On Reflexion - what we've been thinking...

B2B sales people: You get delegated to the person you sound like

The quality of any conversation, whether business or social, is largely determined by who we choose to talk to, what we choose to talk about and the form of language we choose to use.

But in the business domain, and particularly as a sales person, your choices have another important impact - because if you get these choices wrong, and whether you like it or not, you’ll end up getting delegated to the person you sound like.

“Solution selling” is only part of the solution...

If you’re in high-tech, it’s hard to maintain high growth through technical product superiority alone, because the early adopters who buy that way represent such a shrinking percentage of today’s market. Today’s buyers are mostly risk-averse pragmatists who are looking for proven solutions.

That’s why many sales organisations have bought into the concept of “solution selling”.  They acknowledge the advantages of solving problems rather than promoting features. They make determined efforts to sell “top down” within a potential prospect. Their top performing sales people are often successful. But many more fall short of their targets.

Zen and the art of quality conversation...

Like many of us, the protagonist in Robert M Pirsig’s best-selling “Zen and the Art of Motorcycle Maintenance” struggled to formally define quality - but knew it when he saw it. Now, I’m not suggesting that we need to master either motorcycle maintenance or Zen, but I believe that we can all identify the characteristics of a “good” conversation.

One of the key attributes is relevance. When I conduct voice of the customer analyses on behalf of clients, senior decision makers frequently offer the same feedback about sales conversations: “As long as I am learning something of value, you’ve got my attention. Share a relevant insight, and I’ll want to hear more. But the moment you start pitching your product, you’ve lost me”.

Cut out the techno-babble...

These decision makers weren’t interested in product features - particularly if they were described using the techno-babble that still resonates around so many high tech industries. They wanted to be sure that the vendor empathised with their problems, had valuable insights to share and had a track record of delivering relevant solutions.

They distrusted claims that the vendor’s products were better, and wanted to understand how and why they were different. They needed to be sure that if they went ahead that the vendor would help them manage change and mitigate risk. They recognised the need for someone in their organisation to understand the underlying technical detail, but they “had people who did that for them”.

What top performing sales people do well...

When you look at the habits of successful, top-performing sales people, it becomes clear that they do one thing particularly well. They are able to empathise with senior decision makers, and they understand, use and reflect their language. Their conversations are full of anecdotes, examples and illustrations.

They resist the temptation to prescribe a solution until they fully understand the prospect’s problem, the underlying causes, and why it might be important to deal with it now. They avoid dealing with product detail until the time is right, and the need is clear. And when they do, they negotiate and manage access to the prospect’s relevant internal experts.

This behaviour can be learned...

There’s no doubt that some top-performers just have a natural gift for this sort of behaviour. They have the emotional intelligence that Tony Blair recently claimed was so lacking in Gordon Brown. But this customer-aware behaviour can be learned, and average sales people with potential can significantly boost their success rates by embracing the principle.

Above all, they must learn to take their time diagnosing the prospect’s situation and avoid prematurely prescribing the solution. When a prospect acknowledges a problem, issue or a goal, they must take the time to understand the root causes, the potential consequences and who else is affected. They need to build the economic case for change before they propose their solution.

Key next steps...

How can this be accomplished? It requires a team effort. Marketing (with sales’ help) needs to identify the issues that are catalysing change within their prospects and market to these themes. Top sales performers need to share the questions and anecdotes that they find most effective in advancing quality conversations in prospects.

The organisation needs to identify the common characteristics of winning deals, and to find ways of both connecting with similar prospects and conducting similarly successful sales campaigns. And sales people need to both be coached and encouraged to share best practices in the art of sustaining winning conversations with senior decision makers.

If they sound like the right people, they are less likely to get delegated to the wrong ones...

Can sales + marketing agree on what an ideal prospect looks like?

It’s an old story, but one that I still hear far too often. Salespeople complaining that marketing never generates any decent leads.  Marketing getting frustrated that sales never follows up on the leads they have created.  And, amusing though the idea might at first appear, we can’t excuse it by claiming that “Sales is from Mars and Marketing is from Venus”.

I should probably have put the word “leads” in quote marks.  It’s not unusual for part of the problem to stem from a failure to agree what a sales ready lead looks like, or to get confused between an enquiry, a lead and an opportunity, or even (bizarre as it may seem) to regard those three categories as being in some way interchangeable.

