Selling Power Blog

Beyond Listening: Integrative Conversations

Salespeople today know that listening is a vanishing art in a world where knowledge is exploding all around us. Top salespeople know that buyers can be liars. Sometimes, they're confused as to what they want, and they often need a guide who helps them clearly define what they really need. Like psychiatrists are trained to listen to facts, feelings, and fantasies, top salespeople tune in to the customer's psyche, probing for needs, wants, hopes, desires. They always make sure there's a pause after the customer has finished talking; they know that the most important clues to the customer's real concerns often come as an afterthought.

Listen to More Than What Is Said

Great salespeople also listen to their own streams of thought that are triggered by their customer’s words, sounds, and images; this is also known as following our instincts. These salespeople go a step beyond rephrasing the customer's problems to demonstrate understanding. They do more than ask probing questions that allow them to sharpen their understanding. These superstar salespeople follow a highly effective process that good psychiatrists use: integrative conversations.

Summarizing Your Understanding Is Not Enough

Average salespeople are too preoccupied with reducing the customer's comments to a Reader's Digest version of the conversation: "What I hear you saying is…" Great salespeople kick it up a notch by weaving what they've heard the customer say with what bubbled up inside their own mind while they listened.

An integrative conversation is an authentic exchange of ideas, concepts, opinions, and feelings, with both parties developing a new narrative that reflects a synergistic whole that's co-created by both partners. Integrative conversations happen naturally between non-neurotic people who are willing to give up their preconceived notions when a better idea comes along. For integration to occur, there must be freedom from emotional obstacles or ego-related issues. Integrative salespeople don't push ideas into a prospect's mind; they tease them out instead. They are not preoccupied with the outcome of the conversation; they focus on the quality of the conversation, the flow of ideas, and the depth of understanding that leads to fresh insight. An integrative conversation gets both people to focus on co-creating an optimized outcome.

Become an Integrative Leader

Sales leaders can maximize their potential by becoming integrative leaders. Management guru Warren Bennis once said that becoming a leader is much the same thing as becoming an integrated human being. Integrative leaders are continuously exploring their inner life while passionately pursuing their business goals. 

Key takeaway: Next time, try to be open to what the customer communicates, and observe how the customer's facts and feelings resonate with you. Instead of focusing on the logical content as the sole source for your response, integrate your own associations into your response; it will greatly enrich your conversation. You will become a better collaborator and feel better about your personal and professional achievements. 

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It Is Time to Shame Spammers Publicly!

I am fed up with spammers! When I check the comments on my blog posts, I find more and more nonsensical comments with links to Websites whose owners pollute blogs with nonsensical comments and links to drive up their Internet traffic. Here are a few examples.

Someone with the email address luckypamela123@gmail.com posted this comment: "My thanks to this article, it has a super-duper instigation." After checking the site, I discovered that the site's owner is Kucheruk Pavlo, located in the Ukraine. The company is called infoessays.com. It offers writing services to US college students – I suppose in "perfekt" English.  

Below is a sampling of other spammers and their comments:

1.       "Houses are not very cheap."

2.       "You mention truth issue."

The owner of this site:

Eric Morse
Sales Result Inc.
2018 156th Ave NE
Bellevue, WA 98007
emorse@salesresult.com
Toll-free: (877) 427-2490

My comment: Eric, stop spamming my blog. I won't spam yours.

3.       "Why loose free time?"

The owner of this site:

Registrant
c/o TOPWRITINGSERVICE.COM
P.O. Box 821650
Vancouver, WA 98682
US

4.       "If students are willing to know." 

Note: The owner of the site is located in Australia

My comment: Put a shrimp on the barbie, wash it down with a tall Fosters, and stay away from my blog. 

5.       "Great SEO specialists are not easy to be saw." 

My Comment: Your English teacher must have been an old saw.

This site offers to create 60 Blog Comments for $150 - free typos included! 

The ad on the site describes the process: 

In addition to locating all of the correct blogs for your business, you have to study the rules of each blog and be certain that you follow them. Some blogs have maximum post lengths; others allow only one link back to your site; still others allow two up to no limit of links. All of these things you must record, so that each time you post a comment, you do it correctly. And each comment you post must be different from the one before, and on and on and on! You can spend a great deal of your day reading the most recent comments on blogs and then creating unique and important content, adding your keyword links, and imbedding your url into those links. At the same time, you must implement marketing strategies for all other types of Internet marketing and run your business as well. 

Note: The owner of this site is unknown - private registration by a company in PA 

Question: Is your blog flooded by spammers? What can we do to stop this insanity?

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Taking a Lifetime View of Customers

This guest blog post is by Eli Jones, Ph.D. and Co-Author, Selling ASAP: Art, Science, Agility, Performance. Visit www.sellingasap.com to learn more. 

