. These reviews should include a deep dive into the pre-ramp accountabilities (industry quizzes, sales process role plays, leading indicators like pipeline growth/health, new appointments, etc.). These periodic reviews keep onboarding success front and center.

Key Takeaway: Most onboarding programs are ineffective because they fail to hold sales managers responsible for the success of their new hires. Ensuring Sales Managers accountability is a key to implementing and executing a world class onboarding program.

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The 4 Steps You Must Take to Stop Collecting Useless Sales Data

Mike Drapeau — Sun, 12 Feb 2012 12:00:00 GMT

One of our most common discoveries in B2B organizations is that sales managers are drowning in a sea of sales data but getting little value from all the effort spent in collecting and reporting on it. Further, even though the purpose of analyzing sales data is to support effective decision-making, oftentimes the one is divorced from the other.

How frustrating!

One of the key benefits companies realize in implementing a sales performance management (SPM) framework is that they stop the habit of collecting sales data for its own sake. What they do instead is to collect that sales data necessary to answer the vital sales questions, track performance against strategic objectives, predict future outcomes, and support ongoing decision-making. That is a tall order indeed. So how do they do it?

Step 1: Design a process for decision-making

The first thing best-in-class sales operations do to get their hands around the process for making decisions within sales. The graphic at the top represents one enterprise view of how the SPM process spans multiple disciplines within the Sales function (e.g. Talent Management, Compensation Planning, Territory Design) and requires system integration (CRM, Knowledge Management, Marketing Automation). It also needs to connect the day-to-day activity of front-line sales professionals with the boardroom strategies driving the business.

Step 2: Inventory your Decisions

The best way to do that is to first inventory the decisions made by and for the Sales organization. Find out who decides what, when, why, and most importantly, what data so they need to make that decision. It is easiest to assess and inventor decisions at three levels:

Sales Reps
Sales Managers
Sales Executives

Each of these communities will have a different set of data needs, decision frameworks, time horizons, and degree of accuracy. Sales performance management addresses each one separately to optimize the data flow to them and for them.

Step 3: Stop Reporting on ‘nice to have’ Data

Once you have inventoried the data and compared it to the decisions that need to be made the result will be a great mass of sales reporting that is no longer needed. Typically this was the fruit of some exercises long ago forgotten and no one has re-evaluated the need for the data. You can save a lot of cycles just by cutting out this legacy sales reporting activity.

Step 4: Institute a Periodic sales Data audit

So that your efforts do not become a one-off improvement, the final step is to set up a periodic audit of data collection, reporting, and usage. This job typically falls to the sales operations function and can be woven into their other annual planning tasks as it relates to the re-issuance of the corporate and sales strategies. Doing this every so often ensure that the data made available to all levels of the organization is timely, relevant, and tied to the decision-making.

Add your thoughts -- What's the Most Useless Sales Report you have ever seen?

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4 Signs a Sales Manager Can Recognize an ‘A’ player in an Interview

Dan Perry — Sat, 11 Feb 2012 12:00:00 GMT

One of the most challenging things to do as a sales manager is to determine if the person sitting across from you in an interview will be an ‘A’ player. Will he or she be the next superstar? Can this person ‘make it rain’? Can I rely on them to exceed their quota?

Sales Managers consistently ask me what tips or tricks they can use in an interview to ensure hiring an ‘A’ player. Since SBI has started measuring ‘Ramp to Productivity Failure Rate’ (aka: how many of your people hit their quota vs. how many fail and leave the company), it has slowly been increasing. Our median rate 9 years ago was 42%. It is now 52%. This means 52% of all new hires FAIL. This means over half of all new sales hires don’t make their quota in year one. Ouch.

The only true way to hire ‘A’ players is to have a robust Talent Management Program. This includes 5 major components: Talent Definition, Acquisition, Evaluation, Selection and Development. A good TM program will attract, select, retain and develop ‘A’ players.

Talent Management

But what happens when you don’t have a TM program? What happens when you are actually in the interview asking questions and listening to the candidate’s answers? What do you look for at the ‘moment of truth’?

