Sales Force Effectiveness Blog

Save a Sinking Sales Territory in Exactly 400 Words

Bryce Record — Wed, 30 May 2012 11:00:00 GMT

No doubt you spent hours trying to accurately forecast, but as Q2 comes to a close, it’s obvious that you aren’t going to make it if you stay your current course.

Can you revitalize a struggling sales territory mid-year?

How do you save a sinking ship when you’re already out in the middle of the ocean, halfway through your voyage?

Here are 5 quick tips to help:

Re-Analyze: Over my past 3 blog posts, I gave ample instruction about how to properly understand and analyze your sales territories beforehand. Did you go through this process? Do you need to do it again? Re-Balance. Re-Align. Follow the process so you understand the market potential and get the most out of it.
Sales Training: Are you giving your Sales Reps the proper tools they need to succeed and make their quota? 15% of organizations' C-Players eventually become A-Players. Give them the proper Sales Training, so that they can reach this elite level. Ride-Alongs, Webinars, Checkups, whatever it takes.
Change Compensation Structure: Are your Sales Reps properly motivated? Perhaps your current compensation structure simply doesn't get them razzed enough to attack their sales territory as they should. Ever thought of short-term bonuses to give them an extra push? Or it might take a long-term compensation structure change to really keep things rolling along smoothly.
Change Sales Reps: No, I'm not talking about hiring or firing. I'm talking about shaking things up and getting the right players in the right places where they can succeed. When a baseball team goes into a slump, the manager will often change around the batting order. That may be all you need - examine your lineup and see if someone else might do a better job batting cleanup.
Alter Your Quota: So much of sales is about managing expecations. In the event that you did not properly analyze your sales territories before designing them, you may have unrealistic quotas. Additionally, you may need to adjust your ramp up time for new hires. Don't create frustrated managers or unmotivated reps where you don't have to. Be sure you fully understand all the factors affecting your quota before you set it.

Hopefully there aren't too many organizations in this predicament. However, in the event that you are, try and use these tips to rejuvenate your year!

Have any of your own tips to add? Post them below.

Follow @MakingTheNumber

Why Your Top Sales Talent Fails at the Big Meeting

Matt Sharrers — Tue, 29 May 2012 11:01:00 GMT

Your best new business hunter calls you as he walks out of the big meeting: “Boss! We killed it! I saw lots of buying signals and they’re going to make a decision soon. This is a game-changer for us!” Two weeks later, your competitor wins the deal.

What happened?

The rep failed to tell a story in a way that connected your solution with the prospect market problem.

Was it a failure to perform pre-call planning? Doubtful. Was it sales skills? No. This is your best sales rep. Your product offering is superior, and your sales organization can articulate the value prop. The reality is more complicated, because it touches on an important aspect of human psychology: People Are Moved to Action Best Through Stories.

A real time gap VPs are dealing with today is their sales talent hasn’t learned to tell stories in a way that connects your solution with your customer’s market problem. Curious if your team has this refined capability?

As a benchmarking firm, we have a distinct advantage of speaking with Executives from across 19 industries on a regular basis. Sales forces are not evolving as fast as executive leadership needs them to. Executives need their reps to know how to think and connect at a deeper, more strategic level with customers. And your customers are hungry for this level of connection.

Have you ever met a new person at a dinner party and genuinely enjoyed visiting with them? Was it because they could tell you the exact specifications to which the chicken was prepared? Of course not! They told stories – clever, engaging stories that told you what kind of person they were and what their world view was. And as a result you made a connection.

Think of it as the Holy Grail for top sales talent. Individuals who have mastered this trait are able to connect what their company is selling to what their customer is trying to accomplish in their business. And the more complex the product, the more mission-critical this skill becomes. Why should you care? Because this hard-to-measure quality often determines the victor when top competitors go head-to-head to earn business. It’s a failure to shape and tell a story…

The good news? Storytelling is a skill and can be learned like any other. Here are three ways to get started:

#1 - Spend more time on preparing the story than on the feature/function portion of the presentation

Use the “Guidance” form in the storytelling job aid. What’s the desired outcome? How will you “grab” your listeners so that they are influenced by your words?

#2 - PUNCH the story!

Put your audience in the story. Get their attention by saying or doing something Unexpected. Introduce a New thought. Challenge conventional wisdom. Use Humor when appropriate (but no jokes! The key is to be fun, NOT funny…).

#3 - Use images

Images enhance words. Images live longer in the mind. Images provoke an emotional reaction and connection to what you are saying. No need to get fancy – a key statistic thoughtfully culled from a sea of data might be plenty.

What do you do next?

Tell a story of your own (leverage this storytelling tool here). Use it to gain your top sales talent’s buy-in that effective storytelling is a muscle that can be built, like any other. Curious how you measure up with competitors? Download our competitor comparison tool. Assign this as a developmental item to one of your ‘A’ players that wants to move to the next level– and help your sales talent walk away with the business locked up.

Tell me your best story down below; thanks in advance for sharing.

Follow @MattSharrers

Follow @MakingTheNumber

If you enjoyed this post, get free updates by subscribing by Email or RSS.

Will Inside Sales Become Prominent in Your Industry?

Scott Gruher — Mon, 28 May 2012 11:00:00 GMT

Let's start with the answer. Yes. In order to know when, you need to look into the mind of your customers. Many well established organizations are unwilling to face the fact that Inside Sales is relevant in their space. Let’s discuss some indicators that provide foreshadowing.

How to Know:

Customers – don’t want to see your reps face-to-face as much. More and more of the job is done virtually. 90% of the job can be performed via Webinars, phone, email. You are hearing and seeing this from your outside sales team
Commoditization – customers are trying to drive competitive pressure and focus on product assortment versus service levels
Competitors – your competition is spending less time face-to-face with their customers. They also seem to be retaining or gaining wallet share within accounts you are both selling to
Touches - it is important to touch your customer often, but those touches are becoming less strategic and more transactional
Margins are eroding inside key customers – you need more focus on these customers to drive value and create differentiation
The revenue disparity between an A customer and a D customer is becoming larger – key accounts are growing faster than small accounts

If these sound familiar, what should you do?

Embrace Inside Sales. The benefits typically outweigh the risks which is why Inside Sales roles are the most frequently added role as part of sales force structure changes
Invest in standing up Inside Sales properly – don’t move outside resources to an Inside Sales position and expect results. This starts with creating the proper role profile including the scorecard, job description, role cadence, etc.
Overinvest in your key accounts - reallocate the dollars you save to your top accounts. Drive leads, over resource, and gain wallet share

A Few Mistakes to Avoid:

Phone and a body - building an inside sales team is much more complex than this
Approach Inside Sales as less strategic - you need at a minimum the same level of process, training, and technology as outside sales
Be a slow follower - get ahead of your competition and secure the best talent. A misconception exists that since Inside Sales does not involve face-to-face contact the reps are less talented and therefore easier to source. Not true. Since Inside Sales is growing rapidly, it is actually more difficult to find 'A' players Inside Sales reps.

Show your customers that you are listening to them and agile enough to change as their demands do. A sign that your sales organization is progressing up the maturity model is the ability to use data to make strategic decisions about your Go to Market Strategy.

Attend our webinar "Designing Inside Sales Organizational Models" to learn more about how to deploy Inside Sales: Inside Sales Webinar

A Big Thanks to Those That Protect Our Country!

Follow @ScottGruher

Follow @MakingTheNumber

If you enjoyed this post, get free updates by subscribing by Email or RSS.

Memorial Day: Remembering the Fallen

George de los Reyes — Sun, 27 May 2012 11:00:00 GMT

My usual blog topic is sales force sizing and resource planning. But occasionally, our blogging schedule plays out so that my rotation lands on or close to a national or religious holiday. This provides me an occasion to deviate a bit.

As most of you know, in the United States we celebrate Memorial Day on the last Monday in May. It is the day we honor all Americans who have died while serving their country and defending its freedoms. Formerly known as Decoration Day, it originated after the American Civil War to commemorate the fallen Union soldiers of the that war. It was officially declared into Federal law in 1967.

I regrettably admit that growing up, Memorial Day was just another three-day weekend to relax and hang out with the family. It was a great occasion to barbecue or go catch the latest movie blockbuster. Many enjoyed the great department store discounts while others watched the Indianapolis 500.

Don’t get me wrong, enjoying the long weekend with friends and family is great. Everyone needs some R&R to recharge the batteries. But as we kick-back this weekend let’s remember in gratitude all those who laid down their lives so that as Americans we can enjoy the freedoms they died to safeguard and protect.

Enjoy the rest of your weekend and Happy Memorial Day.

Catch up on my latest top blog posts with great tools below:

The Secret Sauce to Right-Sizing your Sales Force (Download the Assessment Tests)

Do I Have Enough Coverage? Quick Test To Gauge Your Sales Force Size (Download the Sales Force Sizing Calculator)

A Simple Tool to Help Right-Size your Sales Force (Download the Time Study Template)

Sizing your Lead Development Team (Download the LDR Lead Generation Calculator)

Follow @GeorgedlReyes

Follow @MakingTheNumber

If you enjoyed these blog posts, get free updates by subscribing by Email or RSS.

Leveraging Sales Performance Management to determine Cost to Sell

Joshua Meeks — Sat, 26 May 2012 11:00:00 GMT

Do you know how much are you spending to win an opportunity today? Are you even tracking it? Should you be? The answer to all of these questions is “yes”, and you better make sure your sales performance management system is collecting data faster than one of those Ferraris flying around the Monaco Grand Prix track this weekend!

Over the past two months we have been working on several projects where we have needed to determine cost to sell for specific opportunities. Needless to say, determining this value has been extremely challenging when the organization does not have clean data and an effective sales performance management system.

