Will the VP of Stuff see dollar signs?

Posted on February 21, 2011. Filed under: Sales, Sales Funnel, Sales Goals, Sales Velocity | Tags: , , , |

If you’ve been following me for a while you know I believe the BuyCycle Funnel can improve your selling in many ways.  One of those ways is making better sales calls.

Let me get us on the same page first.  If you’re making a sales call then your goal should be to get closer toward a sale.  If it’s not a sales call then this goal isn’t valid.  For example, a service call on an existing customer isn’t a sales call.

Let’s say you’re making the first sales call on a new prospect.  The VP of Stuff has agreed to meet you because you’ve been referred by one of your clients.  He has a broad idea of what you sell.  You want to find out if VP of Stuff has a need for your services and eventually if he or someone else is committed to spending money with you.

How do you prepare to make that outcome happen?  First you need to define what that outcome should look like.  The funnel can help you do this as long as it’s a commitment-driven model like our BuyCycle Funnel.

The BuyCycle Funnel defines the customer buying process by defining the stages as customer commitments.  That’s because for a purchase to happen the customer must commit.  Early in the buying process the customer is recognizing a problem or opportunity.  To go further in the process the customer needs to commit to understanding the economic or financial effect of the problem.  Otherwise he’s not as likely to make a change, eg buy your products or services.

Therefore, your call plan should be designed around getting the VP of Stuff to commit to exploring the financial effect of the problem.  That could be achieved in many ways, maybe the VP introducing you to someone on his team who plays a key role in the buying process, or setting up a walkthrough of the facilities himself.  Building your call plan around this outcome helps you qualify the opportunity better.  If you get the commitments you seek then the sale is moving forward.  If not, then you know the sale isn’t moving and you try another approach.

Your funnel model is most productive if you’ve defined specific, high impact selling activities to do at a stage like this one.  Those activities could include getting executive alignment or the customer commits to a needs assessment.

With each stage of the funnel representing a commitment the customer must make to move further in the buying process it’s easier to define your objectives for each sales call.


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Sales Velocity and the Funnel

Posted on February 2, 2011. Filed under: Funnel Audits, Lead Generation, Pipeline Measurement, Sales, Sales forecasting, Sales Funnel, Sales Goals, Sales Management, Sales Metrics, Sales pipeline, Sales Quota, sales training, Sales Velocity | Tags: , , , , , , , , , , , , , , |

One of my clients, a director of sales, gave me solicited input in a meeting I was preparing to facilitate for him and his colleagues and the VP of Sales last year.  This was an existing Funnel Principle client looking for ways to leverage the system they installed a few years earlier.  “Let’s make sure we talk about sales velocity”, he said.

“Absolutely”, I replied.  Then I asked, “If you had better or more information about sales velocity for your region funnel how would you use that information to manage better?”

He replied almost before I finished the question.  “I don’t know.  But it seems like I should know more about it.”

Metrics like sales velocity are valuable for many reasons.  Whether your company has a sophisticated system of metrics, or keeps metrics to a bare minimum, or has no metrics at all you all share a common need to make the information you gather meaningful to your troops.   Ultimately, their greatest value is the role they play in changing or reinforcing selling behavior.

Funnel value (we call it TVR, Total Viable Revenue) is probably the most common metric that I hear VPs of Sales say they want to have and provide for their salesforce.  I agree it’s a valuable metric but only if it’s acted upon.  I continue to see a gap in having that information and in driving change.  I see two reasons for this.  One is because the users don’t trust the data on their funnels.  Therefore, the funnel value has little credibility.  Two, there’s a lack of connection between funnel value and actions to run a territory.

TVR is a key leading indicator to the true health of a funnel.  It’s all the sales on the funnel that have reached a critical stage of the customer’s buying process called Commit Funding.  At this stage the customer has committed funding and possibly significant resources to making a change one way or another.

The best way to connect TVR to actions is to inspect the funnel regularly and use the information to plan, organize and execute.  Think ‘lean’ for a second.  If a rep’s TVR is in the red, the action plan has to include ways to get it to green.  These ways are tied to working specific accounts and opportunities at specific sections of the funnel, namely the non TVR sections.  These are the early stage opportunities.  You go there first to find more TVR.

