August 26, 2009

Why Sales People Should Think in Terms of Buying Cycles

A cycle is defined as 'a series of events that are regularly repeated in the same order'. Thus the term fits well with the modern world of buying and selling, with buyer and seller increasingly adopting a structured and systematic approach to their work. In this article we discuss the many reasons why we have used the term cycle as part of the sales and marketing engine (shown below).

Don’t miss the cycle. If you go straight from sales meeting to sales proposal, you miss a vital step. That is the essential step where you confirm, clarify and shape needs, establish the requirements of stakeholders, explore solutions and gain a shared commitment to take action. It is where you sell your solution, people and processes. 

Don’t sell too early, because:
· Selling in initial sales meetings or in cold calls is ineffective. Buyers don’t like it. You have to use a more effective means of getting their attention. Simply delivering your traditional, feature led, sales pitch will not work.
· A proposal written without sufficient interaction with the prospect runs the risk of failing to accurately understand needs, or to build ownership of the solution among the prospect.
· You cannot sell until you know what is required. Even if you already know, you cannot sell until you show you are interested.
· You cannot fast track the buying decision, or the building of a relationship.

Buying decisions are complex, indeed increasingly so. Cycles connotates this well. There are many people involved in the buying decision, multiple stakeholders, complex requirements (some of which may be conflicting), competing priorities and projects.

Buying cycles do not necessary correspond with sales cycles. Buyers call sales people to the table later and later, often after requirements have been determined and the business case created. To avoid this sellers have to look beyond those who have a need and a budget, that means selling to satisfied.

Buyers don’t just arrive at decisions; they go through a process of decision making. We look at organisations who are at 3 stages:
· Recognition of need
· Search for solution
· Selection of supplier

The salespeople must think in terms of the buying cycle. The sales approach should vary depending on the stage the buyer is at. The sales approach has to blend each stage. For example, if a prospect is looking for training it is beneficial to look beyond that solution to the need – that is what the training is expected to achieve. This examination may enable the ideal training solution to be defined, or indeed enable looking beyond training to other solutions.

A structured sales process is important. We wanted a term that related to a sales process, as well as buying process. This is important for two reasons firstly it helps with pipeline visibility, predictability and control. Secondly it helps to determine if an opportunity has proceeded though the standard steps of the sales process, for example;
· needs analysis across all stakeholders,
· defining buying requirements,
· covering the buying unit,
· prequalification of the opportunity (in terms of budget, timing, etc.).

Selling is complex. We wanted a term that recognized that sales process is not a straight line. The salesperson may at certain times feel like good progress is being made, while at other times he or she may feel that the deal is getting further away, as opposed to closer.

Buyer trumps seller, every time. We wanted to focus attention on buying process, as opposed to sales process – but not just about trying to corral the buyer into a process that suits the sales organization. Indeed, often the seller is not at the centre of the buying process.
Avoiding confusion. We could have called this cylinder opportunities, or prospects. Here is why we didn’t:
· Both terms are hard to define and can be highly subjective
· Both terms tend to suggest that you can go straight into a pipeline forecast after a meeting or two
· we wanted a term that was buyer – seller neutral –that is relevant to either side

Your work is never done, until the decision is made the salesperson must continue to build the relationship, understand the needs and so on. If the seller stops then he may be leaving the way open for a competitor.

The sale is not the end. The cycle in a way, has no beginning and no end. The relationship is more important than the order, or the transaction. Even if vendor does not win one order, it does not mean that the relationship should not be maintained. The lifetime value of the relationship is what is important. Suppliers disappoint their customers all the time, so by maintaining the relationship, in spite of not winning the order, the salesperson can ensure that he, or she is in pole position for the next purchase.

Both sides now! We also like the term cycle because it fits well with what we call 360 degree selling –where the salesperson is able to make a 360 degree wing from the sellers side of the table to the buyers side of the table and back again - thereby facilitating a better understanding of the buyer’s requirements and capable of adopting the position of trusted advisor. This is also reflective of a bi-lateral approach to the sale, where buyer and seller engage in a joint process of exploration and problem solving. This is particularly important in an environment where buyers are increasingly keeping salespeople at arm’s length.
Bi-Cycle or uni-cycle. We like to think of cycles (either buyer, or seller) as being two types, that is; bi cycle, or uni cycle. The later involves the salesperson, or buyer alone, while the former involves both in equal partnership. Two wheels are better than one - it is what others have called Joint Venture selling, or a bi-partisan approach.
For an overview of the sales engine and its role in setting sales and marketing priorities click here.

August 23, 2009

Why LEADS Are Out and CONTACTS Are In!

Old fashioned lead generation dies a death.