To resolve this problem we have identified the seven pieces of information you need to determine the cost to sell a single opportunity including:

How many calls were made on the account?
Average amount of prep time before each call
Average call duration, including travel time
Average amount of post call follow ups
Sales Representative Base Salary
Sales Representative Annual Bonus
The amount of bonus the sales opportunity makes up (% of total)

Once you have gathered all the input data for a given opportunity you can then calculate the cost to sell.

Account segmentation is the biggest beneficiary of determining cost to sell because it enables your organization to ensure limited resources are focused on not just the biggest opportunities, but the opportunities that are the most cost effective to acquire. For example, let’s say one of your sales reps is trying to sell customer X a $20,000 piece of machinery and between client calls, pre and post preparation time, travel time and bonus compensation the total cost to acquire the client is $25,000. The client will never be profitable and even though revenue was expanded, shareholder value did not increase.

As you continue to build out your sales performance management system begin to think about how you are going to capture cost to sell by opportunity which will enable you to target the types of organizations that will make your organization successful.

If you enjoyed this post, get free updates by subscribing by Email or RSS.

Follow @MakingTheNumber

Follow @The_Meeks

Sales Managers: Grab 2 more Sales Calls per Week for your Reps

Dan Perry — Fri, 25 May 2012 11:01:00 GMT

This year to date SBI has surveyed over 8,000 sales reps and 1,500 Sales Managers asking a series of questions. One of the most important questions on the survey is how everyone spends their time. The answers are extremely revealing.

Sales Managers are only averaging 14% of their time with Sales Reps and Customers. World Class Companies Sales Managers spend over 75% of their time with their reps.

Sales Reps are only averaging 42% of their time on Selling Activities. World Class Companies Sales Reps spend over 72% of their time on Selling Activities. (See Below for a Definition of Selling Time vs. Non-Selling Time and results of one of our Sales Management Time Studies.)

Wasted time is the easiest corrective action you can take. It’s not hard to reprioritize everyone’s time. The question is why are you then not focusing your team on the correct actions to drive revenue? What is more important?

One word: Complacency

If you grab 2 more sales calls per week from your reps, the productivity results are staggering. Think about it: That’s 50 more calls in a year (assuming a two week vacation). And if you had a win rate of 40% (which is low), an average sales cycle of 6 months (which is on average 8 calls with a customer) and an average sales price of $50,000; you could sell another $125K in deals per rep. 8 reps on your team and you just brought in another $1 million. All just by prioritizing what is important for your reps.

How can you improve Selling Time and decrease Non-Selling Time?

3 Ways to Increase the Sales Reps Selling Time:

Baseline the Sales Rep and Sales Manager Selling Time. You need to know what is currently happening on your sales team. The amount of hours your sales reps spend and where they spend them. For example, you need to know the amount of time internal stuff takes to complete. And the amount of time your peers spend and how they spend it. Get real proof. Not what you ‘feel’. Download both a standard sales rep and sales manager survey here. Have your Sales Reps and the Sales Managers complete the survey. The answers are the baseline.
Prioritize their actions. You set the culture for your sales team. If you prioritize seeing customers, your reps will see customers. If you make sure they don’t waste endless time forecasting, they will spend more time with their customers. If you eliminate dealing with supply chain issues, they will spend more time with their customers. Get it?
Get commitment from your boss, owner, CEO. When we roll out a new process, the first person we get their full commitment from is the boss. Without it, any reprioritization of time and responsibilities will be wasted energy. She/he needs to commit the urgency for sales people to spend more time in front of customers (that’s why you show them the survey for proof). She/he must allow the unnecessary reporting and time sinks to be eliminated. And the full support and backing to you allowing this to happen long term. Your income depends on it.

Reverse the trend of non-selling time from you and your reps. It is rapidly decreasing individual rep productivity which is creating demand on your talented reps to sell more each month, quarter and year.

One of my favorite managers who spend time focusing his reps on selling time and eliminating non selling activities is Gianni Rugginenti. I had the pleasure of working with him recently and noticed how he spent time ensuring his sales reps didn’t waste time on useless internal activities. Every day he prioritized seeing customers vs. spending time in the office doing ‘reports and forecasting’. He risked getting in trouble from his supervisor and his supervisor’s boss. The result: Exceeding Quota in a troubled Italian economy.

Download the surveys, have your teams fill them out and either email me here or leave a comment on the results. I can help you analyze the findings and prioritize the actions for your team. Hopefully I will be speaking with you soon.

If you enjoyed this post, get free updates by subscribing by Email or RSS.

Follow @DanPerrySBI

Follow @MakingTheNumber

Great Sales Leaders Have Incredible Sales Cadence - Do you?

Tony Albachiara — Thu, 24 May 2012 11:01:00 GMT

Working in Sales Force Effectiveness Consulting allows me to observe and engage in many business’s sales operations from a perspective that is downright incredible. On a daily basis I get the opportunity to interact with a wide variety of business leaders: Board Members, CEOs, CFOs, CSOs, CMOs, you name it. And also as a result of working in SFE Consulting, I’m frequently asked, “What do we at Sales Benchmark Index see that separates the greatest sales leaders from the rest of the pack?”

What’s my answer?

After interacting with these leaders day in and day out, there is one thing I’ve consistently seen that separates Average Performing Sales Leaders vs. High Performing Sales Leaders – their Sales Cadence.

You might be wondering what I mean by this, as Sales Cadence (like many other business terms) can mean a million different things. What I’m referring to specifically is the cadence in which they operate, manage time, and the flow of information between themselves and their Sales Team.

Let me give you some examples:

Leader #1 (Average Leader). Will struggle to maintain a schedule, or any type of regularity around a schedule. He most likely has great intentions of creating and maintaining a proper Sales Cadence, but he is unable to keep to it for more than a few weeks before the structure begins to fall apart. It will most likely look something like this:

Pipeline Calls are made “every so often.” They tend to be either infrequent, sporadic, or both. Inadvertently creates tremendous amounts of extra work for all involved.
Forecast calls are performed to make sure you’re “close” to the projection. They are also inconsistent. Again- creates tremendous amounts of extra work for all that are involved, or those that are required to participate.
Sales Management calls are planned and scheduled to be performed weekly, but oftentimes they are rescheduled and not followed up on until the following week, or later.
Accountability – Promises are made from both parties, but lack of mutual accountability, follow-up and follow through make the commitments meaningless.

Leader #2 (Great Leader). His Sales Cadence will be consistent, predictable, and will have a well-defined purpose.

Pipeline Calls are made weekly. As a result, this Sales Leader knows the status of all the major accounts in the Pipeline, as well as if there are any promising opportunities to look forward to down the road.
Forecasting calls are opposite weeks of the Pipeline calls in order to track Quarter To Date and/or Year To Date progress. Since this Sales Leader is already aware of the status of the Pipeline, forecasting calls become easier. Furthermore, he is kept abreast of any Sales Reps who are falling behind and can act upon these situations accordingly.
Sales Management calls are also made weekly. This allows the Sales Leader to check in on his Sales Team and do all that he can to help improve their performance.

A Sales Cadence can seem troublesome or like just another “hassle” at first. But, believe me, it’s not.

Take the analogy of rowing a boat. It can be such a struggle – as you fight choppy waters, you can’t keep the boat straight, and your progress is stunted. The key is just to find the right rhythm. Once you find that rhythm, the momentum of your entire team will increase, and you all ride smoothly. All of a sudden you realize that you’re moving at 100 mph, but it feels effortless. All that you notice now is the cool breeze on your face and all the other teams in your wake.

Over the next few weeks, I will be breaking out the importance of the Sales Cadence, the different stages and levels of it, and some of the best practices that can help you find that rhythm that gets your sales team humming like a well-oiled machine.

For now, begin your Sales Cadence journey by downloading the June 2012 Sales Cadence Calendar here. This will get you started and off on the right foot.

Matt Sharrers’ e-book “Promoted to VP Sales: The Year 1 Toolkit” does an incredible job articulating many of the critical components needed to make it past the 18 month CSO life expectancy mark. If you haven’t read it yet, it’s a must read.

Follow @TonyalbAchiara

Follow @MakingTheNumber

If you enjoyed this sales strategy post, get free updates by subscribing by Email or RSS.

Our 500th Sales Blog Post

Greg Alexander — Wed, 23 May 2012 11:01:00 GMT

Our sales consulting firm published its 500^th sales blog post this week. You can subscribe here if you like. I wanted to thank three groups of people for helping us reach this milestone:

SBI’s clients. You have hired us to solve the most challenging sales problems. With each project, we get smarter. This allows us to share fresh insights with the world every day. Thank you for the privilege to serve you.
SBI’s consultants. My team sacrifices billable hours to write an article every single day. It is a rare person who would take an income hit for the betterment of the community, especially in the sales profession. Your commitment to the firm’s community is appreciated more than you know.
Sales Force Effectiveness Community. Your contributions to the body of work is much appreciated. We will continue to do our part and appreciate being part of the club.

Here are 5 posts from the first 500 hundred that generated above average interest:

"Why Sales Leaders Don't Fire 'C' Players"

"Three Ways Sales Management Can Move 'C' Players to 'A' Players"

"Sales Strategy: The 3 Things a CEO Evaluates a Sales Leader on: Company, Customer and Competitor"

"Sales Compensation: How to Overpay Your Top Performers"

"Lead Gen: Stop Sending Your Competitors Your Call Plans Via LinkedIn"

If you have a sales problem you would like us to tackle, let me know in the comments section below.

Thanks again everyone and here’s to the next 500 posts.

Follow @GregAlexander

Follow @MakingTheNumber

Greg on Google+

If you enjoyed this post, get free updates by subscribing by Email or RSS.

Sign up for our next webinar: Each month a sales consultant from our firm presents a best practice taken from one of our clients. You can sign up for the next one linked below or view past recorded webinars here:

Channel Partner Compensation: In Love with the 800 Pound Gorilla

Drew Zarges — Tue, 22 May 2012 11:01:00 GMT

We all know the guy from college who manages to nab a girl way out of his league.

