No, I’ve not decided to convert this blog into a lesson on Anatomy, I actually want to talk about systems.  But I don’t mean systems–technology, I mean systems–the way thing work, how things interrelate, specifically in acquiring and retaining customers.

The way we acquire and retain customers is a complex inter-relationship of different activities and processes.  These processes occur within our organizations, for example through sales and marketing, with our customers–their buying processes, and in the surrounding community–our competition, opinion leaders, and others.  All these “subsystems” are connected together, they depend on each other, respond to each other.  Likewise, these systems don’t work well in isolation or without the other systems.  For example, a selling process is meaningless unless aligned with a customer engaged in a buying process.

The complexity of these systems and their relationships cause us to break them down, focusing on subsystems and components.  We start to specialize in these subsystems, for example, marketing may focus on demand and lead generation.  We in sales focus on our selling processes.  It’s a natural and probably the only way to manage the complexity and begin to design, develop, execute and manage our customer acquisition and retention processes.

Designers and engineers try to manage the complexity of the interrelationships between subsystems by trying to define clean interfaces–defined inputs and outputs.  The theory being as long as we keep the inputs and outputs the same, we can change anything within the subsystem and not have an impact on the overall system performance.  We try to do that as we define our marketing and selling processes — it’s perfectly reasonable and puts some manageability to what we do. 

Designers and engineers design subsystems, trying to keep clean interfaces, optimizing the overall system.  Here’s where some of the challenge comes in.  First, as much as we try, it’s very difficult to keep clean interfaces — even in designing “products.”  For example, when we develop mechanical assemblies, we design within certain tolerances.  As we try to fit those parts together, each subsystem that worked on its own–used the expected inputs and delivered the expected outputs, now the system as a whole doesn’t achieve it’s objective.  In the case of mechanical assemblies, this problem is called “tolerance stack-up.”  Each part meets its tolerance requirements, but when I try to fit them all together, they don’t fit.

We see the same thing in out processes for acquiring and retaining customers.  Marketing may define a perfect lead nurturing and qualification process, it may fit the “specs” perfectly; but when it is “assembled” with the sales lead/qualifiation process, it blows up and doesn’t work.  Something is lost in the interfaces, something is lost in the interrelationship of these processes.

The problem gets more complex — at least with sales and marketing.  Designers and engineers know that all the subsystems must come together and work as a whole.  They understand that missing major subsystems means the thing doesn’t work.  A car without a braking system doesn’t works very effectively as a car.

We seem to forget the need for “clean interfaces” and the view of the “whole,” looking at our customer acquisition and retention processes–sales and marketing.  CSO Insight’s 2010 Sales Performance Optimization Study provides some interesting clues about these issues.  We design our sales prospecting strategies around achieving certain goals and objectives, yet we cut marketing budgets for lead generation.  We base our quotas around certain sales performance levels, but we cut training budgets so we don’t develop the skills of sales people to perform at the expected levels.

Now let me add another level of complexity.  In sales and marketing, the interfaces are never clean.  Moreover, they are constantly changing.  Using my car analogy, it’s kind of like installing a new braking system while driving at top speed on a curvy mountain road–covered with ice.  It’s not a trivial problem to solve.  One of the ways we start managing this is simple, we start talking to each other.  The days of marketing and selling “silo’s” are over.  We have to have to coordinate our programs, processes, goals, investments.  We need to start collaborating.  We need “interlock” what we do with the other functions in our organization.  (As a side note, Andrew Rudin is looking at this same issue from a slightly different perspective, “Fools Gold:  Searching For The Most Important Step Will Ruin Your Sales Process.”  Take the time to read it, it reall compliments some of the points I am making.)

I’ll stop here — but there’s more, so far I’ve been focused on our marketing and selling subsystems.  Now imagine adding the customer buying and community subsystems into the mix.  I’ll talk about these in the next blog post.  I’ll leave you sitting at the edges of your seats for now.

There are a couple of things that I’d like to conclude with:

• We do have to break down these processes, developing high performance subsystems.  There is so much that can be gained by optimizing these subsystems and processes.  All the work that is being done to improve marketing effectiveness and processes is critical to our organizations.  Likewise, all the work that we do in improving sales processes, performance and effectiveness is critical.
• While we are “solving” those problems, we must be cognizant that what we do with these subsystems may not work when you look at the system as a whole.  Ultimately, we have to look at how all the pieces – parts fit together.  Does the “whole” work together to achieve the results we want?  Are we making changes to one subsystem that adversely impact another subsystem? 
• As sales and marketing professionals, we need to be thinking in “systems” terms.  We need to think how subsystems fit into the overall system and how we interlock on programs, processes, goals and objectives.

