From the CCS® Sales Blog

June 2015

Viewing posts from June , 2015

Sales Tips: Who’s Driving the Bus?

By John Holland, Chief Content Officer, CustomerCentric Selling® – The Sales Training Company

Image courtesy of Serge Bertasius Photography at FreeDigitalPhotos.net

driving-the-busIt is astounding to see how often the phrase “changes in buying behavior” is invoked in articles about selling. In my mind, vendors that for decades have clung to traditional sales and marketing approaches have made some flawed decisions in reacting to perceived buying behavior.

B2C buying has served as the canary in the coal mine for B2B buying. Many approaches apply but I believe a line has to be drawn in the sand. For complex B2B offerings costing more than $50,000 (a figure I’ve arbitrarily chosen) the landscape should be considerably different because there are many people involved in what becomes a committee decision.

The deluge of inbound website activity has left vendors little choice but to make some changes. The biggest confusion that I see is that inbound visitors have been viewed and therefore treated as though they are buyers. People have seen studies over the last 5 years that show increasingly higher percentages of buying activities are completed before salespeople are involved. While true in many cases, I don’t think this data is accurate for B2B transactions over $50K.

I can accept that up to 80% of product/offering evaluations can be completed without seller involvement, but there are many buying activities that need to be completed before enterprise purchases can be made. The questions become:

  • Who does most of the work in evaluating offerings? I believe the answer is researchers who are not buyers. When you step back, you realize that grading of website activities (#visits; duration of visits; pages views; time spend on pages; webinar sign ups/attendance; etc.) likely means that low to mid level staff are the only people that will score high enough activity levels to be considered “qualified.”

  • Why are they evaluating offerings? I think there are many instances of DIY evaluations that stem solely from curiosity about what’s available in the market more from user than buyer perspectives. Without budget and awareness by Key Players most of these evaluations will fall under their own weight. Without budget or funding, no buying will take place. It is possible sellers won’t be involved at all.

  • Why treat evaluators as though they are buyers? Don’t get me wrong, interest in offerings should be a good thing, but to my previous point, part of nurturing is making B2B researchers aware of potential value and payback that can be realized by implementing offerings. For that reason I believe the role of researchers is to serve as coaches in helping sellers gain access to higher levels so that value can be established.

  • What activities beside product evaluations are necessary if purchases will be made? Before a PO is issued the business objectives of Key Players should be defined, the reasons those objectives cannot be achieved should be uncovered and buyers should understand the capabilities they need to address those reasons. In addition potential value and payback must be documented, vendors must be evaluated in a number of areas that include financial viability, support, quality, reputation, references, expertise, terms and conditions must be negotiated, etc.

  • How have approaches been changed so that when they are contacted by knowledgeable buyers, sellers can align with them? I hope you’d agree that sellers that either treat these buyers as novices or prematurely try to change the requirements will provide negative buying experiences and run the risk of not making the short list of vendors being considered if the evaluation gets that far.

What I find most ironic is that researchers (not Key Players) are the root cause of knee-jerk changes vendors have made in processing inbound interest. This is a consequence of vendors confusing researchers with buyers.

In a strange way it has provided a common ground of sorts for vendors and executives within their prospects and clients. Vendors have always been concerned about controlling their cost of sales by trying to focus only on qualified opportunities. In a similar sense unauthorized DIY evaluations have and continue to waste valuable time researching offerings that ultimately won’t be purchased and therefore won’t provide any value (return on research efforts). 

It makes you wonder if vendors and executives they call on are better or worse off than they were 15 years ago before the rush of evaluations via the Internet. It seems to be in the best interests of both parties to ensure potential value/payback exists before resources are expended. This could allow a win-win by reducing the costs of sales as well as evaluations.

mobile sales app

Sales Tips: Making Sense of Vague Advice

By John Holland, Chief Content Officer, CustomerCentric Selling®The Sales Training Company

Image courtesy of Stock Images at FreeDigitalPhotos.net

After graduating from college, IBM spent a year teaching me about computers for the SMB market, business fundamentals and selling skills. In retrospect they provided a great amount of knowledge but it was left up to each seller to decide how to make calls on owners or executives of small businesses to have them consider migrating from manual ledger cards to automated systems. It was a mountain to climb.

light-bulbMy sales manager frightened new people into making the prescribed number of calls, but did little to impact the quality of calls that we made. When he made calls with me, little skill transfer took place. It wasn’t Jeff’s fault. Like many sellers he couldn’t describe in adequate detail HOW he sold. His approach was intuitive and differently every call.

