Is the expertise of your sales and sales support people harnessed and enabled to have a ROI?

‘Is the expertise of your sales and sales support people harnessed and enabled to have a ROI?’ by Jeanne Hellman (author of case study ‘Sales Enablement Implementation & Case Study: Achieving Your Sales Knowledge Advantage’):

“McKinsey says: 47% of US workers are paid up to 75% premium. Are you getting your moneyʼs worth?

When companies look to measure the ROI of initiatives, they tend to focus on the obvious usual suspects. But if the definition of what McKinsey is measuring across all US workers here was, “all those employees who contribute and create information, provide knowledge or expertise, and tailor or deliver this knowledge/information to gain clients, win profitable deals, and retain customers“, then in many organizations, the percentage of people who are paid up to 75% premium might as well be double the 47% McKinsey has. You have to consider all the supporting roles found within large enterprises.

However more to the point, any challenge so broadly affecting the company and potentially so tied to the top and bottom line has to be seen as strategic, especially in particular, at the large, global Enterprise. Why? The inherent challenges of a complex global organization [heavily matrixed, many regions, multiple product groups, etc. = many silos] – they sell complex solutions in a complex selling environment with complex processes in multiple markets with a complex set of competitors. (Get it? Its complex!)

For the majority of these companies their comparative advantage is how well they can leverage their expertise:

  • Expertise in the clientʼs situation/context;
  • Expertise in any aspect of the available solutions;
  • Expertise in the market and competitors.

With the increased speed of all markets today, changes in the competitive landscape and unforeseen macro-events, technical disruptions and innovations can impact entire industries and regions. How quickly your organization can respond, shift and adapt will determine if you lead/win or follow/lose.

Manage the complexity of your environment (lots of data sources and business processes): When we define the term Sales Enablement portal as “the place on your intranet where employees contribute and create information, provide knowledge or expertise, and tailor or deliver this knowledge/information to gain clients, win profitable deals, and retain customers” then my advice is to make sure the technical aspects of your Sales Enablement portal fits into your landscape and you do not create some over-simplified new one (e.g. yet one more place to put and get information for each business unit or country).

Do not see the statement “We are in the information age” as just something regarding the broader world we live in, but make it an important part of your corporate culture: The lesson of web 2.0 for companies is that people=expertise. There are a lot of innovations that can streamline peopleʼs collaboration and leverage their expertise (social networks, wikis, SharePoint like platforms, micro-blogging, instant messaging, Voice over IP, etc.). But they all are not right for every company, and you can spend more time trying to manage all of the technologies than getting any value from them. Just because they all exist doesnʼt mean you have to use them.

Some tips for selecting a new collaboration technology for your large, global enterprise to help get you on your way are:

  • Find the right few technologies to support your culture of collaborating. (No culture of collaborating? You better get one – fast)
  • Manage your technologies: donʼt let them dictate your strategies
  • Focus the development and deployment of technologies to specific groups and goals
  • Be iterative in the process to use success to build momentum – leverage quick wins
  • Develop and understand the personas of your sellers or other end users: define their needs and any benefits gained – whatʼs in it for them?
  • Create a Sales Enablement road map that includes all four legs of Sales Enablement (People, Technology, Processes and Content).

Best of luck circumnavigating this brave, new (collaborative and technically advanced) world.”

 

Sales vs Marketing – Whose job is it to generate leads?

‘Sales Vs. Marketing: Whose Job is it to Generate Leads?’ by Pete Caputa from November 4, 2009:

This article is an interview of Anthony Cole by HubSpot’s Peter Caputa. Tony is a sales development guru and the founder of Anthony Cole Training Group. Anthony Cole Training Group (a HubSpot customer) helps individuals and companies drive consistent and predictable sales growth. Tony’s blog is called the Sales Java blog.

In marketing, we call it “generating leads.” In sales, it’s usually called “prospecting.” Whose job is it anyways?

