Don’t throw the baby out with the bathwater

It seems pretty obvious that the profound shifts in customer behavior render traditional sales processes obsolete. Why then do so many managers still insist on the compliance of their people to such processes? Most sales managers perceive any change proposed, on how to assure making their numbers, to be as risky as open heart surgery.  Declaring the death of the sales machine (as a metaphor for the traditional sales process) and proposing more reliance on intuition of the sales people might therefore involve too much risk for sales managers.  They prefer to stay in denial that what got them here will not get them further. Maybe a metaphor comparing the adaptation to the new customer behavior with the evolution from using automates (machine) to using robots might be less daunting.

A robot differs from an automate in two aspects. A robot has sensors to be able to recognize context and is built for agility to adapt to and to act within this context. Automates are built to work only in one context. However, the behavior of robots is still guided by rules and principles programmed into the robot.

The new sensor system for Sales

We first have to accept the fact that a single customer can choose different journeys when purchasing goods and services. As sellers, we need thus to develop a sensor system which allows us to predict which journey  the customer is going to choose,  to recognize evidence on what journey the customer is on and where the actual position in this  journey is.    

This implies that we have a set of standards, allowing us to determine the customer evidence needed to answer those questions in an unambiguous way within an entire sales organization. Checking the adherence to these standards, instead of asking for compliance to a given sales process, is then the new foundation for managers to assess whether they will make their numbers. To assure managers that such an approach will work, we can find evidence in research from CSO Insights which shows that continual tracking of customer behavior leads to higher forecast accuracy. This sensor system is actually implemented through comprehensive diagnostics going much beyond the simple process of just probe for a pain in order to be able to offer a solution.

Using principles to achieve agility in Sales

Within a customer journey, there are still logical sequences - the very characteristic of the existence of a process. Ignoring these sequences will have a detrimental impact on the outcome of a sales effort. However spelling out these sequences on the level of granularity of individual activities is ineffective. Therefore, we should work on the level of principles which allow for flexibility on choosing the activity best suited to perform on these principles.  This will Increase the agility of the sales organization.

The sensor system will be used helping sellers in selecting the right sequences of principles that should be applied. By using the proper sequence of principles, the seller can provide added value in guiding the customers through their different journeys. This increases the likelihood of winning the deal. Customers tend to decide in favor of the offering of the sales person having provided the most added value in the journey.

Here is a proposed list of such principles: Rapport Building, Triage, Pain Creation, Vision Engineering, Vision Re-Engineering, Establishing Confidence that expected business outcomes can be obtained with the proposed offering and Value Confirmation.  Triage might be an expression needing some clarification. It is used, prior or during the initial customer interaction for a single sales case. It determines the customer’s choice of the journey and the position within that journey.    Triage, Pain Creation, Establishing Confidence and Value Confirmation are needed in this exact order to help navigate through any customer journey.

The need for Rapport Building is limited to situations where no relationship exists yet between the seller and the buyer. If used, it must precede Triage. Value Engineering or Value Re-engineering are also only relevant as alternatives in some journeys. Value Engineering is needed for customers who have not spent any money neither with us nor the competition for a particular category. Value Re-engineering is used when the customer has spent or currently spends money with competitors for a category where we have to offer viable alternatives. It is also used when we recognize that the customer has adopted a vision before our initial contact with them.  To make the right choice on the alternative, Triage is a prerequisite.

On the level of these principles, there is no freedom what needs to be done when. There are also clear rules when and how to use optional principles. This provides a framework for managers how to coach their salespeople on the application of those principles. In this coaching framework, there is room for intuition when determining the actions on how to best execute on the principles.

Conclusion

Given today’s Customer behavior, replacing the classical sales process by a framework based on standards and principles helping us to become more agile within a well understood context, seems a viable alternative to throwing out the sales machine and depend on more intuition. Establishing this framework however does not guarantee success. Competencies of salespeople and particularly sales managers must equally be augmented for successful execution. The framework helps however to understand the capability gaps.

This article appeared first in the December 2013 issue of Top Sales World Magazine

Are you suffering from “Top of Funnel Myopia”?

Bob Apollo recently launched a poll on LinkedIn asking: “Which one of the following initiatives has the greatest potential to boost your organisation's sales performance in 2011?”

a) Finding more qualified opportunities

b) Shortening our average sales cycle

c) Increasing average sales win rates

d) Qualifying bad deals out earlier

e) Improving sales & marketing co-operation

Finding more qualified opportunities as well as improving sales & marketing co-operation are “top of funnel” initiatives. Three quarters of the respondents to Bob's poll consider that this is the way to go to boost sales performance for 2011. For those, Bob has since written a post giving ideas how to shape such initiatives.