I’ll never forget the advice he shared after assigning my quota and territory:

Call high, stay high and don’t lead with product.

It was like Curly in City Slickers telling Billy Crystal to find the one thing that was important in life. When asked what the one thing was, Curly’s reply: That’s for you to find out! 

Jeff’s advice was of absolutely no use to me. The first few months I made terrible calls on business owners in my territory. IBM taught me about hardware and software and I mistakenly thought my job was to educate buyers. They had neither the time nor inclination to be educated. I struggled to get traction or mindshare with them. 

Three months into my sales career I took a step back over a weekend and tried to figure out why a small business owner would buy a computer system. Some scotch was involved and ultimately the epiphany came. Business owners wanted reports (billing, inventory control; accounts receivables, sales analysis; accounts payable, general ledger; etc.) so they could improve bottom line results. Hardware and software were nothing more than means to an end and business owners didn’t need (nor want) to know all the esoteric details.

I had mistakenly believed I was selling computers. I should have been selling computing that could provide information. Jeff’s cryptic advice now made sense. I realized the first step in selling was getting buyers to realize their manual processes were labor intensive, but more importantly were holding the business back.

Calling on senior executives is about uncovering desired business outcomes and discussing product usage rather than product. After my weekend of reflection, things improved. Jeff recognized my pipeline was growing. As a result he dispensed his second piece of advice: Plan your work. Work your plan.

This gem was easier to decipher but far less helpful than his first, albeit cryptic advice.

sales training workshop

Sales Tips: How to Make the Most of Your 168 Hours Every Week ?

By John Holland, Chief Content Officer, CustomerCentric Selling® – The Sales Training Company

Image courtesy of Hin255 at FreeDigitalPhotos.net

time-is-moneyTime is a precious commodity for everyone. It’s especially critical for sellers to make good use of their time. They’re under pressure to achieve revenue targets each quota year. As sellers become more competent they understand the difference between activity and progress. They start more stringently qualifying “opportunities.” At a high level, one of the primary responsibilities of first level sales managers is ensuring that sellers work on opportunities that have a high probability of closing. Statistics show about half of sales cycles end with prospects making no decision. This outcome means the buyer organization and all vendors that competed wasted valuable time.

While enticing, I question whether the torrent of activity from inbound non-Key Player researchers is helping salespeople achieve their numbers. As mentioned in several previous blog posts, nurturing programs that pass leads to sellers run the risk of confusing activity with progress. A few simple questions can save researchers and sellers from spinning their wheels.

My concern is the volume of inbound research that is being done today:

  • Without the knowledge of Key Players within prospect organizations
  • Without budget/funding approved for offerings

Time ManagementHow to Maximize Your Time

1. If and when sellers contact or are contacted by people knowledgeable about offerings it is important to have them share the list of requirements they feel are needed and determine if a seller’s offering is a fit. A common mistake is failing to establish value early in the process. Absent strong payback, it’s unlikely sales will happen further down the road.

2. A seller may want to ask if budget has been approved. If the offering is fairly complex, understand that if buyers say they have budget, it’s likely there is a Column A vendor driving the evaluation. Gaining access to Key Players will be important in qualifying these opportunities.

3. If budget has not been allocated, honesty may be the best alternative. The seller can thank the prospect for their interest and acknowledge that both parties’ time is important. He or she can then express concern that many product evaluations have come to grinding halts when funding is requested because potential value was never established. It would be a shame to waste time in moving forward with the evaluation until potential payback had been defined.

4. At that point, the seller can ask what business outcomes can be improved through the use of the offering being considered and whether benefits had been quantified. In my mind the seller should consider a quid pro quo (give and get) at this point: 

  • I’m willing to commit my time and effort in making a recommendation (the give) if:
  • You’re willing to work with me in giving access to the people that would need to provide input so that a preliminary cost vs. benefit could be completed (the get).

