Posted by Bob Apollo on Thu, Oct 01, 2009
Nick de Cent, editor of Modern Selling recently asked me if I had any feel for how people are thinking about the economic climate and business prospects looking forward over the next few months. It gave me a chance to step back, reflect, and gather my thoughts.
Here's what I told Nick ... I'd love to hear whether it tallies with what you are seeing and hearing in your own markets:
"According to the messages I hear from the market, it remains tough out there, but some of the projects that have been in limbo since Q4 last year are starting to come back to life. Even in live projects, there remains a big gap between being chosen and getting the order. Many internal champions haven’t yet fully understood how to navigate their pet projects through a financial approvals process that has become much stricter and highly risk-averse. “Deciding to do nothing” remains a common outcome. The vendors that are breaking through have mastered the art of both eliminating the perceived risk of their solution and elevating the negative consequences of doing nothing. Simply exhorting your sales people to “sell harder” is absolutely, definitively, a losing strategy. Instead, they have to focus on eliminating risk and facilitating the prospect’s buying process.
The early adopter market has shrivelled to almost nothing – not because their aren’t still some early adopter individuals out there, but because the companies they work within have become more conservative in approving new projects and new expenditure. So innovative technologies are having to work out how to “cross the chasm” (and talk business, not technology) far earlier in their company’s evolution than was necessary in the past. Start-ups who haven’t mastered this are particularly hard hit, without an installed base or an established service revenue stream to fall back on. But failure is not inevitable – companies that have the discipline to focus on creating genuine customer value (rather than product marketing puffery) are winning business."
What's your perspective? Please share your comments.
Posted by Bob Apollo on Tue, Sep 01, 2009
Most sales organisations have some sort of CRM system in place. Many have made significant investments in the system. Yet simply implementing CRM – just like just running a sales training course – offers no “magic wand” for improving sales performance. In fact the energies expended on them are often wasted.
Time after time, we come across Customer Relationship Management solutions that bear little or no relation to how a vendors’ most promising prospects actually buy, or what the vendors’ top performing sales people actually do.
There are 5 danger signs that indicate that a CRM system is actually behaving as a sales prevention system:
1. Unhelpful Stage Definitions
CRM deal stages (often implemented “out of the box” using CRM system defaults) are based on sales person activity, rather than tangible evidence of what the prospect has done or committed to do. Deal status is often based more on hope than reality. The resulting mismatch between sales perception and what’s actually going on in the prospect’s decision process is a primary source of inaccurate sales forecasting.
2. Give – Get Imbalance
Sales people are expected to give far more in terms of data entered than they ever get back in terms of feedback received. The problem is frequently compounded by the data falling into a “black hole” with no evidence it is ever subsequently used by management for any practical purpose. Sales people need to believe that the information they enter is used by management to help them improve their chances of winning.
3. Poor Forecast Accuracy
Sales forecasts - particularly at the detailed level - are all over the map. Even if the projected headline revenue number is achieved, the way in which the number is made up bears little relationship to the deal by deal forecasts, and relies on heroic selling rather than intelligent use of resources. CSO Insights estimate that detailed sales forecast accuracy for the average company is now less than 50%.
4. Static Sales Process
The sales process and stage definitions that are reflected in the CRM system are static rather than dynamic, haven’t been reviewed or changed for ages, and have failed to take account of changing market conditions, buyer behaviour and sales best practice. This failure to adapt to changing conditions is often particularly striking at the bottom of the funnel, during the prospect’s decision making process.
5. Failure to Reflect Prospect Decision Making Process
Many CRM and associated sales forecasting systems have failed to capture the nuances of today’s risk-averse prospect decision-making process. Even after a vendor has been told they are the chosen solution by the decision team, most organisations now submit proposed expenditure – even if already budgeted – to a rigorous review process that all too often results in a decision to do nothing or to spend the money on a completely different area judged to be of higher priority. CRM systems must reflect the difference between being chosen and the subsequent steps involved in approval.
Avoiding Sales Prevention
How have successful CRM users managed to avoid these issues? By basing their CRM process around a clear understanding of who their best prospects are, and how and why to buy - and by embedding the customer decision journey (example below) into the system.
In addition to having the discipline (and the common sense) to only collect information that is of clear value in tracking the buying process and managing sales efforts, these CRM champions have established clear stage definitions and dynamic sales processes, and many of them have benefited from (amongst other initiatives) well researched prospect profiles, systematic opportunity scoring and sales playbooks.
As a consequence, they can boast near-universal levels of sales adoption of the CRM system - and are getting real payback from their efforts in terms of shortening sales cycles, increasing win rates and improving forecast accuracy.
Posted by Bob Apollo on Sat, Mar 14, 2009
There's an excellent article in ModernSelling on the latest Miller Heiman findings about the things that set top performing organisations apart.
The results speak for themselves. These organisations have proven themselves to be consistently successful in 5 key areas:
- Average account billing
- Sales force quota attainment
- Number of qualified opportunities
- Customer retention
- Forecast accuracy
But how have they achieved this? They create the foundation for success by aligning the entire organisation (sales, marketing and the rest) around a profound understanding of who their best customers are, what matters to them, and how and why they buy.
Miller Heiman's conclusions align closely with what we are observing in the marketplace.
Creating Opportunities
At the top of the funnel, best in class organisations are able to maximise opportunity value by understanding who their best prospects are, by carefully qualifying opportunities, by understanding where their value to the customer lies, and by walking away from poorly qualified deals.
This is not a static process - and is even less so now. As the report points out, ideal customer profiles are likely to change in line with changing market conditions. New criteria are likely to evolve, and organisations have to ensure that marketing isn't focusing its messages on last years' (or even last quarter's) audiences or issues.
Advancing Opportunities
Miller Heiman recommend that vendors carefully assess whether the prospect seems likely to enter in to a relationship that will provide long term value for both the buyer and seller. If not, even the current deal will prove harder to win, and less likely to be profitable.
Having a strong value perspective is important at a tactical level, as well. Our own observations suggest that at every step along the way, vendors need to be able to answer the question "how does this sales action create value for the buyer, and advance their buying process"? If you can't answer the question or measure the outcome, you need to seriously question the tactic.
A significant part of creating value for the prospect is their feeling that they are learning something to their advantage - but few like to be lectured. We all know that the best sales people do this through anecdotes - and we are strong believers in coaching the entire sales team on the power of selling through storytelling.
Closing the Sale
It's clear that decision making has become even more risk averse, and that ever more people are involved in the decision making process. It's always been important to identify and reach as many of the decision-makers as possible - but even then some may be unknown or unreachable.
We've found that two things can make a difference: first, elevating the consequences of inaction to the organisation - and using that to reach the other parties who may be affected, and second, recognising that you need to equip your champion to help secure approval for your proposal with their decision-making colleagues.
How does your current sales process compare to the best-in-class? Take our free sales process healthcheck.