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Aug 22 19

Improving Sales Performance Without Changing “How You Sell”

by David Brock

Too often, as executives look to improve sales performance, they look to doing something new or different. It may be adopting a new methodology, new technologies or tools, changing your go to customer strategies.

Any of these can improve sales performance, but the come with their costs. Since these represent major changes, the change management process and time involved in solidifying changes can be very long. Again, with any change, or doing something “new” or “different,” there are huge risks, and then there are the costs.

Ironically, when we assess the performance of organizations, we find they aren’t as effective or efficient as they can be, using the things they already have in place. Stated differently, most every organization can achieve huge improvements in performance by executing what they already know or what they already have in place. In every case we’ve seen, there are huge opportunities for performance improvements, improvements in effectiveness and efficiency, just by improving execution on the things that are already in place.

Here’s a laundry list of ideas, primarily focused on doing what we know we should be doing and what we know how to do more effectively.

  1. Pipeline cleanup/pipeline integrity: We waste so much time and productivity with sloppy/bad pipelines. Virtually every organization I get involved with, when I look at their pipelines, I can eliminate at least 40% of the pipeline. Too often, we have bad opportunities, opportunities that have “exceeded their expiration date,” unqualified opportunities, or opportunities far outside our ICP. Managing these takes time away from focusing on the real, highly qualified deals. Additionally, they mask performance issues and cloud our ability to correct them. As bad as it may look, a high integrity/high quality pipeline will immediately illuminate the key issues and dramatically improve your ability to address them.
  2. Hyperfocus on your ICP. As people struggle to make their numbers or to maintain their pipeline/activity metrics, they tend to cast a wider net, losing focus on the Ideal Customers, pursuing marginal cases. As in (1), these opportunities are low probability, but consume lots of sales time. While it seems counter-intuitive, the fast way to improve performance is to narrow your to your ICP.
  3. Doing (1), (2), and (3) changes the dynamics of your numbers. Your win rate will skyrocket–simply because you are focusing on opportunities you can win. This means you don’t have to carry as many qualified opportunities in your pipeline, so those skinnied down pipelines don’t look so intimidating. Also, your average sales cycle will probably decrease, freeing time up for people to look for more qualified opportunities. Chasing bad opportunities and pursuing low odds opportunities is a time suck. Typically it takes us twice as long to lose an opportunity than it does to win an opportunity. Think of the time you can free up simply by chasing the right opportunities.
  4. Focus on disqualification. Even if you are focused on your ICP, sometimes we chase deals where the customer has no compelling need to change. These customers may buy, eventually, you will want to nurture them. But the most important thing to drive performance is focusing on customers that have a compelling need to change. These customers will tend to move through the buying cycle more quickly, there is a smaller likelihood of “no decision made.”
  5. Make sure your people are executing the sales process. The sales process represents our best practice in aligning our activities with the customer buying process. We develop the sales process based on the things we identify that maximize our success and ability to win. Yet too many sales people aren’t using the sales process. They are wandering aimlessly, usually reacting to the customer and not being as effective and efficient as possible. At the risk of repeating myself, the sales process represents our best experience in developing and executing winning strategies. Why wouldn’t we exploit it, why wouldn’t we make sure every sales person is executing it with precision. You don’t have a sales process……… Shame on you, get one in place immediately (remember, the sales process and a sales methodology are different.
  6. If your people have been trained in a methodology, make sure they are using it. Like the sales process, sales methodologies work, but you have to be using them. Every client I walk into has had some training in a sales methodology. But when I look at what they are doing, the majority aren’t using the methodologies. The data on sales training is that over 80% of the skills that were developed on no longer being used 90 days later. Your people have been trained in these methodologies, they have the tools to help them implement them. Make sure they are using them, make sure your managers are coaching them on them when they do deal reviews, account reviews, territory reviews, and so forth.
  7. Keep a disciplined review cadence. That which gets inspected gets done. Too many teams don’t have a disciplined review cadence. They may go through the motions of having weekly meetings, pipeline reviews, deal reviews, etc. But they are just going through the motions. They aren’t using these to communicate consistent priorities, to follow up, and to make progress. I can’t tell you how much improvement organizations achieve just by having front line managers establish a regular cadence of high quality reviews. To learn how to do this, look at Part 3, Reviews–Accelerate Your Coaching Impact (pages 97-140) in Sales Manager Survival Guide.
  8. As an initial focus, once you have a high quality pipeline, coach people on these three thing (focusing on one at a time): Increasing win rates, increasing average deal size, decrease sales cycle. Don’t do anything else, but improve the ability of each person in each of these areas. This is all about execution.
  9. Pay attention to your people’s weekly schedules and “time blocking.” Too much time is wasted by not having a disciplined approach to doing the job. People tend to react/respond rather than managing their time proactively. Make sure they block time for all aspects of their job, prospecting, managing current deals, preparing for customer calls/meetings, administrivia (keep in minimal), training/learning. Make sure they do what they are supposed to be doing in those time blocks.
  10. Make sure everyone knows what they are accountable for, how performance is evaluated, and why it’s important. Then hold them accountable for doing their jobs. This seems obvious, but sadly, people are confused. Sure they know their quotas, but that’s just an outcome measure. It doesn’t clearly communicate what their accountabilities are. And too often, we don’t hold them accountable for doing their jobs. As a result, performance of the overall organization suffers.