5. The understanding in moving forward would be that the value would have to be adequate to justify a purchase. If not there would be no point in moving forward and spending additional time and resources. It would be a pink (if not red) flag if a prospect was unwilling to work with the seller on trying to build a business case.

In today’s environment, sellers with extensive product knowledge don’t bring much to the table for researchers that have poured over multiple vendor websites and are intimately familiar with offerings from several vendors. Introducing the concept of business issues and cost justification is a way to differentiate from other vendors.

Oddly enough, it turns out to be a potential win-win because there’s little sense for buyers and sellers to spend time and resources only to end up with a very common end to buying cycles: No decision.

sales training workshops

Sales Tips: Patience Pays Off for Sellers

By John Holland, Chief Content Officer, CustomerCentric Selling® – The Sales Training Company

patienceEarly in my sales consulting and training career I encountered an irreverent, funny and deceptively intelligent person named Bob Populorum. He defined selling as a hurt and rescue mission. When sellers call on executives they must establish sufficient credibility so buyers will share goals or admit problems they are willing to spend money to achieve or address. It’s a watershed event in their relationships with buyers. The first core concept of CCS® applies: No goal, no prospect.

Mistakes sellers make stem from their impatience. Once goals or problems are shared, many sellers immediately try to rescue buyers by telling them the solution, a phenomenon I call “premature elaboration.” Sellers are well intentioned but there are two (2) problems in jumping to the rescue:

  1. Sellers are shooting blind because they have no way of knowing if their generic “solution” will address a buyer’s needs.
  2. Buyers aren’t ready to be rescued until they and the seller calling on them understand the shortcomings of how things are done without the offering being discussed.

Taking a step back, if buyers knew why desired business outcomes couldn’t be achieved they would try to address them without help from salespeople. The “hurt” amounts to asking questions to help buyers understand what’s broken in the way they currently operate. One further caveat: Sellers should uncover areas that are broken that can be addressed by capabilities within their offerings.

Having the patience to ask relevant diagnostic questions allows sellers to: 

  1. Understand the buyer’s situation before discussing their offerings.
  2. Share only those capabilities that address barriers to achieving the desired outcome so that they share specific rather than generic solutions.
  3. Help buyers quantify the potential value of achieving the goal being discussed by finding out how much problems cost buyers that are uncovered.

Being patient can be especially difficult for experienced sellers. They’ve had these conversations several times before and therefore see “solutions” long before buyers do. Understanding it’s the first time through for buyers can allow sellers to do thorough diagnoses (hurts) before earning the right to present solutions (rescues). Buyers want to know how things are broken, the specific capabilities they need to address them and the value of fixing them. 

Ben Franklin said:  People are best convinced by reasons they themselves discover. As it relates to selling I think Bob Populorum would agree to tack onto Franklin’s phrase: by answering relevant questions posed by patient salespeople.

Time to sharpen those selling skills-WO-logo.png

Sales Tips: Taking Stock at Mid-Year

By John Holland, Chief Content Officer, CustomerCentric Selling®The Sales Training Company

apples-scaleIn a way it’s astounding how much leeway salespeople are given in how they go about making calls and making their numbers. In many companies, selling is considered more an art than a science. Sales calls are as unique as snowflakes. I find it ironic in light of the varied approaches to selling that measuring performance is so precise. Seller achievement is calculated to decimal places throughout every year by dividing YTD revenue booked by YTD quota. The journey is uncertain but the desired outcome of clients paying invoices is clearly defined.

Analogous to a baseball player’s batting average, percentage of quota is the way sellers are stack ranked, evaluated and considered for promotions. Baseball players and sellers performing poorly halfway through a season or year are convinced major improvements will take place in the second half and they will make up ground.

I often had to make up ground while attending college. I realize now I was a “just-in-time” learner. That’s a euphemistic way of saying there were many semesters that I spent early morning or late evening hours cramming. Part of my excuse is that I attended a cooperative school. After freshman year there were four additional years to earn a degree, each with 6 months of school and 6 months of work related to my major. It became clear that working full time in Poughkeepsie, New York was no day at the beach. In the first few weeks back in school in Boston I had a habit of freeing up my calendar for relaxation by deferring my studying.

