First of all, what is winning? Do you know what winning means to your board? Does the CEO and your peers leading their respective groups all agree on what winning means? Does winning mean increased market share, increased margins, or top line revenue growth? Here’s my definition from a sales perspective: Your sales division needs to make the assigned sales quota number…..not come close, not just keep margins healthy at the expense of top line growth, but MAKE or EXCEED the assigned sales quota, period. Teach your reps how to cross the finish line. This rises up from the individual sales rep to the region to the division to the company.
The assigned number typically comes from trend data. Makes sense right? Not neccessarily! Trend data represents historical performance. Historical performance may not have reached potential and simply building a curve based on past performance will lead to mediocrity. Trend data, although very important to have, will not do you justice if you are a newer, small or even mid size company who has not yet reached potential.
Sales leaders need to track various data points but the difference maker is when new opportunity is factored into forecast methodology. Forecast sales revenue based on opportunity and you’ll set a higher bar for your whole company to reach. This higher bar will test sales, marketing, finance, technology, customer service and operations. Of course sales reps will need reassurance there is good reason and new tools and resources to help them deliver the higher numbers.
When you can stretch your sales organization and the company supporting the effort, you are finding out how good you really are. Talent, resources, value proposition, product and process throughout the organization are hung out to dry and all the weaknesses start to show up. This is where leadership takes the bull by the horns and as necessity is the mother of invention, process, product improvements, sales optimization and productivity are improved to keep up. Action plans are built and executed on to find ways to get there.
These are some of the ingredients to develop a top-to-bottom winning culture throughout the organization. Asking reps to reach for the stars requires a whole lot of prep work to make the request reasonable. You must arm your team to succeed. You’ve certainly heard the expression expecting better results while doing the same things is insanity. Process improvements, lead generation, market segmentation, product improvements, pricing, new offering packages, relevant marketing programs and sales optimization including fair compensation plans that allow your reps to earn what they deserve will pave the way for sales breakthroughs.
Respect your reps, treat them like partners and solicit their advice and suggestions. Reps are on the front lines every single day. They’re the face of the company and have lots of valuable information that can be converted into companywide improvements. When your sales reps have a voice, are recognized for their efforts and successes and paid fairly, they feel like winners.
As you continue to build trust throughout your sales force, reps will have a bounce in their step and look forward to the challenge of setting new sales trends within their industry. When you’re the best you carry that badge with you every day and you will live up to it. Winning culture requires all out effort throughout the company. It starts with the CEO who needs to foster transparent relationships between all group leaders within the company. There’s no room for heroes to problem solve in a vacuum. If you have the green light to share your group’s weaknesses, the company can help solve the problem. This takes the right senior leadership. This is where many companies fail, as groups do not openly share issues but sit on problems in the hopes of fixing them before they’re discovered outside the dept. This is a formula for disaster. Regular monthly and quarterly operational reports should provide deep dive data and establish action plans to drive the necessary fixes.
Some tenets from wise and phenomenally successful people I’ve been lucky enough to work with:
“Always be trying and pilot testing new things”
“Keep doing new things but don’t get enamored with your ideas, it will probably change ”
“If we have the right people we can do this…if we don’t have the right people it won’t matter what we do”
“Know your business from the ground up”
“I have faith”
Create a winning culture based on trust, real data, collaborative effort and high expectations across the organization. The result will be a sales team that goes through brick walls for you.
Now watch your sales soar.
Wednesday, July 14, 2010
Wednesday, March 10, 2010
Are Sales Territories Essential?
While recently discussing sales strategy with Paul Ringuette, a colleague of mine from our Monster days, we analyzed the question of assigning hunter sales reps territories or directing them based on changing opportunity. Retention or "farmer" reps will typically be assigned accounts to retain and grow. What follows applies to new business acquisition or "hunter" reps:
There are definite pros and cons to the concept of assigned territory vs. working leads that produce the highest ROI regardless of territory. Assigned territories can provide geo based accountability to ensure coverage in the respective market. Someone is responsible for that geo and there is a micro universe of potential customer records for that territory that can be identified and tracked. Also, action plans can be created specifically to address market factors in certain geo based territories with someone specifically responsible for executing on those plans.
Territories can be geographical or vertical-based depending on the product or service offered. A geo based territory set up could make sense where product appeals uniformly to a large mass of customers across many industry groups, Verticals may be required if sweet spot industries to target are concentrated in few areas. Verticals also make sense when the selling process requries a unique approach for certain sweetspot industries.
Territories, however, can be cumbersome if reps are not easily directed to where the opportunity is. A sales manager with data intelligence can point the team in a different direction to get more sales conversion results if there were no territory limitations.
An alternative to territories: when you're trying to maiximize revenue by focusing your greatest asset (your sales force) on high value activities, one of the greatest levers to pull is sales optimization. Sales optimization, or efficiency, minimizes sales "dead" time and increases productivity per head. Calling on the wrong prospect records to connect on 1 out of 100 calls is pure insanity. If you had a way to use data captured through the CRM, your website and financials, to create analytic models, you could then score prospect records and leads based on success trends and "push" these high yielding customer prospects to your reps. Your reps' success ratios could then improve dramatically to say 1 out of 25 calls. Now that's greased lightning productivity boost multiplied by the number of reps you have! You might now even be able to afford adding more reps as the cost of sales and rep ramp time improve.