Salespeople face the task of keeping customers satisfied while increasing the value of customers to the sales organization. In recent years, customer lifetime value (CLV) has become a handy method for achieving those goals. Using mathematical equations to determine CLV is now part of the science of selling. At some point, salespeople may require a sophisticated set of analytical capabilities in order to predict customer needs accurately and interact with customers more profitably. Essentially, however, professional selling today requires taking a long-term view of customer relationships. Here are the four facets of lifetime customer relationships:

1. Product holdings – the products a customer has purchased and the products the customer currently has on hand.
2. Product use – how the customer uses the product and what value the customer derives from using it.
3. Contacts – the nature of the sales organization and the salesperson's contacts with the decision-making unit of a client company over time.
4. Events – occurrences in the life of the customer (e.g., birth of a child, new business opportunities, change in competitive activity, etc.).

When salespeople collect and use information about these four facets of customer lifetime relationships, they are able to answer questions such as the following: How many customers have purchased product A? How many customers have purchased it more than once? What is the frequency of contact with customers? Which customers are most profitable? What events occurred prior to losing a customer? What customers purchase which products? What events typically precede purchases?

When salespeople can answer questions such as these, they put themselves in a better position to create, maintain, and grow lifetime relationships with customers. A key part of building customer relationships is, simply stated, truly knowing your customers. You must think of customers as partners in collaborative relationships designed for maximizing value to both the customer and you and your organization over the long term. Thus, you must develop "thoughtware" about your customers. Thoughtware represents the thinking process salespeople use as they continuously learn about their customers. For example, customers are often grouped by types of relationships, which provides the following advantages:

• Identification of significant events in the life of the customer.
• Avoidance of unneeded duplication of effort.
• Knowledge of loyalty patterns based on the type of relationship established with individual customers.
• Identification of cross-sell opportunities (i.e., finding additional products or services that can provide added value to current customers).
• Identification of up-sell opportunities (i.e., working with customers to upgrade existing products or services for the purpose of providing added customer value and solidifying relationships).

Customer lifetime value is not just a forecasting technique or a software package, but a way of thinking about and doing business with customers that emphasizes up-front preparation and profitable long-term relationships. Such long-term relationships are less costly than those formed under the traditional model, which emphasizes single transactions with customers and closing sales.

Learn more about customer lifetime value. Join SellingASAP.com.

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SFA Is Dead. Vive la SFA!

Eryc Branham is CEO and founder of Cogar Branham, a business and services incubator, and he can be followed @erycbranham. For selected articles and research, visit www.salesopscouncil.com.

Sales force automation (SFA) has failed us.

Think about your own sales team members; do they use their SFA tool because they’re forced to, or because it makes them more productive? Do they use their SFA tool as a part of their daily job?

Unless you’ve got a high-volume inside sales team, the probability is nearly zero. Field sales teams are mobile; they spend their days interacting (virtually and face-to-face) with their prospects, partners, and customers. The last thing they want to do is data entry. The least productive thing for them to do is data entry. You pay them to sell.

After nearly 20 years in the CRM industry and seeing the results of hundreds of SFA projects, I have come to the shocking conclusion that SFA as it exists today is dead.

Why? At best, today’s SFA tools have become back-office applications, a repository for data that management uses to extract key sales information for executive reporting. There is little value for feet-on-the-street sales professionals in their daily jobs.

Not long ago, I spent time with a Fortune 1000 company where the vast majority of sales reps logged into their SFA application once a week to update a sales forecast, about 15 minutes a week. Yet even that value was suspect, as sales operations did its forecasting with spreadsheets.

The truth is that an entire suite of tools does sales force automation better than the so-called SFA applications.

Contact management is better with LinkedIn.

There’s nothing less useful than out-of-date contact information, yet that’s what SFA tools provide us with in the static contact record.  What I really need to know about my contacts is their most current contact information and how I can establish a connection to them through my personal and business networks. Thus, the power of LinkedIn, where my contacts keep their own profiles up-to-date as they move jobs and companies. Or the power of Data.com (formerly Jigsaw), where social networks provide real-time contact information for the people I need to track.

Account management is better with Google.

What do I really need to know about an account? Simple: what are the business units, what does the executive org chart look like, what does the company do (in other words, does it have needs that my company can fulfill), and what are the compelling events that would cause that company to buy my product or service now versus later? All this information is readily available on any news aggregation source, such as Google Finance.

Collaboration is better than opportunity management.