A different look at the results

Shortening the average sales cycle, increasing average sales win rates and qualifying bad deals out earlier are sales effectiveness initiatives. I believe the quarter of the respondents who gave priority to these sales effectiveness initiatives to boost sales performance have an important message to tell.

When parsing the responses according to job titles, 'owners' as well as 'C-level &VP' focused exclusively on “top of funnel” initiatives. While 'owners' gave about the same weight to finding more qualified opportunities and improving sales & marketing co-operation., 'C-Level & VP' want to focus solely on finding more qualified opportunities.

Respondents carrying a 'management' title were split about into equal parts focusing on the ”top of funnel” initiatives and sales effectiveness initiatives. They only mentioned finding more qualified opportunities as “top of funnel” initiative. Among the sales effectiveness initiatives, they mentioned increasing average sales win rates twice as often than shortening the average sales cycle.

In the 'other' category “top of the funnel” activities were equally split between finding more qualified opportunities and improving sales & marketing co-operation. A quarter of the respondents falling into the 'other' category see qualifying bad deals out earlier as top priority to boost sales performance.

The differentiation of the results by job function is also very interesting. Half of those being either in a sales or marketing role want to boost performance by finding more qualified opportunities. The remaining half in marketing sees shortening the average sales cycle as the top priority. The remaining half in sales wants to put the priority on increasing average sales win rates.

Although the poll sample is very small, I think this look at the results by job title and job function is revealing.

What are these results telling us?

The results seem to suggest that the executive level does not believe in effectiveness initiatives such as shortening the average sales cycle , increasing average sales win rates to boost sales, while mangers are well aware, that these measures can also boost sales performance.

Possible explanations for this are: The distance to the front line where sales really happens and the different time horizons.

Management knows very well, that sales effectiveness initiatives improve results faster than “top of funnel” activities., especially with long sales cycles. Management also seems to be aware that blending sales effectiveness initiatives with “top of funnel” initiatives is the way towards sustainable, superior performance.

“Top of funnel” initiatives fit though better with the long term view of executives.

This sole focus on “top of funnel” initiatives can though be dangerous when executives start to intervene because they see an urgent need for improved sales performance. If they then insist on giving priority to finding more qualified opportunities as the measure to improve performance, they might actually cause a momentary drop in sales performance. On longer term, performance might return to what it was before the dip.

Following the order of executives, managers and salespeople will spend more effort on “top of funnel” activities. This will go to the detriment of sales effectiveness initiatives.

It would though be wrong to associate only a short term effect to sales effectiveness initiatives. A more effective sales force also needs fewer new qualified opportunities for sustained superior performance. Too much focus on “top of funnel” initiatives though leads to a vicious circle, inhibiting sustainable sales performance improvement.

Conclusions

Executives having doubts about these mechanics should look at how top sales people work. Top sales people usually pursue fewer opportunities than average performers. The sales effectiveness initiatives mentioned in the poll can thus be considered best practices to increase sales performance

Executives wanting to boost sales performance should thus make an effort to better understand “funnel mechanics” and abandon “top of funnel myopia” which furthermore could be taken as still believing that sales is just a numbers game.

Acknowledgments

Thank you Bob for having launched the poll and sorry for the different twist I added to the interpretation of the results.

The poll can be found here (you might need to log into LinkedIn) and this is the link to Bob's article triggered by the results of the poll.

What possessed sales leaders to raise quota...

especially in a down economy? Is a question that has been frequently discussed since CSO Insights released their 2010 Sales Performance Optimization (SPO) Survey and Analysis report. Despite the steepest decrease in quota attainment observed since CSO Insights started their survey, 85% of the respondents to the 2010 Survey ( data collected late in 2009) said they intended to raise quota for 2010. Already in the 2009 SPO report (data collected in late 2008) a similar amount of respondents planned to raise quota. At that time it was though already evident that the economy had started its nose dive. The decrease it sales performance, measured in quota attainment, in the 2010 report was therefore almost a self fulfilling prophecy.

They had no choice

Is not a cheap excuse at least from sales leaders working for public companies. In many cases it is unfortunately the brutal reality. Sales leaders are prisoners of the mechanics imposed by SARBOX, rules intended to protect share holders' interests. One of the rules therein stipulates that the revenue target has to be allocated in its entirety to the sales people, becoming their quota.