This is where the strategic method of using analytics for lead generation may require doing away with structured territories and instead pushing these highly scored prospects via CRM to your sales force. The main advantage of this method is your sales reps are calling on the most fruitful segment of prospects. In time, as more data is fed into the analytics algorythm, prospect scoring will become more and more accurate. Of course, accountability can still be measured using coverage data on the number of prospects contacted and the resulting conversion (success) ratios of respective reps compared to the companywide standard.
Another advantage to focusing reps in this manner is the flexibility to shift direction as market factors change. You can position your sales reps based on current conditions rather than be stuck with hard coded territories.
The difficulty with running this model is the need for superior operational process to keep the flow of prospects coming into the CRM's prospect pool to keep your reps busy. This will require business analysts and impeccable CRM management on a day-to-day basis, as well as, disciplined data capture by sales reps, Marketing and Finance.
Which model is best for your company? Comments and thoughts on this topic are welcome.
There are definite pros and cons to the concept of assigned territory vs. working leads that produce the highest ROI regardless of territory. Assigned territories can provide geo based accountability to ensure coverage in the respective market. Someone is responsible for that geo and there is a micro universe of potential customer records for that territory that can be identified and tracked. Also, action plans can be created specifically to address market factors in certain geo based territories with someone specifically responsible for executing on those plans.
Territories can be geographical or vertical-based depending on the product or service offered. A geo based territory set up could make sense where product appeals uniformly to a large mass of customers across many industry groups, Verticals may be required if sweet spot industries to target are concentrated in few areas. Verticals also make sense when the selling process requries a unique approach for certain sweetspot industries.
Territories, however, can be cumbersome if reps are not easily directed to where the opportunity is. A sales manager with data intelligence can point the team in a different direction to get more sales conversion results if there were no territory limitations.
An alternative to territories: when you're trying to maiximize revenue by focusing your greatest asset (your sales force) on high value activities, one of the greatest levers to pull is sales optimization. Sales optimization, or efficiency, minimizes sales "dead" time and increases productivity per head. Calling on the wrong prospect records to connect on 1 out of 100 calls is pure insanity. If you had a way to use data captured through the CRM, your website and financials, to create analytic models, you could then score prospect records and leads based on success trends and "push" these high yielding customer prospects to your reps. Your reps' success ratios could then improve dramatically to say 1 out of 25 calls. Now that's greased lightning productivity boost multiplied by the number of reps you have! You might now even be able to afford adding more reps as the cost of sales and rep ramp time improve.
This is where the strategic method of using analytics for lead generation may require doing away with structured territories and instead pushing these highly scored prospects via CRM to your sales force. The main advantage of this method is your sales reps are calling on the most fruitful segment of prospects. In time, as more data is fed into the analytics algorythm, prospect scoring will become more and more accurate. Of course, accountability can still be measured using coverage data on the number of prospects contacted and the resulting conversion (success) ratios of respective reps compared to the companywide standard.
Another advantage to focusing reps in this manner is the flexibility to shift direction as market factors change. You can position your sales reps based on current conditions rather than be stuck with hard coded territories.
The difficulty with running this model is the need for superior operational process to keep the flow of prospects coming into the CRM's prospect pool to keep your reps busy. This will require business analysts and impeccable CRM management on a day-to-day basis, as well as, disciplined data capture by sales reps, Marketing and Finance.
Which model is best for your company? Comments and thoughts on this topic are welcome.
Thursday, December 10, 2009
Field Readiness (Tools and Training)
Is your sales team able to effectively compete? How knowledgeable about the competitive landscape and solution alternatives are sales reps? Do reps exactly understand what problems their product or service offering solves and do they know how to communicate these to prospects? Do reps know whom they need to speak with to increase successful conversion? What is the buying process of your sweetspot prospect base? What is the message your company is standing behind, what do your competitors do better than you, what do you do the same as your competitors and what do you have that's unique. Where do you win?
What tools do your reps need to make them smarter, faster and more productive? Have you been asking for more sales revenue growth but haven't changed or added sufficient action plans in this year's business plan? Why would result expectations be any different? This is Field Readiness. The whole company must stand behind sales efforts from Finance through Marketing and Product Development to Customer Service and Legal. Operations needs to be the enabler that pulls it all together.
Let's talk about sales optimization...this is the concept of the "value of each hour". Your annual sales revenue can be broken down into hourly chunks. This is what your team produces per hour in sales. Imagine taking your team off selling efforts for a number of hours per month times 12. That is serious and real revenue loss. Very expensive isn't it? Well, consider your reps either being disrupted because they have inefficient workflow systems that slowwww them dowwwn. Consider that your $100K+ per year reps are doing prep work that support people can do for much less $$. Refocusing reps on high value yielding activities can give back more selling time. Segmenting your sales force to align with customer demographics with appropriate compensation plans and quotas will give you more efficient sales coverage plus more effective sales reps with a better understanding of their assigned demographic. Simplifying complicated processess for lead generation, customer/prospect follow up, communications, demos, RFPs, fulfillment and delivery, customer retention, and capturing data will add to selling time and lead to increased sales revenue.
Strategic pricing, (Finance) targeted product packages (Product Marketing), predesigned and customer centric collateral (Marketing) will increase conversion rates through more competitive offerings, demographic-relevant products and powerful messaging. Reasonable and streamlined legal clauses in your sales contract, competitive advantages with customer service capability, case studies and third party references to provide credibility and timely executive accessability and flexibility will help your reps win.
