Archive for category Sales Process Evaluation
Does Your View Of Value Limit You And Your Customers?
Posted by Rick Pranitis in Sales Process Evaluation on March 25, 2016
Value is one of those $25 words everyone talks about. We all want to talk about our value and value propositions. But we have huge variations in the way we interpret value and the way our customers interpret value.
Value in it’s simplest form is price. Unfortunately, that’s where the majority of sales people compete. They provide the customer with their best price, crossing their fingers, hoping to win. The customer is left with the challenge of which alternative to choose. Since, inevitably, the entire alternative will meet their requirements; the only differentiator becomes the vendor offering the lowest price. Customers still struggle, their job isn’t over, and they still have to justify the investments they are making to their management. A lot of “done deals” get undone at this point, so even if our price has been the lowest, we don’t get a PO.
Some sales people, unfortunately far too few, go a step further. They provide a business justification for their solution. It may be a cost benefit analysis, they may have calculated ROI, NPV, Payback. That’s a huge step forward. It changes the basis for comparing alternatives, because it focuses on return the customer will expect to receive. There are still some challenges with this, and value that we leave on the table that could be claimed by both the customer and us. Most of the time, we are looking strictly at the business case for our solution, not the business case for the customer project. We may just be a component of the solution, so we aren’t helping the customer understand the entire picture. Maybe we’ve done a TCO, which should look at the entire project over its life cycle. But there are a number of other things the customer has to consider in their business case.
Risk is a huge part of what the customer has to figure out. This is both risks in the project success and in achieving the long term outcomes which is why the customer initiated the project in the first place. (That last part is often called value realization. I’ll be coming back to this later.)
The other challenge the customer faces is justifying this investment to their management. Their managers are responsible for determining how to best invest in various projects that compete for funding. To get what they want, the customers presenting our solution have to position–justify the project in terms of how it contributes to the attainment of the strategic goals. Only the best alternative will win. But too often, our customers don’t recognize they need to do this, or don’t know how to do this. Unless, we’ve understood the company priorities and goals, unless we’ve helped the customer connect the dots from this project–what they want to do–with the strategic priorities of the company, they won’t get the funding. We don’t get the PO.
The next level is value realization. Are they actually getting the value we claimed in the first place? Did they get the results expected? Too often, we ignore this. After all, we and the customer don’t know until sometime after we’ve gotten the PO. It could be months or years. We’ve already spent our commission checks on the deal. But value realization is critical to the customer. If they don’t realize the value expected, they have failed. It may mean a failed product launch, adversely impacting the perception/competitiveness of their company in the markets. It could be a failed internal project. They don’t achieve the cost/expense reductions expected. They don’t achieve the quality and customer satisfaction goals they expected. They didn’t achieve the margin or profitability improvements expected, They didn’t see the revenue uplift expected. Failure to realize value has huge business consequence for the customer–they could, in fact go out of business. It also has huge personal impacts for the customer, they could lose their jobs. The impact of not realizing the value expected can be devastating. For example think of Takata Airbags and the impact on automobile manufacturers, dealers, and customers.
People in SaaS, embedded products, or similar types of business are seeing the importance of value realization. Customers simply aren’t renewing their contracts. When the contract expires, the customer doesn’t renew it.
This challenge also applies to outright purchases. If the customer doesn’t get the value they expected, they won’t buy again–for the upgrade, the next project, the cross-sell opportunity. They might even become a negative referral, impacting potential business in the rest of the market.
So making sure our customers realize the value claimed is critical for their and our future success.
But there’s more.
We know 60-70% of projects end in no decision made. Most of the time it has nothing to do with selecting solution alternatives, but it has everything to do with the customer internal project success. These are customers who have already recognized the need to change. They have committed to a project and a project team to develop a plan, drive the change, realize the expected value. But they struggle to align themselves, their agendas, their goals/priorities. They struggle with the project itself, often failing before they started their buying journey. They recognized an opportunity to change, that there was business value to be seized or realized, but they fail to realize it before they even start. As a consequence, an opportunity for us has disappeared. Getting that opportunity restarted is very difficult.
To address this challenge, we have to think of value differently, not just the value of our solution–to be realized at some future point. But the value of helping them solves their problem so they can realize that value and we get our PO.
Just think about this issue from pure selfish motivations–getting PO’s. If 60-70% of projects end in no decision made, we are leaving twice as much real, qualified opportunity unaddressed. We and our competitors are only getting 30-40% of the real opportunity available. There is the 60-70% where a customer has been committed to taking action, but they blow up before they can take action, or before they select a solution.
Making our numbers seems trivial in the face of this! All we have to do is help our customers become more successful in the early stages of their change management projects! We focus on a different type of value, value creation or value in the process.
