3FORWARD recently conducted two webinars with the Outsourcing Institute focused on creating and qualifying sale ready leads. As part of the webinar registration process attendees were asked to answer three survey questions on lead generation, sales team size, and deal size. The majority of the respondents were in sales and marketing, some in lead generation and some from executive leadership.
While the poll is not completely scientific (it is possible that more than one person responded from some companies, for example) we thought the results we quite interesting and worth sharing with others. As you can see from the chart below there is a good cross sampling of sales team and deal sizes.
What’s very interesting is that over 40% of respondents indicated that the sales team was fully responsible for lead generation activities. Regardless of the size of your selling team, having sales responsible for lead generation is like having a brain surgeon doing pre-employment physicals; it’s a huge waste of a very valuable resource!
Also of note is that 15% of responders said they were not sure who in their firm was responsible for lead generation activities; a scary thought and hopefully those answers came form non-sales and marketing people.
It was good to see that 15% of the responders indicate that they have an inside sales/telemarketing team pre-vetting leads. This approach is cost effective and ensures that your valued sales resources are focused on the highest probability targets. This is especially critical for companies selling large contracts with long selling cycles.
Let us know if you are interested in a conversation about how your company compares to these survey results. You may also be interested in a Lead Optimization Review to talk about improving your results.
As we come down the backstretch of 2011 most Chief Sales Officers are giving their sales pipeline a critical look to see which opportunities are still closeable this year. Many are surprised to see that a significant number of deals have started to age, some to the point that they are likely a loss or no decision. They ask themselves, “How could a pipeline that looked promising just a few month ago decline so quickly?” The answer may be surprising because as a CSO or sales leader you could be the core problem.
If your sales process allows sales reps to self-select sales targets they may be pursuing the wrong prospects. Reps are accustomed to hearing from their management teams that their pipelines are not big enough and so they pursue opportunities in the wrong sectors or those that have a low probability of success. They focus on the quantity of prospects or pipeline dollars rather than finding prospects that fit your company’s sweet spot.
Another practice that leads to a bloated pipeline is setting an arbitrary target for what should be in the pipeline and when. If you hire a new sales person and state that they need 5X their annual quota by their 6th month on board they will be driven to achieve that goal. This approach definitely skews your sales metrics and conversion statistics and wastes a tremendous amount of time sifting through the pipeline to determine which targets actually merit sales time investment.
Two Steps to Escaping This Pipeline Purgatory
First, take the time to profile your perfect prospect. By understanding which types of clients you have had the most success closing and servicing you can focus your sale teams on similar prospects. Which industries or vertical markets have you been successful selling into? Is there a revenue size range that is a strong fit for you? Trying to win the mega deal is a nice dream but you can’t bet the entire company on winning one or two deals.
Second, consider moving the lead generation function under marketing if it’s not already there. Building a lead generation and qualification process under marketing will allow you to provide the sales team a steady flow of pre-qualified prospects of the right size and in the right industries. The process also ensures that your sales resources are focused on high value activities such as final qualification and proving the value of your company.
Escaping pipeline purgatory is a must do before the end of this year!
Maybe it’s helping close that final contract, visiting a couple key accounts or sitting in on a year-end customer business review?
How does the sales team look heading into the next year? It is time to take final action on those C players who just didn’t get it done? Maybe you are ready to make offers to some new sales executives.
These last four weeks are a great time to do a detailed pipeline audit and remove any stalled decisions and those perpetual no-decisions that always seem to hang on. Double check that every remaining deal is in the correct stage. Having an accurate pipeline is always important, but particularly as you start a new year.
Reviewing sales process is also a worthwhile use of time at the end of the year. Sales effectiveness is more important than ever and tightly defined sales process helps improve effectiveness. Be sure to include lead generation in your sales process inspection.
Have you started planning your kick off meeting? Whether it’s a big formal meeting or just getting the team together in the office, these beginning of the year meetings are a great time to reinforce strategy, process, compensation and goals.
This has been a tough year for sales leaders and sales teams but resist the urge to let off the gas just yet. Now is the time to put those finishing touches on the past twelve months while taking the first steps to a strong start in the new year.
In an earlier blog post that cited some key data from a recent CSO Insights report on best practices in tracking sales metrics, we noted that companies that measure 4-7 key sales metrics had higher sales performance than companies that tracked 3 or fewer key sales metrics. My first reaction when I read these statistics was that if measuring sales metrics drives sales performance then compensation plans should be used to reinforce those behaviors. The problem with this approach is that it adds incredible complexity when calculating commission compensation (and in some cases the payout associated with certain metrics would be so low most sales people would ignore them completely).
So if measuring sales metrics drive sales performance how can a firm get the desired results with the least amount of complexity?
