2010 is just around the corner
As we entered 2009 all indications were that it was going to be a tough selling year. Layoffs were being announced daily; capital expenditure budgets were drying up; there was intense pressure to reduce costs; and at the same time the revenue targets for many companies were increasing; certainly not the best recipe for success from a sales achievement standpoint. Right now most sales leaders are probably executing a plan that was built late last year as all this bad news was making daily headlines (if they were lucky). Now as the year is unfolding you are working your prospect plans and making minor course corrections where and when you can, hoping you can make the 2009 sales target. Depending on your current pipeline size and closing rates you will know the outcome in a few more months. Even though it feels like this year has just begun, for sales leaders 2010 is really just around the corner. Now is the time to take the “hope” out of your 2010 plan by focusing on three core sales tenets that will put you on the path to sales overachievement.
Using networking as a differentiator
We all know high performing sales people that use networking skills to their advantage; they keep a Rolodex of people that provide them with referrals and references and always have the deals in their pipelines to beat their quota. Their contacts become their value to the company, but the downside is if those sales people leave their company, the value of their network leaves with them. Through the proliferation of social networking mediums such as Facebook and Linkedin companies can now start to leverage the value of networking that was once only available to individuals and consumers. Progressive companies are using these venues to establish their market image, reinforce brand, build interest groups around their capabilities and target prospects. Social networks make it easier for you to get your word out and help prospects find you more easily. A recent post by Tim Klabunde on Cofebuz.com called “Why Network” clearly illustrates that networking is a process that can help both individuals and companies succeed.
Hire exceptional sale people
In any give year 15-20% of a typical sales organization will not make their sales number. Sales leaders must ask the hard question “do these low performers have the skills and drive to succeed?” If the answer is no, now is the time to source their replacement. High performing people do not think like typical sales people. They analyze and understand a client’s needs and are capable of articulating how they can satisfy that client’s requirements. They worry more about solving a client’s problem than making the sale. Most exhibit very strong work ethic and balance their personal needs with the needs of the company and client. Finding the right sales talent is a difficult challenge. Target candidates are probably performing well in their current roles and it will take a compelling story and compensation plan to attract them to your firm. Social media platforms are new tools that can be used to complement existing recruiting techniques to identify and attract qualified candidates. They also show prospective candidates that your approach to the market is progressive and multi-dimensional. Finally, it takes longer than you think, so plan on starting the recruiting process no later than the first of September for a January 1 work start date, as most high producers must remain with their current firm through yearend to qualify for yearend bonuses.
Manage your sales pipeline
A qualified opportunity pipeline is the blood that keeps a sales organization alive. While most organizations track their overall sales pipeline, few have a disciplined method to determine what a qualified opportunity actually is and how qualified pipeline correlates to achieving their sales objectives. Every firm should build a sales revenue planning model based on the following three inputs from their pipeline: dollar (or rupee) value of average sale, average closing percentage, and sales cycle time. As sales opportunities move through the sales cycle it is possible to assign a closing probability and a factored revenue projection based on the sales stage. A sample of Sales Opportunity Stages for a services pipeline is shown below.
|Opportunity Stages||%||Activity||Rev Proj.|
|Opportunity ID’d||10%||Potential opportunity id’d|
|Idea Discussed||20%||Client confirms issues|
|Concept Solution Delivered||30%||Written concept submitted|
|Solution Meeting Complete||40%||Concept discussed|
|Full Solution Delivered||50%||Solution submitted||10%|
|Solution Validated||60%||Modifications if needed||30%|
|Verbal Approval||75%||Decision maker accepts||50%|
|Negotiation of Terms||90%||Contract in review||70%|
|Formal Award||100%||Contract and SOW signed||100%|
|Deal Dead or Delayed||0%|
As you can see from the chart, revenue projections begin only when an opportunity becomes qualified at the 50 % or Full Solution Delivered Stage. At this point, 10% of the total revenue can be counted toward your annual objective. As the sales opportunity moves further through the cycle the factored revenue amount increases. An opportunity only goes to 100% when a contract and SOW is executed. (Most CRM tools have a pipeline reporting module that can be configured to provide this reporting on demand.) Next, be sure to plan for revenue erosion in your existing base. Using past history as well as any known upcoming losses is a usually a good guide. Lastly, to determine where you stand for 2009, add your current booked revenue, plus your factored revenue from your pipeline, and compare the result to your annual sales target to determine if you are tracking above or below your target. Keep it simple: if you are below plan you either need more opportunities or you need to move current opportunities further along in the cycle. This exercise not only helps you complete your current year planning, but projects exit rate and pipeline values going into 2010 (or beyond, based on sales cycle)
Although we all remain focused on the actions and activities needed to make our sales and profit numbers in 2009, taking the extra time now to invest in 2010 is critical. You can drive revenue or let revenue drive you, it’s your choice.