April 19, 2012

What if there was a miracle cure for your sales teams, to make every person a high-performing quota-buster? In this blog I'm going to explore what it might look like and how you might find this silver bullet!

Imagineering

Last April we set up a special team to focus on bringing to market alternative approaches to drive sales revenue and performance. Some of the projects have already started to yield results, whilst others have had as much success as the Hindenburg airship:

• Our attempt to develop a Siri-like automated sales assistant looked initially promising. However, after suffering from an attack of identity theft, thought to have been contracted whilst internet shopping during its break, our assistant decided that acting was its true calling and is now trying to "make it" in Hollywood.
• The Sales Toaster failed to set the business world on fire - after it did just that to one user's home.
• One team member's passion for sheep fueled a project to continue the cloning research that brought us Dolly the Sheep. The idea was to fuse the genetic code of some of the world's most successful sales people to create the "Super Rep." Unfortunately the clone also picked up on the creator's fondness for all things woolly and eloped with one of Dolly's cousins, never to be seen again.

At this point the team was under much scrutiny and its future was in doubt, but after many a broken egg we may finally have our omelet – Closerlin– a new drug that aims to boost sales productivity and effectiveness. Last week marked the end of a successful six-month clinical trial, the results and details of which are presented below.

The Trial The trial involved sending a diverse cross-section of subjects ranging from college graduates to experienced sales professionals approaching retirement to the North Pole to sell a preview version of CallidusCloud's latest collaboration platform - the Integrated Collaborative Environment (ICE). ICE is specifically targeted at inhabitants of remote polar communities that are trying to improve community collaboration and share best practice. Selected at random, 50% of the trial subjects were provided with Closerlin, whilst the remaining subjects acted as a control and were given placebos. All subjects were given a broad and randomly assigned territory, an order book to record their deals and a notepad to record their activities and opportunities.

The Results The results of the study have been very positive and have yielded significantly higher-than-expected results. The trial focused on tracking sales performance across a number of key metrics. All deal information was recorded on the reps' mobile CRM application, known as Paper, and provided the data for the study. As the charts show, users of Closerlin far outperformed their control counterparts. A 65% higher close rate, 88% larger deal size and a 73% shorter sale cycle clearly indicate the significant potential for Closerlin to help boost sales performance.

Conclusions The above results are extremely enticing, but of course there is no such miracle cure. The approach some sales are taking is to roll out technology like iPads or other mobile devices en masse in the hope that simply being connected more will magically transform somebody into a high performer. This is like tossing someone the keys to a Ferrari and expecting him to become the next Michael Schumacher overnight! The successful sales leaders are looking at the bigger picture and analyzing where they need to make smart investments. Here are some of the things to focus on: People: Make sure you are hiring scientifically. Benchmark your candidates against your existing high performers. Build your shortlist in the cloud and socialize the feedback to save time and avoid the significant cost of a bad hire. Process: Make it easy for sales to sell and your customers to buy. Provide guided access to the right information at the right time, including product and sales training courses. Clear product pricing and configuration information with automated quote generation will free up a massive amount of selling time and shorten the sales cycle. Performance: Digest your big data to drive consistent results across your sales teams. Capture more, better-qualified leads that are ready for sales to execute. Align your incentives and commissions to drive the right behaviors, revealed by your data.

Sales can be a science, but not through an overnight "wonder drug." Smart investments in key areas will yield impressive results. Join us at C³, the year's premier Sales Effectiveness conference, May 6-8 in Las Vegas. Customers, partners and analysts will be sharing their insight on where to make your investment, including Peter Ostrow, author of the recent Aberdeen Group report that reveals how CallidusCloud customers outperformed their peers:

• 181% larger average deal size
• 52% shorter time to productivity for new reps
• 67% lower sales rep turnover

Read the Aberdeen report on customer success. If you want to find out more, then please send me an email or tweet us @CallidusCloud.

 

 

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March 23, 2012

Last week, I attended the CFO Leadership Summit 2012 in Orlando, where I hosted a workshop on financial modeling on profitably driving sales revenues. As I prepared for the workshop, I realized that my standard sales capacity model for meeting Wall Street targets and growing sales revenues had evolved to look at a series of potentially more powerful variables than just capacity, including sales force productivity and pipeline.