Have you implemented a CRM tool? If so, do you actualy use it to capture data, measure productivity and drive sales? Have the screens been optimally designed to be user friendly and provide a sensible workflow for reps? Is it the dashboard your reps work from daily to keep them on track? Is reporting providing enough relevant daily visibility to reps and managers to identify opportunities?
Sales methodology needs to be streamlined and address either a consultative or transactional approach depending on the offering. Sales training either at the front line manager level or internal trainers or outsourced training needs to address this for uniformity. I teach reps to be in tune with the following concept: ...once basic sales steps are performed and you have a willing listener willing to go the next step either face to face or on the phone, it's a matter of getting the prospect to think the problem you just uncovered is huge enough to fix. Most reps try to present solution once the prospect has admitted to pain. Unfortunately, customers don't perceive all pain as needing to be solved by spending money on a solution. This is where forecasted sales stall. Reps need to learn to introduce indirect costs that pain is actually causing and this magnification of the pain is what the prospect hadn't considered. This creates sense of urgency to take action. Then, what selling really is beyond identifying pain, is to influence prospects to take action now. Are your reps equipped to do this? Well, your budget and quota depend on it. Nothing else will matter if you can't do this well.
Rep certification for various training modules (which can be done online) such as product knowledge, competitive differentiators, using the CRM, selling methodology and contract policy will ensure your selling teams are up to speed.
Field Readiness is about equipping your band or army with the right plan, the right offerings and tools to give them a fighting chance to win.......Happy Holidays to all!
What tools do your reps need to make them smarter, faster and more productive? Have you been asking for more sales revenue growth but haven't changed or added sufficient action plans in this year's business plan? Why would result expectations be any different? This is Field Readiness. The whole company must stand behind sales efforts from Finance through Marketing and Product Development to Customer Service and Legal. Operations needs to be the enabler that pulls it all together.
Let's talk about sales optimization...this is the concept of the "value of each hour". Your annual sales revenue can be broken down into hourly chunks. This is what your team produces per hour in sales. Imagine taking your team off selling efforts for a number of hours per month times 12. That is serious and real revenue loss. Very expensive isn't it? Well, consider your reps either being disrupted because they have inefficient workflow systems that slowwww them dowwwn. Consider that your $100K+ per year reps are doing prep work that support people can do for much less $$. Refocusing reps on high value yielding activities can give back more selling time. Segmenting your sales force to align with customer demographics with appropriate compensation plans and quotas will give you more efficient sales coverage plus more effective sales reps with a better understanding of their assigned demographic. Simplifying complicated processess for lead generation, customer/prospect follow up, communications, demos, RFPs, fulfillment and delivery, customer retention, and capturing data will add to selling time and lead to increased sales revenue.
Strategic pricing, (Finance) targeted product packages (Product Marketing), predesigned and customer centric collateral (Marketing) will increase conversion rates through more competitive offerings, demographic-relevant products and powerful messaging. Reasonable and streamlined legal clauses in your sales contract, competitive advantages with customer service capability, case studies and third party references to provide credibility and timely executive accessability and flexibility will help your reps win.
Have you implemented a CRM tool? If so, do you actualy use it to capture data, measure productivity and drive sales? Have the screens been optimally designed to be user friendly and provide a sensible workflow for reps? Is it the dashboard your reps work from daily to keep them on track? Is reporting providing enough relevant daily visibility to reps and managers to identify opportunities?
Sales methodology needs to be streamlined and address either a consultative or transactional approach depending on the offering. Sales training either at the front line manager level or internal trainers or outsourced training needs to address this for uniformity. I teach reps to be in tune with the following concept: ...once basic sales steps are performed and you have a willing listener willing to go the next step either face to face or on the phone, it's a matter of getting the prospect to think the problem you just uncovered is huge enough to fix. Most reps try to present solution once the prospect has admitted to pain. Unfortunately, customers don't perceive all pain as needing to be solved by spending money on a solution. This is where forecasted sales stall. Reps need to learn to introduce indirect costs that pain is actually causing and this magnification of the pain is what the prospect hadn't considered. This creates sense of urgency to take action. Then, what selling really is beyond identifying pain, is to influence prospects to take action now. Are your reps equipped to do this? Well, your budget and quota depend on it. Nothing else will matter if you can't do this well.
Rep certification for various training modules (which can be done online) such as product knowledge, competitive differentiators, using the CRM, selling methodology and contract policy will ensure your selling teams are up to speed.
Field Readiness is about equipping your band or army with the right plan, the right offerings and tools to give them a fighting chance to win.......Happy Holidays to all!
Tuesday, November 24, 2009
Sales Productivity
The go-to-market plan is complete, sales roles have been identified and the right talent is on board. You feel good you have the right coverage to reach your prospects and customers. Now what? What should your reps be doing every hour, every day and every month? What is your expectation of them? What are the underlying business plan assumptions that add up to revenue?
Daily productivity is a team effort involving both reps and sales leadership. My philosophy on this is the whole company needs to believe it's in sales. That includes tech and finance not just the more obvious corporate functions such as marketing and customer service. How much output each rep will realize can be facilitated by sales optimization. Tech can provide systems (telephony, CRM, automated reporting, etc.) to make workflow more efficient minimizing time to perform administrative tasks. Finance can provide pricing and terms simplification making proposals simpler to prepare. Finance also needs to work with sales leadership to put a compensation plan on the table that is simple to administer and simple to understand. The comp plan must drive behavior that will yield productivity assumptions drawn up in the business plan. The comp plan must incorporate assumed quotas, new business vs. renewals and maintain the cost of sales balance between acquisition of new customers and retention (renewals) of existing customers. The comp plan goes a long way in what level of productivity you can expect from sales reps.
