Focusing on Winning

The EVP of Sales and Marketing for a $1 billion software company flew to Japan to be present when a big deal was signed. The sales rep, local manager and area VP had invited the executive to the agreement signing formalities. When the EVP arrived, they went to the meeting only to discover that the deal was not ready for signature. The prospect hadn't even made a decision to buy! There were still many months ahead of selling and negotiation before the prospect would even choose a service provider.

How could this happen? It happens every day in the world of complex sales. Salespeople get so involved with where they should be in the sales cycle they forget to validate where they actually are. They are ready to close, but the prospect isn't.

This is a dramatic, although not uncommon, story. The problems that cause this kind of breakdown in communication result from a dialogue between the prospect, sales rep and management which is convoluted and imprecise. The results of this kind of dialogue between sales and sales management are:

• Unreliable forecasts
• Unpredictable fluctuations in the revenue stream
• Management dissatisfaction with field performance
• Poor quota achievement
• Other systemic consequences due to erratic sales

Options for Improving Performance

It doesn't take a genius to realize that being able to rely on sales performance is as important as having product to sell. One problem is that there are so many excuses organizations use to justify why they can't or won't invest in improving this vital area of sales performance. They say:

• We're too small and we can’t afford it
• The methods we have tried aren't being used
• The last method we tried didn't work
• We don't want to invest any more in "training"
• We can fix these problems internally by improving communication
• If we just hire more people, we'll make more sales

The list goes on, but change is inevitably postponed and the results remain the same. The absolute worst excuse is that the organization is doing so well they don't consider investing in performance improvement a good use of their resources.

The logic that more salespeople and more calls mean more sales is flawed. It does not hold true in the “complex” selling environment. One organization tried this by increasing their sales team’s headcount by over one third and setting proportionally high objectives. The next year they missed their revenue and earnings projections in the first two quarters, and their stock went into the tank. Complex sales are not a numbers game. That's one of the things that makes them complex.

One business partner of a company increased their sales 50% in one year and 276% the first quarter of the following year, compared to a 30% and declining overall company average. Another company more than doubled their close ratios over a period of two years while reducing the number of sales opportunities they went after.

I'm going to tell you how they did it, but first you have to understand one principle. You don't sell solutions and then tell the client not to worry about implementation. Solution providers sell a combination of products and services. Without the services, the products either do not perform or perform below expected levels and the results, for the customer, are disappointing. Yet when it comes to performance management and professional development, this is exactly what most organizations do.

The Training Quagmire

The most common approach to addressing productivity problems is training! The problem with training is that within a month or two after everybody learns how business is supposed to be done, they've all gone back to doing it the same old way. This is proof of one simple fact: you can't learn to sell in the classroom. But there are ways to resolve this phenomenon of learning attrition.

First of all, if you spend money on training because you believe it will improve productivity, and aren't willing to demand that it be used - don't waste your resources. Take the luck of the draw and live with it. The main reason that sales methodologies are not effective at producing greater results is that they are not used by the people who are expected to use them.

Let's clear up one thing - training alone is not an effective way to improve sales productivity. There are lots of good sales methodologies. The reason organizations change methodologies or avoid them altogether is that they don't use them as they were intended or they cut corners so that the benefits of their use are eliminated.

Don't even think about investing in sales training if you don't plan to spend at least an equal amount implementing and reinforcing its use. Unfortunately, the up-front cost of many methodologies is so high that companies are often unwilling or unable to invest additional resources supporting field reinforcement.

Another reason they don't work is the profit model used by training companies. This profit model is based on a factor known as “butt in seats.” This refers to the fact that the profit from instructor-led training is made in the classroom. Once a minimum number of participants is reached, the rest is gravy.

The problem is that the training organizations that employ this model are not willing to do the one-on-one reinforcement necessary because they consider follow-up a low margin activity. After all, why do consulting for $2500.00 per day when you can sell classroom training and make $10,000.00 per day?

The problem, of course, is that this mentality is detrimental to the user. If the user pays a lot of money for sophisticated training but has nothing left to invest in ensuring it's used, they won't derive the optimum benefit of the training.

Leave implementation to the field managers you say? Right! They could do it if you cancelled all their meetings, kept them from participating in sales activities, significantly[curtail?] their travel and vacation schedule and didn't require them to do any reporting or spending time lobbying with corporate. Then, maybe they could clear their calendars and become full-time "coaches" who worked on the strategy of every important deal. This is not going to happen, but there are alternatives, like restructuring management's time and setting new priorities.

