Sales Training Article: How much risk is in your forecast?

By Jim Naro, CustomerCentric Selling® Business Partner 

Forecasts are supposed to be built from pipeline opportunities that have a high probability of closing within a specific timeframe, which is often 90 days. To create a forecast, sales people typically look at their pipelines, attribute a revenue number to the deals they think might close, and then roll those numbers up. With sales force automation tools, sales people can even just check off a box and directly feed those deals into the forecast. While helpful, this simple activity makes it easy to inflate the numbers, especially if the sales people are strongly influenced by pressure from above to achieve revenue goals.

Regardless of how sales people build their forecasts, if opportunities are moved into the forecast prematurely just to meet revenue expectations, a certain amount of risk is automatically introduced. It's the job of sales management to access the risks and discern the degree of risk before they create their own forecast. Here are some clues to help determine forecast risk.

1. Are the sales people having conversations with the right people?

By the time an opportunity gets into the forecast, a sales person needs to have established several contacts within the prospect organization. These contacts help to, a) confirm that the sales person's solution is a good match for the needs of the prospect, and b) identify who the decision makers are, including those involved in getting the solution sold, funded and implemented.

If there is an opportunity in the forecast and those contacts have not yet been established, then there is a possibility that this is not really a 90-day revenue opportunity. Sales management needs to understand what inroads have been made and what the quality of the conversations were to determine the degree of risk.

2. Has the buying process been clarified?

The clue here is whether or not the sales person understands the buying process of the prospect. For instance, if an opportunity is in the forecast, a sales person should know whether purchasing, other vendors, or third-party consultants will be involved. Additionally, the sales person should have already sufficiently proved that his or her solution does what the buyer needs it to do. Implementation planning should already have been discussed and documented as well.

Also, there should be no show-stoppers regarding legal terms and conditions, especially liability or indemnification clauses.

Once again, if any of this is not in place, sales management needs to assess the validity - and associated risks - of the opportunity and the potential of it extending beyond the forecast window.

3. Might the deal be lost to inertia?

Unfortunately, great sales cycles can end with a buyer deciding to do nothing. In fact, research shows the largest single competitor, and therefore the largest risk in forecasting, is no decision at all.

Therefore, unless buyers understand that it's more painful to bypass a buy decision than it is to make the purchase, then there is a no-decision risk.

It's key to find out if the sales person has effectively facilitated a cost/benefit analysis for ROI calculations that internal champions can use in securing funding. A lot of building value like this falls short because sales people are not effective in facilitating this type of analysis.

So if this isn't already in place, consider opportunities at this level full of risk.

The risk associated with each of the above three scenarios can be eliminated by building steps, processes and training into the sales cycle. When it gets right down to it, unless sales people know that only opportunities that have met the criteria and qualifications mentioned above can be put into the forecast, there will be risk. So it's up to sales management to decide if they want to play a game with high risks - or minimize and even avoid risk with a few process modifications and a bit of coaching and selling skills development.

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Sales Training Article: Business Development

By John Holland, Chief Content Officer, CustomerCentric Selling® 

CustomerCentric Selling® (CCS™) has launched a one-day Workshop for customers and prospects that focuses on business development as a process. Defined steps in prospecting efforts are important because an American Marketing Association (AMA) survey found that on average it takes sellers more than seven attempts to initiate contact with executives. In light of this statistic it is sobering to realize the AMA also found that a small percentage of salespeople make more than three attempts to contact Key Players. With successes being few and far between, it isn't difficult to realize why general territory sellers feel prospecting is the hardest part of their job.

Business development skills are critical to empowering salespeople to build adequate pipelines and in doing so, have the ability to disqualify opportunities that are unlikely to result in buyers making purchasing decisions. My belief is that in painting with a broad brush, the vast majority of sales (or buying) cycles begin in one of two ways for companies that implement CCS™:

--Salespeople proactively engage Key Players and take them from latent to active need around a business outcome. Consistent with our core concepts, it doesn't make sense to call at low levels for unbudgeted initiatives and sharing business goals or admitting problems start buying cycles.