What do you think?

Stay tuned, the real challenge is still ahead!

I hear the phrase, “Pay For Performance,” all the time.  I think it’s a reasonable concept, that is, the better you perform, the better you get paid.  Naturally, we want to pay our top performers the best, who can argue with that?

Somehow, it seems as though Pay For Performance is getting distorted.  If we want the sales person to do something, other than get orders, we put a bonus on it or add it to the commission plan.  We want the CRM system updated, put a bonus on it.  We want forecast accuracy, let’s pay the sales people for accurate forecasts.  We want the sales person to participate in a task force, let’s put an incentive on it.  Somehow, things seem to be getting confused.  Too often, our solution to motivating sales people to do we need them to do is to put some form of compensation on it–a bonus, a commission element, an incentive.

I get into a conversation about this issue at least once a week.  A sales manager or business executive calls me to ask, “How do I get my sales people to do what I want?  What if I added something to their compensation plan?”  Throw money at the problem, it will motivate the right behavior!

Somehow that seems to be a temporary and, possibly, an expensive fix.

In a comment on this blog, my friend Jim Keenan, reminded me that much of this is all about leadership.  Jim’s right, somehow, the issues, seem to be rooted in leadership.  Leadership–getting people aligned to achieve the organizations goals and objectives, providing them the skills and tools to achieve them, motivating and inspiring them, coaching them–helping them improve their performance.  Leadership is all tough stuff.  It’s demanding, it takes time and patience.  It’s dirty work, a leader actually has to get engaged with their people, they have to set expectations, they have to manage performance–both good and bad.

Getting a sales person to keep the CRM system updated is not just something managers can dictate, we’ve seen the failure of these strategies.  Leaders have to show sales people how the tool helps them–the sales people–become more productive and effective.  They have to help the sales person understand the impact of this information on the rest of the company.  Producing accurate forecasts is important for the company–other functions set their plans and schedules around the forecast, they allocate resources based on the forecast.  Accurate sales forecasts are a cornerstone to overall company performance–leaders need to make certain their people understand this importance of this to the organization.

Leadership requires the leader to clearly identify roles, responsibilities, expectations.  It requires the leader to define expected behaviors, and to model them in their own performance.  It requires the leader to clearly communicate these to the sales person, making sure they understand and own these responsibilities and expectations.  Leadership requires leaders to manage performance.  Thise means they need to invest time in their people, coaching, developing, and helping them achieve the highest levels of performance.

To borrow a term from Jill Konrath, in the “crazy busy world” of sales managers, it’s often tempting to take the easy way out, to substitute pay, an incentive, a bonus to get what we want.   Rather than doing the tough and time consuming work of leaders, we throw money at the problem.

Don’t get me wrong, I think bonuses and incentives are very powerful in motivating certain actions and behaviors.  I think they are best applied over a short period of time for very specific and short term goals.  For example, in a new product introductions, an accelerator or incentive around the sale of that product can give a quick start.  Accelerating penetration of new markets by leveraging a bonus for sales into those markets can be very powerful. 

However, in my experience, bonuses, commissions and incentives are not effective in driving sustained behavioral or performance changes.  Bonuses or commissions to get the sales people to do things that would be considered “conditions of employment,” set the wrong tone for the organization – both the sales organization and the overall organization.

None of these are substitutes for solid leadership!

I’m participating in a discussion with a group of people I deeply respect.  It is about managing sales performance, particularly about getting sales people to do things they don’t like to do.  You know what those are:  Spending time doing reports for management, updating the CRM system, attending one more training class they think they don’t need, getting those expense reports in on time, participating on an internal task force……..   The list goes on.  The argument of sales people is always the same, “You’re keeping me away from the customer, don’t you want me selling?”  “This will keep me making my number.”

In the discussion, a suggestion has been made, “we should base some of their compensation on having them do this [activity].  What if we based X% of their bonus on doing these activities?”