Managers need to stop generating leads and start developing and nurturing contacts. That means nothing short of a revolution in terms of their approach to finding new customers, one that is essential to building a sustainable sales pipeline. Tomorrows sales opportunities won’t be generated by yesterday’s lead generation techniques. They will require a process of ongoing contact and nurturing.

Say Bye bye to LEADS, hello CONTACTS

We have stopped using the term leads. That is because almost everybody we know has some form of baggage when it comes to lead generation. The term leads is just simply too troublesome:

  • The number one cause of tension between sales and marketing is the quality of leads provided
  • The number one complaint managers have about salespeople is that they don’t spend enough time generating new leads
  • The number one complaint of sales managers relates to the quantity and quality of sales leads.
The term leads means different things to different people. Some people call them prospects, others call them suspects. It is all too confusing. For some leads are simply raw names on a target list, for others they are people who have engaged with the business (e.g. registering on a website, or demonstrating interest on a cold call).

More importantly the term leads and all that is associated is outdated and old fashioned. It is not longer sufficient to ensure a sustainable sales pipeline.

Quite simply, yesterday’s lead generation methods are not generating enough sales opportunities, particularly high quality opportunities. They are not enough to lure increasingly sophisticated buyers. However, not only are they inadequate of themselves, but they are being overused and abused. Typical of this is the growth in the volume of generally unwelcome cold calling and email marketing.

The Problem with LEADS…

Lead generation is the Cinderella of sales and marketing, but there is an unmistakable relationship between what goes in at the top of the sales funnel and what comes out at the bottom.

Most organizations lack a plan, budget and target for lead generation, they are over dependent on cold calling and a limited number of sources. Furthermore, there is often a lack of clarity regarding who is responsible for lead generation.

Lead generation tends to be relative unsophisticated and overly dependent on techniques, such as cold calling, that are fast going stale. It is typically short term in focus i.e. ‘we need lead this quarter to fill our pipeline’ rather than with a view to building a relationship and creating a dialogue.

The principal tools used in ths area revolve around the sales pitch and the elevator script – which are difficult to distinguish between suppliers and to tell the truth are of little real interest to buyers.

Lead generation is aimed at sniffing out where there is a demand, as opposed to shaping or creating demand where it is latent. It is aimed at selling to those with a need and a budget.

Move over LEADS…

So, what is the difference between LEADS and CONTACTS. Well, both are aimed at generating sales meetings with potential customers, however the latter is the more contemporary and sophisticated method. Some of the differences are outlined in the table below:

Leads are generated and prequalified.
Contacts are nurtured.

Leads require a campaign.
Contacts require a conversation

Leads are fed a sales pitch, or elevator scripts.

Contacts are provided with useful information, and insights.
Lead generation is typically start stop, adhoc and reactionary.

The development and nurturing of Contacts is ongoing.
Short term focus – get the meeting / sale

Long term view – relationship / dialogue
Leads go stale.

Contacts last forever
Small number of sources
Multiplicity of sources used
Typically poorly organized
Live in a database /CRM system
Traditional marketing focus
Underpinned by a relationship marketing approach

The lead is seen as a cost
Are an investment

Is often interruption based

Are permission based
Based on sources that generate lower conversion rates and less predicatable results - advertising, cold calling, etc.

Emphasis on sources that deliver greater returns and higher conversion rates - introductions, networking and referrals

August 20, 2009

'In the Dark' Sales Managers Cause Alarm

Many sales mangers don't have access to vital information regarding sales performance and potential. That effectively means they are driving in the dark and running the risk of an avoidable accident.

Sales is a Numbers Game!
We like to talk about numbers. We pull the calculator out wanting to really understand sales performance and potential and bypass hours of talking around the issue.
The fact is what gets measured gets managed, we want to talk to managers about their metrics. That is those variables upon which they will be judged and rewarded.
Managers want to talk about numbers too, but there is one big problem. A lot of the time they don't have them and cannot get them.
So when we ask managers about win rates, the number of sales meetings in the last quarter, the number of sales required next quarter we are often greeted with silence and a frown. When we ask about how these metrics vary across product lines, markets, or sales people the frown is even more intensive. Quite simply managers don't have access to key information regarding the performance and potential of their sales teams.
Managers Don't Have All the Information they Need.

Imagine driving without a dashboard telling you the speed you were travelling at, whether you had enough petrol to get you to where you are going.
Imagine not having the instruments to tell you if the breaks, lights, oil levels, or any of the functions important to staying on the road needed attention. Well this is what many well respected sales managers are doing when they don't have the information on the number of leads, meetings and sales cycles their team needs to work on at any one time. This lack of metrics is having major implications on how effectively they can manage communications with their peers, their team, their executives and their customers.
Visibility, Predictability & Control of Sales.
Sales forecast accuracy and sales reporting have long been a hot topic, and something that we are quite passionate about. We use the terms visibility, predictability and control because people can relate to them better. That is:

- Visibility of what is happening year to date (that is historical sales activity levels, sales revenue and margins).