So if sales leaders are handed down a revenue target from the company leadership, together with the order of a headcount freeze, quotas increase automatically. The same is true even if company leadership factors in the current state of the economy and is setting the target to maintain last year's level of revenue. Yet in  that same year, a reduction in field forces was ordered to protect the bottom line. Then quotas cannot but go up again.

Sales performance measured as quota attainment therefore mechanically gets into a downward spiral. This trend is further exacerbated by the fact that quotas, appearing more and more unattainable, negatively impact the morale of the sales people. As there is also little to nothing done to help salespeople to improve their performance hoping for a recovery of the economy remains the only way out of this asphyxiating spiral. However hope was never a good strategy.

What sales leaders can do to stop the spiral?

First they have to have the courage to ask for a seat at the strategy table where revenue targets are set. To make their voice heard there, they need to be able to speak the strategy lingo They should, second,not be shy to ask for help to learn this lingo. They will then be able to demonstrate to their colleagues the legitimacy of the request for being included in the corporate strategy formulation process. The timing for such a request is also right. The era of shareholder value focus, which mainly determined the current participants in corporate strategy discussions is coming to an end. However, third, they have to act now. Given  the often lengthy and laborious budgeting processes, revenue targets for 2011 will be set soon.

How the C-Level Makes or Breaks Sales Performance

Sales performance is at its lowest in years. When thinking about remedies, the first thought usually goes towards initiatives, mostly in the form of training,  focused on sales people helping them to increase their performance in this 'new normal' that seems to emerge.

The 'new normal'

Undoubtedly, sales people need to adapt their skills to this 'new normal'. One of the key characteristics of this new era is that people are much more concerned about spending their money wisely. With respect to traditional sales performance improvement initiatives, this poses though a major problem. Many of those initiatives, often in the form of outsourced training, have not delivered the desired results in the past. How can we increase the likelihood that new urgently needed sales performance initiatives, have a more sustainable effect; even though budgets are tighter than ever. My proposal is to first look at how the C-level ( e.g. Chief Executive Officer, Chief Operations Officer, Chief Sales Officer) impacts sales effectiveness.

The C-level's impact

Many executives on the C-level are not consciously aware of how they impact sales performance. Others have a misconception about the role they play in the sales process. Studies show that, for example, a high percentage of C-level executives consider themselves knowledgeable about the customers of their company. The percentage of field sales people, confirming this perception, is though very much lower. The same pattern emerges when looking at the question how the C-level is involved in the sales process. Again executives rate their involvement much higher than it is perceived by the field.

As a matter of fact, it is probably more likely that fundamentally, C-level executives have a hands off attitude towards sales. Many are guided by the principle “I just care about the revenue, it is sales's job to figure out how to make it”. Yet in contrast to this general attitude, the same executives start to show behavior of micro management when it comes to large deals. This is why they think they are involved in the sales process. Their understandable concern whether the deal can be booked still in a given quarter is perceived by the field that only the numbers count. This behavior goes to the detriment of the sustainability of sales effectiveness initiatives. It is the expression that an outcome based sales force control system is prevailing. Sales effectiveness is however improved by changing behavior. To track and reinforce the behavior change, a behavior based sales force control system is needed. As the companies quarterly figures might though depend on this large deal to close, executives towards the end of the quarter, tend to see the situation as a crises and revert to a command and control management approach. Behavior based sales force control systems though are based on a coaching approach. Fear about not making the number lets executives ignore evidence that others, using behavioral based sales force control systems, are experiencing better and more sustainable outcomes.

What does it have to do with sales performance?

Not only does this focus on large deals shed some doubt on a company's ability to produce sustainable revenue streams if every quarter, their results depend on these big deals. This management approach certainly goes to the detriment of the sustainability of any sales effectiveness initiative. Paradoxically, when you talk to executives, they are often telling you that they are convinced about the need and the usefulness of sales people being coached by their managers. They sometimes even show disappointment about the little coaching managers provide to their sale people.

Managers often are not doing enough coaching because they have never been trained in coaching. Providing training on coaching for sales managers can though just increase the misalignment. There is therefore a high likelihood that the training will not show any sustainable effects. 
 

Where to start a sales performance improvement initiative?

Managers are faced with a constant struggle to balance the people focus (coaching, sustainability) with the business focus (urgency, short term). How can one expect a 'coaching initiative' to fall on fertile ground if the executive level continues to inspect just revenue. For such an initiative having a sustainable effect, a mind shift at the executive level is needed . Executives should recognize their duty to consciously supporting the managers in finding that balance between people orientation and business orientation. This should not be too hard in principal. Successful executives have learned to think in 'and' concept, rather than in 'either or'. How will such a mind shift become evident? When they start inspecting people related parameters besides revenue. It could well be that executives might need help achieving this mind shift and learning what to inspect. Money spent on this help has certainly the highest leverage effect compared to just pouring money into the next sales effectiveness initiative on the individual contributors level.