Organizationally, something as simple as too many meetings or too many email communications (can you imagine coming to work in the morning and seeing 15 emails from, ahem, someone in charge at your company who can't seem to sleep at 3 AM) can be keeping your reps off the phones. Your reps should not be fodder for email barrages from well meaning folks around the company. Remember, your reps are an expensive and highly valued resource. Treat them as such. Most communications can be filtered and delivered at the appropriate time by sales leadership. The key is to keep your reps focused on telling their story to as many prospects as possible and simplify the method of communicating with prospects on follow ups and sales process.
Productivity is also influenced by the front line sales manager who must have the reporting capability to track relevant statistics related to productivity. Sales reps must also have visibility into their own efforts on a daily basis. Productivity metrics include many of the obvious stats but also lesser known activities. Again, when it comes to productivity, visibility is paramount. You must see your target and have a measure against where you are relative to your target. Plans need to be developed to close the gap to your target. These plans need to be shaped by the rep with help from the sales manager. People need to OWN their plans and believe in them. If you let your people take a "whatever will be will be" approach ("we'll do our best"), then you'll get a "where the dust settles" result which is usually not good enough. You can't run a business like this. You'll be average at best, you will not know how to win. Your organization will flounder with questions surrounding how high quotas are and "how will we ever reach these goals?" Tracking data provides benchmarks that provide the basis for productivity assumptions. In newer companies and where new revenue streams are being pursued pioneering efforts and entrepreneurial spirit must provide the faith to march on. Your reps and leadership team should be willing to chart new ground in an effort to reach unprecedented goals. The rewards for reaching those goals should be great and motivating. This is where strong leadership comes in. It's the ability to pull people up from the shirt collar and encourage them and elevate their self esteem and motivate them to go through brick walls for you and for themselves. This is difference making leadership.
Examples of productivity metrics begin with call plans. How many dials and how much talk time should reps expect to have made each day? How many appointments and face calls need to be scheduled and held? How many demos delivered? Contrary to what many believe, field reps spend more time on the phone (upwards of 70%) then on actual face to face visits. Appointments need to be made first. Cold canvassing applies to markets where a "dropping in" approach can work such as when selling to store fronts and the owner is behind the counter or cash register. For the most part, this topic is focusing on more traditional B2B sales efforts where "dropping in" unannounced is less effective.
Call plans take into consideration percentages. Example, make 65 dials per day, reach 18 decision makers, 10 will be interested enough to listen, 5 will request a follow up meeting, 2 will go to proposal stage 1 will buy. As you track your stats, companywide trends will become evident and business plans will incorporate these trends into assumptions. As you add sales "heads' you can then expect based on a reasonable ramp time of 4-6 months, your rep if she's making "X" calls per day at the typical average order size of "Y" will then likely produce "Z" in sales revenue. The success formula is basic math: productivity times transactions times average order size. If you want your output to increase you need to raise any one of those 3 levers, if not all 3. Raising call volume may require sales optimization in workflow and tools. Raising average order size may involve training but also pricing and packaging to migrate customers up to bigger packages.
Tracking actual productivity will alert the sales manager that reduced productivity will likely lead to missing the sales goal. Simple right? Not quite! Making the wrong types of calls doesn't help anyone. It doesn't help to make 100 calls a day and leave 1 minute messages all day long. It also doesn't help to spend 3 hours of talk time to only a few verbiose prospects. There needs to be a balance between sufficient reach and quality talk time. One important metric which gets overlooked but I think is very tale-telling is percent of customers and assigned prospects reached within a window of time (example 90 days). If a rep is only reaching 20% of the assigned customer base over 90 days what can be done to get that number up? I guarantee you the more customers reached the higher your retention rates will be and average order size will creep up and sales revenue will increase not to mention improved customer satisfaction scores. The same is true with new business efforts to reach a prospect base. Again, visibility into these metrics and action plans to drive the numbers allows your sales leadership more leverage to take action before it's too late. Partnering with your reps where data is helping reps succeed and earn more commissions is the win win you are seeking. Data is not meant to be punitive but meant to be used to gain clarity into opportunities.
In addition to the metrics mentioned above, a list of productivity data to track and capture can include a variety of pipeline metrics by revenue stream, lead conversion and product mix (for companies with multiple lines).
Productivity is about day to day execution and visibility into the details. These are the business drivers that get your fingers into the dirt and are at the true heart of what will make your reps and your business succeed. The 4th of the 4 keys, Field Readiness is next...Happy Thanksgiving everyone!
Daily productivity is a team effort involving both reps and sales leadership. My philosophy on this is the whole company needs to believe it's in sales. That includes tech and finance not just the more obvious corporate functions such as marketing and customer service. How much output each rep will realize can be facilitated by sales optimization. Tech can provide systems (telephony, CRM, automated reporting, etc.) to make workflow more efficient minimizing time to perform administrative tasks. Finance can provide pricing and terms simplification making proposals simpler to prepare. Finance also needs to work with sales leadership to put a compensation plan on the table that is simple to administer and simple to understand. The comp plan must drive behavior that will yield productivity assumptions drawn up in the business plan. The comp plan must incorporate assumed quotas, new business vs. renewals and maintain the cost of sales balance between acquisition of new customers and retention (renewals) of existing customers. The comp plan goes a long way in what level of productivity you can expect from sales reps.