- Predictability of what is going to happen to year end and thereafter (including booked and forecast sales, required activity levels and conversion rates).

- Control, that is the ability to impact on the level and effectiveness of sales activity, thereby immediately correcting any gaps and continually optimising people and process performance.

How to Achieve Greater Visibility?

Greater visibility comes at a price. It generally requires:
- Better Systems - that is the implementation of reporting systems, stricter forecasting methods, and even sales database, or CRM systems
- Better structures - such as a more structured approach to sales meetings, sales reporting and customer reviews
- Better plans and more importantly an approach to planning and target setting that sets out targets and metrics, not just based on sales, but on levels of activity (e.g. number of sales meetings required) and effectiveness (i.e. conversion rates throughout the sales cycle and ultimately win rates).
- Better processes - a more structured approach to the management of sales cycles so as to enable more accurate pipeline forecasts and the rating of individual sales opportunities.

Visibility is a Challenge.
We feel it is important that sales managers move from subjective measures to ratings based on the completion of specific elements of the sales process (e.g. documentation of needs analysis, contact with all members of the buying unit, or presentation of ROI model).

Many of these items will generate a kick back from salespeople and will require considerable commitment, effort and discipline to bed in successfully.
What is the alternative? Well, it is to keep on driving in the dark.

August 18, 2009

Sales Priorities - Is There A Concensus About What Needs to be Done?

Most sales managers we know have a clear view of the sales priorities, opportunities and challenges facing their organizations. That is great!

However, this clarity is often not present among other members of the sales, or management team. This lack of a clear consensus makes it more difficult for the sales manager to effectively translate strategies and priorities into action.

Maximizing sales success requires that the sales team must work in unison, following a clear and consistent strategy.

This strategy must integrate sales and marketing, while also ensuring organization wide and cross functional support.

Does Everybody Share the Sales Manager's Priorities?

In many organisations the clarity, consensus and buy-in regarding sales and marketing falls short of what is required.

That is because managers don't get to spend enough time ensuring that others share their assessment of sales and marketing performance and priorities.

That can make it difficult to get others to sign up to, and share responsibility for the required; strategies, resources and actions.

The Sales Managers Has to Sell His Priorities.

The first thing that the sales manager has to sell is his priorities, strategies and structures - together with improvements and innovations - for sales and marketing.

That is to sell them to the members of the sales and marketing team, as well as to other managers and their departments. Yet, this often gets overlooked. That means:

· The sales effort may not get the resources and the support that it needs.

· Responsibility for sales is not spread widely enough, with sales seen as the job of the sales manager, or sales person, as opposed to purpose of the business and an area to which all members of the team must contribute.

Issues that Require A Consensus.

Managers need to make a greater effort to ensure that there is a full appreciation and understanding of:

· The way forward

· Key sales opportunities and challenges

· What is and is not working

· The various roles and responsibilities

· New improvements, initiatives and innovations

· The key priorities and strategies

· Quantifiables and metrics to be used in tracking performance, etc.

How To Fast Track A Consensus.

How can managers fast track the process of getting people to buy-in to and sign-up for what needs to be done? In particular, how to side-step personalities and politics?

Well, the answer is to apply some of the process re engineering type principles common in many other areas of business. That means looking beyond the people to issues of processes, activities, efficiency and so on.

In particular, an effective way is for managers to get their team and their management counterparts to look at sales and marketing as the revenue generating engine of the business.

By framing the process around a concept with which everybody is familiar, one that is intuitive and logical – that is the engine - and looking under the hood' (or bonnet if you drive on the right hand side of the road) managers can get wider involvement, freer discussion and
fresher ideas.

Time to Lift the Hood on Sales.

Engines are an efficient means of achieving a desired result, that generally involves transforming one thing to another. In the case of a vehicle, it ignites a mixture of air and gas to move a piston and rotate a crank shaft and generate the power required to move.

The sales engine is the means by which your business generates revenue from both new and existing customers. It takes in leads at one end and converts them through stages (that is sales meetings and sales cycles) into orders and ultimately repeat orders. That is providing the power to accelerate sales and move your business forward.

Typically, for the complex sale, the sales engine has 5 cylinders, that is key stages of processes in the sales cycle, (the first 4 cylinders) and growing revenue from existing customers (the final cylinder).

