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Sure-fire Ways to Build a Successful Sales Force - Part 1: Be Data Savy

In this new four-part series of articles, we’re going to look at the steps you can take in your own business today to build a sales force that can help you steadily grow your presence in the marketplace in the years ahead. 

 

To keep things simple and easy to read, the seven points we are going to cover are clustered under four themes: data, people, landscape and planning. For each theme, I’ll share an example to illustrate how to implement to get results. So let’s get started! 

                                                  

Make the best decisions based on data

 

There is a difference between decisions based on what you feel is true and what you know is true: reliable data is your proof point. 

 

A gut feeling can be influenced by many outside factors, and it’s governed by feelings that can be as changeable as the weather. Data, on the other hand, gives you solid evidence as information, and it’s up to you to decide how to turn that into meaningful knowledge.

 

Despite this, far too many sales leaders and business owners let themselves be swayed by emotions or anecdotal information when making important decisions on territory maps, compensation plans and hiring requirements. Too often, they treat data as a secondary tool to justify their feelings rather than the other way around. 

 

Data is objective. It gives you definitive answers about your business. For instance, where are your customers located? Data will pinpoint the answer, and sometimes in ways that can surprise you. 

 

To illustrate: one day, I was speaking with a software client in Los Angeles about their sales-force building strategy. I asked them why they were planning on dividing up their sales territory into two halves: east and west. “Let’s have a look at the data,” I said. “What does it say about where your new leads are coming from? Is it really a 50-50 split along an east/west lines?” So together, we went digging. 

 

It turned out that the client’s data showed a very different sales pattern than a simple east-west divide. Had they gone ahead with their east/west plan, they would have had their sales team flying all over the country, overlooking the fact that a sizeable chuck of their new and existing business was coming from a cluster of locations that were all in one relatively close area in the Northern Central area of the United States around Illinois, Michigan and Minnesota! 

 

 

Data can do more than tell you facts about your own business. It also can reveal important information about what’s going on with your competitors in the marketplace. A 2012 study by DemandGen shows that almost half (44%) of executives determine the impact of a solution through other adopters. They also found that nearly 95% of recent buyers said their choice was guided in part by those who “provided them with ample content to help navigate through each stage of the buying process.” Are you using data to help you make the right decisions about your sales approaches?

 

Data is your friend. In the forthcoming articles in this series, we’re going to look at how it can help shape the decisions you make in how you work with people, how you survey your sales landscape and how you plan ahead for the great success you’re going to have with your sales force.

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Your Spiral Pipeline - Step 3: Create Growth Opportunities

In this final instalment in the series on building your spiral pipeline for sales and prospecting, let’s look at the third step: creating growth opportunities.

This Growth step is the culmination of the work you need to do to propel your organization forward with steadily growing sales—no matter what the economic conditions are like for your competition.

As I explained earlier in this series, it’s important to keep a steady inflow of leads and stay engaged with clients even after each sale closes.

When you get that right, you create the ideal conditions for generating new growth. Here’s why: because the client who benefits from your extra efforts is also the client who will be much more open to upselling, and to seeing the added value of doing more business with you.  

Unlock your secret sales force
Creating a great buying experience becomes a magnetic force that draws in your best customers and compels them to tell others about you.

In effect, they become new recruits in your secret sales force: one that helps sell you to new prospects, create new customers and add new segments to your ever-growing spiral pipeline. Always capture these success stories. You can use them not only to sell more to your existing customers but to help you attract new prospects as well. Not a bad return for a little bit of extra work.

Uncovering new value
Growth opportunities can scale beyond selling customers on new products and services. You can also demonstrate to your clients how they can squeeze even more value from the products/services you’ve already sold to them. When you do that, your chances for selling more to this client in the future improves.

For example I work with a client who sells large contracts to financial services firms. When a business typically involves multi-million dollar contracts, it tends to have plenty of competitors looking to carve off a piece for themselves.

Rather than give that up to others, this client worked with us at Engage to uncover deeper value and provide more service to their current customer. Together, we found an area in the business so under-serviced that the client was only using a tenth of its full potential. In other words the client was only using 10% of the “functions” of the products they already owned! In fact, during our discovery the executive said to me directly “Colleen it’s like we bought a DVD player but they only thing we know how to do is hit play!”

Without adding any cost to their customer, we suggested a solution that helped them boost the value of what they’d already sold. In other words, we taught them to record, fast forward and rewind!

This led to improved customer loyalty and increased the leverage our client had on new business with their client in the future.

It’s all about community
Throughout this series, we’ve talked about what it takes to build your spiral pipeline. Beyond methodical steps, what this is really about is building a community where you help make a difference in the lives of your customers. In turn, they help you to grow your business.

Remember that growth doesn’t happen unless you’ve made a difference to your clients!

Communities blossom where trust is earned and added value is revealed steadily. They are the glue that binds our networking efforts.  Work hard to achieve this and your spiral pipeline will reward you many times over with steadily upward tracking sales.

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Your spiral pipeline in three steps: (2) Participate post-sale

It’s time to reframe how we think about closed business. That’s the key to the second of three steps you need to take to build your spiral pipeline[A1] for sales and prospecting.

 

This step involves participating post-sale: staying on the ground and being available even after the sale is closed. What I’m saying is that I would like you to redefine closing: A closed sale only happens when the customer starts using your product.

 

It’s important to do this for two reasons. One, becausethis is where you prove your added value to your customer—that you’re more than just someone who closes the sale and moves on. And two because the faster your customer is enabled (starts using your product) the happier they are and the stronger advocate they become.