In my experience, there are really only three fields that a sales rep cares about in his or her SFA tool: an opportunity’s close date (when he or she expects to win it), amount (the value of the deal), and probability (what are the chances that he or she will win it by the close date). Everything else is nice-to-have or noise. I’ve spent the past five years focused on the emergence of collaborative selling – what sales reps do to collaborate and co-create with their prospects in order to win their business. Collaboration tools such as Chatter and Jive provide the mechanisms for creating “online rooms,” which become the virtual equivalent of (and perhaps replacement to) the opportunity record, where all the relevant data about a specific deal is stored. That is the focus of the BCS sales methodology that we’ve developed at Cogar Branham.

Forecasting is better with predictive analytics.

The entire concept of sales forecasting in SFA tools is absurd. We expect sales professionals to make regular, objective, qualitative assessments of their deals – with 99 percent accuracy. In reality, the best measure for sales forecasting is the past. We can say more about the relative probability of a specific deal closing by comparing it to past deals of a similar kind, size, and complexity. This is one of the so-called “big data” problems (information that we can extract simply by looking at historical data, rather than ask sales professionals to provide to us). We see this approach in action with such tools as DealMaker from TAS.

Activity management is better with social networks.

Ask average sales reps what is always on, and they’ll say their cell phone. And nearly all of those cell phones are smartphones with easy access to their social networks. I’m more likely to react to a direct message on my mobile device than to workflow in a stand-alone SFA application that I have to log into separately. Certainly, the rise of business communication via social networks such as Twitter and Google+ means that sales professionals are more reactive in real time to activity streams shared with them there.

Is there still a place for sales force automation in the enterprise business world? Of course there is, assuming that we mean tools that a company provides (or allows access to while working) that helps a sales rep sell more effectively. But those tools are built on the foundation of selling in today’s networked world. They are primarily social, not forms on a database as with traditional SFA tools.

Beyond the examples cited above, we’re seeing the emergence of sales apps that aggregate key social information (Nimble) or allow sales reps to build social apps on the fly to create their own custom SFA experience (Podio).

Please join us in #ReinventingSFA!

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Pay Your Hunter Sales Reps to Win

Today's blog post is by Christopher Cabrera, CEO of Xactly Corporation, the industry leader in sales compensation automation.

Do you pay your hunter sales reps to perform their best?  This role is important to companies of all sizes. Hunter sales reps account for new sources of revenue.

A team focused exclusively on new business should be a separate group with its own rewards. The sales cycle for cultivating new accounts is longer than, say, subscription-based customer renewal. You need to compensate accordingly.

How?

Hunter reps have to do more work than other salespeople do. That's because they have to sell customers on something entirely new. You need to compensate and reward this additional effort.

Hunter reps play an important role in whether certain deals close or not—your incentive compensation plans should account for this responsibility with a higher variable portion in their pay mix. We recommend between 50-60% variable pay, but the best ways to optimize pay mix with variable pay can vary.

Your commission plans should also offer higher payout levels as reps hit higher goals. Make sure you set appropriate quota levels for your industry and individual rep territories. Here are tips for setting fair and accurate quotas.

Most companies set annual quotas. But in some industries quarterly and monthly quotas make more sense.

Be sure to review past performance when setting payout percentages and quotas.

You should also use your commission software tool to run what-if scenarios with your data analytics tools. That way, you can course-correct in advance.

Getting advanced

Do you credit revenue differently for different products, services or on some other metric? Make sure you write these rules into your commission tracking software. If you use spreadsheets for tracking sales compensation, this could take a long time to do. It's also likely you’ll make errors. (See here for more on what's wrong with spreadsheets.)

You may want to set additional rules to split credit for certain sales across a team, give credit for deals in a geographic territory or assign credit based on a product line.

Be careful to only give credit for business that the sales representative can influence. If you only measure quota attainment, you aren't tracking profitability, so watch for discounting.

Remember, pay more for risk. Pay less for deals that are easier to close. What motivates your hunters?

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This post is part of Xactly Corporation's blog series on job goals and how to best reward for them. It started with rewarding support specialists and incenting your renewal team, also known as farmer sales reps.

The series celebrates the launch of the Xactly Plan Store, which makes customized sales incentive compensation plans available in our solution for small-to-medium businesses.

Stop Blaming the Sales Team for Your Growth Gap

Today's guest post is by Kurt Andersen, Executive Vice President of Sales Enablement and Marketing at SAVO. 

 

 

 

While it's the CEO's responsibility to define the company's strategic goals and set growth aspirations, it's imperative that the rest of the organization be set up to execute and help the company achieve success.

Unfortunately, most companies are witnessing an ever-increasing gap between the CEO's strategies and the ability to see them through. Part of this gap is the responsibility of your sales team, because they stand directly between these strategic initiatives and your customers. Ask yourself: Are you effectively driving these initiatives through this gap? Too often, the answer is no; thus the need for sales enablement.