4 Sure Signs that indicate an ‘A’ player:

#1 - Sense of Urgency. ‘A’ players have a high sense of urgency. They need to get it done NOW. Whatever it is; the longer it takes to accomplish the more frustrated they become. They are ‘A’ players because they challenge the customer. The build trust with the decision maker, not just a ‘good’ relationship. Challenging customers results in increased sales. The challenge comes from the need to expedite the sale. Thus, urgency is the opposite of compliance. You don’t want your sales people to be compliant.

TIP: Look for answers around impatience and 4^th quarter comebacks. (Aka: Eli Manning and the New York Giants)

#2 - Enthusiasm. ‘A’ players are passionate about their work. They get up and stay excited all day. They love to sell and go through brick walls to do it. They have a real passion around selling and enjoy the hunt. (We call these wolves)

TIP: Notice answers around work ethic matched with excitement. Passion is a key differentiator between ‘A’ and ‘C’ players. If they mention how great they form relationships, kick them to the curb.

#3 - Keep it Simple. ‘A’ players have mastered the fundamentals. They don’t look for the next big product to help them make their quota. The sales process is used in every opportunity. SPIN selling is tattooed on their forehead. They actually use call plans on every client meeting. Simply put: They are professionals.

TIP: Ask questions around how they interact with their customers and how they prepare for sales calls. Listen for the use of these fundamentals and how simple they convey it is to sell. (We know it's not).

#4 - Show me the money. Yes Jerry McGuire coined the phrase and almost everyone uses it (including us at SBI). It means to be money hungry. ‘A’ players want to make money. And the more money they make the better. Don’t ever think an ‘A’ player wants to ‘please his customers’. He wants to please them because it means more money.

TIP: Ask what his W2 was last year (what he made last year). He will know it to the penny.

Why should you spend the time weeding through average sales people to get one that’s an ‘A’ player? They exceed your ‘B’ player quotas by over 3x! This difference can set you up to make your bonus and get you promoted.

Below is a Quota and Talent Assessment we performed for a large organization whose stock price has risen 35% in the past 6 months. Notice all the ‘A’ players. The VP of Sales here has a strict Talent Management Process including the 4 steps mentioned above. The results are impressive.

Interviewing sales candidates is tricky. They are sales people and their job is to sell you on themselves. If they can’t sell you on themselves, what will they do with your customers? Make sure you look for these top tips to uncover ‘A’ players in your interviews. Your success is critical to hiring the top talent. These answers to your questions will tip you off on how successful they could be.

What are some other tips in spotting ‘A’ sales reps? Leave a comment for all to get these valuable tips.

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Sales Strategy: Customers Should Dictate Your Sales Support Resources

Tony Albachiara — Fri, 10 Feb 2012 12:00:00 GMT

One of the most common questions that a VP of Sales asks himself is, “Do I have the appropriate quantity of Sales Support Resources?”

There are multiple stakeholders involved who have varied views on this topic. Let’s first take a look at two key internal stakeholders and understand their vantage point:

Financial: CFO - The CFO is focused on driving revenue and being cost efficient and effective. He looks to understand if all the resources involved in each sale are necessary. If they aren’t, he will most likely look to minimize them. Catch Phrase: “Your cost of sale is too high.”
Sales: Sales Leader and Account Executive – Account Executives are constantly asserting that they need more sales support resources in order to move their opportunities through the buying process. Sales leaders are then continually trying to balance what the Account Executives are requesting in order to meet their revenue targets. Bottom line is that Sales Leaders and Account Executives generally feel that they need more Sales Support Resources. Catch Phrase: “I could sell more deals if I had more resources.”

Each lens (Sales and Financial) undoubtedly has a valid point, piece of data or anecdotal evidence to support their respective position. So as the VP of Sales, what’s your solution? How do you determine if you do have the proper Sales Support Resources allocated to your Sales Team?

Customers Are Your Best Sales Strategy Resource
As VP of Sales, you could spend countless hours investigating each internal stakeholder’s view, but you’ll be doing little more than “thrashing” around. Before you “thrash,” you should first take some time to understand the most important perspective: Your Customers’.

Ask Yourself These Questions:

How does Your Customer value the Sales Support Resources during the buying process?
Which Resources did they find the most beneficial?
Which Resources pushed them furthest along towards their eventual buying decision?