 

Actions speak louder than words.

As sellers, nobody has a more vested interest in getting our customersto start using the products and services we sell. However, it’s not enough to just promise a level of commitment. You have to show it. That’s why it’s incumbent on us to stay in touch and ensure each implementation goes smoothly. People remember what we do far more than what we say.

 

Avoid final-yard fumbles.

Beware! All your hard work that goes into creating a great buying experience can be annihilatedat the final-yard before the finish line, just by having an implementation that doesn’t work according to plan. When that happens, you can only make things right if you’re already on the ground and ready to respond. Otherwise, you’ll be playing catch-up, putting in double the amount of time to get half as good results. Make time for this.

 

Little things matter.

Participating post-sale doesn’t have to demand much of your time to be done successfully. It could be as simple as adding a short phone call to your weekly schedule to review each project with installation staff, and providing a quick update to your customers. Little gestures like that can make a big difference: both in terms of what the buyer sees, and in how your sale gets implemented smoothly.

 

For example, when I was with Open Text I routinely attended the kick off meetings for our software installation projects. This enabled me to meet new contacts who would be using the product, leaders who would be leading the teams and advocating on our products behalf, and department heads who were responsible for additional projects that we could participate in.  When I attended these meetings I was not only able to act as a second set of eyes to our project managers, I was able to spot new opportunities for up sell and cross sell before the original project was completed!

 

Learn valuable new things.

Staying on the ground can also be an opportunity to discover new business problems that your customer has—the kind that might not have come up before closing, because they weren’t directly related to the sale. The more time you get to spend with a customer, the more opportunities you have to learn from them. Those are growth opportunities, which I’ll cover in more detail next in the final instalment in this series.

 

Stop thinking your job is done when the contract is signed. Stay on the ground. Remain active even after the deal is closed. It’s a small investment of time that can see you reaping some lucrative benefits.


 [A1]Hyperlink to the original article in the series for background. 

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Don’t settle for living in a boom-bust sales cycle: get started building your spiral pipeline

This is the first in a series of articles that will explore how an important new approach to managing prospects and customers can help you obtain perpetual sales growth.

You hear it so often these days that it has become cliché: that sales growth comes in waves. It’s a notion that suggests you ride the crest of a boom in good times, and put your endurance to the test in tough times when the phone stops ringing.

Buying into that kind of thinking can seriously hamper growth and undermine the earning potential of every salesperson in your organization. Just as important, that way of looking at the world is based on a fallacy—that a boom-bust dynamic is simply the nature of sales in any industry and that you have to accept it as part of a feast-or-famine way of doing business.

Not true! In fact, it’s a choice you make about whether you want to accept the boom-bust cycle as part of your business, or whether you opt to work harder to find a better way to manage your work and your staff.

 

A better way: your spiral pipeline

As a sales trainer and coach skilled at helping organizations sell more in less time, here’s how I describe that better way: build and maintain aspiral pipeline of prospecting and closing for your organization.

No more laying pipe in a straight lineanticipatingnothing. Your spiral pipeline makes a full 360-degree turn while constantly moving forward. It means you make the choice to build an industrial-grade salesforce that can anticipate, respond and propel—generating your best sales ever, month-over-month, year after year.

 

Making the choice

Understand the difference between accepting the status quo and embracing this more dynamic way of looking at your sales force.

Living through a boom-bust sales cycle is like being in a small ship on the high seas, rolling and pitching. You might be slowly moving forward, but your immediate problem is that you’re at the mercy of an endless barrage of unpredictable waves tossing you up and down. Ask anyone who has ever endured these conditions—plenty of people (me included) are bound to get seasick!

On the other hand, having a spiral pipeline is like being on a ship equipped with stabilizers, helping you cut through the rough patches so you can build speed and enjoy a steady, smooth ride. You spend far less time reacting constantly to perpetually changing conditions, and instead you can keep your eye fixed on the horizon and chart a profitable course ahead.

Let’s put this in practical terms: if your business bounces back and forth regularly between 150% quota attainment and 30% quota attainment, you are putting a lot of unnecessary strain on resources. Uncertainty can demoralize even your best salespeople, it sure doesn’t help with cash flow, and like that little ship in rough waters, your staff are left casting about madly between closing and prospecting. Who would choose to put themselves through all of that, especially when it’s entirely preventable?

 

Your spiral pipeline in three steps

Making the choice to build a spiral pipeline for your sales starts with engaging three core activities in your organization. And continuing these three core activities every day. That’s the key to the spiral pipeline, it’s continual. I’m going to highlight these for you now, and in future articles in this series, we will explore each one of these points in greater detail.

 

1. Engage in client attraction: This is about creating a steady input of prequalifying leads so you have a steadily overflowing sales pipeline. By doing this, you will discover that there is a significant overlap between your sales and marketing roles.

 

2. Participatepost-sale: In the past, companies would say to their sellers that a sale was closed oncethey hada signed contract—they could move on to the next prospect. That’s not the case anymore. Based on what I am seeing in top-ranked sales organizations today, I believe that the sale is closed only after the customer starts their implementation process. Not only does it demonstrate to the customer that you’re on hand to ensure a quick transition, it also builds trust and creates ideal conditions for leveraging client satisfaction to assist in new opportunities.

