Posts Tagged Sales Management
Characteristics of a Successful Sales Team
Posted by Rick Pranitis in SALES LEADERSHIP on October 14, 2012
What does it take to develop a high performance sales team? This question has been asked by business leaders for as long as B2B sales transactions have been around. So what should you be looking for in your people and what separates a great sales team from an average one.
In this article I’m borrowing heavily from a piece originally written by Steve Eungblut the Managing Director of Sterling Chase. His group worked with hundreds of sales teams and conducted extensive research into what makes the real difference between an average sales team and a great sales team. They came up with the following characteristics:
1. Customer orientation: Since selling is all about aligning your solution with the customer’s needs and desires, a superior knowledge of the client’s world is crucial to the success of any sales team.
To gain superior customer knowledge and outsell the competition, team members should gather as much information about their customers as possible. They should be passionate in their pursuit of customer satisfaction and should immerse themselves in conversations around the customer’s external environment, internal ‘pain points’ and their (known and hidden) needs. Individual team members should also sell their customers’ needs to their own company and portray their customers as the most important that the company has.
2. Own company capability knowledge, relationships and innovation: To acquire a superior knowledge of their own company’s capabilities, each team member should be encouraged to familiarize themselves with the features, advantages and benefits (FABs) of all their products and services. Along with superior customer knowledge, a high degree of product knowledge will make it easier for sales people to align solutions with customer needs and desires. Individual team members should also map out innovative ways in which their company’s capabilities can be positioned and/or adapted to differentiate their proposition from that of the company’s competitors. This should also help team members to up-sell and cross-sell solutions across their portfolio.
3. A proactive drive & determination for results: The sales team should be highly self-motivated and proactively create and drive sales opportunities forward. This should enable individual team members to deliver benefits for their customers, as well as great results for their employers, the team and themselves.
4. Collaboration and a balance of personality types: To be a successful sales team, it is really important that individual members of the team work together rather than in competition with one another. By working collaboratively and being dependent on each other’s selling skills and knowledge, members of the sales team will be deterred from behaviors which can be destructive to the entire team. Collaboration will reduce the likelihood of a destructive blame culture developing in the sales team, for example, while it should foster a more positive and creative working environment – in turn, improving team performance and results.
The team also needs to be balanced with creators, shapers and completer-finishers. If you have a team that simply consists of fiery hunters and you ask them to work together, sparks will most likely fly and team members will clash. On the other hand, if all of your team members are farmers, it is most likely that your sales strategy will take too long to bear fruit.
5. A structured approach to planning and actions: The sales team must take planning really seriously and ensure that they develop and implement plans that have direct and tested links from the analysis stage right through to action and results. Many times a team will implement a sales strategy which fails to credibly link the past, the present, the near-term and the long-term. Successful sales teams make their plans and all associated activities SMART (Specific, Measurable, Achievable, Relevant and Time-bound). They make their plans drive their activities and constantly revisit, review and test their plans.
6. Manager, leader, coach: Great teams need great leaders. Great leaders are inspirational in the way they are able to adapt to different situations and different challenges. Sometimes they need to tell and drive; sometimes they need to create a credible vision for others to aim for; sometimes they need to facilitate and coach; sometimes they simply need to let go. In fact, every day and every task requires a slant towards different requirements and the sales team’s leader has to let go of his or her own ego – they need to be agile when it comes to switching their leadership style.
Many say great leaders are born and great teams rarely come together by chance. But in reality, successful sales teams can be designed, built, developed and emulated in any situation. You need intelligent, willing and passionate sales people on board who are willing to work together for the customer, the team, the company and for their own ultimate gain.
In summary, great teams need to be put together carefully. They need to love their customers while leading the way for their own company. They need to plan and drive results. They need leaders who can adapt their style from being a sales manager to a sales leader to a sales coach when the time is right.
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Steve Eungblut’s original article can be found at the Sterling Chase Sales & Business Development Blog.
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Structuring an Effective Sales Funnel
Posted by Rick Pranitis in GENERAL DISCUSSION on October 2, 2012
B2B companies often represent their sales process as a funnel. The sales funnel usually starts with qualified (or “sales ready”) leads and ends with closed-won opportunities. Modern sales methodologies insist on managing this funnel professionally. But how should it be structured in the first place? Obviously, the answer will vary from company to company, but here are three quick tips to hone your funnel.