Don’t be shy – jump in with both feet and get the information that matters the most to help you make these tough sales strategy decisions. You have multiple ways to get this information:

Electronic surveys
Phone interviews
Client councils
Advisory boards
Or ask a third party to conduct interviews

At this point you can ask the customers questions concerning the Sales Support Resources you are contemplating. Some examples of the roles in the selling process you may be questioning are: Account Executives, Sales Engineers, Sales Consultants, Architects, Business Consultants, Subject Matter Experts, and Inside Sales.

Regardless of the format you choose for your customer feedback, you must ask questions for each role in the selling process to understand the value each resource played through the customer’s eyes. By understanding the importance the customer places on each of these roles in terms of the buying process, you can adjust your sales strategy accordingly and therefore utilize the perfect quantity of Sales Support Resources. Below you’ll see a list of a few example questions to gather this information from your customers.

Sales Support Resource Customer Survey:

Rank the importance of the contributions by the (Role) in helping you assess the (Product or Service)? – Ranking scale.
The following roles help overcome obstacles within my company when I am trying to buy a (Product or Service). – List roles.
I require support from the following roles to help me leverage (Product or Service). – List Roles.
When I purchased a (Product or Service), I placed trust in which of the following roles? – List Roles.
Please rank the influence each role had in your making the decision to choose (Product or Service) as the vendor to this solution? – Ranking Scale.
Throughout your buying process for (Product or Service), how many interactions (defined as face-to-face meeting, set phone meeting, or a conversation at least 15 minutes that helped move the process forward) did you have with each of the sales resources listed? – List Roles with Number Scale

It’s easy to get caught up in the daily sales grind and all of the internal workings of your business. Sometimes all it takes to find the answers to your most trying questions is a pointed look outwards at the very people who make your business run. Reach out to your customers and you’ll acquire all kinds of helpful data to improve your sales strategy.

Comment belowon what you’ve seen work in figuring out how to determine the appropriate sales support resources.

Have more questions about your Sales Support Resources or Sales Strategy? Request a free demo of sales strategy best practices and our sales benchmarking methodology.

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Sales Consulting Firm SBI Named to 2012 Top Sales Influencers List

Greg Alexander — Thu, 09 Feb 2012 12:00:00 GMT

Our sales consulting firm received some news this week that I would like to share with you. OpenView Labs named its top 25 sales influencers for 2012, and SBI is among them. This is meaningful to you for a couple of reasons.

First, we have much respect for the people who are on this list. Learn more about them here. If you enjoy our blog, check these blogs out.

Second, OpenView Labs’ methodology in selecting its top influencers is a peek into the future. OpenView Labs leverages the Klout True Reach metric to calculate social media influence. Do you know what Klout is? What is your Klout score?

The level of accountability of sales leaders is going up exponentially. Yesterday, you could claim you had “great relationships in the marketplace.” Today, this claim can be verified and turned into a score that can be compared to others making the same claim. Last week I saw a job spec for a VP of North American Sales for a $2 billion business services firm written by an executive search firm. This $500k/yr. position has as its third requirement “a Klout score above 40.” The days of a CEO awarding this kind of pay package to a sales leader after making a few calls to check the candidate out are coming to an end. Sales leaders can no longer fake it. In an online world, everything is measureable, including your personal brand.

Here is your call-to-action if you are a sales leader with a low Klout score:

1- Read this book to find out what the best sales leaders in the world are doing.
2- Schedule some time with Ryan to understand how to leverage social media.
3- Watch this webinar to learn how to use social media to generate leads.

Last week Facebook filed for an IPO. They have 875 million users with most spending more daily time with Facebook than newspapers, TV, and Radio combined. Yet, our sales consulting firm still runs into sales leaders who tell us that their customers are not on social media and suggest they don’t need to be either. I wonder what their Klout Score is?

Here is a question for the subscribers:

“Do you believe there is a correlation between a sales leaders influence and his/her ability to make the number?

Let me know your thoughts in the comments box below.

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Why Manufacturers Are Changing Sales Channel Partners

Drew Zarges — Wed, 08 Feb 2012 12:01:00 GMT

Back in the good old days, channel partners were relied on for expanding a manufacturer’s footprint without requiring a significant investment in Sales Reps. Local distributors were selected for their “Geographic” knowledge and ability to sell/install the products where their clients could not reach.