Consider the following statistics:

•  according to Harvard Business Review, 70 percent of growth initiatives fail;
•  only 1-in-5 CRM systems actually increase revenue (CSO Insights 2011); and
•  the misalignment in sales and marketing is causing the typical company to underperform by 10 percent in annual revenue (IDC 2011).

These are disturbing statistics for any business. The knee-jerk reaction is to solely blame the sales team – but they're not the problem. The problem is that the majority of companies simply don't know how to effectively enable their sellers.

This is why sales enablement has emerged as a frequent topic of conversation in boardrooms and executive offices. Businesses need to close the growth gap to stay competitive and sales enablement is emerging as the pathway to make it happen.

Defining Sales Enablement
What is sales enablement? The category was previously defined as simple tools that were used by individual sales professionals to sell more proficiently. Sales enablement has evolved into a broader corporate strategy embedded in multiple departments with a singular driving force: achieve revenue initiatives by harnessing the resources and knowledge of the collective enterprise to support sellers.

From this viewpoint, you can understand why zero percent of executives interviewed by IDC rated their sales enablement capabilities as "highly effective." The reality is that most businesses have been committing what we like to call "random acts of sales enablement." This is marked by giving your sellers just enough information to be minimally effective, but without implementing a cohesive strategy designed to align different activities within the organization to optimize the chance of achieving corporate initiatives.

In today's business, simply providing your sellers with the latest marketing slick or whitepaper isn't enough. If this is the extent of your enablement practices, you're leaving revenue on the table.

Why Sales Enablement in 2012
A confluence of trends has resulted in sales enablement emerging as one of the most critical initiatives your business can undertake in 2012. Think about your growth strategy – what steps are you taking to maximize the following trends?

Increased Mobility/BYOD  

The media has become fascinated with the Bring-Your-Own-Device trend – enterprise use of personal devices (iPads, iPhones, tablets, etc…) has changed the way many of us work. A recent survey from Citrix found that 53 percent of businesses witnessed productivity improvements by more than 10 percent, thanks to the use of personal devices at work. And 16 percent reported increases of more than 30 percent.

How are you leveraging the mobility trend to better arm and enable your sellers? Sales enablement combined with mobility can significantly empower your sales team by providing them with dynamic, on-demand content that they can access in the middle of a sales situation. Think about that: you’re in a sales meeting, the prospect asks a question, you can immediately pull up situation specific content, demos, video, pose questions to colleagues and get immediate responses, and more. Using sales enablement to maximize sales mobility will increase execution and revenues.

Mergers & Acquisitions/Cross-Sell Opportunities

These two topics tend to fall into the same bucket. While M&A activity decreased in 2011, it's still one of the biggest growth strategies employed by businesses. Being able to sell more products and services tends to be at the heart of most M&A activity.

Simply acquiring a new line of products (or launching one for that matter) is just the start. How are you arming your sales team to sell the new products? The traditional approach consisted of a quick training program, a few brochures on the new product(s), a couple of presentation slides and a wish of good luck on the way out the door. This approach has proven unsuccessful and is a contributing reason why there’s a gap between strategic initiatives (product launch) and revenue (closing sales).

Sales enablement helps maximize every opportunity for cross-sell and upsell by delivering timely and relevant information, when it's appropriate during the sales opportunity. This means brand-compliant materials with the latest information on new products, on-demand, based on the unique selling situation. It also reinforces the broader strategic picture – how do these products fit into the broader portfolio, and why should your customer care?

Social Collaboration

We've seen a lot of companies deploy simple social tools across their enterprise in attempt to foster greater collaboration. However, critics argue that these technologies have little impact on overall productivity. Some of the complaints are that people don't know who to present their questions to, answers provided are out of date or just inaccurate, and too much non-relevant information is shared with the general audience.

Social tools need to be aligned with a specific business purpose and objectives to result in increased sales. Sales enablement will play a greater role in 2012 to mobilize the right subject matter experts, resources and information for each unique situation. Sales enablement will also guide the communication that occurs internally with colleagues and the collaboration that occurs between the sales person and the prospect. Therefore, it will help provide each seller (and ultimately the buyer) with the accumulated knowledge inherent in every organization.

There are a lot of reasons why sales enablement will continue to grow in importance in 2012, but the driver behind them is the same: to close the gap between your businesses strategic initiatives and your sellers.

For more information, check out SAVO's latest e-zine on the topic of sales enablement. There are several case studies from leading selling organizations such as Compuware and Philips, highlighting how they've transformed their selling processes and increased revenues through sales enablement.

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What's your V.I.T.A.L Vision for Success?

This guest blog post is by Donal Daly, CEO of the TAS Group. He shares sales insights, hindsight, and a little foresight on his sales and technology blog, Dealmaker365. Daly will speak on the second day of the upcoming Sales 2.0 Conference: The Art & Science of Accelerating Revenues, on April 3, during his session: Six Factors That Are Transforming B2B Sales in 2012. 