Meaningful Internal Transitions –a good way to choose the right sales funnel stages is to focus on “meaningful transitions”, i.e. borders between stages representing a shift in the sales process. In this respect, the distinction between “continuations” and “advances” established by the SPIN Selling model is very useful:
- A continuation is an action that is useful in the context of the sale (e.g. sending the prospect a presentation he requested) but does not “move the sale forward”.
- An advance is an action that moves the sale forward (e.g. answering an RFP formally).
This distinction gives you an “internal view” of the best structure for your sales funnel, as advances obviously signal borders between funnel stages.
Meaningful External Transitions – you can also take the “external view” of the transition of opportunities from one stage of your sales funnel to the next. The idea here is to consider your sales process from the perspective of the buyer. What information are they looking for in each stage of the funnel? How do they confirm you have answered their questions? From this, you can infer the content of each funnel stage, hence the overall structure of your sales funnel.
Reflect and Refine – there is another, potentially easier way to find the right structure for your sales funnel: start with the time-tested SPANCO model (see below) and refine it based on the analysis of your funnel dynamics. You are looking for two indicators.
- “Reasonable” conversion rates from one stage of the funnel to another: as a counter-example, a seven-stage funnel with a 55% conversion rate from stage one to stage two would obviously be weird.
- Balanced stage durations: funnel stages should have approximately the same length. This is not a question of aesthetics, but of convenience – it makes identifying potential delays easier and thus reduces monitoring costs.
Over time, pipeline dynamics will reflect both the internal and external view of the structure of your funnel. The key is to keep monitoring them.
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Quick foot note on the SPANCO Model: Just in case you need a reminder, and as I hate making a reference in an article (especially when it’s an acronym) without explanation and/or clarification.
“SPANCO” stands for:
- Suspect – Definition of the target
- Prospect – Identification of the lead
- Approach – Analysis – Evaluation and qualification of requirements, identification of the solution
- Negotiation – Negotiation process
- Closing – Finalization of the order
- Order Ongoing – Account follow-up (up and cross-selling, etc.) Order management and sales monitoring
The SPANCO method offers visibility for each lead and progress at the various phases of the sales process. It also provides you with an ongoing vision of the rate of sales activity in your company.
By clearly identifying the stages in the sales process, you will be able to see the state of your portfolio of leads, so that at any moment, the salesperson (and their line management) can identify where and how to intervene in order to turn a lead into a customer.
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Confronting an Under-Performing Sales Rep
Posted by Rick Pranitis in GENERAL DISCUSSION, SALES LEADERSHIP on September 22, 2012
Every sales coaching workshop that I deliver I ask sales managers, “How many of you have a performance problem with a sales rep that is just unacceptable, and you know you need to address the situation?” Everyone raises their hand. Then I ask, “How long have you known this?” The answer I hear is often months, and occasionally years. Clearly, many sales managers have tremendous difficulty confronting an under-performer, and so they keep putting it off.
There are a variety of reasons why sales managers avoid this most difficult of all conversations. Sometimes it’s just a time management issue – the sales manager has many other more pressing issues to deal with. Another reason is that the sales manager blames him or herself for the salesperson’s lackluster results – “I haven’t provided the salesperson with enough ongoing coaching” or “I need to provide this person more training.” So the sales manager accepts personal responsibility for the rep’s performance problem, but that’s not right.
The simple truth for sales managers is that your team is only as strong as your weakest performer. You can say all you want to about sales performance, but your actions speak louder than words. Everyone on your sales team looks at the lowest producer as the minimum level of sales production necessary to stay on your sales team.
When you fail to address a sales performance problem you send a message to everyone else on the sales team – that you tolerate mediocrity. Face this issue now. Have the tough conversation. Don’t let another day go by without addressing this performance problem. And before you have this “positive confrontation” conversation, jot a few notes down next to the following checklist so you are properly prepared:
- What aspect of this person’s performance (and/or skills and attitude) is unacceptable? Be very specific about what the person must change. Be prepared to provide examples.