Times have changed. Today, thanks to the internet, geographic boundaries are vast. A software manufacturer in Sydney can now sell to an end-user in San Diego. With a language tweak, they can also sell to South America. Small Channel partners, solely focused on a very local geography, are now being squeezed. Software and Hardware are easier to install, and complex products are increasingly sold directly to better educated customers. Gone are the “Mom and Pop” Channel Shops, in their place are the Megastore Channel Partners and Nation-Wide Partners.

Why?

Manufacturers Want:

1) Partners Who Can Scale with Their Product

If I’m a manufacturer who is a releasing a new product with exponential growth possibilities, I want someone who is capable of bringing my product to the masses. I don’t want to be locked into a contract with a reseller that is unable to keep up with demand in a rich geographic territory. As my product grows, I want my Sales Channel Partner to scale up their effort, and increase revenues. If I can sign one large partner with the ability to effectively reach more of my customers instead of seven smaller firms, it’s a win-win. I get easier monitoring, better collaboration, and a more robust sales force. One of the biggest concerns of manufacturers is a lack of transparency and communication with their channel partners. If I can vastly reduce my network and reach the same amount of customers, I will.

2) Partners Who Sell To Customers They Cannot Access

One of the fastest areas of channel growth is in Emerging Markets with high barriers to entry. Many times, firms attempting to expand internationally run against geopolitical hurdles that can’t be easily overcome. The solution is to find a trustworthy channel partner with an established presence in the area. The manufacturer avoids many of the cultural, economic, and political risks of expansion. Also, in exchange for a slice of their product margin, they get exposure to the fastest growing economies in the world.

Key Takeaway: As Manufacturers are able to access more customers directly, Sales Channel Partners must either be able to bring their product directly to a wider audience quickly, or bring it to an audience previously unobtainable.

These are two of the biggest trends in the market, but surely not the only ones. Channel Managers, what other criteria are you increasingly seeking in a Value Added Reseller or Distributor? Please post in the comments below.

Also, for instruction on how to properly sequence Sales Force improvements, please refer to Matt Sharrer’s book, Promoted to VP of Sales, starting on page 21.

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One Silver Bullet to Bulk up a Weak Sales Pipeline

John Kenney — Tue, 07 Feb 2012 12:00:00 GMT

Sales managers spend the majority of their time working in the wrong stages of the sales process. They focus on deals in Stages 4 and 5. Intuitively, it makes sense to concentrate the experience and skills of the sales manager on the smaller number of deals that are ready to close. But this is completely backwards. Here are the most common reasons:

Your managers are Ignorant of Early Stage Deals: Reps are not entering deals in the CRM system until they have progressed to Stage 2 or 3. The reps don’t want the extra pressure to move these deals to closure, so they hesitate to update the CRM system until they are ready to commit the deal to the forecast. With no visibility to many deals in the early stages, sales managers simply focus on the late-stage deals they know about.
Some managers are Super reps who still think they should Always Be Closing: New sales managers are often promoted based on their epic ability to sell and close. They see their greatest value to the sales process as the hero who rides in at the eleventh hour and seals the deal. Stage 5 is where they are most comfortable and effective. (The best managers learn how to transfer their skills and enable their reps to be heroes.)
Show Me the Money: Sales managers follow the money and spend the majority of their time closing the 20% of the deals that make up 80% of the revenue. Advancing deals from Stage 4 to Stage 5 is critical, but if the groundwork is laid properly in early stages, the closing is less chaotic.
Empty Toolkit: The sales process lacks job-aids that the sales rep can use to help the customer advance through the buying process. Opportunities dry up early and often.
Get the Leads Out: The Lead Generation and Management process is not producing enough Sales Qualified Leads (SQL) to build a robust pipeline. With little volume at the top of the funnel, sales managers are occupied with trying to squeeze the most out of the late stage deals. (This is more of a Marketing problem, but it manifests itself in a weak funnel.)

There are negative consequences for devoting so much time to late-stage deals:

No Inflow: Without guidance, reps fail to qualify leads correctly, so the early stages yield little. There are so few deals in the pipeline that the sales manager has to rely closing a high percentage of the late stage deals.
Next Rep, Please: The unskilled sales rep often fails to move the prospect through the early stages. The manager is not there to provide feedback, alternative ideas, or motivation. The rep develops bad habits and fails. The manager wastes precious time with HR to move out the underperformer and recruit a successor.
Stormy Forecast: Just when a deal is about to close, the prospect suddenly reverts to an activity that should have already happened. Reps tend to skip activities in a rush to thrust the budding opportunity forward. In later stages, the deal is suddenly delayed. The revenue shortfall is almost as bad as the humiliation of de-committing the deal from the forecast.

