The Ultimate Sales Executive Resource

How Specific do Value Propositions Need to be?

noreply@blogger.com (Christian A. Maurer) — Sun, 08 Nov 2009 13:43:00 +0000

It depends on who is delivering it when in the customer buying cycle.

Early in the buying cycle, marketing and sales can use generic statements. Later in the buying cycle, salespeople must be able to articulate very specific statements, tailored to the individual customer, demonstrating specific value to the customer as well as superiority and differentiation against the competition.

This is how I would summarize the message of my Masterclass “The Dynamic Value Proposition” I gave over at the Top Sales Experts last month. It was also the consensus from a discussion I triggered with the blog post “Can Value Propositions be Generic”.

My friend Dave Brock was the most vocal supporter of the idea by publishing an own blog post. He has actually written a second post since; further elaborating on the dynamic character of a value proposition.

Although having a dynamic value proposition following the customer's buying cycle and the evolution of ones competitive position is necessary, it is not sufficient if salespeople want to follow the recommendation of an IDC Customer Experience Panel in January 2009. They identified that “Putting aside the generic pitch” as the #1 item to be improved by sales people to bring more value to the relationship with the customer.

Even an objectively and technically well crafted message, delivered by the salesperson, has a high chance not to pass with the individual at the customer's organization as we all interpret messages in our own context.

In my next Masterclass “The Adaptive Value Proposition” on November 10, 2009 at 1 p.m. EST, (6 p.m. BST, 19:00 CET) I will suggest to pay attention to three aspects of the receiver's context to facilitate reception of the value proposition:

Functional Position
Attitude to Change
Sensory Predicates

I will discuss why they can be inhibitors for your message to pass and give you suggestions how to overcome them.

Readers of this blog can join me for free at this Masterclass by registering here.

I look forward discussing this fascinating topic with you on Tuesday November 10, 2009.

Having followed the Masterclass about the “Dynamic Value Proposition” is not a prerequisite to get value from this squeal “The Adaptive Value Proposition”.

If you want to know more about what Dave Brock had to say on the value propositions you can follow these links: Post 1, Post 2.

This link will lead you to my post “Can Value Propositions be Generic”

Managing Sales for Construction Projects

noreply@blogger.com (Christian A. Maurer) — Thu, 05 Nov 2009 15:27:00 +0000

Over at construction management degrees Elizabeth Johnson has published a list of the Top 100 Blogs to Boost your Sales Skills . As this blog is included in this list (No. 60), I have invited her to write a guest article to give us some insights on what it takes to be successful as a Sales Managers for construction projects.

A sales manager has various responsibilities, not the least of which involves being responsible for managing an entire team of sales representatives and others. You have the usual job of making sure that the people working under you meet their targets and that they are doing their jobs to the best of their abilities. But when you’re responsible for managing sales in a construction project, you need to know more than just how to sell or how to motivate to sell.

Sales managers for construction projects are generally entrusted with dealing with customers who wish to customize their living or working space. This means they need to know a lot about the construction process and the industry as well, because they will be talking to and dealing with clients before the home or office is built. They have to coordinate various factors, starting with the design and including cost as well.

When you have to talk to clients about the way their home has to be designed, you need to know more than just the basics about architecture and interior design. You need to be able to tell customers if certain design ideas are feasible or not, which is why you need to know architecture even though you are basically a sales manager. And besides the possession of knowledge and experience in these subjects, you must be thoroughly dedicated and motivated.

Your main aim should be to provide the customer with a unique experience that is tailored to suit their needs. And in order to do this, you need to know how to work with a team of industry professionals so that your company is a success. Collaboration is a very important part of any business deal, and only when you can work in tandem with your colleagues can you impart to the customer a truly enriching and rewarding experience.

Your communication skills should be excellent – as someone connected to sales, you must have the gift of the gab and know how to read each customer individually and tailor your words and actions according to their temperament and needs. And even though you are a manager, you must spend enough time in the field, being actively involved in promoting your projects, dealing with clients, taking care of any problems that may arise, and knowing all that is going on in your department.

Even though the construction industry is presently just recovering from the crash of the recession, qualified and skilled construction sales managers are in still in demand.

Elizabeth Johnson writes regularly on the topic of construction management degrees . She welcomes your comments and questions at her email address: elizabeth.johnson1@rediffmail.com

The Right Book at the Right Time

noreply@blogger.com (Christian A. Maurer) — Tue, 03 Nov 2009 15:21:00 +0000

So many people start a business, buy a franchise or an existing business with no previous sales experience. Add to that the fact that they don’t realize they’ll have to sell and you have a situation where they struggle to succeed.

Lemonade Stand Simple, Accelerate Your Business Growth by business development coach Diane Helbig is a straightforward, common sense guide through the sales process. Diane’s goal was to write a book that provided the reader with actionable information about sales.

We live in a time when more and more people are starting businesses. In order to be successful they must be able to sell their product or service. “People pour their heart, soul and life savings into their business. Then they struggle, or fail, because they simply do not understand the sales process. They don’t sell effectively, and therefore don’t succeed. It’s really hard to watch and completely unnecessary,” says Helbig.

“The message in the book is that simple,” Helbig explains. Lemonade Stand Simple provides the clarity that business owners need to be more successful without trying so hard. It breaks down common scenarios, step by step, into techniques just about anyone can employ.

Think back to your own lemonade stand days and the simple pleasure of selling refreshing drinks to family, friends and neighbors. You were certain of your product and you knew your client base, Helbig reminds us. You didn’t get bogged down in the process, and you weren’t afraid to be yourself. You knew what you were selling and who you wanted to do business with.

Lemonade Stand Simple resonates with business and sales professionals as well, who praise Helbig for her straightforward, back-to-basics method to selling.

“Diane provides the reader with a no nonsense approach to the sales process that is based in common sense. This book is essential for every small business owner who has to sell and provides a workable sales plan that gets results simply by reading these pages,” said nationally-read author Hal Becker, one of the top sales speakers and consultants in the country.

The book works because Helbig understands those salespeople and small business owners who think they need to fit their sales strategy into a methodology that is not authentic. She’s here to remind us that we’ve all known how to sell since we were about five years old. It’s simple—lemonade stand simple.

Diane is a business and leadership development coach, speaker and author who provides a matter of fact, basic understanding of the sales process to her clients and workshop attendees.

Lemonade Stand Simple, Accelerate Your Business Growth is available on Amazon.com and BarnesandNoble.com Order yours today!

About Diane

Diane is an internationally recognized business and leadership development coach, speaker, and author. As a certified, professional coach and president of Seize This Day Coaching, Diane works with people starting their own business, salespeople who need and want to improve their skills, and business owners who want to master challenges and realize greater success. She is also co-founder of Seize True Success, a coaching practice dedicated to helping franchisees grow and prosper.

Diane helps businesses and organizations operate more constructively and profitably. She evaluates, encourages, and guides her clients. Working with as few as one person to as many as 100+, Diane creates an environment that is cooperative and interactive Diane is a COSE Mindspring editor and a member of the Top Sales Experts panel at www.topsalesexperts.com. She offers workshops, speeches and seminars on the subjects of sales, business development, and leadership. Diane is the author of Lemonade Stand Simple, a sales book for small business owners and is also a contributing author to Chicken Soup for the Soul: Power Moms. To learn more about her coaching practices please visit www.seizethisdaycoaching.com or www.seizetruesuccess.com

Can Value Propositions be Generic?

noreply@blogger.com (Christian A. Maurer) — Mon, 12 Oct 2009 10:01:00 +0000

Was the subject of a debate I recently followed on LinkedIn. The person asking the question was of the opinion that value propositions work best if they are customer specific.

However a well known expert of the subject was of the opinion, that they need not necessarily be customer specific to be effective. They must though be concrete. Statements like “our solution reduces cost” do not work. However “Customers using our solutions have reduced their operating expenses by 10%” should work.

I teach the concept of the Unique Value Proposition, which must answer the questions:

What do you deliver?
What is the business outcome ?
What makes it unique?
What assurance can you give that you can deliver?

There is also no doubt in my mind that it should be customer specific, actually to be exact, it should be expressed from the customer's view point.

