Selling Power Blog

A Sales 2.0 Conference Q&A with Andy Zoltners

At the recent Sales 2.0 Conference in San Francisco, Selling Power caught up with Andris (Andy) Zoltners, who was there to present “A Top 10: Insights that Lead to Sales Success.” In addition to being one of the founding directors of ZS Associates, Zoltners is a Frederic Esser Nemmers Distinguished Professor Emeritus of Marketing at the Kellogg School of Management at Northwestern University. He has personally consulted for more than 200 companies around the world and taught thousands of executive, MBA, and PhD students about sales force strategy; sales force size, structure, and deployment; sales force compensation; and total sales force effectiveness. For more insight based on ZS Associates’s research and expertise, download the first chapter of Building a Winning Sales Management Team, by Zoltners and coauthors Prabhakant Sinha and Sally E. Lorimer. (Note: This interview has been edited for style and clarity.)

Selling Power Editors (SP): At the Sales 2.0 Conference, you said there’s not a sales force in the world that doesn’t have topline revenue opportunity of at least 5 to 10 percent. How can companies tap into that?

Zoltners: First, they have to find where the opportunity exists. That’s different in every sales organization. You have to look at the drivers of success. You have to hire the right people, train them, and manage performance. You have to size and organize the sales force, get the right compensation plan in place, and align territories. The problem for most companies isn’t that opportunity doesn’t exist, it’s that they’re sometimes reluctant to do the things necessary to take advantage of it.

SP: Like what, for example?

Zoltners: This goes back to one of the questions I asked the audience: would you rather have a stable sales force or an adaptive sales force? With an adaptive sales force, I would come in and say, “We’re going to change account responsibility.” Will they ask salespeople to adapt? Are they open? 

SP: So you’re saying the culture has to be open to change. 

Zoltners: Yes. But the other side of this is that management has to make intelligent changes. Eighty-five percent of sales forces have changed their sales-comp plan in the last year. What does that tell you? Getting it right can be a struggle.

SP: Why is that?

Zoltners: Well, [ZS cofounder] Prabha Sinha, Sally Lorimer, and I wrote a book about this years ago [The Complete Guide to Sales Force Incentive Compensation: How to Design and Implement Plans That Work].  But it’s a big book, and some people have told us you need a PhD to read it. (Laughs.) [Incentive pay] is complicated. But if you want to design and implement a plan that really works, you need to get this right, and you need to have alignment among the entire organization. For example, if you have an aggressive finance team that sets unrealistic numbers, that’s going to reduce the effectiveness of your comp plan.

SP: You mentioned during your presentation that there is no magic number when it comes to setting quotas at the territory level. Why is that? 

Zoltners: Companies may set goals too high, too low, or they don’t allocate the numbers appropriately across the entire sales force. The secret is that the goal should not be a single number. A single number is too rigid. There should be a range.

SP: And why is that?

Zoltners: Flexibility. Think about it at an individual level: if a big account moves from Milwaukee to Atlanta, then the sales rep in Milwaukee is saying, “My VP of sales is telling me that 40 percent of my territory just went away, and he still wants me to make my number.” Meanwhile, the rep in the Atlanta territory gets free incentive money. If the goal number is meant to give reps something to strive for, then you’ve just made it meaningless.

SP: ZS Associates has been conducting research since 1983 on sales leadership. If you had to pick, which group is more important to a strong sales team, excellent reps or excellent managers?

Zoltners: You really need both, no question. The issue is that we’re generally more careful at selecting reps than [we are at selecting] managers. We see more training for reps, more coaching. It’s an issue of scale: if you have only five new managers, it’s difficult to put together a training course just for them. But an excellent manager is going to end up hiring excellent reps. That’s why the link between sales force productivity and the quality of frontline sales managers is so strong. Because the manager selects, develops, manages, and leads the team.

SP: What’s the definition of an excellent rep?

Zoltners: They know their products, [and] they have empathy for the customer. They execute the selling process well. To me, success in selling is not about the numbers or the hard metrics. It’s about the soft stuff – people. Revenue comes from people. Some of the best sales forces in the world haven’t had the best products. And some of the weakest sales forces I’ve seen have had great products. You might be making your numbers, but you have an average sales force.

SP: Can you elaborate?

Zoltners: Look at insurance companies. Many insurance companies make their numbers but have as much as 60 percent turnover among the sales force.