We’re all thinking, “How’d that happen?”

Then we see it: he starts buying her expensive jewelry, taking her out to expensive dinners, bowing to every request. It’s degrading. Eventually, it ends badly. Bank account dwindling, he finally puts his foot down. She realizes the cash flow has stopped and moves on to somebody else.

It’s the classic Vlasic Pickle and Wal-Mart Epic, cataloged in the book Transforming Your Go-To-Market Strategy.

It’s the mid-nineties and Vlasic is the biggest pickle manufacturer in US with the highest brand awareness (and is able to command a healthy premium over other brands). Wal-Mart is a key partner, as it is to many other processed food companies, when it stumbles on a unknown Vlasic Product- the Gallon Pickle Jar. Wal-Mart begins testing Gallon Pickle jar, and finds that at $3 they are flying off the shelves. Wal-Mart wants to run the promotion nationwide- the Vlasic Rep, responsible for selling pickles to Wal-Mart, quickly agrees.

Soon, Vlasic was selling 240,000 gallons of pickles at Wal-Mart every week. Sales growth was phenomenal, but margins were down. Way down—Vlasic estimated it made less than a penny per jar, and the gallon jars sat in their customers’ homes, cannibalizing new, higher margin, business. When Vlasic tried to renegotiate the price, they were threatened to be pulled from Wal-Mart entirely. Vlasic’s management now couldn’t risk losing the partner that accounted for 30% of their sales. Wal-Mart eventually moved on to other big name promotions. Vlasic filed for bankruptcy in January 2001.

While Vlasic says that the Wal-Mart debacle wasn’t responsible for their filing, it’s still a classic case in channel mis-management.

Here are some questions I thought of during the story:

Why was the Vlasic representative compensated on Gross Dollars, not Margin?

Did management think that reporting explosive growth in gross dollars with a dwindling margin would satisfy shareholders?

Who cares if it is 30% of total sales, if it’s 0% of net income? Why couldn't they walk away?

Who buys a gallon of pickles? The jar alone weighed 12 lbs.

When designing a Sales Channel, it’s important to follow a sequence that makes sense. Make sure that you don’t design a channel management program with the wrong incentives - Download and view this Channel Management Design presentation Here.

While I agree that the gallon pickle jar most certainly caters to the Wal-Mart, cost conscious consumer, Vlasic misfired on its compensation program. As a market leader in pickles, they could have chosen higher niche supermarkets, with better margins. Instead, they went for the beautiful girl and left with an empty bank account. If a Channel Partner holds too much power, learn when to walk away.

Channel partners and managers, what do you do when your biggest Vendor/Partner threatens margins that make the venture no longer profitable?

Go in with a plan on everything, including your direct sales force. Attend our webinar on June 14th to learn how to organize an Inside Sales Organizational Model.

Follow @DrewZarges

Follow @MakingTheNumber

If you enjoyed this post, get free updates by subscribing by Email or RSS.

Autopsy of a Failed Sales Process Implementation

John Kenney — Mon, 21 May 2012 11:01:00 GMT

In spite of strong vital signs at launch, one new sales process became increasingly lethargic, lost motivation and slipped into a quiet coma before expiring. To the dismay of the team that labored to construct a high performance sales process, the embryonic journey from concept to adoption by the field sales force was never completed. This fruitless implementation was doomed by one major flaw. The diagnosis that follows reveals what happened and the lessons learned from this implementation we witnessed in 2011.

The Background Story

Implementing a new sales process consists of 2 major steps:

Step 1: Research the buyers’ process and design a new sales process that is mapped to it

Step 2: Train the sales force on the CRM tool, sales aids and the exit criteria prior to launch

However, successfully implementing a new sales process requires a third step:

Step 3: Reinforce the new behaviors to drive adoption

Understandably, it makes no sense to simply take the first two steps without the third. However, 90% of the energy and resources for this custom sales processes development were focused on the first two steps while the third step became an afterthought. The priorities seemed right at the time. There was tremendous visibility on the launch deadline. Senior leaders scrutinized the progress of the project which was accompanied by a substantial investement in a new CRM platform, building to a crescendo as the launch date approached. Slipping the launch date would spell catastrophe, so few resources were allocated to the post-launch activities.

Failing to focus on the reinforcement step undermined all of the work before it. Without the focus of a plan to drive adoption, the implementation team was left to assess the poor performance and then attempt corrective action. But the corrective actions were too late because the window of hope and enthusiasm that empowers behavior change had closed. To regain momentum with a doubting and tentative sales force will now require double the effort to overcome their first negative encounter with the new process. What could have changed the outcome?

Behavior Change is Indispensable

The key to success of this project was not simply to change the CRM practices and selling behaviors of sales reps. The transformation needed to permeate the sales organization; changing the behaviors of sales executives and sales managers as well. Old habits die hard. Even though the new process was well-designed and the training was engaging, adoption foundered. Let’s look at the behavior gap:

Desired New Behaviors

Reps:

Follow the flow of the new process for every opportunity
Use the CRM system and job aids correctly to make progress towards exit criteria
Develop proficiency through repeated use and coaching

Managers:

Coach the reps to become adept at the new process
Use the job aids as teaching tools
Develop proficiency through repeated coaching

Executives

Recognize, encourage and reward the new behaviors
Require compliance and accountability
Foster continuous improvements

The Adoption & Reinforcement Plan

The failed implementation had an intrinsic flaw. To their credit, the team had constructed an adoption and reinforcement plan, but they never convinced senior leadership to support it and take the initiative to make the activities a priority. Here are the key elements of the plan that could have guaranteed success:

1. Email Status Update:

Content: Implementation news, success stories, featured job aids
Cadence: Weekly until Week 16, then bi-weekly
Leader: Executives and Managers (alternating weeks)

2. Group Manager Call:

Content: Review live opportunities in progress
Cadence: Bi-weekly 60-minute call for 30 weeks
Participants: 5+ Sales Managers

3. Team Deal Strategy Call:

Content: Sales managers and reps collaborate on live deals using job aids
Cadence: Weekly 30-minute call for 30 weeks
Leader: Sales Manager

4. Reinforcement Team Call

Content: Deep dive into a specific tool or how to execute a stage in a live deal
Cadence: Bi-weekly 60-minute session for 30 weeks
Leader: Sales Manager

5. Recorded Training

Content: Deep dive into a specific tool or how to execute a stage
Cadence: Bi-weekly 30-minute session for 30 weeks (alternates with #4 Team Call above)
Media: Web training; available on demand

6. Day in the Life Of (DILO)

Content: In-depth observation of the application of the new tools and process
Cadence: Each rep participates once or twice during the 30 weeks
Participants: Sales rep daily routine is observed by executive, manager, or specialist

7. Senior Leadership Call

Content: Recognition and visibility of the importance of the new process; success stories
Cadence: Bi-weekly for 10 weeks
Leader: Sales Leadership

8. Manager: Rep Observations

Content: Sales manager participates in live sales calls to observe and coach
Cadence: Travel with 2 sales reps per week for 20 weeks
Leader: Sales Manager

This Reinforcement schedule involves the entire organization, it includes a variety of activities, and it engages through an assortment of communication vehicles to shine a sustained spotlight on the adoption of new process. The fatal flaw in the failed implementation was that the sales organization only made superficial attempts at #8 above and sporadic efforts at the other 7 elements. At the end of Week 2 the sales managers asked their reps, “So, is that new process working out okay?” Ouch!

Sadly, the tragic fate of this of this stillborn sales process could have been avoided. Accepting the passive resistance of the senior leaders doomed its adoption. Exposing them to the comprehensive plan outlined above would have earned their support and established a strong reinforcement cadence in those critical early days. The responsibility for the reinforcement of the process was never transferred from the implementation team to the sales leaders and managers.

To avoid a similar fate for your own sales process implementation, you should download the template of the Adoption & Reinforcement Schedule and be sure to gain commitment from all levels that it has a top priority. I would like to hear about your own experiences and ideas, so please comment below. Implementing a new sales process offers a rare opportunity to take a quantum leap forward in sales effectiveness and realize the dream of predictably achieving revenue and margin goals. Reinforce!

If you enjoyed this post, get free updates by subscribing by Email or RSS.

Follow @jdkenney

Follow @MakingTheNumber

Lead Generation Technology Heading Toward Ferrari or Yugo extremes?

Vince Koehler — Sun, 20 May 2012 11:00:00 GMT

Lead Generation is a top priority for CEO’s, Marketing Leaders and Sales Leaders. Why? Lead Generation is a game changer with a significant contribution to the bottom line. Unfortunately many companies have an extreme focus on the technology portion of LeadGen --- often over-emphasizing or completely neglecting technology.

As your internal teams grapple with the complexity to refine/launch your lead generation program --- make sure your technology team isn't taking a Ferrari approach with unneeded complexity that radically increases cost and delays impact. Likewise, make sure your team isn't about ready to hit the road with a Yugo approach that seeks to operate without key technology best practices.

Guide your team with a series of best practices to drive focus to the essential elements for success. This article on Lead Generation Technology is the third in a series of best practices for Lead Generation.

Technology Infrastructure best practices provide the punch to accelerate effectiveness. The following are the top best practices for the Technology Infrastructure required to support a world-class lead generation effort:

Download the Technology Infrastructure Assessment Tool here:

Common CRM across marketing & sales – Once an inquiry has transitioned into a potential lead, the marketing team’s lead development team must work from a common CRM to remain aligned with the sales team. Look-ups prevent stepping on each other’s toes when there are existing opportunities in the pipeline. Notes and activity history must be provided in a single CRM.

Marketing Automation system is in place – Don’t make the mistake of starting with technology, but rather nail down the lead management strategy and configure the marketing automation technology to support the business. Once a lead management process is in place, marketing automation technology increases the efficiency and effectiveness of the lead generation team.