So here is a much better known expert than I stating that a Value Proposition need not necessarily be customer specific to be effective. Was it time for me to revise my opinion on the subject? The short answer is no. Here is why:

The sales world is full of experts contradicting each other. The search for the silver bullet to success is still a very common trend for people working in sales. Such differences of opinions lead thus to heated debates about who is right or wrong. In my experience this is most often the wrong question. The answer depends on the context.

For this question about the value proposition, the context to consider is the customer buying cycle.

This lead me to the concept of the dynamic value proposition In this concept there is room for generic and customer specific value propositions. Using both of them at the appropriate moment while facilitating the customer's buying process will increase your chance to success.

II have explained my thinking in a recent masterclass If you scroll down on the blog you can find a copy of the slides used therein. VIP members of Top Sales Experts can listen to the replay here.

Compare Apples to Apples…

noreply@blogger.com (Christian A. Maurer) — Mon, 05 Oct 2009 14:42:00 +0000

when using sport’s teams analogies to coach sales teams.

A Sales Team is a Sales Team or not?

There are at least two definitions that come to mind:

A group of sales people reporting to a sales manager
A group of specialists (an account team) all facing a particular customer orchestrated usually by an account manager.

How are they different? An account team is a work group, whereas a team of sales people reporting to a sales manager is not.

What is a Work Group?

I came across the term reading “The Skilled Facilitator” by Roger Schwarz. Schwarz defines a work group as follows: ” A work group has a collective responsibility for performing one or more tasks and the outcome of the task can be assessed” He goes on explaining that a work group is a social system with boundaries distinguishing members from nonmembers. To qualify as a work group, its members are interdependent in producing their work.

While both two types of sales teams fit to a large extent to this definition, there is though a key difference; the interdependence of the members to produce their work. In an account team, the interdependence is a prerequisite to success.

The team of sales people reporting to a sales manager however is a set of individuals each pursuing his/her own goal. They are primarily paid on making their quota. There is though a team goal. But there is no collective responsibility for that goal; it is primarily the sales manager’s. It is reached if all sales people make their individual contribution. So only the sales manager is dependant on the performance of the individual team members and can achieve his/her goal if he coaches the individuals to maximum performance. For some it might help to define a workgroup by describing what it is not. In the words of Schwarz “A set of people working on similar but essentially individual tasks is not a work group”.

Why is this relevant?

Examples how sport coaches lead their teams are of little help unless we the equivalent types of sport’s teams. To the above defines types of sales teams.

A set of sales people, reporting to a sales manager, resembles more a team of individual athletes such as swimmers or skiers. The result of the individual matters most and the performance of the team (e.g. the numbers of medals won at the Olympics) is merely the addition of the performance of the individual members.

An account team however resembles more to a soccer or baseball team. Here the sum of the individual contribution does not necessarily make up the performance of the team. There are many examples of well coached and motivated teams having been more successful than a team of uncoordinated stars.

What are the consequences?

While work groups can be coached similar to team sport’s teams, a set of independent specialist has to be coached on a one to one basis. Using the wrong approach is a waste of time and causes frustration as the hoped for success cannot be had.

The productivity of the respective team meetings is a good indicator if the approach is matched to the characteristics of the team. For example if a sales manager has to declare attendance to sales meetings mandatory is an almost sure indicator for unproductive meetings. Sales managers confusing their own goal with the team’s goal as described above are more likely to have mandatory meetings.

There is more advice available how to run meetings for workgroups.

Understanding the different characteristics of teams is also essential for promoting the right people. Sales managers and account managers are distinguished roles requiring their own set of skills. Star account managers do not necessarily make good sales managers.

The most demanding sales manager’s position is probably leading teams of account managers. The dimension of work group leadership must be added when coaching account managers. In this role sales managers must though be well aware that “do as I do” is not a recipe for success.

Sales does not use our Marketing Assets

noreply@blogger.com (Christian A. Maurer) — Wed, 19 Aug 2009 12:41:00 +0000

There is hardly any CMO not having complained about this. It is nothing new but in today's economic environment, this can be a serious threat to their career. Producing assets that are not used is a waste of money. My conservative estimate is that this waste could easily amount to 10% of the marketing investment in people and programs. This is probably not a wise thing to do when CMOs are increasingly held accountable by CEOs about their contribution they make to the business.

In my Masterclass “Why do Salespeople Make Little Use of Marketing Assets” on August 20, 2009 at 11 a.m. US Eastern, 4 p.m. UK, 17:00 CET, I will discuss why this is, and what can be done to increase usage. TSE VIP Members can see a replay here. Further down on the page you can find the slides I used. Be warned though, the slides are meant as illustration to to what I said. They are not a self standing document

You might wonder why a consultant focusing on sales effectiveness cares about this and what recommendations he can make to solve this marketing issue.

I am interested in the question for the the same reason why also CSO's (Chief Sales Officers) should be concerned. Not using marketing assets negatively impacts sales effectiveness. It is not that sales would not need such materials. One reason for not using them is simply because they are not aware of what is available and how it could forward their sales campaign. So they might create something on the fly. If sales people are aware of the assets, they find that these often do not fit with the need of the salesperson for a particular sales call. Salespeople spend time to create or adapt those assets to their needs which is time not spend with the customers. We are speaking about several hours per week.

My personal experience about this misalignment between sales and marketing comes from coaching strategic key account teams. Very often, when I ask the question whether they have considered Marketing as a resource they can leverage for the formulation and execution of their key account plans, I get a a blank stare or I draw a laughter.

As a former head of a solution practice in a boutique consulting firm, it was in my remit to create marketing assets. Through this, I gained some practical experience how to create them so that sales people made use of them. That is also when I started to use the term Marketing Assets instead of Marketing Collateral. This might seems dwelling in semantics.
To me however it is the symptom of a mind set.

If you are interested in a methodologically sound but pragmatic approach to help bridging some of the marketing and sales divide, you can join me

In my Masterclass “Why do Salespeople Make Little Use of Marketing Assets” on August 20, 2009 at 11 a.m. US Eastern, 4 p.m. UK, 17:00 CET. Readers of this blog can register for free.

Contradicting opinions on who generates leads

noreply@blogger.com (Christian A. Maurer) — Fri, 14 Aug 2009 09:59:00 +0000

There are studies out there telling us that in the web 2.0 world up to 90 % of purchases today start with an internet search.

This searches will end on someones landing page and can be interpreted as a lead generated by unaddressed attraction. As landing pages are usually owned by the marketing department of the respective organization, these leads can therefore be considered to be generated by marketing.

In contrast to this, CSO Insights in their Sales Performance Optimization – 2009 Survey and Analyzes, report that about 52% of the leads salespeople are working on, are self generated by the salespeople. This figure actually has risen over recent years. In 2006 only 40% of the leads were self generated.

How can we reconcile these two views?

One possible explanation for this discrepancy could be that a shift has already occurred how field sales forces are used. They might increasingly be used only for offerings where the customer needs help early on to understand that there is a problem and how it could be solved. It seems plausible that for this scenario, generating leads directly by the sales force might be more effective. The majority of respondents to the CSO Insights study operate in B2B selling environment , whereas it is not so clear whether the studies claiming the percentage of buying cycles started with an internet search are making this distinction between B2C and B2B selling.This could be another reason for the discrepancy of the two trends.

You can read here, enableyoursales why I think the question is relevant.

If Knowledge is a Key Ingredient for Success in Sales…

noreply@blogger.com (Christian A. Maurer) — Thu, 02 Jul 2009 12:07:00 +0000

How is it managed? Is it through CRM systems? You can read my blog post discussing this question also here.

The 3 C’s of Knowledge

For a successful sales campaign, adequate knowledge is needed about:

The customer’s/prospect’s situation
The competitive landscape
The supplier’s capabilities

How do CRM Systems Support These Domains?

Using the above framework, we can make the following observations.

1. Customer Knowledge

One of the primary purposes of CRM systems is to provide data structures allowing tracking every relevant interaction between the companies customer facing people with the customers/prospects, they look after. Thus a body of situational knowledge is created. Consultation of this knowledge is then particularly valuable in the maintenance of a customer relationship.

This body of knowledge is however not sufficient when building or expanding a customer relationship. In this case, the following additional elements are needed:

Background information about the prospect
The current situation the prospect is in
Trigger events causing sales people to want to build the relationship to eventually close a deal.