 

3. Create growth opportunities: Stay engaged with clients post-sale through their implementation process to make sure they are receiving full value from what they bought from you. If the client doesn’t perceive that they have received full value, then a growth opportunity has been missed. Don’t make that mistake. Satisfied clients who are sold on the value of your product or service can create new growth opportunities—helping you in the product- and service-creation process, introducing you to a new market, and creating new customers.

 

Summing up

The three steps I have outlined for you are the foundation on which you will be building your spiral pipeline for continual and consistent revenue generation. In forthcoming articles in this series, we will explore in greater detail how to implement each step so that you can continue adding new segments to an ever-growing pipeline…and achieve a steadily growing record of sales success.

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The borderless bazaar: how you can build a modern sales force that connects, enlightens and thrives in a new era of sales

Today’s marketplace is in the midst of a profound transformation in how sales are generated and sustained, and nowhere else is that more apparent than in the changing relationship between sellers and buyers.

 

Gone are the days of pure transactional selling. Buyers don’t wait for you to come to them anymore. Instead, they seek out what they are looking for. When they’re prepared, they choose to do business with those who best meet their needs. More than ever, the strength of the connections you cultivate determines how successful you’ll be in positioning yourself in the minds of your buyer as that top pick.

 

That’s why in this article I’ll share with you how you can act on the opportunities I’m seeing in the marketplace today. I’ll also provide a valuable case study that underlines how this new approach can translate into steady sales growth.

 

With any transformation comes the need to examine and explore the “new normal” of the landscape and to develop new rules to survive. This is especially important for those of you who are eager to adapt quickly and to help your sales organization thrive amid all these changes.

 

Some, such as Seth Godin, have looked at how selling is changing and have concluded that connections are now going to be made by people who are willing to create and lead “tribes.” The trouble with that way of looking at things is that it’s based on a false analogy. Things that are “tribal” evoke imagery of warring factions who each seek to win at the expense of others. Tribes divide people. The root of the word tribe reveals the underlying problem—it comes from the Latin word tribus, which was meant to describe the social order of the city state in ancient Rome. Tribes—in the classic sense of the word—were things you either belonged to or were excluded from depending on your family lineage or where you lived.

 

That doesn’t really sound like an idea that properly explains how businesses and the people who lead them today can thrive and grow, does it?

 

However, that’s not to say that history is unable to teach us something valuable in this exercise. Think back to when you were young and you were enchanted by the tales of One Thousand And One Arabian Nights. Commerce in the ancient world of that story took place in the merchants’ bazaar (and an interesting aside: that classic story itself was passed down by word-of-mouth over the ages through bazaar storytellers). Bazaars were the places that lay the foundation for the modern marketplaces we know today. Part of their power was in their community structure. No single seller had a monopoly. Nor could a seller possibly be a leader to everyone with whom they wanted to do business.

 

Instead, being part of a bazaar meant that sellers shared what they knew and pooled their resources—banding together into a connection-rich network of selling goods and services. Just like the changed landscape of today, this was good news for buyers. Whether they needed a merchant, a craftsperson, a food seller or a banker, a buyer could confidently find what they were looking for. These were self-contained, self-sustaining little communities within themselves (and that remains true even today at grand bazaars around the world). Your work earned you a spot in that marketplace. Your reputation determined whether you stayed, and that reputation was measured by how useful you were to others in that community as much as by how well you looked after your customers.

 

In other words, success at the bazaar hinged on relationships—the ones forged in the marketplace in those networked communities. That matches what I’m seeing in the marketplace today. Communities are where relationships get forged now, and to be part of a community means to put in the time to share what you know so that you help something meaningful grow for the benefit of others.

 

Occupy spaces and create communities

 

It’s not just about closing the sale anymore. And it’s not about telling others to follow you as leader in a tribal fashion. Today’s bazaar without borders means that buyers from the four corners of the earth can find what they are looking for in spaces where people congregate. I’m choosing my words carefully here: I’m talking about spaces rather than places. Spaces don’t occupy a fixed location, nor do they have limits on who can join or what they can contribute. Spaces can be created online. They can be found in professional associations. And they can be forged in the content that you create for others, addressing topics that people are thinking about. By occupying spaces, what you are doing is creating a sense of kinship and shared purpose.

 

Out of this, communities are born—and with it, a sense of permanency and socially tested credibility that provides the potential for perpetual sales growth, month-over-month, year-over-year. When managed correctly, it means an end to the boom-bust cycle of sales, because unlike the old way of doing things, communities are populated first and foremost with people, not buyers.

 

Four essential communities for today’s sales force

 

If you are committed to adapting and building a sales force that can really thrive in this new landscape, there are four kinds of communities that your organization needs to focus on building and sustaining. Each of these should be a formalized part of the platform that you build to offer to prospects and customers.

 

1. Knowledge communities. Information and field-tested insight are highly valuable commodities in today’s marketplace. People have a hunger for good ideas, and that’s why it’s important to share what you know. When I say this, I don’t just mean on a personal level: this applies just as much to groups of people you manage. Today, many businesses are building these types of communities to better engage their prospects and customers. They’re posting videos, publishing case studies, developing whitepapers and ebooks, and posting fresh ideas to their blogs. The content that you generate has more than just “new release” shelf appeal today. It also creates a valuable backlist—just like a publisher (who, it’s worth noting, generate a significant percentage of their sales in this area). The more you add to your knowledge backlist—especially if you post your content online—the more valuable the information becomes for your audience today and in the future.