--Mid to lower level buyers leverage the Internet and social networking to do significant research about a given offering and are well along in the process (Sirius Decisions indicates buyers are 70% through buying cycles) before they contact salespeople. As you can imagine, by this time buyers believe they know their requirements and will not be receptive to premature seller attempts to change them.

As indicated in Rethinking the Sales Cycle there are an increasing number of evaluations that begin below Key Player levels. Despite all of this activity, one statistic that seems to remain a sore spot for vendors is "no decision." This occurs when buyers get multiple vendors involved, have them generate proposals but ultimately decide not to buy, or to develop a solution in-house. Why does this happen?

I believe non-executive buyers behave in a similar fashion to struggling salespeople. They are too product focused and fail to consider the potential value (business results) that can be achieved to offset the cost of the offering being evaluated and have trouble articulating what it is they want to buy. Because they cannot create budget for new initiatives fairly late in their evaluations they approach a Key Player leading with product and asking for money to buy it. Unless the Key Player somehow "gets it" they are told there is no money to fund the initiative, so it should be tabled. Even for internal customer evaluations, the first core concept of CCS™ should apply: No goal, no prospect.

CustomerCentric Selling® provides ways for sellers and managers to understand the difference between activity and progress. It appears mid to low level buyers are spending a great deal of time (activity) in evaluating vendor offerings on their own, but internal selling is a difficult job and many of these evaluations result in no decision.

Salespeople, whether being brought in late into evaluations or initiating them at Key Player levels, do potential buyers, their companies and themselves a service by uncovering desired business outcomes from Key Players as soon as possible. Gaining buy-in from Key Players and access to the people that will be involved in buying decisions qualified opportunities and means the result of activities is progress through buying cycles. Taking these steps minimizes the chances that the final decision will be no decision.

Learn more about our one-day Prospecting & Business Development™ Workshop!

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Sales Training Article: Hey Sales Leader! Improve Sales Strategy by Listening to Your Team

By Tony Albachiara, Sales Benchmark Index (SBI)

Definition of:

Listening (Verb)

1) Give one's attention to a sound

2) Take notice of and act on what someone says; respond to advice or a request

As a sales effectiveness consultant, I engage in lots of conversations across the entirety of a corporate organization. Getting the opportunity to speak with "C" Level Executives all the way to the front line Account Executives provides an incredible view. What's interesting is the amazing difference in priorities and agendas across the organization. What's troubling is the feelings that many top-tier (top 10% of a sales organization) Account Executives share.

What they consistently tell me is you're NOT LISTENING!

Why is this a problem? Your Account Executives are the connection between your organization and your customers. If the Account Executives aren't aligned and you (The Sales Leader) aren't listening, how do you expect them to execute your sales strategy?

Ask yourself:

• What formal processes do I have in place to listen to my sales organization?
• What informal processes do I have in place to listen to my sales organization?
• How am I letting the organization know I'm listening and that I want continuous feedback?
• What am I doing with what I've been told?

How to Listen to Your Sales Team (Formally)

Many sales organizations have "Sales Councils," or a team of sales executives that meet on a frequent basis. Typically these groups function as the sounding board for the sales leader for insights and validation on sales related issues.

How often do you use this forum as a resource to improve your sales strategy?

How often do you ask someone from outside your sales organization to run this meeting so the participants can express their view in a "safe" environment? Remember, all the participants know who makes the decisions on promotions, territories, and careers.

You can really open up this forum, and increase your constructive feedback by getting a "third-party facilitator" to run your next Sales Council meeting. Allow your team to speak openly, and see what happens. You may be surprised with what your sales team thinks about your lead generation efforts, sales compensation, sales process, CRM, etc. You don't want to lose out on new customers and revenue due to a lack of attention to your sales team.