There are two key tenets in the sales world, sales people are motivated by money and companies need new revenue to survive. When it comes to sales compensation the carrot is to highly compensate sales people to bring in new logo business and at the highest possible margins. The problem with this approach is that it can cause a sales person to neglect key activities such as updating the CRM system; following established sales processes and accurate forecasting, etc.. These activities are critical to running an efficient company – and sometimes a stick is needed to make sure they are completed accurately and on time.
Rather than using the carrot and stick approach to this issue I prefer the small carrot / big carrot approach. You may want to consider a quarterly bonus or commission accelerator for those team members that religiously follow the sales behaviors you desire. This bonus or accelerator needs to be large enough to be meaningful and would be on top of commissions for actual closed deals. I especially like the accelerator approach because sales people can’t control the timing of most sales so they will stay continually motivated to follow all the sales rules rather than risk losing commissions unnecessarily.
When designing next year’s compensation plan include key stakeholders from sales finance, operations, and IT. Strive to keep your compensation plans simple and easy for you and your sales person to calculate, and always pay them on-time.
When you ask a sales leader or CEO what is the primary metric their firm uses to monitor sales performance the answer will usually be, “Did the rep make plan and did they win new logo accounts?”
A recent CSO Insights whitepaper titled ” Optimizing Sales Performance 2011-Volume 4,” suggests that best-in-class companies more consistently achieve their sales plans by designing plans that drive sales rep behaviors beyond just “making the number”. The report suggested there are 11 key behavior metrics that should be tracked to motivate/encourage positive selling behaviors.
Interestingly, the report indicates that companies that track fewer than 3 metrics performed significantly lower than companies that tracked 4 to 7 metrics, often by a large margin.
11 Key Behaviors Cited in the Report:
- Selling Value and Avoiding Excessive Discounting
- Selling as Part of a Team
- Selling Higher Margin Products
- Selling New Products
- Farming Additional Business from Existing Customers
- Accurately Forecasting Business
- Selling to New Accounts
- Sharing Best Practices with Other Sales Reps
- Consistently Utilizing the Company’s CRM System
- Consistently Utilizing the Company’s Sales Process
The report also clearly outlined the difference between incentive management and performance management. While it makes sense to reward the sales person on 3 or less metrics, differentiating between the “ability” to get paid and how much you are paid needs to be clearly stated.
One example in the report centered on a company policy of CRM accuracy. Their policy was that an opportunity must be registered in the CRM for a significant portion of the selling cycle. If a deal closed that was not in the system for at least one or two months before the sale closed no compensation was paid. This example of performance management is how companies are creatively driving the right behaviors.
Building compensation programs that have too many variables are often difficult to design and even harder to administer, stick to a few critical metrics and track them religiously. You can’t mange what you can’t measure!
“The Social Media Data Stacks” is part of Watershed Publishing’s Data Insights series featuring trends, data and research. This collection brings together months of surveys, reports and insights released by nationally recognized research and marketing organizations focused on keeping pace with the latest data about social media – its growth and use.
The charts in this collection are ready to use, download, format, and otherwise support your marketing goals. Feel free to share the whole presentation or any slide, with your colleagues and business partners, but please preserve credits to the sponsor, HubSpot, and their research partners who provided the source data, and their links to MarketingCharts.com.
MarketingSherpa LLC, a MECLABS Group Company, has released their 2012 edition of the B2B Marketing Benchmark Report. They surveyed more than 1,700 B2B marketers in what they call one of the most extensive studies in the industry. The full report looks at top challenges B2B marketers are facing, barriers preventing success and best practices to attract and convert the B2B buyer.
Based on survey responses, MarketingSherpa claims “Marketers now prioritize lead conversion over branding, reputation and awareness, despite its traditional connotation as a ‘Sales responsibility.’” They also state that, “Marketers are realizing the importance of supporting conversion as a marketing function by incorporating funnel optimization strategies to accelerate sales pipeline performance.”
I wonder how many Chief Sales Officers agree with these two findings?
Our conversations are far more anecdotal than Sherpa’s 1,700 person survey but the majority of CEOs and CSOs we talk to still claim far less than necessary support from marketing in the area of lead generation. Sure, that could be because CSOs talking to 3FORWARD are the ones looking for help in some aspect of their sales process – and leads is on the top of nearly every CSOs list. But other internal data we do track very closely tell us marketing may be talking lead gen but is not ready to own lead gen.
Back to the Sherpa study. Here’s one set of findings from the survey showing what B2B marketers indicate are their top priorities. How does this compare to your organization?
Top B2B marketing priorities (vs. challenges)
- Lead generation
- 60% – Priority
- 48% – Challenge
- Converting qualified leads
- 57% – Priority
- 52% – Challenge
- Branding, reputation and awareness
- 45% – Priority
- 38% – Challenge
Do you run sales or marketing for your company? Tell us how this compares to your priorities, challenges and realities.