 

2. Expert communities.No matter what line of work you’re in, you’ve been honing your professional skills throughout your career and have built up a library of know-how. Multiply that by the number of people in your sales force and you’re looking at an incredibly deep pool of expertise for audiences to draw from. Skill complements knowledge. It adds proof to the promise of good ideas. That’s why expert communities help nurture prospect relationships. They help build trust, proving your competence and adding value so you can establish and retain more customers in less time. They showcase the mastery of your sales force or your executive team—how you use your sharpened skills to achieve great results. Building expert communities can also include your clients, giving them the opportunity to share their expertise or even to talk about how they have benefitted from the skills they have gained by doing business with your organization.

 

3. Corporate communities.What I am seeing in the marketplace today is that smart leaders in sales work hard at developing a good corporate rapport with their clients. In particular, they seek multiple buying influences inside their own accounts. They create a community of advocates inside their best customers. The outcome is that they gain a broad base of support throughout the organization while building a library of knowledge about how that client’s business operates (e.g., who makes decisions and according to what criteria). This is about more than mining a corporate hierarchy for influential decision-makers. In fact, every point of contact has value. Every conversation is a good conversation—whether it’s with a CEO or a gatekeeper. Insight comes in many forms, and each contact you make in that corporate community plays a role in the sales process. You will never lose business by forming too many of these relationships, but you’re sure to lose business if you fail to engage too few of them.

 

4. Learning communities.Create a community of clients who talk about how you’ve helped them solve challenges, helped them make them more money, saved them money or time, or retained their employees. You can leverage that learning opportunity to help grow your business even bigger. Learning communities come in many forms. It can be as simple as forming an advisory group or a user forum. It can feature shareable best practices or case studies, each one underlining the advantage of doing business with you. Smart, successful companies today recognize the power that results from bringing people together. They don’t settle for sales teams who operate in isolation. They create these communities where everybody can learn from each other and gain from that expertise.

 


Why communities matter so much now…

 

So why do communities matter so much now? Because just like in those ancient bazaars of the classical world, buyers today are looking for more than a transaction: they want to do business with people who can offer knowledge and insight on top of the products or services being offered. That meeting point can only be achieved if you take the time to build a rapport with your prospects and customers. That means putting their needs first: helping them learn and grow, and delivering value above and beyond what your product or service provides.

 

Consider the following case study, which reveals the power of leveraging community and relationships.

 

A few years ago, Engage Selling Solutions began working with a small-business telecommunications company. Previously their business model hinged on having their clients perform as resellers of their product. It meant that the product itself remained static, since there was no opportunity for their clients to provide feedback. They were reactive rather than strategic. With help from Engage, this company decided it was time to do things differently.

 

A senior executive within the firm spearheaded a bold initiative to create a client-focused community. Doing this meant embracing one of their biggest fears—that their clients would just use the forum as an opportunity to complain about what was wrong with their product.

 

Instead, three interesting things happened. First, the clients began offering suggestions about product features, leading to entirely new applications that had never been considered before. Second, the company suddenly found themselves with range of success stories as their customers began to share with them and with each other all the ways that they were using their product. Third, the firm’s customers became deeply loyal, not just because they felt their input was valued, but also because they had a new sense of personal ownership in the new direction of the firm. The outcome of this community and relationship approach was immediate. Sales skyrocketed and continued to do so quarter after quarter for several years.

 

Amazing things can happen when you embrace change as an opportunity to work differently than you have done in the past. Find ways to build your own communities. Think about how you can become a trusted part of that borderless bazaar in the marketplace today. In doing so, this year could be your best ever. It’s right there within your reach.

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State of the Sales Nation: One Simple Tip for Drastically Refining Your Sales Pipeline in 2013

Understanding that no two sales pipelines are exactly the same, there’s a general flow that most follow.

 

Typically, pipeline models start with some forms of discovery, prequalification, and qualification, before they move on to stages like solution design, customer evaluation, and proposal delivery. Lastly, there’s generally a stage (or stages)for negotiation and closing.

 

Yours might follow that format exactly, or it might have more (or fewer) steps. But that’s a pretty standard pipeline — leads go in the one end and they come out the other. In between, they’re nurtured and developed to improve their chances of progressing through the pipeline.

 

But you knew that already, didn’t you. So why am I attempting to bore you with an elementary-level sales refresher?

 

Because, unfortunately, many organizations confuse their pipeline with their forecast, and vice versa. Or maybe they don’t recognize that there’s a difference between the two at all. That’s a big problem, because to create true sales predictability (and avoid Sales Whiplash), it’s critical to consider both independently, and to have your pipeline numbers influence your forecast output.

 

At its core, the sales pipeline is simply a view of all of your opportunities. As such, it must show everything — from a newly identified opportunityall the way down to an opportunity in which there is a verbal agreement that’s simply waiting for a signature to make it official.

 

Ultimately, tracking both of those types of opportunities and everything in betweenhelps you better measure, manage, and evaluate your sales pipeline, and create more accurate forecasts (more about that later).

 

The Real Risk of Confusing Your Pipeline with Your Forecast

 

When some salespeople and sales professionals think about their pipelines, they think only about the middle and latter stages (proposal delivery and negotiation, for instance).

 

The reason? Salespeople don’t like to put things into the top end of their pipeline because they think it’s their forecast and they fear committing to deals they aren’t certain about. As such, they only want to put deals in their pipeline when they’re sure that they will close.

 

The problem with that, of course, is that it makes gauging pipeline health impossible for sales managers and executives.