- Why has the person not been performing up to expectation? As the sales coach, you must assess the performance problem. Is it the rep’s lack of skill, a lack of will, or both? During the meeting, ask questions to either confirm or disprove your analysis of the situation. You never know what might come out here. I once had a salesperson break down in tears in my office about his marital problems.
- Why should the person make these changes? Remember that Skill + Activity = Sales Results. All too often sales managers, when communicating expectations to the team, focus on the outcome expected (sales quota) rather than the inputs necessary to achieve the outcomes, and the importance of each step in that process. When you explain “why” a certain task must be accomplished with a certain amount of quantity or quality, you are also explaining why it cannot be avoided.
- What should the consequences be if the salesperson does not make these changes? Another conversation with the manager? A written warning in their personnel file? Termination? You must be prepared to explain in very clear terms exactly what will happen if the changes are not made.
- The “Two-Roads” Discussion One sales manager with whom I’ve worked refers to this is the “Two Roads” part of the discussion. “Ms. Or Mr. Under-performer, you have reached a fork in the road. If you continue down the path that you have been on this is what the consequences will be… However, there is another path for you to choose, and it leads to greater sales performance, more money, etc.” Ultimately, the responsibility for change is the rep’s responsibility, not yours. If coaching or training is required, or would help the situation, then do it now.
Peak performance sales managers do not accept mediocre performance. They realize that their entire sales team is watching how they handle the under-performer. They accept the responsibility for their role, and if someone is not performing up to expectations they address the problem sooner, rather than later.
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This article was originally posted on the TopLine Leadership Blog by Kevin Davis on September 18, 2012
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Does Your Sales Dashboard Have The Right Indicators?
Posted by Rick Pranitis in GENERAL DISCUSSION, SALES LEADERSHIP on September 20, 2012
The idea of a sales dashboard is appealing. What business manager wouldn’t like to run their company like a well-oiled machine, with the help of a few select indicators? But in practice, it is ironically the choice of these indicators which can stall the effectiveness of the sales dashboard…
Every company is certainly different, and it goes without saying an industrial equipment maker cannot manage its sales process (for example) like a travel agency, or a service provider. However, here’s some tips on zeroing in on the right indicator can be helpful in the majority of situations.
Choose indicators which are useful throughout the sales process – As the saying goes, you shouldn’t count your chickens until they hatch. Nevertheless, you want to manage your sales process continuously, not just once a quarter. It’s important to avoid indicators which only become meaningful at the end. For example, “Actual/Projected sales” is more useful when compared to its historical average at that stage of the quarter.
Be selective – you start with the laudable intention to stick to the essentials, but find yourself a few months later with a computer screen that looks more like a spacecraft cockpit than the clear-cut dashboard of your dreams. To be more selective, ask yourself this question before adding another indicator to your sales dashboard: is it directly related to what your company is trying to achieve (i.e. prospects progressing along your pipeline), or is it merely informative?
Choose actionable indicators – avoid indicators which look sexy but don’t bring anything tangible to the table. A traditional indicator that clearly points you in the right direction is better than a “sophisticated” one which needs to be explained to everyone and even leaves you scratching your head.
Favor dynamic indicators – one which measures a sales team’s progress. A static indicator only measures an activity. For example, “Number of leads qualified/Week” is a dynamic indicator, while on the same subject “Number of qualification calls/Week” is a static indicator. From this example we can infer that a dynamic indicator is naturally outward-looking (i.e. focused on prospect dynamics) while a static indicator is often inward-looking (i.e. concerned with your team’s processes).
Beware of environmental indicators – those which are focused on your company’s environment (e.g. “Number of RFPs in my sector”) are most certainly outward-looking. Yet, do they belong on your sales dashboard? Not especially. You’re interested in your company’s performance, which only indirectly depends on its environment. Environmental indicators are rarely actionable, unless you are matching them to a triggering threshold. For example, you could decide to re-contact your existing client base systematically when the number of RFPs in your sector falls below a threshold of ten per month.
Certainly there are others, more specific to your particular situation. The objective here is to give you a starting point. Get you thinking about what’s key to steer your sales process to success. As always I’m interested in what you think and what you’ve found to be effective in your sales dashboard. I invite your comments, ideas and suggestions.
