Sales

Is there such a thing as Sales and Marketing Harmony?

Some say they have accomplished it, but they infrequently share how (if they really know how).  Many marketers say that sales and marketing harmony is an oxymoron.  Salespeople refuse to think anyone can produce sales but them. We know that those that achieve S&M harmony are said to perform wondrous deeds in the name of revenue.  In this CRM Radio interview with Giles House of Callidus Cloud, we tackle sales and marketing harmony building. The CRM Radio host is Jim Obermayer.

 

About the Guest Giles House - SVP and CMO of Callidus Cloud  

 

Mr. House is an experienced marketing executive with a proven track record of successfully marketing and selling business software and technology. At CallidusCloud he is responsible for the company’s global marketing activities, communications, product strategy, brand and sales enablement programs.  As a thought leader, House regularly speaks on sales and marketing, and has been interviewed by leading publications such as Inc., VentureBeat, MarTech Advisor and CRM Magazine.

 

About CallidusCloud

 

CallidusCloud is the global leader in cloud-based sales, marketing, learning, and customer experience solutions. It enables organizations to accelerate and maximize their lead to money process with a complete suite of solutions that identify the right leads, ensure proper territory and quota distribution, enable sales forces, automate configure price quote, and streamline sales compensation — driving bigger deals, faster. Over 5,000 organizations, across all industries, rely on CallidusCloud. 

 

About CRM Radio

 

CRM Radio is a weekly live internet radio program on the Funnel Radio Channel.  It is broadcast at 11 AM Pacific time GMT +6. 

Criteria for Insourcing vs. Outsourcing Business Development

I have written extensively over the years as to why and when it makes sense to outsource business development primarily for economic reasons.  

That being said, when a company is considering business development to create a systematic and sustainable lead pipeline building process one must consider a number of criteria (not only cost).  

 

Let’s consider some of the issues:

Criteria

Insource

Outsource

Headcount

Will require allocation of resources and overhead.

Draws on Human Resources investments and resources.

Headcount will not need to be increased,

In fact you may gain an opportunity to reduce current headcount or overhead.  

No Human Resources overhead required.

Retention / Churn

Business Development staff are often looked on as entry level for Sales jobs. If so they are not hiring people with the right abilities (for business development) as sales requires different skills.

Hiring the wrong people will increase turnover and lower success potential for the insourced operation while at the same time incurring additional costs.

The provider is responsible for providing qualified and professional staff.

At ETI our staff retention record is second to none and the median tenure of an ETI Business Developer - will for the most part - be longer than of an insourced Business Developer.

Control

Everything done under your roof.  They are your employees and they are assigned to focus on your business only.

Perception is better quality personnel and management.

Perception is that you have less direct control as it is not under your roof.  However in reality you exert substantially more control - for example the ability to ramp and and down, messaging control, real time production levels and results monitoring etc.

In ETI’s case we provide as a deliverable complete transparency (far more than would normally be available inhouse).

Focus

Inevitably an insourced operation (in our experience) is rarely 100% focused on the business development task ahead.  Over time priorities change and in many cases general administration and account management activities creep in.

100% focused on the business development task at hand.

Fully accountable for results.

Productivity

Insourced operations are rarely as productive as outsourced ones.  

Result:  Lower throughput of leads into the Sales Opportunity Pipeline.

Generally speaking productivity levels in real terms of an insourced operation will be about 50% of the outsourced company meaning that to fill your sales opportunity pipeline you will require about 2X the staff levels just to match the outsourced solutions throughput.  (See our prior blog on this subject.)

At ETI, whatever the model (Hours / Pay for Performance or Hybrid) you get 100% for your investment.   

Product knowledge and expertise / Brand Representation

Insourced should be better with more invested in training and access to information.

However, if the business development task is to identify new business opportunities - i.e not sell or close the sale - then engaging in highly technical discussions when the need it to build interest and awareness, might be a minus not a plus,

Conversations should be focused on need/pain current solutions etc.

Conversations should be consultative … not sales or product oriented.

Focus is entirely on identifying in qualifying and quantifying potential.

In reality since ETI’s BD’s generally have longer tenure than insourced, they often have a better understanding of your solutions as well as the the applications within the target markets being called.

Hand off is only done once relevant criteria meets this requirement.

Management Expertise

Management expertise in Business Development is rarely available insourced - and if there it is usually focused on other activities.

Acquiring such expertise or reassigning internal management is costly and disruptive.

Extensive experience and expertise.

In ETI’s case it’s management team is unsurpassed having decades of experience in “making it happen”.

Generally speaking insourced operations cannot deliver the extensive experience of the outsourced solution provider.

CRM

Most companies today have a CRM.  However, few CRM’s (if any) are built to maximize Business Development productivity.

However, to optimize and drive the internal operation you will usually need additional licensing costs and the training and or consulting fees that go with that.

If you stay with the CRM as is, your productivity levels and the ability of management to effectively manage the activity will be significantly compromised.

In ETI’s case we have a CRM (i*Collaborator) built entirely to manage the Business Development process.  Even third party systems that “bolt on” too traditional CRM’s cannot match our state system.

Furthermore, ETI offers services to leverage traditional CRM API’s to push and pull data seamlessly giving you the best of both words.

ETI has also developed its own tools to allow its staff to operate in your own instance of Salesforce.com while leveraging ETI’s CRM to maximize productivity and efficiency.

Technology

Although the technology components today are largely commoditized (and relatively lower cost) an effective insourced operation must have the following capabilities.

  • Monitor live
  • Record calls
  • Mentor live
  • ACD

Some older systems do not have these capabilities and may require additional purchases/licenses.

Any outsourced operation worth its salt should have a state of the art PBX and or technology platform delivering all the functionality required.

Suffice it to say that the notion that cost and the perceived improved internal controls and quality of staff is often not true.  When comparing apples to apples you may well find that an outsourced solution (or an outsourced supplemental team) can more than match an internal effort both in terms of costs, results, brand delivery and the overall productivity of your sales effort.

 

How Effectively Are You Managing Your Valuable Leads?

