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 )
What season is it? Duck season? Wabbit season? It’s baseball season!
With America’s favorite pastime in full swing I am inspired to use some images of baseball to create tips that will help you have a great year on your field of commissions.
Tip one: Get more trips to the plate
Otherwise known as add more sales opportunities to your funnel.
This is a pressing need for many salespeople I talk to. I recommend distinguishing between two types of funnel opportunities: Nonviable and Viable.
Nonviable opportunities are the ones that just begin to enter your funnel. The customer is in the early stages of the buying process. They’ve recognized a problem. They’ve started the search for discovery and answers. They’re looking to improve some kind of performance. They’re possibly frustrated with how something works. I call these Nonviable because they haven’t yet reached the commit funding stage of the customer’s buying process. The spirit of the commit funding stage is the customer is really, really serious about purchasing or moving the business to another supplier. If the customer doesn’t commit funding he won’t purchase.
The second type of opportunity, I call Viable, is one where or significant resources or funding has been committed. These opportunities will very likely become a sale for some supplier. As long as the customer’s buying process includes making that purchase this fiscal year these opportunities belong on this year’s funnel. Viables are important because funnel value is made up of only the Viable opportunities. If you need more funnel value, you need more Viables.
So when you need to have more opportunities on your funnel ask yourself do I need more Nonviables or Viables? Or both?
If you need more funnel value you need more Viables. The first place to look for more Viables is your Nonviable section of the funnel. Here’s how you can convert Nonviables to Viable.
Since a Nonviable opportunity is one where funding hasn’t been committed yet your sales strategy should focus on convincing the PFA (person with financial authority) to commit funding. Are you even speaking to the PFA? If not, your strategy is compromised. Get an Advocate to help you find and sell to the PFA. Can you present a business case for ROI that compels the PFA to commit funding? Is there a current event in the PFA’s world that suddenly changes his business outlook, like the loss of a big customer or the impending launch of a new product? Finding the economic impact of these events helps you build a compelling case for the PFA to commit funding. After that you’ve got to sell the key stakeholders on why they should buy from you.
Sometimes Nonviable opportunities are stalled – they’ve been Nonviable for a long time and you’re frustrated with that. Realize that the PFA hasn’t seen a compelling reason to commit funding. Sometimes the compelling reason is a personal incentive. If you can get the PFA to see how committing to this project achieves a personal win it might change his or her mind. You’ve just created a new Viable opportunity. If there is no personal incentive for the PFA or any other stakeholder to take action it might be because they have other problems or issues to solve that are perceived to be higher importance. Try to find the personal incentive for a key stakeholder to take action and this opportunity might start moving again.
- Adding more opportunities to your funnel could be adding a combination of Nonviable and Viable opportunities.
- Only the PFA can create a Viable opportunity by virtue of committing funding.
- Create a business case for ROI to influence the PFA to commit funding.
- Look for the personal incentive or current or pending event to compel the PFA to commit funding.
Looks like tip 2 is on deck…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)
Last week’s blog was devoted to developing good funnel habits as your new year’s resolution. Once you have a plan for that then you can set goals.
You know what they say about goals. If you don’t know where you want to go, you’re sure to get there.
Goal setting is the essence of the sales professional. Where some people shy away from setting goals, we embrace them. Where some people would never share their goals with others, we’d put ours on a billboard in Times Square. We don’t care what others think. We know what we want to achieve and we go after it. This doesn’t make us better, it just make us us.
If you’re not tracking with me, let me give you an incentive – nine times more money.
This is what you’d earn in a lifetime simply by writing down your goals, according to Dave Kohl, a professor at Virginia Tech, a college in the US.
So a million dollar career could become nine million dollars? I’m just doing the math.
But here’s the astonishing news – Kohl says 80% of people say they don’t have goals. 16% percent say they have goals but don’t write them down. 4% have goals and write them down.
You can take this concept one step further by ‘going public’ with your goals. Telling others your goals puts an added pressure on you to produce results. Salespeople like pressure.
Several years ago w(hen I didn’t know better) I ran a marathon. 26.2 miles. About 42 kilometers. I told everyone I would beat three hours and 30 minutes. That’s just about 8 minutes per mile. I wasn’t bragging. Rather, I knew that it was a more likely outcome if I shared it with others. I finished in three hours and 26 minutes. When the pain was like a knife stabbing my thighs I kept telling myself, “Sellers, you fool don’t you dare slow down or give up!”
I suggest you break up your annual sales goal, quota, into quarterly goals. The whole year is so long it’s like a marathon of selling. Four quarterly marathons might be less overwhelming and easier to track.
I suggest you define some activity goals. The splits in a marathon tell you if you’re losing ground or keeping pace. Similarly, activity goals serve as splits to let you know if you’re keeping up the pace of funnel related activity. One activity goal could be number of sales appointments you make in a week. Another one could be the number of sales calls you have in a week. If you hold lunch and learns, or do webinars, or attend lead generating shows, you could set a goal for the number of those events you hold.
As long as you’ve got your strategy defined first, you can set goals and watch with delight as you knock them off one by one.Read Full Post | Make a Comment ( None so far )
With another year of selling behind you, the important thing to remember is it’s gone.
I salute you if you had a great year and I’m sorry if your year didn’t turn out as you wanted. For this new year all runners line up at the same starting line once again.
The sales numbers might not lie but they don’t always tell the entire truth either. Therefore, regardless of last year’s results the important thing to do is to learn. I devote this entire week’s blog to last year and helping you learn from it. This week I’ll discuss:
- 4 key sales metrics to understand the raw numbers
- 3 key funnel management metrics that every salesperson must manage to
- 2 key metrics related to lead generation and the customer buying process
As you read through the entries and perform the review remember this:
- Be honest with your assessment and answers.
- Be factual. The better ‘data’ you have about your performance the better your analysis will be.
- Give yourself credit for doing the exercise. The vast majority of sellers don’t do this.
Here are the 9 metrics I’ll cover:
1- Number of sales made
2- Size of sales
3- Percent of sales coming from existing customers versus new customers
4- Mix of sales (if you sell more than one product or service)
5- Win rate
7- Push rate – percent of sales that don’t close within the timeframe you originally state
8- Lead source
9- Funnel stage of discovering the lead
In the next blog post, I’ll tackle the first four.Read Full Post | Make a Comment ( 3 so far )
One of the golden rules of selling is to understand needs before you pitch solutions. It’s similar to what Steven Covey drilled into us with his Seven Habits book, ‘seek first to understand, then be understood.’
While Covey’s advice is aimed at understanding people, we can apply it to managing your sales funnel throughout the year. Over a 365 day period you’ve got to regularly seek to understand your funnel’s condition, then set action plans to accomplish your goals.