Creating a contract between sales and marketing

But the real root cause predates even the enquiry-lead-opportunity definition problem: it arises from the failure to agree and define what an “ideal prospect” looks like.  Without a consensus about the characteristics of a well-qualified prospect, marketing are likely to continue investing resources targeting people who are never likely to buy - and sales will be unable to sign up to a contract with marketing that basically says “find opportunities that look like this, and we will commit to pursue them”.

What does an ideal prospect look like?

I’ve conducted a number of ideal prospect profile exercises with clients - I have come to regard them as the essential foundation for making smart sales and marketing investment decisions - and here’s what I’ve learned:

• Demographics alone aren’t enough.  The classic dimensions of market segmentation - industry, geography, company size, etc., form the foundation of an ideal prospect profile, but they are by themselves insufficient
• The devil is in the detail.  When you evaluate recent sales successes, you can usually uncover more subtle characteristics that have a more important predictive effect.  Things like existing systems in use often have a profound impact on the chances of sales success
• Don’t ignore behavioural factors.  Years ago, when I was working at HP, we uncovered something that had far greater impact than any demographic factor: companies that were highly decentralised (like HP) tended to prefer to buy from HP. Companies that were highly centralised (like IBM was at the time) strongly preferred to buy from IBM
• Look for patterns. A more recent predictive factor has emerged from my work with SaaS based offerings: for reasons that are fairly simple to understand, companies that have already signed up for one SaaS based solution are far more likely to buy additional ones.  The pioneering work has already been done

A few simple recommendations...

Here’s what I’d recommend to any organisation that wants to leverage the concept of “ideal prospect profiles” to dramatically increase sales and marketing effectiveness:

• Establish ideal prospect profiles for each of your significant product or service offerings as a collaborative exercise between sales and marketing.  Be sure to combine demographic, environmental and behavioural characteristics
• Make a determined effort to progressively enhance your target account prospecting database by capturing the characteristics of your “ideal prospects”.  Include this learning in the information you collect in web form submissions, etc.
• Help prospects to self-qualify by explaining how your solution is particularly relevant to organisations that exhibit the characteristics of your “ideal prospect profile”.  Ensure that your case studies and reference materials support this
• Encourage sales and marketing to enter into a contract based on the commonly agreed characteristics of an “ideal prospect” that ensures that if marketing uncovers a suitable candidate, sales commits to follow them up
• Implement a continuous qualification process that helps marketing and sales to judge - in an evidence based way - just how good a prospect any given enquiry, lead or opportunity is likely to be

Trust me, it will be worth the effort...

Get this right - and continue to refine it - and from all my observations, you’ll spend your marketing money far more wisely and apply your sales resources far more effectively.  And both departments will enjoy working together.

Are you really adding value?

I’ve lost track of the number of companies who proclaim that they are embracing a “value-added” strategy in order to differentiate themselves in an increasingly commoditised market. They often see it as their best chance of breaking away from relentless pricing pressure and a highly competitive sales environment.

Many have thrown enormous sums of money at trying to move up the solution value chain without successfully changing a sales culture that is still rooted in selling simple product offerings and lacks the experience or credibility to deal with the buying processes that are associated with evaluating complex solutions.

Value-added - or cost-added?

So why do so many of these “value-added” initiatives manifestly fail to deliver the hoped for results? And why in many - maybe the majority - of cases, do the initiatives turn out to be nothing more than “cost-added” strategies that only serve to further depress the profitability of the organisation without actually moving the dial when it comes to sales win rates?

In my experience, most of these initiatives make no attempt to confirm that their various so-called “value-added” activities have any meaningful value to the prospective customer, or are likely to positively influence their behaviour. In fact, all-too-often they reflect the misapplied imagination of a product marketing manager about what matters to customers they have spent all-too-little time trying to really understand.

It's what the prospect is prepared to pay for...

I propose the following test of value added: “that which a well-qualified prospective customer proves by their behaviour they are willing to invest their time or money in, which materially advances their buying cycle, or increases the chances of them making a positive buying decision”. In other words, we shouldn’t be doing anything that a prospect isn’t prepared to pay for with their time or money.

Of course, there is a big problem implementing this thinking in an environment which is focused primarily around a vendor’s sales process. But when you turn the telescope around and look at matters from the perspective of the buying process, and what it takes to persuade your prospect’s decision making team to move forward from stage to stage, you can much more easily identify where the real value added lies … and where all the potential sources of wasted effort might sit.

Are your "value-added" efforts wasted?