 

Our work shows that most companies have a 33 percent closing ratio when it comes to qualified leads in their sales pipeline. So, to hit its quota, a company must have three times as many opportunities in its pipeline as it needs to reach its revenue targets.

 

Now, if you manage a sales team whose salespeople only put deals ready to close in their pipelines, you might think the business is in serious trouble because your metrics suggest that two-thirds of those opportunities won’t close. 

 

That system may not cause a short-term financial problem for the business, but it will prevent you from:

·         Accurately predicting future revenue

·         Objectively coaching your team and analyzing its strengths and weaknesses

·         Implementing strategies to improve your team and your pipeline.

Let’s be clear, your sales team needs to remember that putting deals in the top end of the pipeline has nothing to do with them being real sales. It has everything to do with revealing the true quantity of opportunities in the marketplace, and measuring your true closing ratio. And the only way to do that is to put all of your opportunities (prequalified and qualified) in the pipeline from the very beginning and analyze how many of them convertto each stage and, eventually,real revenue.

 

Ultimately, this discipline will allow you to create accurate forecasts, which are true reflections of your revenue potentialfrom well-qualified deals that are in the later stages of your pipeline.

 

One Simple Change to Make to Your Pipeline in 2013

 

Now that you understand why it’s critical to put all opportunities in the top-end of your pipeline (even if you’re not confident they will eventually close), here is the nuance that will help you make a meaningful change to your pipeline management process this year:

 

Stop talking about probability of close at each stage, and start talking about percentage complete in the sales cycle.

 

As you move through your pipeline, every stage represents a step that’s been completed and a new step that’s beginning. What you want to see as a sales leader is that your team is moving deals through pipeline, completing each stage properly, and gradually changing the prospect’s mindset.

 

When an opportunity moves to the next stage, their percentage complete increases. And when opportunities reach the stagethat you define as your “fully qualified” stage, it’s probably safe to assume (as I mentioned previously) that one-third of them will close.

 

Simply put, that calculation will yield your forecast.

 

By arriving at that number through an objective measurement of percentage of pipeline stages complete (rather than the subjectivity of “probability to close”), your forecasts will be significantly more accurate, and you’ll have an objective coaching tool to use in sales meetings and reviews.

 

Best of all, this pipeline model will mitigate your chances of suffering from Sales Whiplash.

 

If you’re using a 33 percent closing ratio to calculate your forecasts, you will be accurate within 5% of your forecast each reporting period and it’s certain you’re your team will never under deliver.As a plus, if you happen to have a month or quarter in which your team closes 50 percent of its highly qualified opportunities, you’ll significantly overachieve.

 

As a sales leader, creating revenue transparency, consistency, and predictability is critical for numerousreasons, not the least of which is your — or your boss’s — sanity and stress level.

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The First Half of the Sales Pipeline

 

Welcome to the second article in our series, “Stop Guessing! Sales Accuracy Redefined.” Previously, we discussed the importance of measuring your pipeline as percentage complete versus probability of close in order to grasp an accurate revenue forecast.In this article, we will take a closer look at the pipeline and the logistics of measuring percentage complete, reviewing the first half of the stages.

 

Measuring your sales pipeline as percentage complete, as opposed to probability of close, will give you a more accurate number for your sales forecast and a more complete picture of your future sales. By drilling down into a typical sales pipeline and its stages, we will get a better idea of how the percentage complete concept works, as well as how an opportunitymoves through the pipeline. This article will review the first four stages of a typical sales pipeline; the next and final piece in our series will review the last four.

 

We’ll be using a sample pipeline based on the sales stages of one of Engage Selling’s clients. It’s important to ensure that your pipeline is customized to your business and it’s OK to have more, fewer or different stages than those we’ve defined in our example. We’ll be reviewing what qualities each stage has and its exit criteria. The important takeaway is to ensure you have similar criteria for whatever stages comprise your pipeline.

 

Stage 1: Discovery (Opportunity Initiation)

Once the sales department receives a lead and its contact details, discovery begins.Leads can originate from marketing, a networking event or a referral, your website or any other source. The objective of this stage is to gather basic information about the contact and make the initial call or email.An opportunity only enters the pipeline if you have had some preliminary conversation about the prospect’s search for a solution and determined that you are a potential match. Business cards collected at networking events and info forms from website don’t count for this stage until the seller has made contact with the prospect.

 

Exiting the discovery stage requires:

·         Completing the conversation and establishing that the account meets criteria.

·         Confirming client information and processing in CRM.

·         Understanding the client’s buying position.

·         Establishing a specific follow-up.

·         Confirming lead source accuracy.

 

At this stage, your opportunity is only 0% to 5% complete in the sales pipeline, as you haven’t qualified the prospect or begun the sales process yet. You’re just getting started! However, it’s important to add the opportunity into the pipeline even at this early stage in order to track how many initial leads transfer into real, qualified leads and then lead to close. In large part, adding leads this early is about data gathering for later.

 

Stage 2: Pre-Qualification

After initial contact is made, you are now establishing credibility and rapport with the opportunity during the pre-qualification stage. As a seller, you are confirming the prospect’s desire for a solution and the time frame in which they’re working, as well as beginning to establish “why us,” as in why the prospect reached out to your company and what about your company stands out to them. The final objective of this stage is identification of key individuals, including CXO, VPX, directors and officers.

 

Exiting the pre-qualification stage requires:

·         Converting the lead to a contact and associating with an account or company.

·         Creating an opportunity.