While salespeople have always been measured on their ability to generate leads, inside sales people are often measured only on their ability to turn a cold list into warmer leads for their outside reps. However, even outside sales people who do their own prospecting are measured on their ability to fill the top of their funnel based on what leads turn into sales at the bottom.

Great marketers generate demand for their sales teams. With online marketing, marketers are now being measured on their ability to do so. With measurement comes great responsibility.

As a marketer, are you up for the challenge? Is your sales team carrying their weight too?

To find out what it takes for a salesperson to be good at prospecting and generating leads, I turned to a sales training guru that I’ve been following for a few years, Anthony Cole:

Pete: How do you teach sales people to prospect?

Tony: Actually the real key is to hire people who can prospect (prospect qualification is a testable skill) and then help them improve their techniques. Prospecting effectively is a topic we help sales people with every day and maybe for the marketers out there, this may help you understand how to better support your sales teams. We coach salespeople that their attitude about prospecting will determine how successful their sales career will be. If they feel that prospecting is something they have to do, then they will view it as drudgery. They will resist it; they will find other things to do instead of prospecting. They will not improve their skills at it and  their performance and success in sales will suffer. They must embrace prospecting. They must understand that prospecting is the job. They get paid a lot of money because they are willing to do what others won’t – prospect.

Pete: Most people think that the best salespeople are the ones who are all about talking a lot and closing hard. In your experience, would you say that prospecting is the hardest thing for salespeople?

Tony: Those people in sales who are making the most money are not making the most because they are brighter or have better presentations, or because their product is better. They are making big money because they have figured out that the real job is getting in front of people or businesses that need, want and can pay for the product and services they provide.  The moment they realize that prospecting is THE job, they have taken their first step to the best year in sales they’ve ever had.

Pete: Have you found that there are certain salespeople that are better at prospecting than others? Why?

Tony: Yes, there are people who are better prospectors and here’s why.  They have less of a need for approval and can ask tough questions.  Also, they recover from rejection quickly so not much gets them down.  They need to have the attitude of prospects that ‘some will, some won’t, so what, next…’  Many salespeople have self-limiting beliefs that in turn limit their behavior. The first step to unlocking the locked mindset is to identify those beliefs. Here are some examples:

  • “I don’t like prospecting.”
  • “It’s hard to get past gatekeepers.”
  • “If a prospect asks me to send something, I usually send something.”
  • “I’m uncomfortable asking for referrals.”

Pete: How do you recommend salespeople get over these self-limiting beliefs?

Tony: Having the right attitude and beliefs about prospecting is the essential key that will unlock the skills they may have already, if they had just been able to overcome their own self-limiting beliefs. We tell them to take the limiting beliefs they’ve identified and turn them into positive affirmations. Below are a few examples:

  • “I don’t like prospecting.” –> “I love prospecting because it is the key to great prosperity.”
  • “It’s hard to get past gatekeepers.” –> “Getting past a gatekeeper is what I do best when I prospect.”
  • “People don’t like to give referrals.” –> “People are more than willing to introduce me to other people they know.”

Pete: That’s really interesting. Do you think marketers have self limiting beliefs about generating leads for their sales teams?

Well, I’m not the expert on that. But, I’ve listened to enough salespeople complain about their marketing teams to know that it’s probably a good idea for marketers to reflect on it.

[…]”

Sales Team Effectiveness Assessments

Blog post ‘Sales Team Effectiveness Assessments’ by Greg from peaksalesperformance.wordpress.com from October 1, 2009.

Whenever Greg gets asked for his opinion on a firm’s sales organization overall and for a development plan, he always works from a copyrighted formula:

“Sales Results = (Sales Skill + Sales Will) X (Execution + Leadership)

Each of these variables has 8 drivers.