Take a look at your sales and marketing actions?  Can you identify where and how they add value to your prospect's decision-making process?  And if not, how much more effective could your organisation be if you saved that money and effort or re-purposed it to a better cause?

Does your sales pipeline need a massive clean-up operation?

BP has been getting a great deal of adverse publicity for the recent massive leak in their Gulf of Mexico oil pipeline.  It’s taken an age to address the underlying problem.  The clean-up operation is clearly going to take ages and cost billions.  The fortunes of the Bubba Gump shrimp company and many others like it may never recover.

Those of us who manage sales pipelines know that they rarely run freely.  Many are clogged with deals that are going nowhere and which only serve to slow the progress of more promising opportunities.  

But slow-moving pipelines aren’t the only problem.  Sales pipelines also leak, as prospects either decide to buy something else or do nothing.  Worst of all, many deals leak late in the process – towards the end of the pipeline - after huge amounts of sales effort have been applied.

My observations of high-value B2B sales suggest that clogged and leaky sales pipelines are often the norm and that much of the effort that sales teams expend on trying to move deals forward is wasted.  So it’s no surprise that CSO Insight’s annual report on sales performance optimisation has recorded some of the lowest sales win rates on record.  

It’s time for a massive clean-up operation – let’s just hope we can do better than BP.  But what is it going to take?

Clearly define the key stages in your sales pipeline

Let’s start with the basics.  Your pipeline stages must be clearly defined, consistently applied, and reflect meaningful steps in your prospect’s decision making process.  The progress of each opportunity must be based on observable evidence of your prospect’s behaviour and intent, and not just on your sales activities.  These are the essential foundations for any successful sales pipeline clean-up operation.

Carefully measure flow and leakage

Once you’re sure that the contents of your sales pipeline are being reported accurately, your attention should turn to measuring flow and leakage.  Flow is about measuring how long it takes for successful deals to pass from one stage to the next in the pipeline, and using this as a benchmark to identify deals that have been “stuck in stage” for too long.  This is important because of one simple fact: it inevitably takes you longer to lose a deal (or recognise it is lost) than it does to win.

Leakage is the other key metric.  At what stage do deals fall out of the pipeline, and what is the real percentage of deals that ultimately convert to wins from each stage?  I use the phrase “real percentage” deliberately.  More often than not, CRM systems apply percentages to stages that have no relationship to reality, have never been reviewed or adjusted, and are precisely and dangerously wrong.  It’s no wonder that average forecast accuracy rates (as measured by whether deals close as predicted) is now below 50%.  If you’re still using the percentages that came out of the box with your CRM system – or if you haven’t reviewed them against reality recently, deal with it now.  You can’t afford to wait.

Establish benchmarks

Once you have good underlying data and good metrics, you can establish benchmarks and start comparing the performance of your sales team members.  Look at recent sales successes.  Establish the cadence of their progress from stage to stage.  Set deal flow  benchmarks.  Isolate deals that are taking longer than these winning benchmarks, and carefully re-qualify them to make sure they are real.  If not, remove them from the pipeline.  Review your sales strategy for deals that still seem promising but are stuck in stage.  What can you do to help the prospect move forward to the next stage with you?

Look at the shape of your sales team’s pipelines.  Are they qualifying out early, or losing late?  Winning sales people seem to follow a consistent pattern – they take time over qualifying, qualify more deals out early in the pipeline, and successfully close the remaining opportunities faster than their also-ran peers.  Conversely, average sales performers often have a habit of “losing late” – deals are either lost or qualified out late in the journey, after huge levels of effort have been wasted.  You need to understand why, and take remedial action to help them embrace the winning behaviours of your top performers.  But most important, if you’re going to lose, lose early!

Qualification should be a continuous process

Another common reason for opportunities getting stuck in the middle of the sales pipeline is that the prospect’s circumstances have changed.  Even if the deal appeared well qualified initially, something’s happened – maybe the prospect now has other priorities – and progress has stalled.

Qualification is not and cannot be a one-time event.  In fact, I recommend that at each stage in the sales pipeline that you identify and assess key qualifiers that are relevant to that stage in the buying process and which can alert you to these changing circumstances and either give you the chance to react to them or to qualify out before any further sales effort is wasted.

Avoid putting rubbish in your pipeline in the first place

My final recommendation is to avoid filling the pipeline with rubbish in the first place.  Make sure that you establish “ideal prospect” profile, target your marketing towards them, and qualify inbound enquiries against them.  Be careful to distinguish between interesting, important and urgent needs, and ensure that you are working on opportunities where the problem is already urgent or can be elevated to an urgent need.

