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May 2012

An $80,000 Mistake (and What I Learned about Comp Plans)

Cabrera_newToday's blog post is by Christopher Cabrera, CEO of Xactly Corporation.

Note: hear Christopher Cabrera keynote on June 7 in London at the Sales & Marketing 2.0 Conference. Email larissa@salesdottwoinc.com for more information.

Would you brush your teeth with a toothbrush duct-taped to a blender?

This is the question I posed to an audience of sales and marketing leaders last month at the Sales 2.0 Conference in San Francisco. I wasn’t being flip.

While many of us are out there selling cutting-edge products, we still somehow justify motivating our teams with a tool from 1982 (Excel).

I’m not knocking Excel. It’s a great tool. We use it at Xactly every day. But, Excel was not designed for managing the commission payments for a sales team, any more than a blender is meant to safely power your toothbrush.

You are creating real problems when you use Excel to motivate a sales team of any size. Gartner estimates that errors can amount to 10% of commissions. How much money is that for you—$10k a week? $100K?

The math is too big; the equations too complicated. The system is too slow to truly reward and actually encourages communication breakdowns. When you try to turn Excel into a sales motivator, you create real business problems.

Consider an example I shared at the conference: Back when I was a sales manager, I was mistakenly paid $80,000 instead of $8,000 in commissions. When I reported the mistake, my manager said to me: “Wow, Chris, do you realize we would have never caught that?” Turns out, my employer overpaid three of us $72,000 each and didn’t realize it. Combined, that’s more than $200,000!

And just imagine all of the incorrect payments they didn’t catch over the years. These errors happen all the time. They cost companies millions. But this isn’t the only cost. Salespeople who don’t trust their paychecks aren’t motivated to try for incentives. Why should they if their pay is essentially random? They may even waste time tracking their commissions.

But more and more companies are eliminating the sales roadblocks -- like errors -- created by running commissions in Excel. When they swap Excel for automation, they tap into the science of human psychology—the desire to compete and win.

Research from CSO Insights and the Aberdeen Group even shows that companies that use new incentive solutions sell more, more efficiently. Xactly’s customers, for instance, see 146% revenue growth and 36% shorter sales cycles once they ditch manual compensation processes. What these leading companies understand that others don’t (yet) is that the science of effective motivation can be built into incentive compensation tools.

To see what I mean, consider these not-so hypotheticals. Would your sales reps be more motivated (and capable) to outperform quota if they could:

  • Track their performance against goals every minute of the day?  
  • Know exactly how much they’d get if they closed a potential deal?  
  • Trust the accuracy of their payments?

What about your sales managers? Would they be more effective if they could compare sales reps’ performance by territory, product, and margin? All with the click of a button?

We all know the power of human motivation. When sales leaders ditch the thing that stands between incentive programs and real motivation -- Excel-driven errors -- they create a company culture that encourages top performance, healthy competition, and accelerated revenue. So why are you trying to force 30-year-old technology to do something that it was never meant to do?

GgAtFox headshotPublisher's note: Join me on June 7 in London and hear Christopher Cabrera’s keynote, "The Science of Sales Performance," at the Sales & Marketing 2.0 Conference


Are You A Leader of Change in Your Business?

Today's guest post is by Jeffrey Hayzlett, Best-Selling Author, Global Business Celebrity, and CEO of The Hayzlett Group. Follow him on Twitter at @JeffreyHayzlett

I had the pleasure of keynoting recently at DocuSign Momentum 2012 in San Francisco to a group forward-thinking change agents. For those sales leaders who haven’t heard of DocuSign or recognized the impact eSignature can have on your business -- watch out. There was a whole ballroom full of business leaders who get it; these folks understand the need to increase speed-to-revenue, drive sales, simplify workflow and process, and to change.

And change is tough. Here's a tidbit I shared with the crowd (this is also the dedication in my book, Running the Gauntlet): "To the naysayers, opportunists, and obstructionists who stand in the way of driving change and progress in any organization, take note: WE WILL BEAT YOU!"

Driving change can sometimes feel like you’re running the gauntlet. You come up against obstructionists, backstabbers, and opportunists who do their best to stand in the way of change.

People who don’t like change are going to fight it. Whatever they can do to resist change, they will -- because change makes them uncomfortable.

As a leader of change, you need to create tension, constantly seek ways to improve your business, increase sales and speed, and learn new technologies. Failure to adapt and change in sales or any business is a surefire way to sabotage your own success.

So adoption of eSignature is a no-brainer. Why wouldn’t you want to do things faster, better, more efficiently? No more paper. No more chasing a wet ink signature. Instead, adopt a totally legal, legitimate, and trackable way to continue on driving change in the gauntlet of business.