SP: Is turnover in this case a sign that there’s room for improvement?

Zoltners: High turnover is usually an indicator of a problem. In this case, existing salespeople do not share their accounts, and new people do not have enough opportunity to be successful.

SP: In your research, you’ve said that many companies tend to retain poor or under-performing managers for “too long." What constitutes "too long"?

Zoltners: One day is too long! Evaluate and replace sooner. 

SP: Sounds simple. Why is it so difficult?

Zoltners: Because they’re buddies. The company says, “He’s done so much for us. We should give him another chance.” They don’t want to make their valued employees sad.

SP: So what’s the solution?

Zoltners: You make ’em sad.

SP: What role does technology play in creating a successful sales culture?

Zoltners: I’m a meat and potatoes person. The precedent that sales can really sell better with all this technology needs to be established. You have to be smart about how you use technology. If you’re overzealous, it can end up costing you money.

SP: Would you say technology alone isn’t the answer? That it’s more about how people use technology?

Zoltners: It’s about getting the best people to engage in the right activities. You can’t ask for anything better than that.

For more insight based on ZS Associates’s research and expertise, download the first chapter of Building a Winning Sales Management Team, by Zoltners and coauthors Prabhakant Sinha and Sally E. Lorimer.

Secrets to Developing Successful Sales Managers

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

Back in November, I wrote here about how sales managers who are on the cusp of hitting quota sometimes hang on to low-performing reps in the hope of eking out even a few more sales.

Obviously it’s not good business to keep poorly performing sales reps on the books. But the underlying issue ­– and perhaps the more important one ­– is that first-line sales managers have a huge impact on company performance, yet they’re often overlooked for training and career development. They may get a workshop or two when they’re new to the manager role, but after that, the training emphasis shifts to the sales staff.

At Xactly, we’ve been thinking a lot about this lately because of a Webinar series we’re conducting with the management experts at ZS Associates. Andy Zoltners and Marshall Solem of ZS have some keen insight into problems that arise at the manager level.

One such problem can be traced to the structure of the typical sales career path. Got a sales rep who knocks it out of the park every quarter? Paid his or her dues, put in the time, deserves a promotion? There’s your next sales manager! Trouble is, great reps don’t necessarily make great managers.

That makes sense when you think about the characteristics each position requires. A top-notch sales rep, for example,

• wins through personal effort,
• is customer-centric,
• sets a personal agenda,
• and is focused on results.

The traits of a good manager are completely different. These managers

• win through leading others,
• focus on both customer and company,
• balance the demands of many stakeholders,
• and act strategically.

Sales managers also have to maintain a balance among three roles: they’re people managers, business managers, and customer managers. When the company changes its strategy or new regulations come into play, it’s up to the manager to communicate to the field. When the field reports on changes in the marketplace, the manager communicates with the company on how it needs to adapt. Not everyone can balance the competing needs.

Promoting good reps who aren’t well suited to management is a classic lose-lose situation. The star seller most likely will be replaced by someone who isn’t as strong. And ZS research has found that performance deteriorates over time in territories run by weak managers.

So what can a company do to ensure a strong team of first-line managers?

• Hire for characteristics. Train and coach competencies.

Characteristics	Competencies
Integrity	Market knowledge
Empathy, listening skills	Business savvy
Social skills	Hiring skills
Competitiveness	Region planning and management skills
Assertiveness	Negotiation skills
Decisiveness	Experience

Ideally, a first-line sales manager will possess all of those characteristics and competencies alike (although that’s asking a lot). But if you have to make a trade-off, go with the characteristics. Market knowledge and planning skills can be taught; integrity and decisiveness can’t. Or, as ZS’s Solem puts it, “You can’t send a duck to eagle school. If you want an eagle, you have to hire an eagle.”

• Give sales managers the support and training they need to be effective and efficient, including the following: 
  • Data and tools: dashboards and metrics, tools for territory goal setting or territory realignment, and tools for budgeting and expense management.
  • Processes and systems: processes to help manage performance reviews, hiring, and goal setting, so all managers operate in much the same way and don’t have to make up processes on their own.
  • People: administrative staff and regional analysts to help managers understand the business, and a “traffic cop” to manage requests from headquarters for field time and manager time.
• Create a career path for sales reps that lets them advance without becoming managers. This could mean setting up different levels of responsibility, from junior rep to senior rep to key-account exec assigned to global accounts. Seasoned salespeople could be given extra internal responsibilities, such as leading task forces to address issues within the organization, or coaching and mentoring new reps.