Organizationally, something as simple as too many meetings or too many email communications (can you imagine coming to work in the morning and seeing 15 emails from, ahem, someone in charge at your company who can't seem to sleep at 3 AM) can be keeping your reps off the phones. Your reps should not be fodder for email barrages from well meaning folks around the company. Remember, your reps are an expensive and highly valued resource. Treat them as such. Most communications can be filtered and delivered at the appropriate time by sales leadership. The key is to keep your reps focused on telling their story to as many prospects as possible and simplify the method of communicating with prospects on follow ups and sales process.
Productivity is also influenced by the front line sales manager who must have the reporting capability to track relevant statistics related to productivity. Sales reps must also have visibility into their own efforts on a daily basis. Productivity metrics include many of the obvious stats but also lesser known activities. Again, when it comes to productivity, visibility is paramount. You must see your target and have a measure against where you are relative to your target. Plans need to be developed to close the gap to your target. These plans need to be shaped by the rep with help from the sales manager. People need to OWN their plans and believe in them. If you let your people take a "whatever will be will be" approach ("we'll do our best"), then you'll get a "where the dust settles" result which is usually not good enough. You can't run a business like this. You'll be average at best, you will not know how to win. Your organization will flounder with questions surrounding how high quotas are and "how will we ever reach these goals?" Tracking data provides benchmarks that provide the basis for productivity assumptions. In newer companies and where new revenue streams are being pursued pioneering efforts and entrepreneurial spirit must provide the faith to march on. Your reps and leadership team should be willing to chart new ground in an effort to reach unprecedented goals. The rewards for reaching those goals should be great and motivating. This is where strong leadership comes in. It's the ability to pull people up from the shirt collar and encourage them and elevate their self esteem and motivate them to go through brick walls for you and for themselves. This is difference making leadership.
Examples of productivity metrics begin with call plans. How many dials and how much talk time should reps expect to have made each day? How many appointments and face calls need to be scheduled and held? How many demos delivered? Contrary to what many believe, field reps spend more time on the phone (upwards of 70%) then on actual face to face visits. Appointments need to be made first. Cold canvassing applies to markets where a "dropping in" approach can work such as when selling to store fronts and the owner is behind the counter or cash register. For the most part, this topic is focusing on more traditional B2B sales efforts where "dropping in" unannounced is less effective.
Call plans take into consideration percentages. Example, make 65 dials per day, reach 18 decision makers, 10 will be interested enough to listen, 5 will request a follow up meeting, 2 will go to proposal stage 1 will buy. As you track your stats, companywide trends will become evident and business plans will incorporate these trends into assumptions. As you add sales "heads' you can then expect based on a reasonable ramp time of 4-6 months, your rep if she's making "X" calls per day at the typical average order size of "Y" will then likely produce "Z" in sales revenue. The success formula is basic math: productivity times transactions times average order size. If you want your output to increase you need to raise any one of those 3 levers, if not all 3. Raising call volume may require sales optimization in workflow and tools. Raising average order size may involve training but also pricing and packaging to migrate customers up to bigger packages.
Tracking actual productivity will alert the sales manager that reduced productivity will likely lead to missing the sales goal. Simple right? Not quite! Making the wrong types of calls doesn't help anyone. It doesn't help to make 100 calls a day and leave 1 minute messages all day long. It also doesn't help to spend 3 hours of talk time to only a few verbiose prospects. There needs to be a balance between sufficient reach and quality talk time. One important metric which gets overlooked but I think is very tale-telling is percent of customers and assigned prospects reached within a window of time (example 90 days). If a rep is only reaching 20% of the assigned customer base over 90 days what can be done to get that number up? I guarantee you the more customers reached the higher your retention rates will be and average order size will creep up and sales revenue will increase not to mention improved customer satisfaction scores. The same is true with new business efforts to reach a prospect base. Again, visibility into these metrics and action plans to drive the numbers allows your sales leadership more leverage to take action before it's too late. Partnering with your reps where data is helping reps succeed and earn more commissions is the win win you are seeking. Data is not meant to be punitive but meant to be used to gain clarity into opportunities.
In addition to the metrics mentioned above, a list of productivity data to track and capture can include a variety of pipeline metrics by revenue stream, lead conversion and product mix (for companies with multiple lines).
Productivity is about day to day execution and visibility into the details. These are the business drivers that get your fingers into the dirt and are at the true heart of what will make your reps and your business succeed. The 4th of the 4 keys, Field Readiness is next...Happy Thanksgiving everyone!
Thursday, November 12, 2009
Availability - Market Coverage
Where do you leak sales revenue? The answer is almost always found in how well you're covering your sales markets. Let's break down sales market...are we boiling the ocean or are we targeting a sweet spot? Both can work well depending on the value proposition. If you don't have product with universal needs (most companies fit this) then we go for the sweet spot. I've been in both scenareos and can tell you boiling the ocean is extremely challenging and requires significant segmentation but is also lots of fun especially when sizing up the opportunity. Sweet spot keeps you focused and resources and cost of sales are easier to predict. Either way, lack of visibility into specific revenue streams will cripple your revenue generation efforts.