While CRM systems might provide a structure to capture this information for ready reference, the original source is outside of such systems. What is captured is the knowledge salespeople have gained through research activities such as: General searches on the internet, reading general printed press or specific trade journals and increasingly through the use of specialized systems made available in a Sales 2.0 context. CRM systems support the research activity through specialized systems by providing embedded links to such system. The research can be conducted without leaving the CRM systems context. Some of those specialized systems can also automatically push information into CRM data structures.

2. Competitive Knowledge

For building and consultation of competitive knowledge, CRM systems are used pretty similar to what is described above for customer knowledge. In large companies, there might though also be dedicated people researching the competitive landscape and making it available for ready reference in CRM systems, together with the knowledge built up by sales people themselves from information learned through customer interactions.

3. Capabilities Knowledge

Was one to ask salespeople where they get the information about their companies and product and services capabilities so they know what to say in a particular sales situation, they hardly would answer, that the CRM system is the primary source. Most CRM systems do though hold some capabilities knowledge usually referred to as company literature. The original design idea for this was to enable sales people to easily and efficiently answer fulfill information requests from their customers. There are though two factors that limit the usefulness of such company literature repositories. First, the internet has caused the number of such direct information requests from customers to drop drastically. Second, it is a well known fact that salespeople consider such literature not to be of much use in their campaigns anyway and make thus little to no use of it.

Capabilities knowledge is probably mostly stored in Sales Portals. These portals are often built from a product marketing perspective. Salespeople are thus left on their own to match the complexity of the customer requirements and the complexity of their companies capabilities to propose a valuable solution to the customer. Furthermore, customers today do not tolerate salespeople being simple conveyers of canned marketing prepared standard value propositions anymore. Salespeople are expected to be able to add value to the interaction. The messaging has to be adapted to the individual customer and to the current context of a sales campaign.

Conclusion

While CRM systems are configured to guide salespeople in what needs to be done in a sales campaign through the implementation of sales processes, they provide no support for the sales people of what is best said to the customer in a particular phase of the process. Sales portals are also no help for this as capabilities knowledge is stored under a different view point there. It becomes thus pretty obvious that sales enablement systems guiding salespeople in what needs to be said in a particular phase of the sales process and allowing furthermore the tailoring of the messaging to the specific customer context can significantly improve the productivity of salespeople, while maintaining image integrity required from a marketing perspective.

Are your Salespeople asking the right questions.......

noreply@blogger.com (Christian A. Maurer) — Mon, 11 May 2009 10:34:00 +0000

to add value to the conversation with and informed self driven prospect.

Reading a contribution by Paul McCord to an interesting discussion on sales force ineffectiveness started by Dave Brock over at The Customer Collective, lead me to this question. I think it is a real challenge we have to become aware of and have to have answers to if we want salespeople to be able to continue bringing value to their interactions with such prospects. Bringing this value is key for the salesperson to build credibility and establish a relationship to generate sustainable revenue streams.

Most buying processes, today, start by a search on the net. This allows prospects to form an opinion about a product or service and its potential suppliers without needing the help of the salesperson. Before the Internet, salespeople were the gateway to this information. What is left now is the mistrust and fear from prospects to be manipulated by the sellers. Before they did not have the choice than engage with the salesperson anyway. Today, prospects are given means to form the opinion keeping the salesperson out of the loop until late in the buying process. .

As if this were not enough, new lead generation and lead nurturing tools, mostly operated by the marketing organizations, cause that the initial contact between the prospect and the salesperson is even later in the buying cycle.

When a sales person finally can establish contact with the prospect, this prospect is already very advanced in the decision process. Salespeople just wanting to close a deal, probably will even be happy about this. They run though the risk that they might become obsolete very soon, if all they do is taking the order. The number of purchases customers are able and willing to make via the Internet without direct human intervention from the seller is growing daily.

For purchases where the customer is not willing or able to make the purchasing decision without a salesperson's help, we have to consider modifying the approach of needs analysis as it is taught today.

While a patient, seeing a doctor, will accept that the doctor goes through his/her diagnosis procedure despite the fact that the patient formed an own opinion about his/her state of health, a prospect having formed an opinion about a solution is very unlikely to accept the standard needs analysis procedure from a sales person. Such an analysis would be perceived as a waste of time. Studies done with buyers in the IT sector revealed that they already think salespeople are making the sales cycle too long compared to how they want to buy.

Why is it more difficult for a sales person to use the classical needs analysis scheme with an informed self driven prospect? Prospects rarely see a sales person as a trustworthy authority for where they seek help. Their impression will be reinforced by the fact that chances are high the salesperson will not be able to help immediately. Prospects will ask for help in their decision on a level where the salespersons first must consult with other functions within their organization. Salespeople risk giving the impression of 'just being a conduit without much value added'.

Nevertheless, a salesperson seriously interested in building a relationship instead of closing a deal,has to make sure that the prospect has not formed any wrong perceptions about a certain offering. Purchases done on wrong perceptions will end up in customer dissatisfaction.

Guess who the customer is going to blame if this were to happen, the sales person. “He/she should have told me so that this offering does not fit my needs”. It is an irrational reaction. First the prospects mistrust salespersons and make it difficult for them to fulfill their role of a consultant. When expectations are not met, customers need somebody to blame. Ironically, they accuse the same person, that they before did not let do the job properly. We cannot change the customer. So we have to adapt the behavior of the salespeople.

The remedy, I suggest is to modify the questions we ask informed self driven prospects.

Using confirmation questions could be the way forward to provide value for interaction with such prospects. Why not start with something like “I assume you have set your mind on this solution X to help you improve your business in area Y.” I think few prospects would object being asked this type of question . It acknowledges the fact that the prospect is already far advanced in the decision process. It also signals that the sales person is focused on the customer's business outcome and wants to make sure that the solution meets the prospect's expectations in this respect.

For such an approach to work, we not only need to focus on the questioning technique used by the salesperson. Being able to ask this simple question requires, that the salesperson understands what business problem a particular offering solves.

Ask yourself where the salesperson can get this information within your organization? I would not be surprised if no place could be found where this is readily available. Salespeople, aware of the need for such information, will thus have made up their ideas by themselves. Leaving salespeople alone in this important task, creates the risk of ending up with unsatisfied customers. Sales people might have formed wrong perceptions for themselves and despite good intentions will end up perpetuating their wrong perceptions to their prospects. The customer will thus end up with unmet expectations.

Preparing salespeople to add value to informed and self directed prospects will require new approaches for sales enablement. Teaching people what a product does, how it compares to competition etc. is relevant because salespeople are expected to know more if they want to gain credibility with their prospects .But it is not sufficient. Sales people also and maybe first need to understand what business outcome a customer can expect from buying a certain offering. I consider it a task of marketing to create this understanding.

Successful sales enablement will thus start with marketing expanding their focus and understanding themselves as a service provider to the sales force. After all they were instrumental, with their websites, lead generation and -nurturing systems, creating the new environment salespeople have to live in.

Revenue Growth Strategies are not an Oxymoron....

noreply@blogger.com (Christian A. Maurer) — Thu, 23 Apr 2009 16:16:00 +0000

in this down economy. On April 30, 2009, I will hold a webinar over at the Top Sales Experts entitled “Where is your revenue Growth to come from?”. Having lived almost an equal amount of years in the corporate strategy sphere as I live now in the Sales Consulting, Teaching and Coaching world, I have helped many Sales Executives and Managers to get more clarity on their Sales Growth Strategies.

Based on this experience, I have now develop a new road map to clarity. I will present this for the first time to a wider audience on said occasion.

Lots of advise is available to salespeople and how to adapt to these turbulent times. For example, I have heard Jill Konrath saying in her fist Sales Stimulus preview call that salespeople need about 50% more leads to have a chance to make their numbers this year. I will show you on a high level where to look for those leads without running the risk of creating collateral damage. Getting clarity on this will also help you to work smarter instead of harder. Others have suggested you should prune your pipeline and focus on the best opportunities. These can seem as contradicting suggestions. I will show you that the question is not either/or but doing both and assuring on strategic level, that your pipeline does not fill with hopeful but with realistic opportunities

I will introduce you to four generic sales growth strategies. which you select based on where you are finding your leads you want to covert into revenue sources Although defining strategies is important, their flawless execution is the real key to successfully grow your revenues. I will therefore discuss key success factors helping you for flawless execution. Knowing those factors can also help you to have meaningful discussions with marketing on how they can support your strategies.