Some salespeople assume the management mantle seamlessly, but don’t assume everyone can make the transition. Use these tips to keep management problems at bay and your top sellers doing what they do best. 

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The Sales-Performance Puzzle: How to Solve It

This is the month in which many sales organizations are busy with the Big Sales Kickoff. As the sales leader, you orchestrate a fast-paced show delivered by your company’s best platform talent. The CEO’s keynote is inspirational, the CMO’s presentation is aspirational, the product manager’s demo rocks, and your keynote is densely packed with bold and optimistic predictions and tough challenges. As the sales leader, you are the merchant of hope, and your salespeople are swallowing your message hook, line, and sinker.

But after the team heads for the airport, you may be left with a nagging question: what impact will this kickoff have on your sales numbers? Here is my guess:

1. Retention of information

Twenty percent of your salespeople will absorb 80 percent of the content and then use half of it with customers. Eighty percent of your salespeople will absorb 20 percent of the content and use one-third of it with customers.

2. Impact on motivation

Eighty percent of your salespeople will feel recharged and optimistic about the company and their future, and 20 percent will continue shopping for better opportunities.

3. Acquisition of selling skills

Ninety percent of your salespeople listened to some of the selling skills you shared during the kickoff meeting, but fewer than 10 percent will try to apply the new skills, and after experiencing some failure they’ll revert to their old behavior.

If you don’t believe my guesstimates, consider the solid numbers uncovered by ES Research: according to ES Research’s sales-training surveys, between 85 and 90 percent of sales training has no impact after 120 days. Of the $5 billion US companies spend yearly on sales training, more than $4.25 billion are wasted.

Last week I interviewed John Doerr, a sales-training expert. John is co-president at RAIN Group. I edited the one-hour interview to the most essential nine minutes, and I highly recommend that you watch them, since he shares uncommon insight into solving the sales-performance puzzle.

If you are short on time, you can skip to the end, where I summarized the key points in a few PPT slides (that you can download from our new Website, www.salesopshop.com). To watch the video, click on the image below.

Please feel free to comment below, or tweet your questions using #salesopchat.

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Remembering Zig Ziglar – America’s # 1 Motivator

This morning we learned that Zig Ziglar passed away at the age of 86.

Zig Ziglar has been a positive thinker and professional motivator for many decades. His electrifying speeches had a reputation for drawing standing ovations and leaving audiences spellbound. And he relished every single word of his famous punch line, “You can get everything in life you want if you help other people get what they want.”

During our first interview I realized that Zig Ziglar was more than a motivator. He was a person with a strong, well-established guiding philosophy, one that had enduring value for everyone. Ziglar was his own best success story. It began in Yazoo City, Mississippi. He was born one of twelve children. His father died when he was five, leaving his mother with five kids too young to work.

He became one of the most successful cookware salesmen of all time but quit knocking on doors when he recognized his ability to motivate others. Here is a transcript of my first interview with Zig that was originally published in Sept 1982.

Q: In one of your speeches you mentioned that negative thinking is as common as the cold. Did you find a cure for negative thinking?

Ziglar: If you feed your mind with positive thoughts, if you are selective about the things that you choose to read, look at, or listen to, then you are taking effective action against negative thinking.

Q: So you are saying that there is a direct link between negative thinking and negative input and that people can become more selective about the input?

Ziglar: Absolutely.

Q: What is your definition of success?

Ziglar: I believe that you're successful when you've dealt with the physical, the mental and the spiritual man successfully. If I made millions and destroyed my health in the process, or if I become the best at what I do but neglect my family, I wouldn't call that success.

Q: One of your claims is that your attitudes in life determine ultimately how successful you become.

Ziglar: Yes. Dr. William James said the most important discovery of our time is the realization that by altering our attitudes we can alter our lives. There is also a Harvard University study that points out that 85 percent of the reason people are hired or get ahead in their jobs is directly related to their attitudes.

Q: I once read a magazine article about motivational speakers that stated, "Speakers are superficial on the subject of motivation - like cheerleaders at a high school rally. Thin on content, heavy on performance." How do you respond to that?

Ziglar: I think they are right on the button. A lot of people do leave without any real meat. Excitement, yes, but nothing they can chew on the next day.