In my business I look for problem solvers, not problem seekers. And I found myself among a group of problem solvers at DocuSign Momentum 2012. Innovation is always a key driver for any business leader, so show initiative by introducing innovative ways to drive your business. Adapt or die!

GgAtFox headshotPublisher's note: Want to learn more about how you can fill orders faster by getting sales contracts signed electronically in minutes or hours? On Wednesday, June 6, I'll host a live Webinar showcasing tips from experts at DocuSign and Yamaha Corporation. To join us, register here


The Power of Psychology in Selling

Today's blog post is by Samara Pope, author of The Sales Psychologist.

Clip_image002What would it mean to you to have the ability, knowledge, and insight to turn around any sales obstacle? What would it be like if you had the answers to every possible sales objection? What would it feel like if you knew what to do in every possible situation and in response to any challenge thrown your way in your sales job? This is the power that comes from the knowledge of sales psychology.

The prospect's behavior can be a torturous mystery for many sales executives who are often left clueless as to what to do next, gabbling when faced with seemingly insurmountable objections and obstacles from prospective clients. Here are some of the most common questions I hear sales executives ask:

"They seemed really interested. What happened?"

"Why did they say no when everything was going so well?"

"It's such a great product/service. Why aren't more people buying?"

Many such questions go unanswered, and the most commonly prescribed antidote to a sales executive's woes is to carry on, as sales is supposedly a numbers game, and not get stuck in the paralysis of analysis: "Don't stop, don't look back, don't analyze; just keep going, and if you work hard enough, you will see returns."

The assumption that sales is a number's game is based on the law of averages or probability, which states that given a certain number of attempts, a hit is inevitable. Hence, sales executives are coached to reach out to as many prospects as possible to ensure returns and not ponder over the ones who seemingly lost interest and turned "cold" along the way.

This traditional advice is truly well meant; however, when we look at the number of prospects who are lost due to unknown, unanswered, undisclosed reasons, this staggering figure raises the question of whether more could have been done if someone involved had a better understanding of the underlying dynamics of the failed sales transaction. It is simply that, in most cases, no one knows what to do. So the best advice given to sales executives is to stop wasting time on the "dead" prospects and move on to the next one.

But ask most sales executives, and they would most likely say that they wish they had more insight into what actually happened, and through this insight, they'd like to have the ability to know what would have been the best thing to do to possibly have saved the sale. To many sales executives, it seems like a losing battle to hastily cross off high-potential prospects because of seemingly insurmountable obstacles and then restart with new prospects with whom they may face equally unique challenges that might result in having to give up on them, too. I call it "running the hamster's wheel," as sales executives are made to blindly follow a given path without the ability to stop, sense, analyze, and ask such questions as, "Where am I going? What am I doing? Is it working? If not, what can I do about it?"

Looking at 3,000 Failed Opportunities

These are the questions that I asked myself 10 years ago when I looked at the 3,000-odd highly qualified prospects who had said no to a very essential business service. This particular service was deemed unsellable because the company couldn't kick start its sales in the five years that it had been in business.

When I analyzed the numbers, they showed that the company had a 2 percent closing rate, which meant that a sales executive would have to make 100 proposals to qualified prospects, and from these 100 proposals, only 2 percent would come through after an average follow up of eight months. Each sales executive's target, including mine, was to bring in four sales per month, which meant we had to make 200 proposals to qualified prospects each month. This was the system that had been in place and unsuccessfully followed for the past five years.

Different businesses have different closing rates, but most have a high prospect causality rate, resulting in a large number of "dead" potentials, because the focus is always on getting through the list as quickly as possible to find hot leads. If we apply the knowledge of sales psychology to a company's sales process, however, this would result in sales executives getting the maximum number of high potentials from their lists in the shortest time possible, meaning more prospects, closed deals, and clients for their sales efforts. Sales is not a number's game; rather, it's a game of applied psychology. The knowledge of sales psychology is simply the understanding of human behavior in a buyer/seller relationship. When working with the knowledge of sales psychology, every single sales effort, call, meeting, and proposal has more impact and produces greater results.

The Pot of Gold

My recognition of the law of success is to look at what everyone else is doing in order to find the path that the majority are following – and then to do something different. With this guiding philosophy, I started my first sales psychology project by working on the lists of the thousands of cold and "dead" prospects left behind by the sales team. While everyone else was looking for hot leads and hot prospects to pursue, I wanted to dig only for the ones delegated to the rubbish pile. At first, my colleagues and seniors thought I was wasting my time, but in my perception, I was digging for gold. And while it was not possible to make others see my way immediately, my drive and determination were contagious. Within a few weeks, I hit the jackpot.