Know Your Cost of Leads

Do you know how much it costs your company to generate profitable sales leads? The emphasis here is on profitable - because not all sales leads are profitable. Nor do they each cost the same. However, they represent good money you’ve spent to buy more sales opportunities for your sales force. 

Of course not all sales leads are born equal. They come in many shapes and sizes. From advertising, trade shows, seminars, direct mail, email promotions, teleprospecting and other promotions. Each lead costs you, and someone in your organization is comparing cost with revenue generated.

Effective Lead Qualification Essential

Generating an inquiry is of course the first step. The purpose of lead qualification is to turn them into prospects. And prospects into customers – hopefully lifelong customers.

All leads (at some point) must be qualified whether we like it or not. The sooner the better!  More often than not the most effective way is to outsource to an experienced sales support agency with a history of sales qualification success.  Why?  Because it’s unlikely you will develop an in house resource staffed with a dedicated and professional Business Development Team of the highest caliber that are focused entirely on the lead qualification process.  If you have (or create) an in-house resource to do this then your actual operational costs will be higher and profitability therefore will be lower.  

Some companies believe they can avoid the cost of qualification by turning the leads over to individual salespersons (or in some cases to the salespeople of their Channel Partners). A more effective solution is to pre-qualify and only have a salesperson engage once the potential exists for a sale. The salesperson - whose time is far more costly - can then focus his or her time entirely on the job of selling.  

Impact on sales force sales productivity can be as high as 400% when a salesforce is focused entirely on pre-qualified leads!

Leverage your CRM - Require feedback from your Salesforce

While many opportunities require immediate follow through (and the sooner the better!) others require multiple follow ups over an extended period of time before they mature. Salespersons without the support structure (i.e. a functioning and workable CRM) to manage and control future sales appointments may permit many of these qualified opportunities to gather dust and die.   On the other hand few companies who have CRM’s actually leverage them to maximize sales force productivity (a subject covered in other articles and blogs on the ETI site)!

Are you in control?

  • Do you know exactly, at any time, what happened to each sales lead you distributed ? To every salesperson or salesforce, VAR, channel partner, distributor? To every office in the U.S.? Worldwide? Last month? Last quarter? Last Year? Year before?
  • Do you know exactly how much each sales lead cost?
    • Per ad source?
    • Per VAR?
    • Per distributor?
    • Per salesperson?
    • Per area?
    • Do you know exactly how much sales volume each sales lead or source produced?
    • Which source generated the greatest number of sales? Per ad? Per month, season, period? Highest to lowest?
    • How much you profited?
    • Do you know which VAR, distributor, salesperson, is most efficient in terms of number of sales leads converted? Over any period? Highest to lowest?

Feedback, Feedback, Feedback

Feedback is the crucial element to successful lead management and tracking. Yet there are many salespersons, both in your direct and indirect sales forces who don’t understand the importance of disciplined feedback. As a result, they don’t provide the necessary status or progress reports on each sales lead for which they are responsible.

The consequence of this is that no CRM or equivalent will work for you. An exceedingly high price for a company to bear. Leads are the lifeblood of business. And since you’ve already incurred the high cost of generating and qualifying the leads, it is intolerable to lose the immediate and future business they represent. And you lose the rewards of lifetime sales. Worse, you aid the competition.

Effective Customer / Prospect Profiling (Part 2)

Imagining Business Profiling Nirvana

Sing along …

  • Imagine all those salespeople selling all the time.
  • Imagine their pipeline that is constantly being topped up with fresh “sales ready” opportunities.
  • Imagine if real ROI is positive.
  • Imagine your salespeople could be held to account for focusing on the prospects and accounts you want them to focus on (not just the low hanging fruit).

Let’s be honest.  You can imagine all you want but unless you have and own the business intelligence (data) to know the makeup of your account and prospect base, you have no real chance of attaining any semblance of Nirvana.

Nirvana (or something close to it) requires a determination and a commitment to deploy resources to achieve it.  Above all it requires a salesforce that is disciplined to focus their efforts on those prospects and or accounts that you (i.e. management) want them focused on because that is where the business and sales growth is going to come from.

Why do you think the military places such an emphasis on good intelligence? How about the importance the US government places on it by spending trillions on the CIA and NSA?  Why does the Financial Industry spend billions on analysts to research the companies they want to invest in?  They do it because if there is any sure way to winning a battle it’s knowing the enemy, their resources, their location/s, their tactics and their operational plans.  

So why is it that when it comes to business, so few companies invest significantly in business intelligence.  Some do research gathering statistics for trend analysis but very little is invested in deep strategic data about targeted and strategic accounts and prospects.

Ask yourself …

  • How well documented is your database (CRM or other database system) with strategic information of your top accounts?
    • Do you know the names and contact details of the key stakeholders?
    • Do you know all relevant locations / geographies that the account operates in?
    • Do you know the potential account size (not historical value)?
      • How confident are you that part of your marginal accounts are not in fact LARGE accounts purchasing from a competitor?
        • If so which competitor?
    • How much do you know about adaptation and potential usage (or the number of installations)?
    • Do you know about growth (or contraction) plans?
    • Is the data accessible to all sales and marketing resources?

If the answer is “.. we know very little” then you have an opportunity to change that by engaging in a structured and ongoing information and business intelligence building effort that will give you a leg up on the competition and will enable your sales and marketing operations to be laser focused by maximizing sales and marketing productivity to increase sales.

See Part 1 of this article

Lead Generation is about building Sales and Revenues. Not about fairness!

Companies often look at their sales force as if all reps were equal.  But of course this isn’t so.We appreciate the motivation of clients being fair insofar as the number and type of leads each rep should receive per week/month/year.  Sales and Marketing Managers frequently ask us about this all the time.

not-fair-logo.png

Experience has shown that acquiring new leads in certain geographies may be more difficult than in others.  This results in some reps being rewarded with fuller sales lead pipelines than others who receive less.

Within your salesforce you may also find some reps who are only interested in “ready to buy now” type leads.  They prefer not to be bothered with anything else (one could describe these reps as order takers).  Others may be hungry and are thankful for all the qualified leads they receive even those with lower qualification criteria.