As you know, the Bible is my great source, because God's plan deals with this dilemma: He never makes a promise unless he gives you a plan. This translates into the principle that motivation without direction is very frustrating. You need to have a plan in addition to the motivation. Motivation without a goal doesn't get you anywhere. Personally, I never make a promise in a book, a speech or a recording unless I give a plan so my reader or listener can achieve the promise.

Q: What is your theory of self-motivation? How do you develop it?

Ziglar: When I build a fire in my fireplace, it will burn for a while. Then I notice that there are no flames. It has died down. I get up and take my poker and shake up those logs. All of a sudden, we've got bright flames. Now, all I did was just poke them, which created some motion. The motion creates a partial vacuum and new air is pulled into the fireplace. With an additional supply of oxygen, the fire ignites, and now we've got a flame. If I hadn't done some poking, there would have been no flame.

Now, this business about all motivation being self-motivation is only partially true. You can choose among many different sources to rekindle your motivation. In other words, the environment you select and the people you associate with become large contributing factors.

Q: Do positive input and the positive attitude need to be supplemented with a sound business plan and professional skills?

Ziglar: Absolutely. Positive thinking is an optimistic hope, not necessarily based on any facts. Positive believing is the same optimistic hope, but this time based on a sound reason. Here is an example. It would be positive thinking if I said I could whip George Foreman. It would be an idiotic action if I tried to do it.

Q: I've heard many sales managers express doubts about the lasting value of a motivational seminar.

Ziglar: They're absolutely right! Motivation is not permanent. Neither is bathing. But if you bathe every day, you're going to smell good. Fifteen minutes a day of motivation from a good audiocassette or a book can make a tremendous difference in your life and give you a motivational lift every day.

Q: You said once that life is simple but not easy, and that too many people are looking for quick and easy solutions.

Ziglar: Right. I firmly believe that the best work is often done by people who don't feel like doing it.

Q: Why do you recommend that salespeople listen to your books on tape 16 times to completely absorb the full message?

Ziglar: There are several university studies revealing that two weeks after you've learned anything new, unless it's reinforced, you only remember about 4 percent of it. That's the first reason. The second reason is that while we are listening we may experience a certain mood, and our minds will seek out messages that relate to that particular mood. On another day, let's say you just made a sale; you'll be in a different mood, and a whole new range of messages of the same recording will become clear in your mind. So by listening 16 times, the odds are that you will have absorbed the entire content.

Q: Let's say I've listened 16 times to your tapes on motivation. Do I know then how to motivate myself?

Ziglar: Yes.

Q: Do I master the skills sufficiently so that I become independent of your recordings?

Ziglar: Only if you've been practicing the things we've been advocating. It's like driving a car. You don't learn to drive a car by watching.

Q: Can I graduate in self-motivation, ever?

Ziglar: I don't think so, and I don't think I've graduated, because I constantly read and constantly study. I think you could draw an analogy with eating. You can't graduate in eating. You need to continue to make choices about your input. The same is true with self-motivation. You need to continue to make choices about what level of self-motivation you want to maintain.

Q: Many salespeople have a tough time in this economy. What thoughts can you offer to approach these tough challenges more positively?

Ziglar: A good friend of mine, Calvin Hunt in Victoria, Texas, said, "You know, Zig, it's an absolute fact that when we are in an economic slump, 50 percent of all salespeople literally slow down rather than speed up their efforts. They are not motivated to do something. They lose that enthusiasm.

"Now," he continued, "when that happens, it simply means that if business is down 20 percent, but 50 percent of the salespeople are not nearly as active, your own personal prospect list is considerably higher than if there was no recession."

Q: And the winners still keep winning.

Ziglar: Absolutely. It's their discipline, their commitment to maintain a high level of motivation and their sense of direction that gets them to the top.

Tomorrow: Zig’s Keys to Sales Success and his most memorable quotes

Are Your Managers Hanging On to Bad Sales Reps?

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

 

One of the benefits of collecting detailed data is the insight you can glean about your company's training needs. Armed with information that clearly highlights each field rep's strengths and weaknesses, sales managers can devise training plans that are tailor-made for each individual.

Great plan!

But while so much coaching advice focuses on field reps, another group has been all but overlooked: the sales managers themselves.