There is a better way – do a Shift and Lift of your sales manager’s time.

How do we get the manager the visibility they need on the true state of early stage deals?

Ask the Rep: During weekly coaching sessions ask about prospects that have been added to the top of the funnel. What about the prospects that were added last week? Agree on specific next steps.
Plan for Success: Train and coach reps to understand the customer’s needs, timeline, buying criteria, and decision making process. Follow the selling process; invest the time up front to understand if you can win and what it will take.
Slow & Sure: We call this ‘slowing down to speed up.’ By taking care and patience to execute the early stage activities correctly, the deal is set to close more smoothly in the later stages.
Sharp Tools: Make sure your reps have job aids that help them move the prospect through their buying process. Call plans, opportunity maps, and evaluation grids can lubricate the process and make consistent forward progress.
Exit Ahead: Clearly defined exit criteria are essential. Work with reps to help them advance to the next step in the buying/selling process by constant attention to ’verifiable outcomes’ that indicate that the buyer has done something to exit from one phase to the next.

We know that there is a finite amount of selling time available to each sales manager. Shifting focus away from the late stage deals takes courage, but it will pay off with a stronger sales pipeline and a more effective sales team. It cannot happen instantly. It requires a gradual but disciplined shift. Let me know your thoughts on how to allocate time by stage of the sale with a comment in the box below.

Proper attention to the top end of the funnel will enable your sales process to deliver world class results.

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LeadGen ROI: Calculating Marketing Contribution to Sales Revenue

Vince Koehler — Mon, 06 Feb 2012 12:00:00 GMT

Hard-hitting Lead Generation programs are rapidly being implemented across the corporate landscape. In the spirit of the results-oriented approach to Lead Generation, marketing is transitioning away from soft success metrics. The favorite metric of the past year is the Marketing Contribution as a % of Total Revenue.

Sounds great doesn’t it? Calculating Marketing Contribution provides a hard metric that is highly relevent to the CEO. However, it’s difficult to quantify.

The purpose of this article is to provide marketing and sales leaders a framework to define the metric properly for your company through two steps.

1. Marketing & Sales Agreement

The senior leadership of marketing and sales must sit down and agree on how to define ‘marketing contribution’ for your business.

Net New Customers are easy to define. It’s common for sales leaders to ask marketing to focus in this area. This makes sense for marketing to direct significant resources on new logos. This should not be a sole focus that excludes existing customer upsell/x-sell.

The acquisition of new upsell & cross-sell to existing customers is difficult to define the true marketing contribution. Among existing customers there are often deep relationships across the sales force. The most annoying thing for a sales leader is to see marketing ‘claim’ credit for driving revenue among customers cultivated long-term by their sales reps. The most annoying thing for a marketing leader is to be closed out of the existing customer base when most businesses generate 80% of their business from their base. The base is a fertile and efficient hunting ground. Sales and marketing leadership need to approach this with a partnering mindset.

Sales resources can’t cover every account. Marketing can drive awareness and early stage interest. Plus, the most efficient lead generation efforts are those campaigns run with the existing customer base. By leveraging marketing, sales can increase the opportunities in the funnel.

Focus on identifying an ‘Inactivity’ period that defines a scenario where a sales rep is not engaged in an active dialogue. Marketing efforts that activate a contact to engage should be credited as a contribution by marketing. The percentage of revenue derived from these activations should be tracked and celebrated.

Sales leaders can get sideways when they see ‘activations’ that would have likely happened sooner or later regardless of marketing involvement. Yes, that can be true. The advantage is that marketing efforts drive engagement early in the process. This early engagement is combined with lead nurturing with sales brought in at the right time. Early entry increases close rates and keeps competitors at bay.

Document the agreed definition and maintain a dialogue as marketing and sales review the bottom line results of lead generation.

Run through scenarios to validate that the definition plays out right for common occurrences in the field. Don’t focus on rare exceptions.

Agree on a draft definition and plan to revisit the definition monthly. Expect to need to tweak and fine-tune the definition as you begin to track actual results with real-life examples.