You may also have salespeople who are more effective when selling to larger companies rather than smaller ones.  Some sales persons may be are successful selling into certain verticals.  Some may be better selling certain products/solutions only.

The more important question is what will it take to make your salesforce more productive (i.e. how to sell more in less time?) Treating everyone equally may actually hamstring the desired end result.  Customizing the leads  you deliver to your reps and focusing on their individual strengths will help to maximize their productivity.  They should also become more effective over time.

ETI Sales Support will work with each one of your salespersons to make sure they succeed with the leads they receive based on their individual needs and capabilities.

Customizing a strategy for each salesperson which focuses on his/her strengths increases the odds for each one’s success.  Naturally the more your reps succeed the more your company does to.

A win win for all!

The New Sales Machine

A few months ago I read an article in the Harvard Business Review entitled ”Dismantling the Sales Machine” that I thought provided some vital insights into the ways in which the selling paradigm has shifted over the past 20 years. The proposition was that B2B sales leadership has always been fixated upon building a repeatable, sustainable process as the keys to success. These processes were accompanied by a myriad of KPIs and scorecards, qualifying criteria and activity metrics, all designed to paint a picture of sales productivity, process and results. Focus and discipline in this view of the world were the keys to success. B.A.N.T. was a required viewpoint.

If you could create one of these built-to-outlast-the-competition machines, if you could train the players, build a set of world-class tools (CRM, Marketing Automation, et al.) to support it, and create an environment in which the expectations were clear and the formal processes focused, you could win out.

But, as the article points out, buying behavior and stakeholder expectations have changed. Customers are far more empowered than ever. They now have the means to research what they need and craft an understanding of the solutions that are available independent of the technically trained sales rep. In a way, it disrupts the solution-selling paradigm before it gets off the ground. What’s left is to compete on the old sales paradigm of price or another of commoditized characteristic.

The article suggests that in order to compete successfully in the “new” environment, the sales rep needs to move from solutions to insights. If you can build a comprehensive understanding of the prospect companies needs, the solutions they have selected to meet those needs and, if you can identify the full array of stakeholders in the decision making process (all of those whose work is affected by the solution), you can contribute to their success by offering insights they may not have considered which would serve to disrupt and redirect the process, helping them to rethink their solution decision, thereby opening it up to you.

When we at ETI work with our clients to develop new business in their target market, engage consultatively with the key stakeholders and, ultimately, uncover qualified sales opportunities, we view a major part of our role as one of profile building on behalf of the sales rep. We’re the ones who are asking “how are you accomplishing these tasks now” and “what made you choose that path.” We follow up with questions like “to what degree are you satisfied with your current solution” and “if you could imagine making a change to improve your current solution, what changes would you envision.” It is probing at that level that gives the sales reps the foundation they need to craft relevant insights to engage prospects constructively.

The sales rep’s ability to deliver just the right insight at the right juncture in the process, and demonstrate how their solution can both meet the existing needs and achieve an improved solution, gives them the ability to compete in the new B2B sales environment. The challenge to sales leaders in this new environment is to move from thinking about sales as a linear process in which prospects move from stage to stage or in a direction down a funnel (or some variation of those sequences) into raising and leading a generation of sales reps who can think about business more creatively and bring more value and insight to prospect relationships than ever before.

Their success is now driven by their creativity and flexibility, not by their adherence to established process-oriented behavior. The rules and formal lines of authority in the new order shift dramatically and the incentives move from competition, contests and campaigns to creativity, collaboration and cooperation. Teamwork replaces individual achievement. And more sales are closed.

Why good sales people should be terrible at prospecting

Here is a simple proposition: When a sales person is selling, he or she is not identifying new opportunities. And that’s a good thing, because you always want your sales people to be actively selling.

The better the sales person, the greater the imperative to focus his or her attention exclusively on selling. It’s not that great sales people can’t prospect successfully. It’s just that they simply shouldn’t have the bandwidth available to do the job well.

Consistent prospecting requires organized, dedicated contact with prospect companies, initially to identify the right stakeholders and then to engage with them, cultivate a relationship, and build an in-depth understanding of their needs, challenges and aspirations. That’s a full-time job; it can’t be done well on a catch-as-catch-can basis. It’s not a “one day a week reserved for prospecting” kind of task.

And, it’s no secret that most sales people hate prospecting. They often find it demotivating and foreign to their primary skill set. Good sales people get “pumped” when they are eye to eye with a prospect, deeply engaged in problem identification and solving, not when they are “smiling and dialing.”

Put them in front of the right people with an identified need and interest and they are smack in the middle of their ideal milieu, with their juices flowing. That’s when they can be most productive — cultivating the relationship, building a foundation of trust and closing the sale — and that’s exactly what you pay them for.

So, if your sales people aren’t engaged in prospecting, how do you get it done?

You can either develop your own, internal, dedicated business development team or you can outsource the activity to a company that specializes in lead generation. The choice is up to you, and it’s a function of how you want to deploy your resources. There are arguments to be made in support of either choice.

The key variables to consider include whether or not you want to take on the responsibility and overhead of hiring employees and the associated costs and, if you go down that path, whether you will then have the flexibility to ramp up and down as needed to meet your seasonal needs — not as easy with an in-house team.

There’s also the matter of lost opportunity costs associated with sick time, vacations and turnover. You pay an outsourced partner only for what they are doing, not for lost time. Along with turnover comes the need to hire and train regularly (it becomes a revolving door).

Then there are the costs of management, equipment and systems (all of which have their own associated indirect costs). Most often, in-house solutions are more costly than outsourcing if you account for all direct, indirect, and lost opportunity costs.

But you may want to spend more to gain greater control, and owning the process internally certainly gives you that. Moreover, it's easier to facilitate communication and teamwork between your own employees than it is if you use an outsourced partner. And that's an important consideration.

And let’s not forget your brand and the image that is portrayed by those who are representing you to your prospect (and customer) base. Whether the solution is in-house or outsourced, that’s a critical variable that is too often overlooked. The cost of a bad connection between one of your representatives and a prospect or client is huge. You can’t overestimate the importance of professionalism and brand and product image.