Start with one simple concept - Your salespeople are not paid to sell; they are paid to WIN! Any advanced or strategic approach that does not teach them how to recognize the difference between when they are winning and when they are losing is a waste of time and resources. This is not to imply that other face-to-face skills are not important. We are talking about learning how to manage “complex” sales opportunities at the strategic level, where you must make decisions about the amount of time and resources you will invest in a sale.

Management must evaluate ongoing sales to determine whether they are winning or losing to justify the expense of selling. Furthermore, they must determine, if they are losing, whether they can do anything about it. Reviewing the status of ongoing sales is the best way to determine which opportunities are the best investment of sales time and resources. When this kind of practice is implemented, you will see the impact on productivity. If you don't do this, your productivity will never reach its potential.

That's what we're talking about - potential. I've seen good salespeople improve their close ratios from 80% to 100% by simply applying the use of a good methodology. Good methodologies enabled them to identify the difference between a win and investing their time in an opportunity they were destined to lose.

Methodologies for managing sales opportunities, if properly used, can only help because they:

• Give you a more objective view of where you are in a given sales cycle
• Improve your ability to select the right deals to invest in
• Provide the data necessary to determine the best strategy to win
• Result in higher win ratios

Focus on Performance

But, in addition to employing a good methodology, you must establish performance requirements. You must also define the difference between what constitutes a prospect and what constitutes a sales opportunity. There are lots of people who would buy from you if they could, but that doesn't make them worth an investment of your sales time and resources. There are different stages of business development. Not all of them demand the investment in direct sales.

You should also establish clear guidelines for validating exactly what stage of the sales cycle an opportunity is in. If you do not, your revenue stream, and even your pipeline, is validated only by intuition. Like the example we started with, this can create embarrassing results. There must be accountability up and down the line for knowing the status of every major sale as well as what's in the pipeline. Definitive standards and a good methodology will help you achieve this objective.

Knowing the answers to the status of sales in progress is the responsibility of sales management. Managers must have the mandate and the tools to be able to deliver accurate and dependable sales forecasts.

The most highly productive salespeople know that the key to successful selling is working on the opportunities they know they can win. The selection of the right opportunities and determining whether they can be won do not require instinct or even experience. They require the ability to analyze information.

Assessing Sales Opportunities

There are certain aspects of a potential sale that will help you determine whether or not it will be a good investment of your time and resources. To determine this, you should be able to answer some questions like the following:

• Are you able to determine whether the prospect has actually decided to enter into a buying cycle?
• Can you define a clear sales objective?
• Have you identified the key decision-makers involved, and do you have access to them?
• What alternatives will the prospect choose from? (This includes direct competitors, internal and consulting solutions as well as the choice of doing nothing.)
• Do you or any alternative[substitute other sales person?] have supporters or sponsors who can influence the decision in your favour?
• What is the "buying readiness level" of the prospect? (If they have the chance to buy, what convinces you that they will?)
• Does this opportunity represent a better potential return on investment from sales than others you might pursue?
• Do you have the resources and strategies necessary to win if you decide to compete for the business?
   

If managers and sales do not regularly discuss these aspects of their sales opportunities, it is difficult to determine your standing in a sale. Part of the sales plan should be to execute activities that will enable you to obtain these answers. As this information is gathered and analyzed, you should get a better idea of where you are in the sales cycle and your chances of winning.

Management’s Role

The bottom line is that it is quite possible for your sales team to know whether they are working on the right opportunities and talking to the right people at the right time. Learning how to do this is easy. Making sure these practices are ongoing is the real challenge. Sales management must be held accountable for knowing the status of every important sale.

Don't waste your time and resources investing in methods that teach you how to do this unless you plan to spend at least an equal amount to insure it’s being done. Poor implementation is the best way to fail at efforts to improve sales productivity. If you're not going to do it, save yourself some time and worry and don't do it at all. But, if you conduct a good implementation, you will see a direct correlation between your investment in a methodology and your sales results.

Managing sales performance is not rocket science. It does, however, require a methodical approach. Insisting that your people make their numbers is no guarantee they will. They must have the tools and methods to make it happen. If they have the tools and don't use them, they may as well not have the tools.

Productivity is everybody's business, especially in sales. If you can replicate best practices, the results will follow. This may require changes in the way you manage, but accountability is one of the reasons you became a manager. If you can implement a good model, you can impact performance and results.