·         Confirming that this is a real opportunity within a specified time frame

·         Adding all the additional contacts to the account

 

Exiting the pre-qualification stage completes 10% of the sales pipeline.

 

Stage 3: Qualification

The qualification process requires time and lots of contact with the prospect to ensure you differentiate your solution, establish credibility and learn more about the customer, including their current and future desired state. You must develop an understanding of their budget, constraints and ownership, their decision process and criteria and your competitors for the deal. You’ll also meet with all decision makers and quantify the ROI as well as the effort to win the deal. Finally, you’ll identify the internal team at your own company that will work on the sale.

 

In order to exit the qualification stage, you must collect the following information:

·         Prospect’s size

·         Current technical environment

·         Buyer characteristics and their role in the process

·         Buying profiles of all the buyers and influencers

·         Buying stage and timeline

·         Business drivers and buying triggers

·         Competitors

·         The estimated price on your opportunity

 

Qualifying the prospect is a huge step towards completion of the sales pipeline; at this stage in our example, you’re 25% through the pipeline.

 

Stage 4: Solution Design

Once the prospect is qualified and initial information about the opportunity known, it’s time to get down into the nitty gritty of solution design. What, exactly, does the client want or need of your offerings? Which options make most sense and how will the solution be rolled out? This portion of the sales process is about deep conversations. From a sales point of view, it’s the time to engage the customer with references and case studies as the client is ferretting out whether your solution is the right one for them.

 

In the solution design stage, it’s important that all concerns, objections and impediments are aired and that the team understands any budget constraints so that the solution you are proposing in subsequent steps is precisely what the customer wants.

 

In order to exit the solution design stage, you must:

·         Establish that the proposed solution meets the prospect’s needs.

·         Receive internal approval on the solution design.

·         Produce a proposal.

·         Engage any required partners.

·         Reach a conceptual agreement on the solution with the prospect.

·         Define and approve the criteria for success.

·         The pricing model is accurate and confirmed.

·         Validate the timeline.

 

Completing solution design brings you to around 40% completion in the sales pipeline.

 

In our next article, we’ll continue reviewing the final four phases of the sales pipeline and bring the sales opportunity to a close—whether a win or loss—and 100% completion.

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The Importance of Key Performance Indicators (KPIs) in Measuring Sales Success

 

Too often when looking at a sales team’s success, managersonly look at the actual sales (the closing of the business). Of course, this is important—but the sale is a lagging indicator. If you have no sales closing today, it indicates that your team has not been performing well for months. By the time you’re at the point of no business, you’re already well into trouble. In fact, you are at the point of no return.

 

So how, as sales leaders, do you create leading indicators, tracking the behaviors required today for sales tomorrow? The answer is Key Performance Indicators (KPIs). KPIs are important leading indicators that ensure you have a healthy pipeline and future business. They provide an objective form of measurement that allows you a glimpse into your future—before it’s too late to change the direction or solve any issues with your team.
 

The first step in determining which KPIs to measure and how to measure them correctly is to differentiate between a sales pipeline and a sales forecast--two terms that many sales professionals mix up or don’t differentiate. A sales pipeline provides clear visibility into all of your opportunities, regardless of their probability of closing, whereas a forecast is a subset of the pipeline that only includes those qualified opportunities that are expected to close in a defined reporting period.

 

A properly defined pipeline and its stages help you organize your sales process and create effective tools and benchmarks for your sales team, making it much easier to predict the future success of your sales force. In fact, using KPIs, it’s possible to get within 5 percent forecast accuracy, meaning that you’ll always know not only how your team is currently performing, but also what roadblocks might lie ahead.

 

A sales forecast is a forward planning tool for budgets and spending, and measuring KPIs around lead conversion success, such as the cost per lead, can help you budget appropriately and accurately predict your revenues.

 

The KPIs that every sales team should be measuring are:

 

Leading indicators: KPI’s for funnel development

·         Number of qualified leads in the pipeline

·         Sales cycle length

·         Total length of time to qualify a new prospect

·         Qualified to proposal ratios

·         Number of evaluations / short lists per year

·         Number of new (first) client meetings per month

·         Cold lead to qualified ratios with conversion rates

 

It’s important to not only measure your opportunity-to-close ratio but to measure conversion from stage to stage, which may be a new concept for you. Keeping an eye the length of your sales cycle, the number of new client meetings you have each month, and the conversion ratio of new leads to qualified leads will provide insights on whether you will be ahead or behind on future revenue and how you can best adjust now to ensure you will hit your future revenue goals.

 

Lagging indicators: Revenue and quota focused KPI

·         Proposal to closed ratio

·         Average deal size

·         Number of sales per year

·         Annual quota

·         New vs. existing client sales

 

KPI’s for Account Management and client retention / growth

·         Average client growth year over year

·         Client retention rates

 

Depending on your business, you may have additional KPIs to take into account. A staffing company, for example, would measure positions filled. A company with multi-year contracts and varying usage would measure contract value versus actual contract spend, for example. Software as a Service companies would measure average contract value and average length the client stays in the program.

 

Be objective and use data when establishing KPIs. Each should have an appropriate benchmark based on actual data and information from your sales history or benchmarks from the industry if you are a new startup. Review your sales from prior years or quarters to help you calculate averages and quotas. Understanding your average deal size and combining that with your lead conversion rate will give you an idea of how many opportunities need to be in the pipeline in order to hit your quotas in a very objective and scientific way.