Depending on where you find your leads, the time it takes to turn them to revenue contribution will differ. Being aware of this, will help you to have more realistic revenue projections.

Sales managers will learn what type of people resources they need for flawless execution of the four generic strategies.

Often, I hear sales people saying, that they could be more successful if the company were to provide them with the right products at the right price points. You need not necessarily to wait for these things to happen to execute your growth strategies. I will help you to get clarity where you can act alone and where only a tight alignment between your strategy and the corporate strategy well lead you to success.

This is not a promise for the silver bullet. All it is, is a framework pointing you to the aspects that you have to consider when defining successful, executable revenue growth strategies for your business. Although Sales executives and managers are profiting more from this concept, particularly B2B sales people with account management or territory management responsibility can also apply parts of the concept.

Developing strategies is often perceived as an abstract task aloof from reality. I promise you that I will make it come to life through examples.

If you are interested to learn more, you can register here for the webinar taking place on April 30, at 1 p.m. US Eastern Time/ 7 p.m. Central European time

Is There a Future for Professional Selling?

noreply@blogger.com (Christian A. Maurer) — Thu, 16 Apr 2009 13:03:00 +0000

Yes, but not in the form we know and practice selling today. This is one of my takeaways from the round table discussion between Nigel Edelshain, Jonathan Farrington, Jill Konrath, Linda Richardson and Dave Stein over at the Top Sales Experts. Especially “order takers” and 'glib talkers” will have a bleak future according to Jonathan Farrington. Intelligent strategic orchestrators and business advisors looking to develop long term allies however will have a bright future according to him. Jill Konrath seconded that she hopes that sales is really changing that much.

So we should expect a lot of organizational transformation within sales forces. However, and this is my second take away, the salespeople are not the primary target for this transformation. The sales profession -if we want to use this term despite the fact that from a scientific standpoint 'sales' is not yet a profession- faces not only a leadership crisis but a disaster as Dave Stein put it.

The transformation has to start at the very top with company leaders. They should get rid of the myths that super salespersons make good sales managers and that the necessary competences come with the title. Sales Management is an occupation in itself requiring different specific skills than those of a sales superstar.

Relying just on tribal wisdom, where newly appointed sales managers draw on what they have observed their own managers doing, will not bring the desired result as it is very likely that these managers were not properly prepared for the job either. In addition their understanding of selling and of their job role might be outdated and not fit in today's unforgiving economic context.

In my own opinion there will be no room left for purely action and result oriented managers trying to manage outcomes. It makes little difference if they rely on data from their own home grown spreadsheets or on sophisticated analytical CRM tools in their attempt to manage these outcomes. Outcomes are lagging indicators even if they come in the disguised form of forecasts. Management actions based on these metrics will always be too little too late. The future belongs to sales managers being able to interpret leading indicators helping them to derive coaching needs of their sales people.

The panelist were all in agreement that being able to coach people is a very essential skill for successful sales managers going forward.. There is however a huge skill gap with current sales managers. Linda Richardson's re-edited book on this subject will help fill this gap. As a questions from a listener indicated, a significant number of sales managers has though not only a skill gap but an outright attitude problem towards coaching. Let's hope for them that they can be convinced by appropriate business cases to avoid being phased out.

The dilemma for preparing sales managers for their job is though deeper. While a lot has been written with the salesperson in mind, there is a lack of a body of knowledge from which sale managers can be taught how to do their job. This is the reason why already three years ago, I started my blog with the sales executives and managers in mind.

In a webinar that I will hold on the Top Sales Experts platform at the end end of April 2009, I will introduce a method on formulation of sales growth strategies , which hopefully will contribute a further puzzle piece to this much needed body of knowledge about the sales management process. You can register for this event here.

The Role of Social Media in B2B Selling?

noreply@blogger.com (Christian A. Maurer) — Fri, 10 Apr 2009 09:47:00 +0000

Dave Stein published a report on this question, warning that the importance of social media in B2B selling situations should not be over-hyped. According to this report, good use of methodologies and CRM systems are still more important for successful B2B selling.

You can imagine, that this conclusion did not sit well with the social media fans. They used the tools they believe in (e.g. twitter and blogs) to make their opposition to be known loud and clear. I do not want to enter into this debate as I think it is of little help for sales leaders looking for guidance on this question.

Why is the question relevant?

From own experience, I know that using social media can eat up considerable time, especially in the discovery phase. It is thus legitimate for a sales leader to be concerned whether the time salespeople spend with social media is time well spent to interact with the prospects and customers in an optimal way to generate the revenue streams expected from them. Leaving the sales people alone in how to integrate social media into their work practice is the least effective approach and will negatively impact productivity. I therefore want to propose a pragmatic proactive approach sales leaders can take to tackle the challenge.

A pragmatic approach to Social Media

For the purpose of this discussion, social media can be understood as a number of different continuous 24/7 networking events in separate venues (platforms) , each with its own flavor and attendance. As with classical networking events, the question is probably not so much whether to attend such events at all but to choose the events provide providing the highest return on the time invested for attending. Common sense would suggest to go there where prospects, customers and respected opinion leaders for your target markets are “hanging out”. So why should this guidance not be used for selecting the social media best suited to enhance relationships with your clients?

Where can I meet my audience?

This screening of suitable platforms obviously takes time. It should therefore not be left to the individual sales person. Rather task a social media savvy individual or a small team within your organization with finding out where your target audience can best be met. If you have a millennial (generation Y) person in your team, I would delegate this task to him/her. You would not only minimize productivity impact on your team, but a the same time create a valuable learning experience for this individual or small team. A millennial most likely takes it for granted that social media is the first choice also for building and maintaining professional relations. Through these screening task, they could discover the relevance of their assumption. If the targets cannot be found there, then obviously they will see that they need to learn some other methods if they want to be successful in their selling role.

For this screening process, it is also important to use a wide definition for 'social media”. It is not only “Facebook”, “LinekdIn”, “Xing”, “Twitter” etc. There are many more specialized communities having their own sometimes very sophisticated platforms. In my filed of interest “The Customer Collective” is an example of this category. “Sales Management 2.0” is another one in my space who uses “Ning” . Most likely you will discover, that there is more than one platform that needs considering.

How to use the platforms?

Knowing only where your audience can be met is not enough to let your salespeople loose on using social media. There is still too much of a danger that individuals might waste their time not only in the initial discovering how to use the media, but they might also develop sub optimal habits that become time wasters on the long run.

Figuring out the right use is a much more complex task than the screening process. The sophistication of those platforms creates a lot of overlap functionality especially when several platforms are relevant to reach your audience. Each platform tries to offer a wide range of functionality because their primary purpose is to generate captive audiences which attract advertising dollars.

Millennials or social media enthusiasts are not the best suited people for this task. Here pragmatists with a broad business perspective but at the same time sufficiently detailed knowledge about the platforms to be used are needed to reduce the complexity to a palpable level for the individual sales person. Chances are that such individuals cannot easily be found within the organization or building the expertise internally will take too long and you will need some external help.

Conclusion

The best way assuring that social media does not distract your salespeople is to take a proactive role and figuring out how best to use it specific for your organization and then give clear guidelines how you want your people and provide them with help to use these media to become more effective .

Does frequency of posting matter...

noreply@blogger.com (Christian A. Maurer) — Thu, 02 Apr 2009 10:25:00 +0000

for the popularity of your blog? The short answer from recent own experience is: I could not find any evidence.

I have neglected my blog recently and not published a new post for more than a month. I just did not have the bandwidth because of customer work and the time it took writing an Executive Briefing Paper on Sales 2.0. I probably also suffered somewhat from writer's block. First I felt guilty about this, but then I thought to turn it into an experiment.

The one negative effect I suffered was that I was notified by Alltop that they have removed the reference to my blog due to too low frequency and irregularity of posting new material.
I am not too concerned about this, because I could not find any evidence that being listed on Alltop generated any traffic on my blog anyhow.