I think this is a fundamental problem.  Sales people are motivated by compensation–aren’t all of us.  However, tying everything to the compensation plan is wrong.  It dilutes the plan–pretty soon the plan gets so confusing with the number of bonus elements, that it no longer becomes a motivator.  What are we saying our people should do?  Where should they focus?  Do we want them to sell?  Do we want them to do other things?  Which is more important?

This is a common problem, I think too often, managers try to leverage the compensation plan to drive the behaviors we want.  It’s kind of like a parent, giving a child a reward for doing what they have been asked.  Over the long term, it drives dysfunctional behaviors  –”You want me to do this, you have to pay me for it.”

We need to remember, there are several dimensions to performance management.  One is the compensation plan.  It should focus on the 2-3 major behavioral and performance expectations you want the sales person to focus on—in the case of sales people, that’s probably something directly related to sales.  We want to keep this clear, simple, unambiguous.

There is another side to performance management, that’s the performance plan or review process.  Too many managers don’t use this–frankly they do a bad job of managing this process and reviewing performance.  Just a point of clarification, many think a performance plan is something you put in place for people who are on notice and must improve their performance or be terminated. 

The performance plan is (or should be) something different.   It should set the basic standards of performance we have for each person in the organization.  It should establish each person’s goals and objectives for the year–not only their quota, but other expectations we have of the person and their expected contribution to the organization.  It provides a framework for the behavioral standards of each person.  The performance plan is where managers need to address expectations of the job that may not, or should not, be covered in the compensation plan.  If we expect CRM systems to be kept up to date, we don’t want to compensate them on doing this, we want to set it as a performance objective in their performance plan.  If we want them to do certain developmental activities, these should be covered in the performance plan.

I think a performance plan is critical for everyone.  It sets overall goals and objectives for each person in the organization, it outlines areas of personal development, it establishes “MBO’s.”   In many organizations, the performance plan and subsequent review is the basis for establishing raises, promotions and other things.  Every organization should have a performance planning process, every person should have a performance plan.  Managers should periodically review performance against the plan as part of their normal coaching process.  The goal is to make sure people achieve their performance objectives, that they are continuing to develop and perform.

It’s important for the sales person and the manager to develop the performance plan jointly–it provides the framework for them to work together, making sure expectations are being met, for aligning priorities and objectives, for growth and development.  It provides a road map for both the sales person and manager to inspect throughout the year.  It provides the basis for a coaching plan for managers.

In managing performance, we need to leverage both the compensation plan and the performance plan.  Without both, managers aren’t leveraging the tools necessary to develop their people and drive the highest levels of performance.

A  week ago, I posted, “I’ve Succumbed–I’m Talking About Sales 2.0.”  Last week, I had the opportunity to participate in a webinar hosted by Tom Scontras of Glance Networks on this topic.

We had a great conversation!  In case you missed it, you can still listen to it at Glance. If you missed it, take some time to listen sometime this weekend.  It’s only about 45 minutes long.  I’d love to get your comments and feedback.

Your Help!

If you are a regular reader, you know I have no shortage of opinions about sales, business, and leadership.  However, I want to pause and ask for your input and ideas.  I’d really appreciate it if you would take a moment to comment suggesting topics that I should write about.

In the past year, I’ve written extensively about sales process, value propositions, sales management/leadership, metrics, and customer focus.  I have more that I want to add to those topics.  I also plan to write quite a bit more on coaching and developing sales professionals, channels, collaboration and partnering in sales, funnel and pipeline management, sales on-boarding, and sales strategy development.

What would you like me to be writing about?  Thanks for taking the time to give me your ideas.  I so appreciate your comments and support, either on the blog, through your emails, or at the other sites these articles appear.  Thanks for your continues support, encouragement, and ideas!

I few days ago, I started a discussion with “What Are The 3 Characteristics That Set Great Sales People Apart?”  followed by “How Important Are ‘Techniques’ To Sales?”  I hadn’t meant to turn this into a series (or saga), but the discussion has been very interesting.  For me, it has been a bit of a journey of discovery.  I’ve always had an aversion to what I call “techniques”  — those 68 closing techniques, the persuasion technique and so forth. 

At the same time, there are techniques or tools that I have found very helpful, questioning approaches, storytelling as a means of illustrating complex points, using humor to offset my natural clumsiness, and so forth.   Somehow, these techniques have become “a part of me.”  They are natural, I never have to think about them, they seem to flow with what I am trying to achieve in engaging the customer.