So far, these activities focus on the sales person and the front line sales manager. Senior sales management should look at the following:

  1. Attrition, voluntary or involuntary. Or the counter to that, what we we doing to hire and retain the best talent possible. The cost of turnover is represents millions of dollars for each person. This is all opportunity cost. Reducing attrition, will immediately drive performance improvement. I believe this is one of the top 3 issues sales management must confront in the coming 5 years. You may want to look at Are We Underperforming Our Potential?
  2. Look at “time available for selling.” As our businesses and organizations get more complex, unwittingly we start impacting time available for selling. We, typically, see time available for selling at 15-25%. Imagine increasing that by 50%. Without changing anything about how your people sell, you have simply given them more time to sell.

I’ll stop here. I’ve not talked about any new approaches or methodologies to selling. I’ve not talked about implementing new technologies or tools, or new training programs, or new structures, or anything new at all.

All I’ve focused on is improving our ability to execute what we already know we should be doing and we already know how to do. Yet, few organizations are doing these things.

There’s too big a temptation, and too many consultants, trainers, and sales automation companies that want to separate you from your money with the promise of “new, latest greatest.” Many of these are good and can contribute, but if we are building on a foundation that is already shaky, we will never achieve what we should from those new initiatives.

If you haven’t realized it, all I’m doing a focusing on a “Back to Basics” focus. Virtually every organization I look at has a tremendous execution gap. They know what they should be doing, they know how to do it. They just aren’t doing it.

Imagine how performance would improve just by focusing on these basics.

Afterword: Our Sales Execution Framework provides a tool for managers and sales people to get back to basics, identifying how to improve their focus and ability to execute. Just reach out if you want a free copy of this white paper.

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Aug 21 19

“The Right Commission Plan Will Fix Everything….”

by David Brock

It’s that time of year. Many senior sales execs are starting their planning for next fiscal year. Inevitably, the commission plan becomes part of the discussion.

“Dave, if only we get the right commission plan, we will fix all our performance problems! Can you help?”

Of course I can help, but I always ask, “What makes you think it’s the compensation plan that’s standing in the way of sales performance?”

The answers are pretty predictable, vague ideas about sales people being money driven, so all we have to do is show them the path to making more money, then they will sell more. I end up asking a lot more questions, they lead into weird conversations, here are some I’ve had in just the past few weeks:

Conversation 1:

Me: “Let me ask a few questions, how effective are they now? What’s they’re win rate, what’s the average deal size, what’s……”

Sales Exec: “Their win rates and average deal sizes are way too low and their deal sizes are too small, we need to improve both?”

Me: “How will fixing the commission plan improve those? Are they not winning as much business as possible because they are making too much money already? Alternatively, will giving them a better commission plan cause them to win more business?”

Conversation 2:

Me: “What percent of your people made/exceeded their plan and OTE this year?”

Sales Exec: “Only a small percentage of them made it this year, it’s been like that for several years.”

Me: “What percent of your people have left as a result of that?”