Here's a real-life example that may open your eyes: We just conducted an "Expert Panel" at an organization where the participants responded by saying, "We hate the CRM, but our sales leader said, 'Use it, or get fired!'…so, we log in twice a week so when the report is run, we're not on the radar." Is this (or something comparable) happening in your sales organization? Is your sales strategy suffering because of it? Had you asked and been listening, you'd have realized there was a behavior problem that needed adjusting long before it became a major concern.

How to Listen to Your Sales Team (Informally)

Informal conversations and observations also have the power to produce very meaningful insights. As noted in the book "Promoted to VP of Sales: The Year 1 Toolkit", research shows that the front line is ignored. Don't let that happen! Make it a priority to spend time in the field with your Account Executives, and while you're there, ask them questions that can improve sales strategy such as:

• What should we change about our go to market strategy?
• How is the sales compensation plan?
• What is not working today that needs to be fixed?
• What obstacles are preventing sales from success?

Improve Sales Strategy with Feedback

Great! Now you have 2 separate methods to garner feedback from your sales organization - formal and informal. This will undoubtedly supply you with a number of options for possible tweaking and/or improvement of your overall sales strategy.

Will all feedback from your sales team be beneficial? Probably not. Will some of it be straight out of left field? Probably. But that's ok!

As the Sales Leader, it is now your job to take this feedback and make the most of it. Pinpoint the feedback that can be most beneficial to your sales organization and implement it the right way. Your number is on the horizon. Make it!

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Sales Training Article: Seven Steps to Sales Transformation

Published by Selling Power

There is a parallel between biology and business. Our biology is largely influenced by our DNA, our genetic makeup, which contains a set of instructions vital to our ability to function, adapt, and transform over time. Our business is influenced by two DNA-like sets; one is the DNA of the economy, and the other is the DNA that's expressed by our decisions. The quality of our decisions impacts our customers and ultimately shapes sales success. Below is a brief overview of the steps that can lead to ongoing sales transformation. No matter what chaos or challenges we are facing today, we can at any time choose to transform and move ahead of our competition. Here are seven steps to consider:

Diagnose. Define the current level of sales effectiveness. Assess all internal resources (people, process, and technology) and measure how effectively they align with external opportunities. Determine the external and internal disconnects. Drill down into each area: Do we have the right people who can win in new and existing markets and create more customers? What changes are needed to optimize our sales process? What would the ideal technology road map look like that would continually increase operational efficiencies?

Get executive sponsorship. Get agreement that the sales organization is a key competitive differentiator. Articulate the new vision, create a realistic sales-transformation road map, and define what success looks like. Get the financial support needed to continue the journey as described in the road map. Collaborate with senior managers and develop a set of key performance indicators that will allow them to track progress.

Create a culture of measurement. Sales force transformation requires a culture change from making decisions based on hunches to making decisions based on science. While, in the past, selling depended on the skills of individual players, sales organizations today are synching resources and developing a collaborative approach to create customer value. A clear set of performance-measurement tools will not only help the synchronization process, but also contribute to a predictive organization in which pipeline potential and velocity are clearly visible, forecast accuracy will exceed 90 percent, and salespeople are routinely coached on bridging the gap between actual and required performance.

Eliminate departmental silos. To win in today's environment, sales must be aligned with marketing, service, finance, HR, and legal. Sales organizations need to seek alignment between sales ops, sales channels, and internal and external teams, but must also closely collaborate with all departments. When it comes to negotiations with clients, salespeople have greater chances of winning deals when all departments have a clear understanding of what represents customer value and what value a new customer means to the company. Once all departments are aligned and in synch, there will be little internal friction on how an order is handled, how discounts are approved, or how cross-cultural roadblocks are removed. As a result of this alignment, crisis management will be reduced, customer information will be easily accessible, and all stakeholders will clearly see how they can contribute to the creation of a new customer and the retention of existing customers.

Shift to strategic and operational competencies. While many companies believe that operational efficiencies come from supporting legacy systems, smart companies are redesigning their entire sales operation and creating a customer-focused enterprise, where all stakeholders listen, understand, and respond to the forever-shifting demands of the customer base. This transformation cannot succeed without embracing one version of the truth, which will help create a standardized process for producing and serving customers across the enterprise. This shift cannot be achieved without bringing more art and science into the sales operation.

