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May 22 17

“Do Sales People Make A Difference?”

by David Brock

Steve Burton posed an interesting question on LinkedIn:

When a large ticket item 500k + is purchased in a B2B transaction how much of it so you think is down to the salesperson’s skill ? If we analyzed some these deals would the majority just be down to the buyer putting the 3 most well known options on the table and picking the most sensibly priced deal with the simplest on boarding ?

My knee jerk reaction was, “Well of course!”  But as I thought about it, I revised my position:

Top performers always make a difference, but not only at the tail end of a sales cycle.  Their biggest difference is much earlier on, perhaps in inciting the customer to change, or helping them through their buying process.  Top performers teach and lead their customers.  They are a valued part of the customer buying process.

Part of what makes top performers the best is they find and define opportunities far before anyone else does.  As a result, they have huge influence in shaping what the customer seeks to do.  Since they are doing this, price is seldom the determining factor when the customer makes a decision.  But let me come back to this later.

Unfortunately, this represents a minority of sales practice.  Too many sales people are basically walking/talking data sheets.  They add little value to the customer, other than answering questions about the products that customers can’t find on the web.  They may be useful in arranging demos or other things, but usually are in react mode with customers driving them (and their competitors).

Too many organizations seem to build their strategies around waiting until the customer has defined their needs, requirements, and priorities–then having the sales people respond to them, positioning their products as positively as possible.

Increasingly, these activities can be replaced with well designed websites, configurators, and shopping carts, making the sales person less important.

In cases where they can’t be automated, too often the activities of the sales person as “information concierge” are undifferentiated.  That is, they are doing the same thing their competition is doing.  Again, in these cases sales people don’t make a difference.  If all else is equal, the customer will buy on price.

Perhaps instead of asking, “do sales people make a difference,” we should be asking, “how can sales people make a difference,” then orienting everything we do to responding to that issue.

Customers struggle–they need help, though sometimes they may not recognize they need help.  Great sales people–those that make a difference are those focused on helping their customers improve, achieve their goals, or reach their dreams.

Sales people make a difference by:

  1. Helping educate customers about how they might better achieve their goals and improve.
  2. Creating a compelling need to change by helping the customer understand the consequences of doing nothing.
  3. Helping customer organize themselves to buy, aligning the various agendas, priorities and goals of the buying group.
  4. Helping the customer ask the right questions, helping them understand what they may not know, but need to know in making the decision.
  5. Helping the customer understand critical risks and issues important to their success in selecting and implementing the decision.
  6. Helping the customer understand critical issues in implementing the solution and achieving their goals.
  7. Helping the customer build the business case and justification for the solution.
  8. Helping the customer learn how to sell what they want to their management.
  9. Assuring the customer achieves the goals/values they expected.
  10. Finding new opportunities with the customer to continue to improve.

Sales people can make a difference.  Customers want sales people who do make a difference.

It’s our decision about whether we choose to make a difference and create value for the customer.

 

 

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May 15 17

Sales Quotas, A Thing Of The Past?

by David Brock

Recently read a provocative post declaring “Sales Quotas A Thing Of The Past!”  For the most part, the article was a tutorial on pipeline metrics and a diatribe against much of the quota setting process.

I don’t disagree with a large part of the article.  Much of the way sales quotas and goals are set is wrong.  Too often, we see manager setting goals that are arbitrary or not based on sound analysis.

This isn’t just the quota, but it’s a majority of metrics that sales people are subjected to, including meaningless call metrics, activity metrics, pipeline coverage metrics–all that bear little or no relationship to the goals that actually need to be achieved.

Quota’s are often set in the same haphazard manner, “We did this last year, so we need to do much more this year……”  “We need to manage the sales expense, if we set the quotas in this way, it will minimize commission dollars….”  “We need to achieve this much growth in the coming year.”

There’s a lot wrong with the way quotas and goals are set.

But is the answer throwing these out?  Or is it fixing the process by which we establish goals?

Throwing these out certainly gets the votes of approval for those that fail to make their quotas, for those who don’t want to be accountable, and for those who just don’t understand business.  Suggesting metrics around revenue generation be abandoned, generates a lot of hype, but is really meaningless and misleading from a business management point of view.

Also, much of the argument looks at sales in isolation, but not at sales role in the enterprise and helping the enterprise achieve its goals.

Unfortunately, sorting through this means getting to the basics of business—all business profit or not for profit.

A business exists to achieve goals.  It does this through providing innovative products/services that it’s customers want to buy.  It attracts investment from companies that believe the business can achieve its goals, grow, and provide a reasonable return on the investment (whether in the public or private markets).  Top executives are held accountable for achieving goals, generally measured in terms of growth, profitability, revenue, and sometimes other factors, even social contribution.