Sales Exec: “None, they’ve been here for a long time.”

Me: “So they aren’t making their OTE or plan, but they are happy with whatever they are earning. Am I missing something?”

Conversation 3:

Sales Exec: “I need to change what our sales people are doing and where they focus. We need to change the comp plan to do this?”

Me: “I can see that may be something that you may do, but have you considered all the other things you can do to refocus them and drive their performance. You might be able to do this more easily, without changing how you pay them or how much you pay them.”

Conversation 4:

Sales Exec: “We need our people to defend price and drive for price increases in renewals. We need to have a bonus element for that in our comp plan?”

Me: “Why don’t you just not allow them to propose anything but the prices you want? Why don’t you focus on developing their capabilities to defend whatever pricing you have? Also, pricing really isn’t in their control, you control it, they just have to sell it. So why are you paying for something they have no influence over?”

Sales Exec: “But how do I get them to sell that price?”

Me: “If that’s the only price they can propose, then they can’t sell at any other price. If they can’t defend the pricing, that’s a different issue, but that won’t be solved in your comp plan.”

Conversation 5: (I couldn’t believe this one)

Sales Exec: “We need our people to keep CRM and other reporting updated. I want to put a small bonus in place to encourage them to do this.”

Me: “Huuhhhhh?”

I could go on, but I’ll stop here. These are real stories of conversations over the past few weeks.

Let me be clear is important (I’m not sure commission is). It has to be competitive, it has to reinforce the behaviors and priorities you expect from the organization. But compensation is not the “fix” for the majority of sales performance problems. Changing how we pay or how much a sales person can earn will probably impact only the smallest part of your organization (and they are likely to be the high performers).

Unfortunately, too many sales executives believe sales people are coin operated and driven purely by comp/commission.

There are too many things that impact sales performance. There are too many other “levers” management can use to drive sales performance. The comp plan is, generally, the last lever you focus on, if you want to drive performance.

Some thoughts:

  1. In the first case, sales performance was suffering because the people didn’t know how to compete and win. Changing the comp plan won’t improve their ability to sell.
  2. In the second case, people weren’t unhappy with what they were earning. Sure they may have wanted to earn more (who doesn’t), but they weren’t unhappy with what they were earning. It may be surprising, but despite all the words they feel obligated to say, too many people get comfortable with a certain earning level, even though they know they can earn more. They settle for what they get, they are unwilling or unable to change to earn more. Changing the comp plan won’t change that. In fact, done wrong, we may end up paying them more, but they actually don’t do more or change their performance.
  3. The third case is interesting. People will sell what and where they are most successful. Sometimes, that may not be aligned with shifting company strategies and priorities. If they can continue to be successful doing what they have always done, they probably won’t change. Shifts in the comp plan are helpful, but may not drive the behaviors the company wants and needs. Let’s imagine you are introducing a new product. You want to motivate a person to sell it, so the commission rate for every dollar of revenue is 50% higher than the commission rate for the products you currently sell. The thinking is, “they will sell more of the new product because they earn more.” But, it’s probably much more difficult, since it’s new, sales people may not feel comfortable, or it may take much longer. The risk to success is much higher. Let’s use an example. Say the products I currently sell are $100K. The new products are also $100K. One might think, everyone would shift to the new product because they earn 50% more for the same revenue. But if it takes me twice as long to sell that product, I won’t do it. I could sell two of the first in the same amount of time, making much more commission. Using commission, alone, people will do the mental calculation, “where am I most likely to be successful, maximizing my earning potential in the same period of time?” To drive these shifts, you have to look at other levers that will shift the focus, getting people to execute what you need them to execute.
  4. The fourth example is one I get quite a bit. I recently talked to a VP of sales that wanted to pay a larger commission for people that negotiated price increases. I challenged the manager, “Is the price increase optional? Does the sales person get to choose what price they want to sell the product for?” Lots of times we try to incent sales people to do things that really aren’t in their control. Pricing is one of the biggest areas where I see people putting compensation incentives, yet sales people don’t or shouldn’t control pricing. If people are struggling with this, incentives make no sense, but equipping them to defend value and pricing is important.
  5. The last case is unbelievable, but I can’t tell you how many times I see managers trying to incent behaviors around CRM, forecasting, or other non sales related tasks. This is craziness. There are certain expectations we should have of people in the job. If CRM updates are an expectation then make sure they know. Don’t pay them an incentive to to what they are expected to do in the job.
  6. As I mentioned, there are lots of other levers managers should focus on, before looking at the comp plan.
    1. First, we have to equip our people to do the things we expect them to do. Training, systems, tools, programs, processes and coaching are all things we can put in place enabling them to do and perform as we expect. If they aren’t equipped to perform as we expect them to perform, how we pay them or how much we pay them will have no impact.
    2. We have performance plans and expectations we put in place. As part of their jobs, we have certain performance expectations. For example, we expect them to do certain things as part of their jobs, we have expectations about how they treat and engage their customers, we have expectations about balanced performance in executing the company strategies. We can manage all these things through setting very clear performance expectations and making sure they own the accountability for those expectations.

