Several years ago Public Television sponsored a competition called Frontier House. Several families traded in their comfortable homes and modern day lifestyles to live a simulated life in 1880s Montana. This was no walk in the park, fake reality TV experience. From late spring to fall these families lived the frontier experience, Montana style 24/7.
The goal of the competition was to prove they could survive the coming winter. This meant stockpiling food in underground pantries they made with shovels; equipping the home to withstand the cold; chopping enough wood to heat and cook during the winter months. Without wood there’s no fire. And without fire there’s no heat and no way to cook foods. Like Jeff on Survivor tells us, fire represents life.
It was critical that the families correctly calculated their needs to get through the winter. Then they worked back from that to know how to spend their time every day preparing. If they calculated wrong, or worse just got lazy in their execution their ‘lives’ would be in jeopardy. Of course back in the real Montana it was no game. Surviving was the incentive.
A panel of historical experts judged the competitors on how well they prepared. In the end only one family won, but the judges said even this family would have barely survived.
If you think of your sales funnel as a pile of wood to keep you warm throughout the winter, the question is are you chopping enough wood to survive?
Just as a furnace produces heat only if it’s full of wood your funnel produces revenue only if it has qualified leads that eventually close. Keep it full of enough qualified leads throughout the year and you achieve your quota.
The coming year is already here. Here are some strategies for keeping your sales funnel full and enjoying the fruits of that labor 12 months from now:
1) Manage to Target TVR. Measure the health of your funnel using TVR, Total Viable Revenue. TVR deals are only the deals that have reached a stage where the customer has committed to making a change or purchase. Working back from quota you can clearly define the Target TVR, that is how big you need your funnel to be. A $3M quota with a 50% win rate means your funnel needs to be $6M of TVR. As sales go up throughout the year the Target TVR goes down, but the key is to manage to the Target TVR, not to your quota gap.
2) Be selective in the opportunities you pursue. Nothing improves sales performance efficiency like purging the deals that take too much time to win and are not worth winning in the first place. Winning the right deals takes no more time than winning deals that are not a good fit or profitable.
3) Re-win the business you have at your best customers. Like the couples who renew their wedding vows after 40, 50, or 60 or more years go back to your current, best customers and show them how much you appreciate their business. Show them the love! This is an annuity that you cannot afford to take for granted.
4) Get into a Funnel Audit plan, do, check, adjust routine. There’s no better habit than one that commits you to a regular schedule of diagnosing your funnel and setting monthly action plans. Spotty diagnosis is a sure way for execution to suffer.
5) Every time you close a sale commit time to replacing it with 3-4 new opportunities. There’s no better time to add TVR to your funnel than after you have closed a sale. You’re feeling good, you can take the rejections, you’ve got energy. Get back out there and build funnel value now.Read Full Post | Make a Comment ( 3 so far )
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 )
Stop swinging at bad pitches
Otherwise known as learn to qualify better.
Qualification has always been an important skill for sellers. Now the stakes are even higher. For many sellers there are fewer opportunities to chase than before when the economy was booming and sellers mainly took orders. The more time sellers spend on leads that will go nowhere is less time available to chase leads that could become sales.
Our clients have learned to improve qualification by understanding it from the customer’s perspective. From the customer’s perspective they go through a series of three significant stages in the buying process. Our BuyCycle Funnel™ gives sellers the guide to get inside this customer perspective. The seller is more productive – he loses faster, he avoids overcommitting, and he avoids overestimating the value of his or her sales funnel.
The first stage of qualification (Stage 1) is Problem Recognition. The customer needs to express an issue, a need, an opportunity or a problem clearly enough that the seller knows he or she can solve the problem.
The key to Stage 1 qualification is knowing how much the customer knows about the problem. Vague comments about wanting to ‘reduce costs’ and ‘get better’ have to be explored and challenged. For a software client of mine the seller might learn from a CIO that his medical supply company is spending too much time tracking certain assets once they leave the warehouse. The CIO might say “we’d like to improve our efficiency.” Has the CIO or his staff spent time understanding this problem? What do they know about it?