Perhaps my aversion to what I view as “the techniques” is that I’ve never been very good at using most of them.  I get too caught up in listening to the customer and having a conversation to remember that I should be “mirroring” them or that I should be using certain neuro linguistic or psychological wording  (Make sure you say their name in every sentence …. or whatever that one is).  Somehow I’m too busy working with the customer defining the next steps and moving forward to remember to ask if they like German Shepherds or Saint Bernards (I think the puppy dog close goes something like that).

I wonder if being yourself counts as a technique?  Somehow, I have found my customers and prospects seem to like having a conversation, they tend to appreciate directness.  I have managed to stop saying “that’s the most stupid thing I’ve ever heard, “  but I chalk that up to politeness.  I tend to handle that with, “Have you ever considered looking at it differently?”  Maybe that’s a technique.

I think of the experiences I’ve had with people selling me something.  I know they are trying to sell me something, I don’t resent it, after all I participating in the discussion.  But the sales calls I appreciate the most are those great directed and focuses conversations.  No pretense, no techniques (I know most of them well enough that I watch for them), just a discussion focused on what I am trying to achieve and how they can help me.

I sit in meetings in large corporations–I see selling going on in every meeting.  People trying to persuade others about an idea or an approach.  People discussing different things, having honest disagreements or differences but working to resolve them.  People aligned to achieving common goals.

Sometimes I think we would be much more effective as sales professionals if we started simplifying things, if we had the courage to be ourselves, if we focused on natural conversations with our customers.  Be sure, these aren’t random or wandering conversations.  Remember, one of the characteristics that I think distinguishes top sales performers is “goal directed curiosity and a problem solving orientation.”  I don’t have a lot of patience (or the requisite social graces) for random conversations.  I’m interested in having great conversations with people who have problems or goals that I can do something about.  I’m interested in learning what they want to achieve and demonstrating how I can help them achieve their goals better than anyone else.  I tend to be very focused and direct about this and they know it.  Somehow, virtually everyone seems to appreciate it—they like getting to the issues without the typical “dancing” we often do.

Let me crawl further out on the limb I’m on.

Sometimes I think we use ” the techniques” for surrogates for being ourselves and being truly engaged in having a conversations with our customers.  When we aren’t curious about the customer and what they are trying to achieve, when we aren’t trying to solve problems, when we really don’t care about them other than convincing them to buy our products, it’s hard to be ourselvesa and be engaged.  Perhaps this is when we use techniques.  Perhaps this is a sweeping generalization and very inaccurate, but it seems those people (I hesitate to call them sales professionals) who use “the-techniques” in the most manipulative ways are those who are more focused on themselves and selling their product and less focused on me and what I need.

Techniques can be important and useful, but I think they have greatest impact when they allow the sales person to be her/himself and enable them to connect more naturally in real conversatons with the customer.

Am I crazy?

The other day, I wrote a piece, What Are The 3 Characteristics That Set Great Sales People Apart?  It stimulated quite a reaction as people started suggesting their ideas.  I was surprised by the focus of a number of people on the “right techniques.”  These comments started to make me wonder about my own belief system and biases.

I guess I have a very negative reaction to the concept of sales techniques.  When I think of these techniques, I think of sales tricks and manipulation.  I did a little research:

• Persuasion techniques like, “the art of repetition,” “the foot in the door,” “the bait and switch,” “low-ball,”that’s not all,” and the lists of techniques for persuading people can go on.
• Closing techniques like, “the assumptive close,” “the puppy dog close,” “fire sales close,” “thermometer close”, “the ultimatum close.”  I actually found a site listing 68 closing techniques!
• Objection handling like, “the boomerang,” “pushback,” “deflection.”

I could go on with list after list of techniques I found in researching “sales techniques.”  I went to the dictionary to look up the definition:

tech-nique  [tek-neek]  1.  The manner and ability with which an artist, writer, dancer, athlete, or the like employs the technical skills of a particular art or field of endeavor.  2.  The body of specialized procedures and methods used in any specific field, esp. in the area of applied science.  3.  Method of performance ; way of accomplishing.  4.  Technical skill; ability to apply procedures or methods so as to effect a desired result.