 

I recall when, back in 1989, I was a few years into the growth of my first software company. Having bootstrapped the business and eked out survival through the first year or two, things were beginning to take shape. Each year I grew revenue levels over the previous year – but not by a lot. I used to approach planning from a position of "Where am I now, and how can I improve on this?" The result was steady-but-not-spectacular growth.

As I was entering my fifth year, I was struck by the realization that with this growth curve, it was going to take me a long time to create a company of any real mass or substance. I was in my twenties and obviously still had a lot of time, but I was impatient. I didn't know a lot about much of anything – though I didn't appreciate that at the time; however, this blissful ignorance enabled me to think about things in perhaps nonconventional ways. I read Drucker, Townsend, Peters, McCormack, Kotler, Sun Tzu, Machiavelli, Porter, De Bono, Iacocca, and other topical and nontopical tomes of business development, strategy, corporate lore, thinking, leadership, etc. I was struck sometimes by how insightful some of these authors were, and in the haze of boundless self-belief found only in youth, I favored those whose views echoed mine. I must have learned something along the way, however, as I still remember the day my growth-challenge epiphany occurred.

When I changed the question from "Where am I now, and how can I improve on this?" – which invariably translated into 20 percent increase in revenue – to "How can I achieve 200 percent growth this year?" a fundamental change happened. In hindsight, with the benefit of many years' experience, I now know, as you do, that this goal-oriented or vision-oriented method is well understood. As a paradigm for growth strategies, it is a method by which you can stimulate creativity, momentarily suspend reality, and remove constraints or guardrails to release your unfettered potential, untrammeled by the stifling boundaries of "What's reasonable?" or "What do other companies do?" or "What's acceptable?"

I was reminded of this recently when I was speaking to Tom, a successful salesperson, who, when planning for 2010, asked my opinion on his sales plan. He had closed about $2,000,000 in 2009 and was among the top performers in his company. His plan was well structured, clear, and very focused – and his personal target for 2010 was $2.2 million. When I inquired as to the basis for that number, Tom cited 10 percent growth on his previous year's achievement. We got to talking about potentially taking a different approach. We discussed what he would do differently if he had to achieve $4 million.

I had little value to add to the conversation, as I did not know Tom's business, but he took a "I think that's crazy, but let's brainstorm it a while," approach. The following hour was peppered with such phrases as, "But I'd need help from...," "There's no reason why that shouldn't happen," and "I wonder if...," "No, I knew you were crazy," and finished with, "Now that I've thought about it that way, I think maybe $2.8 million is achievable."

As I said, I didn't add any value to the planning, but Tom, who, to his credit, was open enough to indulge my questioning, stretched his own thinking and created more of a vision for success than a plan for incremental growth.

I've tried to put some structure around this approach for myself and others with whom I work. To make it easy to remember, I use an acronym: V.I.T.A.L., which goes something like this.

• V – Vision – This needs to be very ambitious but not ludicrous and is a quantifiable statement of the ultimate goal for the time frame in question.
• I – Implications – These are the things that would need to fall into place, the activities required, and the resources needed to support the vision.
• T - Test Reality – While still keeping the bar quite high, exclude elements that are entirely impossible, but keep those that are merely a real stretch.
• A – Aggregate – As if the goals remaining from the reality check are the baseline objective, figure out how to achieve each of those, aggregate the identified initiatives and associated resources required, and create a two-dimensional, high-low map of reward versus effort so that you can prioritize your efforts.
• L - Laser Focus – Now put your new ideas into action. Stop things you were planning to do –because that’s what you always did – but that don't bring high return. Keep on doing the things that you know work very well, and start doing those new things you've identified that can add significant incremental value.

None of this is easy, and while it's important to plan and question and question your plan once you've done it, you need to commit to it and follow through. As Jack Nicklaus said when asked about his incredible shot-making ability:

"I start by assessing where I am, looking at the lie of the ball, figuring out the terrain, gauging how far I am from the hole, and thinking about the wind and other elements of the weather. Then I decide where I want the ball to land so that it ends up near the hole or at the right place on the fairway. Next, I visualize the flight path of the ball and see in my mind the kind of swing I’m going to have to make to get the ball to travel on that flight path. Then I commit to that swing."

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Pricing Optimization in a B2B World: Value-Based Pricing Comes of Age for Sales

Today's blog post is by Steven Forth, CEO of LeveragePoint, the leading SaaS platform for value-based pricing and sales.

