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Experience Sales Advice Uncategorized

Is Your Sales Forecast Inaccurate?

A few years back, I worked for a company that spent more money, time, and effort on sales forecast accuracy than what most companies pay in corporate taxes.  There was a complete department that had 3 permanent employees and at any given time 2 temporaries.  Why the expense?  While most would say spending this amount of money was ludicrous, this company’s accuracy in sales forecasting was 8%.  At the time, this was phenomenal compared to other companies in the same industry.

In later years, I worked for a Fortune 500 company that demanded 4% forecasting accuracy.  Moreover, they got it too!  Being a public company, how the street loved them!

So why are most companies lacking in their accuracy?  I think it comes down to a couple of things.

  1. Pressure to make a number that executives have not been realistic in obtaining.
  2. Not getting input from the rank and file members of the salesforce.

Too often, I have seen front line managers take numbers, pad them, then pass them upstairs.  No two ways about it, this is just plain wrong.  I think this is unethical because it is now forcing a quota number on someone that was not involved in the planning process.  Crazy idea, but how about getting people responsible for what they were hired to do, generate revenue. When you get the by-in from the sales force, it now becomes a point of pride and ownership.  No salesperson I have ever worked with wants to tell their manager they won’t be making their forecast.

Despite loads of money spent on CRM and SFA tools and software, along with hours of time dedicated to reviewing the forecast, it is still way out of line.  Why?  In all my years in sales, I have never seen a company do a detailed analysis on a territory other than do say “it did $$$ last year and we expect $$$ this year”.  What does this say about the coming year, or the next?  Nothing, absolutely nothing. When a new sales person starts a territory, unless a detailed analysis has been done, how can a quota be set and handed to them with an honest expectation of meeting that quota?

The fundamental flaw in all forecasting is that we are asking the wrong questions.  It does no good to set-up a sales rep for failure from the very beginning by overestimating the territory.  This is like having no target; you are going to hit it every time.

When salespeople, especially those who are behind are asked to update the forecast, are you really expecting accuracy? Organizations are kidding themselves if they do.  The opposite end of the spectrum has the top reps ‘sandbagging’ or understating their pipeline.  The point is, if done correctly, the accuracy is built from the ground up with everyone’s acceptance, and no one has to be double checking numbers.

If this sounds familiar in your company try these:

  • Collaborate with the sales force to get ownership of the quota.  Supply detailed supporting data so that informed decisions can be made; not what you want to be made. Managers need to remove the pressure from the process.  If you do not, the resulting forecast is no more than a subjective and inaccurate piece of paper.
  • Quarterly reviews are worthless.  The process of review needs to be ongoing and management updated weekly.  Clearly establish grading milestones for pipeline deals over a certain amount.  Once they reach a percentage level towards close, do an overall review.
  • Have an agreement between the salesperson and the customer that qualifies all key measures, conversations and meetings.  The process that outlines the due diligence necessary to lead to the ultimate ‘yes’ or ‘no.’  In most cases, any verbal agreement ambiguity from either side removed and now put into writing.  Both parties now share and understand with crystal clarity. Every step the customer adds and agrees to adds to the next level of accuracy to the forecast.

Hope you find this useful. Please let me know by leaving a comment. If you have a Twitter account and found this article useful, it would be much appreciated if you would retweet this at the beginning of the article!

Happy Selling!

Ed Warner

Categories
Experience Hiring Sales Tips

Judged by Your Rolodex

Sound familiar in some way?  Some think size matters, others think quality does.  I am of the opinion that sales organizations that look for sales people with a big Rolodex are putting the cart before the horse.  What really surprises me is that the word “rolodex” still exists in the vocabulary of the modern salesforce.  With today’s technology, there are far better places to effectively manage your contacts.

Having a well stacked contact list is not necessarily the best hiring criteria of a sales person, yet it still carries considerable weight.  I believe it is one of the worst measures and needs to be removed from the “must have” list.  Let me explain why.

The current state of social media lends itself to everyone having a big contact list.  I like the analogy of your phone book’s white pages.  If you live in or near a metropolitan area, the white pages contain thousands of names.  Do you know everyone included in the phone  book?  No, and that is my point. Same applies to your contact list.  The amount of time necessary to keep up with a rolodex that size leaves no time to do what a salesperson was hired to do: SELL! I’m not saying someone doesn’t have that many contacts, I’m saying that the relevance of the names to the position being filled is probably a fairly low percentage.  I say “probably” because the majority of salespeople do not move to another company that is selling the same line of products.  Ok, granted some do, but most don’t.