Advantages of the Sales Engine View.

The advantages of looking at sales and marketing as an engine are as follows:

• It is a simple, intuitive and visible, plus it is light on terminology and therefore is accessible to all the team (including those outside sales). That makes it an effective tool for coaching, planning and facilitation.

• It looks beyond the people and personalities involved to depersonalize sales and marketing and thereby facilitates an objective view.

• It encourages looking at sales as an organisational capability, rather than just an individual, or team. Sales people will come and go, but the capability must remain with the company.

• It adopts a high level view that integrates all aspects of sales and marketing into a central framework that can serve to rally all managers and their departments around the sales effort.

• It sees all aspects of sales and marketing as being interconnected and interrelated, for example if the leads cylinder is broken this will have an impact on all other aspects of the engine. An engine is the perfect example of multiple components working together to deliver a result - something that the video below, showing an internal combustion engine, demonstrates well.

• It brings systems thinking to bear on sales and marketing, including the concepts of business process re engineering and continuous improvement. Moreover, it encourages looking at sales in terms of a science, rather than a black art, or set of ad hoc, or sporadic activities.

• It is compatible with, and complementary to existing sales methodologies and processes that may exist within the sales team. It is just another way of looking at sales and marketing and getting a broader consensus.

• It employs terms, such as LEADS, MEETINGS, CYCLES AND ORDERS that are easy to apply. That is because they involve less subjectivity and are activity based. That means they can be tracked using most CRM, or sales reporting methods.

How is your engine performing?

So, if sales and marketing are viewed as the engine of the business, here are some good questions to ask:

• Is the sales engine running smoothly and purring nicely? Or is it labouring, chucking, or back firing?

• Is the sales engine firing on all cylinders? Or are some cylinders misfiring?

• Are there opportunities to fine tune, or even turbo charge any of the cylinders?

• Would a change of oil, spark plugs, or filters help?

• How powerful is the engine? Is it up to the job? Will it get us to where we want to be?

• How efficient is the engine? Is it giving delivering high MPG? Is there waste in any areas?

• How do we know if it performing at its best? Are the metrics clear? Is there a management dashboard? Are there tell tale signs if there is a problem?

• Who is responsible for engine maintenance / optimisation?

• When is the last time the sales engine was serviced, or fine tuned?

• How will the engine need to change to meet the companies growth ambitions / market conditions?

• If we were starting from scratch and building the engine again, would it be different?

Putting Metrics in Place.

When we help managers apply the concept of the sales engine to their business, we start with the metrics and work from there.

In the example below, for a start-up engineering business, the sales engine is used to determine the level of sales activity required to year end (above the engine) and for the next financial year (below the engine).

In this instance the manager can see that 111 leads and 45 sales meetings (companies as opposed to individuals met) are required in order to meet target based on anticipated conversion rates.

The performance of the sales engine can be improved by:

- Increasing the numbers for each cylinder (e.g. increasing leads generated from 111 to 120), or more importantly by;

- Improving the conversion ratio between the cylinders (e.g. increasing the conversion rate from sales meeting to sales cycle from 1 in 3 as shown above for the rest of the year, to 1 in 2).

Small Improvements Can Have A Major Impact.

The most important principle of the sales engine is that a number of small improvements made in a number of areas across the sales cycle can have a significant overall impact on overall win rates and sales success. For example, a 3% improvement at each stage of the sales cycle, or cylinder of the sales engine, can increase sales performance by up to 33%.

No two organisations, sales teams, or individuals have the same requirements, or the same levels of capability, or performance with respect of any or all of the cylinders. That means each
organisation, sales team or even each sales person's engine is different, and arriving a shared view of the engine across a sales team results in new insights into the way the organisation sells, and more importantly how this can be optimised.

In conclusion, when it comes to sales and marketing, it can be very helpful to lift the hood and get a consensus as to what is and should be happening underneath.

August 17, 2009

Sales Engine Versus Sales effort, or Sales Person

The Role of the Sales Person in Sales Success.

We have worked with sales managers and their teams in 100s of organisations for over two decades. That means we have had contact with lots of great sales people and, as the law of averages would dictate, with a minority of 'not so great' sales people.

All of this has shaped our view of what determines sales success. In particular, it has led us to the view that sales is not just about the sales person. This may sound like a statement of the obvious, however it all too often goes unsaid and the sales performance of many companies suffers as a result.

The Sales Person Centric View of Sales.
Too often organisations take a narrow view of sales success. They focus on sales people and personalities, without full consideration of the many other issues involved. This people centric view tends to characterize sales, more than of any other function of the business.