Resist the temptation to add more poorly qualified prospects to the pipeline – you’ll only make matters worse, and have an even more expensive clean-up operation to perform later on.  Focus on managing quality, velocity and leakage and encouraging winning behaviour, and you’ll have the foundation for a smoothly flowing sales pipeline.  And by eliminating all that wasted effort, you’ll be doing your bit for the environment as well!

What really motivates people?

What really motivates people?  Dan Pink is a contrarian thinker who always challenges me to think from a new perspective.  I think that you'll really enjoy this video...

 

Sales people: can you resist the itch to pitch?

Jill Konrath's "SNAP Selling" identifies the "itch to pitch" as one of the most damaging habits sales people can possibly fall into - and my own observations suggest that it's one of the most common and dangerous ways of driving an otherwise promising sale off-track and into the weeds, with little hope of recovery.

The itch to pitch - otherwise known as "showing up and throwing up" or (in particularly trigger-happy cases) "premature elaboration" is an all too common condition.  It can be observed whenever a sales person, upon hearing their prospect acknowledge an issue or challenge they know they can fix, can't wait to pitch in with an enthusiastic description of their company's offering or capabilities.

"As long as I'm learning, I'm listening..." 

Within seconds, the previously receptive prospect has usually completely tuned out and the opportunity has been lost - potentially forever.  When I talk to today's B2B buyers, one theme comes through loud and strong - they tell me that "for as long as I am learning, I am listening.  But the moment I feel I'm being pitched to, I'm outta here".

Today's buyers hate being sold to.  They can't stand over-enthusiastic sales people who can't wait to tell them how great their product is, or how many features it boasts, or all the acronyms that are inevitably associated with it.  And they have come (with good reason) to dread the phrase "and here's another feature...".

Missing the golden moment...

Sales people who cannot resist the itch to pitch are missing a golden moment.  When a prospect acknowledges an issue that you are confident you can help with, the worst possible thing you can do is to jump straight in and tell them how.

Time to explore... 

Think of their acknowledgement of the issue as a golden opportunity to explore.  Instead of prescribing your "solution", determine instead to learn more about their circumstances.  

What first drew their attention to the problem?  What are the consequences of the problem?  Who else is affected?  What would happen if no fix can be found?  Could they live with the status quo?  Have they tried to deal with it before?  With what results?  Why is solving it important now?

Interesting, important or urgent... 

You'll learn an enormous amount by following these lines of enquiry.  You may even help your prospect to think differently, and to take a fresh perspective - and earn their respect as a result.  Perhaps most important, you'll be a better position to judge whether the issue they have acknowledged is interesting, important or urgent to their organisation.

Interesting needs can get you considered.  Important needs can get you evaluated.  But only urgent needs will get you bought.  There's no point in pitching a solution to a problem that isn't regarded as urgent.  But by asking these questions, you may be able to elevate an interesting or important need to an urgent one - or to identify a related need that turns out to be truly urgent.  Or you may be in a position to conclude that there's no urgent need to be solved, and nothing that you can do to secure a sale.

Making it easy to buy...

When the time finally comes to present your solution, you'll be in much better shape.  You'll be confident that you are addressing a real need that demands an urgent resolution.  You'll have discovered who else is affected.  You'll be confident in your business case.  And you'll have built a rapport and a reputation with your prospect as an expert advisor, rather than a trigger-happy sales person. 

When was the last time you were exposed to a sales person who can't resist the "itch to pitch"?  And how did you feel about the experience?  Well beware, because if you can't resist the tendency, your prospects will be feeling the same...

What motivates a salesperson – the results are in!

Regular readers will recall that I've been pleased to republish a number of guest blogs from Donal Daly of our partner the TAS Group. Here's an article that he first published a couple of months back on the Sales20Network that I am sure you'll find fascinating. 

Over to you, Donal:

"There is much debate about what makes a good sales person, or indeed whether you can actually ‘make’ a good sales person. The debate of selling as a science or art continues to elicit much passionate discourse. What’s the role of sales training?  Does how the sales person is compensated make a big difference? Does marketing drive sales or sales guide marketing? Why are there no (or few) professional qualifications for sales people? How come there are no standard measures? How can I get the most out of the sales team I have?

Sales fuels growth – and many reports have been commissioned on how to identify, hire, fire, coach or motivate a sales team to produce that growth. Depending on the audience, the answer to ‘What motivates a sales person?’ varies. Well, the survey results are in, and the answer is clear.  But the important action for you to take right now is not to sit back and go “Hmm, that’s interesting”, but rather to think about what it means to your organization.