A go-to-market model should empower the company to reach specific customer segments. Strategy will also be shaped by budget. You'll find capacity planning the number of sales reps needed can be calculated by setting your sights on about 60% of your potential customer base. This 60% is likely to yield 80-90% of the revenue potential in the market. There is a law of diminishing returns applied to capacity planning for a higher percentage of the customer base. Where that top 60% customer base resides can be determined by geo or by industry vertical depending on your value proposition. Another important consideration is where you can demonstrate product strength is where you will likely win more often. These considerations then begin to point us in the right direction how many reps we need, what type of sales territories we create and what the overall sales org will look like.
Will there be segments of customer demographics by customer size? Will there be specialized industry verticals such as Healthcare and Government sales? How many revenue streams within each segment can you identify? Revenue streams can take many forms. Examples of revenue streams: renewals, upsells, new business, winning back lost accounts, product mix when your company offers multiple lines, etc. Once these are in place, reaching the customer base and building plans to maximize each revenue stream becomes one of the sales leaders main concerns.
Visibility through key reporting mechanisms and productivity metrics will identify opportunity. Example, sales rep turnover will undoubtedly impact sales in the respective territory. How long does it take to get a replacement rep? Process to facilitate hiring, onboarding and training will minimize open selling days and boost sales. Sick days and vacations add to open selling days. Managing this process will reduce revenue leakage. Open selling days needs to be part of forecasting methodology and front line sales managers need to be trained on minimizing open selling days.
Visibility into customer and prospect calls covering the assigned territory over a window of time (example, 90 days) will give you percent of customers contacted. Managing to these numbers and comparing data at the rep level, as well as, other regions and across the board will set benchmarks and provide areas of opportunity to squeeze out more revenue. Other less obvious revenue thieves include keeping reps away from the phone by requiring too many meetings, training sessions, administrative work and inefficient workflow.
Rep role segmentation to align reps with the right customers enhances conversion ratios. Depending on the size and complexity of your organization you may need telemarketing reps, an inbound team, hunters (acquisition) and farmers (retention), associate reps for smaller accounts and key account reps for the largest accounts. Keep your best reps with your best customers. Minimize customer re-assignments. The probability of losing customer loyalty increases significantly when reps are reassigned. Customer segmentation by opportunity will also provide better rep alignment and market coverage. Rank your customers "A" "B" "C". Plan call frequency, messaging, account plans, rep quota expectations and compensation targets around these rankings to get lazer focus on each segment and maximize sales for each stream.
Lastly, create a strategic account migration plan to move the acquired prospect from lead generation to sales, then evolve the customer from acquistion to retention and subsequently upsell. Sales and financial data will provide much of the intelligence necessary to make tough management decisions on migration strategy. Collaboration with your front line sales team and Finance and Marketing Depts. will also provide valuable insights and feedback to make these decisions with. This disciplined approach to covering your market based on visibility and metrics will lead to jumps in sales revenue unlike any you imagined.
I'll cover the 3rd of the 4 keys next...Productivity....
A go-to-market model should empower the company to reach specific customer segments. Strategy will also be shaped by budget. You'll find capacity planning the number of sales reps needed can be calculated by setting your sights on about 60% of your potential customer base. This 60% is likely to yield 80-90% of the revenue potential in the market. There is a law of diminishing returns applied to capacity planning for a higher percentage of the customer base. Where that top 60% customer base resides can be determined by geo or by industry vertical depending on your value proposition. Another important consideration is where you can demonstrate product strength is where you will likely win more often. These considerations then begin to point us in the right direction how many reps we need, what type of sales territories we create and what the overall sales org will look like.
Will there be segments of customer demographics by customer size? Will there be specialized industry verticals such as Healthcare and Government sales? How many revenue streams within each segment can you identify? Revenue streams can take many forms. Examples of revenue streams: renewals, upsells, new business, winning back lost accounts, product mix when your company offers multiple lines, etc. Once these are in place, reaching the customer base and building plans to maximize each revenue stream becomes one of the sales leaders main concerns.
Visibility through key reporting mechanisms and productivity metrics will identify opportunity. Example, sales rep turnover will undoubtedly impact sales in the respective territory. How long does it take to get a replacement rep? Process to facilitate hiring, onboarding and training will minimize open selling days and boost sales. Sick days and vacations add to open selling days. Managing this process will reduce revenue leakage. Open selling days needs to be part of forecasting methodology and front line sales managers need to be trained on minimizing open selling days.
Visibility into customer and prospect calls covering the assigned territory over a window of time (example, 90 days) will give you percent of customers contacted. Managing to these numbers and comparing data at the rep level, as well as, other regions and across the board will set benchmarks and provide areas of opportunity to squeeze out more revenue. Other less obvious revenue thieves include keeping reps away from the phone by requiring too many meetings, training sessions, administrative work and inefficient workflow.
Rep role segmentation to align reps with the right customers enhances conversion ratios. Depending on the size and complexity of your organization you may need telemarketing reps, an inbound team, hunters (acquisition) and farmers (retention), associate reps for smaller accounts and key account reps for the largest accounts. Keep your best reps with your best customers. Minimize customer re-assignments. The probability of losing customer loyalty increases significantly when reps are reassigned. Customer segmentation by opportunity will also provide better rep alignment and market coverage. Rank your customers "A" "B" "C". Plan call frequency, messaging, account plans, rep quota expectations and compensation targets around these rankings to get lazer focus on each segment and maximize sales for each stream.