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Five winning strategies of the world’s top sales organizations
Posted by Rick Pranitis in GENERAL DISCUSSION, SALES LEADERSHIP on September 12, 2012
The team at McKinsey and Company evaluated the results of over 700 sales projects and identified the companies that consistently delivered industry-leading sales performance, that is companies which grew their revenues an average of 48% faster and their EBITA 80% faster than their peer groups over a five year period.
What were their common characteristics? It turns out that size, geography and what they sold had little effect on performance. It was how they sold which drove the differences.
Here are the five common strategies which McKinsey determined characterized the top performers:
They found growth where their competitors could not. Top-performing sales organizations tended to both look far ahead – an average of 10 quarters – and uncover growth opportunities in the near term. Perhaps most telling, top performing sales organizations practiced micro-segmentation. They divided their potential markets into as many as 100 or more cells and identified areas where significant growth potential existed even when the overall market growth appeared slow or stagnant.
Key take-away: take a look at your current approach to market segmentation and targeting. Are you looking at a sufficiently granular level to identify the pockets of segment-leading growth potential?
They sold the way their customers wanted to buy. There’s no excuse any more for basing your sales process and sales pipeline stages around sales activities, rather than stages in the buying decision process, and the results of the top sales performers validate this strategy. In a striking validation of the “Challenger Sale” philosophy, McKinsey also pointed out that top performers focused their attention on the prospects for which they had something original to offer.
Key take-away: even if it means dramatically restructuring the way you manage your marketing and sales processes and pipelines, you must refocus your efforts on understanding, tracking and facilitating your prospect’s buying decision process.
They freed up their sales people to sell. Sales people in the top-performing sales organizations tended to spend far more of their time on customer-facing front-line sales activities rather than wasteful back office administration, and it’s no accident that these organizations used technology and process as key weapons to make their sales people more productive.
Key take-away: look carefully at what your sales people are currently spending their time doing, and systematically eliminate or offload any tasks that are not directly contributing to the customer sales experience.
They focused on developing their people. The top-performing sales organizations not only recruited thoughtfully, they also implemented induction programmers that served to turn “rookies into rainmakers” far faster and more effectively than their competitors. They established a tempo for reporting and targeted intervention that helped the sales people with potential to realize that potential faster. They inoculated the whole sales organization with the winning habits of their top performers, and they refused to leave new hires to “sink or swim”.
Key take-away: the consequences of making a bad hire are horribly expensive. First, make sure that you recruit for attitude and not just experience. Then, involve every new hire in a carefully crafted skills transfer, induction and mentoring program.
They expected exceptional performance. The top performing sales organizations drove growth from the top. They set stretching targets, challenged the status quo, established role models, and created a culture that expected results. The pains they took to equip their sales people to be successful were balanced with the expectation that their sales people would succeed, and persistent poor performance was constructively addressed.
Key take-away: if you have taken pains to establish a winning environment (and only if you have), and invested in recruiting and developing the right team, it is reasonable to expect your sales people to rise to the challenge.
So there you have it: five winning strategies which have driven exceptional results for the organizations that have put them into practice. Together, they make a smarter approach to accelerating revenue growth. It should be noted: none of these winning habits require huge budgets or large staffs. All they require is smart thinking, focus, discipline and willpower. So if your organization hasn’t yet put every one of these principles into practice, what’s holding you back?
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This article was originally posted by Bob Apollo in the Inflexion Point Blog on June 12, 2012
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Keys to Building a Startup Sales Team
Posted by Rick Pranitis in GENERAL DISCUSSION on August 27, 2012
Okay, you’ve developed an innovative product or service and you ‘hung your shingle’ out to the world a couple of years ago. Lo and behold, your idea took off and you’re making good progress – and a little profit as well. Congratulations! Now you’re telling yourself it’s time to expand, add a few people to your organization, AND hire a sales team to really make the business grow.
These days that’s great news from any perspective. I’m all about building and growing business. Here are some things you should keep in mind to help guide your expansion and keep you on the growth (and profitability) track.
- Don’t hire sales people too early. In the early days (and even if you’re a couple of years into the start-up, it’s still the early days) you the founder should be able to sell (and should be selling).