 

Of course, measurements are only helpful if they’re paid attention to. Get to know your KPIs, and review your data weekly. Pay close attention to any trends—both worsening and improving—so you can react appropriately. It’s helpful to include your sales team in this process; review each person’s KPIs once a week in a coaching session. This will help them to understand the types of behaviors that are important and will ensure that you spot any lags in performance early and can course correct quickly.

 

No one likes to be blind sided by poor sales, and there is no reason to not see what is coming! There are few opportunities in life to accurately predict the future, but paying attention to leading indicators now is an opportunity not only to predict, but to change the future course of your sales.

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What Can the Sales World Learn from 2012?

We’re three months into the New Year, so most businesses have turned their attention to the challenges (and opportunities!) that 2013 will inevitably present.

And why not? Whether you killed it last year or struggled to live up to your lofty expectations, 2013 presents new hope. The economy seems to be showing signs of life, and both B2B and B2C buyer behavior is trending upward in many industries.

But let’s stop for a moment and reflect a bit on 2012. After all, the only way to really improve in 2013 is to better understand what held us back last year and what we need to avoid doing going forward.

So, what’s the biggest sales lesson we can learn from 2012?

Avoid sales whiplash™ like the plague.Be cognizant of it. Constantly look for signs of it. And course correct before you fall into a very dangerous sales trap. Because if sales whiplash goes unnoticed or untreated, it will cripple your company before you knew what hit you.

 

What is Sales Whiplash™?

What I call “sales whiplash™” you might refer to asboom and bust revenue production, fluctuating sales performance, or underperforming sales teams.

The most obvious symptom of sales whiplash is your company crushing its revenue targets one quarter, only to fall completely on its face the next. It’s a proverbial roller coaster ride that – unless you like drama, uncertainty, and unpredictability – isn’t much fun to ride. Just imagine going up and down hills at 100 miles per hour one moment, only to come to a screeching halt the next.

That’s not at all what I’d call enjoyable, efficient, or productive.

Ideally, sales team performance should follow a smooth, upward path that yields a perpetual sales boom. And that boom doesn’t have to be – and shouldn’t be – followed by a bust on the other side.

But that’s exactly what sales whiplash is – a boom one quarter, a bust the next. Ultimately, you might still end up hitting your annual revenue targets, but even if you do, the side effects of sales whiplash will reveal themselves eventually.

 

One Example of Sales Whiplash™

Recently, I worked with a client that had two sales teams selling into two very different markets. Team A sold very big multi-million dollar contracts that spanned multiple years. Team B sold smaller, faster transactional deals.

For much of the company’s life, profits were carried by two very large deals that Team A had closed. Team B, by contrast, never really delivered on its targets, but nobody caredbecause Team A’s success overshadowed its underperformance.

Then, in Q3 of one year, the company encountered a major problem. Its larger annuity contracts were going to end and not renew in January, and its smaller transactional business wasn’t delivering enough revenue to counterbalance the loss. In fact, only 10% of Team B’s pipeline was in place to secure deals in January.

You can probably guess what happened.

The company didn’t have enough time to react (sales whiplash), and the bust that followed its boom wasn’t fixable. Ultimately, sales teams and VPs were fired, and it took the company an entire year to rebuild its pipeline and revenue.

 

4 Causes of Sales Whiplash

Unfortunately, the example above is just one of several that I could share.

And as much as those companies would prefer to believe that their sales whiplash was caused by fickle markets, new competition, underperforming sales reps, or other extraneous factors, the truth is that it wasalways self-inflicted.

Yes, sales whiplash can be caused by those things, but those causes areoften symptoms of some much bigger internal problems. Specifically, there are four core causes of sales whiplash:

1.      Sales leadership and individual sellers only focused on one aspect of client engagement.That’s a critical mistake. Every part of client engagement – attraction, participation, retention and leverage – is important to long-term sales sustainability. For instance, if your salesperson closes a deal and then passes the customer off to someone else for onboarding (during the participation phase), and then never speaks to that customer again, they are opening the door to sales whiplash. Why? Because it becomes nearly impossible to ensure customer satisfaction when no one person is monitoring them throughout the entire engagement process.

If customers aren’t satisfied, they won’t be retained. If they are not retained,whiplash is likely. Every individual in your sales organization – whether it’s one person or one hundred – must sync up to ensure that every aspect of client engagement is given its due attention, and that the customer is never left to its own devices.

2.      Sellers only nurture one buyer relationship.To protect and retain your customers, you have to expand your breadth of relationships inside an organization. I saw too many clients in 2012lose business that they should have won because they were the incumbent; they hadn't built out a broad base of support. These sellers were relying on a single decision maker, only to find out that person was either influenced by his colleagues or people below him, or he left the organization altogether. And when you lose this “easy” business, it naturally causes sales whiplash because you’ve got to make it up with new prospects, which take time to close and require capacity you might not have.

3.      An overemphasis on closing. Now, before you freak out and think, “what the heck are we supposed to be talking about or emphasizing,” let me explain. You have to put equal emphasis on attraction, closing, and engagement. If all you say to your sales team is, “close, close, close,” and you stop paying attention to the front end of the sales cycle, you risk having an empty pipeline the next month or the next quarter. And, when you do that, you create these booms and busts in sales production. So, I'm not saying don't focus on closing. I'm saying don't stop focusing on other areaswhile you’re closing.