Of course, this requires changes in what we do and our own capabilities. We can no longer wait for the customer to reach their 57% before engaging them. Many projects with customers having a real need to buy will have blown up long before this. We have to be finding and engaging customers much earlier. We have to be helping them with their project, not focusing just on demonstrating the value of the solution. This means new skills, both in prospecting, change management, project management, and facilitation.
It’s not over yet. What about the biggest part of value that we can create and claim? What about those customers who don’t even recognize the need to change? They may be struggling, knowing something’s wrong but not doing anything about it, except working harder. They may be settling, thinking good enough is good enough, when they are losing share, there are emerging new competitors, and their future is threatened.
From a selfish point of view, these are easy opportunities to spot. All we have to do is look at the underperformers in our markets. Or even those whose performance is OK. We have to be able to engage them in meaningful conversations about the costs of doing nothing. We have to incite them to see the potential value that can be realized. and guide them in the journey to realize that value.
Our perspectives of value can seriously limit us and our customers. The majority of sales people focus purely on price–minimizing the value they can claim in competitive situations. Those that develop rich business justification models are doing better, but aren’t claiming as much value as they could. Consequently, they are missing huge growth opportunities, both now and in the future.
Changing our perspectives, having a much larger view gives us the opportunity to at least double our own business volumes. More importantly, it cements our value and leadership position with customers by helping them achieve and realize more value.
The key issues are: Are you hungry enough to chase this opportunity? Do you have the skills and tools to change your engagement model? Do you have the skills and tools to provide the right value to the customer at the right time?
This article was originally posted to the Partners in Excellence Blog by David Brock on March 2, 2016.
Developing an Effective Sales Force in Today’s Complex Environment
Posted by Rick Pranitis in Sales Process Evaluation on November 16, 2015
“In most business models, the sales department is fixated on selling. The problem with this approach is that people no longer want to be sold.”
— The Modern Face of Sales by Humpus Jakobbson
All aspects of business have changed, and as Jakobsson points out, this includes sales. Traditional approaches to selling and training your sales force are outdated. So how do you address the challenge of achieving a successful sales interaction with today’s customers, and how do you equip your sales force to consistently perform to produce the sales outcomes you need?
Some organizations seek simple answers to a complex problem. If sales are down, then more sales training must be the answer. Teach the team more about the product. Or get them to memorize more features and benefits. Or focus the training on how to better use the sales management process to improve the customer experience. Or modernize the sales force automation tool. While aspects of these solutions could be helpful, they are just shots in the dark if you don’t first conduct research to understand what is important for your particular sales force.
Complex problems demand a rigorous approach to determine what matters. Selling in today’s highly competitive market filled with technically savvy buyers and hungry competitors certainly qualifies as a complex problem. For many organizations, sales is the final frontier calling for a robust approach to develop in-depth understanding. For instance,
- Research is conducted to understand what features and functions are important to the target segment.
- Research is conducted to understand what matters to the user.
- Research is conducted to find the right price point.
Typically, however, no research is conducted to understand what is important for individual sales professionals in their roles.
Focusing on the right things, the things that matter, is the fuel that energizes successful sales force improvement efforts. How do you determine what matters most, specifically to your sales team, to create success in your complex selling environment?
The answer, similar to strategies used in marketing and product development, is straightforward and can be summarized in a four-step diagnostic.
Step 1: Identify who’s already getting it right (or starting to). Referring to the sales force with gross generalizations such as, “Our sales force is great,” or “Our sales force is not very good,” is common. These generalizations ignore the fact that the performance of the sales force follows a normal distribution curve. This curve has subpar performers, mostly average performers, and a small handful of top performers. Regardless of your sales situation, the top performers have either already solved or are in the process of solving the mystery that has ensnarled your sales circumstances. Identifying these top performers, though not always as straightforward as you may expect, is the first step in the process of analyzing sales performance. Performers in your sales organization today are creating the customer conversations, experiences and ultimately the end results your organization is seeking. These people are typically the most-respected members of your sales team.
Step 2: Gather data from top performers. Your company’s product, your customer experience initiatives, your incentive programs, your competitor analysis and your customer support all must be integrated within each individual on your sales team. And it is a truly human integration, so understanding your top performance is a people-centric endeavor. In the language of performance improvement specialists, those top performers who have successfully achieved this integration are “unconsciously competent.” In other words, they execute patterns of success without consciously thinking about what they are doing or need to do next. For them, being consistently successful in their roles is a bit like driving a car. They know when to brake, when to accelerate, and how to instantly spot and take action to avoid hazards. Simply surveying them or conducting how-do-you interviews will likely not result in sufficient data to understand what sets them apart. However, collecting data on top performance behavior is not illusive; it can be gathered through observation and diagnostic interviewing techniques, typically conducted by performance improvement specialists. Applied across an appropriate sample set of top performers, these techniques yield an impressive collection of raw data.