- You don’t need sales people, you need sales. Don’t think VP of Sales — think Revenue Engineer. (Not the greatest analogy, but just like you won’t hire a development ‘manager’ as one of the first five people in a start-up, you shouldn’t hire a sales ‘manager’ either). Don’t get caught up in fancy titles — focus on dollars in the door.
- Don’t hire several sales people at once. Your goal is to figure out the pattern of what kinds of people are best based on what you’re selling and who you’re selling it to. You need some feedback from the system so you can continue to iterate on your hires.
- If you’ve never hired or been around sales people before, be prepared for a bit of a shock to the system. They’re not bad people, they’re just different. If you’re somewhat of an introverted geek, it’s helpful to remember that your start-up needs to sell stuff.
- Resist the temptation to create complicated compensation plans. If it requires a spreadsheet to figure out the commission, it’s too hard. You’ll have plenty of time to confuse sales people later — start simple.
- Agile methodologies can work in sales as well. Iterate! Refine your demo script, your slides, and any other collateral information. Capture the lessons learned by the best-performing people and spread it to the rest.
- Sales people will generally act in mostly rational (but often surprising) ways based on incentives. The rules-of-the-game defines the behavior of the players. Be forewarned!
- You should always connect incentives somehow to ultimate customer happiness. If you reward just “deals getting done”, you’ll get deals — but at too high a price. You might get push-back that sales people don’t control/influence customer happiness, but they do. They “pick” customers, they set expectations, they control the degree of “convincing” applied.
- Make sure you understand the economics of your business. Figure out your total COCA (Cost of Customer Acquisition). This includes sales people, marketing people and marketing campaigns. Quick example: Let’s say you paid a sales person $10k, a marketing person $10k and you spent $5k on Google AdWords (for a total of $25k) last month. If you sold 10 customers last month, your COCA is about $2,500. Different businesses have different needs in terms of sales vs. marketing spend. Make sure neither is too far out of whack.
- Your Life-Time-Value (LTV – how much revenue you expect to generate per customer) should be higher than your COCA. No, you don’t need a degree from MIT to figure that out. Once your LTV is a multiple of your COCA, you’re ready to start turning the knob and scaling the business a bit (hiring more sales people). But, if your LTV is way lower than your COCA, proceed with caution. If there is no hope for LTV getting higher than COCA, you’ve got a problem. Don’t try to hire additional sales people until the economics sort of make sense.
- Track data maniacally (even if it’s just in a spreadsheet). Information you will want includes: What was sold, who sold it, when, for how much, etc. This data will be invaluable later as you start to scale. For example, you should be able to answer the question: We had 14 customers cancel last month — who sold those customers? Is there a pattern? In the early days, you likely won’t have the volume (or the time) to analyze the data — but you should at least capture it for future use.
- Your pricing should be in line with your sales structure. For example, you can’t expect to have an outside sales force (that meets with customers in person) if your average deal size doesn’t cover your cost of sales. The math won’t work.
- Once you get beyond three or so people, running your sales in a spreadsheet will become painful. Start looking at CRM systems (like Salesforce.com).
- Start watching the shape of your ‘funnel’ as early as possible. How many leads are you getting a month? How many turn into opportunities? How many of those convert into paying customers? Once you understand your funnel, you can slowly start tweaking your system to fix the ‘leaks’.
I know this is a lot to juggle along with running your business and everything else you have on your plate. But if you want to keep your company, and your profits, growing you have to accept the fact ‘expansion’ means more than just adding bodies to the personnel roster.
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5 Tips For New Sales Managers
Posted by Rick Pranitis in GENERAL DISCUSSION, SALES LEADERSHIP on August 1, 2012
Congratulations! You’ve worked hard, made your quotas, and succeeded in exceeding all your goals. As a result, your company has seen fit to reward you with a promotion to Sales Manager. Now what do you do? Managing your own book of business and a personal sales process is one thing. But leading a team of sales professionals with different personalities, strengths and weaknesses, while attempting to meet the sales goals set by your company can be very difficult – frustrating even. Here are five activities commonly overlooked by new Sales Managers and some tips on how to successfully implement them into your strategy.
Number One: Develop A Plan!