In developing the business plan, the goals are parsed out to the different parts of the organization based on their responsibilities.  For example, product development is accountable for developing products according to a certain timeframe, to achieve certain goals, often measured in revenue generation, market share, growth, and so forth.  Likewise, manufacturing has certain goal, it has to build quality products, meeting cost, delivery, and a number of other criteria.  Go through every part of the organization, and you will find each function and every individual has goals that, in some way, tie to the overall corporate goals (both tactical and strategic.)

Sales is no different.  Since sales is accountable for executing the corporate strategy in the face of customers, sales has its own set of goals, including revenue, growth, share, mix, customer sat, and any number of other things.

Clearly, each part of the organization is dependent on the other to achieve their goals, and only when all work together effectively, will the enterprise achieve its goals.

If  product development misses a major new product launch, the impact of that ripples through to all parts of the organization–manufacturing may have built new assembly lines or entered into agreements with suppliers, customer service may have invested in putting capacity in place that will now be wasted, and sales will miss the ability to generate revenue for that product–part of their total quota–inevitably causing sales to miss its quota.

Likewise, when sales fails to deliver on its commitments, the ripple effect impacts all parts of the organization.  Manufacturing may have excess capacity and inventory, missing its goals.  Margins from sales that were earmarked for product development dry up, forcing vital projects to be cancelled.  Capital investments may have to be postponed, downsizing happens, people lose jobs.

Sales does not exist in a world by itself.  The rest of the organization depends on sales achieving its goals, so they may execute and achieve their own (which in turn enables sales to achieve its goals).

It all has to work together or it doesn’t work at all.  That’s just business 101.

Each part of the organization has its goals (or quotas, if you will—and many of those functions refer to their goals as quotas).

Layer some other expectations on top of that.  For example, we are expected to continually improve.  Designers are expected to improve design productivity, manufacturers are expected to improve manufacturing productivity, and sales is expected to improve it’s own productivity.

So through both growth and continued productivity improvements, we continue to expect increases changes in our goals.  Growth suggests adding additional capacity to meet growth goals, productivity improvements offset some of that capacity increase by improved methods/etc in the way each of us do our jobs.

Again, all of this is basic business and economics.

I feel a little like Michael Douglas in “Wall Street,”  Goals are good!  Quota is good!  Without these the economy doesn’t work.  We achieve nothing by trying hard and settling for what we get.

It’s ironic that pundits argue there should be no revenue quotas and goals, when the fundamental job of sales is to help our customers achieve their revenue targets and goals.

Yes, too often, goals are mis-set.  There is no connection to reality–that is the goals of the enterprise.

But that’s bad management, whether on the part of sales or the part of others in the enterprise.  Not being able to tie the goals we have in sales (or any other function) to the overall goals of the enterprise is a management failure.

Yes, there are clueless or unreasonable productivity expectations.  To arbitrarily set goals that have no connection to real productivity numbers is just setting the organization up for failure.

Yes, there are terrible management practices, in sales and the rest of the organization that let this goal setting process get out of hand with too many games being played on each side.  And this leads to failure in goal attainment.

But when you take a broader view, it’s a self correcting problem.  Bad management, setting inappropriate goals, fail to achieve their goals.  When they consistently fail to achieve these goals, they are replaced or the organization fails—in any case it is self correcting (not without sometimes terrible consequences.)

Yes, it creates a lot of “likes” and grabs attention to say, “Eliminate Quotas, Eliminate Revenue Goals……”

But it’s simply bad business.  It draws attention from the real problems and challenges.  Let’s focus on management and establishing meaningful goals in the first place.

Let’s focus on management, making sure the right people are in place, that they have the right training, tools, systems, processes, programs, and coaching to achieve those goals.

Afterall, isn’t that what high performing businesses do?

 

 

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May 14 17

It’s Not The SDRs’ Fault!

by David Brock

It seems that SDR/BDRs  are bearing more than their fair share of blame and frustration from their targets.  Yes, I’ve whined about them many times in my blog and on LinkedIn.

I’ve thinly disguised the lamest emails and recounted misguided conversations I’ve had with these poor sales people.

SDR bashing and shaming has become one of the latest “sports” in social media.  People with too much time on their hands and too little empathy are lashing out, naming names.  Ironically, most of these people would never have the courage to pick up the phone and do what SDRs do.

Don’t get me wrong, there is plenty wrong with much of what these people are doing.  I try to pick up on most of these calls, filtering the pure garbage/scammers, 95% of the calls I receive from SDRs are horrible!

They go off base in so many ways:

  • Our company is not an appropriate target.
  • I’m the wrong person.
  • They know nothing about me or my company.
  • They pitch their product, without knowing what I care about.
  • Many are “provocative,” suggesting we are underperforming our potential in an area.  When I ask, “What are we doing wrong,” they are unable to respond and engage me in a conversation.
  • and on and on and on …..