Unfortunately, too many managers believe the compensation system is the primary tool they have to drive behaviors. They put everything they want people to do as an element of the comp plan. Inevitably, it gets too complex, people can’t figure out how they will be paid, and we end up paying for things we should be using incentive comp for. Frankly, I think managers who feel they manage their sales people primarily through the comp plan are lazy and don’t understand their job or people.

Managers need to leverage everything they can to drive performance. The comp plan is just one.

Having gone through this discussion, there is one comp plan issue managers often bring up, that just causes me to walk away:

Manager: “We have to put ‘caps’ on total earnings, I can’t have my people making more than me.”

Me: (Thinking this, I can’t verbalize it) This person is clueless!

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Aug 20 19

Discovery, What’s Your Customer Learning?

by David Brock

We get discovery wrong in so many ways:

  1. We fail to do discovery. We jump straight to the pitch.
  2. We ask all the questions we are supposed to ask, without knowing what they mean and why we are asking them. Or we don’t pay attention to the answers. (This is a variant of 1, but we want to make the customer think we care when all we want to do is pitch.)
  3. We make it all about ourselves (so what’s different). We use discovery to learn what it takes to win the business. You know the routine: What are your needs, who’s involved in the decision, when will you make a decision, what’s your budget, what competitors are you considering, what does it take to win your business—-all about us and what we need to know.

We miss the most important thing in discovery—what’s the customer learning?

The discovery process is as much (or more) for the customer as it is for us. As we go through the discovery process, the customer is going through theirs. They are trying to understand — or should be trying to understand a whole number of things, the smallest part is about us and our products.

Among the things they are trying to discover are:

  • What are they trying to achieve and why is it important to them?
  • What are the consequences of doing nothing?
  • What’s the business goal/impact of what they are trying to do? How important is that in the context of things? Is it aligned with the top priorities of the organization?
  • Does everyone in the buying group have a common view, how to they align differing priorities, agendas, perspectives?
  • What sponsorship and support do they need from the rest of the organization and from management?
  • What are the risks?
  • What are the change management issues, implementation issues?
  • What does it mean to each of them, personally? (WIIFM)
  • What alternative approaches and solutions might they consider and why?
  • What do they need to learn about each of the alternatives, how will they do this?
  • How will they choose an approach or solution, aligning everyone involved in making the decision.
  • How will they develop the business case and sell their recommendation to senior management?
  • Once they have decided a course of action, what do they need to do to achieve the outcomes they need to achieve? What’s their project plan, how do they reduce risk and move ahead successfully.
  • What could cause them to fail in achieving their goals? How do they avoid that? What are the consequences of failure?

And, I’m certain there is more.

Notice, the smallest part of what they need to discover has anything to do with buying or what we sell. Yet we make discovery all about us!

What would happen if we shifted our perspectives, focusing on the customer’s discovery process? What if we helped them through their discovery process?

Perhaps by changing our focus on discovery, we would actually be more helpful to the customer, creating greater value with them.

Afterword: Thanks to Kevin Dorsey for inspiring this article through his great LinkedIn Discussion.

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Aug 19 19

Building Your Personal Brand — Again

by David Brock

There’s a lot of discussion about how important it is for sales people to “build their personal brands.” I’ve written about this topic several times before, even using the same title before. But it’s a topic, as much as I wish would go away, doesn’t.