Harness the collective intelligence of the sales organization. Sales transformation is not only the result of good leadership, but also a reflection of good stewardship of the information streams that all stakeholders create in the quest to win new business. As we move from a sales-pitch-based economy to a conversation economy in which the brands are a reflection of rich social-media information streams, salespeople need to become better storytellers and learn how to initiate and lead customer conversations that are focused on value. This also requires the mastery of social-media tools that are fully integrated with the sales process.

Select and deploy the best technology. Sales technology is critical to both growth and profitability. Sales organizations have stripped hundreds of millions of dollars of waste out of inefficient sales operations. Lead-management apps have improved demand generation, proposal-management tools have improved win rates, and compensation-management apps allow companies to incentivize the right sales behaviors that improve a company's bottom line. As a result of the transformation, salespeople should spend less time tickling keyboards and more time co-creating sales with customers. Savvy sales leaders achieve successful sales transformation by aligning the best people with the best processes and technologies.

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Sales Training Article: Sales Management - Three Sure Ways to Get Fired This Year

By Dan Perry, Sales Benchmark Index (SBI)

Sales Management Turnover in 2011 exceeded 28% across all sales organizations. 52% of VP of Sales are dissatisfied with their current Sales Management team responding that most are 'B' or 'C' players. Over 63% of Sales Managers are dissatisfied with their current jobs and are looking for new ones.

'Houston, we have a problem'
If you want to be one of the sales managers that get fired this year, there are 3 sure ways to accomplish that task. This list does not include missing your quota. That is a non-negotiable of your job. Why should a company even have a sales manager if you can't hit the number?

The list is a combination of actions you wouldn't do that will help make the quota. They are all centered on how you are spending your time.

Accomplishing these three things will have you updating your resume:

1. Inaccurate Forecasting. You consistently miss your forecast with only 75% accuracy. Your sales reps don't use the company sales process because you don't reinforce it on every deal. The sales reps don't place their opportunities in stages. They consistently provide you "a gut feel" about their monthly number. And you don't help strategize with them, instead yelling something like "just go out and make it rain" or "don't tell me how rough the water is, just bring the ship in."

2. Desk Jockey. You show up in the office (or your home office) every day "riding the pines". You haven't seen a customer for a month and focus your time and attention on pricing deals for your reps. You consistently are reading sales force effectiveness books because you don't really know what is happening with your customers. You use your expense account as a form of income because you aren't earning any bonus due to your poor team's performance. And you are always interviewing sales people with industry experience looking for the quick fix.

3. No new capability acquisition. (aka: playing it safe) Why rock the boat with a new idea? Why learn about the new way to cold call? Why try different ways to solve a customer's problem? You got the Sales Manager job because you were the best sales rep on the team. Building relationships is the best way to keep the business. So don't challenge the customer or jeopardize the account with some crazy idea that would solve the customer's problems. As long as your customer retention number is in the high 80% range, you can 'survive' until this poor economy turns around and you will be back on easy street.

Unfortunately, we see Sales Managers every day really 'nail' these three actions. We see them trying to do the least possible actions thinking the 'good' times will be back. Sales Management needs to improve. And they need to improve quickly.

I had a sales manager who displayed these three actions every week. When I interacted with her or her sales reps (more than 3 reps who distribute these actions on a team make a trend), I always caught her in the office. She consistently missed her forecast blaming her reps and she was late and left early when we rolled out a new training process. She was lousy at spending her time wisely.

She was fired. I fired her. And my sales from that team improved over 35% in 3 weeks.

Are you afraid of making a mistake? Are you frightened of changing your daily actions in fear of losing a rep or missing some short term revenue? Are you trying to hold on thinking the old ways of the past will keep you in the job?

If you are, update your resume. You are about to get fired.

Do you want some help? Start with the chart below. Do more of the things on the left side and reduce the actions on the right:

 

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