Sales Skills (primarily B2B)

  1. Prospecting Skills
  2. Presenting Skills
  3. Probing Skills
  4. Listening Skills
  5. Closing Skills
  6. Pipeline Management Skills
  7. Product Knowledge
  8. Industry Awareness

Sales Will

  1. Recruitment Process
  2. High Performance Focus
  3. Target Compensation @ Plan
  4. Peer Recognition
  5. Family & Friend Recognition
  6. Tactical Sales Plans Aligned with Strategy
  7. Incentive Plan Clarity
  8. Effective Field Coaching

Performance Management

  1. Goal Clarity
  2. Tactical Prescription
  3. Performance Metrics
  4. Defined Performance Management Process
  5. Joint Call Activity Levels
  6. Readiness Assessment
  7. Coaching & Counseling
  8. Culture

Leadership

  1. Strategy Development
  2. Strategy Communication
  3. Tactical Definition & Measurement
  4. Readiness Planning
  5. Sales Participation
  6. Performance Management Process Execution
  7. Leadership Style
  8. Recognition & Communication

These are the 32 drivers of sales results.  Based on your industry and sales channels they will vary somewhat.

You start the assessment process with the understanding that there is a limit to the organizations resources and ability to execute change.  With this in mind, the key is to find the largest gaps and then to formulate a “do-able” organizational development plan that will begin to close those gaps.

I begin my assessments by examining the drivers at a high level, identifying the major gaps and then drilling down.  This saves me time and saves my clients significant money.  Once the four to six gaps are identified I review and discuss them with the assessment sponsors to find those gaps where the solutions can be bundled into a singular development initiative.  Again, this approach is designed to save money, time and ensure execution.

Why bother with an assessment?  It saves time, money and ensures sales growth.  Why spend money on negotiation training if your issues stem from a lack of field coaching?  Why waste time perfecting a lead generation program when your individual contributors are handicapped in their search for client pain?  Why would you continue to give up margins just because your sales pipeline is anemic?  Why continue to throw good money into an incentive plan when your recruiting process keeps bringing in candidates with low skill and low sales will?

Great organizations have a common approach to problem solving.  Assess, plan and execute.

If you want to grow sales, you’re best approach is to start at the beginning.”

Selling, as the Art of Persuasion, was killed by Information Overload

In the comments of ‘Facts vs Fiction – Social Media Tools in B2B Selling’ I found the following from Jacques Werth:

“[…] The reason that selling is dying is because the basic concept of how to sell is obsolete. Selling, as the Art of Persuasion, is dead. It was killed by Information Overload. The markets for every product and service are far more sophisticated than ten years ago.

  • Cold-calling doesn’t work anymore.
  • Lead acquisition methods are costly and inefficient.
  • Finding needs has become counter-productive.
  • Establishing Rapport has become counter-productive.
  • Educating prospects has become counter-productive.
  • Selling benefits turns off most prospects.
  • Persuasion causes resistance.
  • Selling points have become resistance points.
  • Consultative selling has been show to be fraudulent.
  • Closing techniques do not work.
  • Overcoming objections kills sales.

Top sales producers do not do any of the above. Their sales processes are simple, yet highly effective.

  • They know how to find prospects that are ready, willing, and able to buy.
  • They know how to develop immediate relationships of mutual trust and respect.
  • They know how to determine prospects’ exact buying intentions.
  • They know the importance of assessing prospects’ conditions of satisfaction.
  • They know how to quickly arrive at mutual agreements and mutual commitments.
  • They know how to have prospects’ enthusiastically close the sale.”

Obviously this does not tell us how to become or create a top sales producer but it shows all that is broken and won’t work in a Sales 2.0 world anymore.

In one of his own blog posts Jacques Werth goes on to say…

“[…] There are no secret tips. There are no magic tricks. Effective selling is about finding a sales process that works, following that process carefully, and measuring the results. Pay attention to doing it right. You can’t learn how to sell just by reading articles or participating in sales discussion groups. Although it is possible to learn to sell by reading a lot of books, this doesn’t work for most people.