Lastly, create a strategic account migration plan to move the acquired prospect from lead generation to sales, then evolve the customer from acquistion to retention and subsequently upsell. Sales and financial data will provide much of the intelligence necessary to make tough management decisions on migration strategy. Collaboration with your front line sales team and Finance and Marketing Depts. will also provide valuable insights and feedback to make these decisions with. This disciplined approach to covering your market based on visibility and metrics will lead to jumps in sales revenue unlike any you imagined.
I'll cover the 3rd of the 4 keys next...Productivity....
Wednesday, October 28, 2009
Talent
Talent is the first of the 4 Keys to building a peak performance sales organization. Among many other principles, Jim Collins' book "Good to Great" reveals the best thought out plan with sub par talent on board won't work well, but even a mediocre plan with great talent will succeed.
Talent begins with creating specific PROFILES for roles the go-to-market plan calls for. Will the sales force be hybrid, specialized for hunter/farmer, segmented by vertical or require various levels of sales reps to call on specific customer demographics? Will reps sell through an inside sales model or face-to-face or both? Will there be lead generation or will reps need to prospect heavily on their own? Does the product or service require technical integration, is it a simpler sale with no switching costs for the customer or is it a rip and replace proposition? Will reps be reading a script or setting appointments for conducting a full needs analysis? Will the sales rep sell ROI to executive decision makers or sell usability and function to users of the product? Will reps be required to sell volume or higher average order size sales with fewer transactions? What is the length of the sales process and time to close? The job description and list of rep competencies desired for the role must mirror the answers to these questions. The interview process needs to uncover skills needed to perform these tasks. Hiring managers need to be trained to interview, ask the right questions and interpret candidate answers.
Existing talent needs to be deployed to the right role. I've seen reps thrive when they're positioned correctly in the appropriate role. Not everyone can crank out loads of cold calls each day. Reps may be better suited to managing a portfolio of customers and building long term relationships to learn the customer's business intimately. In early stage companies where acquiring critical mass of customers is life blood, reps with a hunter mind set are necessary to reach as many prospects as possible. We work hard to bring new customers on board. We must work just as hard if not harder to keep them. That means hand holding customers, training them properly to use our products/services and encouraging adoption throughout the customer's organization. This requires an attentive rep who has patience and networking skills to penetrate the customer account with numerous contact points.
Don't let your reps die on the vine. Talent development requires a feedback loop. Front line sales managers are a critical component to any well functioning sales organization. I find most regional sales managers (RSMs) are good at providing informational feedback but are lacking at two other important feedback mechanisms. Informational feedback is a list of performance statistics. "You made 40 telephone calls yesterday" "Your average order size is $2,400". You're selling 22 transactions per month, your product mix is 90% "A" Widgets and only 10% "B" widgets, etc. Where RSMs miss the boat is providing the developmental feedback and motivational feedback necessary to drive their reps upwards to better metrics. Telling your rep you need them to increase their average order size or make more calls isn't enough. What does it mean "I need you to be more aggressive on your calls"? Do you want your rep to punch someone on the nose? Developmental feedback might sound like this..."being more aggressive means ask for a specific timeline for the next step in the buying process to occur so it is not open ended. Hold your prospects accountable for their timelines and get back to them as agreed" or "keep your telephone sales conversations tighter and on track" "tighter means ask the tough questions and get right to the point and ask the prospect for feedback and listen to what they want to do next". "Don't take too much time with how well the sports team did last night". These are examples of developmental feedback. Teach your reps how to do what you're asking them to do! If you want more telephone calls then something else has to give. Work with the rep to figure out where they are tripping that's preventing more calls. The answer could be an ineffective work flow process in the CRM. You need to find out. Motivational feedback is encouraging reps who have made partial progress and going in the right direction. Don't wait until reps are all the way to the goal before patting them on the back. That could take a while. You need to reinforce their positive behavior all the way up the ladder. Clear expectations, constant written and verbal communication and a clearly defined vision of what winning looks like needs to be permeated throughout the organization.
There are many tools to help keep sales talent and employee performance on track. Publishing daily weekly, monthly and quarterly reports of key sales indicators (to the individual rep level) will provide visibility for reps to measure themselves against and also provide benchmarks for improvement. Performance appraisals and performance improvement plans are tools that provide a regularly scheduled feedback mechanism. In addition, these tools allow an avenue for professional development action plans and are a good standard on which to fairly base merit increases.
The right talent needs to be attracted, developed and retained. Remember your people are your greatest asset. Your technology is certainly important and you should be proud of its creation. Your people however, are what will take you over the top.
Next I'll talk about the biggest area of revenue leakage...Availability (or Market Coverage)...
Talent begins with creating specific PROFILES for roles the go-to-market plan calls for. Will the sales force be hybrid, specialized for hunter/farmer, segmented by vertical or require various levels of sales reps to call on specific customer demographics? Will reps sell through an inside sales model or face-to-face or both? Will there be lead generation or will reps need to prospect heavily on their own? Does the product or service require technical integration, is it a simpler sale with no switching costs for the customer or is it a rip and replace proposition? Will reps be reading a script or setting appointments for conducting a full needs analysis? Will the sales rep sell ROI to executive decision makers or sell usability and function to users of the product? Will reps be required to sell volume or higher average order size sales with fewer transactions? What is the length of the sales process and time to close? The job description and list of rep competencies desired for the role must mirror the answers to these questions. The interview process needs to uncover skills needed to perform these tasks. Hiring managers need to be trained to interview, ask the right questions and interpret candidate answers.