The software rep needs to challenge the CIO’s intent to act now. He could reply “Do you have a target performance goal for improving efficiency this year? Or, “Where are you seeing the inefficiency the most? A vague reply could indicate lack of a commitment to take action. It can also be your opening to suggest that the stakeholder be more aware of the real consequences at play.
The second stage of qualification (Stage 2) is Defining Economic Consequence. In this stage the customer is deciding how costly the problem is or could become if it doesn’t change. It’s largely a dollars and cents kind of assessment. Problems that cause enough economic distress or anxiety for key stakeholders are more likely to be acted on. The software rep might ask these questions:
- Is the efficiency problem costing you money that you’re aware of?
- Does it threaten any key customer relationships? Could it if the problem worsens?
- Is it a top 3 problem? Have you reached a point where you can’t afford to run your business this way?
- Do you know how it affects other parts of the business?
- What’s at stake for you if this issue doesn’t get addressed?
If the economic consequence or impact is not great enough and if the anxiety isn’t high enough then the stakeholder continues to live with the problem.
Knowing what type of stakeholder you’re talking to is important. If the PFA is ambivalent there will be no change. If the stakeholder isn’t a PFA he could be pulling his hair out with frustration but will have to live with the problem.
The third stage of qualification (Stage 3) is Commit Funding. Here the PFA has committed funding or significant resources to fix the problem. The PFA is expressly saying “we choose to no longer live with the problem.”
Yeah this is big deal when the PFA commits! It’s almost as big as signing on the line that is dotted. The key here is to be sure you’re hearing correctly that funding has been committed. You can hear it directly from the PFA or from a highly reliable source that knows this has happened.
Don’t complicate your selling. It’s already tough enough. Stick to these fundamentals as you evaluate how qualified your funnel of opportunities is.
Looks like we’ve got a base hit! See you next time for our third and final tip in the series.Read Full Post | Make a Comment ( None so far )
Is there a difference between ‘qualifying’ and ‘disqualifying’ and if so is it meaningful and relevant? Let’s see what one difference looks like.
A few months ago I had a sales call with a high level sales leader. He found us on the web, checked out our blog, the videos, white papers and more. After about 5 minutes of talking with him I concluded he didn’t need me to convince him of what he was already convinced of. So I shifted my focus to the next hurdle – making change happen in his company.
If I was trying to qualify the opportunity I might ask this question:
“Who else do you think we need to talk to in your company to understand the needs better?”
This question probably gives me names of sales managers reporting to this VP of sales and maybe someone outside of the sales function like marketing. It is helpful. A follow up question might ask about the needs of these other stakeholders and even their level of influence.
“Who’s opinion do you particularly look for in this situation and why?”
On the other hand if I take a disqualifying approach my questions might look like this:
“I appreciate your need to increase sales and have better insight into the sales funnel. But people and teams can often resist change. Why would your team embrace the idea of changing its selling process right now?”
I like this question because it’s the question this VP of Sales needs to ask next. He has to sell his team on the need to do this. In doing so he might offend a stakeholder who had a hand in the current process or in no process at all. He might be seen as causing upheaval to other stakeholders. How about this as a disqualifying question:
“You know these initiatives take energy and resolve. Why would you want to take this on right now?”
Another follow up disqualifying question might be:
“I’m sure there’s one or even more people on your team that might have more skepticism about embracing change now. How do you plan to deal with them?”
Again, it puts his obstacles front and center.
Do you worry that this style reveals things that you’d rather not be revealed? I think you’re not giving these people enough credit. They’ve been down this change road before. More likely they’ll be impressed that you can relate to their challenge.
I shifted my questioning to money and funding.
A qualifying question about funding might sound like this:
“Do you have money in the budget for hiring someone like our company?”
A disqualifying type question about funding might look like this:
“You probably don’t have a line item in your budget for ‘implementing a sales funnel business process’. If you had to ask for approval to spend $100,000 how would you defend that?”
“If you found $100,000 for this program would another program be sacrificed? How would that go over?”