Should you be interested in knowing more about the impact of the C-level on sales performance and what to do about it, you can follow this link,

How 2500 Sales Leaders Intend to Improve Sales Performance of Their Troops

CSO Insights just published their The Sales Performance Optimization 2010 Survey Results and Analysis Report which this year captures and consolidates the opinion of more that 2500 respondents to the survey.
As a customer focused sales effectiveness consultant, I always look first at the section of the report providing the list of initiatives CSOs plan to undertake to improve the performance of their troops. I find this a valuable orientation to check whether the offerings of my practice are in line with market trends. Although, I very much appreciate the insight comments provided in the report together with the data, I like to form also my own opinion by just looking on the data itself.
Looking at the list of initiatives ranked in importance in the 2010 report and comparing it to the same list in the 2009 report, there are three trends catching my particular attention.

Increased Process Orientation

What struck me first were the changes in ranking of initiatives in the upper middle of the table. The initiative «Analyze customer buy process» has moved up in rank and is now considered more important than «Revise Sales Process» I consider this a very positive trend which fits well with what I have believed for years. Improving performance requires an understanding of the processes leading to the results with which performance is measured. Furthermore, I am a long term advocate that sales processes must be aligned with how customers want to buy. So ranking the initiative of understanding these buy processes higher in importance than revising one’s sales process makes all the sense for me. Maybe it is also an indication, that the sales leader community finally acknowledges the fact, that Web 2.0 has a far reaching impact on how customers buy.

Access to knowledge repositioned

The second remarkable trend to me is the ‘relegation’ in importance of the initiative «Improve Reps access to information» to just below «Revising Sales process». Although I have invested quite some time and effort to expand the capabilities of my practice in the Sales Enablement domain a solution which can answer such initiatives, I am not unhappy about this trend. I take it that sales leaders have become more realistic and do no longer take Sales Enablement as the next silver bullet. I do not believe that this new ranking can be interpreted that the considerable drain on sales peoples’ time to search and adapt information to suit a particular sales situation has diminished. Thus the negative impact on performance is still the same. I take this new ranking rather as an expression, that for Sales Enablement to serve its purpose: Increasing the ‘situational fluency’ of sales people, it must be put in the context of the buying process and the corresponding sales process.

More focus on Sales & Marketing Collaboration

The third observation is about the increase of importance of the initiative «More closely align Sales & Marketing» which now ranks second directly behind what remains to be considered the most important initiative «Revise lead generation».
This must be good news to Chief Marketing Officers who are increasingly held accountable for business results. They should now find a more open ear with their CSO counterparts. This also confirms my believe, that CSOs seeking top performance can no longer ignore marketing. My continued investment in improving my capabilities is thus timely to support CSOs wanting to implement such initiatives.
Lead generation remaining the top initative is of some concern to me. The fact that this initative has the highest priority for the fifth consecutive year now, indicates first, that the ranking has probably little to do with the current economic situation. To me it is more an indication, that CSOs and CMOs for that matter, are handed down a target revenue number from the CEO, COO,  CFO level  mainly taking into account share holder value aspects. CSOs seem to continue to believe that for meeting those targets, most attention should be given on filling the funnel on the top. It is my hope that the increased focus on process aspects will lead sales leaders to the conclusion that there might be other means to increase revenue by getting more out of what you have (i.e. increase velocity and conversion rate of opportunities).
Another way to do more with the same could be by ’lead recycling’. This is probably the most promising area where CSOs and CMOs can start collaborating and learn how they can leverage each others capabilities in a very pragmatic low risk manner.
The Sales Performance Optimization 2010 Survey Results and Analysis Report by CSO Insights is thus as thought provoking as ever and is a must read for anybody concerned with sales performance.
To me personally, the report provided assurance, that my practice is well prepared to help Sales Leaders implementing the initiatives they consider most important for improving sales performance.
You can get the report on CSO Insights’ website at http://www.csoinsights.com/Publications/Shop/Sales-Performance-Optimization

The Role of Social Media in B2B Selling?

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

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

Why is the question relevant?

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

A pragmatic approach to Social Media

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

Where can I meet my audience?

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

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

How to use the platforms?

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

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

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

Conclusion

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

If I Was a Sales Executive...

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

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

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

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

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

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

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

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

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

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

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

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