With today’s economy, an experienced sales professional (bag carrying or manager) is expected to have a list of contacts.  Personally, I keep 4-5 thousand names.  Sound like a lot?  Not really when you consider my list is broken down into an industry list.  Those individual lists are small in comparison to the whole.  The key is they are valid!

What I find truly amazing is sales managers still believe when they find a candidate that states they have contacts at Fortune 500 companies including the CxOs,  that this is going to be the hiring difference.  What makes you think IF you did have those contacts that the company would just rip out their existing product and plug yours in?  For every contact you have, an investment may not have run the course of the ROI.  There are few questions hiring mangers need to ask themselves:

  • Does a big rolodex equal qualified leads?
  • Ask your self about brand equity–a relationship established under one does not guarantee success somewhere else
  • Are you that desperate that you believe this person’s contacts will boost revenue?

There are situations where having the contacts is a good thing.  Selling services, which can and should be viewed as an intangible is probably a better use for the contact list.  In conclusion, the next time you hire someone, don’t ask about the size, rather how many names are relevant to the position.

If you find this useful, Contact Me or please leave a comment. If you have a Twitter account and found this article useful, it would be much appreciated if you would retweet this at the beginning of the article!

Happy Selling!

Ed Warner

Categories
Experience Hiring Sales Advice Sales Tips

Sales Talent- The Horn of Plenty

Be afraid, be very afraid of what you wish for. 
Ok, perhaps a little melodramatic, but seriously, as the economy begins to pick up so will the inevitable hiring.  This is where caution needs to be exercised.  I see planning taking place in all industries and in all different sizes of companies.  This planning is turning executives into “wide-eyed-Christmas-morning-children” just thinking about the level and sheer number of top-grade sales talent presently in the job pool.

The fallout of the economic recession left extremely talented sales professionals in one of several states of flux.  Either currently out of work, doing less-than-their-potential, or covertly looking for the next position.  Either way, senior sales people are out there.  The rub is, companies are looking to acquire this talent, yet they do not have the “infrastructure” to support this level of talent.  The opportunity to obtain this talent has never been better, and quite possibly will we never see this plethora of talent sitting idle again.

Sales managers coming out of regular or special planning sessions need to understand how extraordinary this level of talent is and how to quickly adjust to accommodate them.  If you made the commitment to raise the level of sales standard in your company by hiring the upper echelon, then you need to understand the following basics:

  1. What makes them different
  2. What motivates them
  3. How to interact with them

Understand that personalities at this level are mostly of the “A” type and nothing should be done to counter what works for them.  After all, you are looking for the best, right?  Doing so could signal an implosion of success and leave you as a manager holding the bag that just exploded and wondering what happened.

Several years ago, I worked for one of the biggest software companies in the world.  This company had a HUGE pool of top-level salespeople.  Yet, they did not possess the infrastructure to guarantee their salespeople’s success.  Why?  Because they didn’t understand the complexities of this group, nor what it took to support this level of talent.  At the time, most other companies didn’t either; and still do not.  The damage this did was to put the mark of “unsuccessfulness” on these people.  There were those that were good and did well, but there were a lot more that didn’t fair as well through no fault of their own.  They were just as talented.  The reason: No SupportThe company basically said here’s your territory…go get’em! The lesson learned was a hard one for every software company at the time.  The bottom line is they gave sales and market share away and never knew it.

So what does this all mean?  The level and number of talented individuals in the labor pool right now is enormous. Not every company needs this level of talent.  If yours doesn’t, then don’t drool over something you don’t need.  If your company does, this use this list as a starting point for successful onboarding.

  • If your company’s culture will not or cannot support these people, then do not hire them until it can.
  • Does your sales model support this level of talent?
    • lead development
    • no overlap of territory
    • clearly defined compensation model
  • How are you going to measure success level?

These are just a very few considerations you must think about.  The biggest and most overlooked is lead generation.  Let’s face the fact here; these people are going to command $6-figure base salaries.  Do you want to pay this kind of salary for someone to cold call or close business?  I would hope the latter, but you might be surprised to learn some managers today don’t understand this logic.  If you don’t understand this, then you don’t need this level of talent…period!!

If you find this useful, Contact Me or please leave a comment. If you have a Twitter account and found this article useful, it would be much appreciated if you would retweet this at the beginning of the article!

Happy Selling!

Ed Warner

Categories
Experience Sales Advice

Getting Past the Gatekeepers

Gatekeepers:

Every organization has them, though that is not their primary purpose.  They can be the scourge of the planet or your best friend.  Which would you prefer?  Regardless of what a sales manager says or expects, it isn’t always possible to call the decision maker direct.  That doesn’t mean you will never talk to them, just that you are not starting with them.