So, whatever route you choose, be sure that your representation is professional enough to raise the esteem of your brand as well as accomplish the primary goal of generating qualified sales opportunities Ensure that your management structure is sufficient to mandate accountability from everyone involved, from those responsible for seeking out the opportunities to the sales people who must follow up if your investment is to have solid ROI.

Regardless of your choice, the lesson here is simple. Sales people are among your most expensive assets. Employing them to undertake work that can be more consistently and productively accomplished by a competent, dedicated prospecting team is both far more expensive and unproductive. Keeping them in front of the right people as often as possible is the best way to maximize their productivity as well as the return on your investment.

Problems vs. Needs

Recently I spent some time watching a presentation (actually it’s a detailed course) by Steve Blank a seasoned Silicon Valley entrepreneur entitled “How to Build a Startup”. And for anyone starting a business or is involved in a startup this is highly recommended. Part of the course deals with the concept of “Pain Killers” where he elaborates on the difference between Problems and Needs. For someone in the B2B Lead Generation business, the identification of Problems, Needs, and Pain that prospects are experiencing provides us with an opportunity to explore those pains in greater detail and, perhaps engage the prospect in exploring the solutions our clients offer. So understanding the difference can be critical.

How does Blank define Problems and Needs?

“... it's kind of interesting to differentiate between solving a problem or if somebody who has an accounting problem or a word processor or they can now use Google docs versus Microsoft Word versus a need. “ “What's a need? Well, a need might be a need to be entertained or a need to communicate. Needs are something that are universal across all 7 billion people on the planet. Your total available market plus or minus a couple of billion. Maybe kids 0-5 don't have those needs but eventually you will find market sizes for needs to be multiples by orders of magnitude above solving problems. And so, I'm not suggesting that you don't solve problems. I'm not suggesting that you try to turn every problem into a need. But let me suggest the one company in the 21st century that did this better than anybody else in the planet was Apple and the iPhone. They took a communications device and made it a status symbol, and they transitioned from a product that solved a problem, integrated web browser, e-mail, and phone into something that people now every year obsolete their own products by wanting to get the next one because it's now a need rather than a product.”

The takeaway? Generally problem-solving while important, is often both short-term and one-off. Being able to identify the nascent human needs that will drive demand for your solution (as Apple meets the need for status, entertainment, communication and simplicity), coupled with the ability to satisfy one or more of those needs, will produce a stronger, longer-term relationship, assuming your product or solution continues to satisfy the need.

Generally companies look to solve problems other businesses have. If they could deliver more comprehensive solutions to solve needs (vs. problems) then a deeper and longer relationship will ensue.

Turning Nightmares into Sales

The number one challenge for a sales person is overcoming inertia. Every sales person knows this well. Far more often than losing a sale to the competition, you lose to a non-decision, essentially a default to maintain the status quo. In all likelihood, it’s not that you weren’t able to convey your value proposition or demonstrate the potential ROI of substituting your solution for their existing practices. It’s simply a matter of prospects having to confront the often irrational fear of abandoning what they have been doing up until now, that has been failing them, to adopt a new process that has the prospect of being far better. Change is that scary and inertia is that powerful.

Inertia, and the irrational fear of change, can and has caused companies to fail. Ironically, inertia is often more powerful in the most critical situations in which the problems have existed for a long time. What else could explain the delay by an otherwise smart and rational business person to identify and implement a solution with far greater potential to resolve the problems before things reach a critical stage?

Compare it, if you will, to an individual with a phobia. According to the American Psychiatric Association, a phobia is defined as an irrational and excessive fear of an object or situation. In most cases, the phobia involves a sense of endangerment or a fear of harm. Phobias strike very smart people as often as people who are less intellectually gifted. It is intelligence neutral so to speak.

One of the most successful approaches to treating phobias is by the use of guided imagery, in which patients are systematically desensitized to the object of their fears by visualizing situations in which they can calmly and safely coexist with the object of their fears.

So how does that inform the sales process, especially as it relates to the fear of change?

When you are presenting your value proposition, after having assessed and diagnosed their needs and crafted a solution, it will help if you are able to give them a meaningful opportunity to visualize life after the change is implemented. Help them imagine how they will feel about the success of adopting a new and improved solution. Let them dwell on that. Indeed, encourage that actively.

Encourage them to be active participants in that endeavor. It’s just like the beer commercial where you see two (or more) attractive people sitting on a lounge chair on the beach with a slice of lime hanging off the rim of their beer bottles listening to the waves crashing on the shore.

Ask them... literally ask them ... to picture themselves in the absence of the problems caused by their current practices (or their lack of an adequate solution). How would that free them up to deal with more important issues? How would other people regard them in the light of that success? How would they feel if they had a solution that will enable them to sleep at night unfettered by the challenges they are facing now?

By helping the prospect imagine and embrace a positive outcome - instead of being haunted by the nightmare of what catastrophe change might cause - you will give them a path to embracing change instead of fearing it. It’s as if you could give a claustrophobic locked in a closet the power to imagine that the door is transparent or invisible.

Most Sales People Still Don’t Get It

Recently my wife and I went out to buy a washing machine. We really had no choice and couldn’t wait. The old one broke after 20 years. The need was imperative. So we went through the very same experience that virtually every buyer goes through as we shopped for exactly the right appliance to meet our needs. Ultimately, with alot of research and effort. we were able to find a product that met our needs at a value that made sense for us.

But virtually all of the sales people we spoke with were absolutely useless and, as a result, failed to gain our sale.

Let me describe our experience. It will ring familiar. And they were serial experiences in several showrooms, so it wasn’t simply one bad dealer. It was almost universal.

We walk into the appliance showroom. We are ignored for a while as we wander around looking at various appliances. Maybe their sales manager taught them to do that on purpose. It was certainly a universal experience.

Ultimately, a sales rep comes up and asks, “Can I help you?”

“We’re interested in a washing machine”, we say.

What comes next?

“Let me show you the models we have.” “This one has the fastest spin cycle in the industry.” “This one is the most energy efficient washer on the planet.” “This one is best on gentle fabrics, and this one.....”