Integrate the CRM and marketing automation – Lead Development Representatives (LDR’s) should have the ability to work form the CRM system and utilize marketing automation functionality to assign auto nurture paths, access 1:1 engagement templates, and monitor the level of interest and fit to the Ideal Customer Profile (IPC).

1:1 contact integration between CRM and Marketing Automation – The CRM system should serve as the master, with updates pushed to the marketing automation system. Technical data integration is only possible to the extent that the Lead Development Reps are disciplined in their look-ups of new contacts.

Capture level of interest through Scoring of prospect activities – The level of interest a prospect has in your product/service should be tracked through a point system that captures observable activity. This includes website page viewing, downloads, email clicks, webinar participation, and manually entered physical events such as workshop attendance. The score is used to set thresholds for levels of engagement and to prioritize follow-up.

Automated lead nurturing through a sequenced campaign targeted based on interest and/or profile – Once a prospect has completed a single form fill, automated lead nurturing gives you the capability to build a value-based dialogue. Once engagement of the prospect increases to a level of high interest (Scoring threshold), then the LDR begins 1:1 engagement. The automated nurturing provides an efficient ability to nurture many, and allow those that are truly interested to rise to the top for human follow-up.

Tracking capability to tie campaign elements, website visits, form fills, inquiries through to opportunities in a closed loop – Website and campaign element tracking must be in place to provide a full view of how individual activities track through the complete interaction.

Campaign element tracking – Emails, banners, and communications sent from individuals should provide full click metrics reporting.
Website tracking – Individual website pages, forms, downloads and video viewing must be tracked in aggregate as well as at the individual contact level. The individual contact level tracking is tied to a contact in the CRM and the activity history is added to the record.
Inquiry>MN>MQ>LEAD>OPPORTUNITY tracking – The conversion between lead management stages required to move a prospect through from Inquiry onto Opportunity must be tracked. This provides valuable insights into how individual LDR's are performing at various stages of the process.

Website configured to capture inquiries through custom landing pages – Most leads begin when a prospect declares their interest by filling out a lead form. High value assets on the website should be ‘gated’ to include a form. Keep in mind though, that a balance of un-gated and gated assets can produce a higher level of engagement than 100% gated. The lowest possible barrier should be balanced with the right level of information to research and diagnose the prospect.

Progressive profile building and/or Login capabilities have been assessed – Progressive profile building is the ability to build profile data over time through a succession of simple form questions. This is complex to build and should be assessed for advanced Lead Generation teams.

Download the executive assessments below to have the full suite of Lead Generation assessment tools:

Demand Generation best practices
Lead Management best practices
Lead Generation Technology best practices

Your comments and suggestions are welcome. If you enjoyed this post, get free updates by subscribing by Email or RSS.

Follow @vinkoe

Is Your Lizard Brain Ruling Your Sales Compensation Plan?

Ryan Tognazzini — Sat, 19 May 2012 11:00:00 GMT

CEOs don’t like paying big commissions to sales reps. When designing sales compensation plans, I’ve often heard the CEO’s say “…if a rep can sell enough to make a million bucks, I’ll gladly pay him.” However, when the big deal happens or a rep over-achieves quota and it’s time to pay up, the “pucker factor” always appears. Somewhere between designing compensation plans that reward peak performance and actually paying for the performance, buyer’s remorse sets in and the CEO starts asking questions.

Is this too much money to pay a rep?
Will this kill my margins?
Does the rep really deserve the money?
Did the rep really earn it?

The interesting thing about the above questions is that they are rarely asked during compensation design sessions.

Why? The Reptilian Brain vs. The Neocortex

How the human brain works:

There are 3 main systems in the brain: Reptilian Brain, Limbic System and Neocortex.

The reptilian brain is at the base of your skull. Its main role is managing survival instincts like fighting, fleeing and eating. It operates quickly and without conscious thought.
The limbic system sits on top of the reptilian brain and regulates emotions like fear, love, empathy and respect. This allows (most of) us to be socially conscious with our communication.
Finally, the neocortex is the largest part of the brain and is used for complex reasoning and logic. It’s large (~85% of the entire brain), but slow. In cases of panic, fear or distress, signals never make it to the neocortex and are managed by the reptilian or limbic systems.

The reason the above questions don’t get asked during compensation planning is because people use the neocortex and design plans through reason and logic. When the plan takes a turn down the path of massive individual payouts, the reptilian brain takes over and the fight for survival kicks in. In the case of the CEO, survival equals EBITDA. “Can I deliver the EBITDA with these enormous payouts?”

If the answer to the preceding question is affirmed, the thought process travels to the limbic system, where emotion comes into play. Feelings such as “that rep is a turd” or “she doesn’t deserve that much money” begin to play a part. Often, this is where the internal monologue concludes and the rep ends up with a smaller commission check.

So, how do you avoid operating on your reptilian brain and make logical decisions about your sales compensation plans? Download the Reptilian Brain Assessment to see if your lizard brain is taking over.

Here’s what to do with the output:

Is this too much money to pay a rep? The cost of sales threshold is set at 25%. What this means to you is that anything below a cost of sales (base + variable) means you should not modify the plan. If it is well above this, you need to consider what type of plan you designed and what the potential costs will be to make a mid-year change. Unless this is drastically out of order, I recommend biting the bullet and making your changes next year. Use your neocortex and act on rational thought, not kneejerk reactions.

Will this kill my margins? The variance here measures the EBITDA average the rep’s sales generate in relation to the company average. You’re testing the value of the revenue the rep brought into the company. If you are more than 25% below the company average, time to take a look at how this rep arrived at their numbers. If they are within those parameters (and certainly above the company average), use your neocortex and pay the rep.

Does the rep really deserve the money? This has nothing to do with your comp plan. Ignore it and remove subjective bias from your thinking. You are in the limbic system and acting on emotion.

Did the rep really earn it? See above. Elevate your thinking and remove emotion from the equation. If reps aren’t “earning” the money, you have a role clarity problem, not a comp problem.

In the end, our recommendation is to pay the rep what they earned. If you feel you are overpaying your sales team, validate that against objective benchmarks and change the plan next year. If decide you want to modify your sales compensation plan to trim commissions, prepare your lizard brain for its next big test: turnover.

If you enjoyed this post, get free updates by subscribing by Email or RSS.

Follow @RyanTognazzini

Follow Sales Benchmark Index @MakingTheNumber

Are You Evolving at a Pace Equal to Your Key Accounts?

John Staples — Fri, 18 May 2012 11:00:00 GMT

Over the last couple of weeks I had the opportunity to sit through several customer change management related meetings. These meetings involved issues with key account management, major account teams, and large channel management programs. The one undertone that continued throughout all of the conversations was the idea of “pace of evolution”.

A term you may be familiar with, if not, you will be is Digital Darwinism - the evolution of consumer behavior when society and technology evolve faster than some companies’ ability to adapt.

Brian Soli, the author of The End of Business as Usual and principal analyst at Altimeter Group, was recently quoted as saying “Identity, persona, essence and promise, are the new kings and queens of the branding kingdom, thanks to technology and the deeper connections it creates between brands and consumers”.

Are you evolving at a pace equal to your customers? Take this quick 10 question survey here to determine whether your evolving fast enough.

The question of evolution focuses on almost every aspect of the business; marketing, automation, sales talent management, decision making, speed, product, customers etc.

Pace of evolution is a cultural shift and something that should be driven from the top down. Here are 5 behavioral changes you as leaders should look to adopt in order to influence and promote change within your organization:

Purge and delegate – stop allowing subordinates to delegate up
Move with speed – never end a meeting without clarity about who will do what by when
Speak with passion – relentlessly talk about the need to move, adapt, and stay ahead of the competition
Match words with deeds – don’t just talk about the external world, look at it constantly
Let them all see it – do all of the above and make it as visible as possible

For many of you, you’ll read this and say I’m evolving, my company is evolving but then stop and think about some of the major brands that have failed over the last few years.

According to 24/7 Wall Street, these are the 10 Brands expected to disappear in 2012: 1. Sony Pictures, 2. A & W, 3. Saab, 4. American Apparel, 5. Sears, 6. Sony Ericsson, 7. Kellogg’s Corn Pops, 8. MySpace, 9. Soap Opera Digest and 10. Nokia. Not exactly a list of unknowns.

Another article you should review is Why Brands Die published by the Washington Post.

If you have questions regarding whether your evolving at a pace equal to your customers, contact me to discuss a Sales or Marketing Productivity Benchmark project (12 weeks).

Follow @JohnStaplesSBI

Follow @MakingTheNumber

if you enjoyed this post, get free updates by subscribing by Email or RSS.

How to Balance and Produce Refined Sales Territories

Bryce Record — Thu, 17 May 2012 11:00:00 GMT

This is the third and final blog in my current series about proper Territory Design.

Much of the first two blogs were about discovering, understanding, and finding ways to maximize the market potential for your sales organization.

Now that you have determined true Territory Potential using the process in my last blog and had a head start of downloading the Territory Planning & Sizing Calculator, you are ready to begin enacting your master plan.

Step 4: Map Information to Sales Territories

In order to properly map and apply all of your information to your Sales Territories, you must first calculate your Territory Pot. It’s very simple:

Territory Potential = Existing Customer Base + Pipeline + Prospects

When calculating your Territory Potential, be sure to eliminate any duplicates (ie: Existing Customers currently in the Pipeline for a new contract) in order to get the most accurate Sales Territories.

Step 4a: Optimize and Balance Sales Territories

After you know your Territory Potential, you have the data you need to begin to balancing and optimizing your Sales Territories.