After reading the definition, I started to think, much of the “advice” I and others I respect offer are “techniques” — or methods — or processes.  After all, I’ve written a lot about effective questioning, listening, qualification, developing and communicating value.  I present tools (techniques) people can use to make them more effective in connecting with and engaging customers.  Likewise, there are a large number of other consultants and bloggers that offer great approaches that create real value for customers, sales professionals and others.

So why do I have such a negative reaction to “sales techniques?”  I think I my negative reaction to “techniques” is not the techniques themselves (though I saw very little redeeming in the list of 68 closing techniques), but the intent or use of the technique.

So often, underlying the use of technique is an intent to manipulate, trick, or deceive.  Anytime the person(s) on the receiving side of a sales person using “techniques” in these ways, everything sours.  What may have been good suddenly turns distasteful. 

On the other hand, techniques can be important to gaining insight and understanding about the customer.  They can help you engage the customer in a conversation about their problems, dreams and goals.  Techniques can be important in communicating complex ideas.  They can help people understand, they can serve to simplify.  Techniques can be important in helping facilitate the customer’s buying process, in helping present value, in helping manage change.  They provide structure for us to work with customers, improving the way we engage them.

I suppose any tool, tip, process, methodology, and, yes, technique can be abused.  Their use can be manipulative and misleading.  Yet we do need techniques.

I’ll have to mull this over a little while, I’m still uncomfortable.  I’m trying to talk myself into believing that techniques are good.  However, I just can’t help it, whenever I hear the term “sales technique,” I immediately think of scenes from movies like Boiler-room.  I think of sleazy sales people doing the “bait and switch,”  followed by the “boomerang” objection handling technique, capped off by the “puppy dog close.”  They trigger the worst examples of sales I can imagine.

Am I wrong on these sales techniques? Can any of you offer advice that can make me more comfortable?

Last Friday, I had the privilege of being interviewed by an executive on critical issues in buying and selling.  It was a great conversation, but one of his questions stuck in my mind.  He asked me, “What are the 3 characteristics that set great sales people apart from others?”

I responded, “Oh, there are so many……”  He interupted, saying, “Dave, you only get to choose the top 3, no more.”

This caused me to pause, any of us can come up with lists of characteristics of great sales people, sometimes it’s half a dozen characteristics, often a dozen, sometimes the lists go on and on…..  Brian’s question was really challenging, he only allowed me 3 characteristics.  I thought to myself, how can I combine several into one, maybe I can create a giant run-on sentence with all sorts of adjectives describing great sales people.

After a few moments of reflecting, I provided three carefully worded phrases:

1. Goal directed curiosity and a problem solving orientation.
2. A genuine interest in helping people achieve their goals and dreams.
3. An ability to embrace changes and to get the people they work with to embrace and own change.

Let me explain myself.

1.Goal directed curiosity and a problem solving orientation.  Every great sales professional I’ve met is incessantly curious.  They want to learn as much about their products and solutions as they can, they want to master them, so they can present them to their customers.  They are curious about their customers–both their customers’ businesses and their customers as individuals.  they study their businesses, their customers’ customers, their customers’ markets and competition.  Their curiosity is not random, it’s very focused.  The greatest sales people know how they can help their customers.  Their curiosity is purposeful, it’s focused on trying to find problems and opportunities their customers have–that the sales person can do something about.  Great sales people don’t go on random fishing expeditions, they don’t cold call–every call is carefully researched and planned,  they don’t waste their customers’ or their own time.  They don’t fool themselves with wishful thinking, but focus pragmatically–does the customer have a problem I can solve?  Can I present and opportunity that would accelerate the ability of my customer to achieve their goals?   In the end, they are about results–those they help the customer produce and those they produce for their organizations.  The greatest sales people are also curious about their profession.  They are constantly reading, attending workshops and seminars, talking to others they respect.  They know to stay at the top of the profession–to be a top performer, that the bar is constantly being raised.

2.  A genuine interest in helping people achieve their goals and dreams.  Top performers care about their own performance, but they know they only way they achieve their goals is through helping the customer achieve their own–whether it is the overall business goals, their function’s departments goals, or their own personal goals.  Top performers revel in seeing their customer being successful in implementing the solutions they have sold them.  Top sales people never “hit and run,” if things aren’t working, they don’t ignore the customer, they go back in and do everything they can to correct things.  Sometimes they can’t correct things, but the customer knows it isn’t for the lack of trying.  Top sales people care!