Not once did any of them ask us simple, relationship building, helpful, guiding questions like...

  • Do you already have a washing machine?
  • What kind?
  • How long have you had it?
  • What did you like about it?
  • Why are you looking to replace it now?
  • How important to you is replacing it immediately?
  • How frequently is it used?
  • How big is your family (kids)?
  • Do your kids play sports or get very dirty?
  • Do you wash your dress shirts or send them to the cleaners?
  • How is it used (colors/whites/shirts/heavy dirt)?
  • How important to you is energy efficiency?

How much were you looking to spend? (Well this one they do ask, but way down the road)

You get the drift.

If they simply took the time to ask us these questions BEFORE they overhelm us with 30 different makes and models, most of which we have no interest in, they could close the sale in a flash. We could have saved hours of comparison research, and they would have gained a loyal, long-term appliance customer.

But, no. They chose reflexively to inundate us with a never-ending list of features and benefits,presumably as a way of differentiating each product. Wow! It felt like it went on for a mind-numbing lifetime.

Of course, that robotic approach lead to the inevitable ending that every salesperson has heard, in one form or another more than once until, of course, they gain the requisite insight to mitigate it: “Do you have any brochures? We’d like to review them, think about it, and get back to you.”

By the way, we also went car shopping. That was even more fun.

When will they ever learn?

How Good is Your Sales Execution?

We have a valued client company that is expert in what they term “Retail Execution Solutions”. In essence, they enable large retailers to “have the right product in the right place at the right time.” While they do have some very powerful proprietary solutions, very few of the specific services they provide are truly unique. In fact, virtually every retailer is already conducting the standard activities that our client provides as services. They include inventory, space planning, shrinkage and supply chain audits and a program for site design and organization. Retailers may not be doing each of these activities as efficiently or effectively and cohesively as our client would, but these are all essential business practices that every retail operation must conduct to stay alive.

The unique aspect that our client brings is a highly systematic, integrated approach that enables them to link all of those disparate, essential activities, giving them the power to bring the results to bear on the full scope of their operations. Hence, the term “Retail Execution.” As I said before, it gives them the ability to “have the right product in the right place at the right time.”

As I was thinking about all of this, it dawned on me that what our client provides to retailers is analogous to what we provide to our clients. We provide “Sales Execution Solutions.”

Surely every company we work with is already doing the basics: generating leads, perhaps even pre-qualifying them, they have sales forces and, especially nowadays, they may have access to some kind of CRM to track their leads and sales activities.

They might want or need more leads, or better qualified leads. Or they may need help managing their database and tracking their prospects, leads and sales activities. And they may need to better understand their market or ways to develop new markets or bring new products to market. But the basics elements are there in order for them to survive.

So where does Sales Execution come into play? In the very same way our client supports their retailers: our deliverable is in providing clients with a systematic, repeatable, successful closed-loop process for growing revenue, developing and managing new business opportunities and targeting their marketing investment on vehicles that have the best potential for revenue growth and the successful development of their company.

By engaging with a company that focuses on Sales Execution (or enhancing sales productivity), you are focusing your sales resources precisely on those qualified prospects and customers that are ready to make a purchase decision in the near term (“the right contact in the right prospect company at the right time”).

There are many companies that can provide pieces of this kind of solution on an outsourced basis, some at a far lower cost than managing it internally. But the real trick is in creating an environment in which all of the pieces of the business development puzzle can work together, seamlessly, and one in which they augment one another to create true, powerful sales execution.

So, while “Retail Execution” enables a retail company to have the right product in the right place at the right time, “Sales Execution” enables a company to put their sales people in front of the right prospects at the right company at the right time.

I’d love your comments and questions.

Successful Sales and Marketing Strategies for Both Good Times and Bad

Ever notice that, even in the very toughest economic environments, 20 to 25% of companies still manage increase their sales? These winning companies are successful even in the face of the most punishing economic conditions. Their competitors, often with the same or even superior products and services, struggle and all too often fail.

What’s even more telling is that these very same companies thrive to a greater degree during good times. When everyone else is selling successfully they far outsell their competition and steadily increase their share of market.

Clearly, their success is not based on having a better solution. It’s really based upon the application of time-tested, solid sales and marketing strategies that keep them headed in the right direction regardless of the environment.

At ETI we've worked with many of these world class companies over the past 25 years. We have been witness to the strategies they employ that have created the most success. We've also learned from their failures.

We've distilled some of the insights we've gleaned from our clients' successes and many of the best practices employed by these winning organizations in a new eBook entitled Successful Sales and Marketing Strategies for Both Good Times and Bad. As a business leader with an interest in strategic business development, we'd like to share with you those strategies for success.

The eBook is yours to download for FREE by clicking here. There’s no obligation whatsoever, so click here to get your copy.

If you find it interesting, please feel free to share it and discuss it with your colleagues. And if you have any questions or comments when you’re done reading, feel free to give us a call.

Think twice before you grow your sales force!

With the economy picking up, you may be contemplating ramping up sales operations by taking on more sales staff. Some food for thought.

Depending on the additional costs of hiring a new sales person (in real terms probably about double his/her salary), you might instead want to consider investing that money in a professionally run lead generation and qualification campaign to maximize your existing sales force’s productivity.

For example - using only one sales recruit as an example (and you can play with the numbers as they may be applicable to your business): Salary - $60k + commissions.    Assume $75k (low by any standards for most B2B industries.)

Overhead x2 (travel, recruitment, training, social costs, management, etc.).  Real costs are probably in the range of $150k.

If you assume that the cost of identifying a qualified sales opportunity to be in the range of $1,000, then for the same $150k, you could deliver 150 newly minted, highly qualified sales opportunities to your existing sales force. And if the cost were $500 per qualified opportunity, that’ would present 300 new opportunities.

Looking at this conservatively (@$1k per), let’s say your sales team can convert 20% (1 out of 5 of those qualified opportunities) into a new client. That would generate 30 additional sales at your average sales value. If each average sale was worth $50k in revenue, that’s an additional $1.5 million in new revenue. (Not to mention the potential recurring value of that new client relationship).