Territories can be balanced by a number of criteria, including:

Revenue Potential
Average Revenue
Customer Count
Opportunity Count
Location
Vertical (Industry)

Balanced territories allow you to allocate effort evenly. This process assures that all sales opportunities are being properly pursued, and existing customers are receiving the attention they deserve. Make sure that your territories have concise geographic boundaries. (Additionally, properly balanced territories can eliminate disputes between sales reps about potential revenue in a given territory)

Steps 5 - 6: Produce and Refine Sales Territories

There are a few important processes that you must complete throughout Steps 5 and 6 in order to finish up the Territory Design process. Once you have completed these, you should have a Sales Territory Network that is optimized, aligned, and balanced. Furthermore, it is a Network that you will be able to more fully understand, as well as use to predict your productivity in the future.

Perform the processes below:

Understand Potential Distribution
Prioritize Accounts in Each Territory: This is one of the most important steps to Refining your Sales Territories. It’s paramount that you know which Accounts are the most important to your sales organization. This determines which sales reps you assign to which Territories, and how much effort to expend.
Know Prospect Density: This is another way for your sales organization to portray where the most demand, or potential, is. It’s not a bad idea to put together a “Heat Map” like the one portrayed above to illustrate the regions of greatest Opportunity and Prospect Density.
Best Practice: Assure that sales reps with the largest work capacity and best historical win rate get the largest Territorial Patch. It’s the same idea behind why a sports team wants their best player to have the ball in the closing seconds of the game – you increase your chances of success by putting your best players in a situation where they can help you win.

In closing...

Hopefully this blog series has shown you some of the benefit behind doing the proper Sales Analysis before and after desiging your Sales Territories. The information to be gleaned from these processes can lead to much more balanced, aligned, and optimized sales territories - as well as improved numbers from year to year.

Follow @MakingTheNumber

If you enjoyed this post, get free updates by subscribing by Email or RSS.

The Biggest Market Problem the VP of Sales is having in Q2

Matt Sharrers — Wed, 16 May 2012 11:01:00 GMT

Why is my sales organization not evolving faster?

As a benchmarking firm, we have a distinct advantage of speaking with VP of Sales from across 19 industries on a regular basis. Sales forces are not evolving as fast as the executive sales leadership would like. They have identified a sales talent problem. Why do you care? Because the maturity level of the sales force determines what improvement initiatives can be consumed by your team. If you want to know where to target your initiatives, complete our assessment by clicking here. We just completed a round of research on the current market problems for the sales leader. A year ago, VP of Sales were more focused on improving performance conditions.

The tide is shifting to talent; specifically sales rep talent. VP of Sales want their sales reps to evolve faster.

Below are three most common reasons for the lack of evolution with a fix for each:

#1 - Pace - front line sales management does not push the pace at which market information is consumed and absorbed by the sales force.

Fix – disrupt the current state an “outside in” vs. “inside out” customer and prospect review twice yearly. Quarterly Win/Loss is a best practice that should be adopted. Companies fail to get feedback from those that matter the most and win/loss is the best way to accomplish this. If you want to learn more, click here and you can get started tomorrow.

#2 - Lack of Business Acumen- sales reps inability to think like a business person is causing prospects/customers to increase the number of “no decisions” where they choose not to buy from any of the potential vendors.

Fix - coach on business skills, not selling techniques. In 2012, most customers have the ability to learn almost everything they can about a product or service without speaking to a sales person. They derive value when a sales person can help them connect a widget to a market problem. To qualify as a problem, it must have three things:

Pervasive-see it all the time
Urgency- in the critical path
Money-the prospect/client must be willing to pay money to solve it.

#3 - Super Rep Syndrome - front line sales management is not investing in development of their teams. Because competition is growing more stiff and buyers are more knowledgeable, this is having an inverse effect on quantity and quality of coaching. Front line management are reacting by trying to parachute in and close more deals vs. improve their coaching techniques to keep pace with buyer changes. This is coming from direction from their bosses to make the quarterly number.

Fix - Executive Sales Management needs to be more visible in the field. It is impossible to coach a front line manager if you don’t spend time coaching via direct observation. Part of being a coach is understanding that your discipline to follow a methodical process around rep development is why your role exists. Your ability to scale is directly related to how many ‘A’ players you can produce and retain.

Now what do you do?

Answer the following question:

What one new capability will I bring my team to help them evolve faster? Looking for ideas? Read these tips here and your VP of Sales will thank you for pushing the pace. Also, don't forget to take the maturity model assessment here.

Share your best ideas with me below in the comments; would enjoy hearing about them as I know your peers would.

Follow @MattSharrers

Follow @MakingTheNumber

If you enjoyed this post, get free updates by subscribing by Email or RSS.

Hit Your Number by Hiring 'A' Player New Business Reps

Scott Gruher — Tue, 15 May 2012 11:00:00 GMT

I continue to see sales organizations attempt to specialize by selling activity and fail to hire true hunters. Furthermore, the environment they create isn’t conducive to retaining top performing new business reps. If your sales force structure has been designed based on an effectiveness strategy (growing revenue and maintaining cost), specializing by selling activity is a great way to drive revenue. In this article we will explore why mistakes are made when deploying new business reps and how you can begin to solve the issue. The result will be an uptick in new logo productivity.

Why do sales organizations make mistakes in regards to hiring new business sales reps?

Not fully understanding what a hunter looks like

No process to identify hunters – just hoping they find one through referral or on an internal job posting. Not likely. Great hunters have jobs and you need to go recruit them.
Hiring internally - pulling new business rep candidates from service or operations is typically a mistake. A good new business sales rep would not thrive in that type of role. These folks are more likely to succeed in an Account Management role
Hiring from within the industry - unless you are substantially behind your competitors, why would you hire the talent that failed with them? Why would a great new business rep leave a competitor to come sell for you unless there was an issue?
Putting too much weight on referred candidates - while referrals are typically more successful employees, being referred doesn't have anything to do with a candidate's ability to persuade, handle objections, negotiate, and be resilient.

The comp plan isn’t hunter friendly

Mainly base and little commission – great hunters want high risk/high reward comp plans that allow them to make a lot of cash if they blow it out
Doesn’t reward new logos – if you pay based on revenue stream and don’t incent opening new store fronts you may miss the boat
Capped Plan – no great hunter will accept a capped comp plan. Why would they?

Value culture fit and industry knowledge over role competencies

I am not disregarding culture fit and industry knowledge as unimportant, but these alone have nothing to do with a candidate’s ability to go get business. You need someone that has shown past success hunting and has the desired competencies. Examples: Persuasion, Drive for Results, Resilience, Objection Handling

Great hunters can come with some perceived baggage

Greed – hunters are typically financially driven. They want to focus on new business sales and get paid. They may not be as interested in collaboration or customer profitability
Sell and cut bait – great hunters don’t want to manage accounts that aren’t producing new business for them
Not Ops friendly – great hunters may cause some friction between sales and Operations because they want to sell everything. Remember, they love the conquest of bringing somebody from No, to Maybe, to Yes. You will have to provide the rails they can work within and redirect at times. Your Front Line Sales Manager should help manage the relationship with Operation

Lack of proper role support

You want new business reps focused on selling. To ensure this is the case, they will need proper support from marketing, during the post-sale transition, and after implementation
Hunters are asked to manage existing relationships – this creates a lack of focus and corrupts the hunter job. This is a mistake

How to Make Your New Business Number:

Develop a clear hunter role profile including the job description, scorecard, and competency profile
Define your hiring process for hunters. This should include a sourcing plan, job tryout, and reference check
Make the comp plan hunter friendly - high variable pay component with no cap
Understand the leadership style and support necessary - hunters need help getting deals approved. This typically involves more effort because the new customers don't have a track record with your organization
Focus hunters on hunting only. Utilize marketing, remove admin functions, and transition accounts to Account Managers as soon as possible. Focus = improved productivity

Hire the right talent for the new business role and you will see a drastic improvement in new business results.

What else have you seen work with regards to hiring “A” player new business reps?

If you enjoyed this post, get free updates by subscribing by Email or RSS.

Follow @ScottGruher

Follow Sales Benchmark Index @MakingTheNumber

Understanding Market Potential to Properly Size your Sales Force

George de los Reyes — Mon, 14 May 2012 11:01:00 GMT

Sales Force Sizing is defined as the science of matching selling capacity to market demand. In my last blog post, I laid out our six-step methodology for determining optimal headcount and aligning sales force size with market potential. In this post, I want to specifically address market potential.

We often find that most sales organizations lack clarity on their TAM (Total Addressable Market) and as a consequence, the market potential within their individual territories. In lieu of market potential, we typically see sales territories designed based on customer density, location or even historical sales precedence. All of these methods ignore the actual demand in the marketplace for a given product or solution which can and does change over time.

Remember this equation… Success = 50% Talent + 50% Performance Conditions. You can have the best talent available, but if you’re not putting them in the right performance conditions, you will not achieve the desired results.

My colleague, Bryce Record, recently outlined the 5-Step Process to Uncovering True Market Potential. In his blog post, he guides us through the major steps to optimizing and aligning your sales territories. The formula for determining Market Potential, writes Bryce, is the multiplication of a company’s Total Number of Prospects by Potential Customer Spend. Check out his post for an in depth explanation.

At the end of the day, the goal of any sizing exercise is to answer the following three questions:

How many heads do I need?
Where do I need them?
When do I need them?

Without understanding your market potential, you will not be able to accurately answer these questions.

If you want more information on how to determine the real potential of your territories, download our webinar on “Instant Improvements for Segmenting Your Accounts - How to Determine the Real Potential of Your Territory”.

Follow @GeorgedlReyes

Follow @MakingTheNumber

If you enjoyed this post, get free updates by subscribing by Email or RSS.

Sign up for our next webinar: Each month a sales consultant from our firm presents a best practice taken from one of our clients. You can sign up for the next one here:

How to Set Accurate Quotas Q&A from May 10th Webinar

Joshua Meeks — Sun, 13 May 2012 11:00:00 GMT

Setting quotas is difficult for organizations because so much at stake from a financial perspective for both sales representatives and the company. The way to perform proper Quota Setting is by following our Methodology shared in our webinar that you can download today here.