2. Determine the % of Marketing Contribution

Separating the revenue into three buckets:

Net New Customers – New logos
Existing Customer – Upsell and cross-sell
Re-occurring Revenue – Maintenance fees, service agreements, license upgrades, etc. that are considered carryover sales from past efforts.

It’s important to split Net New from Existing Customers since they are vastly different in the difficulty of acquisition and the expected percentage of contribution.

Once you have segmented the revenue, think through the expected marketing contribution based on the agreed upon definition.

Net New Customers – Marketing typically will have a contribution rate of 15-30%. The range spans based on the level of maturity of marketing capabilities. A best-in-class demandgen team supported with experienced lead management staff will trend toward 30%.
Existing Customers – Marketing contribution will range between 10-20%. This is significantly less than Net New customers due to greater quantity of sales deals derived from existing customers. The % of contribution is lower, but usually greater than Net New revenue.

Below is an example - Download PDF:

Another factor that raises the percentage contribution is field marketing personnel located at the geo level. Organizations with field marketing personnel have a greater capacity and therefore have higher contribution levels.

In Summary

Download a Worksheet to get started. Work through the exercise and develop your baseline. The ranges provide yardsticks for comparison. Once the baseline is established, the marketing team goals itself to beat their number. This continuous improvement approach leads to best-in-class performance.

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Wish the Super Bowl Had a 5th Quarter? Your Sales Compensation Plan Can

Ryan Tognazzini — Sun, 05 Feb 2012 12:00:00 GMT

What if you could balance your selling expense throughout your sales organization while driving the desired behaviors all year long? Consider adding a “5^th Quarter” to your sales compensation plans to accomplish this.

Sales compensation problems arise when reps either fail to make the number early in the year, or they fly out of the gates and coast the rest of way. This can negatively impact both selling expense and rep performance by causing you to potentially overpay for unbalanced results.

While quarterly commissions focus on production of a singular quarter, a 5^th quarter commission adds emphasis to the annual result. Here’s how it works:

The "Standard" example on the left shows a “standard” commission plan that is distributed equally across four quarters. The rep has a goal so sell $1M, or $250K per quarter. If your plan looks at quarters individually, a rep who gets off to a slow start loses out on 50% of his or her annual commission. They give up. Conversely, someone who flies out of the gates may earn a huge commission check in the first half of the year and start sandbagging for next year.

The "1/5ths" example on the right takes a 1/5ths approach. In this scenario, the rep can earn 80% of their annual variable compensation through results in the four quarters. The remaining 20% is reserved for “Q5,” or hitting the annual goal. In other words, if the rep misses out on any particular quarter during the year, but manages to hit the total quota, there is 1/5 of the variable paid at year-end.

The 1/5ths approach provides several benefits:

Balances selling expense by paying for both quarterly and annual performance
Keeps sales reps engaged by creating two ways to earn commissions
Incents the desired performance of your sales force

Even though your team won’t get a 5^th quarter to try and win the Super Bowl on Sunday, give your sales force a shot at victory in 2012 with a 1/5ths sales compensation plan.

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Are You Struggling with the Political Battles Around Key Account Management?

John Staples — Sat, 04 Feb 2012 15:36:00 GMT

The question always becomes, who owns the Key Accounts. You’re selling one product, your peer sells another, yet you’re both selling into the same accounts that are critical to our company’s success. Yet based on internal politics and a poorly designed compensation program, you let a bad situation continue because a change might not benefit you.

When do you stop doing what is right only for yourself and do what you know is right for the company? The examples I see are numerous, and I don’t need to look very far to highlight examples I see of senior executives, looking out more for themselves rather than the company that signs their check. It’s said, it starts with leadership. So why do we have so many senior leaders setting the wrong example: it’s about me, not the company, yet they expect different behavior from their teams?

Colin Powell said:
“Leadership is solving problems. The day soldiers stop bringing you their problems is the day you have stopped leading them. They have either lost confidence that you can help or concluded you do not care. Either case is a failure of leadership”.

If you’re planning to build a key account program or all the signs exist that the customer would benefit from a program; take a strong position and do what is right for the company. When I look back at the times in my career where I had the most success, it was always those opportunities when I spoke my mind, had a strong opinion and did what was right for the company and not always right for my bank account.