Existing talent needs to be deployed to the right role. I've seen reps thrive when they're positioned correctly in the appropriate role. Not everyone can crank out loads of cold calls each day. Reps may be better suited to managing a portfolio of customers and building long term relationships to learn the customer's business intimately. In early stage companies where acquiring critical mass of customers is life blood, reps with a hunter mind set are necessary to reach as many prospects as possible. We work hard to bring new customers on board. We must work just as hard if not harder to keep them. That means hand holding customers, training them properly to use our products/services and encouraging adoption throughout the customer's organization. This requires an attentive rep who has patience and networking skills to penetrate the customer account with numerous contact points.
Don't let your reps die on the vine. Talent development requires a feedback loop. Front line sales managers are a critical component to any well functioning sales organization. I find most regional sales managers (RSMs) are good at providing informational feedback but are lacking at two other important feedback mechanisms. Informational feedback is a list of performance statistics. "You made 40 telephone calls yesterday" "Your average order size is $2,400". You're selling 22 transactions per month, your product mix is 90% "A" Widgets and only 10% "B" widgets, etc. Where RSMs miss the boat is providing the developmental feedback and motivational feedback necessary to drive their reps upwards to better metrics. Telling your rep you need them to increase their average order size or make more calls isn't enough. What does it mean "I need you to be more aggressive on your calls"? Do you want your rep to punch someone on the nose? Developmental feedback might sound like this..."being more aggressive means ask for a specific timeline for the next step in the buying process to occur so it is not open ended. Hold your prospects accountable for their timelines and get back to them as agreed" or "keep your telephone sales conversations tighter and on track" "tighter means ask the tough questions and get right to the point and ask the prospect for feedback and listen to what they want to do next". "Don't take too much time with how well the sports team did last night". These are examples of developmental feedback. Teach your reps how to do what you're asking them to do! If you want more telephone calls then something else has to give. Work with the rep to figure out where they are tripping that's preventing more calls. The answer could be an ineffective work flow process in the CRM. You need to find out. Motivational feedback is encouraging reps who have made partial progress and going in the right direction. Don't wait until reps are all the way to the goal before patting them on the back. That could take a while. You need to reinforce their positive behavior all the way up the ladder. Clear expectations, constant written and verbal communication and a clearly defined vision of what winning looks like needs to be permeated throughout the organization.
There are many tools to help keep sales talent and employee performance on track. Publishing daily weekly, monthly and quarterly reports of key sales indicators (to the individual rep level) will provide visibility for reps to measure themselves against and also provide benchmarks for improvement. Performance appraisals and performance improvement plans are tools that provide a regularly scheduled feedback mechanism. In addition, these tools allow an avenue for professional development action plans and are a good standard on which to fairly base merit increases.
The right talent needs to be attracted, developed and retained. Remember your people are your greatest asset. Your technology is certainly important and you should be proud of its creation. Your people however, are what will take you over the top.
Next I'll talk about the biggest area of revenue leakage...Availability (or Market Coverage)...
Wednesday, October 14, 2009
Learning to Develop Corporate Sales Strategy
A critical step that is surprisingly overlooked in many startup companies is learning the landscape BEFORE planning sales strategy. Once sales strategy is developed and actions to execute on that strategy are identified, we can begin to build a go-to-market model that will best carry out the strategy. It is at that point when the sales force is planned. In mid to larger companies, there could be a shift in market coverage and different sales roles that will require significant change management to realize.
There is a comprehensive learning process designed to learn what it takes to make correct decisions on building corporate sales strategy. Historical perspective, performance benchmarks, people, challenges, opportunities, data and processes are a few examples of input. Sources of information include internal employees at all levels, customers, hard data, board members, suppliers, analysts and also very important, company culture.
Why then don't many companies follow this evolution of stepping stones? It's hard work! Ego's get in the way. Someone decides they want it done a certain way rather than test their ideas first. Or, leadership has a singular method and is not versatile enough to design any number of plans that fit the situation. Time is critical for any size company and making mistakes in strategic development and building out a sales force cause negativity, distrust, turnover, additional cost, lost revenue, loss of management credibility and time.
Is it worth the effort to learn before you build out the corporate strategy? You bet! It will save you grief and put you on a path to success. Effective CEO's won't ask their new VP Sales hire to pull a strategy out of their back pocket. The learning process while building sales strategy can take anywhere from 60-90 days if done right.
There is a comprehensive learning process designed to learn what it takes to make correct decisions on building corporate sales strategy. Historical perspective, performance benchmarks, people, challenges, opportunities, data and processes are a few examples of input. Sources of information include internal employees at all levels, customers, hard data, board members, suppliers, analysts and also very important, company culture.
Why then don't many companies follow this evolution of stepping stones? It's hard work! Ego's get in the way. Someone decides they want it done a certain way rather than test their ideas first. Or, leadership has a singular method and is not versatile enough to design any number of plans that fit the situation. Time is critical for any size company and making mistakes in strategic development and building out a sales force cause negativity, distrust, turnover, additional cost, lost revenue, loss of management credibility and time.
Is it worth the effort to learn before you build out the corporate strategy? You bet! It will save you grief and put you on a path to success. Effective CEO's won't ask their new VP Sales hire to pull a strategy out of their back pocket. The learning process while building sales strategy can take anywhere from 60-90 days if done right.
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