If you’re a VP of sales and you’re thinking about making an investment in sales process or methodology right now it’s probably a stressful decision. For one it takes a lot of time to think through the possibilities of what could be valuable. You want to select something that’s going to squarely hit the mark. It takes a bit of political capital if you’re needing to get financial approval from your boss. It’s stressful because you’re not 100% sure your team will embrace it or reject it. Your credibility as a leader could take a hit.
There’s one question that you should ask yourself to help with the decision: How will it improve how your sales people think, dialogue, plan, and execute around selling?
Take the funnel for instance. It is still popular to assign percentages on funnel stages. Early stage sales opportunities might get a 5% or 10% assigned number. Opportunities that reach a proposal stage might get 50% and one that is in negotiation might get as much as 80% or 90%. But when asked how these percentages help a salesperson sell the answers are usually weak. They don’t promote dialogue. They don’t foster coaching. They don’t help set strategy.
Another example with the funnel is funnel value. We call it TVR, Total Viable Revenue. TVR is the sum of the dollar or euro values of each opportunity that has reached the Commit Funding stage of the customer’s buying process.
With TVR the seller and manager have a powerful piece of information to help the seller plan, organize and prioritize to maximize his or her productivity. TVR is used with the Funnel Audit to determine a 30 day plan every 30 days for working the funnel. But even some of my clients fall back into the habit of cramming the night before the test, completing their Funnel Audit Worksheets the night before. They’ve missed out on the power of the Audit as a planning and prioritizing process. When used properly the Audit helps the seller think with structure about his situation, weigh alternatives, assess the best option, and define the plan.
Finally, another example of using information to help you think and strategize better is when a sales process reveals something important about the sale that you had not considered. Let’s say you had made a few calls on a current customer and thought you had a pretty good idea of the stakeholders involved and their roles in the buying process. But you assumed that someone in purchasing had the financial authority to commit funding based on past experience with the account. In a strategy session with your sales manager she convinces you that your purchasing agent doesn’t have this power and you don’t know which stakeholder does. Now what do you do?
You could do nothing different and proceed as planned. Or you could meet with the purchasing agent and explore this topic of funding. By raising the topic you would learn something at least, such as what else is being considered or timing. But at best you might learn exactly who has that funding authority and even get advice on how to get a meeting with that person.
I haven’t made your decision easy but I hope you put all of your options through the test of how will they help me and my sales team think better, improve dialogue, and ultimately perform the job of selling more effectively.Read Full Post | Make a Comment ( None so far )
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.
- 3 Important Sales Funnel Metrics (funnelprinciple.com)
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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