3.  An ability to embrace changes and to get the people they work with to embrace and own change.  The greatest sales people in the world know that sales is fundamentally about change.  We ask customers to change suppliers/vendors, to select a different product than they have been using.  We ask people to change their processes, the way they do business–to explore new ways of growing being productive.  We ask customers to embrace a new vision for their organizations, to consider new ways to improve or grow.  The best also realize they are asking their own organizations and the people in their organizations to change–how we hold and value customers, how to create the best experiences, how to retain and grow our customers. new products and solutions we might provide to enhance our relationships and grow our business.   Top sales people realize that people may fear or not understand change.  They realize their role is to help people understand it, to own it, to take it on as their own mission and goal.  The best in sales realized they are change managers and that they must create the same vision and excitement for change, with their customers and within their own companies, that they envision.

There’s a lot more characteristics for good sales performance.  But I think these three set the best sales people in the world apart from everyone else.  Do you agree?  If you had only 3 characteristics to choose, which would you select?

I guess as a blogger, twitter user, and sometime pundit, it’s natural to get into a lot of conversations about the impact of Social Media, and the Internet for that matter, on buying and selling.  In the past several days, I’ve had a number of conversations with people all over the world.  “How do we leverage social media to sell?”  “What should we be doing with social media?”  “What is social selling?”I have to admit that I feel a little awkward in these discussions, I don’t by any means consider myself a social media expert—it seems, I’ve just learned how to spell www….

Social media, social selling, and the Internet are very powerful tools for buyers and sellers.  As with any tool, there are good and bad aspects.  As sellers, we can reach out to a far wider customer base, we can get our “message” to people that were difficult to find and reach in ways that are much faster and cheaper than before.  As buyers, we can be much better informed.  We can do a tremendous amount of research on the Internet, in discussion forums, through blogs, through a tweet here or there.  I recently bought my wife a new car.  I researched models on the Internet, researched pricing, researched dealers and was able to walk into a dealer armed with data to get the right car at the right deal.  We do this in the products we buy every day, our companies do that for the solutions they are purchasing, and suppliers they are considering.

I can’t imagine what we would do without all the information, data, and insight we can quickly get from the internet, social media, and through many of the tools that enable us go find information quickly and easily.  However, it creates a great challenge for buyers and sellers.

The explosion of garbage and bad information available seems to grow at a rate faster than anything else.  Sometimes we (as sellers and marketers) do it ourselves–the victims of our enthusiasm in communicating through this medium call that SPAM.  Sometimes the volume of messages, communications, and information is so much, it’s difficult to sort through the clutter and noise.  The reaction is to turn it off.

Buyers use social media to become informed—not necessarily well informed—just informed, or often misinformed.  Social media can create an illusion of validity.  After all, if it’s in a blog, it must be accurate!  If there’s a discussion about a certain product, company, or topic, it must be true–the words are right there on my screen, it’s the next best thing to being in the newspaper.  Someone has anointed themselves with the title “Expert,” or “Guru,” and they immediately become experts.  We must hang on every word they write.  The problem is so much of it is just wrong!  It’s bad data, harmful advice, or something taken way out of context or misapplied.

All of this makes us informed–not necesssarily well informed.

It brings new meaning to the concept, “Buyer Beware.”  Buyers have to sort through mountains of garbage, research and understand, validate to get “good insight.”  Just because it’s on the Internet, doesn’t mean it’s gospel.  Just because it’s written in a blog doesn’t mean it’s true (present company excepted

But sometimes buyers are naive and accept things at face value.  Sometimes they don’t have the time to dig and research–afterall, isn’t social media and social selling supposed to make things easier and faster.  Sometimes buyers to their homework and reach incorrect conclusions.

All this creates a challenge for sellers, “Sellers Be Aware.”  I get sales professionals and executives telling me they don’t have time for social media.  You need to make time.  You need to be Aware!  It’s critical to understand what customers are saying—about their issues, trends and business.  It’s critical to understand what customers and others are saying about you and your competition.  Some of it is accurate, lots of it is dead wrong.  If you aren’t aware of what is happening on the Internet, of how your products, services and companies are being reviewed, you will walk into your customers disadvantaged.  They think they are informed, but they may be misinformed.  As sellers we need to know that and address that–with customers and through social media. 