Books and CD’s can teach you a great deal about selling, but not much about the step-by-step details on how to actually do it. For that, we recommend training and practice. […]”

Metrics to measure around a deal

The blog post ‘Sales people do not like to be tracked, measured or accounted for against anything other than quota’ started the longest discussion in the comments this blog as seen so far. Whilst you should check out all the comments, I would like to highlight the one from Bryan Karp (@midnitecoder). He also posted it to his own blog www.bryankarp.com. I agree with him that the following metrics are important but I am sure sales people would not like to be tracked against all of them:

“Yes, Sales people must be measured by much more than just their quota. I run the Pre-Sales and Analytics department where I work and engage with multiple internal sales people and our external channel partners. I spend a good percentage of my time reviewing and analyzing metrics for various aspects of the business and metrics are critical, hence my view “Unless you can measure something, your attempts at managing it, and maintaining or improving its performance, will be unscientific at best.” by Lord Kelvin.  So, yes sales must be tracked and measured on each aspect of the business, and while quota is certainly an important aspect in what sales people need to be measured by it can by no means be the only measure.

I’ll walk through each of the points, but sales people should also be measured by the

  • ROI of the deal
  • Lead to close time
  • Customer satisfaction after the deal is closed
  • Accurate population of data within the CRM
  • Forecast-to-actual sales
  • % Penetration within account
  • % Conversion rate by lead type (hot/cold)
  • Time per sales stage
  • Attrition rate per sales stage
  • Average deal size
  • Ramp time

Metric: ROI of the deal – It does no good for a deal to be sold if the return is going to take years, or there will never be a return because the contract ends before a return can be recognized. Far too many times I have seen in companies where the sales rep pushes for a deal to meet their quota without regard for the level-of-effort required by services, or support after the deal is closed. This then kills any margin left.

Metric: Lead to close time – While not a metric to hold a rep 100% accountable for it is a key metric. Imagine if you knew for all your deals the typical lead to close time from when it entered the queue from BusDev and/or marketing to when it was closed. This can enhance your visibility and forecasting capability. Additionally it can help highlight individuals how might need additional training and who might be able to help them.

Metric: Customer satisfaction after deal closing – This ties back to ROI and later in the account when you try to get a reference. If you have a true ‘Cassius the closer – character from Selling the Wheel’ they worry about getting the deal closed, not always what is required afterwards. This can lead a bad taste in the client’s mouth and put the deployment team in a precarious situation.

Metric: Accurate and complete data population within the CRM – A no brainer! I have heard the reasons why it isn’t done from various sales people and it ceases to amaze me.

Metric: Actual-to-Forecasted sales per time period – this does tie to quota, but really it ties closer to how well the rep does at forecasting. Additionally if you track this over time companies can increase their visibility in corporate forecasting, and also detect problems earlier. If you detect a sales person is historically off by 10% you can adjust in your corporate forecasts and help them with training to improve. If you see a one-time drop you can keep an eye on them for the next time period vs. trying to guess what happened last reporting period. Seems like a no-brainer, but as I’ve talked to people it seems this metric is never reported on or tracked.

Metric: % Penetration within account – In most sales engagements there are specific roles that need to be identified. Where deals can go bad pre or post deal closing can be attributed to not having fully penetrated the account to find all the key players.

Metric: % Conversion rate by lead type (hot/cold) – Simple measurement by resource to determine what % of leads they are given convert.

Metric: Time per sales stage – Quickly highlights for management and sales person if displayed properly deals that need attention. These would be the deals where it is taking significantly longer in the current deal stage vs. the average. Additionally it helps to identify problem spots if it is tracked. We measured every stage in one of pre-sales efforts and were able to quickly identify key areas for improvement, and develop a longer-term plan. By doing this we reduced our step within the sales stage thereby helping the sales person move the deal faster. My point is…IF you track the time per stage by deal you can quickly find areas that need improvement and focus a team to improve the methodology.