Step 3: Analyze the data to develop a model of top performance. Invariably top performers think about their roles differently. Their focus is based on the mental model they have created through trial and error as they have pursued success. By synthesizing the data, a mental model of how top performers view the sales role can be developed. This model is defined through a set of five to seven outcomes that in aggregate are consistently produced by top performers. These outcomes tend to be leading indicators of success rather than lagging indicators. This forward-looking view is the chief reason it is key to identify and codify the desired outcomes.
Step 4: Take action to equip the entire sales team to behave like top performers. Taking action to equip average performers to produce the same outcomes as top performers does not necessarily equate to training. Though effective approaches to equipping the average performers do not ignore knowledge and skill development, these attributes are not the sole focus. The focus should be on equipping the individual sales professionals and the organization to produce top-performer outcomes throughout the sales organization. In our experience, focusing on the outcomes creates alignment throughout the organization that in turn drives new and significant behaviors in both sales leadership and sales professionals. At the core of this behavior change is a set of new and meaningful conversations: conversations between supervisor and sales professional, conversations amongst leadership, and conversations with customers. These new, meaningful conversations have a compounding effect in driving success across the organization.
Following these four steps provides tremendous clarity and focus for the sales team in today’s complex environment, which in turn produces huge dividends for the organization.
This article was originally posted to the Sales & Marketing Management Blog by Greg Long and Butler Newman on September 21, 2015.
Focus on the Customer and Magic Happens!
Posted by Rick Pranitis in Sales Process Evaluation on July 21, 2015
Several weeks ago, I did a deal review with a client. It was a very large deal, important to my client. The sales person is an outstanding sales person–one of the top performers in the organization.
As I looked at the notes on the deal, the sales person had a number of good conversations with people in the organization. He had a pretty good understanding of what they were trying to do. He was laser focused on demonstrating how his solution was the best in helping the customer achieve the goal.
He was trying to reach the decision-maker and had hit a road block. He’d made call after call, sent email after email. He was very frustrated; he was normally accustomed to getting into whoever he needed to see at an account. But this particular customer was just not responding to any of the creative offers he made—lunch, a demo, meeting with product managers, an extended loaner of a system—nothing would drive a response. What was worse, is the people he had dealt with before started going dark.
As I looked at the email chain, each email was a variation on the same theme, “Let me tell you how wonderful my product is.” The emails were written much more artfully and each offered an enticement about learning more about the product. But there were no responses.
In the review, I started asking my usual questions, “What are they trying to achieve, why are they doing this, what are the consequences of doing nothing, how does this fit into their overall strategy/priorities/vision, what are the personal wins for each person involved in the decision, ……..”
The sales person thought he knew the answers, but struggled. He realized that he had jumped from “discovery,” to “pitching” before he really understood all the stuff critical to his sales strategy and winning the deal.
We decided to do a little research. It took just a few minutes–we went to the company website. We started understanding more of their strategies, priorities, and what might be driving the need to change. We went to Google and pretty quickly we found a number of press releases, speeches, presentations the company had given about their strategies and priorities. This particular project and its impact on the company were mentioned several times. In fact, the key executive we had been trying to reach had been interviewed a number of times–including his priorities around this particular project.
We went to LinkedIn and started looking at the profiles of each person involved in the project. We were trying to discern their biases, motivations, experience with these solutions, and the personal wins. Again, the profile of the key executive was rich with information. He had posted a number of presentations and video’s in his profile. It was clear the executive was a real visionary, he was driven to achieve certain things in the organization, and he had a strong strategy.
I know what you are thinking, why didn’t the sales person do any of this up front? He really should have, in hindsight he recognized the error. He had fallen into the trap too many of us fall into—listening for what he wanted to hear, rather than really trying to understand what the customer was trying to achieve.
To his credit, once we started to see the problem, he came up with a new strategy. Through the research, we had a pretty good idea of what was going on, but he still needed to reconfirm everything with the customer–understanding their strategy, priorities, the views of each person involved.
He wrote a very short email to the decision maker. In that email he indicated his understanding of the key issues–but posed some very good questions about what they were trying to achieve. In one sentence, he explained the experience my client had helping similar organizations on this issue. He finished the email, leveraging some of the executive’s quotes on his vision and the importance of the project in implementing the strategy. Then he asked for a meeting.
Late the other night, I got an email from him, it was titled, “Some Magic Happened!” He had forwarded me the response from the executive. It was the kind of response any sales person dreams of. The customer was impressed with the knowledge and understanding of his and his company’s issues/strategies/priorities. He was intrigued to learn more about how my client might help them address the issues. He was flattered by the reference to his quotes and visions. He was eager to meet, share more about what they were trying to do and learn more about my client’s ability to help.