So here’s my challenge to you sales leaders as it relates to key account management: do you see all the signs that your company would benefit from a key account program yet you wait for someone else to step up? Well, take the opportunity, you may find huge success, more reward than you sacrificed, and perhaps an example for others to follow. You chose to lead, define the need/vision but more importantly you acted upon it.

If the signs are there, step up to the plate and take a swing. No one hit a home run from the on deck circle. Customer indications you need a Key Account Program:

Client or prospect has high growth potential but minimal account penetration (wallet share)
Little differentiation & few competitors for the product: don’t be the odd man out!
Provides a disproportional amount of your revenue / potential
Consumes 70-100% of your product / solution set
Buys on competitive price but values the quality, service, and support
Your product / solution is essential to their success
You have similar company cultures
Request’s support for product or service development

Take away: If you recognize the key account opportunity: gather your evidence, pull together a meeting, and present the business case.

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How Sales Techniques Can Improve Sales Coaching

Kevin Vear — Fri, 03 Feb 2012 21:01:00 GMT

Is your team struggling with sales coaching? Leverage existing sales knowledge to drive more meaningful coaching discussions. In my previous post, I shared two metrics (quantity and quality) that could be used to provide insight into the effectiveness of your sales management team. This led to the obvious question: How does one improve coaching capabilities that results in sustainable improvements? Quantity is an easy one to fix. Quality... now that can be difficult to pull off. It's easy to change behavior temporarily. How do you drive sustainable action? As soon as deadlines approach, and the s_ _ _ hits the fan, all bets are off --- all progress is forgotten.

I recently re-visited Solution Selling by Michael Bosworth to back up some hunches I had on this topic. Sales techniques, when viewed from a different perspective, can be used to improve the quality of the sales coaching relationship between the manager and the rep. Employ successful sales techniques that we use to improve the typical sales call. Why can’t you use these same techniques in developing better coaching outcomes? We can.

Example Concept: Picture a three by three matrix as a way to structure a set of questions that help you participate in the buyers vision. Once buyers have acknowledged their pain, asking this set of questions will help lead the customer in creating workable solutions. If you simply apply this same construct in the coaching discussion, you would ask a set of questions that would help you participate in the reps vision. The purpose is to guide the rep in creating solutions that will improve performance. Your management style must engage the reps. Without engagement in coaching you will encounter the same poor results when your selling style does not engage the customer……nothing!

To put this in context, imagine that you are preparing for a coaching discussion with a sales rep who is missing their annual target. You know that they are not meeting their weekly activity goals in terms of the number of appointments or phone calls. To solve this problem, you need to "sell" them on implementing a more structured time management process.

The following diagram shows the sequence of questions that can lead to a potential solution. To begin, follow the nine-box system by asking open, control and confirm questions in three sets:

Identify the “reasons” the problem is occurring
Determine the potential “impact” on their future in sales
Help them determine their “capability” in solving the problem.

It is easy to forget that coaching discussions are sales calls with the intent to sell ideas that lead to improved performance. If you are struggling to improve the quality of your sales coaching, adapt to leverage sales techniques you already know and use with customers. By adopting this new perspective, you will improve the quality of your coaching sessions.

Please share any sales techniques that you have used to improve the quality of your coaching. Looking for additional ways to improve your salesforce? Give the following complimentory e-book a read to discover some additional practices:

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How to Determine the Right Number of Territories with a Workload Capacity Model

Bryce Record — Fri, 03 Feb 2012 12:00:00 GMT

Using a workload capacity model to design territories is a concise and succinct method to assure that your organization’s sales talent is well aligned with market demand. A sales leader must understand and quantify several key pieces of information in order to use a workload capacity model in territory design:

Frequency of sales visits and general contact requirements needed by your existing customer account base. Is a monthly face to face visit required? What type of visit does your customer prefer – face to face, or will a simple phone call suffice? In some cases, national or even international travel is required to meet for each sales call or contract review. Understanding and quantifying this time investment is a key requirement to accurately flesh out your territories.
The types of activities necessary to produce a fruitful call must be identified. For example, what are the pre-call activities, post-call activities, and other general admin duties required for a specific type of client interaction? They should be identified and quantified.
Account types. Have you segmented your account base? Is each account broken into a clear category based upon its importance to your organization? Is an account an “A”, “B” or “C” customer through its sales or profitability contribution? Accounts are usually stratified or segmented based upon several key pieces of information, sales, margin, strategic position, etc…
Total number of accounts in each segment to be serviced. The volume both in terms of existing customer accounts and future prospect accounts should be fully understood.