Take finance, for example, where standards, systems, controls and procedures, rather than just individuals, govern success. This means that a particular financial controller may come, or go, while the systems and structures should remain in tact. The competence, strategy and structure is at the level of the organisation, not the individual. Similarly, just because a production worker leaves does not mean that production stops.

Too often in sales, the strategy is the salesperson, so to is the approach. The production of leads, orders and repeat orders depends on the salesperson. He, or she controls the pipeline. This has two undesirable implications. The first is that the sales person is expected to succeed, often without the right strategy, structure, or support. The second implication is that the organisation can become too dependent on the salesperson. That means if he, or she leaves much of the information, skill, contacts and so on, will be lost.

In sales the skills and efforts of the individual seem to matter more than in any other area. Yes, a good salesperson is important, but equally if not more important is the development of the core sales and marketing capabilities, strategies and systems within an organisation. Without these the success of any salesperson, however great he, or she is, will be constrained.

The Traditional View of Sales Success.

The traditional view of sales success focuses too narrowly on the salesperson. In this salesperson centric view of sales, success involved a two step process:
Step 1 Hire a good salesperson.
Step 2 Provide the right incentives and an element of management control
If success does not result then the salesperson is bad, so fire him, or her and repeat steps 1 and 2. The only problem is that there is no direct correlation between the quality of the salesperson and the rate of sales success of the organization.

In reality, how good the salesperson is, or is not, is just one of a range of factors that determines the sales success of an organization. That explains why
not all great sales people are to be found in fast growing companies, and not all the ‘not so great sales people’ are to be found in slow growth companies.

Sales Effort, or Sales Engine.

Which is better – to have a great salesperson in an average sales organization, or an average salesperson in a great sales organization?

Salespeople come and go. This is particularly true in the context of our own experience which puts the annual rate of turnover of sales staff at 33%. However, it is the capability of the sales organization that matters. The capability of the organization is more important than the capability of the individual sales person.

What is the difference between a great salesperson and a great sales organization? Well, the salesperson has skills, techniques and personal characteristics that are important for success. However, even more important are those sales and marketing competences, resources and capabilities and skills at an organisational level. It is essential that every organisation develops a proven capability, strategy and system for generating sales that does not just reside in one person, but is at the core of the organisations competence and capability.

Does that mean you don’t need good, or even great sales people? Well, effective salespeople will always be required. However, key to this is the organisational environment within which he, or she operates, as well as the systems and supports available.

August 13, 2009

Want to Build Trust? Then Minimise Buyer Risk

Finding the issue of trust a little difficult to deal with? Well, look at it in terms of the buyer’s risk can help. Specifically the risk of making the wrong buying decision and the consequences in terms of; embarrassment, annoyance and cost. Your concern for and efforts to reduce the buyer’s risk are probably the most effective way to build trust.

Is Trust a Little ‘Airy Fairy’?

A lot has been written about trust based selling, to which we have added more than a few lines. I have to confess however, that like many people, I find it a little strange to talk about the subject.

Let’s face it talking about the buying process and the business case is a lot easier. Trust can be hard to define and hard to measure.

Buyer risk of course is the real issue. That is why trust is important and necessary. Buyers are not guaranteed the outcomes that they require because of a range of business, technical, project/delivery and supplier related risks.

Minimizing Buyer Risk.

The buyer’s job is to minimize those risks. That means the buying decisions is not just about costs and benefits – factors that are somewhat easier to measure. It is also about the likelihood of those costs and benefits and any other consequences that may arise.

There is also the personal risk inherent in the decision itself that is of; being compromised, bypassed, or undermined. That includes the information that is provided, the choice of suppliers that are engaged, the level of openness and engagement with selected vendors.

It is unfair, but as salespeople are remembered for the big deal, buyers are remembered for the bad ones. That means a life of successful purchases could be overshadowed by one mistake, or one miscalculation of risk.

Building Buyer Confidence.

As regards trusting the seller, the buyer has to be confident that the organization will deliver what is promised, do it well, pick up the pieces if anything goes wrong and look out for your personal, team and organizational best interests along the way. Of course, he, or she has to trust the salesperson making the promises, the team that will deliver and the organization that is backing it all up. These are inseparable.

Trust is not the default setting as regards business relationships and particularly buyer-seller relationships. It has to be built up over time. With many cynical buyers trust may not even be possible. However, that does not mean that the salesperson should not work towards the attainment of this idealized ‘trusted advisor’ position. Like Buddhists, for example, not all will achieve the highest states of meditative bliss, however that does not stop them working towards its attainment.

While the buyer won’t buy if he, or she does not trust the seller, nor will he or she buy if key requirements (value for money, compliance, business impact) aren't clearly met. Trust alone won’t swing it. Let us be clear about it ‘trust’ is only part of the equation. The buyer’s business case has another word for it - that is risk.