Going through the list of 3,000 prospects, a unique behavior pattern was identifiable for the sales cycle of this particular business service. Both the sales executives and prospects seemed to engage in the same steps and present the same challenges and obstacles at the same point in the sales cycle in every sales proposal. Going through the notes, even the excuses given by different prospects to sales executives working independently of each other at various times in the company’s history were similar, almost down to the exact words.

As in the above example, every product or service will have its own unique sales cycle with identifiable dead ends and obstacles. If you would analyze your own sales cycle and CRM records, you would be able to identify common trends in the objections and excuses given by prospects. So instead of adding to the pile of no's and blindly running the same path, wouldn't it be worthwhile to take a moment to analyze and assess your sales cycle and rework your course of navigation to be able to successfully deal with the obstacles encountered? In most cases, all that is needed is a little bit of psychological insight from a sales perspective. Here are the action steps, based on a case in the software industry:

1.  Create a psychological profile of the target. 

Our target is the IT manager, who reports to the company president. Since IT managers are trained in technology, not business, they are often excluded from the executive strategy meetings that involve operations, production, finance, sales, marketing, and service. IT managers focus mainly on supporting the existing legacy systems, and they are often afraid to take risks and are not skilled in selling their own ideas to their superiors.

What motivates them: feelings of security, detailed documentation, solid references, serious research, and concise presentations.

What demotivates them: feelings of uncertainty and ambiguity, incomplete documentation and presentations. If you cannot prove what you claim you can do, you will not be taken seriously by IT managers.

2.  Their most likely objections:

"This is going to be difficult to sell to my boss."

"How are we going to justify the budget for something that's not on our road map for improvement?"

"I am worried that this isn't going to work the way we expect it to work."

"I will have to think about this."

"Your price is too high."

3.  Do not target the IT manager alone.

Our own sales records show that when our salespeople include other managers, together with the IT manager, in their discussions, the chances of closing a sale go up by 50 percent.

4.  Know when not to invest your energy.

Do not pursue deals when the circumstances are not right. Here are the telltale signs that you may not be able to make headway:

  1. Fewer than 60 days on the job. Unless the manager knows our technology, he or she will be too busy learning about the existing systems.
  2. A budget freeze.
  3. Cancelled meetings. You tried three times to get a meeting, and each time it was cancelled. Move the account to lead nurturing.
  4. Personality conflict. If you feel your prospect has a personality that makes it hard for you to think positively while in this person's presence, assign the account to someone else.

A combination of simple research, human psychology, and a review of the best practices will give you a deeper and meaningful understanding of your company's unique sales challenges and more successful solutions.

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The Right Use of Logic and Emotion in Sales

Clip_image003

Selling is a transfer of energy that comes from two sources: logic and emotions. Guess what has more influence over a buyer's actions? To explore this further, let's review some of the logical elements that can influence the outcome of a sales call:

  • Product knowledge
  • Customer knowledge
  • Social information
  • Sales process
  • Diagnostic questions
  • Sales-ready messages or call script
  • Persuasive proposals
  • Persuasive presentations
  • Call timing

Most sales training prepares salespeople to tap into the right information, ask customers the right questions, diagnose the right problems, create the right solution, prepare the right proposal, and close the sale at the right time. It all sounds wonderful during the sales-training program, and it looks great on a whiteboard. The trouble is, when salespeople believe that their job consists of building a prefabricated bridge made of the right logical elements from the seller to the buyer, those salespeople will be disappointed 80 percent of the time.

Zig Ziglar once said, "Logic makes people think, and emotions make people act." I am convinced that the logic bridge between buyer and seller represents only 20 percent of the buying decision in a B2B setting. If logic was all it took to persuade a buyer, we could move the entire sales process online and eliminate the need for salespeople, just like Amazon did.

What Creates Emotional Impact?

Dr. Albert Mehrabian at UCLA found in his research that feelings and attitudes are communicated 7 percent by words, 38 percent by tone of voice, and 55 percent nonverbally. Since most inside salespeople use the telephone as their main connection with the buyer, how we say what we say (tone of voice) has five times more emotional impact than what we say (the actual words).

What creates emotional impact is the salesperson's ability to do the following:

  • Create feelings of trust and rapport
  • Affirm the buyer's need for good self-esteem
  • Sense the buyer's emotions in the moment
  • Show empathy
  • Appropriately reflect on the buyer's emotional expressions
  • Adapt to the buyer's rate of speech
  • Harmonize with the buyer's tone of voice
  • Get in synch with the buyer's emotional energy
  • Complement the buyer's moods with uplifting statements
  • Give the buyer emotional space to facilitate free associations
  • Draw out and address the buyer's hidden fears
  • Support and enhance the buyer's positive viewpoints
  • Project and maintain positive energy throughout the call
  • Be authentic and spontaneous

These points describe some ways that sellers need to meet buyers’ emotional needs so that buyers become comfortable with sellers. This list is by no means complete, but it creates a composite image that defines likeability.