Without further ado here are the answers to the great questions that were submitted during our webinar.

How do you set quotas when you are launching brand new products and don’t have accurate historical data?

Launching new products or services is always a daunting challenge. In terms of setting quotas for a new product or market, market potential and sales process will determine how to set an accurate quota. Marketing potential should be included in the business plan that has been built by marketing or finance. The sales process designed to sell the new product/service will determine amount of time or it will take to sell. If you are launching a new product without knowledge of the market potential or sales process send me an email and we can help you install a sales enablement program for new product/services launches.

In a long sales cycle such as 6-9 months, how much quota should be based on the pipeline vs. market potential?

Pipeline should never drive quota. If pipeline is determining quota in any way you are stacking the deck and showing favorites to people in the organization. The five components of my quota methodology ensure that everyone is treated fairly. Use market potential as your rationalization step. Just because a rep has a big opportunity doesn’t mean they should receive a bigger quota. Fairness is essential to keeping “A” players.

How do you implement quotas without having “A” players walk out?

“A” players like quotas for two reasons. First, quotas identify who the real “A” players are and expose individuals who are underperforming. Second, having a quota system will starve the underperforming reps and shift that money to “A” players through effective compensation design. If you are considering implementing quotas into your organizations make sure you design and effective compensation plan and over communicate what is going to happen and why you are making this change.

Do you include current revenue in the market potential calculation?

Current revenue impacts the market potential calculation in that the more penetration you have the less market potential. Take a territory that a total market potential of $5M in annual revenue. The company already has $2M in revenue from that territory so the market potential is $3M.

How often do you realign quota allocation throughout the year?

Realigning quotas throughout the year is a dangerous game and one that should be thoroughly considered before implementation. If sales goals are too high the best position to take is to leave quotas as unattainable to preserve the integrity of the goal setting process and instead offer special promotion incentive feature or SPIF to provide the sales organizations with something to strive for that is attainable. If the quota is too low you can adjust them up at the end of a quarter or month if they are calculated in such a way. If you the quota cycle is for one year your hands are most likely tied. If you find this to be the situation begin to communicate early and often to the sales force that this was a windfall year and to expect quotas to be significantly raised next year.

If working with quarterly quotas, is it better to be a rolling 3 month average or a straight 90 day goal?

It all depends on what you are trying to do. Personally, I have seen the best results at organizations that provide period of time goals so straight 90 day approach. With that said, if you are having sales reps sand bagging, holding back deals until a quota window opens, the compensation program a rolling 3 month average can work for you. This decision comes down to the culture of the organization.

What techniques do you use to value the pipeline?

I use two variables to value the pipeline. The first is cash win rate because it is most accurate representation of what I could expect to win in the pipeline. (Cash win rate is calculated as dollar value of deals won divided by the total dollar value of deals.) The second variable is percent of historic sales by period of time. You refer to my previous post “3 steps to developing a Tight Sales Dashboard” and download my sales dashboard template here.

Follow @MakingTheNumber

Follow @The_Meeks

3 ways to get Sales Managers to change the habits of ‘A’ players

Dan Perry — Sat, 12 May 2012 11:01:00 GMT

87% of sales management tell me they want to spend more time with their ‘A’ players Yet, Sales Manager selling time is hovering around 48%. SMs don’t have the time to spend with their ‘A’ reps (or any reps like they should). In comparison, World Class selling time is around 77% for SMs. And part of this time must be spent with those ‘A’ players.

Why?

You need to retain these people and help them increase their productivity even more. Your best sales people are being recruited away daily. Heck, I get phone calls from recruiters about every other week. Great talent is hard to attract, recruit and retain. But once you get them on board, losing one can cost the company literally millions of dollars.

Recently, one of my customer’s sales managers called me. He just had his best sales person (‘A’ player) resign. “Dan, what do I do? What can I say to ‘save’ him? Give me something good” he asked me. Of course I asked him how have you retained him? “Couldn’t spend time in the field with him Dan. I have too many ‘B’ and ‘C’ players that I need to ride with” he claimed.

By the way, that’s a big problem. Best in Class SM coaching performance tells us you should spend 20% of your time with ‘A’ players; 70% of your time with ‘B’ Players and only 10% with ‘C’ players .

My next question was ‘Why did he resign?”. Answer: “The new sales process and coaching program you guys helped us put in place is frustrating him. He doesn’t want to use it and thinks his productivity is dropping and I am micro-managing him because of it. The competition kept calling him and he finally agreed to meet with them and make the jump.”

SBI has recently helped numerous organizations map their sales process to a buying process. We have designed, developed and implemented many Sales Management Programs in companies worldwide. And every one of them needed a change management plan for the sales force. The problem is they don’t separate out the ‘A’ players from the others. ‘A’ players don’t want a new process. They don’t want to be coached differently. They just want to be left alone.

There are three big problems with this thinking:

What got the ‘A’ player there currently won’t keep them there long term.
The ‘B’ and ‘C’ player says “If they get an exception to the process, why do I have to follow the process?”
Without consistent process throughout the organization, you can never understand what you did right or wrong. The process provides a baseline. And without this baseline it leads to low or no growth in companies (ever wonder why some companies, big or small, just don’t grow)

Got it. So what do I do?

3 ways to get Sales Managers to change the habits of ‘A’ players

Ride with your ‘A’ players in the field. This may seem obvious but finish reading this blog, call up your ‘A’ players and put a date in the calendar with them NOW. Spend the quality time with them. Don’t just ride to one customer and then leave; complete the whole day. And evaluate them with a Field Ride form. We call ours a DILO (Day in the Life of). Download a copy of it here.
Develop individual change management plans around new processes. New processes, systems or changes will always have a dip in productivity. The severity of productivity loss and length of time of the dip is up to you. Customizing an individual change management plan for each ‘A’ player will allow that individual to understand and adopt the process, system or change. If you try and slam the person into the overall system, you might get a resignation email from them shortly.
Be very consistent with your interactions. Cadence is the key with ‘A’ players. Planning to have a one on one with them, placing a DILO on the calendar and keeping the date or at least setting a weekly catch up call is critical. They think they really don’t need you. And they will tell you everything is great. ”No Worries boss” is a phrase I hear a lot. Don’t buy it for a second. All ‘A’ players love the attention. Consistency with them is king.

Homer Gray demonstrates these abilities as a sales manager. I remember when I promoted Homer to the SM role. He took over for a team that consistently achieved their quota. In fact, they were the best sales team in the country. Homer made sure he spent time with his ‘A’ players. He rode in the field, never missed a one on one session and helped those ‘A’ players when we rolled out a new sales process. It wasn’t easy with those great sales reps. But Homer didn’t say ‘Don’t worry, you do a great job, so using this process is optional.’ Instead, he created a separate plan for each individual on his team. This plan helped the implement the new process by allowing the ‘A’ player to get some quick wins using part of the process. These quick wins helped change his attitude. Instead of cherry picking the process, the ‘A’ player commits to using the entire process and shortens the change management process.

Are you struggling with change management with your ‘A’ players? Do you need some coaching on how to handle them?

Download our new book: Or send me an email at dan.perry@salesbenchmarkindex.com. We can help you get your ‘A’ players to be more productive and retain them in your company.

Follow @DanPerrySBI

Follow @MakingTheNumber

If you enjoyed this post, get free updates by subscribing by Email or RSS.

How to Use Influencers and Impact to Improve Win Rate

Tony Albachiara — Fri, 11 May 2012 11:01:00 GMT

SBI has developed a model that utilizes your findings from the Win/Loss Analysis and Assessment Phase so as to allow you drive up your win rate percentage, and to improve your overall sales strategy.

This model focuses on 3 Categories Essential to a Sale:

Company (e.g. brand strength, reputation etc.)
Solution (i.e. product and/or service)
Channel (i.e. direct sales, indirect, etc.)

Each of these Categories has their own Influencers that are known to directly affect your Win Rate. Some of these influencers are portrayed below in the chart:

Measuring Influencer Impact

Impact illustrates which Influencers will most greatly affect your win ratio. This measurement is expressed as a percentage, and thus each increase of 1 point should increase your win ratio by the percentage represented in that Impact Score. For example:

Assume the Impact of the “Ease of Use” Influencer is 6.5%
Assume that your average rating for “Ease of Use” is 7.0
Assume you improve this Influencer over the next 6 months
Assume you then perform a new Win/Loss Assessment and you discover that the new round of respondents gives you an average rating of 8.0 for “Ease of Use (improvement of 1.0)
You can expect that your win ratio will have increased by 6.5% for those new deals

Make sense?

NOTE: Influencers with the greatest performance gaps do not indicate Impact. Similarly, Influencers are not based on competitive performance (most firms guess wrong in this instance).

How do you Determine Influencer Impact?

Depending on how each of your Influencers scores during the interviews you conducted during Phase 1 of the Win/Loss Assessment, SBI can utilize their technology tool to properly and accurately calculate your Impact scores.

Each Driver (Category) is assessed by asking respondents to rate performance across a series of Influencers. These respondents are guided through these Drivers so that they can rate individual Influencers for each Driver.

Once you have this knowledge documented and you understand how each of these Influencers is going to affect your Win Rate, you can pull those levers accordingly in order to adjust Win Rate to the point that your sales strategy becomes its most successful.