But first, the background …

I conducted a simple poll of the LinkedIn membership to answer a simple question:

What motivates sales people?

• Compensation or Incentives
• The thrill of the chase
• Making progress or winning
• Recognition

As I write this, there were 129 respondents, and though that is not a huge sample size, my experience with these kind of surveys would suggest that the percentages don’t change much after the first 50 or so respondents – assuming you’re targeting a fairly homogeneous group.  So, I’m pretty confident that the responses here are sufficiently representative.

As you can see from the chart below, the overall results from the survey would suggest that what keeps the sales professional fired up and motivated is tangible evidence of making progress (40% of respondents).  ‘Compensation or Incentives’ is strong second (at 35% of respondents) , but you will see that the gap increases when you look a little more closely.

Overall Results

Now, stop for a minute and think about how your organization provides you, or your sales team, with tangible evidence of progress. As the sales person progresses a sale, does sales management coaching measure progress against evidence of customer actions?  Is it all about activity?  Does the CRM system provide feedback to the user on the progress they are making – or is is just used for data entry to supply management with whatever reports they need.

When you further analyze the data, and look at if from the perspective of different job functions, you will see that from the sales professionals’ perspective, ‘Making progress or winning’ (at 67%) is the clear leader in the motivation stakes.  It’s interesting to note that Consultants have it so wrong.  Remember the old adage that says “Those who can, do; and those who can’t consult.”  Be afraid – be very afraid.

Results by Job Function

As one of the respondents to the survey commented “So, maybe we’re not just money grabbing leaches after all.” Sales people, like everyone else, need to feel good about the job they do every day.  Not every day is going to be a day where you close a deal.  Sales is a profession peppered with rejection and disappointment, and it’s only those who have planned out their path to success, and have put in place a mechanism to measure progress against that plan, who can exhibit the necessary resilience to make success a pattern.

When we (The TAS Group) ask our existing customers what they like about the Dealmaker Sales Performance Automation platform, one of the most common answers we get from individual contributors and sales management alike is “We can always see when we are making headway.  It’s not just like the CRM black-hole.”

One of the most interesting findings from this poll was the variances in response across age groups.  Is this representative of an evolving shift in values?  It is a sign of the impetuosity or impatience of youth – in this increasingly interrupt-driven environment? As you can see in the chart here, younger respondents want feedback – and they want to see progress, and they want to see it now.

Results by age categories

I found the results of this survey to be at once interesting and uplifting.  For those who are open to interpreting it this way – it removes, or at least dilutes, the stereo-type of the snake-oil salesman. Sales people, like everyone else, want to feel good about themselves, every day, one small win at a time.

We shouldn’t  ignore this when we think about how we manage, and might perhaps consider what one thing we can change to leverage this inherent attribute to accelerate revenue growth."

So - if you're a sales manager, how do these results relate to your experience?  And if you're a sales person, do these findings reflect the way you feel?  Or is something else motivating you?

One more thing: if you would like to learn more about how sales process equals sales success, you can complete a form to down load the TAS Group's recent white paper on the subject here.

There are only 2 reasons why you lose a sale

I'm happy to share the second in our series of guest blogs from Donal Daly, CEO of the TAS Group.  In this article, first published in his Sales20Network blog in April 2010,  Donal explores the factors that affect sales win rates - and concludes that there are only two reasons why you lose a sale.  

I am sure you'll enjoy his perspective - over to you, Donal...

"One of the issues that I’m often asked about is how to improve Sales Win Rate.  Sometimes the question is presented as “What’s a good Win Rate?”, or “What percentage of deals that I bid for should I win?”  Of course there is really no universal answer to this question – and the reason for that is that it’s the wrong question.  In my opinion, energy is more productively spent in determining why you lose deals, and in my experience, the explanation follows a fairly predictable pattern. If that is true, then if you can identify the common attributes of lost deals, you can work to avoid deals with those attributes, or focus on how to overcome the weaknesses that gave rise to the failure. Then by definition, your Sales Win Rate will improve.

In reality there are really only two reasons why you lose a deal:

• You Should Not Have Been There (pursuing the deal) In The First Place, or
• You Were Outsold.

I will substantiate this claim a little later, but first I want to share some alternative perspectives.