In fact, adding sales capacity is the easy answer, and as long as you are capacity constrained and not market constrained, this is an important model to start with. Understanding if you are in fact capacity constrained is a key question you have to answer before you use this model, because if you’re market constrained, you have to apply a model that focuses on other parts of the business. If you make the assumption you are capacity constrained, you can use basic sensitivity analysis showing the number of quota carrying reps against the expected level of attainment (this is based on looking at historical attainment for the last 2 years.) This gives you a ballpark of the revenues each incremental rep adds.

Figure 1 is a simple sensitivity analysis of the impact of adding new reps on revenue at various levels of attainment. Adding new reps will have a positive impact on the topline, but that is not necessarily the case with the bottomline because of the various fixed costs associated with bringing on new employees. Marginal profit from adding new reps is a function of the quota attainments, and unless you can guarantee attainments, your results from adding new reps will be less than optimal.

Adding new reps will have a positive impact on the topline, but, again, the key word is profitably driving revenue. It’s very important to look at the cost of adding these reps, and understand the capacity against the revenue that brings profitable revenues. This tells you straight away the levels that will be profitable when you’re pulled into staffing discussions.

Other Variables Drive Bigger Wins

On looking closer at the model, you can see that a small change in quota attainment makes an even bigger impact on revenues, and holds employee costs constant. For example, consider a company that is at the 400-person, 70% attainment level in the chart above. Adding 10 sales reps increases revenue $1.8 million whereas a 10% increase in attainments will add $10 million, a more than 5x. At a given level of capacity, the biggest opportunity for improvement may well be on quota attainment.

Here are some of the key investments we reviewed in the workshop for driving higher attainment levels:

		Replicating the success of top reps - The fundamental premise of coaching is that high sales performance can be replicated across the sales team, bringing a lift in overall team attainment. By tracking and quantifying the activities and behaviors that drive your top reps, you can begin to correlate top performance with business outcomes, and then use that insight to drive specific improvements in your “B” and “C” players.
		Use the right incentives - Consider investing in targeted incentives to drive the business you really need, and build models to investigate the impact of these incentives before you roll them out to the field. These include investigating higher leverage on your compensation structure, stepped versus flat for attainment, and accelerators based on monthly, quarterly & annual targets.
		“Social-ize” the team - Organizations accumulate vast amounts of “tribal” knowledge but struggle to deploy this knowledge to their benefit in sales cycles. The key to doing so is to make this information easily accessible to your highly mobile sales force, and to foster a culture of constant collaboration both within the team and with the customer.
		Focus on lead quality - The key to selling success starts at the top of the funnel—by generating higher quality leads. By passing quality leads up front you can increase your close rates – potentially the single biggest impact you can drive on attainment levels given fixed capacity.

In summary, while head count is a good starting point for modeling, you may be able to deliver strong growth without adding capacity. You may actually be better off making an investment in the productivity of your sales force to boost revenues profitably.

Let me know what you think. Email me at salespulse@calliduscloud.com.

 

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February 28, 2012

In our last post on leaky buckets and the sales funnels, we focused on how marketing can better align with sales goals by focusing on the top of the funnel, i.e., filling the funnel with good opportunities. The second area that marketing should focus on is providing advanced intelligence about every lead that enters the funnel. In a socially connected world, the customer is better informed than ever before, and the success of the sales cycle depends on how well the sales person knows the customer and her needs.

In the past, companies relied considerably on cold calls to get its sales process started. But cold calls are meeting with an increasingly hostile audience. According to Chet Holmes, author of the "Ultimate Sales Machine," most sales people make cold calls to prospects with little idea about their requirements or needs, invariably resulting in irrelevant pitches and minimum success. This is an avoidable outcome given the abundance of information about the customer – the digital pulse — that allows the sales person to know the customer well before first contact is made. Cold calls are now akin to flying blind in broad daylight through clear skies.