Even if this person is the one with financial authority for this spend he or she still has to sell it. You’ve now invited the dialogue to be more about things this stakeholder will have to begin addressing sooner rather than later. Selling change. You’re in a position to help him or her build the business case to do so.
If this stakeholder balks at any of these suggestions you know he’s probably not as far along as you hoped. You also know that this sale isn’t moving any time soon. These issues of finding funding, building a business case, assessing the strategy for making change happen are what’s next in the buying process.
These questions might be subtle but I think they’re subtly significant. Let’s put the burden of proof onto the stakeholders we’re calling on to show us that they have incentive and energy to sponsor change.
- Stop Qualifying and Start Disqualifying Part 2 (funnelprinciple.com)
- Stop Qualifying, Start Disqualifying (funnelprinciple.com)
I struck a chord with many of you last week when I blogged about the mindset of ‘qualify’ versus ‘disqualify’. Therefore I have disqualified a few upcoming blog topics in favor of writing more about this comparison.
In my search I looked for clarity in the definitions of qualify and disqualify. To qualify is ‘to become eligible to do something’. To disqualify is ‘to debar from a competition because of an infringement of the rules’. Unfortunately I don’t find either one to have a clear advantage in putting me in the proper mindset.
I don’t claim to be the first author or consultant to wave the disqualifying flag and I don’t claim to own it. I went back through about 20 books on selling in my library to understand more credibly who is taking this angle and who is not. I found the word ‘qualify’ in about 90% of the books I reviewed. Some of them had chapters devoted to the topic. In two books the authors’ called it qualifying but their approach to qualifying suggested more of a disqualifying attitude. This resonates with me.
For most part sellers have been raised in a ‘qualify’ house. It could be that taking an explicitly disqualification approach rubs us the wrong way. Salespeople tend to be hopeful and aggressive. Disqualifying is skeptical or cautious. We’re also cursed with the blessing of being stubborn. We don’t want to think (or admit) that we can’t win that deal and we show our faith by pouring ourselves – and sometimes dragging others with us – into the pursuit.
Particularly determined sellers find it hard to take no for an answer. They are convinced they can win even the ugliest, smelliest deals that most others would have rejected much earlier in the buying process. The worst thing to happen is winning one RFP out of 29 you blindly responded to. Like the once in a generation miracle you now have a victory that’s mounted in the bar of fame that proves that your determination pays off.
Your interpretation of what it means to ‘qualify’ is affected by the manager you work for and your company’s sales culture. If the sales manager looks at your weak, at risk funnel and has a holy s— moment , he might scream that you’ve got to fill that funnel and fast! When you do a Funnel Audit a month later and it’s loaded with new opportunities he says wow! That’s what I’m talking about. But often the truth is that funnel is full of made up, ‘unqualified’ opportunities.
So does any of this really make a difference? Am I making something out of nothing or is there value in adopting a disqualifying approach? You tell me. Take the poll, below. I’ll continue the topic in the next post.
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Lots of books have been written on asking questions and doing discovery on sales calls. Some are excellent. Many of them have given us new approaches to our craft.
I’d like to suggest you think of the BuyCycle Funnel™ as a way to ask better sales call questions and do discovery. Do this by asking stage questions.
A stage question is a question that is most relevant to where the customer is in the buying process for a given sales opportunity. If the deal is at stage 1 you want to ask stage 1 questions. If it’s at stage 2 you ask stage 2 questions. And so on for each stage of the BuyCycle Funnel™.
Questions relevant to where the deal is in the buying process make a lot of sense for several reasons:
- They help you prepare a good sales call plan.
- They give you credibility with the stakeholders.
- The stakeholders are more likely to respond to questions that are aimed at where they are in the buying process. You get better information.
- They put you in a position to get commitment more often and more consistently.
- They give you the information that is most important right now. This helps you determine the best sales strategy moving forward.
- You’re better at disqualifying the opportunity.
- They help you learn about other stakeholders involved in the sale.
- You can develop advocates.
A stage 1 question is aimed at going deeper and wider with your understanding of the problems or opportunities. Think of asking questions in the vein of who, what, why, when and how.