When I ask sales managers why their teams lost a specific deal the most frequent responses include things like:

1. “Well, he wasn’t speaking to the Decision Maker.”
2. “She didn’t understand what the customer really wanted to achieve.”
3. “We should never have bid in the first place, the customer is locked into our competitor.”
4. “Our solution just wasn’t a good fit, and he (the sales person) tried to squeeze a round peg into a square hole.”
5. “The competitor had a stronger relationship with the customer.”
6. “There was never a project there in the first place.”
7. “We didn’t understand the personal motivation of the Decision Maker.”
8. “He couldn’t get the customer to understand our value proposition.”
9. “She never realized that the budget was way too small for our product.”

Responses from sales people to the same question include many of the above, but there are sometimes some additional reasons given:

1. “We’re just too expensive.”
2. “We couldn’t provide a reference because we’ve never sold to that type of customer before.”
3. “I never knew [the deal] had to be approved the technology committee.  He never told me that.”
4. “The customer just doesn’t get it. I don’t understand it – she really needs our stuff.”
5. “I never knew that the competitor wrote the RFP.”
6. “He never told me that Capability X was important.”
7. “My [internal] sponsor just didn’t have the juice to make it happen – even though he told me he did.”

For mid-to-large deals in an enterprise B2B market, the costs incurred in pursuing a sale will typically range between $10,000 and $100,000. Our research at The TAS Group has shown that it takes 50% longer on average to lose a deal than to win one.  Think about that for a moment.  If your sales team is spending more time losing deals than winning deals, what’s that going to do to your quota achievement?  Or, if you could fix the problem, what impact would that have?

No matter how you look at the reasons given above, in truth there are really only two reasons why you lose a sale:

1. You Should Not Have Been There (pursuing the deal) In The First Place , or
2. You Were Outsold.

It’s as simple as that – just two reasons. In my experience, failure is weighted fairly evenly across both. So, let’s look at these in a little more detail.

Reason 1. You Should Not Have Been There In The First Place

At The TAS Group, we discuss ways to help sales teams win 4 of 7 deals, instead of 3 of 10.  This means that you pursue fewer opportunities.  It’s not about ‘getting up to bat’ more often. In fact it’s the opposite.  In practice it means determining at the outset if your solution can uniquely and competitively add value to the specific customer that you are targeting. Of course it means research, and work, and understanding of what the customer wants to achieve, and how your solution might be applied to solve their specific problem.  This information is only useful if you understand what the competitor might be offering.  Often, it’s as simple as defining your ’sweet-spot’ customer – listing the attributes that describe the profile of the customer to whom you can competitively add value. When you hear yourself saying “We’ve not sold to this type of customer before – but I think I can make it work.” – then move on. You’re wasting your time.

If you look at the ‘lost deal’ reasons listed above, items 3,4,6, and 9 in the Sales Manager’s list, and items 2 and 5 in the Sales Person’s list fall into that category – you should not have been there in the first place.

Reason 2. You Were Outsold

Sometimes this is hard to accept. I know that in my case, if it’s not Reason 1, then I’ve been outsold. I didn’t understand what the customer wanted to achieve, I was not politically aligned in the customer’s organization, I didn’t understand the customer’s buying process, I chose the wrong competitive strategy, I failed to articulate my value proposition in terms that the customer understood, I failed to demonstrate ROI for my solution, or, more likely, a combination of a few of these.  Looking at the lists above, items 1,2,5,7,8, and 9 in the Sales Manager’s list, and items 1,3,4,6 and 7 in the Sales Person’s list fall in to this category. I’ve been outsold – someone else did a better job.

Now, even if you’ve done a great job in qualification – and that’s what you’re doing to pass the ‘Should I Be There In The First Place?‘ test, you won’t win all of the deals.  Sometimes, you will be outsold, 3 out of 4 is a realistic Sales Win Rate target.

* * *

When I express the perspective outlined here, I get a range of reactions, ranging from animosity (“Who does he think he is? He doesn’t understand what I go through to win a deal”) to guarded acceptance and excitement (“Wow, if we could actually achieve that, it would be incredible. We should give it a shot.”).

As we’ve watched our customers move to these kind of ratios it’s been really gratifying to know that we’re making that kind of difference for some.  I’ve spoken at length to those who excel on this journey, and there are a number of common attributes – some organizational, and some with respect to the tools they use to help them.  Organizationally, the companies just seem to be run better, and sales is viewed as the engine that fuels growth, and investment is commensurate with that view.  From a sales tools perspective, the common elements are a sales process that maps to how the customer buys, deep analysis of the customer’s political structure, and collaborative interaction with the customer to truly understand their business problem and what they want to achieve.