Let’s take a more optimist tack. If the cost per qualified opportunity was actually as low as $500, and the resulting 300 additional sales opportunities converted at a better rate, such as 25%, this would net you 75 sales (to new clients).  And using the same $50k average per initial sale, this would net $3.75 million in additional revenue.

Not chump change!

So, in lieu of investing in new sales reps who need to be recruited, trained and mentored, and who will take some time and effort to hit the street running, it may well be more lucrative to increase the productivity of the existing sales force.   Also consider your recruitment success metrics.  How many new recruits  succeed out of the block.  What is your cost of failure?  And will an investment of $150k for example net you between 30 and 70 new customers with between $1.5 and $3.75 million in new net incremental revenue?  It’s doubtful.

Of course, your company might be among the very few that has a sales force that is really productive and has no need for additional qualified sales opportunities to work with.  But, in the 25 years we’ve been in business, I’ve never come across one.

Remember that for every minute your high cost field sales people are not out there selling to prospects and customers that have a need for your solutions, you’re losing a selling opportunity!

By the way, ETI has a great Sales Opportunity cost calculator that you may find useful.

For more on how ETI can help you ramp up your sales please call us at 1.800.466.4384 (914.747.3030).

Are you losing business because of your choice of words?

Today’s Guest Blogger is Joseph Olewitz .  In addition to being Founder and Principal Consultant at 22nd Story Strategies, Inc., Joseph currently shares experiences derived from years of pitching large professional services deals to major corporate brands on his blog: Intentional Growth. How precise is your business language? When Shelly Sachs of ETI Sales Support asked me to write a guest post, I immediately thought of the lesson I learned from him earlier this year. Even though I always operate as though word choice is critical, in a joint presentation we were making to a client of mine, Shelly pointed out that I had represented a core part of my recommended strategy as promoting the “USP” (Unique Selling Proposition) when it seemed that using “UVP” (Unique Value Proposition) as a title for the same presentation would be more customer-centric and a much better focus on benefits. I have not only used this term with other clients until now, but I also had recently written a blog about using USP to increase revenue.

Mea Culpa: Shelly was right of course and that caused me not only to immediately correct USP to UVP but to realize that I had been using a lot of terms in my vocabulary for a long time and that regular re-examination and consideration of language is imperative. “Sales” in my universe is a powerful and useful term – but not always! In services sales, when talking about the relationship between my offering and my client’s they want to know how I will help them increase sales or revenues. However, their customer wants to know about the “Value” that’s being brought to market and that’s the term that should be used when describing your unique positioning.

I am now regularly reviewing words chosen for business communications with an additional POV perch – that of asking the question: “How powerful and how appropriate is that term in this specific context?” And I think we all need to do that much more often.

Some thoughts:

  • Ask some of your clients to read and comment on existing promotional material – with no sacred cows (include website, one-sheets, signage and more).
  • Have someone who was not involved in the writing review the proposal before it’s sent out.
  • Carefully look at how the client will respond to the pitch language (is it culturally appropriate?)
  • Remember to keep revising as time goes on, things change – and you do, too.

I’m now more attuned to the downfalls of complacency – how about you?

Build relationships with prospects to become a better salesperson

Making a sale starts with a building a relationship – and building a relationship takes effort. A lot of it. That's not to say it's hard, of course; building a relationship may not be the easiest thing in the world, but it's certainly simpler than trying to push or bully a potential client into purchasing from you when your product isn't a good fit with their mission, goals or company. If you want to start closing sales and creating a fuller professional life, it starts with making yourself available to your prospects as a valuable source of trustworthy, honest and useful information. If you want to sell something to someone, it's essential to know what he or she is looking for. Think of it this way: You wouldn't try to sell a minivan to a childless bachelor, just like you wouldn't try to sell a Corvette to a mother of four. When you understand your client's needs, you can work with them show them how valuable the service or product you're offering can really be to them. To do this, you need to open up a conversation with them – believe it or not, they might surprise you. Don't try to guess what they'll want. You never know, sometimes that metaphorical mom really is looking for her own sports car.

A salesperson's role is to understand the unique challenges that a client faces in its specific market or environment, then discover a solution that will help the client overcome these issues. Rather than simply asking, many inexperienced salespeople try to guess what a client needs – or, if that doesn't work, start throwing out every possible service or product in hopes that'll something will stick. This, however, is a waste of not just your client's time, but yours as well. Instead of taking this amateur approach to making a sale, start by simply asking questions, listening to their answers and working with your prospect to devise a solution.

If you want to start see your sales close, it's time to stop focusing on yourself and start paying attention to your client. Don't just sell what you offer -sell what your client needs. To learn what that is, ask questions – What are their key interests and challenges? What do they struggle with in their industry? What are they looking to fix?

Even if it doesn't appear that you have much to offer them immediately, a little extra digging might uncover a way that you can aid them in their mission. And if not, at the very least, you've opened up a productive relationship and established yourself as a trustworthy source should they ever need a service or product that you offer.

 

Inertia and aversion to change

You’ve carefully identified and qualified the prospect, clearly identified a need and even gotten them to speak about their “pain” and the challenges they are facing in retaining their current solution. You’ve made a sterling ROI presentation to demonstrate the cost effectiveness of your solution and the fact that it will return the full cost of the investment in less than a year!

Partnering Business Developers (BDs) with Sales

Experience shows that the relationship between Business Developers (BDs) and the sales people who ultimately are our primary constituents is very important to the success of a business development effort. A basic element in this relationship is the need to foster bi-directional communication as a regular discipline.

Lead generation vs. Appointment Generation

What are the primary differences between Appointment Setting and Lead Generation efforts?

  • It’s relatively easy to get appointments.  Even with top decision makers in large companies.
  • It’s generally much harder to identify genuine purchase potential in addition to setting an appointment with the key  individuals who would ultimately be involved in making a purchasing decision.

Why?

Appointment Setting:

Assuming the solutions you offer and your brand is well positioned in the marketplace, then many executives may be at least willing to “learn” more about what you might be able to do for them.

If you’re brand is not well known, then it’s certainly much harder.

However, when little or no commitment is involved, it’s an easier row to hoe.