4.      Sales teams favor one product or service line at the expense of others. Sometimes you do this by accident. Perhaps because you receive directives from above stating, “sell this new producthard at launch, we want to make a big splash.” Or, maybe you have a new product that’s exciting and easy to sell, so you focus on that and stop paying attention to other lines of businessthat create consistent revenue. Sometimes, it’s purposeful because one line of businesscloses more quickly or results in bigger deals. Other times, it happens because you believe in one product line over another.

Either way, favoring one product or service is a big mistake. That singular focus naturally creates holes in your pipeline and booms and bustsin your revenue production. Different products have different sales cycles. To create a perpetual boom of revenue you need to focus your team (and pay them) to attract and retain customers across all lines of business. If you don't, you’llcreate bow waves of revenue rather than a consistent flow, and put your neglected business lines at risk of losing market share

OK, you should have the gist of Sales Whiplash™ and what causes it. Doing any one of the things listed above will cause sales whiplash, and trust me when I say that it’s not something you want to experience in 2013 if you didn’t go through it in 2012.

The best companies last year were set up so that the whole sales organization was focused on all four areas of the client engagement – attraction, participation, retention, and leverage. They closed new business, brought customers onboard quickly, retained, up-sold, cross-sold, and created new opportunities.

Not surprisingly, that will continue to be critical to sales success this year, as well – and, frankly, every year for the foreseeable future.

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Growth Strategies: How to Decide Which Customers are Up-sell and Cross-Sell Worthy

By Colleen Francis

 

In one of my recent articles, I wrote about why up-selling and cross-selling to your existing customer base — rather than focusing most (or all) of your attention on new business development — is the easiest and most efficient way to drive business growth.

 

Those up-sell and cross-sell opportunities, after all, very often yield quicker sales, higher profits, and improved leverage, largely because existing customers know you, trust you, and have displayed a clear affinity for your company’s products and services. As a result, they typically require less work to convince them to buy more of the products and services you offer.

 

So, why shouldn’t businesses simply eliminate new business development initiatives altogether and focus instead on up-selling and cross-selling to their current customer rosters?

 

Business owners and executives should know the answer to that question (hint: new business development must always be at least a small part of your sales strategy). And while selling to existing customers might offer the path of least resistance to driving efficient growth, that doesn’t mean you should be trying to sell more products and services to all of your customers. In fact, if you spend too much time up-selling or cross-selling to certain types of customers, you’re probably creating a sales formula that will produce more chaos than profits.

 

For instance, if you’ve got a few customers who buy several of your products but are perpetual complainers and total customer service headaches, do you really want to keep trying to sell more to those clients? Probably not. In fact, you may want to do the opposite, and subtly eliminate them from your client roster. Especially if the cost of maintaining and servicing those customers is higher than the money they bring in.

 

Far too many salespeople and business owners forget that no one is putting a gun to their heads and forcing them to sell to certain customers. We live in free countries, after all, and you can sell to whomever you want. If a customer doesn’t feel right or they’re more trouble than they’re worth, then you should filter them out and focus more on the customers who are truly worthy of your time and energy.

 

Which leads me to a very important question: How can you determine who those perfect up-sell and cross-sell candidates are, and what should you do once you’ve identified them?

 

There are a lot of different ways to go about that process, but one of the easiest and best ways to handle it is to implement a customer review system that gauges your new and existing customers’ path to purchase, and their current needs or concerns. In many ways, it’s simply an intelligence gathering process that will allow you to better understand who your customers are, why they buy, and what their current and future pain points are.

 

During those engagements with new and existing customers (which should happen within the first 30 days of acquiring new customers, by the way), you might ask questions like:

 

  • What prompted you to buy our product or service?
  • Why are you continuing to do business with us?
  • Why did you buy more from us in the past?
  • How is our product helping you, and are there additional features that could add more value?

 

Be sure that you don’t simply focus on acquiring positive customer feedback, however. It’s also critical to uncover your customers’ concerns and objections. That information can help you understand what’s keeping your customers from buying additional products or services from you, or why they’re choosing competitors to fulfill a particular need that your product might address.

 

To do that, you might ask questions like:

 

  • What kept you from buying a larger product package from us?Some customers are afraid to put all of their eggs in one basket. If you know that, then you can address that concern and tailor your package to mitigate it.
  • How important was pricing in your decision? If a customer reveals that they didn’t buy more from you because they didn’t think they could afford it, you might be able to pitch them on the value of package deals and appeal to their price-first concerns.
  • What features do you think our product lacks or what would you change?There might be some features or services that a customer wishes they had, feels would improve their experience, or is unaware that you offer. Ultimately, that could open the door to premium tier up-sell opportunities, or cross-sell packages.

 

Ultimately, that information will help you strike when your customers are happiest, most interested, or most needy. Quite simply, those types of customers are often the most worthy of your up-selling and cross-selling energy.

 

Your goal should be to determinewho your best clients are, how much they’re spending with you now, which products or services they’re not buying (and why), and what value you could deliver to improve their overall experience. With that, you should be able to easily estimate each customer’s growth potential, and the net new revenue that they represent.

 

If you discover that certain existing customers’ growth potential is low relative to the amount of time and energy you need to invest to maintain them, then they’re probably not the best up-sell or cross-sell candidates. If, on the other hand, you uncover existing customers with unmet needs that you could easily and efficiently fulfill, then you’ve probably found up-sell or cross-sell opportunities that will lead to quicker sales, higher profits, and improved customer leverage.  

 

At the end of the day, what business couldn’t benefit from identifying more of those opportunities?

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