Key Attributes of an Effective Lead Intelligence System

Long-term success hinges on implementing sales processes and systems that deliver lead intelligence in real time, so that sales staff can take the appropriate follow up actions. These processes and systems must possess the following attributes.

Lead Intent: Let's face it — not every "lead" really is a lead. A "lead" may actually be a competitor looking for information, a vendor looking to sell to/partner with you, or even anyone with a passing interest in your products and services. You need to separate the "wheat from the chaff," and focus on the real leads to maximize your chances of sales success. For example, you can track the source domain and user behavior of your website visits to identify intent, and you can use this information to quickly zero in on the real leads.

Lead Quality: Not every lead is created equal. They vary in terms of their level of interest, awareness about your products and the stage of their buying cycle — all of which can be discerned by their digital footprint on your website, social channels, and possibly, other sources. While the sales team should focus on the "higher quality" leads to maximize the chances of the immediate sale, the marketing team must focus on nurturing the others and improving their "quality" to the point where they are ready for the sale.

Lead Enhancement: Sometimes, a "lead" is a pointer to the actual lead. The sale happens fastest when you directly address the key influencers or decision makers, but these folks may not always be the ones that are out there looking at your products. But, can you get to them? The answer, fortunately, is yes. The technology exists to identify the visitor's domain mash it up with commercially available databases to identify key people at these companies that you can then sell to, all in real time.

Lead Insight: At a time when the buyer is more in control of the selling cycle than ever before, sales must know not only the buyers' needs and stage in the selling cycle, but also the buyers themselves. In this era of the social web, people are voluntarily putting growing amounts of information about themselves on social networks and other websites. This information needs to be harvested (again, in real time) so that sales use this valuable insight to make a better connection with their prospects.

Lead Integration: A lead evolves into a prospect, then into a customer, and in many cases a repeat customer. You operate on the basis of this larger picture of the customer lifecycle, and your systems must reflect that larger perspective and timeline. Information collected at each stage of the customer lifecycle should be made available from a single point of contact, most likely, your CRM system.

Putting Knowledge into Action

Done right, a good lead intelligence system can have a profound impact not only on new leads, but also existing prospects in terms of upsell/cross sell opportunities. While the marketing organization must invest in arming the sales team with precisely this kind of intelligence, the sales team must reorient its selling style to make use of this intelligence. In other words, it's time you stop flying blind.

I would love to hear from you. Please leave a comment below or email me at salespulse@calliduscloud.com.

 

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February 3, 2012

Last week, we wrote about the need to align marketing incentives with sales goals to drive the marketing behaviors that deliver sales results. The first focus: Filling the sales funnel with the opportunities sales needs, that is, taking the sales quota and working backward to build a marketing opportunity quota to ensure marketing is focused on the leading activities, from press to webinars to events, required for building pipeline. But is it just that easy: Can Marketing really turn on a faucet and generate more lead volume for sales as and when they require those leads?

In a 2011 B2B Marketing Benchmark Report released by Marketing Sherpa, 44% of marketers said that "generating a high volume of leads" is a top priority, and 78% of marketers identified "generating high-quality leads" as their top priority. This need for "more" is relentless; and as customers become savvier, companies need to up their game to convert a casual visit into a lead. In this post, I will focus on how marketing organizations can increase lead volumes, especially in the online world.

Your lead funnel is like a "Leaky Bucket" — it is difficult to plug leaks completely in any scenario, and the thinning of the funnel from top to bottom is inevitable. The funnel represents the process of narrowing the theoretical range of options until a sale is the only path left. The crux of the problem is that if you don't have a wide enough net at the top of the funnel, you'll most certainly not have enough sales activity to fatten the funnel.

One of the most important channels is the corporate website. According to the 2011 Demandbase National Website Demand Generation Study, the corporate website was the top source of leads at over a quarter of all companies. Website design, management and optimization was identified by B2B Marketers (31% of the respondents) as one of the top five initiatives in a study by Marketing Sherpa. Regardless of the source — search, blogs, social media sites and other websites — it is your primary point of contact with your leads, and should be optimized to convert visits to leads.