This does not, however, signal that they have real buying interest.  They may have a need.  They may even have some pain.  But that’s not what’s being asked of them.  They’re simply being asked to say yes to “learning more.”  Most of all, it doen’t mean that their organization has the capacity to implement the required change in the near term.

Yes, a good sales person who is worth his or her salt might take this opportunity and, over time, develop it to the point that a sale can take place.  However, rarely do appointment setting programs generate near-term sales.  And rarely are sales persons efficient and patient enough to nurture leads over time to ensure their long-term success.

Of course, you can always get lucky.  But luck is not a strategy. It’s always useful to remember in this context that in any given sales force the 80/20 rule generally applies.  80% of the sales force is comprised of order takers (or farmers) and only 20% are real hunters.  Moreover, generally speaking, 80% of the sales force generates 20% of the sales revenue.

So is an appointment with a decision maker in and of itself a “bad” result?  No.  It’s just not an efficient or productive one, because the productivity of the sales person is not maximized and the cost per sale, ultimately, is more expensive   even if your cost per appointment is lower.

Lead Generation: Consider on the other hand a lead generation effort that is focused on maximizing sales productivity.  It emphasizes identifying real “ready to engage “opportunities, enabling the sales person to spend more time selling to the right prospects at the right time.  In other words, lead generation effort should not just open the door,they should open a door only where real potential to purchase exists.

Why it comes down to sales productivity.

Sales productivity has been addressed many times in this blog.  In fact, for the past 20 years it has consistently been ETI Sales Support’s motto.  (You may find the 3 part blog entitled  Rethinking BANT  of interest.)

Table 1:

Assumption Explanation
Time available to each sales person A sales person can potentially visit with one opportunity per day
Cost per appointment (Appointment Setting effort) $600
Closing ratio – Appointment Setting (year 1) 10%
Closing ratio – Lead Generation (year 1)/td> 20%
Appointment Setting annualized result: Assume 50 weeks per year X 5 appointments per well X 10% closing ratio 55 Sales Cost $150k Cost per sale: $2,727
Lead Generation annualized result: Assume 50 weeks per year X 5 appointment per wellX 20% closing ratio 110 Sales Cost $250k Cost per sale: $2,272
Impact of increased sales productivity on the cost per sale $455 less from a Lead Generation effort vs. an Appointment Setting effort.

So even though the cost per opportunity is higher ($1,000 vs. $600) via a Lead Generation effort, the number of “sales” over the equivalent period is double and the actual cost per sale is $455 less than the result of an Appointment Setting effort.

Lastly, let’s also not forget the Lost Opportunity factor.  If your sales people are not calling on those prospects that have real buying potential and the competition is, then your poor investments in Appointment Setting are just that much more costly because they are spinning their wheels talking to the wrong people and the wrong prospect companies.

So think twice about wasting precious selling time on plain old appointments.  A better choice would be to invest in a highly effective and sustained lead generation effort that will result in real sales sooner.

Aberdeen 2009 B2B Teleservices Buyers Guide is out

The Aberdeen group is out with their 2009 buyers guide.  This study focuses on the Best Practices of Best-in-class companies who deploy outsourced B2B Teleservices. Some highlights ...

Best-in-Class companies have sales teams with an average of 90% achievement of the overall sales team quota

Best-in-Class companies increased their average revenue per sales rep by 10% on a year-over-year basis

Best-in-Class companies experienced an average 7% year-over-year improvement of their bid-to-win ratio

Here is the press release:

SOURCE: Aberdeen Group

  

Dec 10, 2009 10:00 ET

B2B TeleServices: The 2009 Buyer's Guide

Going Beyond the Simple Acquisition of Flat Data or Sales Appointments

BOSTON, MA--(Marketwire - December 10, 2009) - Top performing sales organizations are meeting the challenges of increasing the quality of incoming leads, as well as the overall size of their pipeline, by turning to external providers of business-to-business (B2B) teleservices for a wide variety of deliverables, according to a new research study published by Aberdeen Group, a Harte-Hanks Company (NYSE: HHS).

"B2B TeleServices: The 2009 Buyer's Guide," which examined 206 organizations deploying outsourced B2B teleservices, found that the sales teams of Best-in-Class companies achieved an average of 90% of the overall sales team quota.

"When organizations deploy an outsourced B2B teleservices provider to acquire and deliver some form of sales opportunities, they are essentially seeking to fill the selling pipeline with as many qualified leads as possible," says Peter Ostrow, Research Director, Sales Effectiveness, Aberdeen Group, the report's author. "Leading companies are building substantial, multi-faceted relationships with solution providers that go far beyond the simple acquisition of flat data or sales appointments."

The report reveals what leading companies have been able to achieve through deployment of outsourced B2B teleservices, such as:

 

--  7% yearly increase on average in bid-to-win ratio
--  Average annual revenue per sales rep has increased 11% year-over-year
Click here to obtain your copy.
 

Rethinking BANT, continued: How to better define a qualified lead

Final part of a three-part blog Part 1 | Part 2

In Part 1 of my three-part “BANT rant,” I expressed doubts about BANT being sufficient as the determinant of qualified sales opportunities.  First and foremost, BANT takes a seller-centric perspective that doesn’t consider the ways in which buyers think, at least not with respect to purchases that are not commodities.  Second, I suggested that while the BANT elements might be necessary for a buying decision, by themselves they are not sufficient to ensure that a purchase decision will ever be made, or if that purchase decision will be favorable to you.

In the second part, I reviewed each of the BANT elements, exploring in sequence why I felt that the BANT model is overly simplistic and fails to consider the buyer’s perspective.  I argued that requiring a Budget, for example, was less relevant than having adequate Resources (to acquire your solution), and might even work against you if that budget was determined without your input.

Then, I suggested that Need was also seller-oriented; the buyer is focused more on having a reason to act…now if the problems are imperative.  We have a multitude of needs that often remain unfulfilled for lack of impetus.  And, depending on how vital it is to obtain an adequate solution, the resources will flow accordingly.  Finally, I argued that decisions (perhaps for anything other than commodities) are virtually never made by a single individual, especially in the enterprise.