How does the salesperson and the sales approach minimise buyer risk? Well it counts right across the sales cycle, for example:

· Replace marketing brochures, with insightful white papers

· Develop customer case studies and effectively use customer testimonials

· Develop the position as a thought leader

· Provide access to your experts

· Allow your prospect to experience your services/products during the sales cycle

· Employ effective pilots and demos

· Understand the buyers requirements before advocating a solution

· Don’t try to impose your sales process on the buyer

· Earn the right to ask questions and employ tact when you raise sensitive issues

· Focus on helping, not selling

· Focus on the business case

· Show your commitment to the prospect

· Demonstrate professionalism and respect at every turn (keeping promises, turning up on time, keeping notes of meetings, listening & showing a personal interest)

· Follow the rules of engagement and access

· Share information with the buyer

· Don’t tell stories that suggest you are breaching the trust of other customers.

· Answer direct questions with direct answers

Building trust takes time, trusted relationships do exist between buyers and seller. These relationships can be built by small, medium and large scale enterprises selling high value services and solutions. According to one professional buyer "trust helps buyers buy and sellers sell, it minimizes risk on both sides. Without trust you have dysfunctional buying and selling which helps know one".

Why Buyers Believe They Would Make Great Sales People

The former head of procurement in a major telco commented to us recently that ‘good buyers make great salespeople’. However, more controversially perhaps, he suggested the reverse is not necessarily true. That is that salespeople do not necessarily make good buyers. Interesting topic indeed, so we decided to give it a little thought.

Gamekeeper Turned Poacher.
Applying the ‘Gamekeepers turned poacher’ principle, buyers should logically make good salespeople. Would you agree? Well, we have learned to be cautious in picking the right salespeople, so in answer to the question ‘do buyers make good salespeople’ our answer would have to be ‘some would and some wouldn’t!’

However, what is incontestable is that buyers should have several advantages when it comes to selling. The reasons include:
- Buyers have learned all the tricks of suppliers, once more they know what works and what does not.
- They know the processes involved in buying, the rigor, the controls, the people and the process.
- They know how to evaluate a proposal and more importantly how to write a business case.
- They are highly experienced in understanding stakeholders, their needs and priorities.
- They also have experience selling, having been involved in a lot of internal selling in the context of organizational priorities, competing projects and limited budgets

Here is another way to look at it: In many organisations the buyer is the first (and sometimes) the last line of defense against the salesperson. So, imagine the defender switches sides and becomes the attacker – and not just any attacker, but one who thinks like the defender and can anticipate his, or her every move!

So, it stands to reason that as buying is the inverse of selling, the buyer turned seller could be a formidable seller indeed. The buyer turned salesperson would clearly have some valuable insider information, as well as some very applicable systems and skills.

There are perhaps some other factors involved however. The first is whether the buyer would want to be a salesperson. I imagine the commissions and the company car would be welcome, but perhaps not the targets, the sales meetings and the cold calling.

Often the aspect of the salesperson that the buyer sees – the sales presentations, the client entertainment, the negotiation, etc. – is only a small proportion of the salesperson’s role – one that is dwarfed by the remainder of the tasks associated with maintaining a healthy pipeline (meeting potential customers, developing relationships and understanding changing buyer requirements).

If buyers make great sellers, then why don’t sellers make great buyers?
If good buyers make great salespeople, then do great salespeople make good buyers? Now buyers reading this may quip ’the salesperson gets honest and becomes a buyer!’ Well, let’s not go there and focus purely on the question to hand. Shouldn't some of the skills, tools and techniques applied by sales people prove valuable in the role of buying?

Well, it would seem logical that they would. The caveat, being however, that we are talking about those skills, tools and techniques of the professional salesperson. The word professional is key, some of the skills associated with the stereotypical salesperson are not got from either buying, or selling. So again, perhaps the safest answer is ‘some would and some wouldn’t’. Food for thought.

August 11, 2009

How Far Ahead Can You See? The Ability To See Beyond This Quarter is A Key Ingredient of Success.

We are continually looking for the indicators and predicator of both sales success. In this respect we track and analyse the performance of hundreds of companies in order to identify the common characteristics, traits and behaviors that are associated with high levels of performance.

One such ingredient of sales and marketing success is the ability to see beyond this quarter.

It is particularly important in the present market environment, as companies narrow their focus from longer term success to short term survival.

This reaction, although instinctual, means that some companies are making short sighted sales and marketing decisions that will have serious longer term consequences.

Looking One Quarter Ahead.

