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

Do not Deprive Yourself of Valuable Insight

Companies usually describe their sales process, if they even have one, by a sequence of sales stages describing key activities that are to be carried out by the sales person in the respective phase. I am not going to repeat my opinion on the pitfalls such a concept - focusing on the activities from the sales person’s perspective- can have in understanding where opportunities really are in the sales cycle. I think I have said it loud and clear in last Monday’s entry (September 4, 2006).

It is another odd thing I want to draw your attention to today. Quite often you can find in those sales process descriptions a sales stage called “closed lost”. The typical rule on how this is to be used is that all lost opportunities have to be put to that stage. Does this not leave the impression, that opportunities are only lost in the close phase? Where do you put the opportunities that you are losing in earlier stages of the process? Or do you really believe this never happens to you; loosing an opportunity before the close phase?

Chances are that when constructing the sales process no distinction was made between a sales stage and the status of an opportunity. The status of the opportunity though is exactly the additional data element I talked about two days ago, If the right rules are applied on how to use the opportunity status, this data become the basis for calibrating the conversion rates at each stage transition of your leaking sales funnel. The status is also an important element for “win/loss” reviews. I will come back to this topic in a future entry. I will show you then how these reviews can be used for calibrating sales methodologies. If used right, the opportunity status also allows you to benchmark how you stand with carrying opportunities in the forecast that will end up with no decision by the customer. Actually, you will be able to detect this rate for each sales stage. Be prepared the opportunity status is an element to discover a maybe painful truth. But it is worth the pain, as it can help you detect the waste of the most precious resource: time of your sales people.

What are the values you should foresee for the status of an opportunity? In my experience, the following list of values has proven sufficient to gain a wealth of additional insight on how your organization handles opportunities and the detection of potential room for improvement:

“Active”, “abandoned by us”, “abandoned by customer”, “lost to competition”, “won”.

The rules how to use these values could not be simpler. If one of the described events arrive you just change the status accordingly, but you do not change the funnel stage, the opportunity is currently in.

You then can run statistics to find out in what stage what status appears in what frequency. These statistics will allow you to detect potential flaws in the execution of your sales process. Here are a few examples of what those statistics might tell you: If you find very few opportunities with status “abandoned by us” you might want to look into how your people qualify opportunities. Qualification done correctly, should actually lead to this opportunity status quite often with opportunities in early stages. Finding the status “abandoned by us” only with opportunities in the last stage, might also hint at a not rigorous enough qualification process. Should you find the status “lost to competition” frequently with opportunities in early sales stages, check if your people detect opportunities considerably later than your competitors.

There is however an important prerequisite that these statistics lead to meaningful results. Your people must tell you the truth of what really happened. It is my experience that if your people can trust you, they will be more honest. I guess it is nothing new to you that the way you manage your people is an important factor for establishing trust. If you turn each anomaly you detect in the opportunity status statistics into an inquisition why on earth your people could let this happen, do not expect that you will be given a very accurate picture. Chances are that understanding these observations from your statistics as an opportunity for a coaching event and turn it into a learning experience for your people, so they can be do better next time, you will also get a fairer picture of what happened. The uncomfortable truth is that change management needed for introducing the rules on how to use opportunity statuses might start with you as their manager.

Who could say it better I no uncertain terms than Jeffrey Gitomer. He ran a story in one of his recent eZines entitled “Manager, put yourself to the test before you test your people.”

For many of the issues discussed so far in this Blog, change management is the essential incredient to improve the situation. In future entries, I will give you my opinion, why it is especally hard to introduce change to sales organizations.