This year, Xactly enlisted researchers from the Massachusetts Institute of Technology (MIT) to help us analyze some of the 200 million transactions we handle each month,  and some interesting patterns emerged when we looked at sales managers and their relationships to field reps. In the coming months, we'll report on our findings in more detail.

We're still interpreting the data, but our hypothesis is that many managers, if on the borderline of attaining their quotas, tend to keep low-performing salespeople on the books for too long. Those managers would rather keep underperformers on the books to generate even a few sales rather than the guaranteed zero sales they'd get if they fired the bottom tier.

That can have worrisome implications for company leadership. It doesn't do your company any favors to have bad salespeople representing you. They can tarnish your hard-earned reputation, blow solid leads, anger potential customers, and lose a lot of deals.

How did we come to this supposition? Through a lot of digital legwork. Our extensive study looked at data from

• 22 million transactions
• 7,492 sales managers at 244 firms
• 61,092 of their immediate subordinates
• 134 million events on which an individual is credited
• 5,897 distinct incentive plans

Here's some of what we found regarding sales managers:

• When managers were on target to hit their quotas, sales-rep turnover was 22.2 percent. If the managers are on track, there's no benefit to keeping salespeople who aren't up to snuff.
• When managers were clearly going to miss their quotas, turnover of sales reps was 18.6 percent.  If there's no advantage to keeping poor performers, managers will go ahead and cut them loose early.
• When managers were on the margin of making quota, when every little bit counts, sales-rep turnover was only 5.6 percent. The sales managers held on to bad reps if they considered them essential to achieving their own quotas.

The message here? You want to monitor your poor performers to determine if you should be coaching them or letting them go. But along with that, be sure to monitor the managers who might be protecting them. You don't want to waste good leads on bad salespeople.

This is just one facet of the data MIT is analyzing with Xactly. Look for more as we develop it further and create benchmarks beyond single companies. Our use of the most current technology, multitenant SaaS, allows us to gather this information across companies and industries.

We'll use this information to help us – and you – learn more about quota attainment and quota-setting trends, and learn more through benchmarking.

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What's Ahead for Sales Organizations in 2013?

How clearly do you see the road ahead? When we are driving down the highway, we notice that, the faster we go, the more the view begins to blur – yet the dashboard is clear and bright. This also applies to sales leaders. While the speed of change accelerates, many sales leaders become confused by the rapid shifts in buying behaviors. While some customers act as if they’re in a boom cycle, other customers react and prepare for tougher times in the road ahead.

As we plan for 2013, salespeople demand more clarity of vision from their sales leaders. An overarching vision has three elements:

1. A guiding vision. It begins with an accurate appraisal of the present. Salespeople want to know the answer to these questions: Where are we now? What are our strengths? What makes us vulnerable? What threats are we facing?

2. A guiding fiction. Nobody can predict the future, but effective leaders have an uncanny ability to direct followers to imagine and find the best opportunities in the market. Uncertain times demand leaders who can stimulate the imagination so that their followers can clearly focus on winning more business month after month. The best leaders are merchants of hope.

3. A guiding process. Salespeople need a continuously improved and accelerated process for everything from generating leads to closing the sale. Successful sales leaders need to constantly realign people, process, and technology. 

In many companies, there are as many sales processes as there are salespeople. World-class sales organizations follow a process that’s based on A) the know-how of their best salespeople and B) how customers want to buy. Many sales leaders believe that their well-thought-out sales process reflects the customer’s journey.

While the economy continues to challenge, confuse, and surprise decision makers, effective sales leaders ignore the noise on the sidelines and get busy improving sales productivity across the organization. According to a survey performed by the SalesOpShop, sales leaders’ top two priorities for 2013 are 1) topline growth and 2) improved sales process. To achieve these goals, sales leaders need to become more innovative when aligning people, process, and technology. The challenge in most organizations is that people are often too slow, processes are often too old, and technology is often too complex. To meet that challenge, we need to invest 60 percent of our effort in helping people change, 30 percent in improving our processes, and 10 percent on implementing simpler and better technology. The key to winning in 2013 depends on expanding the innovative capabilities of the organization.

Albert Einstein once said that imagination is more important than knowledge, because knowledge tells us what was, whereas imagination tells what will be. What will be in 2013 depends on adaptive and creative sales leaders, who drive people’s capacity to change and lead them to execute on a customer-focused process that’s accelerated by the best technology available. Your success will also hinge on what you believe you can achieve. 