Let us start with a statement of the obvious - companies that live day by day, or quarter by quarter are less successful than those that are capable of looking one, two, or more quarters out.

Too many companies live in a hand to mouth existence, driven by an economic imperative to keep the bills paid. Other may have the funds available, but lack a coherent strategy, the vision, the confidence that is required. That means they are not, or cannot invest in the longer term. Next quarter and next year are a distraction, rather than a focus of attention.

As an example most managers will agree that sending a whitepaper to a prospect is much more effective than sending a brochure, however, knowing that the former will take some time and effort to prepare, they go for the short term solution and put off a decision on a whitepaper until the next quarter. When next quarter comes the same thing happens again, with the results being achieved suffering as a result.

Why A Long Term Perspective is Key.

A business cannot achieve its long term objectives by simply focusing one quarter at a time. That is because with ever lengthening sales cycles sales and marketing cannot be measured simply in terms of its short term payback.

Here are some of the reasons why taking a longer term view is vital.

1. Generating demand takes time.

Exploiting the full potential of those who are contacted this quarter – assuming they fit the right profile - will require a sustained effort over a period of 3, 6, 10, or 16 months. That means the task is not to just serve existing demand in the marketplace, but to create, or at least shape it.

It is not enough to focus simply on those companies that are actively engaged in a buying decision, or even those with a defined need, or budget. Your sales and marketing effort has to has to address the greater number of companies who exhibit longer term potential, but have latent need that can be nurtured. But that requires a long term investment.

2. Maintaining a Balanced Pipeline involves Multiple Timelines.

Ensuring a balanced pipeline requires action across time horizons:

- Successfully concluding existing sales cycles/opportunities - this quarter and next
- Nurturing those opportunities with the potential to generate sales 3rd or 4th quarters out
- Generating fresh leads, or prospects to go in at the top of the funnel

However, most salespeople admit that they struggle to maintain this balance. In particular, they struggle to balance prospecting with managing opportunities.

The result of a stop-start approach to lead generation is an unbalanced pipeline, or a feast-famine situation.

When the company is busy dealing with a number of opportunities - that commands full attention and distracts from generating or nurturing the leads that will be required next quarter.

That means that when the present opportunities close, or don’t close (as the case may be), there are not enough new opportunities lined up ready and waiting.

As a result the approach to lead generation is reactionary and panic driven.

When the short term crisis is met, the salesperson gets busy again and the cycle repeats itself. Lead generation is dropped and those leads generated and companies met in the last quarter are neglected.

3. Taking a longer term view is essential to ensuring effectiveness.

Too often marketing and sales initiatives are stand alone, as opposed to integrated and consistent.

That means one quarter's efforts do not logically reinforce, or complement those of another. For example the target list for one quarter is not progressively nurtured in each successive quarter.

Some companies may be called once and then put aside if not immediately interested, or ready to meet with a salesperson.

However, the reality is that one contact is never enough and that the chances of one single contact hitting the right person at a time - that is when they are actively pursuing a solution - is small.

However, if a longer term perspective was adopted each successive quarter's marketing activity would compound the previous quarter's, with those companies targeted, for example, being progressively nurtured over time. This multi touch approach is vital to success, with an initial contact by telemarketing, being followed up by an occasional email, an invite to a webinar, etc.

Adopting a longer term perspective, would mean that a marketing campaign could be evaluated not just in terms of number of leads generated this quarter, but also in terms of building the company’s profile in the industry, or the generation of demand.

4. Relationships take time.

Relationships take time to develop. Just as the one meeting close is an illusion so too is the notion of the instant relationship, or immediate credibility and trust. After all, a customer, or prospect cannot trust you until he, or she knows you.

Building relationships requires an ongoing dialogue and interaction over time. Showing interest and commitment before the sales meeting takes place, as well as after the order is won is key. In fact you may win the sale and still be working on the relationship, with the repeat sale as the ultimate prize.

The Rise and Rise of the Business Case - A Review of Best Practice

Many large organizations require a business case for purchases of as little as €20,000. Unless the seller's proposal focuses on costs, benefits and risks it is going to miss the mark.

The Rise of the Business Case.

As one salesperson told us recently; ‘I have seen more business cases in the past year than I have in the previous 19 years’.

With budgets being squeezed, projects and purchases must increasingly compete for scarce organizational resources. The reality is the business case is now more important than the sales proposal.

The Salesperson as Business Case Facilitator.

The emergence of the business case as the prime factor in organizational spend decisions obviously presents advantages for those sellers who can demonstrate the business justification for their solution.

If a vendor wants to win the sale, they must at least input to the preparation of a credible and compelling business case. Traditional features and benefits message are no longer adequate.