But what does it mean to build our personal brands?

Many advocate building a massive social media presence–doing everything one can by increasing your presence in places like LinkedIn, Twitter, Instagram, Facebook, and other social channels.

Apparently, we are supposed to blog and tweet. We are supposed to be constantly involved in conversations or other things that increase our presence and visibility in these social channels.

I wonder what an individual sale’s person’s personal brand means to customers. For example, is a customer going to call asking to talk to Lori rather than Bill, because Lori has a higher SSI and stronger personal brand? Or are they going to want to speak to the person responsible for their account or who they have worked with before.

But when I think about sales people, I wonder, “Who is it important to build our brand with?” It’s our customers, prospects, colleagues. There are few sales people that have a need to develop a global presence/visibility. Most every sales person I know has some sort of defined “territory.” It may be a few accounts, it may be a geographic region, it may be customers/prospects within a certain industry or market.

But it doesn’t seem to me that our customers and colleagues don’t care so much about our brand, rather they care about our reputations. I think a reputation is very different from a brand, and far more valuable.

What does it mean to build our reputations within our territories?

Some thoughts:

  1. First and foremost, it’s about meeting commitments to our “constituents.” It’s letting our customers/prospects and colleagues know that we meet our commitments, through our day to day activities, it’s making sure they know they can count on us.
  2. We build our reputations by being helpful to those people in our territories. Whether it’s a colleague that needs ideas or help, a customer that is struggling with achieving their goals, or a prospect that might want to learn something different, that might want to change.
  3. We build our reputations by being knowledgeable, both about the companies/enterprises within our territory, and about the people who are our constituents. We have to be knowledgeable about them, about what they face, about their problems, about their dreams and goals.
  4. We build our reputations by caring about our constituents. By our empathy in understanding what they face, by being driven by their success.
  5. We must always remember that we represent our companies, not ourselves. Our “brand” is an extension of our “company’s” brand. It is the last mile connection to our customers. As an aside, if you find your “brand” in conflict with that your company represents, then you are in the wrong job.
  6. To build our reputations, we have to focus on the channels most impactful to them, using means where we best stand out to them. Of course some will be leveraging the traditional social channels, but it’s so easy to get lost in those. Other channels become important to leverage as well: the telephone, email, webinars/webcasts, direct mailing (it’s actually making a revival), local trade shows/conferences. If we have accounts, spending time on site, eating lunch, having coffee in the company cafeterias are among the most powerful ways to networks. We expand our networks there and through referrals.

Building our reputation, is important. Your managers care about this. But what they care about is not the number of followers you have in LinkedIn or other platforms, or the articles, comments, likes you have. They care about how visible you are in your territory, what your reputation is with your customers and prospects, and within your own company. They care about how you can build on those relationships and your reputation to expand within your accounts and territory. They care about how effectively you represent the company and its brand to your customers. Everything else is meaningless.

I’m not naive, I suspect a lot of personal brand building is about positioning oneself to find a new job or a better opportunity. Having hired 1000’s of people (directly or indirectly), one’s social reach or social scores aren’t too important to me as a hiring manager. I’m not sure customers look at your social scores, I’ve certainly never looked at a social score other than curiosity and wondering, why?

Your reputation is what’s most important to me. What do your customers/prospects, and colleagues think of you? What do you do to build your visibility within a territory–I could careless about your visibility in the world. The fact that you may have 10’s of thousands of connections in social channels is meaningless. I’m looking at the connections you have within your territory, or your ability to go into a new territory and build your relationships quickly.

Some of you might, fairly, say: “Dave, you are very active in social media, why are you telling us something different.” I do spend a fair amount of time on social channels, but understand my goals. I’m less focused on my individual brand than I am on building my company’s visibility. Since I’m the “face” of the company, much of my activity is based on “company brand building.” If I look at the people in our company, they are spending significantly less time on social channels, focusing more on personalized “one to one” outreach. They leverage the work I have done in building the company brand and leads generated through my corporate brand building are distributed to the team.

My two sense, a personal brand is relatively meaningless, your reputation is priceless.

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