The following movie links give an overview of components of how the Dealmaker Sales Performance Automation platform is used to support these three goals.  Though, as it uses our Dealmaker product, it’s a little self-promotional, and I don’t like to do that in the blog, it’s the best way I can think of to elaborate on the areas that I think add considerable value and I’ve seen executed well."

• Sales Process
• Political Alignment – go to the 3min mark in the movie
• Collaboration

I hope that you've enjoyed Donal's perspective, and that you'll understand why we see such value in our relationship with the TAS Group. You can learn more about Dealmaker here.

5 Facts about how b2b sales cycles are changing...

Inflexion-Point has recently established a partnership with the TAS Group to offer their Dealmaker platform to clients who want to combine clear market focus, systematic sales process and best-practice sales execution.

I'm delighted that Donal Daly, CEO of the TAS Group, has agreed to contribute occasional guest blogs to Reflexions.  I'm sure you'll find his insights fascinating.  The following article was first published on the Sales20Network on 1st November 2009.  It goes a long way to explain why we chose to establish our partnership.

5 Facts About How Sales Cycles Are Changing

by Donal Daly, CEO, The TAS Group

"Over the past few years the TAS Group has observed (in a measurable and analytical sense) tens of thousands of winning sales cycles.  Through the Dealmaker platform, we can aggregate anonymous data, to learn about the evolving cadence of the sales cycle.  For each of our customers, Dealmaker allows them to track and measure the actual sales cycle of each deal, and analyze on a macro or micro level. For reasons of privacy and general good business practice, we don’t access individual customer’s data, but for certain accounts where we’ve been given explicit permission, we have been able to measure sales rhythm, and extrapolate to an overall measure of global sales velocity that we feel is a good indicator of the changing nature of the business of sales.  Here are some facts you might find surprising.

Fact #1: Winning Sales cycles are shortening. 

This may appear to be counterintuitive, but, over the last 12 months, in an economy that been as difficult as many of us will ever have seen, winning sales cycles are getting shorter. The time from Qualify to Close has reduced by a little more than 23% over the past year. Finding truly qualified opportunities has been harder, as many projects have been stalled or cancelled, but when green-lighted, they’re closing faster than before.

Fact #2: It takes 150% longer to lose than win.

On average, the typical salesperson spends 150% of the time on deals that he (or she) eventually loses, than he does on deals that he wins. The sales cycle for opportunities that you eventually lose drags out for much longer, and the attendant cost of sale (or in this case ‘cost of loss’) is much higher.  When you think about this, the impact to your overall sales and organizational velocity and productivity is staggering.  The opportunity cost (no pun intended) is huge.  The organizational cost, measured by mis-allocated resources, inaccurate sales forecasts, and missed [winning] opportunities is dramatic.  If your win rate is 50%, then you’re only spending 40% of your actual selling time on winning deals.  That probably equates to just about 20% of your total time on winning!

Fact #3: Most [winning] sales cycles follow a predictable pattern.

In a specific company, most sales efforts that results in a sales win follow a predictable pattern.  When you remove the exceptions at each extreme of the spectrum, the time is takes to move through each stage in the sales cycle is fairly standard.   If the average length of time that it takes to progress a sale from a verbal order to a signed contract is 20 days, then guess what – it usually takes around 20 days to make that progression.  No matter how good you’re feeling about a deal, it’s unlikely that you will get the contract signed to include in the quarter’s numbers, if you’ve only 5 days left.  Understanding the actual sales cycle of each deal, and the average sales cycle across all deals, helps hugely in arriving at accurate sales forecasts.

Fact #4: Rushing through Qualification or Needs Analysis lengthens the sale cycle.

Intellectually, everyone understands this – but still sometimes some very experienced salespeople forget the basics.  Spending enough time in the early stages of the sales cycle is crucial to managing the cycle, and yes, shortening the overall sales cycle.  The data suggests that if you spend considerably less time (than average or recommended for your business) in the early stages of the sale, the latter stages drag out.  This happens more frequently when the salesperson has not taken enough time to ensure that he and the customer have a complete and common understanding of what’s needed to satisfy the customer’s requirements. As the customer get closer to finalizing the deal, new items appear, for example, that the customer perceived as implicit requirements, but the salesperson didn’t include in his pricing.  The result is that a complete mini-sales cycle has to be redone to get everyone on the same page before the deal can get signed.