 

 

The economic climate is tough: financial uncertainty, wild fluctuations in commodity prices, global competition, and rapid commoditization of products that we all thought were safe. Business buyers are paying a lot more attention to the economic variables in a purchase decision, and this is putting new pressure on sales to execute with an emphasis on value-based selling. This is something with which most of us have little experience. We know how to build relationships, uncover customers' needs and pain points, and translate features and benefits into solutions. But most of us are not very familiar with translating those solutions into economic impacts. And yet, that is precisely what we need to do today to capture an unfair advantage in the market.

One approach is to estimate the return on investment (ROI) for the customer. Many buyers, especially financial buyers, insist that the sales team provides ROI calculations as part of their proposal. In fact, though, ROI is not a very useful tool for sales. It is an important approach for the chief financial officer (CFO), who often needs to make decisions between very different options – apples-to-oranges kinds of decisions.

But in sales, we are more often comparing apples to apples – the buyer is trying to decide between two similar solutions from competing vendors. Or, in some cases, it is apples versus going without ("I haven't been eating apples, so why should I start now?"). How does one make the economic sale in this case? 

Over the past two decades, pricing experts have been developing an approach called value-based pricing, which depends on the creation and subsequent use of value models to set price ranges for different segments and hone value message. (There are many articles on this available on the Resources section of the LeveragePoint Website.) Value-based pricing is based on a few key principles:

1. The customer always has an alternative (known as the Next Best Competitive Alternative), and the price of this alternative sets the market price.
2. Your solution will have some positive economic impact for the customer that your competitor’s does not. By working with the customer, the scope of these can be estimated.
3. Your solution will have some unique costs or shortcomings compared to the competitive alternative, and it is important to acknowledge these.

These three principles are combined to create a value model. A value model is a collection of value drivers for a specific customer or segment relative to a competitor. A value driver is a mathematical equation that shows how a customer derives value from your solution.

One common objection to value models is, "We can't get data for the value driver functions." Our experience is that, as long as the value driver makes sense and the initial numbers are reasonable, customers are willing to discuss them and share information in the sales conversation, especially if the salesperson understands value and acknowledges the competitor and the positive and negative value of his or her company's own solution.

Like sales, pricing is a conversation, and it needs to be collaborative. In the current economic environment, we need to be able to sell the economic value of our solutions as part of an honest conversation with our customers.

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Setting Sales Goals and Targets: Step 1 to Creating a Winning Sales Plan

Today's blog post is by Dan Hudson, President and Co-Founder of 3FORWARD. He has a B2B sales and sales leadership background of more than 30 years.

  

 

Sales planning for 2012 is well under way, and most sales teams are facing quota increases for the coming year. The fact is, every sales leader will have to do more in 2012, often with limited additional resources. Even best-of-class sales programs (with average win rates of greater than 30 percent) need to continue improving their year-over-year performance. It's one of those indisputable laws, like paying taxes and getting older.

This reality is what makes formal sales planning so important. It's main the difference between making it happen and hoping it happens. The fundamental goal of the sales plan is to put on paper specifically how the sales team will make next year's revenue target. We recommend your sales plan cover (at least) the following areas to make sure the fundamentals are addressed:

1. setting goals and targets,
2. building the revenue model,
3. filling the sales funnel,
4. building a dynamic sales process,
5. executing and measuring.

By focusing on these five core areas, you can build a sales plan that is reasonable, measurable and, most important, achievable. Each section is vital, but let's take a closer look at section one, since it sets the strategic direction for the tactical elements that come later in the plan.

Setting Sales Goals and Targets: Section 1 of the Sales Plan

Whereas the B2B sales plan establishes the playbook for a successful sales year, the initial section of the sales plan, "Goals and Targets," is the foundation of the written plan itself. Following are the three main topics for this section, with examples of where to focus.

1.  Making Goals and Targets Specific and Measurable

Too often, sales goals and targets have a case of the "warm and fuzzies" – a feel-good tone that is vague and undefined. To be clear and actionable, goals and targets must be specific (numbers and dates are best) so that you can measure your progress throughout the year. 

Example of "fuzzy and feel good" targets:
"Establish new relationships for our outsourcing practice."

Example of specific and measurable targets:
"Establish two new relationships per quarter in the US Financial and Accounting Outsourcing practice. The targeted annual contract value of each new relationship is $2 million."

When setting your goals and targets, try to strike the sweet spot between "go big or go home" and the reality of your market situation. Every company faces its unique challenges, but if you are prepared, then it's easier to overcome them.

2. Prioritizing Challenges and Creating Defensive Strategies

Consider your last couple of sales years, and list those challenges that kept you from achieving your sales targets. Think in terms of the key areas of the selling process:

• lead management
• account management
• opportunity management
• territory/area management
• pipeline process
• metrics and reporting
• team skills development
• rep and manager recruiting
• compensation

Prioritize your list of challenges and identify your strategy to minimizing these sales barriers. Use a template, such as the following, to identify, rank, and address your challenges.