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Planning for 2013: Six Fatal Mistakes to Avoid

Today's blog post is by Ron Snyder, President of Plan 2 Win Software, which provides apps that enable salespeople to create and manage territory and account plans in their Salesforce.com environment to dramatically improve sales results.

 

As you prepare for success in 2013, here are six common planning mistakes to avoid to ensure you achieve your goals. Those sales managers engaged in complex, value-based selling should be especially vigilant to avoid these fatal mistakes. You need a plan to win!

1.    Not Having a Plan

Many salespeople feel that they don't need a plan, that they understand their market and how to sell to their customers; however, in a complex selling environment, there is so much to consider and keep track of that a plan is essential to success. Otherwise, the salesperson is strictly in reactive mode and is going to miss opportunities and spend more time on opportunities that will be unproductive.

2.    Not Analyzing Your Target Market

Simply working through a list of target accounts, opportunities, and contact information is not sufficient to achieve sales goals in proactive, value-based selling. Analyzing your target market and customer profiles will determine the best sales approach. Without this analysis, the sales rep is likely to pursue accounts in a very opportunistic fashion, often creating the selling proposition on the fly. This leads to a very inconsistent approach and results. Your team must have clear criteria about the target prospects, their needs, and your value proposition. They must prioritize accounts and opportunities so they spend their time and limited resources wisely.

3.    Not Connecting Strategy to Action

Territory and account plans must be based on the trends in the industry, geography, and/or vertical market. From here, strategies are generated to optimize results and form the framework for the action plan. Each strategy must be linked to a set of tactics and actions that will yield the results you intended. This must include plans for each critical sales call (i.e., call objectives, participants, and their roles; issues to be prepared to address; and the intended next step), focusing on letting sales actions drive the strategy.

4.    Not Responding to Change

Every plan must be a living document, enabling the salesperson to adjust to changes in the environment. In order to do this, the plan must live in your CRM and be readily available to use and fine-tune as needed. To support this, there should be reports and dashboards that highlight progress on critical success factors and regular plan reviews that provide input from sales management and others on the team.

5.    Not Using All Available Resources

In today's selling environment, one person cannot know everything that is going on in any account or territory. Effective and efficient use of all resources and tools will enable the sales team to compete and win. Confirm that your sales reps know what resources are available and how to use them most effectively in each stage of the sales cycle. These resources include extended team members, (i.e., from technical, marketing, and support) and partners. Using the most effective sales collateral available without having to create it from scratch will provide more selling time. Finally, there should be a coordinated effort to leverage references across the organization.

6.    Not Making It Easy

It is important that the manager make it as easy as possible for the sales team to create and implement the plan. Provide training to make certain the team understands the key ingredients of a successful plan and is capable of creating one. Using a readily available template (i.e., a template that exists in your CRM system) can guide and shape the thinking that goes into creating an effective plan. Finally, there must be coaching, especially in the initial phases, to help people as soon as they get stuck.

Salespeople must see how planning improves their results. The manager must socialize how specific plans have contributed to sales results, having successful sales reps share their experiences with the team. This is critical to ensure that the planning process is adopted by the team.

Creating an environment in which salespeople generate plans that are consistently implemented and produce desired results is one of the key jobs of management.  Avoid the mistakes listed here and win in 2013.

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Are You a Discount Leader or Loser?

Today's blog post is by Chris Jones, chief sales officer for PROS, a big-data application software provider that gives salespeople the confidence to compete and win by taking control of their deals and directing them to opportunities that will close, products that will sell, and pricing that will win. Jones will present How Big Data Gives Your Team a Competitive Advantage at the Sales & Marketing 2.0 Conference on October 22-23. 

• A global chemical company increased its revenue by 3 percent last quarter, despite seeing no volume growth.
• A global heavy-equipment manufacturer increased price realization by more than $300 million in one quarter. 
• A software company reduced discounting by 6 percent, on its way to drive 22 percent bookings growth.

What do the winning sales vice presidents at these companies realize about selling that others don’t? They know that mining and leveraging their data –- data about their markets, customers, and products – is the ultimate opportunity for improving sales effectiveness.

Consider this: a company with 500,000 products and 1,000 customers sells through direct, indirect, and e-commerce sales channels, with potentially 1.5 BILLION selling and pricing decision points. How are you managing that complexity in your own sales team?

