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 )
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 )
Our chief want in life is someone who will make us do what we can. Emerson
Do you dread the question ‘What’s for dinner tonight?’
I’ve got a house full of people who are constantly coming and going. Me for one (often gone), my wife with her own career, two teenage daughters active in school and athletics, and a son in third grade. Eating together as a family is hard, but figuring out what to eat is often harder.
Except for Taco Tuesdays.
Someone at my house came up with this brilliant idea to simplify dinner at least one night of the week. The kids look forward to it. We plan for it by making sure we don’t run out of ingredients like cheese and hamburger and lettuce. In a way we’re executing on two important values in our family, eating together and simplifying the process.
Facilitating execution is the third of three key themes for you to get the most from your salespeople. Depending on who you talk to you’ll likely hear that the lack of sales execution is a major gap in sales effectiveness. You can relate to this. Your people often know what to do regarding sales strategies and managing their funnels but they sometimes don’t do what they know they should do.
It’s kind of like that intuition argument. The salesperson says selling is intuitive to natural born sellers. Maybe so but I say ‘knowing’ doesn’t guarantee doing, and knowing doesn’t guarantee doing well.
One of the best ways to facilitate sales execution is to have a framework for selling. Frameworks save you tons of time interpreting what she means and what he means. Jim Collins devoted an entire book to frameworks for running businesses and you have probably read it (Good To Great). Frameworks for selling allow you to reinforce a repeatable way of setting strategies and using the funnel. This has huge value. You can more easily spot variances in performance. You can coach more effectively. For example, if your selling method says you’ve got to discover early the person who has the authority to fund a project and one of your sellers consistently falls short in doing this you know what to focus on with this seller.
Another way to facilitate execution is to have your own version of Taco Tuesdays. Having a fixed time and date and rhythm of review of deals or inspection of funnels ensures that a regular time for practicing and applying the frameworks for selling will be done. Funnel inspections (Funnel Audits™) done every month like clockwork facilitates execution throughout the year. In some ways it’s like going to the golf driving range and practicing. Show me an accomplished golfer who doesn’t do that.
Facilitating execution is the structure your salespeople need that they’ll never ask for.
- The One Time Trust Means Nothing in Sales (funnelprinciple.com)
- For all the Warrior Sales Managers out there… (funnelprinciple.com)
This week’s blog entries are related to Hitting the Ground Running in 2011. Click here to go back to and start at the beginning of the week. A good place to begin your review is with these four sales related metrics:
1- Number of sales made
2- Size of sales
3- Percent of sales coming from existing customers versus new customers
4- Mix of sales
Number of sales closed is important for several reasons. Consider some extremes. If you made one sale the entire year then your results were highly vulnerable. If you win it, you’re a hero. If you don’t, you’re a zero. On the other hand when you spread your sales results across many, many sales you could be losing some sales due to a lack of enough focused selling effort on each one. You lightly skip from deal to deal doing just enough to be in the running but not enough to take it across the finish line.
If the number of sales you made this year was markedly different from the number you made the year or two years before then take the time to understand if your approach to the funnel also has to change. If you need a higher number of sales, then your funnel might need more opportunities on it too. If you need fewer sales of a higher dollar value then you might need to improve your qualification of those larger deals.
It’s important to know the typical size of sale you win. If you’re more comfortable winning smaller deals and now you’re being asked to win bigger deals you might want to get coaching on how to make that shift. One of my clients had a sales force that was not equipped to sell seven figure deals. The VP of sales wisely and quickly brought in ‘big deal’ talent that knows how to sell at that level. If you typically win few big deals and now you’ve got to win a higher number of smaller sized deals you might have to prospect more than you normally do to fill your funnel full of smaller sized deals.
Knowing the percent of business coming from existing customers versus new ones can expose important things about how you should work your funnel and find leads. If you’re a ‘farmer’ type seller you might be more comfortable getting incremental business from existing customers. The focus of your lead generation might be selling more stuff to the base of relationships you have, or selling to sister divisions of the division you sell to. On the other hand if you’re a ‘hunter’ type seller you’re probably turning over more sales from year to year and you’re active in filling your funnel with new leads. Now, if you’re a farmer being asked to prospect more, or a hunter being asked to do more account management your funnel management approach will have to change.
Finally, knowing your mix of sales and how it has changed can lead to changes in how you manage your funnel. One of my clients launched a new service that could be sold to existing customers but also could help them get in the door to new customers. Generating sales from the new service will require new approaches to lead generation that might differ between existing and new customers. Sellers that have a low turnover of sales year to year might be surprised at how much prospecting effort is needed to generate opportunities with the new offering.
Tomorrow we’ll look at last year’s results from the perspective of three key metrics, win rate, velocity and push rate.Read Full Post | Make a Comment ( 1 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 )