Preparing for Sales Plan Risks and Challenges

Challenge	Not enough qualified leads from marketing's lead generation program.
Impact	The sales pipeline and ability to make the annual revenue target.
Severity	High
Recommendation	Meet with marketing to jointly define what constitutes a qualified lead. Increase quantity of target accounts by X and identify Y key contacts in each target.
Assigned to	Joe King, Director, Marketing Lead Management
Complete by	March 1, 2012

3.  Define Investments Needed to Achieve Success

You are likely in the same boat as most sales leaders heading into a new year: you're getting a quota increase! In the old days, we might have grumbled a little, played around with territories and headcount, and then told the CEO we needed another seven sales reps to meet the new number.  

More Effective Approaches to Investing in Sales Success

Yes, headcount is still a critical success factor for a sales team; however, benchmarking of best-in-class sales teams demonstrates several process-level improvements that consistently improve win rates and increase a team's ability to hit its numbers. These enhancements allow both the current team to perform better and the improvement of new-hire success rates. Here are some areas to consider:  

1. Establishing a formalized sales process, including targeted account planning
2. Sales manager effectiveness training and industry-specific rep training
3. Lead management process and marketing automation
4. Sales leaders dashboard and sales knowledge management
5. Sales intelligence, prospect profiling, and industry monitoring

Additional Resources for Setting Sales Goals and Targets

There you have the outline of "Setting Sales Goals and Targets," the first section in creating your new sales plan. You can clearly see why getting this on paper creates the foundation for everything else in your plan. If you'd like some help getting started, 3FORWARD provides several complimentary templates to help sales leaders develop their 2012 sales plans. 

• Sales Revenue Forecasting
• Do I Have Enough Leads Calculator
• Do I Have Enough Pipeline Calculator
• Finding Your Best Prospects Success Kit
• Target Account Plan Success Kit

Give them a try and let us know if you have any questions. Remember, the most important takeaway is to realize that your team WILL have to sell more in 2012 than in 2011. Hope isn't a strategy! Having a plan is the only way it will happen.   

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Seven Steps to Sales Transformation

There is a parallel between biology and business. Our biology is largely influenced by our DNA, our genetic makeup, which contains a set of instructions vital to our ability to function, adapt, and transform over time. Our business is influenced by two DNA-like sets; one is the DNA of the economy, and the other is the DNA that's expressed by our decisions. The quality of our decisions impacts our customers and ultimately shapes sales success.

Below is a brief overview of the steps that can lead to ongoing sales transformation. No matter what chaos or challenges we are facing today, we can at any time choose to transform and move ahead of our competition. Here are seven steps to consider:

1. Diagnose. Define the current level of sales effectiveness. Assess all internal resources (people, process, and technology) and measure how effectively they align with external opportunities. Determine the external and internal disconnects. Drill down into each area: Do we have the right people who can win in new and existing markets and create more customers? What changes are needed to optimize our sales process? What would the ideal technology road map look like that would continually increase operational efficiencies?
2. Get executive sponsorship. Get agreement that the sales organization is a key competitive differentiator. Articulate the new vision, create a realistic sales-transformation road map, and define what success looks like. Get the financial support needed to continue the journey as described in the road map. Collaborate with senior managers and develop a set of key performance indicators that will allow them to track progress.
3. Create a culture of measurement. Sales force transformation requires a culture change from making decisions based on hunches to making decisions based on science. While, in the past, selling depended on the skills of individual players, sales organizations today are synching resources and developing a collaborative approach to create customer value. A clear set of performance-measurement tools will not only help the synchronization process, but also contribute to a predictive organization in which pipeline potential and velocity are clearly visible, forecast accuracy will exceed 90 percent, and salespeople are routinely coached on bridging the gap between actual and required performance.
4. Eliminate departmental silos. To win in today's environment, sales must be aligned with marketing, service, finance, HR, and legal. Sales organizations need to seek alignment between sales ops, sales channels, and internal and external teams, but must also closely collaborate with all departments. When it comes to negotiations with clients, salespeople have greater chances of winning deals when all departments have a clear understanding of what represents customer value and what value a new customer means to the company. Once all departments are aligned and in synch, there will be little internal friction on how an order is handled, how discounts are approved, or how cross-cultural roadblocks are removed. As a result of this alignment, crisis management will be reduced, customer information will be easily accessible, and all stakeholders will clearly see how they can contribute to the creation of a new customer and the retention of existing customers.
5. Shift to strategic and operational competencies. While many companies believe that operational efficiencies come from supporting legacy systems, smart companies are redesigning their entire sales operation and creating a customer-focused enterprise, where all stakeholders listen, understand, and respond to the forever-shifting demands of the customer base. This transformation cannot succeed without embracing one version of the truth, which will help create a standardized process for producing and serving customers across the enterprise. This shift cannot be achieved without bringing more art and science into the sales operation.
6. Harness the collective intelligence of the sales organization. Sales transformation is not only the result of good leadership, but also a reflection of good stewardship of the information streams that all stakeholders create in the quest to win new business. As we move from a sales-pitch-based economy to a conversation economy in which the brands are a reflection of rich social-media information streams, salespeople need to become better storytellers and learn how to initiate and lead customer conversations that are focused on value. This also requires the mastery of social-media tools that are fully integrated with the sales process.
7. Select and deploy the best technology. Sales technology is critical to both growth and profitability. Sales organizations have stripped hundreds of millions of dollars of waste out of inefficient sales operations. Lead-management apps have improved demand generation, proposal-management tools have improved win rates, and compensation-management apps allow companies to incentivize the right sales behaviors that improve a company's bottom line. As a result of the transformation, salespeople should spend less time tickling keyboards and more time co-creating sales with customers. Savvy sales leaders achieve successful sales transformation by aligning the best people with the best processes and technologies. 