The bigger surprise was however, that lack of new material did have any impact on the traffic on my blog measured in page views. Looking at the pattern over the last four months, it seems that the number of days in the month was probably the factor determining the number of page views.

So if it is not the frequency of post, what is likely determining the volume of traffic? In my case the bulk of traffic is generated by google searches and some by referrals from other blogs. I recently started to be active on twitter and I see first references coming in from there as well.

If you measure the popularity of your blog by comments to your posts, I also did not see any impact. Not that I had ever many comments anyway. I was surprised though about an sudden increase of comments on older posts. They must apparently still be relevant to readers.

The only explanation I have for the above observations is that I seem to write contents that remains relevant over a certain period of time and contains key words that are picked up by search engines and cater to inquiries of my target audience.

It looks to me that having a body of knowledge on your blog is key. Evidently it takes some time to build this up. So in the beginning of the existence of a blog, there might indeed be a closer correlation between the frequency of new posts and the traffic you generate.

Could though also be that also in the blog sphere quality goes over quantity I would be interested to know the opinion of blog and SEO experts on my experience.

The experiment is now over and I will do my best to add new contents to my blog more frequently again.

Sales Managers: How to Provide for Your Team Members on a Shoe String Budget

noreply@blogger.com (Christian A. Maurer) — Mon, 16 Feb 2009 09:12:00 +0000

Over at “eyes on sales” colleague Paul McCord, gives some real practical advise on how Sales Managers can still provide for their Team Members even, if in an attempt to lower cost of sales, their budgets have been cut to the bare minimum.

These days, using budget cuts is no longer an excuse for not helping upgrading the talent in your team . As Paul points out, there are free training resources in abundance available be it on the net or in form of books and articles. I personally find the iTunes Store a very useful source for inspiring podcasts. It is just amazing what resources you can download for free from there.

Using this material in sales meetings seems just such an obvious option. The team members don't even have to set aside reading time to prepare for the training part of the meeting. They can use unproductive time (e.g. traveling to and from work) to listen to these sometimes excellent materials. If carefully selected, there is material available that could be recommended as a refresher to be listen to on the way to the customer.

Sales Managers hardly need to worry about the cost of providing iPods or other MP3 type readers to their teams. Chances are that their salespeople own already one or more of those devices. Marketing departments love them as vehicle to broadcast their messages.

Although acquiring the know how is made easy, putting it into use is another matter. Here is where sales managers can provide added value by helping their teams to practice on the newly gained knowledge in a save environment, before trying it out with real customers.

Granted, it takes sales manager's time to find these and other resources like blogs, articles and books and then make a suitable selection for the team. As a sales manager ,you could thus also take the attitude, as it is so easy, let your salespeople can find these resources by themselves. The risk you run with this attitude is that everybody might pick a different source best fitting with their individual preferences. You will end up with an organization operating what CSO Insights call an organization with a Random Process. I recommend you consult their “Sales Performance Optimization 2009 Survey Results and Analysis” where you will learn that this approach might cause you sleepless nights.

Since last week, sales managers have now an new resource at their fingertip helping them to develop their people on a show string budget. Top Sales Experts 2.0 (TSE) have opened their door last week. On this site some 60 well renowned sale experts from around the globe offer a repository of their articles they have written. You will find also a library of 'How to guides'. Podcasts etc. There is also one place to go to consult their Blogs. By clicking here you can subscribe to this resource at a preferential early bird rate.

Full disclosure: I am proud to be a member of TSE.

This is the link to Paul McCord's article. CSO Insights can be found here.

If I Was a Sales Executive...

noreply@blogger.com (Christian A. Maurer) — Sun, 08 Feb 2009 16:09:00 +0000

looking for resources to help me upgrade the talent of my people, to whom would I turn?

There is certainly an abundance of information starting from books over websites to blogs, pod casts, and social networks I can use to get a first impression of what is available on the market of sales training, sales enablement or sales effectiveness offerings all aimed at upgrading the talent of a sales force. At the second glance, this abundance, apparently giving me a lot of choice turns out to me more a curse than a blessing. The sales consulting, training and coaching industry offerings are full of juxtapositions making choices difficult.

I just have to look at my bookshelf where I can find a book entitled “The Death of Demand” right next to one entitled “There is a Customer Born Every Minute” or “ Death of a Salesman” next to “Birth of a Salesman” contradicted by yet another title “Selling is Dead”.

If I go on the Internet, looking up 'Cold Calling' for example, I will find proponents absolutely convinced about the effectiveness of that discipline claiming to be “Queen of Cold Calling” opposite a self declared guru claiming “ Never Cold Call Again”.

Sometimes, the contradiction appear right in the same presentation. Just the other day, I heard that in these tough times; one has to get in front of more customers than in previous years to have a chance to make even the same amount of revenue. And a few sentences later, I heard that the priority is to take special care of your existing customers, they are your gold in these harsh times.

Although I have learned that great leaders rather think in terms of 'and' than 'either or', I have difficulty to adhere to this advice faced with the above juxtapositions. On the other hand, I think it is not worthwhile to get into these discussions who is right and who is wrong, popping up in blogs and social media platforms quite frequently.

You certainly know the stereotype of what a lawyer would say faced with such questions “It depends”. Well this is not exactly helpful either for making a decision, but it helps us to be aware that all these statements were made in a specific context. One can further assume, that in that specific context, there is a least anecdotal evidence, that the varied proposed methods have each lead to some success. Although it will probably be difficult to discern whether this was due to the 'placebo effect' or a real remedy.

The obvious next question then is: What is the context, we should consider, when evaluating the organizations and persons giving these contradicting advice? Does it depend o the industry, the geography, the sort of goods or services sold or on the period these described methods were invented and applied in?

This last aspect, the period when methods were invented or applied, is probably the first one helping us to narrow down the choice of potential candidates suited to help the sales executive to upgrade talent. There is so much written about sales from the perspective “I have done this, it brought me success, try it, there is no reason why it should not work for you”. The way customer buy have changed dramatically over the last few years increasing the danger that such advice might therefore be obsolete in the current circumstances.

Understanding how customers want to buy is therefore the relevant context in which I would judge the suitability of all the different methods available. For many sales executives, this is though the biggest hurdle to jump; to shift the mindset from an 'inside out', to an 'outside in' approach.

As a next selection criteria, the executive can then use the fact, that whoever is offering services to upgrade sales talent, is selling as well. If I were an executive, I then would narrow my choice of potential service providers to those of whom I could say: “I wish that my people could sell in the same manner as this person is just selling to me”. Using this criteria, there is at least a higher likelihood to work with someone, “walking the talk”.

Having worked with thousands of sales people, I have come to the conclusion that authenticity and relevance are key elements needed by someone wanting to help shift the performance curve of a sales force by upgrading the talent.

Publish or Perish?

noreply@blogger.com (Christian A. Maurer) — Mon, 02 Feb 2009 11:05:00 +0000

When looking at the frequency blog posts are cranked out, it seems that in the era of Web 2.0 this saying is more true than ever . It leads to the phenomenon, that bloggers, despite the dialog functionalities offered by the technology, often write at each other through own posts on their respective blogs instead of having a dialog around one post. I believe this latter way is better suited when having the reader in mind as it is easier to follow a discussion

As so many buying processes today start with an inquiry to a search engine, I agree that it is essential that blogs used in the marketing mix of a business need a steady flow of fresh well thought out material to have a high likelihood to appear in these searches.Writing a blog is however only one element to build a personal brand via the internet.

I have at least anecdotal evidence for this. Recently, a sales manager asked me for advice through LinkedIn. My contributions to 'answers' there and my reading list that I maintain on the same media were the decisive factors for reaching out to me. This experience made me also awrae that one can subscribe as a follower to these reading lists. I personally like this almost better than Twitter, although I give interested people an opportunity to follow me there as well. Frankly, I think that following my reading least is probably of more value than reading on Twitter what I am currently doing.

Motivated by this experience and with the intention to “walk the talk”, I have spent more time participating in discussion groups like this LinkedIn.

I also participated in discussions on The Customer Collective writing more profound comments than “I like this” or even less time consuming by just voting on a post. Here is an example. TCC It happened to be in connection with the post having gotten the highest ever number of comments and reads on this site. The dialog then evolved to an new subject TCCbis.