An action plan to find more TVR if that’s what the diagnosis suggests is not a loose, airy, feel-good next step kind of thing.  It’s specific and therefore accountable.

It’s the sales manager’s job to help the seller define this plan and keep her accountable to it.

Ain’t rocket science.  But man it is powerful.

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What will it Take for Sales & Marketing to Stop Duking it out?

Posted on February 1, 2011. Filed under: Lead Generation, Sales, Sales forecasting, Sales Funnel, Sales Goals, Sales Management, Sales Metrics, Sales Quota, Sales Velocity | Tags: , , , |

boxing

Image via Wikipedia

In this corner…the challenger.  Weighing in with strategy and branding.  Just returned from a trade show where he picked up 1500 new leads is…MARKETING!

And in that corner…the champion.  Completely focused on closing the next sale.  Sometimes accused of operating in a silo.  Looking for new, qualified leads all the time is… SALES!

At the recent Sales 2.0 conference in San Francisco the new theme was sales and marketing.  In fact, ‘Marketing’ was invited onto the conference stage and title.

If you’re as ‘seasoned’ as me you grew up in a corporate household where marketing and sales duked it out all the time.  Call them kissing cousins or strange bedfellows or whatever.  Attracted to each other, they definitely had separate rooms in the house.

Marketing was part brochure builder, part communications creator (think marcom), part trade show tycoon, part branding advocate and advertising angler – and even product management porfessional.  Sales was simply about net new business.  You can tell who wore the pants in the family.

Marketing was about the big picture and sometimes didn’t get as much credit for demand generation as it deserved.  And in some organizations marketing didn’t deserve any credit for demand generation.

Today Marketing is under pressure to contribute more to the demand gen side.  Who could possibly find a problem with this?  But working together with sales is not easy.  I’ve got the perfect tool for both groups:  the sales funnel.

Instead of focusing on how they disagree, how about focusing on how and where they agree?  Marketers and sellers can easily agree on this:  the customer has a buying process.  The most effective way to generate new sales is to interact efficiently with the customer throughout its buying process.

The funnel, when designed the right way, is the perfect tool to do this.

Starting with pre-funnel and continuing through the last stage before a purchase order or contract is signed, the funnel gives marketing and sales a way to get on the same page – be aligned. Each stage represents a key to the puzzle of how the purchase happens.  Armed with that context marketers and sellers can identify the best selling activities at each stage that will keep the prospect engaged and advance the opportunity toward a purchase.

You can start by defining the customer’s buying process stage by stage.  It’s not as easy it seems because of the deeply rooted legacy of seller activities and sales processes.  Then, you should identify key selling activities at each stage that are instrumental in engaging and moving the opportunity along.  These might include demos, or walk throughs, or samples or executive sponsor meetings.  Marketing obviously can help with these resources by building collateral or tools that impact the buying process.

I see marketing’s impact mostly at the early stages of the buying process.  This is when prospective clients are surfing the net, tweeting, joining discussion groups, and doing research on their own.  It’s too expensive for salespeople to interact there and clients don’t want them to.  B2B marketing companies perform this service if you don’t have the expertise.

At some stage there’s a hand off to sales, which is nothing new.  But what is new is the quality of information that now gets handed over.  The ramifications of poor handoffs can be severe in lost sales, low sales productivity and more.

I don’t suggest this is a simple or complete solution.  It is the best place to start though.  There’s nothing mysterious about getting marketing and sales on the same page, when they are aligned around the customers’ buying process.


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The Missing Link in Opportunity Management

Posted on January 19, 2011. Filed under: Funnel Audits, Lead Generation, Pipeline Measurement, Sales, Sales forecasting, Sales Funnel, Sales Goals, Sales Management, Sales Metrics, Sales pipeline, Sales Quota, sales training, Sales Velocity | Tags: , , , , , |

If you want your salesforce to be more effective at working sales opportunities through the process, the missing link could be the sales funnel.

Let me say it another way – using the funnel can help your sellers be more effective at qualifying and winning sales opportunities.

Recently I talked with a prospect, the VP of Sales of a successful high tech company.  He said he was using a method of selling from a well known company and wasn’t completely satisfied with the results.  His people were trying hard to follow this method, defining the opportunity, identifying the right people, getting to the decision makers, and learning their needs.  They’re doing ok but he thinks they could do better.