Tips for Maximizing Website Leads

Based on my experience, here are my top 3 tips for maximizing the leads from your website:

First, there is a "moment of truth" when your visitor is ready to become a lead. Your website needs to be able to give your visitors the information they are looking for, and at the right moment present them with an offer that they will find valuable enough to give you their information. You can make this determination based on the amount of time they spend on your site, their source domain, and the kind of content that they consume. For example, assume that a visitor from an insurance company visits your site. At the right moment — this could be based on the number of pages read, total time spent, and possibly other factors — you should offer an insurance-related asset that this person will find useful. By doing so, you will be increasing the chances of converting this visitor into a lead. You can do all of this without having access to any personally identifiable information. Internet protocols have been passing information about the source of traffic from the beginning of the internet. It's just that the technology to leverage this information in real time is now available.

Second, your offer pages must be clear, concise and direct. Remember that the visitor is doing you a favor by accepting your offer, and that you need to work to earn and keep their trust. Your messaging must be consistent across your site, and there must be no doubt in the visitor's mind about what they are signing up for. Do not make multiple offers on a single page. If you have multiple relevant assets, run tests to identify the relevance and popularity of these assets and make the determination about which asset to offer and when.

Third, design simple forms that collect a minimum amount of information and nothing more — you can collect this information as part of your nurture program as you earn the trust of your lead and s/he becomes more willing to share relevant information with you. Forms should have fewer than 4-5 fields and ideally, should be limited to the contact information — location, corporate identity, organization size, etc. can be stitched together from the information passed from the browser. The abandonment rate is directly related to the length of the form and the nature of the questions within. Also note that you need to be prudent about the assets that you want to guard behind a form. Very often, it is better to present your asset and use them to convince your visitors to become leads rather than the other way around.

To state the obvious, this post is not meant to be an exhaustive discussion of website/landing page design and lead generation. Technological advances have brought ever increasing amounts of information to our finger tips, and greatly enhanced our ability to harvest this information in real time.

I would like to hear from you about techniques that have worked for you. Please leave a comment below or email me at salespulse@calliduscloud.com.

 

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January 23, 2012

As sales leaders look for ways to be more effective (in many cases with fixed headcount), they need to look at the broader organization to identify adjacent groups that can bolster their performance, including the call center, sales engineers, inside sales reps, and yes... marketing.

Can sales really look to marketing to help boost their revenues and effectiveness?

There's a lot of talk about sales and marketing collaboration. But can sales and marketing really collaborate to boost revenues? They must. But the force of the organization needs to ensure their collaboration. Businesses with strong sales and marketing alignment do in fact grow significantly faster relative to competitors, and lose fewer customers. Still marketing is often overlooked as an integral part of the broader sales function, primarily due to the perceived, and often real, unequal accountability assigned to the two departments. The Aberdeen Group reported that in best-in-class organizations, 40% of the sales forecasted pipeline is generated by marketing[1]; in fact 35% of best-in-class organizations tightly align marketing activities to specific sales objectives and goals[2]. Marketing needs to be equally accountable for sales results, including pipeline creation, quota attainment, revenue growth, average deal size, and win rate.

How do you make marketing accountable for sales results?

The same principle that drives sales behavior needs to be applied to marketing as well: leveraging incentives that drive key sales targets. For achieving critical sales objectives, salary-based compensation should be balanced with more targeted incentives. This includes leveraging quota-based bonuses, special incentives, and MBO programs to focus marketers as individuals and as a team on driving activities that are critical to filling the sales funnel, and critical to closing business.

To drive real sales and marketing collaboration, marketing must be goaled – and incented - in alignment with sales goals:

• Filling the sales funnel with the opportunities sales needs: One way I've seen this work is to take the sales quota and work backward to build a marketing opportunity quota. For example, you can build the marketing quota based on the number of accepted opportunities sales requires to meet their quota. (This is based on the historical close rate of accepted opportunities and the average deal size.) This focuses marketing on the leading activities required for building pipeline, but also hones their focus on mining leads specifically that convert to opportunities, rather than pure lead generation.
• Opportunity yield: Another key metric to ensure marketing focuses on quality as well as quantity of leads is to goal them on the actual pipeline value of accepted opportunities, or close value. This helps focus the team on higher yield prospects and verticals and not simply on opportunity volume targets.
• Close rates: The third target should be based on the % conversion to deals. This helps focus marketing not only on driving competitive advantage and monitoring competitive win ratios, but also on mining for opportunities with a high propensity to close. In addition, marketing can help provide key product, competitive, and customer knowledge to move deals swiftly through the pipeline when focused on close rates. Holding budget constant, deal conversion represents the greatest potential for growth and for driving higher effectiveness ratios.