After weeks of emails and phone calls focused on “Let me tell you about my product,” shifting the approach to focus entirely on the customer and the individual had completely changed things.
The door is now open. The sales person has a long way to go, but he now has a strategy that puts the customer and what they want to achieve at the center of everything he is doing with them. This stuff works! It’s not trickery, manipulation, or any great sales technique. It’s simply focusing on the customer, understanding what they want to do, learning from them–then helping them learn. It’s really that simple!
Take a look at your most important stalled deal. Do some research on both the company and its people. Try answering for yourself the questions I posed earlier in this post. Then go to the customer and ask them, let the words come from their mouths, probe, verify, validate, quantify. Be interested in them and what they want to achieve.
This article was originally posted to the Partners in Excellence Blog by David Brook on June 23, 2015.
Three Questions to Assess Sales Force Effectiveness
Posted by Rick Pranitis in SALES LEADERSHIP, Sales Process Evaluation on July 13, 2015
Every company wants a more effective sales force but few know where to start. Seeking quick results but unsure as to what is broken, sales leaders often launch a dozen or more initiatives simultaneously, hoping one of them is the real root of the problem.
Unfortunately, this approach often creates entirely new problems. Scarce resources are stretched thin. Sales teams, pulled in many directions at once, are unable to execute well. Results are typically poor when trying to focus on too many initiatives rather than three or four ideas that might really matter. As effectiveness slides, frustrated leaders must ask again, “What levers should I be pulling to boost performance?”
While the specific levers differ for every company, sales effectiveness issues can most often be traced to one or more of six very common culprits. Before launching any sales effectiveness initiatives, ask yourself the following three questions to maximize your chances of attaining good results.
- Is our field sales management effective in driving sales performance?
Companies aiming to improve sales effectiveness usually zero in on “fixing” the sales force but often the problems lie with the managers who lead them. We see it time and again: When a company with an average sales team hires a great manager, that manager elevates the performance of the entire team. The opposite is also true. When a team of superstar reps is led by a mediocre manager the performance slides and turnover increases.
Highly effective field sales management may be the single most important driver of overall sales force performance yet many companies don’t develop and tightly manage an effective sales management process. To begin, identify the skills and capabilities required for sales management success in your company, hire to those skills and then invest in proper development and training. Sales managers must be viewed, managed and measured with the same lens as salespeople: Are our sales managers helping their reps target and prioritize the right prospects? Are they coaching reps to help improve the win rate? Are they tracking metrics that measure the right behaviors and activities in the sales force and coaching to improve performance? Without excellent sales managers, even the best designed sales force effectiveness program will fail.
- Are our sales reps spending time on the activities and prospects most likely to generate incremental revenue?
Targeting and prioritization continues to be a top issue for sales forces. It comes down to this: Are your sales reps spending their time with the prospects that will generate the most incremental revenue and who are most likely to buy? It sounds basic, but we find most reps spend up to half their selling time pursing the wrong customers. These include prospects that are unlikely to buy, who have small incremental revenue potential, who are geographically convenient and who are “comfortable” because they are friendly. Growing incremental revenue requires spending more time selling to the highest priority targets.
A related problem is the limited time reps spend with customers. Time-use studies reveal many reps spend as little as 30%-50% of their time with direct customer/prospect selling activities, largely due to administrative burdens, corporate demands and lack of support. By freeing more of reps’ time to sell, then making targeting and prioritization activities a key part of coaching and metrics, sales reps can learn to re-direct their efforts and their expanded selling hours to prospects with the highest revenue/margin potential and the highest probability of buying. Sales managers often focus their coaching on point-of-sell messaging, but prioritizing who to pursue may be a more impactful lever.
- Do we fully leverage both hunting and farming activities to drive new revenue?
Any good revenue engine needs the right mix of revenue from winning new customers and from farming existing accounts. The right blend of hunting and farming activities will be different for every company and it is important to be intentional in creating it. Hunting involves knocking on new doors to drive new business; farming requires deepening relationships to further penetrate existing accounts. These are different activities that require different skill sets, different behaviors, different process and different metrics. Successful sales organizations leverage these differences to effectively target each prospect with reps whose skills match the opportunity.
Sales territories created by geography or industry without a real understanding of where revenue opportunities are and how they align with the assigned salesperson’s skill set usually produce lackluster revenue results. Hunting and farming skills are so dissimilar, they usually don’t reside in the same person. When organizations understand the hunting and farming requirements in their particular environment and differentiate those activities to match the skill sets of the sale team, revenues improve.
This article was originally posted to the Sales & Marketing Management Blog by Brad Wilsted and Ryan Tubman on April 27, 2015.
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