What your solution does and how it does it, including the technology involved, is the stuff of traditional sales presentations, but not a business cases.

The reality is that many buying decisions are made when the salesperson is not in the room, by a sceptical audience that the sales person may not have met, based on information which the salesperson has had little, if any input to. Traditional feature led sales pitches are out of touch and won't cut it in the boardroom.

The Compelling Business Case.

Whether your sales goes ahead will depend on a ‘to the point’ value equation, that reflects not only costs, benefits and risk, but also how the project will contribute to the achievement of broader organizational goals and strategies. That is the new reality of the business case sale.

A compelling business case is not just important in getting the sale, it is also essential to ensuring successful implementation and developing long term client relationship. As one buyer said to us, "the business case is also playing a role in guiding, tracking and managing project success, it may no have done in the past but it is now".

A Review of Business Case Best Practice.

In order to guide you in your new role as business case facilitator to your prospect we have reviewed the work of 9 of the leading experts in this space (the list is at the end.)

Specifically, this article presents an overview of the key advice from specialist books written for buyers on how to develop a business case and sell their projects internally.

The Business Case and Success.

The business case is not just a means of optimizing the allocation of scare organisational resources among competing projects. It is also an important means of ensuring project, as well as organisational success.

Let us take IT projects as an example. Everybody knows that most IT projects run into problems - the Standish Group and other figures are familiar to us all. However, the cause of those problems is often misdiagnosed.

Indeed, most of the experts suggest that the number one reason for the failure of IT projects is a poor business case, or no business case at all. That is not just failures in terms of delivering on time and within budget, but more fundamentally for IT to impact on business success.

Cost overruns are often not the result of overspending, but of underestimation of costs at the planning and budgeting stage. Indeed, the problems with most projects can be traced back to their inception and planning. The business case has an important role to play in making sure projects get started, but also stay on track.

Business Case Quality Issues.

Some of the experts suggest that expenses claims were subjected to more scrutiny than business cases for the purchase of multi-million pound IT systems!

All too often the business case was seen as bureaucratic, as opposed to a strategic exercise. As a result, many business cases were prepared to justify a desired choice of action, as opposed to presenting management with the information required to evaluate, select, manage and track projects in terms of their impact on the organizational success. Times have changed whether it is an external purchase, or an in-house solution, the development of a robust business case is now essential. As sales people we need to ensure we keep our focus on the how (the features, the technology, the solution) and the why (the business case).

12 Tell tale Signs of Poor Business Cases

Based on our experiences and the experiences of nine leading experts in the field, here are 12 telltale signs of poor business cases:

1. Lack of skills, discipline, or more importantly objectivity
2. Absence of cross functional involvement
3. Failure to engage with stakeholders and their needs, creating buy-in in the process
4. Failure to adequately define scope and requirements
5. Failure to present a menu of alternatives and options, in the context of business drivers and constraints
6. Lack of feasibility study type information and scientific validation, or data
7. Failure to address how the project fits with the organization’s strategy and past decisions.

8. Failure to conduct an accurate, robust, and credible cost – benefit analysis, underscored by clear and realistic assumptions
9. An overly simplistic analysis of project related risk, or implementation issues (governance, control.)
10. An overly simple view: The business case is prepared and presented; but it has limited value throughout the project lifecycle
11. Lacks structure and process for completion / agreement
12. Weak investment analysis

Business Case - Document, or Process?

Underpinning many of these problems is the fact that the business case is often seen as a document, rather than a process. This is particularly the case in the absence of corporate standards with regard to:
· How a business case should be completed
· What it should contain
· Who should be involved
· How it will be evaluated
· What templates are to be followed

The single most important factor in terms of business case preparation is the process involved, in that any business case is only as good as the process by which it is prepared. Also the process of business case preparation is iterative, evolving to reflect changing needs and requirements.

The Full Life cycle Business Case.

All too often a business case document is hastily prepared and then once the project is given the green light it is put aside. A business case should be a living document, that:

· Guides implementation
· Tracks progress
· Manages change requirements and helps the seller and buyer
· Enables management to assess if projects are delivering as expected and if corrective action is required

Business Case - Attractiveness and Achieveability.

A business case is concerned with 2 dimensions of a project – attractiveness and achievability. So it is not enough to include just a cost and benefits justification.

The business case must also address how achievable it is, including for example a register of risk, as well as details of implementation, governance and control.

When it comes to the economic analysis, it is important to realize that people often have a genuine difficulty with numbers and in particular in working with spreadsheets. That is not withstanding the challenge that may be presented in terms of the monetization of benefits, particularly in the case of less tangible ones.

All of the above is a lot to take in, as sales people we need to develop our business case development skills.