Yes this is taking time away from writing posts on the own blog. First experiences however seem to prove, that it is not to the detriment of building a personal brand. I guess I am though still learning “the marketing mix” for the era of social media.

What is wrong with the Hunter / Farmer Metaphor?

noreply@blogger.com (Christian A. Maurer) — Fri, 16 Jan 2009 14:04:00 +0000

Putting the right person into the right sales role is one of the key responsibilities of a sales manager. The Hunter / Farmer metaphor is frequently used as guidance to fulfill this demanding task. Is this still a valid concept today with informed self directed buyers?

I have assisted many heated debates about the usefulness of this Hunter / Farmer concept. The Hunter role was rarely put in question. There are even suggestions, that in these challenging times, hunter qualities are required more than ever. The debates were mostly around the question, whether the Farmer role, usually associated with the role of an account manager, does exist in a pure form, or whether an account manager does not also need traits of a Hunter though maybe to a lesser degree.

I found that the image people had of a Farmer was often the cause for these debates. If a Framer is primarily seen Harvester, then indeed it is probably not a good analogy for what an account manager does. Before a Farmer can harvest, planning the use of the land best suited to the quality of the soil, according fertilizing and sowing the right crop are prerequisites for success. These activities are analogies to understanding the customer, building the right relationships and positioning the right solutions. Thus for me the role of a Farmer is a good metaphor for the traits, attributes and qualities needed to be a successful account manager.

From these discussions, I conclude that there is a third role to be considered; the one of a Harvester. Particularly today, with the Internet empowered customers and the frequently observed trend for marketing to reaching further down in the sales funnel, the role of the sales person risks to be reduced to that of a Harvester, harvesting what Marketing has sown. The value a Harvester can add in such situations is to assure that the client is buying the solution best suited to the need. Salespeople being in a Harvester role already today, risk to be made obsolete, if sophisticated buyers do not need this assurance and therefore can accept to do their purchasing exclusively through e-channels.

Orientating the salesperson's role on how the customer wants to buy, is not a new concept. Research undertaken by the industrial psychologist Robert McMurrry let him conclude already In 1961 that a 'true' salesperson should not sell to anybody. The increase of customer's negotiation power makes us however more aware, that the days of manipulative selling are probably definitely gone.

In this context, the Hunter metaphor is probably the most debatable. Yes a Hunter has to find the animals first before being able to kill them. This killing aspect for me is though to close to the yesteryear's mindset where selling is about fulfilling the salespersons need instead of those of the customer. The set of traits, attributes and qualities of an Explorer seems to me to be the more appropriate analogy for a practitioner of business development; the ability to win new customers in unchartered territories.

Should you think this discussion about the Hunter is splitting hair, there are more and more sales experts emphasizing the salesperson's right mindset as a primary prerequisite for success.

I am also convinced that Framers and Explorers with the right mind set and focusing on the clients that need and appreciate the added value they can bring to the relation, will run a lesser risk to become Harvester or even obsolete. However the time to upgrade the set of skills needed for success in those roles is running out fast.

Guest author Ian Brodie on diminished returns to sales calls

noreply@blogger.com (Christian A. Maurer) — Tue, 06 Jan 2009 09:03:00 +0000

In today's business climate, sales organizations think that they have to increase their activities to counteract the increased reluctance of customers to buy. These increased activities will however not necessarily be rewarded by higher revenue.One might end up trying to get more juice from an already squeezed out lemon. Read below the thoughts of Ian Brodie, triggered by my mentioning of diminishing returns to sales calls in a previous post:

“A few years ago I was involved in some consulting work for a large pharma company where we used Operational Research techniques to try to identify the optimum call frequency for doctors. Normally you can’t do this in Europe because you don’t know the exact number of drugs prescribed by each physician (only the number of prescriptions picked up in pharmacies in postcode “bricks”). But in our case we could – it was vaccines delivered and used at each clinic so we knew exactly what the demand was and could correlate it to the sales calls.

Traditionally, the company had concentrated on calls to high prescribing physicians. Any extra resources it had it put into more calls to these physicians.

But our statistical analysis identified that after about 10-12 calls per year to this group, additional calls made no difference. They had heard the message and bough in to it – any extra calls were just “preaching to the converted”.

In contrast, there was a distinct segment of physicians who were typically younger and early on in their careers, and who prescribed less – but an extra visit to those physicians generated a significant increase in sales.

Then finally there was a group that no matter how many times you visited they weren’t going to prescribe your product.

The company ended up diverting resource from both the non-prescribers and some from the over-visited high prescribers to the middle “high response” segment – and sales went up by nearly 20% - a huge leap in the competitive pharmaceutical world.

I still see today many segmentation models being used which aim to put the most resources to the “biggest” customers – not necessarily matching resource with where the highest response may come from.”

Let me add another spin to Ian's conclusion: While not all sales organizations will be in the fortunate position to produce such hard evidence to segment their territories, all can develop a certain level of understanding where to focus activities on. The first step is though to be willing to break away from some “handed down management wisdom” like bigger is better or that increased activities lead to a higher chance of making the numbers.

If you want to read more from Ian Brodie, you can visit his blog Sales Excellence.

New Milestone

noreply@blogger.com (Christian A. Maurer) — Wed, 03 Dec 2008 06:45:00 +0000

I was waiting quite a while for this event. I am proud to announce that my blog is now read on all continents. Getting to South America took me the longest. If you want a proof, have a look at the widget on the bottom of the right hand side bar.

Thanks t o all the followers

Those Who Measure, Measure Rubbish

noreply@blogger.com (Christian A. Maurer) — Wed, 19 Nov 2008 17:58:00 +0000

is the translation of a play on words in German: “Wer misst, misst Mist”. Physicist use it to remind themselves that not all what they measure can be taken as hard facts.

Sales managers might want to adhere to this caution as well. Especially in uncertain times, it is important to have confidence, that what is measured are facts helping them to navigate through the turbulences.

Sales performance measured with company results
As the role of a sales force is to generate revenue for a company, and it is furthermore easy to measure, it is a frequently observed practice to use revenue as the primary performance indicator of the sales force. Andris A.Zoltners, Prabhakant Sinha and Greggor A. Zoltners remind us in “The Complete Guide to Accelerating Sales Force Performance” that company results are not necessary good hard measures for managing salespeople. They refer to findings from their statistical studies , suggesting that the one-year impact on revenue of a sales force at the sales territory level is anywhere from 20 to 90 percent. Admittedly, the book was published in 2001. I believe however that, with the self directed customers empowered by the Internet, the situation is probably even worse today,. But this is not the only problem. Revenue is also not an adequate indicator to understand coaching needs of salespeople.

Revenue is a lagging indicator
Revenue is the outcome of the sales process. It is the result of actions that have happened in the past. If the results are not satisfactory, we have to modify the process. For knowing where the process fails, we need measurements along the process chain, not only at the output

The root cause for missing the number might be found several months in the past. Despite this, result oriented managers tend to try to manage this outcome. directly This also means that corrective actions to curb the trend might show results much later than the patience of a sales manager lasts. Many “improvement plans” imposed to an under performing salesperson are thus self fulfilling prophecies for failure if results on revenue level are expected in a shorter time frame than the average sales cycle length.

Derived productivity indicators might be misleading
Also derived productivity ratios like sales per head or quota attainment are not necessarily good productivity indicators for the salesperson. As indicated in a previous post, quota attainment might reflect more on the ability of the sales managers to set realistic targets than on the salesperson to make the expected number.

The same is true for sales per head; especially if the manager has fallen in the trap of the law of diminished returns. This can happen when managers follow the rule that “more feet on the street” will increase revenue. In a saturated territory, there is just not enough potential for the additionally assigned sales person to bring in the expected revenue increase. So again it is more a result of a management decision than the salesperson's ability to sell.

Alternative Indicators from the sales formula
In 2000 at the first indication of the burst of the Internet bubble, I proposed to my then employer the first version of the sale equation, built from indicators than can be influenced directly by the sales force. The potential impact of the formula was not very well understood at the time. Today it is known as the sales velocity equation. As the equation in its original form lead to wrong interpretations, I have it now reformulated to:

Revenue = ∫((# of Opportunities*average deal size*conversion rate)/time in funnel)dt

Don't let yourself be scared by the math. Essentially, what the formula says is that revenue is dependent on the number of opportunities in the funnel, the average deal size, the conversion rate and average the time it takes to get an opportunity through the funnel.