Social media, social selling, and the internet are powerful, we can’t function without them.  But it creates challenges for buyers and sellers.  Buyer Beware, Seller Be Aware!

A few weeks, ago, my post on The Most Used – Useless Metric In Sales created an avalanche of comments and emails.  Many of you commented on a variety of “useless metrics” you have experienced.  One of the most popular categories of “useless metrics” was Activity metrics.  Activity metrics are very popular, they’re easy to establish and measure.  There are all sorts of activity metrics:  Number of outgoing/incoming phone calls handled per day/week, number of customer meetings per day/week, number of proposals, number of sales opportunities in the funnel — the list is endless.

The problem with activity metrics is that all they measure is activity (dughhhh), they don’t measure the appropriateness, impact, or outcomes of the activity.   Activity metrics tend to measure what you’ve done, not whether you have moved the opportunity forward in the sales process.  In establishing activity metrics, it’s important to understand the behaviors they drive and to assess whether they are motivating the right outcomes.   It’s important to define the metric in terms of the results you are trying to achieve.

As I mentioned, Activity Metrics show up in various forms.  They can be goals that management sets on number of calls, meetings, proposals.  Activity also shows up in sales processes, one of my favorites is “Meet with decision-makers.”  For what purpose?  OK, I met them, I said “Hi,” they know who I am and what I am selling.  Did I bother to ask them their needs and priorities?  Did I determine their role in the decision making process?  Did I ask them about their attitudes toward us and the competition?  Do I understand why they are involved and what a personal win might be?

Another example of activity oriented metrics run amuck, requires me to reveal a deep dark secret from my formative years as a sales person.  Early in my sales career, my manager in the hopes of motivating the team to spend more time with customers, set the following metric:  There was a $10/day fine, if you were in the office between 8:30-4:30, unless you were entering an order, attending a meeting, or researching a sales opportunity.  You can guess what happened, we were already spending as much time with customers as we could–the team was good, we were really driven to make our numbers, we knew that we had to meet with the customers, but they only had the time to see us a certain amount of time, try as we might, we couldn’t fill all that time with cusotmer meetings.  Well, we solved the problem, the reality was, at least one day a week, we would have to pay $10 to our manager.  My teammates and I thought about it, we figured, why not spend that money in a way that we wanted to—that summer, every Friday, we ended up going to the movies–I’ve never seen so many movies.

Our manager’s intent was right, but the way the measure was implemented motivated unanticipated behavior.  When she understoond what we were doing, she quickly  stopped the metric, we started coming back into the office and doing things that would get us more meetings.

Often in doing reviews with sales people who have strong activity measures, I see much of the same thing.  People say similar things, “It’s easy to make my ‘call number,’  I can dial the phone so many times, I can talk to someone, they are often people that I know will never have an intention of buying, but I talk to them because I make my number.”  It’s hard to criticize them, they are doing exactly what their managers want them to do.

The problem is the way the metric is defined.  I actually like activity metrics.  Activity metrics, properly structured are great forward looking indicators.  Good activity metrics can give you great insight into your likelihood of meeting your overall business goals.  As an example, I measure myself on a couple of key activity metrics, but they are defined in a way that focuses me on achieving my objectives, not just accomplishing the activity.  For instance, I have to have a certain number of calls or meetings each week.  Those calls have to be with a certain type of person and produce very specific outcomes.  It’s a key metric for me.  I know if I achieve my goal, that I am highly likely to achieve my overall quota.  What makes this different though, is the activity is very well defined in terms of its purpose and the outcome.  Without this, it could be useless.

There’s another problem with activity metrics, it’s the way managers use them.  Too often activity metrics are used as a weapon (Metrics — The Secret Weapons Of Sales Managers) rather than as a diagnostic.  Since Activity metrics give you a forward looking view of the business, when an individual or team is not achieving the metric, it’s important to look at the underlying reasons.  Have there been fundamental shifts in the business or markets that are causing people to not achieve the activity goals?  Are there specific skills problems that might indicate a need for coaching or training?  Does the person understand the selling process, are they executing it well?  Activity metrics are great indicators and warning signs, they are not ends in themselves.