He wanted to know how a funnel could possibly help with opportunity management.   After doing some discovery I told him the funnel, when designed right, is the missing link.

This wasn’t obvious to him and I know it’s not obvious to much of the larger market, including some of you reading this blog.  There’s a clear explanation for this.  But first, why is it the missing link?

Sales pros have always had a mental map in their minds of the steps they need to take to advance and win sales.  Using this to guide their sales efforts for each deal is a great way to stay organized.  Being organized is valuable.

The funnel intuitively sets up a way to organize the steps.  You can easily visualize a deal starting at the top of the funnel, wiggling its way down and popping out the bottom as an order.

The challenge is in knowing what happens in between.  And you’ve got to do something very important with the funnel first.   You’ve got to temporarily set aside your steps for selling and replace them with the customer’s steps for buying.

The steps as a whole are the customer’s buying process.  The buying process is simply how a bunch of people are working together to figure out what to do about a problem or an opportunity for their company.  This is what you’re trying to discover when you sell.  They’re looking for a solution, but first they’re looking to understand the situation better.  And then they want to know if the situation (problem or opportunity) is worth the trouble and expense of fixing.  Then they want to find a solution that best fits their needs.  Then they buy it.  There’s always been this buying process dynamic going on even decades ago when the common sales approaches were much less customer friendly.  Today there are so many choices and so much access to information and opinion that customers have more control over their own buying process.   That’s ok because you don’t need to control things to be successful at selling.

Let’s bring in the selling steps.  The goal of any sales activity is to move the opportunity further toward a sale.  The biggest productivity killer for sellers is doing selling activities that are ill-timed and have little impact on advancing a sale.   For example, doing demos when the wrong people are in the room, spending hours preparing a proposal that will not be read, giving samples that will not be used, and more.  But sellers often do things to stay busy or in the hope that something positive will come out of the activity.

The funnel, when designed right, is the missing link because it serves as the productivity protector, the ideal check and balance system for deciding what selling activity to do next.

When it’s designed right the funnel tells the seller what the customer has committed to and how far along the process the customer is.  It then tells the seller what activities are most appropriate to do for this stage of the customer’s buying process.  For example, if the funnel design says do a demo once the customer tells you enough about the problems or vision of better,  then you’re less likely to do a demo before the customer has committed to sharing information with you.  Or, if the funnel says prepare a proposal after the customer commits to a proposal review with you, you’re more likely to get the customer to commit to a proposal review instead of emailing it and letting the main contact read it on his own.

If this sounds simple and straightforward that’s because it is.  However, I can tell you that over the past 15 years I’ve seen many salespeople, even accomplished ones, that don’t consistently sell this way.

The VP of Sales I talked to was not getting the right performance from his current sales method because it is not linked to the customer buying process.   The method had ideas and concepts that categorize aspects of the sale, things like labeling the players and their motivations and whether or not they’re champions or coaches for you.  This can be helpful.  But these categories are at best a collection of good isolated ideas.  They’re in no way intuitively connected to the buying process.

The funnel, when it’s designed the right way, makes this link and gives the categories a lot more relevance.

Ok, so why isn’t this missing link obvious to more people?  The simple reason is because of the traditional funnel.  You know, the funnel where the stages are defined by seller activity.  It’s been around forever.  It’s a seller centric design.   It’s what most people think of when they hear funnel.

As I said three years ago it’s time to rethink the funnel™.   One deal at a time.  The BuyCycle Funnel™.

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Habit #3: Use Your Sales Funnel to Drive Deal Reviews

Posted on January 13, 2011. Filed under: Funnel Audits, Lead Generation, Pipeline Measurement, Sales, Sales forecasting, Sales Funnel, Sales Management, Sales pipeline, sales training | Tags: , , , , |

Secret Funnel Habit Number 3: Use Your Funnel to Drive Deal Reviews

When your sales funnel is designed correctly, it’s a great tool to set strategies for qualifying and winning sales deals.

Correctly designed funnels have stages that map to the customer’s buying process.  What constitutes a correctly designed funnel is a topic all by itself.  I’ll avoid that to stay on point – let’s reinforce the good funnel habit of using your funnel for deal reviews.  Let me define a deal review and how the funnel can help you do them effectively.