In all, I thought the following questions were far more buyer-oriented and relevant to how and when a decision would be made:

  • Is there a compelling reason to do something?
  • Are the stakeholders who would feel the impact included in decision-making?
  • Is there a solution out there that can resolve the problem using the resources available?
  • And, are there substantial consequences for failure to act timely?

Perhaps the very best place to start is by taking a hard look at the sales process and analyzing the critical stages.  First, a statement that may seem, on the surface to be overly simplistic, but when you consider it carefully, you may find yourself in full agreement.

The biggest impediment to closing a sale is inertia.  And, overcoming inertia is the primary challenge. Look at some of the language of selling: “value is more important than cost,” “it’s vital to provide clear ROI,” “establish mutual perception of need,” “where’s the pain?” and so on.  These are all perfectly legitimate perspectives, and I have made similar statements like that many times in coaching sales people.

But, the fact is, you can definitively establish value and pain and need and ROI and yet the prospective buyer simply doesn’t buy.  They continue the status quo with all of its inherent costs and pain (all of which they have openly acknowledged).

I can’t help believing that the reason for inaction is that the perceived cost of changing the way in which they currently operate – financially, emotionally (more likely) or both – exceeds the cost of maintaining the status quo, even to the point where status quo leads to the failure of the company.  It may not be rational, but it is quite human.

So, if inertia is the critical factor that a sales person needs to overcome in order to successfully conclude a sale, then it is vital for them to have an understanding of the prospect company’s orientation to change.  Wouldn’t it be important for them to know if a company is risk averse or, alternatively, is an early adopter, or somewhere else along the continuum?  And wouldn’t that be a valuable element to capture and rate relative to the qualifying characteristics?

This is clearly the missing element in the traditional BANT paradigm because, regardless of whether you view the sales process from a buyer or seller’s perspective, an opportunity can’t be seen as fully sales qualified unless there is a legitimate possibility that the prospect company will make the necessary changes. So what we do have?  I suggest “I CARE”:

  • Imperative – a compelling reason to consider a new solution
  • Consequences of inaction
  • Agreement among stakeholders
  • Resources to obtain a solution
  • Environment conducive to change (overcoming inertia)

This acronym represents a more practical and accurate method for defining a qualified sales opportunity and it is equally applicable to both seller and buyer.

First, it’s important to uncover a compelling reason for a company to take an action to meet a need or resolve a challenge.  Next, the consequences of inaction need to be sufficient to warrant a search for a solution.  Is there consensus for taking action among all the key constituents (stakeholders) who are feeling the impact of the need/challenge as well as those responsible for resolving it?  Then, a solution needs to available and the capacity to obtain the resources needed for a solution needs to exist (remember, if it’s important enough, the resources can be found, regardless of budgetary considerations).  And, last and most important, how amenable is the organization to effecting change?

Before I end this, I don’t want to forget the promise I made at the end of the first part.  Here is the setting:

You are walking down the street on your way to an important meeting.  It is lunchtime and you are hungry, you have the resources and sufficient time to eat.  There are a multitude of restaurants and street vendors, including some of your favorites.  Although you are hungry, eating is not your highest priority.

Your decision to stop and eat is reasonably complex.  There are competing needs, at varying levels of urgency.  You are hungry (a function of an early breakfast), abetted by a regular ritual of eating lunch at the prescribed time.  So your internal debate will take a multitude of factors into account.  For example:

  • I’m hungry
  • This meeting is very important
  • I always eat at this time of the day
  • I have sufficient time to eat before my meeting
  • I would love a few moments to check my email and voice messages before my meeting, (but I could do that without eating)
  • If I don’t eat, my growing hunger may become a distraction during the meeting
  • I have more than enough money in my pocket and, besides, my bill for lunch will be covered as a reimbursable expense

While considering your options, these and other questions will arise until you make a decision.  And, of course, making no decision is equally a decision.  In complex businesses, making no decision is what happens all too frequently – because the cost of doing something has ripple effects throughout the organization.  Inertia – maintaining the status quo (sometimes even in the face of all rationality such as unquestionable ROI) – is too often the easiest course of action.

How would this decision-making process be represented in the I CARE model?

  • Imperative: hunger, time of day (lunchtime)
  • Consequences of inaction: poor meeting performance, distraction
  • Agreement among stakeholders: You (and your growling stomach)
  • Resources: money is not an issue, and it’s a reimbursable expense
  • Environment conducive to change:  it boils down to inertia, doesn’t it?

How can a proprietor get you to stop and eat?  What can they do to raise the threshold high enough to overcome inertia?

You experience the answer all the time in those situations, don’t you?  Some vendors and restaurants pump out tantalizing smells of their luscious offerings and tease you with them.  Others do something with their display; maybe they toss the pizza in the front window, or display the desserts or even offer you a complimentary taste in front of their establishment.  Maybe they offer free Wi-Fi that enables you to easily and quickly check your messages.

All of those actions and offerings are designed to entice you to into their establishment and overcome inertia.  When they hit the right hot buttons for you, you’re sold.  But even having decided where you may eat, unless all the other factors are aligned you still may not physically go in (inertia).  It’s only at the point that you decide to CHANGE the course you’re on right now that the sale may actually get consummated.

To conclude what we’ve been exploring over the past few weeks, BANT has been a useful and important early model for focusing the qualification process.  But it needs some rethinking because it fails to consider the prospective buyer’s viewpoint and is inadequate in identifying the elements that are the key determinants for concluding a sale.

When a seller has a clear understanding of how a prospective buyer makes their decisions, and solid insight into how the prospect views the issues and their proclivity to change the way in which they behave, they have more chance of success.  This more closely aligns their goals with those of the prospect and provides them with far better insight as to the hot buttons that will serve to overcome inertia (which is, after all, the heart of the sales challenge).

And isn’t the purpose of defining a qualified lead all about providing sales people with opportunities that offer them a better chance of closing more sales in less time?  Success in that endeavor is the basis for enhancing sales productivity, maximizing ROI and increasing sales revenue.

BANT, however time tested, does not necessarily increase the chance of sales success.  I CARE does it better.

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