Stage 2 questions focus on the economics of the problems. Without a sufficient economic justification for changing it’s harder to change.
Stage 4 questions are mostly about how the company is approaching the process of finalizing requirements and specifications and the way the various stakeholders will collectively evaluate and decide on a solution.
Thinking of your questions this way lets you move more efficiently from one conversation to another with a large number of stakeholders. Each one might be at a different point in the buying process. Meet them on their terms.
- Use Your Sales Funnel to Drive Deal Reviews (funnelprinciple.com)
Recently I wrote a blog on qualifying sales opportunities. I suggested that you take a disqualifying approach to qualification. It makes you more productive.
One of the ways to make a shift to disqualification is to change your view of ‘qualified’ as a binary thing – that is, shifting your thinking from ‘the sales opportunity is qualified or it’s not’ to thinking of it as qualified to degrees.
In our BuyCycle Funnel™ model there are three funnel stages that serve to qualify to opportunity to progressively higher degrees. The first stage is Problem Recognition. The second stage is Define Economic Consequence. The third stage is Commit Funding. How can you use these stages to disqualify more effectively?
In 15 years of sales consulting the most common challenge I have seen facing salespeople is getting to the person who is authorized to make a purchase. This person is the PFA, person with financial authority. Many times salespeople don’t find this person and therefore don’t sell to him or her. They hold the money authority so it’s obviously a big weakness in the seller’s sales strategy.
Sellers often call on stakeholders other than the PFA because they have easier access to these other stakeholders. These other stakeholders could hold a key to getting to the PFA if they are approached right. Taking a disqualifying approach will help you.
After you’ve confirmed that the stakeholder you call on has a problem but no authority to act on it you have to find out if he or she has incentive or motivation to recommend and fight for change in the organization. Any amount of change will require energy, political capital, and credibility. Is it worth it to this stakeholder? A couple of disqualifying questions might look like this:
“I understand this issue is a hassle for you but honestly is it a hassle enough for others to make it a priority now?
“Whoever has to authorize spending money to buy a new solution here, what reasons would this person have to spend political capital and money to do something about this situation now?”
“Can we talk about the culture of change in your company? What are some things that might be used by other stakeholders to say that now is a bad time to change how the organization approaches this part of the business?”
These non-PFA stakeholders can be crucial to your sales strategy. To disqualify you need information and insight. If this stakeholder has incentive to change she might be useful. Find that out more quickly by disqualifying the opportunity.Read Full Post | Make a Comment ( 4 so far )
Every seller has been told, trained, coached and coddled to qualify his sales opportunities. The better you are at qualification the more productive you’ll be.
The past several years I’ve seen a few books and sales methods that recommend ‘getting to no‘, ‘starting with no’, or just ‘saying no.’ No kidding.
I like this theme in general because in a different, potentially very effective way it reminds us to do things that make us productive when we sell. Things like qualifying effectively, doing discovery, getting to the right stakeholders, and getting commitment throughout the buying process.
Adopting an attitude of ‘no’ is like adopting an attitude of disqualifying sales opportunities instead of qualifying.
For example if you call on a stakeholder who has a problem but no authority to change and you don’t uncover this lack of authority you risk spending way too much time on this person. Repeated calls back to this person might feel like you’re making progress but structurally it’s simple. You’re not. You’re doing a poor job of qualifying. Qualifying questions for me in my business might take the following form:
“So tell me, what is it about your sales funnel process that you’re not satisfied with?”
“It’s affecting your forecasting accuracy you say? How far off are your forecasts typically?”
“Have any of your sales managers mentioned how much time it takes them to do funnel inspections?”
If I hear what I hope to hear I’m tempted to walk away thinking I’ve got a qualified opportunity. I’ll get some valuable information but if I stop here I could be wrong. If I take a disqualifying approach I walk into the call prepared to ask questions that challenge the stakeholder to tell me why they would take the time and energy to act on these needs. These disqualifying questions are looking beyond need to incentive and motivation to change.
Most VPs of Sales will agree or admit that their sales process isn’t 100% satisfying and delivering desired results. There’s always room to improve. But for me to sell the VP the VP has to have energy and motivation to change.