Sales trainers and sales managers constantly remind us that selling is a people business and that we buy from people we like. Guy Kawasaki tells of how he met Richard Branson in Russia. They met in a green room before a speaking engagement. When Branson asked Kawasaki what airline he used, he learned that Kawasaki was loyal to United because he had the highest status there. Branson didn't use logic to persuade Kawasaki to become a customer; he simply picked up his leg and started to polish his shoes with his jacket. Kawasaki switched to Virgin America in a heartbeat.

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It's about time that we recognized that buyers want to deal with likeable salespeople, and it's about time that we give them what they want. At our last Sales 2.0 Conference, an attendee told me about her interest in a Sales 2.0 solution that was offered by a sponsor. She said, "The salesperson in the booth perfectly understood my needs, and I shared our pain points with him in great detail. At the end he told me that he would put me in touch with his company's rep in my region. That was frustrating, since I have to go through the same process all over again." Isn't it time for buyers to be able to choose the salesperson with whom they want to work?

With new social CRM solutions such as Nimble or Reachable, geographic territories will be giving way to social proximity, in which leads are assigned to salespeople who have the best social connection with prospects.

In the not too distant future, companies will allow customers to select a salesperson who scores highest in likeability. Who wouldn't want to get a shoe shine from Richard Branson or a direct tweet from Zappos CEO Tony Hsieh or a Facebook "Like" from Michael Dell?

Since most products become commodities faster, the ultimate competitive advantage is the salesperson. In the future, smart companies will give buyers the ability to choose salespeople, based on what they believe is the ideal match between professional competence and emotional intelligence. Emotional proximity could be the ultimate competitive advantage.

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Social Proximity

0e617d1Today's blog post is by Al Campa, CEO of Reachable. He is responsible for the strategic and operational leadership of the company. 



With all the changes in business, one thing remains the same: business is about people. Despite globalization, technology revolutions, social networks, and razor-thin competitive margins, business is still about people working with people. People who can’t connect effectively with others rarely do well in business.

Consider sales, for instance. We buy things from people we have positive relationship with, people we like and trust. And if those relationships stay positive, we keep buying from them over many years. So one would assume that when companies assign sales territories and determine which sales reps will sell to which accounts, they would consider the strength of social relationships in their assignments.

In reality, however, most sales territories are determined by geographic boundaries and physical proximity. Sales reps are assigned to nearby zip codes or area codes, or they are assigned by state boundaries where they live. Yeah, who cares about whether they have good connections, solid relationships, and reliable networks? If the zip code matches, well, anyone can see that’s what’s important, right?

Yet in the age of conference calls, WebEx presentations, and Skype, social proximity becomes a far more important tie to an account or prospect than geographic proximity.

To make the best use of this social proximity, Reachable has created an online solution that helps businesspeople leverage their personal contacts and the contacts of others in their organization, to broaden their professional network and reach people they need to know – people to people, rather than area code to area code. Our research shows that having an existing relationship with an account or prospect makes the likelihood that you’ll be able to engage that prospect or account three to four times higher.

At Reachable, we believe that social connections and relationships are solid gold for a sales organization and should be leveraged as much as possible. We make it possible for a company to leverage and manage the connections of all its employees, as well as its customers and partners. And we integrate these connections into the sales process. Assigning leads and accounts by social proximity, rather than geographic proximity, will increase account engagement and account knowledge and increase close rates.

Social Selling

Reachable offers a number of capabilities that make leveraging social selling easier for reps who have contacts spread all over the map. Considering that reps probably have contacts in one or more email address books, social networks, databases, etc., Reachable brings together these contacts so reps don’t have to check different places to see if they have a connection with a lead or within a target account. Once a user has imported his or her contacts, Reachable scours all contacts to find potential connections.

In addition, being able to leverage the networks of others can extend one’s reach dramatically. Reachable’s ShareGroup feature lets salespeople leverage the contacts of trusted associates on their sales or executive teams. Users opt-in to be a part of a ShareGroup and are able to leverage one another’s network as if they were their own. Contact information (email, phone numbers) are not shared but can be requested from the contact owner. This lets users take full advantage of the collective network within their company while maintaining contact privacy.