Metric: Attrition rate per sales stage – Where are deals falling out of the sales process and of equal importance is why?

Metric: Average deal size – Easy metric to measure, but if you measure properly you can get a good feel for the number of deals you’ll need to close when doing next year’s budget.

Metric: Ramp time – Sales people just like everyone else need to be measured on how long it takes them to be self-sufficient. While most have the sales background every company has a unique value proposition, methodology and of course product / service. If a particular rep is taking longer than average you can work with them to close the gap with training or determine if you need to make a change.

I’m sure there are other metrics that can and should be measured, but the list above are my thoughts. Again let me know if you think I’m off base, or just plain missed some key metrics.

Thanks,
Bryan”

The metric ‘ROI of the deal’ could probably even be split in ‘Expenses necessary to close this deal / deal size’ and ‘% price was discounted by’.

business case data for sales enablement solutions

This work in progress blog post collects data that Sales Enablement Solutions vendors use to make business cases.

This work in progress blog post collects data that Sales Enablement Solutions vendors use to make business cases.

The first one is from Lee Levitt (former Director, Sales Advisory Practice; IDC) in response to the question “Which percentage of what marketing teams make available ends up being used by sales?”:

November 22, 2010: “In researching this question two years ago at IDC, we found that between 50 and 90% of all marketing provided collateral goes unused. Sales people can’t find the right stuff, it’s too inwardly focused, it’s not tailored to client’s specific needs, sales people got a copy of something a buddy used that worked…

Good sales and marketing alignment can substantially reduce this vast wastage and help sales people to be more productive. It requires that sales and marketing executives together identify target markets, specific business issues, goals, etc., and jointly develop the plan to address the opportunity. The deliverables should then support that plan.”

Lee Levitt also wrote the following comment on July 29, 2009:

“[…] Companies are reporting results with sales enablement. American Express, for instance, indicated that Time-to-Revenue for new reps dropped from months to weeks after they implemented a leading SE environment. They reported this at an IDC Sales and Marketing summit in 2008.

For another large IDC client, we identified a 15% increase in sales productivity after the company implemented some basic sales enablement processes, a small subset of the possibilities in that multibillion dollar organization.

While it’s still early in the sales enablement game, virtually every midsize or larger company today does something in the area of sales enablement, typically based on internal processes and maybe some intranet or SharePoint support.

A very small handful of companies, maybe a thousand in total, have taken a focused approach at moving their sales enablement activities to what IDC refers to as the third generation of sales enablement.

In these early markets, innovators and early adopters don’t care about ROI. That’s for the late majority to worry about. They’re looking for competitive advantage…and they’re finding it. When companies seek to address specific business challenges (new rep support, competitive response, customer intelligence, campaign support, etc), they find substantial improvements in sales productivity and customer satisfaction.

We’ve only scratched the surface with sales enablement. We believe that the potential for sales productivity improvement is on the order of 30-50%, or more, particularly if employed with the other four levers of sales productivity and properly measured.

And the net savings to the organization may be substantial. The typical technology firm spends more $12,000 per rep per year in marketing collateral development, with the vast majority of that expense going to waste. Firms that take an outside-in approach in sales asset development will find this cost dropping by an order of magnitude.

There’s ROI for you – higher sales productivity and lower costs.”

This one is from Bruce A. Brien’s blog post “The core problem with sales enablement”, from July 9, 2009:

“[…] sample company does $10 million in annual revenue with a 40% close ratio and an average deal size of $100k on a 90 day sales cycle.