Consider the following situation. You are the newly Chief Sales Officer for a company with a major need to jump start sales. Everything seems broken, in need of attention or glaringly absent. The sales team is all over the place, process is non-existent, lead gen isn’t happening anywhere and no one believes anything that comes out of Salesforce.com. Congratulations! That’s why they hired you. So where do you start when everything needs fixing? (As they say in Texas…)
One Word: Process
Here’s why process has to come first. A well-defined, logical sales process fixes many of the ills that are impacting sales performance. In fact, many of those problems are symptoms of no process. Sales process makes so many important things clear to the sales team and every person and function that supports and interacts with them. Here are just a few of the benefits:
- Targets reps on the right deals and discourages them from bad pursuits
- Standardizes sales stages, probability percentages and makes pipelines believable.
- Clarifies who owns lead creation and management and defines when leads become qualified.
- Reduces proposal churn on deals that aren’t ready or are a bad fit.
- Establishes trust with the executive team that the sales team is focused and engaged.
- Energizes your top reps and frees them to focus on relationships and creating value for the prospect.
- Sends a message to C players that performance shall be measured and standards upheld.
- Win rates increase and no-decisions are reduced as only the best opportunities make it through the all the opportunity management stages.
- Average win values increase because of better alignment between prospect needs and company solutions.
By now you’re asking how the singular act of implementing a sales process can promise all these results. Don’t take our word for it! Study after study from leading sales research firms such as CSO Insights, AberdeenGroup, Forrester, Marketing Sherpa/MECLABS and others provide detailed analysis on the impact sales process has on sales results. Visit their sites and see for yourself!
Right now is the time to commit your self to formalizing a sales process by the start of 2012. If you would like help or want to talk more, consider our complimentary one hour Sales Optimization Review to get you started.
I was speaking with the CSO of a medium size BPO firm that has been around quite some time but is not yet a household name here in the United States. He has been in his current position several months and is in the process of rebuilding a sales team. I asked him what were his top priorities as he was preparing to enter a new selling year.
He stated he had two goals, the first was that it was critical to improve sales effectiveness by standardizing and streamlining sales processes, a goal of almost every organization we talk to. His second goal was to eliminate all the “sales drama,” a somewhat surprising answer.
When I probed a little further it became apparent that two of his top producing sales people felt that the sales process rules didn’t apply to them. Their actions were a continuous resource drain that was negatively affecting the rest of the team’s ability to make the number. Compounding this issue was his intent to add more rigor to the sales process.
Every sales leader loves to have one or more rainmakers on their team, but when the actions of one or two individuals jeopardizes the health of the selling organization you need to either “coach them up “or “coach them out”. Take a look at your current bench. Do you have one or more sales people that constantly demand more of your time either by listening to their tales of woe or fixing issues they created by being a renegade?
As a CSO your job is to facilitate an environment that makes it possible for your whole sales team to function effectively. If quotas are properly set you will be successful when 80 percent of your team meets or exceeds quota. Having two people exceeding plan and 10 missing plan due to resource constraints is a guaranteed miss on next year’s plan!
Do you have Rainmakers or Prima Donna’s? Find out fast!
Take the time now to look at your bench to determine who you should coach up or out, your team will be far stronger from your actions.
Tap the Social Media Stream for Competitors’ Secrets reads the headline in a recent article on CIO.com. The story looks at how, “Savvy companies are monitoring Facebook, Twitter and LinkedIn to pick up valuable competitive intelligence about their rivals’ product specs, pricing, finances and dissatisfied customers.”
The article provides a couple interesting monitoring examples. It makes suggestions on monitoring options such as either hiring outside experts or doing it in-house with paid for (or sometimes free) software tools.
It also cautions to ‘beware data overload’, which frankly couldn’t be better advice!
We have helped a number of companies create on-line listening programs to track competitors (or prospects). Where everyone seems to struggle is in the sorting through and filtering of mountains of available data to find those links that are truly relevant. Don’t let that be an excuse for getting started. Valuable information is out there and not developing an approach to establishing at least a modest ‘listening’ program is very shortsighted.
Three Steps to Getting Started With Online / Social Media Monitoring
Start Simple and Low Cost
Tools like Google Alerts and Hootsuite let you monitor a massive amount of Internet content for no to very low cost. Set up a couple simple alerts and start following Twitter feeds on things like targeted company names, important hashtags, key individuals or important prospects / accounts.
Set a Schedule
Once a week run a couple reports, update your filters, check out the links on some of the results and start to get a sense of what’s being talked about. Think about who else in your organization might benefit from seeing the filtered data and bring them in on it (consider sales, marketing, product development, customer operations).
Resist Overcomplicating It
You can build a very capable listening program to monitor competitors, prospects, your industry, your own company, etc. without spending a fortune on sophisticated tools. There are also plenty of companies that specialize in this kind of activity that have low entry cost options where they manage the tools and filter out the irrelevant findings for you. For many companies that is a far better option than having to learn a new suite of software tools and burden an already overloaded internal resource.
Want to talk about what we have seen and kick around some ideas? Drop us a note and we will be glad to put it on the calendar.