It's a two-way street

If you are asking the marketing team to deliver more, higher quality leads, then you must also drive accountability in your sales organization to develop those leads. Most important - Sales should have at least one goal based on lead development, and lead development and conversion rates should be linked into regular pipeline reviews and coaching programs. As a best practice, sales is often goaled based on meeting service level agreements for lead follow up (for example, 3 days maximum before first contact) – this ensures leads are consistently corroborated for their quality and that they are all followed up before they turn cold or flee to a competitor with disciplined follow through.

Second, sales teams need to support their marketing leadership with hard data on lead quality. This will not only optimize your sales effectiveness today, but will also help drive more funding for future sales initiatives.

For more thoughts on driving sales and marketing collaboration, check out the LeadFormix blog on marketing alignment and look for our upcoming posts on how CallidusCloud fuses marketing and sales with its Marketing Automation and Sales Enablement platform.

Let me know your thoughts. Leave a comment below or email me at salespulse@callidussoftware.com.

[1] "Sales and Marketing Alignment: The New Power Couple," Aberdeen Group, 2011

 

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December 15, 2011

In last week's webinar, Money for Nothing?!, hosted by CSO Insights and co-presented with Accenture, we reviewed a startling statistic – that only approximately 10% of organizations polled by CSO Insights believe compensation is directly achieving their key financial targets[1]. We reviewed a number of recommendations about how organizations can take a more strategic approach to sales compensation in the new year to increase their sales output without adding sales resources.

Motivating the Four-Minute Mile

One of the examples we reviewed when we started discussing doing this webinar was running a 4-minute mile. While a great financial award will get most people's attention, it doesn't mean they'll wake up the next day and run it. In fact, many of us who don't think we have the right training, equipment, or abilities won't even try.

So after you've provided the financial motivation, how do you ensure the goals you've set are attainable? In other words, how do you identify the right behaviors and skills that will drive your team's success?

Empirically identifying the right behaviors to measure and coach for each selling role is the biggest hurdle to successful execution. We're always trying to identify what really drives top performance. Baseball analysts have shed a lot of insight on how to question superstitions and rituals, and focus on empirical gauges of player performance. Michael Lewis' Moneyball book lays out how the Oakland A's were able to gain a competitive edge against much larger-market teams by questioning conventional wisdom and looking at more predictive gauges of success, taking advantage of baseball's famous propensity for statistics. In football now, visualization technology has evolved to enable coaches to measure tactical statistics before, during, and after each match, so they can really understand each player's contribution to the game.

 

What do the best in class really do differently?

 

Bringing Moneyball Home

What if you could achieve the same insights into your sales force? What if you could visualize your sales team and see all their pre, during, and post-deal interactions, and really understand what the top performers are doing differently?

You can. The amount of data and digital activity you can now capture for each sales person lets you understand more about their behaviors today than you ever could before. This includes SFA and call center data, learning data, social data, and sales communications. By harnessing this data and visualizing your top performers and the activities, behaviors, and processes that produce actual wins in the field, you can begin to create a digital pulse for your sales team, and tie their behaviors to real business outcomes.

 

Coaching in action

 

wrong connections, actually undermining the intention of your compensation plan.

I've focused here on one of the key enablers that you can leverage - alongside your variable compensation program- to help ensure you achieve your financial targets: coaching. While compensation is critical to motivate the sales force on your top strategic goals, it's equally important to provide the coaching regime to enable your team's success. Other key enablers include driving a knowledge-based sales culture based on learning and collaboration. By enabling your sales team success, you can begin to increase your sales team's output and attainment percentage without adding more reps – you can begin to generate money for nothing.