My ‘disqualifying’ type questions might uncover that if they look like this:
“I appreciate you telling me that your forecasting isn’t as accurate as it needs to be. But you said it’s been like this for as a while. What’s the incentive to do something about it now?”
“You said you expect a record year of sales this year. Congratulations. May I ask, what’s the business case for making changes now to your sales process?” Wouldn’t you be concerned that making changes now could jeopardize a good thing?
Let’s say I’m meeting with the stakeholder who has a problem but no authority. Here’s a disqualifying question I might ask:
“I appreciate that you’re having some issues that you’d like resolved. Who else in the company would have to be sold on taking the time and possibly money to fix these issues?
“How would you go about selling these people on a need to change?”
“What incentive would they have to change right now?”
These questions might be subtle but I think they’re subtly significant. Let’s put the burden of proof onto the stakeholders we’re calling on to show us that they have incentive and energy to sponsor change.Read Full Post | Make a Comment ( None so far )
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.
- The Sales Funnel – Much More than the Latest Technology (funnelprinciple.com)
- Sales Velocity and the Funnel (funnelprinciple.com)
Wow! What a finish! If you didn’t see the Masters last weekend you missed a thriller. I can’t believe Johnny Vegas didn’t pull it out, but who besides Gary McCord, Mr. Bikini Wax himself wasn’t shocked at Vegas’s 4 putt on 17? It goes to show Augusta experience wins out over youth again.
You’re confused I can tell. The Masters golf tournament didn’t take place last week. It happens in April and we’ve just stepped into February. It’s true the calendar says February but there’s another calendar that’s even more important to sellers – it’s the funnel calendar.
Your funnel calendar is the one that is based on how long it takes to discover and close the average sale. This is commonly called the sales cycle time. You need to know your funnel calendar to know how much time you have left in the year to find new opportunities and close them to complete your mission of achieving quota. Any new sales opportunities you find today are not on average likely to close before the funnel date.
To get today’s funnel date you add the average sales cycle time to today’s calendar date. For example, if you have an average two month sales cycle then your funnel date is April 9. Any new average sales opportunities that you find today will not likely close before April 9.
Let’s consider a longer sales cycle. A six month sales cycle means that today’s date on the funnel calendar is August 9. Any new sales opportunity you find on your funnel today will not likely close before August 9. How about a really scary example? A twelve month sales cycle means that any new sales opportunity you find today will not close this year and therefore won’t do anything to help you achieve this year’s quota.
Let’s stick with the six month average sales cycle example. First determine your funnel health (value) and Target TVR. Target TVR is the desired size of your funnel at any time during the year. If you manage to a 50% win rate for Viable deals you need a Target TVR that is twice the amount of your remaining sales to reach quota. If you’ve got to sell another $500,000 to reach quota then your Target TVR should be a million dollars.
If your TVR is not at a million dollars, you’ve got a TVR Shortfall. Here’s where it gets interesting. For a six month sales cycle you have about five months left to make up the TVR Shortfall. Any new sales opportunity you bring onto your funnel after July, which is six months from today, has to close faster than your average six month selling cycle timeframe to become a sale this year. Is that possible? Is it possible to find a new opportunity in early October that will close by December 31? Anything is possible Superman. But you’re challenging your law of averages. As Dirty Harry would say, “Are you feeling lucky? ”
My goal isn’t to shock you as much as help you act on the information. So what can you do?
What you do is make it a priority to eliminate your TVR Shortfall. Let’s say your TVR Shortfall is $500,000. Starting today how long would it take you to find another $500,000 worth of new sales opportunities? If it takes you five months you’re cutting it close. If it takes seven months you’re already behind.
Rather than be overwhelmed by a TVR Shortfall steadily chop away at it one month at a time. If you brought in $100,000 of new TVR each month for the next five months you’d eliminate it. But you’ve got to make this a priority because the numbers don’t lie.
So get working. And by the way, don’t forget those Mother’s Day cards guys.Read Full Post | Make a Comment ( 1 so far )
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