Apply Findings to Sales Strategy

The next step is to put all your hard work into action in the hopes that it will improve your Win Rate, and allow you to meet your sales strategy goals. The first stage of this process, after applying all of your new data, is to:

1) Map Buying Behavior to Sales Process

In this stage you need to:

Employ a customized sales process
Map the changed buyer behaviors
Use buyer-driven exit criteria

2) Competitive Summary

Measure your performance against Competitors that you often run up against in your market. If you often face off against a particular Competitor in your market, sometimes the best solution to improve Win Rate is to see where you outrank that Competitor. For instance, do you:

Show superior understanding of the customers’ needs
Demonstrate stronger solution value
Have product configurability and flexibility
Provide multiple solution options
Exploit the Competitors pricing structure
Message around the value proposition

3) Tactical Performance

This stage will measure and improve upon any areas of particular weakness that your organization has when compared to specific Competitors. You will need to:

Identify these areas of weakness
Identify which Driver is responsible for these weaknesses (Company, Channel, Solution)
Employ strategy to limit or eliminate these weaknesses. (ie: Reduce the negative impact of the Cost Influencer by examining messaging and value, creating multiple solution options, or researching the pricing structure of direct competitors)

Win/Loss Wrap-Up

So the big question after all of this instruction and these recommendations is…

How do you make sure that an investment in Win/Loss Analysis pays off:

Ensure that sales, marketing, product development, and executives understand the predictive modeling.
Provide your 3^rd party partner with a random sample of sales opportunities. The results of the research will only be as representative as the opportunities provided.
Move from traditional “looking in the rear-view mirror” thinking to predictive win loss analytics that focus on future performance.
Trust that these predictive analytics will correctly identify Influencers of greatest Impact.
Continue populating the predictive analytics model with additional data to achieve more resolution within data subsets.

The Win/Loss Assessment is not necessarily a project that can be completed overnight. It is a sales strategy tactic that will be implemented and refined over time. However, it is a process that can change the entire direction of your company when properly implemented, as you will see great strides in Win Rate and end of year revenue numbers. If you think a Win/Loss Assessment could help your organization, don’t hesitate. Look into it today. CLICK HERE FOR THE WIN/LOSS INTERVIEW TEMPLATE TO GET STARTED.

This post was the 4^th in a series around the Win/Loss/No Decision framework.

What are you doing in your Win/Loss No Decision you can share with our audience?
How have you leveraged Win/Loss/No Decision within your organization?
What “best practices” have you implemented?
How are you using technology to make the Win/Loss/No Decision more effective and efficient?

Want to spend some time brain-storming and learning more about Win/Loss/No Decision? Send me a note tony.albachiara@salesbenchmarkindex.com and I’ll coordinate a time for us to speak.

Follow @TonyalbAchiara

Follow @MakingTheNumber

Comments are welcome below and if you enjoyed this post, get free updates by subscribing by Email or RSS.

Bad Idea: Chasing Revenue Goals with Channel Partner Acquisition

Drew Zarges — Thu, 10 May 2012 11:01:00 GMT

Too often, Channel Managers find themselves in a familiar situation—the boss wants a high increase in Channel Revenue for the fiscal year, and the numbers aren’t looking too good. Even worse: direct sales is knocking the cover off the ball, eliminating any notion that this is a product based issue.

Many channel partners find themselves in this situation, and the decision path at this juncture is critical. A strong channel manager does a thorough analysis from all angles: End Customer, Competitor, Management and Partner. An inexperienced Channel Manager leaves a mess, makes hasty decisions, and still falls short of goals.

Here are the Channel Management classic “quick fixes” to avoid:

Increase Margin/Lower Price across the board for product sales
Launch a sudden promotion- Big Vacation for the top partners!
Lower criteria for Channel Partner Acceptance, Bring on more Channel Partners

The last bullet point is a crucial mistake when firms try to increase revenue: Instead of finding partners who are truly aligned with their goals, they opt for partners with a broad reach at the expense of margin, or simply flood the market with new partners, increasing competition and lowering prices. This puts them further into the spiral of death--- they now must sell even more than before in order make the number.

Here the simple steps for Channel Partner Expansion:

Don’t Rush: You may miss your number in the short term, but it’s better than sacrificing reputation, margins, or your relationships with the existing channel managers. Think it’s hard to make your number now? Try it when new partners botch service and implementations, your price rapidly erodes in the market as partners compete, or you lose your best legacy partners.
Ask yourself What Do We Want? and What do they want?: Make sure the partner fits your Ideal Channel Partner Profile. An Ideal Channel Partner Profile should be a tool utilized by every channel manager to ensure a tight fit. It should change as your overall Go To Market Strategy evolves, but always used as a reference to avoid toxic partnerships. Download a sample Ideal Channel Partner Profile here.
Develop a list and rank in order of importance: Use your Ideal Customer profile and list out the key attributes of the description. List all the Channel Partners and score them objectively. Choose the channel partner(s) with the highest score.

Sound simple? One of the top reasons that Channel Partners fail is that the Supplier was too lax in accepting partners in the first place. Avoid hooking up with wrong Channel Partner, list out your Ideal Profile, and don’t settle in times of a crisis.

Channel and Sales Managers: What are your must haves, nice to haves, and No-Gos when selecting partners? Please post in the comments below.

Not hitting your number? Don't settle for the quick fix, gain an understanding of how to achieve quota through Best Practices.

Sign-up for today's webinar "How to Set Accurate Quotas" with Josh Meeks (May 10th).

Follow @DrewZarges

Follow @MakingTheNumber

If you enjoyed this post, get free updates by subscribing by Email or RSS.

How to Map Out Who Has the Juice to Get a Deal Done?

Greg Alexander — Wed, 09 May 2012 11:01:00 GMT

The Q1 Win/Loss season just ended and our sales consulting firm performed 409 post deal reviews. The #1 reason deals were lost in Q1 2012 was an inaccurate understanding as to who really makes the decision on a deal. By our estimate, 84 lost deals could have been won, if only the sales team had a better understanding of the influence dynamics inside their accounts. We are in the era of committee decision making.

How many deals did you lose in Q1 that you could have won?

If the answer is “too many”, and you feel a better understanding of account power dynamics might help, here is an idea for you.

Sales Benchmark Index’s PowerGram

A PowerGram is a graphical representation of the power dynamics, and power positions, within an account. It shows the true power structure, which is usually different than the account’s organizational chart. It provides useful insights about an account’s decision making process.

Power is part of each organization. An account’s org model provides the framework for the alignment of power, authority, and responsibility. The PowerGram tool makes the informal framework clear.

**What does a PowerGram Do?**

Whenever people work together, they form groups, whether formal or informal. Relationships amongst members of the group may be positive or negative ones. There will be channels of influence, communication, power, and patterns that regulate the group’s interaction. PowerGrams display exactly those relationships amongst members. PowerGrams represent the levels of power by circles (the larger the circle, the more power a person has). The lengths and breadths of the lines between circles represent how close or strong the relationship between the two members is.

How to Use SBI’s PowerGram?

Get the account’s org chart. Identify the formal lines of reporting and authority.
Identify the people on the org chart you think will be involved in evaluating your proposal. Include everyone, even those you are not sure about.
Use the symbols from Figure 63 (Download here). This is an extract from our win/loss methodology.

Figure 63: An example of a recently completed PowerGram

AB= close, positive and strong. AF= negative distant with major power imbalance similar to CD. ABC appears to have formed an alliance similar to FED. E is a central facilitator role with more power than F or D, but not as much as A or C. E might be a crucial person for A and C to be in good relationship with despite the animosity towards E’s close friends F and D.

Action Items for You:

1 - Be sure to perform your Win Loss deal reviews immediately following every quarter. If you don’t know how, read this and this. Then download this.

2 - If you need help, contact Tony. He is the best in the business in getting accounts to open up and give the real reasons a deal went your way or did not.

3 - Get real if your Win Loss deal reviews are being done by your reps and managers. Half the time they don’t know and for the other half, they are afraid to tell you what really happened. 3^rd party objectivity is a must.

4 - Pick your top 5 deals for Q2 and attempt to use the PowerGram. Watch out for:

Leaving people off the chart.
Assuming rank determines power. It never does.
Lack of clarity around thin and heavy lines. If you don’t know who hangs with whom, you will lose the deal.
If you cannot draw a PowerGram because you simply don’t know how big the circles should be, you are not sure if a line should be thin or heavy, where to strike throughs should go, give us a ring at 888-556-7338. We will get someone on the horn and tell you how to remedy the situation.

If you have anything to offer our subscribers on this subject, please comment below. Mapping power is difficult to do and the more ideas the better.

Follow @GregAlexander

Follow @MakingTheNumber

Greg on Google+

If you enjoyed this post, get free updates by subscribing by Email or RSS.

Why Do Good Reps Resist Sales Process Improvement?

John Kenney — Tue, 08 May 2012 11:00:00 GMT

According to a study conducted by McKinsey & Company, nearly 75% of new sales process implementations are not adopted by the sales force. This is because human beings instinctively react negatively to change. Changing the sales process touches every aspect of the life of the sales rep, so resistance is a natural and expected part of the implementation process. Without proactive measures, your implementation will most likely fall among the 75% group of failures. Here’s what we have seen to be most effective.

Resistance: Passive & Active

Resistance comes in two varieties, Passive and Active. When the new sales process initiative is announced, some sales reps will react with skepticism that it will ever happen. Past experience tells them that this is just a pipe dream, and they won’t waste any energy to deal with it. They passively resist the change. Here are some common examples:

Avoiding offers to participate in planning
Ignoring requests for input in the design
Minimal compliance with assigned tasks

After launch and training on the new process is completed, passive resistance becomes more obvious:

Explaining to customers that job aids are just a new corporate formality
Entering inaccurate data in CRM
Bad-mouthing the process to peers, but not offering suggestions for improvement

Eventually the passive resistance of some reps becomes more active. Examples of active resistance include:

Purposely reporting activities that did not happen
Refusing to use job aids
Entering false information in the CRM system

Why Do They Resist?

A well-designed new process consists of prescribed activities, job aids, and exit criteria that are a quantum leap beyond the current process (or lack of process.) You would expect the sales force to instantly embrace this powerful new stuff and start closing more and bigger deals as soon as they leave the classroom.