Let me know your thoughts. Leave a comment below or email me at salespulse@callidussoftware.com.

[1] J. Dickie et al, "2011 Sales Compensation and Performance Management Key Trends Analysis," CSO Insights

 

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November 15, 2011

In the first part of this two-part blog, we reviewed the four dominant selling styles, and some of the challenges and opportunities each can bring depending on the selling situation. In this part, we touch on how to better understand how your buyer likes to buy, so that you can better adapt your sales campaign to your buyer's personality and expectations and win each phase of the deal cycle.[1]

Looking for the Tells

Generally, you can identify a buyer's root personality style through two key behaviors:

• How direct the person is (that is, talkative, challenging the information you deliver, making emphatic statements, speaking at a high volume and speed)
• And how open the person is (that is, animated, using their hands expressively, leaning toward stories and anecdotes rather than facts and statistics, sharing their feelings open)

Based on these behaviors, you can determine the type of buyer you have:

• Analytical: Guarded and Indirect: Craves a lot of detailed information, makes decisions with caution and time, works carefully and slowly, needs to be right
• Drivers: Guarded and Direct: Craves control, works independently and quickly, likes action and decisiveness
• Amiable: Open and Indirect: Seeks close relationships, avoids confrontation, makes decision very slowly, seeks friendly, understanding dialogue
• Expressive: Open and Direct: Acts spontaneously, makes fast decisions, exaggerates and generalizes, jumps between subjects, works quickly and enthusiastically

Shifting Your Game Based on the Tells

When faced with these root personalities in your buyer, you should be able to identify the buyer's "buying context" – that is, the expectations they bring to the sales situation, and leverage that insight to win each phase of the deal cycle on your terms, and close the deal successfully.

Here's some tips on adapting your sales campaign based on the "tells" your buyer gives you.

Adapting to the Analytical buyer: Often considered the hardest type to sell to, these buyers expect and require a lengthy sales cycle, including technical deep dives in the solution, time for research, and time for deciding. Removing the risk in the sale is also critical to closing, from trials to warranties to "out" clauses. Be prepared to deliver the facts with precision and detail, stress the business case and ROI of the investment, respond to multiple inquires (and not necessarily in person – so keep good documents), and then give the buyer room – and time - to decide.

Adapting to the Driver buyer: The good news is these buyers make decisions quickly, and require much shorter sales cycles. However, drivers crave control, speed, and surety. Be prepared to deliver relevant, precise, and short presentations, with confidence. And to stick to the business at hand. Often the vendor and solution with the quickest, demonstrated results will win with Drivers.

Adapting to the Amiable buyer: These buyers expect to build a rapport with you, including building a friendship with you prior to buying, trusting you are making the right recommendation for them, and introducing you to multiple stakeholders to help build a consensus of decision. Be prepared to deliver a low-pressure sales approach, focus on the relationship and not the sales presentations, and help direct the buyer to the best choice.

Adapting to the Expressive buyer: These buyers are impulse buyers! The bad news is Expressives often make decisions based on first impressions. This can result in an easy sell, or a sale you lose without really understanding what happened. With these buyers, you need to paint a vision and sell the big picture. Be prepared to deliver with emotion and keep your presentations exciting. Always remember: You are on the stage.

While many buyers will illustrate tendencies to more than one personality styles, generally speaking you will observe dominant behaviors in the first couple of interactions that let you tie back the buyer to his or her buying context. You should then use this insight to adapt your selling style — see our last post — to this situation to maximize your chances of success.

Of course, if you encounter a buyer who shares your personality style, then be yourself!

What selling style are you? Take our free Sales Selector assessment test and find out.

Let me know your thoughts. Leave a comment below or email me at salespulse@callidussoftware.com.

[i] Based on research conducted by Callidus' Salesforce Assessments. This subject has been extensively researched through the ages starting from Hippocrates who first identified the four prominent personality styles in the fifth century B.C. These personality styles are broadly consistent with the styles identified by prominent 20th century researchers, including Merrill & Reid, William Marston, and Carl Jung.

 

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