To have that flexibility I tried to avoid professors that collected homework because that required staying current in their courses. I’d get where I needed to be at my own pace. That often required cramming for midterms and finals. At times it was stressful but worked for me. I received my degree in mechanical engineering just before launching my career in Sales.

The reason I raise the issue of cramming is that many sellers go through quota years in much the same way I went through college. You won’t find a more optimistic salesperson than one that enters the fourth quarter at 36% of quota YTD. He or she is convinced (and hoping their manager is convinced) they can and will make their annual number in the next 90 days. By October 31st they’re at 41% YTD. On November 30th they’ve reached 50% YTD. Somewhere in mid December at 54% of their annual quota they realize its time to push business into January to jumpstart next year.

As a sales manager, I learned a long time ago that train wrecks happen a month at a time. Looking in the rear view mirror at YTD achievement means you’re tracking a lagging rather than a leading indicator. Doing some simple math on a monthly basis can allow a sales manager and a salesperson to do some sanity checking as to the likelihood of attaining quota for the year. It amounts to a glance in the rear view mirror (YTD position) and a focus on projecting future performance. 

Let’s assume a seller has an annual quota of $3,000,000, an average sales cycle of 4 months and a 33% chance of closing opportunities in their pipeline. That means to track at quota during a single sales cycle the seller must close $1,000,000. Because there is a 33% closing rate at any given time the sales manager would like to see $3,000,000 in pipeline opportunities.

Regardless of how much a seller is above YTD, the minimum pipeline target will remain at $3,000,000. Let’s say, however, as of January 31st a seller is $50K below YTD. That shortfall must be tripled (to $150K) and added to the base so that the new target moving forward will be a to have a pipeline of $3,150,000. The target ratchets up when sellers fall below quota.

As you can imagine, sellers less than YTD should focus on finding new opportunities (whether they be prospects or add-on business). By doing this each month the seller and manager have greater visibility and hopefully ample time to take corrective action so that cramming at the end of the year can be minimized.

There are two powerful levers that can reduce the target pipeline amounts. In the example above if the length of sales cycles could be reduced to 3 months (i.e. by starting opportunities at higher levels) and the win rate could be increased to 50% (i.e. with more stringent qualification) the target assuming a seller is YTD would be $1,500,000 rather than $3,000,000! 

There are other ways to calculate pipeline targets. For example, if historic flow business from an existing territory generates $1,000,000 each year the seller and manager may want to do calculations on the seller finding $2,000,000 in new business during a given year. If your offering uses a SaaS model, the numbers have to be tweaked accordingly because revenue will be spread out over the current year (and possibly in future years).

Managers should be aware that beside the fact that quotas may vary by salesperson the win rates and length of sales cycles are often different as well. You may have to look back within your CRM system to find actual numbers, or make intelligent guesses that can be monitored and adjusted over time.

One of the advantages of having these targets in place for every seller is that you can go from an individual to an enterprise view. From first line sales managers, district managers, regional managers and up to the CSO, the target pipeline will be the total for all sellers that report up the chain of command to a given title.

Most sellers are now halfway through 2015. This may be an opportune time to have a look at where you are year to date and project a sales cycle ahead to optimize the chances that you’ll meet or exceed your number without having to cram. Oddly enough even if cramming is successful in meeting an annual quota, it often means the following year is effectively only 9 or 10 months long as you start in January with little or nothing in the pipeline.

In the interest of full disclosure, I want to share decades later that it’s likely some of my grades in college could have been higher had I not crammed.