A deal review is a structured conversation about a sale you’re working on.  A review is different from a passing, casual deal update.  Those probably happen all the time either with you as the sales manager coaching them or as you the salesperson leading the review.  Nothing wrong with casual updates, but they don’t yield the same value as a review.

In a review you want to cover key issues and update your strategy as a result of what you’ve discussed.  The issues you want to know about usually have to do with the players or stakeholders, your advocates or coaches, competitors and alternatives, and the fit of your solution to the problem.

The key to making these conversations productive is to follow a repeatable agenda for each conversation and to put a limit on the time for the conversation.  I recommend you get in, get out and get going in 30 minutes or less if possible.

Try this for your next review:

  • What stage of the buying process is this deal at?  What tangible evidence do we have that proves it’s there?
  • Is this any different from the last time we reviewed the deal?  Regardless, why isn’t it different (eg why hasn’t it moved stages, or why did it move stages)
  • What’s changed about the way the customer is buying, if anything?
  • Are the key stakeholders still participating the way we know them to be participating?
  • Are there any new key stakeholders participating?  What role are they playing?
  • What key missing information is there about about stakeholders, the buying process, or competitors that could create trouble for us?
  • When we evaluate the effectiveness of our champions and advocates, what is it that we most need them to help us with?
  • What’s the next commitment the customer must make to advance the purchase and which stakeholders will be responsible for making that happen or delaying it?
  • What commitment of selling resources seems most appropriate for us to make right now?

The benefits of using your funnel to drive this dialogue are several.  One, it keeps the dialogue focused on the customer buying process.  Two, it highlights key stakeholders who will likely have most influence on the purchase.  Three, it forces you to challenge assumptions, the constant nemesis of setting good strategy.  Four, it seeks to identify customer commitment as the next step.  And five, it ends with you identifying your commitment moving forward.

Granted, some deals deserve longer, more detailed conversations.  Fine.  Make those the exception not the rule.

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Secret Funnel Habit Number 2: Monthly Goals and Actions with Bi-Weekly Updates

Posted on January 12, 2011. Filed under: Funnel Audits, Pipeline Measurement, Sales, Sales forecasting, Sales Funnel, Sales Management, Sales pipeline | Tags: , , , , , |

Whoo boy there’s a sexy blog title!  Seriously, this week we are covering the Secrets to Success through good sales funnel habits.  Today’s post is Habit #2: Set Monthly Goals and Actions.  To read about Habit #1, click here.

The good funnel habit you need to get into and get religion about is setting monthly goals and actions and then reviewing your progress toward actions twice a month.  I’m not talking yet about just setting goals, but rather mastering the good funnel habit of setting goals and reviewing progress.

The 12 month year of selling is a grind.  I see it as an ultra -marathon.  I suggest you break it up into 4 smaller marathons – each quarter is like a normal marathon of 26 miles plus.  Develop a rhythm of setting funnel goals and reviewing progress toward funnel actions that remains constant throughout the year.

If you have other business processes that you want to work your funnel process into that’s fine.

Quarterly funnel goals should include Target TVR, sales, and activities.  If you need $500,000 in sales by June 30 you might set a goal of having $1M in TVR by March 31.  Then set goals for key selling activities like number of sales calls, hours per week of face to face and phone to phone selling, number of referrals you ask for and get, and more.

Set monthly goals and then review your progress every two weeks.   If you’re at plan for activities then relax.  Let the process work.  If you’re not at plan then review why not.  This every two week review helps you avoid getting behind too far and not having enough time to catch up.  A flow of events could look something like this:

–          One week before the quarter begins set your quarterly goals.

–          On day 1 of the first month do a funnel inspection (Funnel Audit).

–          On day 15 of the first month review progress toward the funnel actions you set at the beginning of the month.

–          One day 1 of the second month repeat the flow of tasks.

Consider going to your calendar right now and entering meeting notices for these tasks.

This goal setting and reviewing funnel actions regularly is supported by a funnel inspection process we call the Funnel Audit.  I’ll devote another blog entry this week to that.

A rhythm of setting funnel goals and reviewing progress toward actions is a good funnel habit that will never be so sexy as to turn heads but will be the key to having new leads and sales beat a consistent path to your door.

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