The classroom. That’s where the active resistance starts; at the moment reps take their seats (or log-in) and realize that this new process they’ve heard about is actually going to happen. In his recent book, Your Brain at Work, David Rock explains how various chemicals are released in the human brain whenever change is imminent. (Read his book for a fascinating explanation that includes cool scientific words like prefrontal cortex, endorphins, dopamine, and amygdala.)

The hard-wired impact of the human mind may seem slight, but there is an undeniable influence. Here are the subtle reactions that the reps and managers feel when faced with change:

Status: Being directed to do something by an authority diminishes status, which causes a rush of dopamine, a negative brain chemical. Seasoned sales professionals are proud of their past accomplishments, skills and knowledge. A new process implies a loss of status.

Certainty: The human brain prefers repetition and predictability. We are programmed to react negatively to all changes, including a new sales process, even if we have high hopes.

Autonomy: Loss of self-determination sets off alarms. The fear of being forced to adopt new behaviors causes resistance. The human brain rebels at being forced into new patterns.

Relatedness: Facing change alone is unsettling. Humans are social creatures who feel safety in numbers and they respond negatively to situations where they lack support from others.

Fairness: Humans are acutely aware of the equity of every situation. The response to being tasked with new work will seem unfair if it is not balanced with an equivalent benefit.

Here’s the Fix

Surely mature adults can overcome their innate resistance to change and just suck it up. But we are hard-wired to resist. The good news is that resistance can be mitigated. Here’s how:

Status: Select top performers to participate in the design and pilot test. Associate involvement with the new process as a sign of prestige. Publicly recognize the efforts of those who contributed, and use their testimonials to spread the news.

Certainty: Over-communicate. Don’t assume that the sales force reads or listens to every message. Provide schedules, FAQs, and set clear expectations. Broadcast the success stories of early adopters. A regular flow of information will combat the ambiguity that stifles acceptance.

Autonomy: Make sure that the sales force is aware that they have input into the new process. Actively solicit their ideas during development, and provide a closed-loop process to accept suggestions for continuous improvements.

Relatedness: Your sales reps may feel like they are facing this change alone, so you must create an environment that encourages and rewards collaboration and best practice sharing. Host status calls where reps and managers can discuss their experience, both good and bad.

Fairness: Publicize the efficiency and productivity gains that the sales process users are enjoying. If you expect reps to START new behaviors it is only fair to also STOP some. (If there is no productivity gain, the new process design is flawed.)

Tracking Resistance

Finally, start a program to track resistance to the adoption of the new process and tools. Click here for a downloadable spreadsheet that will help pinpoint pockets of resistance, and enable sales managers to take quick counteractive measures.

I'm interested to hear of your own experiences with the implementation of a new sales process. Please comment below.

Ensure the success of your new sales process implementation by preparing in advance to meet resistance and overcome it.

If you enjoyed this post, get free updates by subscribing by Email or RSS.

Follow @jdkenney

Follow @MakingTheNumber

Bring your 'A Game' to Demand Generation – 12 Best Practices

Vince Koehler — Mon, 07 May 2012 11:00:00 GMT

Is your team struggling to drive inquiries into the top of the funnel? Too many companies blindly pursue their lead generation programs absent a structured best practice approach. World-class firms don’t wing it. World-class firms embrace best practices to remarkably increase top of the funnel success. The path to success is in reach.

Demand Generation Defined

Demand Generation is the generation of inquiries into the top of the funnel. This is performed through a series of Inbound marketing activities (SEO, PPC, blogging) and Outbound marketing activities (Trade shows, email, teleprospecting) that generate Inquiries to fill the top of the demand funnel.

One-trick Pony?

The most common area of improvement in Demand Generation is the ‘one-trick pony’ reliance on house email to drive the majority of inquiries. Single-threaded approaches limits success by not leveraging basic principles of combined efforts to boost results. This is a single example of how best practices are not leveraged. Enhance your email campaigns by adapting your email strategy with persona-driven messaging and integrated media efforts.

Invest in Demand Generation Best Practices

Success requires adoption of best practices. Perform an assessment of your Lead Generation team’s demand gen capabilities. Download the assessment tool and references the descriptions below for further information. Identify the strengths and gaps. Begin closing the gaps by tackling the lowest hanging fruit first.

Demand Generation Best Practices – Download PowerPoint Assessment Tool

Prepare a comprehensive annual media plan based on scorecard evaluation – The demand generation activity should be supported with an annual plan that maps out the tactics, media sources, modes (email, direct mail, online, social, etc.) timing, and budget. A scorecard is used as a tool to select media sources based on criteria that are right for your company. For example, scorecard elements for media selection may include 1 – 10 ratings on the following; past performance, audience fit to ICP, cost, flexibility/responsiveness, value-added opportunities, and ability to scale.

Embrace Integrated media campaigns to increase response – It is a known fact that using multiple modes of media in coordination at the same time increases the overall response rate. Demand Generation campaigns don’t just rely on email, but rather leverage a series of coordinated marketing activities. A/B testing discipline is used to fine-tune program roll-outs.

Implement creative brief process for campaign creative – Developing creative assets involves a deliberate creative process with documented goal of the creative element, audience segment targeting insights, current beliefs, and the desired response. The most important element of a brief is the ‘What’s in it for me’ direction to understand the audience.

Consistency of brand voice and visual representation – The series of marketing activities depict a central brand that is reinforced across all campaigns and efforts.

Leverage SME’s for content – Content is developed and/or reviewed by Subject Matter Experts from product marketing, product development, and anywhere in the company to ensure the value and accuracy of content. The demand generation team’s role is to shape the content to be concise and attractive to read.

Leverage creative talent for direct communication headlines, landing page CTA’s, and persuasive writing – A professional copy writer should be leveraged for high impact content lines. Ideally the writer helps copy edit 100% of the content, but at the very least is involved in producing headlines that capture attention and drive results.

Audience buyer Persona exist for each core product – A documented buyer Persona is developed to guide content development, lead nurturing activities, and lead development by Lead Development Representatives.

Persona-driven messaging – Key messages in campaign elements (outbound calls, promotion emails, landing pages, website call-to-action, etc.) a crafted based on documented buyer personas. It’s not enough to just create a Persona, the persona must become an integral foundation of creative development.

Coordinate and sequence campaign timing, including ‘ideal’ and ‘maximum’ touch frequency – There are major differences in the accepted frequency of communications based on whether the audience is passive (Someone you are targeting to respond) or active in their pursuit of information about your company. Rules of thumb exist to for the maximum frequency before the prospect becomes irritated, and the minimum frequency to be successful in demand generation.

Map out the buying triggers/seasons by product – Work with sales and product marketing to document the precise triggers that typically drive the desire for change to purchase, as well as natural seasons of business activity or timing that produce the most fertile ground.

Performance is captured in a ProForma closed-loop tracking framework – The performance of all Demand Generation tactics are planned and tracked within a single framework that projects and captures click metrics, success rates, as well as revenue contribution metrics.

Response activities are tracked and analyzed based on the collective impact – Particularly in a complex sales environment, successful acquisition is done through a series of interactions to produce the result. The interactions should be analyzed to understand the collective impact rather than corrupted thinking that zeroes in on the single tactic that drove the initial form field submission that started the chain of events.

Review and download Lead Management best practices to perform a comprehensive funnel assessment.

Your comments and suggestions are welcome. If you enjoyed this post, get free updates by subscribing by Email or RSS.

Follow @vinkoe

Follow Sales Benchmark Index @MakingTheNumber

Is Your Sales Team Good Enough?

Ryan Tognazzini — Sun, 06 May 2012 11:00:00 GMT

A round of interviews SBI recently conducted with CEOs revealed there are 3 obstacles to hitting the annual sales goal:

Finding top sales talent
Making new hires productive quickly
The quality of the existing sales team

In the eyes of CEOs, it’s people who generate results. When it comes to sales compensation, the CEO looks at sales as an investment….and he wants a return!

Recently, Matt Sharrers explained how to assess your proficiency in hiring ‘A’ players and ensuring they are successful quickly. If you haven’t accessed these tools, you can find them here and here.

Now, what about the people already in the job? Are you getting a return on your investment? How can you tell? Look at the facts.

Before continuing, use this Sales Rep ROI Benchmark Calculator available for free download to calculate your return on investment for both sales reps and sales managers.

How’d you do?

Based on the results, there are 3 implications to consider for sales reps:

Replace – An ROI of <3.5 means your cost of sales for that individual is more than 28% of revenue. Keep in mind this metric is before adding in benefits cost. The implication of keeping this individual on your team means you cannot afford to hire additional people. He or she is sucking up your available capital. They are not good enough. Cut the dead weight.
Improve – A result of a 3.5-4.9 ranking puts your cost of sales at 20-28% before benefits. The sales rep is making the grade…barely. He needs to improve quickly, or it will prevent you from achieving your annual revenue goal. If the sales team is going to hit quota, you better act fast with this group.
Retain – Congratulations, you are generating a 5x return on your investment with this group. Your selling cost is below 20% and for every $1 you invest in this sales rep, he generates $5. Losing sales reps in this category will kill your quota attainment and ability to scale the organization. Make sure you are paying for the performance of this group. They are your future. You need to find more of them quickly.

For sales managers, the ROI metrics are normalized to align more closely with the overall sales budget. However, he or she is ultimately responsible for generating an ROI for the entire sales organization and should not be exempt from generating the ultimate return…revenue.

CEOs, especially those who’ve funded the company with their own money, want a return on their investment. It’s like owning a share of stock. If it doesn’t produce a return, it gets sold and onto the next one. If the investment in your sales compensation plan of your sales organization isn’t generating a healthy ROI, get ready to be sold.

If you enjoyed this post, get free updates by subscribing by Email or RSS.

Follow @RyanTognazzini

Follow Sales Benchmark Index @MakingTheNumber