World-class sales leaders realize that the complexity of managing every sale globally – or even regionally – is too great to rely solely on a sales rep’s individual experience. In fact, sales reps rely on imperfect knowledge. There is a wide gulf between what they think they know about their customers and what their customers actually want. The results are lost selling opportunities and over-discounting. In my own experience, I’ve seen variances of 70 percent between the highest and lowest prices that customers actually pay for the same product. By any measure, that’s an extraordinary differential. 

That gulf is bridged by applying data science that provides real-time, actionable insight to each sales channel. Growing sales in this economy comes down to three essential factors: 

1. Your ability to offer what your customer wants to buy. 
2. Your ability to match your prices with your customer’s willingness to pay.
3. Your sales team’s ability to sell value and out-negotiate tough buyers and relentless competitors.

Making the leap from being the market follower to the market leader requires a proactive approach that empowers your frontline sellers with the knowledge to negotiate confidently. With a cutting-edge sales effectiveness solution, you can harness the collective intelligence of your sales force across every transaction, gaining a clear understanding of what customers are willing to pay for your products and services.

This highly lucrative insight can yield critical opportunities to increase margins and sales, even as you increase your customer’s perception of value.

McKinsey & Company research shows you’ll increase your margins by 10 percent with every 1 percent price increase. Meanwhile, Gartner estimates an average 2 to 3 percent revenue lift with price-automation technology.

Regardless of your industry or company size, the revenue potential is staggering. Here are the top four strategies I’ve seen winning organizations use to outperform in their markets and increase revenue:

1. Create customer buying groups. You need to know what specific customer microsegments are willing to pay for each product, in every market, channel, and region. Armed with these guidelines, you can take your selling effectiveness to the next level.
2. Align resources against your biggest selling opportunities. Which territories and accounts have the biggest opportunity for revenue growth this year? Do you know?
3. Eliminate your weakest links. Drill into your big data across every disparate system to truly understand your gross and net margins. You may be surprised at what you find. Stack rank your sales reps, and lose the bottom dwellers. Arrange your customers in order of profitability, and cut unprofitable accounts. (Yes, you probably have them.)
4. Build margin awareness into your commission structure. Most companies don’t want to expose margin information to frontline sales reps, nor do they often have the capability to do so. But clear, simple negotiation guidelines give them a fighting chance with buyers who are more informed than ever before. It’s their cheat sheet to winning.

When you understand why your customers buy, you can also turn on a multiplier effect that jolts revenue in a way you’ve never seen before.

To win in a tough market, selling must become a science, in addition to being an art. Winning organizations invest in better technology to complement their investments in the art of the negotiation, so their salespeople gain the confidence they need to win more deals at greater profit – and with greater commission. 

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Where Can Salespeople and Sales Managers Get Advice That Works?

Today's blog post is by Christian Maurer, a consultant for B2B sales leaders wanting to improve the productivity of their organization with solutions based on modern philosophies.

There have never been more sales-information resources available than there are today. Seen from a quantitative aspect, this is certainly true to the point that we have to fear information overload. Considering the quality aspect, however, the picture is quite different. Despite all the books, magazines, Websites, blogs, specialized social media, and discussion groups in general social media, it is difficult to identify a commonly accepted body of knowledge about selling. Just pick a discussion group about selling on LinkedIn or browse through Amazon.com at book titles about selling; you will quickly find a lot of contradictory advice. For example, search for “cold call” on Amazon.com. On the first page of results, you will find a book entitled Never Cold Call Again: Achieve Sales Greatness without Cold Calling by Frank J. Rumbauskas Jr. A bit farther down in the list, there is a book called Cold Calling Techniques (That Really Work!) by Stephan Schiffman. If you look a bit closer, you will further notice that there are many texts rehashing the same old principles, just using different words.

How Did We Get Here?

There are three reasons that come to mind:

1. While there is no doubt that a lot of advice is well meant and might even have led to success in certain circumstances, it is presented without this context. This leads to useless arguments among experts based on their own experience and observations trying to prove each other wrong.  I remember a discussion in a LinkedIn group on the topic of lead management. You would not believe the tone one contributor used trying to prove another one wrong.  Calling the other person “old fashioned” was one of the kindest descriptors I could find.
   