Listen to PARTS 1 & 2 of our conversation with bestselling author and consultant, Geoffrey Moore on Sales Rehab
sales training podcast

Sales Tips: Column A vs. Column B

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<a href=”http://blog.customercentric.com/blog/sales-tips-column-a-vs-column-b” title=”” class=”hs-featured-image-link”> <img src=”http://blog.customercentric.com/hs-fs/hub/22968/file-2534481212-jpeg/running-smaller.jpeg?t=1489093932032″ alt=”Sales Tips: Column A vs. Column B” class=”hs-featured-image” style=”width:auto !important; max-width:50%; float:left; margin:0 15px 15px 0;”> </a>
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<h1>Sales Tips: The Difference Between Column A and Column B</h1>
<p><em><span style=”font-family: georgia, palatino; font-size: 14px; color: #152d53;”>By John Holland, Chief Content Officer, CustomerCentric Selling® – <a href=”http://www.customercentric.com” style=”color: #152d53;”>The Sales Training Company</a></span></em></p>
<img src=”http://track.hubspot.com/__ptq.gif?a=22968&amp;k=14&amp;r=http%3A%2F%2Fblog.customercentric.com%2Fblog%2Fsales-tips-column-a-vs-column-b&amp;bu=http%253A%252F%252Fblog.customercentric.com%252Fblog&amp;bvt=rss” alt=”” width=”1″ height=”1″ style=”min-height:1px!important;width:1px!important;border-width:0!important;margin-top:0!important;margin-bottom:0!important;margin-right:0!important;margin-left:0!important;padding-top:0!important;padding-bottom:0!important;padding-right:0!important;padding-left:0!important; “>

Sales Tips: The “B” Word

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<a href=”http://blog.customercentric.com/blog/sales-tips-the-b-word” title=”” class=”hs-featured-image-link”> <img src=”http://blog.customercentric.com/hubfs/budget-chains.jpg?t=1489093932032″ alt=”Sales Tips: The &quot;B&quot; Word” class=”hs-featured-image” style=”width:auto !important; max-width:50%; float:left; margin:0 15px 15px 0;”> </a>
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<h1>Sales Tips: The “B” Word</h1>
<p><em><span style=”font-family: georgia, palatino; font-size: 14px; color: #152d53;”>By John Holland, Chief Content Officer, CustomerCentric Selling® – <a href=”http://www.customercentric.com” style=”color: #152d53;”>The Sales Training Company</a></span></em></p>
<img src=”http://track.hubspot.com/__ptq.gif?a=22968&amp;k=14&amp;r=http%3A%2F%2Fblog.customercentric.com%2Fblog%2Fsales-tips-the-b-word&amp;bu=http%253A%252F%252Fblog.customercentric.com%252Fblog&amp;bvt=rss” alt=”” width=”1″ height=”1″ style=”min-height:1px!important;width:1px!important;border-width:0!important;margin-top:0!important;margin-bottom:0!important;margin-right:0!important;margin-left:0!important;padding-top:0!important;padding-bottom:0!important;padding-right:0!important;padding-left:0!important; “>

Sales Tips: Qualifying the “B” Word and Determining If You’re Column A or B

By John Holland, Chief Content Officer, CustomerCentric Selling® – The Sales Training Company

Image courtesy of Adam R. at FreeDigitalPhotos.net

Sales managers have a difficult job. In many instances, they have to look at opportunities more from a “disqualification” standpoint. I say this because sellers are often over optimistic in wanting to increase the number of opportunities in their pipelines. A common qualifying question that managers ask is: Has budget been approved for this initiative?

budget-chainsIn my experience, unless a company is in bankruptcy or is in the public sector, if budget is a problem then the seller isn’t high enough in the organization. That doesn’t mean that organizations have unlimited funds, but if a seller presents a strong business case, decision makers will often reallocate funding that had already been committed. This amounts to another seller getting a “no decision” outcome in either being told the purchase will be deferred until next year or the organization decided not to move forward.

Think for a minute, however, what it means if an inbound caller during the initial contact with a seller indicates they have budget approved for a B2B expenditure. Sellers may want to temper their enthusiasm because for a complex offering, buyers will usually have to get a seller involved to define their needs and make a recommendation that included estimated pricing. I interpret budget already being in place to be an indicator that sellers are coming in as at least Column B. They may be invited in to compete primarily to provide leverage to negotiate a better price from the vendor that started the buying cycle.

A better qualification question for mangers to ask would be: Whose numbers were used to establish the budget? If the seller indicated they provided budgetary numbers toward the end of the previous fiscal year, then it is far more likely he or she is Column A. If a buyer has funding already approved then it would be better to assume you’ve got some work to do in trying to become column A.