In general, they seem to be uncomfortable in doing anything other than sharing information about their product, collecting basic information from me, and getting me to commit to a follow on call with someone else.

The problem is, it’s not their fault!  They are just doing what they’ve been told to do, the way they have been trained to do it, and what they are measured on.

The blame really needs to be pushed to those who are developing these terrible programs, as well as management paying more attention to the numbers (call volumes/meetings set) than to coaching their people to success.

Too often, we are setting these people up for failure.  In fact, the SDR/BDRs that somehow manage to succeed in spite of this are quite remarkable.

There is no excuse for setting these people up for failure.  But the people designing the inbound/outbound programs SDRs execute have to do the work.  They have to make sure they are targeting the right audience, both companies and individuals, they have to equip the SDR with the knowledge and information to have relevant conversations.  They have to make sure the expectations are reasonable and the SDR can have a credible conversation with the victims—-I mean prospects.

It is an unfair expectation for most SDRs to have a business relevant conversation  with a C level executive.  They just don’t have the experience base!  A close friend, a VP of Sales, who manages one of the best SDR/Sales teams I’ve met says, “What business do they have talking to me, there is nothing most of them are equipped to talk about that I care about!”  (And he has been a SDR!)

There is no excuse for managers not listening to calls, coaching the SDR and improving their ability to execute the right call with the right people.

SDR/BDRs offer exceptional potential!  But we have to set them up for success.  It’s not just giving them the script but it’s making sure they are engaging the right customers in the right conversations, with credibility.

Imagine the change in the results they produce if we start paying attention to what they do and how they engage, rather than just monitoring the numbers.

For those of you frustrated by these calls, don’t bash them—they have more courage than many sales people, they pick up the phone and talk to people they’ve never met before!  Realize it’s not their fault, and perhaps take a few minutes to suggest how they might improve!

 

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May 11 17

What About Sales Person Retention?

by David Brock

Retention is a hot topic–customer retention that is.

We’ve all seen data around customer acquisition costs.  Basically, the cost of acquiring new customers is several time higher than the cost of retaining and growing existing customers.  The whole subscription model, on which all SaaS and XaaS companies are built has customer retention as a fundamental to the success of the business model.  All the discussion around ABM/ABS/ABE is focused on retaining and growing our most important accounts.

Makes sense!

But how come we don’t see similar focus on Sales Person Retention?

A recent study from Glassdoor, shows on average, an employee changes jobs every 15 months.  Granted, this study covered all employees, not just sales.  Other, slightly older data, shows 15-22 months for sales and sales management.

I think it’s fair to say, people are changing jobs with much greater frequency.

Layer onto this revolving door many see in their organizations, the onboarding time–that is the time it takes to ramp sales people to full productivity.  (Note, I’ve defined onboarding differently, it’s not the time we spend in training them, it’s the time it takes for their productivity run rate to reach full productivity.)  For complex B2B sales, data shows average onboarding at 10 months.  With many of our clients, it’s far longer.

Hmmmmm….. let me do some mental math, 10 months onboarding, 15 months before the change jobs……….

Looks like we have them for a good solid 5 months!!!

Before we start celebrating (tongue firmly planted in cheek), let’s add in sales cycles.  If we have a long sales cycles, very often, these people aren’t on board long enough to close their own deals!  Perhaps the deals they are closing are those started by their predecessors.  And their successors (the newbies) are taking up the deals of their predecessors.

Perhaps, now we start to see at least one of the root causes to poor sales quota performance.  Sales people aren’t around long enough to produce sustainable results.  With each churn of a sales person in 15 months, we have potential revenue exposures of millions of $’s.

One would think a reasonable solution might be, “Can we figure out how to retain our sales people?”  Yet in the past year, the number of times I’ve been involved in that conversation could be counted on one hand (until I might have initiated the discussion.).

After all, if we have the right people on board; if we are training, coaching, developing them for success; if we are creating work places that challenge them and recognize their success; if we treat them as valuable contributors; we know they will consistently produce good results.

But too often, we have quite the opposite of a retention/growth mentality.  We churn and burn people.  We don’t equip them for success, we don’t recognize that success, we don’t provide a rewarding work environment.  We expand and contract our sales resources based on the state of the business.

Sales people play a part in this as well, if they don’t see an environment where they are appreciated, where they can learn and grow, where they are recognized and appreciated, where they can be successful; they are going to run to the next opportunity.

Retention is important–customer and employee retention.  Retention problems cost big $’s and have huge impacts on business results.

I believe the onus is on sales management to break this vicious cycle.  We have to recruit the right people in the first place.  We have to train, develop, coach them.  We have to give them the tools, systems, programs, training to be successful.  We have to create a work environment where they are both challenged and appreciated.

How important is retention in your organization?  What are you doing to make it a top priority?

 

 

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