Too often, we also see too many activity metrics.  A sales person has to make a certain number of phone calls, have a certain number of meetings, submit a certain number of proposals, have a certain number of opportunities.  Too many activity metrics confuse the sales person on what the real priorities are, the key goals.  I believe there should be, at most, 2 activity measures.  The trick is determining the 2 that have highest impact on what you want to achieve.  It requires real study to understand what really drives your business.

Activity metrics can be very powerful.  Great sales professionals establish personal activity metrics to guide themselves, improving their impact and productivity.  Great leaders put in place appropriate activty metrics and use them as diagnostics.  When you are putting in place these types of metrics make sure you:

1. Clearly define what you are trying to achieve with the activity–what outcomes, what results?  Make sure the activity focuses on achieving something, not just getting a “tick mark.”
2. Re-assess activities you have in your sales process.  Make sure they are clearly defined.  Again focus on achieving outcomes, not going through the motions.
3. “Game” the activities.  Look at how the sales people might behave in achieving the activity goals.  You don’t want them spending afternoon’s in the movies.  If in gaming them you are getting the behaviors and outcomes you want, then you probably have a good metric.
4. Realize the activity metrics are powerful indicators and warnings–they are great diagnostics.  Use them for this, look at the underlying reasons for not achieving a metric.
5. Keep them to a minimum, use no more than 2.  Make sure you have identified the 2 key activities that really drive your business.

Make your activity metrics useful and you will really drive business growth!

I meet with executives everyday.  They have great knowledge about their businesses–they can cite everything about their strategies, priorities, goals, key metrics.  They study their competitors incessantly, understanding their strategies and positioning.  They study their markets, and the best study their customers.  They have deep insight about everything in their industry.

But when I talk to them, a critical issue they always bring up is, “How do we innovate?”  “How do we start thinking out of the box?”

One of the problems with innovating and thinking out of the box is that we are prisoners of our own experience.  Most of us have long experiences in our industry.  We’ve been working with our company a long time, we may have worked with one of our competitors, we may have worked with one of our customers.  We go to “our trade shows,”  we read “our trade magazines,”  we have deep knowledge about our companies, industries and markets. 

That’s part of what makes us effective as leaders and business professionals, but at the same time, it’s exactly what limits us.  Our ideas and innovations are limited by this collection of past experiences.  We “know” what works and what doesn’t work, never reconsidering ideas that were “bad” in the past.  We look at what our competitors are doing, copying them, perhaps tweaking the idea to one up them.  We turn the crank on the tried and true programs of the past, sharpening them, reshaping them—sometimes it’s just like putting lipstick on a pig.

So how do we escape this?  It’s actually pretty easy (maybe I’m giving away the secret decoder ring of consultants), we need to look outside our own industries.  We need to look in very different industries to see how they approach some of the issues that we face.  For example, a few years ago, we put the executives of one of the leading high technology (B2B) companies together with the execs of an extreme sports company.  It was an interesting picture, on one side of the conference room, a row of execs in neatly pressed khaki’s and blue shirts, on the other side, guys in board shorts, torn tee shirts, lots of body ink and interesting piercings.  Each eyed the other warily, some started looking at me thinking, “Dave, what have you gotten us into?  Who are these freaks?” 

We tee’d off the session with a few key questions about their business models, key challenges, problems, and so forth.  Gradually, they found they had a lot in common.  All were struggling to grow their businesses.  All were struggling to get new and innovative ideas.  As they started to talk over different approaches, one of the exec’s said to his peers in his company, “They are doing something really interesting and different from what everyone does in our industry, if we co-opted their ideas, if we twisted them a little here and there, they would be really new and novel for our company!”

Soon everyone was discovering something “new.”  It wasn’t “new” to the presenter, but to the others it was new and innovative–when adapted to their industry.  Each side started seeing ideas presented from a source they never would have thought about before.

Innovation doesn’t have to be brand new and revolutionary. innovation can be artful adaptations of old ideas from very different industries and sources.  Try looking outside your industry–not just to adjacent industries, but to widely separated groups.  Try looking across generations–forget Gen Y–they are so old–look at kids.  Try looking across national borders and cultures.  Look at what other people do, how they handle similar issues, look at what you can learn and adapt from them.  Share what you are doing, let them learn and adapt from you.

Innovation is simple, you just have to know where to look, how to listen, how to artfully co-opt and adapt.  Tom Peters coined the phrase, Management By Wandering Around, MBWA.  Try IBWA–Innovation By Wandering Afar.