Rep Capacity: Once you have identified each of these key components, calculating the number of territories is as straightforward as doing the math. This concept sounds easy, but in our consulting firm’s experience, it is surprising how often these crucial concepts are not fully fleshed out in the sales world. This is the thinking and decision process that makes sales goals and objectives an operational reality.

The example above concludes from an activity based territory design method, the total required number of rep territories is 77. To learn more about this topic, watch my recorded webinar embeded below on "Instant Improvements for Segmenting Your Accounts- How to Determine the Real Potential of Your Territory"

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How the VP of Sales can Inspire their Sales Team with 4 Simple Habits

Matt Sharrers — Thu, 02 Feb 2012 12:00:00 GMT

77% of VPs of Sales are attending customer/prospect meetings less than 2 full days per quarter. Our 2011 sales force design study revealed this alarming statistic. Think about this:

VP of Sales quarterly work schedule:

600 hours (50 hours per week x 12 weeks assuming 1 week vacation)
16 hours with customers/prospects (2 full days or 4 half days of appointments)
Less than 3% of total time customer facing

Problem: How can the sales leader make informed, strategic decisions on how to lead the customer facing group (sales) if they are not customer facing themselves? They can’t. And the sales force will see this. The VP of Sales is always under the watchful eye of the sales force, especially the ‘A’ player sales talent. Regardless of the number of levels in a sales organization, the person at the top sets the drumbeat; or fails to.

Impact: Average tenure of VP of Sales continues to be 6 quarters. What’s worse is this pattern is followed by the CSO’s direct reports so when they are vying for the big job they mirror the boss. Or, when they get it, then they do what their boss did. Most people, regardless of intelligence will often times follow what their most recent boss did when they get promoted.

The reason for this time drain: meetings at corporate. Any of this sound familiar?

Strategy meeting
Board meeting
Executive meeting
Steering committee meeting
Cross functional meeting
M&A meeting
Strategic Initiative Meeting
Forecast Meeting
Pipeline Meeting
Change Mgmt Meeting
Pre meeting for the super duper big meeting.
- Seriously? The internal meetings that are inward facing reporting on the news instead of being outward facing making the news are stifling sales productivity.

4 Habits To Fix the Problem

#1 - Control Schedule—the best VPs of Sales we met with set their schedule at the start of the quarter. They do the following:

3 of 4 weeks in the field every month
Each week they are in field Tuesday, Wednesday and Thursday
Other meetings get scheduled around this schedule first. The CEO will be fine with this schedule if he knows the VP is in the field.

#2 - Optimize Field Time—VP of Sales usually have 6-8 regional sales leaders (Directors, Area VPs). The best VPs travel to each direct report once per quarter. During this, they are observing their directs ability to coach and train the field by engaging in the following:

2-3 customer meetings (led by an 'A' player sales rep/account manager)
2-3 prospect meeting (led by an 'A' player sales rep)
Meet with the local sales team
Lunch/Dinner with the 'A' players
Review of Core Sales Management Fundamentals with local Sales Manager

#3 - Publishing Failure—the sales force is dying for an authentic leader. They want to know it is ok to make mistakes. To promote this VP of Sales that drive failure based learning via loss reviews/lessons learned creates more loyalty. They don’t give the corporate spin and promote a culture of self-preservation. Once per quarter, walk through the top 5 losses and lessons learned with the entire sales force in 1 hour via a call. Learning and vulnerability in one call will inspire the team.

#4 - Flip the Pyramid—you work for ‘A’ players not the other way around. Too many sales leaders fall in love with their positional authority. The ‘A’ player is your customer. Without them, you have nothing. Lead with this in mind and consult with them. Get to know them. Ride with them and understand them.

Tim Barber, President of Global Sales at Expeditors International, is the best I have seen. Last week he made over 12 customer and prospect calls. He is the leader of a 6B global sales force. When I ask Tim how he finds time, he gives me a blank stare: “what else am I going to do?” Simple isn’t it?

Call To Action— Pick 2 of the above 4 habits and start next week. Our life’s work is always a result of our habits. What habits have you implemented with your sales talent to inspire them? Share them with us.

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