Many salespeople spend much of their day working within their CRM system.  Reachable is tightly integrated with such popular CRM systems as Salesforce, so salespeople never have to leave their CRM app to take advantage of Reachable. Within CRM systems, Reachable uses proprietary algorithms to automatically rank leads, contacts, and opportunities by the strength of a user’s relationship to them.

Sales Insight

Salespeople now have much more information at their fingertips than they had even a few years ago. Company information is available via Hoover’s, Thompson Reuters, or Google. Information about people is available via LinkedIn. Facebook and Twitter provide social information. But in spite of this deluge of new information, close rates may not be improving. Cycle times are not decreasing. Sales teams are not getting more productive, because critical insight, rather than background information, is the key to engaging prospects and closing sales.

Insight is a window into company goals, key business problems, and the critical initiatives a company is launching to achieve its goals, as well as the key people internally who are assigned to make it all happen. The insight on a company’s business problem can come from only a trusted internal source, not Twitter. If you don’t have relationships in an account, you are never going to find out what its key initiatives are and how you can help solve them. It’s all about the people you need to reach, the information you need to have at your fingertips, and the ability to engage with those key people to help solve the problems they deem critical.

These are just a few of the Reachable capabilities that can help salespeople become more people-to-people effective. To find out more about the Reachable solution, go to www.reachable.com.

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The Art of Exceptional Conversations

UntitledRobert King is a conversation coach, keynote speaker, and author of Are You An Exceptional Salesperson? (Exceptional Publishing, 2006). If you would like to learn how to turn your important presentations into seamless conversations, visit www.BetterPresentationsBlog.com.


You've heard people say, "Ditch the pitch."  What is your reaction to that statement?  Do you consider it blasphemous or treasonous?  Does it insult your sales sensibilities?  Is it possible that presentations have become passé? 

So that we're all speaking the same sales language, let's clearly define our terms:  a "pitch" or "presentation" is when you, the salesperson or company representative, stand in front of an audience of four or more in a conference room, town hall, or general session or sit across a table or desk speaking to one, two, or three.  Usually this act involves you speaking, often uninterrupted, and sometimes either using visual aids or slides projected on a screen.

But if your prospects/customers are no longer interested in seeing your pitch or presentation, in what are they interested?  Could it be as simple as wanting to have a conversation, a platform where they can express both their frustrations and dreams and feel like they are being heard and understood by a third-party resource who may be able to help them achieve their goals? Yes! Conversations are the answer. Conversations are the future.  Consultative selling was the last decade.  This decade, salespeople, is all about conversations.

As your conversation coach, allow me to provide five ways to turn your presentations into conversations:

  1. Be interactive.  The very word "presentation" sounds like a performance.  Make sure that your conversation is a dialogue and not a monologue.  Monologues were great for Hamlet, but Hamlet wasn't carrying a bag.  Hamlet didn't have a quota. Banter. Discuss. Engage. 
  2. Listen. It's harder to listen when you're the only one talking. Side note: We salespeople/sales managers/sales trainers can learn an awful lot from our friends the actors.  The best actors are the best listeners.  They are in the moment.  They are not thinking ahead.  They are listening and watching intently, responding accordingly to every stimulus.  In a conversation, we are jointly participating with our prospect/customer to reach a desired solution for both. 
  3. Be generous.  "Presentations" have primarily become all about the speaker's product, services, or company and much less about the customer's wants, needs, or desires.  Consultative selling was supposed to solve all this.  But that process is still front-loaded.  Don't consult, converse.  Plus, change your paradigm to see the world through the customer's experience, not through your desperation to win the business.  Conversations are audience-centric, customer-centric, and your-company-centric.
  4. Question. Interrogation vs. conversation. We know that you know to ask questions.  We know that you understand, teach, and have implemented the tactic.  Now, through the prism of conversations, we ask you to employ a strategy, an innate strategy that you have practiced since preschool.  Don't stop asking questions, just do so in a less caustic and obvious way.  Less selling, please.  More conversations. 
  5. Close naturally.  Examine the conversations you have with your friends and colleagues on a daily basis.  How do they end?  Is it fair to say that action steps are clear for everyone involved?  "We're going to meet at the movies at seven o'clock."  "Don't forget to close the garage."  "All expenses are due by the end of the day."  Action is a natural conversation progression.  Please do not think that if you're having conversations that nothing will happen and you will not close.  You will close, but it will happen organically and won't feel forced or pressurized.  The close to a conversation is the easiest way to gain commitment to the next right step, whatever that may be.

If we are going to ditch the pitch, then let us all adopt a more palatable measure – conversations – and serve our audiences in a way that is unique, extraordinary, differentiating…in a word – exceptional.

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