This is number one for a good reason. Plan Your Work and Work Your Plan applies to both the individual and the leader and not having a plan is a huge blunder. Planning, tracking and reviewing are extremely important when leading a sales team. This can only be done when the manager has a plan. I’m not suggesting you micromanage your team. Just the opposite, it’s fine to allow the individual sales people to plan their sales calls and processes. However you need to develop an overarching plan that will guide your team to achieving success.
Number Two: Don’t Be Too Controlling!
This follows closely with number one above. Some sales professionals will need a lot of guidance and require fairly tight reigns, most will probably not (at least not the good ones). Micromanaging can be frustrating for sales professionals trying to do their jobs. As a Sale Manager you shouldn’t become lax in your leadership, but you need to settle on a happy-medium between being involved but not too involved. This is extremely important: as the Sales Manager you must remember you are in a partnership with your sales people and mutual respect and the allowance of some measure of autonomy is important.
Number Three: Be Supportive!
It doesn’t matter if your sales team is straight off the college campus and new to the business or they’ve been ‘hitting the bricks’ for years. Every sales person requires support. Some won’t need as much support as others but everyone will need it in some form. Having sales materials and information about the company’s products readily available can be of great help. Joining in on important sales calls or allowing a struggling (or new) sales person to shadow one of your own sales calls are also duties of the sales manager.
Number Four: Provide Professional Development!
Part of your new role will most likely be developing some form of recognition program for the team. Prizes and certificates for your top performing sales people are fine. Rewarding good sales performance is part of the job. It’s expected and appreciated. Awards can help to drive results. But real support comes from ongoing coaching and training for the group. Award and bonus programs should not be done in lieu of coaching and professional development. An important part of your role is to work with each sales person to shore up their weaknesses and/or provide general classes to everyone.
Number Five: Hold The Sales Staff Accountable!
Though it is important to consider external factors i.e. the economy, competition, etc. it’s more important to remember the sales team was hired to do exactly that – sell. Should they fail in that expectation some measure of accountability must be taken. This might include more training and more closely shadowing and mentoring on your part. But if they still can’t manage to perform well you have to consider the fact this may not be the best fit for them. You need to make the decision to either move them to a different position, or just let them go.
Successful sales management is the key to the success of a sales team. It can be difficult, frustrating and at the same time a very rewarding job. As a new sales manager, you’re going to stumble. Accept that fact, learn from your mistakes and move on. Concentrate on what’s good for the sales team in terms of reaching your company’s goals and incorporating these five tips. You’ll be successful.
Keeping on Track with Pipeline Velocity
Posted by Rick Pranitis in SALES LEADERSHIP on July 30, 2012
A key metric which successful sales managers watch is “pipeline velocity”. This is an important element in establishing an overarching sales plan for meeting your company’s goals.
Pipeline movement (velocity) is critical to the health of a sales organization. When deals get stuck in the pipeline, revenue is delayed, close rates decrease and quotas are missed.
One of the biggest factors contributing to poor pipeline movement is lack of visibility. Too often, many companies have little to no pipeline reporting. They have no idea what stage deals are in, how long they have been there, when they are supposed to close, the average length of time it takes for deals to close, what their win loss rate is or what their win loss percentage is.
Flying blind isn’t the way to move deals forward. When you can’t see what’s happening you’re powerless to affect change. In today’s world of cloud computing there is absolutely no excuse for not having a decent CRM with even basic simple, yet clear reporting tools.
There is an endless number of sales KPIs or metrics which can be followed. To ensure the pipeline keeps moving and deals don’t get stuck there a few must haves;
- Deal age (days in pipeline)
- Stage age (days in stage)
- Average deal cycle times (the length of time it takes from contact to close)
- Win/Loss Ratio
- Deal close dates by month and quarter
- Deal close dates by stage
- Pipeline revenue by stage, by quarter, by month
Without these specific metrics a sales team is flying blind and therefore almost completely incapable of creating any pipeline velocity.
A good dashboard and reporting are at the core of pipeline velocity. Visibility is critical. Know where your deals are. Know how long they’ve been there. Know how long it takes your average deal to get across the finish line. Know where in the sales cycle deals fall out the most. The more you can learn from your analytical data the healthier your pipeline will be. Healthy pipelines move much faster and are rarely clogged.
I would be interested in hearing how others have measured their pipeline movement, and as always I welcome and invite comments.
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