   
2. Many self-declared experts confuse frequently observed practices with best practices.  The fact that a misconception is believed by many people does not make it true. Consider the myth that the win probability of an opportunity can be associated with a sales stage: nothing is further from the truth, but you would be surprised to see how often this association is still implemented in CRM systems.
   
   A best practice is a codified behavior that, statistically, produces better results than other behaviors. In other words, there is a positive correlation between a codified behavior and a desired outcome. But even people who understand this fall into the next trap: confusing correlation and causality. A positive correlation does not mean that one has found the reason why the behavior produces the outcome. The best illustration of this fact is the observation that sometimes behavior in total contradiction to the best practice delivers the same or even a better outcome. Again, different contexts often cause this phenomenon. 
   
   Consider, for example, the BANT (Budget, Authority, Need, Timeframe) qualification criteria.  You will find plenty of studies trying to prove that having good BANT qualification increases the win rate. To qualify an opportunity, you will ask the customer if she or he has a budget.   Yet this very same question can kill a deal. Imagine that you have adopted a provocative sales style, helping potential customers identify a burning problem. What would happen if you ask this question? The answer, logically, can be only no. In order not to lose credibility with the potential customer, you will avoid this question. Yet you still should have a very high close rate, but for a different cause: helping the customer early on in the buying cycle creates loyalty, which is an important competitive advantage when the customer makes the vendor selection.
   
   
3. Most texts, in whatever media, are not written with the general intent to contribute to the body of sales knowledge. The authors want to grab attention in a cacophony of sales advice; therefore, the focus is on differentiation for marketing purposes. Have you ever noticed the many terms such as “sales enablement” or “total revenue management” or “revenue cycle management” in sales literature? Or the many new sales job titles, such as chief revenue officer, customer success manager, or customer experience manager?

What Can Be Done About It?

1. Do not take the abundance of available information as reason to reduce training and coaching efforts.
2. Create your own mastermind peer group, selecting trusted advisors from academia and sales research experts (CSO Insights, Forrester, Gartner, etc.). Join new collaboration sites, such as www.salesopshop.com. 
3. When selecting blogs, consider whether or not there is an editorial control for comments. This usually is an indicator of quality.
4. Turn your organization into a learning laboratory. Get your peers to submit ideas on an ongoing basis so you get a set of useful resources (books, blogs, collaboration sites, and social media groups).

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How to Get Your Reps to Update and Use CRM

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

Your sales team’s most critical data lives in the brains and spiral notebooks of your reps. Which means that losing just one rep could mean losing an important customer relationship.

Salespeople want to do what they do best – sell. As a result, they won’t learn to use a new tool unless its benefits are absolutely clear. And despite the advantages they can get from CRM (like instant access to lead contact information and account histories, for example), many sales reps still see CRM as a glorified filing system.

The good news is that sales leaders can absolutely change the way reps think about CRM. Here are four strategies based on our work with hundreds of companies around the world.

ONE: Consider plugin applications that align objectives across your entire organization. CRM alone can’t give your sales reps real-time visibility into their progress towards quota – or, for example, how much money they could make if they closed a deal. This is a missed opportunity for reps, of course. It also represents a lost opportunity for sales managers to influence sales results, and for the company to accelerate revenue. But you can give your entire sales team up-to-the-minute access to this information with other applications, like sales compensation plug-ins.

TWO: Make your data work for you. To understand your blueprint for success, dive deep into your data across multiple periods—months, quarters, years—and by product, territory, role, function, or even internal contests. Use customizable reports to improve your onboarding, sales training and coaching. Show your reps how to test what-if scenarios to see which sales they should spend time on, and how they can maximize their commissions.

THREE: Regularly and publicly recognize your winners. Once you’ve drilled into the best practices of your top performers, share them with the rest of the team. Applaud winners over email, Chatter, and during staff meetings. Display contest results on TV screens near your sales cubicles or offices. Send out a simple-results dashboard to your team every day via email.

FOUR: Give both Sales and Finance what they want. Finance wants controllable costs. Sales wants to earn huge commissions. You can virtually test new incentive plans within your CRM to make sure you’ll meet forecasts – while also offering motivating rewards to your top reps.

At the core of these conversations is the user experience. It defines how fast you can drive CRM adoption, and even how much value you can enxtract from good, clean data to drive predictive sales results.

Want to learn more about how you can implement a robust CRM adoption strategy that delivers ROI? Learn more here. 

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