  • That means that the 5 sales reps are each closing 20 deals per year while working 50.  They are focused on 12-15 deals at a time.
  • If our sales enablement capabilities cause a 3% drop in our overall effectiveness, our sales people will only be working on 48 deals [each] and closing only 18 of them for an average price of just $97k. [18 * $97k * 5 sales people] The result is a revenue picture of $8.7 million or a drop of about 13%.
  • Assuming you have fixed costs in the 25% range and an operating profit of 15%, profits would drop by a whopping 47%.  The compounding effect can be devastating.  A 3% drop in sales effectiveness can easily result in the loss of half of your profits.
  • You could re-coup your lost revenues by hiring another sales rep at a cost of $150k and be faced with the same problem next year when your efficiencies drop further or you could address the core of the problem and shore up each part of your sales enablement platform for similar monies while building a solid foundation for future growth.”

Many Sales Enablement and Sales 2.0 start-ups are citing Forrester’s Scott Santucci’s ‘Uncovering The Hidden Costs Of Sales Support’ from April 13, 2009 to make a business case for their services:

“Technology vendors are spending, on average, 19% of their selling, general, and administrative (SG&A) costs or $135,262 per quota-carrying salesperson in support-related activities. Few are aware of this enormous amount because the costs are hidden — tucked away in many different budgets dispersed throughout the organization. Corralling these random acts of sales support presents a golden opportunity. By creating a strategic sales enablement program, marketers can drive significant cost savings in the short term, while improving their companies’ competitiveness to thrive in the new growth cycle.”

On July 7, 2009 Michael Gerard (VP, Research for IDC’s Executive Advisory Group) posted on his blog:

“[…] IDC research shows that over 40% of all marketing assets handed over to sales are not in use today (IDC’s Best Practices in Sales Enablement – Content and Marketing (to be published end of July)). This includes assets that have been developed for sales, channels, prospects and current customers. IDC estimates that at least 30% of companies’ marketing investment, including program and people spend, is dedicated to creating content and marketing assets. Clearly, marketers can leverage cost reduction opportunities if they take the time to improve their content management process and technologies.

– “Our content is all over the place…a more formalized content portal is being created to get our sales team the most relevant materials when they need them.”
– “…marketing is funding an improved marketing asset management system and we are hoping to achieve 3% – 5% reduction/reallocation of spend on annual asset development and improved production efficiencies.” (improvements in production efficiency, reduced program time-to-market, and reduced re-work).

In the next several weeks, IDC will be publishing a sales enablement report highlighting best practices in marketing content management from a lifecycle management, technology, and measurement perspective. Detailed company case studies will be also be included. […]”

In 2004 it was IDC’s ‘The Cost of Information Tasks to the Enterprise’:

Whitepaper IDC Hidden Costs 0405

In its February 2010 issue CRM magazine looked at Sales Enablement Tools:

“[…] THE NUMBERS

  • $135,262 is spent, on average, in support costs per year for each salesperson.
  • 7 hours per week is what the average salesperson spends looking for relevant information to prepare for sales calls.
  • 50 percent of the information is pushed through email.
  • 10 percent is “made available in a useful format.”

Source: Forrester Research & IDC Sales Advisory Service

I have not double checked the following numbers I found in the post ‘Sales people who research cost you big time!’:

“[…] So, what is the actual hourly value for a B2B salesperson? We’ve developed an excel calculator to help do the math. Let’s use a typical experienced B2B enterprise salesperson at a software company and apply these sample figures:

  • Annual compensation (at plan, or meeting quota): $200,000
  • Benefits Paid (20% of a 70K salary): $14,000
  • Annual Quota: $2 million
  • Include 2 weeks vacation and holidays

This salesperson’s true “hourly value” is $1,198!

For companies with higher quotas (I’ve seen annual quota’s as high as $14 million), this figure is even higher!

If you’d like to figure out your own salespeople’s hourly value, send me an email at silvia@industrygems.com and I will email you the calculator.

The next time you see your salespeople doing research, take interest. Using salespeople for anything other than selling, negatively affects your bottom-line. Find ways to remove those activities from their daily to-do list. It could be costing you over $1,000 an hour! Your sales people must focus on the thing they do best… selling!”