Gatekeepers or non-decision making entities can actually help you.  Learning how to deal with them is paramount in gaining access to the real decision makers.  This is the sister article to Reaching the Decision Makers published a few weeks ago.  So how do you start when encountering a gatekeeper?

  • Ask questions having an answer(s) only the decision maker can answer (or a high likelihood).  This allows them to direct you to someone who does know the answer.  If they pause, or show a hesitation in wanting to let you know, ask if they could suggest someone.
  • Ask what functional units your product might impact.  Now ask for that person’s name.
  • Use your past experience and suggest that similar past projects always involved the CIO or CFO.  By doing this, you can ask, “Are you sure the CIO or CFO (or whomever is applicable) will not need to see this”?

Gatekeepers have the duty to guard the castle thereby protecting the company.  Some take this responsibility particularly personal and will do what is necessary to swat everyone that tries to enter.  The problem with this is they really do a lot of harm.  The jury is still out on if the harm is more than the good.  Sales people have two reactions to the gatekeepers; love ’em, hate ’em. Those that hate ’em are the ones that are not successful in winning their support.

When you first encounter a gatekeeper, they usually ask the typical, who you are and what you want.  Most will ask you to send some “documentation or some brochures”.  To get past this, simply say “I would love to but we do not have the standard type of documentation you typically receive from other companies.  If Mr. CxO is interested in saving XYZ% off his bottom line expenses, then I would be happy to discuss this with him and follow up with custom documentation.”

This immediately compels them to pass this on, make the appointment or put you through right then.  It also does not pigeon-hole you as a vendor or salesperson; you are bringing value.  This is where you start to build yourself as a trusted business partner.  If there is any push back, ask if they think the XYZ% is compelling to them.  How can they say no?  They can, but the logic of doing so escapes me.

In closing, there are basically two types of gatekeepers, the one that is charged with keeping everyone out, and the other has the discretion to pass value-producing propositions through.  You can be fairly certain of the type you have run into by asking the above question.   One last item you might try if there seems to be an interest on the part of the gatekeeper, just not the willingness to pass you on. Ccntinue the conversation with the gatekeeper.  Educate them on the value of your solution. They can actually pre-sell the idea in your stead.

If you find this useful, Contact Me or please leave a comment. If you have a Twitter account and found this article useful, it would be much appreciated if you would retweet this at the beginning of the article!

Happy Selling!

Ed Warner

Categories
Experience Sales Advice Sales Tips

How Desperate Are You?–Part 2

In Part 1 I asked, if, as a salesperson you reacted to pressure by showing desperation.  In this the second and concluding part of the article I will address some additional techniques that should be used to thwart any form of desperation.

Some common “must have answers” for any sale should include the following:

  • Does a need really exist?
  • What are the business drivers and motives of this need?
  • Does a budget exist that supports these?
  • What is the timeline for purchase?
  • Do you have explicit knowledge of the buying process? (See the second bullet point)

Unless you know these, your process is flawed from the beginning and puts you at a disadvantage.  Once you arrive at a point in the selling process, a very valuable tool to differentiate yourself from the competition is to draft and write a deliverable document to the executives and team members.  This serves several purposes:  1) Furthers your relationship within the company (insider advantage), 2) Those that respond are usually your allies, 3) The deliverable usually triggers a reaction related to the competitor(s) and allows you to counteract early, 4) Achieve an upsell if the document widens the scope of the project, but only, if there is value and investment is justified.

If the sales process appears to be lagging for no apparent reason, simply ask if the urgency has diminished or that there was no real urgency in the first place.  This allows the opportunity for customer to reveal the timeline changes to you. It also gives you the opportunity to present real dollar figures about how much not buying your solution is costing them.

Another important area to be aware of is the CxO’s time frame.  In other words, if you truly have executive sponsorship and that relationship is solid, use that time line for planning, not yours.

Those that know me know I do not believe in unilateral concessions.  If your client starts early about concessions, push them off until the end.  A lot of salespeople see this as an opportunity for an early close; don’t fall for it, it is a trap. It also shows you to be desperate about the sale.  Set the stage early on concessions.  An article I wrote describes the re-negotiating tactics for those customers that demand concessions.

This last piece of advice to avoid projecting desperation is to fully plan for the type of negotiations you will encounter.  The scope of this article is not long enough to cover the topic, but make absolutely sure you understand what is and is not important to the client.  From that point you can plan your negotiation strategy.  It is unfortunate, but I have witnessed sales managers that have no clue about the art of negotiation.  It is not all about getting the sale, rather it is allowing them to buy and they walk away with the perception they have the best deal.

If you find this useful, Contact Me or please leave a comment. If you have a Twitter account and found this article useful, it would be much appreciated if you would retweet this at the beginning of the article!

Happy Selling!

Ed Warner