The attractiveness of these indicators lays in the fact, that when put properly into the context of the sales situation, they allow to detect on what salespeople need to be coached to improve their performance. I have built a whole sales management training curriculum around this formula. Here we have only room to illustrate the use with an example.

Take a salesperson with a lower average deal size compared to peers. Root causes for this might be lack of capabilities for up selling or heavy discounting. With this knowledge, targeted coaching can take place instead of just pounding on the table and ask for more revenue. Also training initiatives become more targeted and outcomes become measurable.

Especially in tough market conditions, the conversion rate is probably the most effective parameter to focus on. Some experts go so far as to say that managing the conversion rate is the primary task of a sales manager. The conversion rate is also particularly important in complex sales situations as it is an effectiveness indicator. In view of this, I am always surprised how few managers, of those asking me for help to increase the productivity of their sales force, actually know their conversion rate on an overall level, let alone between stages of their sales process.

Conclusion
Performance improvement will have to start with the mindset of sales managers. Especially those believing that “only what can be measured can be managed” should accept that “not all that can be measured can be managed”. Eventually they will have to accept, that sales forces cannot be managed by spread sheets especially if they are full of revenue dependent ratios as sophisticated as they might be.

Life Line for Sales Executives

noreply@blogger.com (Christian A. Maurer) — Mon, 10 Nov 2008 09:35:00 +0000

Most sales leaders are currently faced with a big dilemma. On one hand they have to painfully admit that their teams are probably not apt to be successful in the tough current market context. This is not surprising. It happens every time after a phase where demand was high and covered over deficits in selling capabilities of teams.

On the other hand, It is also normal that in tough times budgets to improve sales effectiveness, although needed more than ever, are tighter. Despite the recommendations of many experts that sales efforts should not be reduced to assure survival of the company, leaders often have no choice but to adjust selling cost to reflect current expectation of market evolution.

These experts are not short in quoting studies indicating the advantage of a counter cyclic behavior with respect to sales efforts They recommend that it is now the time to invest in sales effectiveness. Justifying such investments is however very difficult in belt tightening times. The impression is widespread that past massive investments in such initiatives have not shown the expected returns. It is thus understandable if sales executives and their superiors are very hesitant to follow such recommendations and ask themselves why the outcomes should be different with a new initiative. The danger however is real that not addressing sales capabilities issues might further endanger the sustainability and even the existence of an enterprise.

An alternative way to improve sales effectiveness

Looking for causes that lead to t he impression that past initiatives to improve sales effectiveness did not show the expected results helps us to find an alternative approach.

Here are some reasons leading to the impression of unsuccessful sales effectiveness initiatives:

Potential improvements were not measured at all or with inadequate indicators.
Initiatives were structured as training events suffering from the Hawthorne effect
Managers were rarely enabled to integrate new methods and approaches, taught to their troops, into their daily management practice.
Most sales managers even had never any specific training for their job. They copy what they saw their bosses doing at the time. The methods observed might have been already questionable at the time. The danger of them being inadequate to face today's context is even higher.

Sales Management as the primary target

Focusing on the sales management as the core of a transformation initiative for improved sales effectiveness seems therefore a plausible alternative approach.

Not only is the initiative primarily aimed at sales leadership more affordable than addressing sales people; as there are fewer managers than sales people. Focusing on the managers can also improve sustainability of the initiative. Analyzing failed sales effectiveness initiatives often revealed that sales leadership was the primary cause of failure since they had not adapted their practice to new methods and approaches taught by external organizations to their sales people. Training the sales management on how to adapt to new methods should be considered a minimum but is often omitted due to budgetary constraints. These constraints can however be overcome by enabling sales management to introduce these methods to their teams by themselves. This approach not only dramatically increases sustainability of sales effectiveness initiative, because they now have to give active and visible support to the initiative, enabling sales managers as multipliers also allows for much faster deployment of an initiative. Rapid implementation is particularly essential in though times where improvements are needed fast.

Accompanying the initiative with an adequate set of success metrics seems to go without saying to avoid problems of justifying future initiatives which seems to be inevitable to keep up capabilities in ever changing environments.

Sales Quota Attainment: Who's Performance is Measured?

noreply@blogger.com (Christian A. Maurer) — Fri, 31 Oct 2008 16:36:00 +0000

For companies with the fiscal year identical to the calendar year, we are entering the period where sales leadership starts thinking about the next year. One of the key parameters to figure out are the sales quotas to be given to the salespeople.

As the percentage of salespeople reaching or overachieving quota can be considered an established measure of Sales Effectiveness and it is also common knowledge, that the percentage of salespeople reaching quota leaves a lot of room for improvement, it might be a good time to discuss the above question.

The Sales Leadership View

There is little doubt for sales leadership that quota attainment measures the performance of the salesperson. Setting a sales quota (goal) possibly with some stretch built in, to motivate the salespeople to give their best, is considered good management practice.

As salespeople rarely will be in a position to argue about the quota given to them, this is probably the view that prevails within most companies.

The External Observer View

From a third party point of view, the cause for not attaining the quota, may be caused by inadequate efforts from the salesperson, but it can also be due to a wrong setting of the quota. In this latter case, sales quota attainment would then measure sales leadership performance.

Testing Your Quota Setting Practice

As a sales leader, you might consider the following questions helping you to assess your quota setting practice.

When figuring out the quota for the individual sales person, do you:

Consider the potential number of ideal customers in the person's territory?
Apply measured conversion rates (e.g. prospects converted to leads, to opportunity, to proposals to close) to determine the percentage of customers who are likely to buy?
Do you take into consideration how long the salesperson is already assigned to the territory?
Do you consider the mix of existing and new customers in the territory?
Do you factor in the average deal size to determine the monetary amount of the quota?

The more questions you answered with 'no', the more your quota setting risks to be biased. Quotas might then be perceived as unattainable even with best efforts by your salespeople. This might negatively affect their motivation and morale just at the time when these are needed to persist in a tougher environment. I am not advocating here that quotas should not have a certain challenge for the salesperson, but it should stay with in reasonable limits.

If you care to have a motivated sales team, but had to answer 'no' to several questions, you might then ask yourself what is currently hindering you to adhere to the few simple principles suggested with the questions. If you think the hurdles you find are insurmountable, then I suggest you might want to stop expecting better sales effectiveness of your team measured in quota attainment.

Interface between Marketing and Sales: From a Source of Trouble to a Success Factor

noreply@blogger.com (Christian A. Maurer) — Tue, 14 Oct 2008 15:56:00 +0000

is the free translation of a public workshop I premiered last week with ZfU International Business School in Switzerland.

Delegates from various industries involved in B2B scenarios in either Marketing and/or Sales leadership functions discovered that they all had similar problems with their Sales and Marketing silos.

An assessment of each others function revealed that Marketing complained about Sales being too short term, tactical oriented, and not giving feedback from the field, whereas Sales complained about Marketing being too remote from reality, long term oriented and not listening to the field. The product versus the customer view was another divider.

However,in the following self assessment, the Marketing Leaders initially believed product orientation and the strategic view being key to their function. Sales Leaders admitted their short term view as a a necessity and believed their customer orientation being a crucial asset they provided to their company.

We then concluded that alignment between Marketing and Sales cannot mean making them think and act alike, but entering into a continuous dialog leveraging each others views.

Some companies had delegated both their Sales and their Marketing

executives to the seminar. It became clear that they had made attempts before to narrow the gap. However they lacked a framework for a structured discussion. Their talks did therefore not produce concrete results.

The inside out view induced by the product orientation revealed itself as major roadblock. The recommendation to use the context of the customer's buying process to discuss effective messages to the market and to agree on the split of responsibilities how to help the customer to buy, was therefore well received. Taking this view, sales leaders had to admit that there are buying scenarios where human interaction with sales people is no longer needed. On the other hand marketing leaders had to realize that the frequently observed attempt to reach further down into the sales funnel and handing over only hot qualified leads to sales is not as an ideal solution to bridge the gap between the two silos as suppliers of lead-generation, -nurturing and -scoring tools want us to believe.