Fact #5: You WILL lose deals that are in the pipeline for more than 150% of the winning sales cycle duration. 

When you look at your pipeline, do you look at the total pipeline value, or do you examine the pipeline velocity. Based on the data we’ve observed, it’s really important to understand the value of your Active Pipeline, as opposed to your Total Pipeline.  Most sales organizations will have a significant number of deals in the pipeline that are of little or no value, and the Total Pipeline value is just a number that the marketing department feels good about. It has little or no bearing on what’s going to flow through to closed deals.  Deals that are languishing, are usually deals that should be ‘qualified-out’ or have already been lost."

So - how much of your pipeline is clogged up with deals that  are never likely to close - and what are you going to do about it, starting today?

McKinsey and the end of the Road Warrior...

As we emerge from the downturn, it’s clear that we’re going to have to find new and better ways of reaching and satisfying our customers.  The May 2010 edition of the McKinsey Quarterly reports that “the way businesses buy from and sell to each other is changing”.

No great surprise there.  The article explores three trends that McKinsey’s analysts heard from senior sales executives.  Now the nature of McKinsey’s sample is such that the results reflect the experience of some of the world’s largest and best established companies – but my own observations suggest that a growing number of successful up-and-coming organisations are already embracing their recommendations.

The “end of the road warrior”?

One prediction in particular caught my attention.  Under the heading “the end of the road warrior”, McKinsey pointed out that many sales organisations have built new, lower cost channels to serve smaller customers.  But siloed approaches in which low-value deals are served through a low-touch channel and high-value deals are served through a high-touch direct sales operation are proving - with good reason – to be unnecessarily rigid and increasingly ineffective.

Part of the reason – as McKinsey point out – is that many of the stakeholders and decision makers involved in the buying process have become more relaxed about where and how they get the information they need to support their decision-making.

Time for a blended approach...

For high-value products with complex and lengthy buying cycles, it’s clear that “one-size-fits-all” go-to-market models are hopelessly inadequate to serve today’s buying behaviours.  But it’s equally apparent that rigid demarcation lines that force buyers down specific sales paths according to the value and perceived complexity of their transaction aren’t satisfactory either.

Surely it’s time for a blended approach – one that enables prospects to get the information they need in order to advance their buying process through the medium that they feel most comfortable with.  Rigidly distinctions between inside and outside sales, or direct, indirect and web-based channels aren’t going to help.  Today’s most progressive sales and marketing organisations are thinking “outside in” around how best to facilitate each prospect’s buying decision making process rather than “inside out” around how it might be most internally convenient for them to organise.

Establishing multiple touch points...

We need to establish multiple touch points that can satisfy our prospects and facilitate their buying processes.  Sometimes our prospect’s needs might be best served through face-to-face interaction, at other times through a remote conversation, and at still other times through their ability to “self serve” the information they need.

Our decisions need to be guided by a deep understanding of how – given the dynamics of today’s buying environment – our prospects prefer to receive the information they need during each phase of their buying process in order to facilitate a decision to move forward with us to the next stage.  And, of course, we need to be guided by an appreciation of the costs to us and the value to our prospects of each mode of each interaction.  The goal must be to provide the greatest utility to our prospects in the way that makes the best use of our resources.

Aligning compensation with desired behaviour...

It’s likely that many people could contribute to a successful sale in this new blended model.  And knowing - for sales people in particular – that compensation strongly influences behaviour, it’s important to think through the implications of a fair compensation model that motivates winning behaviour.  

Just as the first past the post voting model seems to have failed the British electorate, simple compensation models that encourage traditional “it’s my deal” behaviours are likely to be counter-productive.  Successful organisations seem to be incorporating incentives that reward collaboration and a shared contribution to sale success.

So – is the era of the road warrior really at an end?

Yes and no.  We are certainly observing a decline in traditional go-it-alone, sales heroics based, road warrior behaviours – but we’re also observing great success in organisations that have successfully created a blended model in which face-to-face interaction is retained where it delivers value to both the prospect and the vendor, and is complemented by alternative methods of interaction where they better support the buying process.

Effective use of technology is clearly a critical factor – to support both remote and self-service interactions.  And there’s no doubt about the attraction of reducing travel costs and avoiding the suffocating and unpredictable grip of Icelandic volcanoes.  Complex, high-value sales will still depend on the power of personal interaction.  But that power will be amplified and focused through the intelligent use of multiple touch points.