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6 Ways to Get Executive Buy-In on Sales Performance Tools

Today's blog post is by Christopher Cabrera, CEO of Xactly Corporation, the industry leader in sales compensation automation.

 

 

Trying to convince management to invest in new sales performance tools to make salespeople's lives easier is no walk in the park. While you understand how much certain sales applications would improve sales productivity, management expects you to demonstrate the value of any new solution.

The big idea is—in order to make sales easier on you and your team, you need to do what you are supposed to do as a sales professional: align the value of the solution with what your customers want to achieve.

Here are six guidelines to follow when you're pitching new solutions to management:

1. Get agreement on what management wants to accomplish

If your CEO wants to increase sales by 20% without a significant increase in cost, do the math for a few what-if scenarios, such as:

• What if we had technology that could improve the number of qualified leads by 100%?
• What if our demand generation team had technology that made them 200% more effective?
• What if we could deploy technology that shortened our sales cycle by 50%?
• What if we cut the time it takes our sales team to write proposals from hours to minutes?

The technology to achieve any of the above already exists. The challenge is finding a solution for your unique situation.

Technology is our means to accomplish our aims. Always begin with the aim, before pitching the means.

2. Be clear about the risk

Not every technology delivers ROI. Technology is only one part of a three-legged stool. People and Process are the other two. Ask yourself:

• How will the new technology change our processes?
• How will our salespeople react to a change in process AND technology?
• What will be the user adoption process?

Do a "Pre-Mortem Analysis" where you assume that your project has failed. Work backwards and define how to avoid unexpected failures.

3. Understand and define the pain

Selling can become painful when salespeople don't have the right sales tools.

• Study the workflow of your salespeople.
• Ask them to prioritize their 3 biggest time wasters.
• Invite your sales team to a 1-hr "gripe" session to voice what they dislike most about their jobs.

There are over 1,600 sales applications designed to improve sales productivity. Chances are, applications exist for the majority of their problems.

4. Demonstrate the ROI of a new solution

One simple ROI formula is:

(cost to acquire + cost to maintain during expected life)

/

(money saved per month + increased abilities per month)

=

(number of months to cover costs)

Other tips:

• Allow for hidden costs, such as customization, the cost of consultants and the cost involved in training and coaching.
• Know when to say no—if the solution doesn't pay for itself in under a year, you're better off working on another pain point.
• Talk to at least 3 references—if they haven't been able to measure ROI, you probably won't either. Time to walk

5. Align the new technology with your overall business strategy

The success of a business depends on the continuous alignment of internal resources with external opportunities. Ten years ago there was only one sales technology: CRM. Today, companies rely on a suite of sales and marketing applications.

The two keys to success are:

1. Alignment
2. Business strategy integration

For example, software company Brainshark integrated 20 carefully selected sales applications into their sales operation. They spent $4,000 per salesperson and achieved a 35% gain in sales year-over-year, for two years in a row. (Source: Brainshark sales executive)

6. Create a roadmap for change management

If you want your company to achieve its revenue goals, you must find and deploy sales performance tools that work faster, better and cheaper. But selecting one sales tool a year won't get you very far in this tough economy. You’ll likely need a number of solutions that you deploy over time.

While external change accelerates automatically, it takes great internal effort to match the pace. Change is hard because:

• People overestimate the value of what they have
• They also underestimate the value of what they may gain by giving up what they know.

That's why successful business leaders continually challenge the status quo; they drive change to avoid being driven out of business.

They also know that the leaders of change are the leaders who will pocket the most change.

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