Having an end to end framework to define Key Performance Indicators was welcomed as another tool helping to enhance the understanding for each other.

Marketing executives from Swisscom's , the incumbent Swiss telecoms operator's, Enterprise Division illustrated to the other delegates how their continuous customer centric dialog with sales had helped them to turn a product centric market approach into a customer centric problem solving approach. Marketing treating sales as a customer of their services, was another critical success factor for narrowing the divide between them and sales They are taking the idea of treating sales as a customer so far that a product manager is sent back to the drawing board if a campaign is considered 'not feasible for the field' by the sales people.

You can get a glimpse of Swisscom's customer centric problem solving approach on their web site for corporate customers.

Their filed sales people have a similar application loaded on their lab tops to insure consistency of the message to the market. Whereas traditional sale collaterals had not much success with the sales force, initial reaction from sales people about this new tool are very encouraging .

Surprising Numbers?

noreply@blogger.com (Christian A. Maurer) — Sat, 20 Sep 2008 17:03:00 +0000

The European edition of “Fortune” magazine of September 29 2008 devotes a whole section to the art of selling. The section features articles like “The Art of Selling” talking about famous figures in the sales profession like John Patterson, Joe Girard and others and “Shelf Help”; a list of recommended sales books. These articles provide not much news to those working in sales. The article “Sales slip ups” which lists the top ten mistakes sales people make according to Dr. G. Clotaire. is worth a glance. I found the articles “Legends of Sales “ and “Inside the Mind of Modern Sales People” most interesting for the figures that can be found there.

For example, did you know that there are about 16 million Americans working in Sales? They represent 12% of the workforce. In 1960 their part of the workforce was only 7%. Wondering what caused this growth, I came to the conclusion that part of the explanation must be in the fact that enterprises focus on core competencies. As they still need services like IT, HR etc. they go for more outsourcing. So more things are bought, which in turn requires more sales people to sell those services. I wonder if Sales 2.0 will curb this trend of always more people working in sales.

Thinking of the Sales 2.0 effects drew my attention to another interesting number. 49% of sales people surveyed answered that they do not use social media at all. With the myriad of articles and the proliferation of solutions in this domain, I would have expected this number to be a bit lower. Even more surprising to me was though the fact, that finding additional contacts within current client organizations was the most cited primary reason for using social media. To make new connections with new prospects was though a closed second. I wonder what has happened to the traditional networking skills. I would have thought that the personal contacts already established in an account would allow to obtain referrals and recommendations within the customer's organization without needing technology like social media.

When it comes to the confidence of reaching quota for 2008, 58% are either completely or mostly confident that they will make their numbers. So it is very likely that surveys like the CSO insight SPO report will probably have to report a slight decrease of quota attainment in their next edition. With the economy becoming tougher, there is though hardly any surprise in this. When asked about the impact of the current economy on their job, 70% of the responding sales professionals thought that their job has become somewhat harder or much harder. 23% thought that the current economy is not affecting them much at all. There are 6% optimists who think the current economy makes their job easier.

If you consider monetary incentives as a means to keep up motivation in this tougher economy, you might be in for a bad surprise. Only 17% of the respondents mentioned that they are in sales because the money bis good. The love for interaction with people and the independence inherent in the job seem to be the major motivators for choosing a job in sales.

Do you need some motivation booster after these facts? In the article “How to sell in a Lousy Economy” some sales professionals are telling us their secrets for success.

Salespeople behave predictably irrational...

noreply@blogger.com (Christian A. Maurer) — Sat, 30 Aug 2008 11:33:00 +0000

when they keep opportunities in their pipeline even if there is little chance that they will ever win them or, even worse, they will never end up as a deal because the customer has no intention to buy in the first place. The observation made by CSO Insights in their SPO Report 2008 about the mediocre forecast accuracy is a flagrant proof of this behavior. According to this report, even around 21% of deals forecast(!), so well down in the pipe, end up with no customer decision. I believe this percentage has not varied much over the time CSO Insights are doing their yearly survey. Until now, I had the opinion that keeping unrealistic opportunities in the pipeline and even putting them into forecast was related to the fact that salespeople are generally of an optimistic nature.

In Dan Ariely's book “Predictably Irrational” (yes thats where I got the idea for the title of this post), I have found insight in basic human behavior (the way we are wired) that might help salespeople and sales managers to fight the urge of keeping unrealistic opportunities in their pipelines. If you agree that keeping doors open is a valid metaphor for wanting to keep as many opportunities as possible in the funnel, you might be interested in the chapter in “Predictably Irrational” entitled:

Keeping Doors Open

Therein, Ariely describes a series of experiments done with MIT students with the help of a simple computer game. The students were shown three differently colored doors on a computer screen. They could enter any door with a mouse click. After having entered the virtual room they then could accumulate earnings as each subsequent click staying in the room added a small sum of money to their earnings. The total amount of accumulated earnings was visible real time. Though, not all rooms offered the same potential of earnings, thus inviting students trying to increase earnings by looking behind different doors. In the first set up of the game , the only limitation was the amount of clicks available. Clicks had to be used wisely as each time a room was switched, the necessary click for the change would not give additional earnings. Only with subsequent clicks applied in the newly (re)entered room, additional money could be earned. Students, earning the highest amount of money from the experiment, sampled all three rooms and then, based on the knowledge from sampling, spent most clicks in the room showing the largest potential for winning.

Where is the relevance for salespeople?

Take the three doors as three opportunities and the limited number of clicks as the one limit you always have, your time. The experiment actually confirms selling best practice; to qualify and then to focus on the opportunity with the highest potential. The set up is though not sufficiently reflecting the harsh reality of selling. Not attending a door for a while, did not have any penalty for the students. That is like acting in a market with no competition. So the second set up added a threat for a door to close permanently if it was not addressed after a certain amount of clicks (time). This set up comes closer to the real sales environment considering competition. There the threat of a door permanently closing is equivalent to he concern, that unattended opportunities might be won by the competition.

Modified behavior when there is a threat for permanent loss of an opportunity

Students faced with the additional constraint of having a door permanently closed on them, started racing frantically between the doors so none would permanently close. They left their previously rational behavior of sampling and then staying in the room they had found offering the highest profit potential. Students working in the set up of this additional constraint in average earned about 15% less money than those in the initial set up. Even when students were told in advance which door hat the highest earnings potential they did not change their behavior of racing around. Apparently our brains are wired in a way that the fear of permanent loss is so strong that we keep reacting to it even if we rationally know that it hampers our ability to maximize financial returns

Do we therefore have to accept cluttered pipelines?

No. Look at star sales people. They are known as ruthless qualifiers, meaning that they work with fewer opportunities in the funnel and still make more money than the average performers. My recommendation for salespeople is that overcoming the fear of permanent loss is a prerequisite for being able to to become a star performer.

As a manager, you might get inspired by the story of Xiang Yut, the Chinese commander fighting against the Qin dynasty in 210 BC. After having crossed the Yangtze river, he had the ships burned that carried the troops over; thus cutting of the escape route. He also violated an other golden rule of military commanders, keeping the morale of the troops by feeding them well. He instead had the cooking pots destroyed. Having done this, Xiang was not exactly popular with his troops as they had no other choice but fighting their way to victory if they did not want to perish. However the measures proved to be effective for the outcome of the war. Yut's troops won 9 consecutive battles thereby destroying the main troops of the Qin dynasty.

You might not want to be so radical. Instead of just commanding your salespeople to take the clutter out of their pipelines, you might want to coach them and sort out the opportunities with them. Be prepared that this might already be enough to make you momentarily not too popular, For being able to command or coach your people on this, you have to be brave and overcome not only your fear of maybe being momentarily less popular but also your own fear of permanent loss. Overcoming these fears will give you and your people the focus needed to increase your chances for winning.

Enforcing the adoption of sales methodologies can help you with this task. From studies, we know that increased win rates is the primary benefit sales managers who have managed getting good adoption of sales methodologies can report

You now should have a better chance to get adoption, because you know that overcoming the fear of permanent loss is a strong barrier to rational behavior. Overcoming this fear yourself and helping your people do the same will help you to obtain better results.