Sales Rep Lame Excuse #83

“They just made an unbelievably poor decision.”

Did you ever watch a customer or prospect make a bad decision?  OK, dumb question…  We’ve all lost deals because the guy on the other side of the desk just flat didn’t do a good job of making the decision.  And because we hold the customer’s best interests near and dear to our hearts, it hurts to watch them do the “wrong” thing and buy from a competitor.  But the sales rep certainly can’t be blamed for that, right?  Wrong!

When a customer makes a bad decision, the blame falls squarely on the sales rep’s head.

It’s a fundamental part of the rep’s job to know and understand each customer’s buying process – or “Buyer’s Journey” – or whatever you want to call it…  Knowing that process consists of getting clear answers to three questions:

  • How will you go about making this decision?
  • What are the decision criteria?
  • Why are those the decision criteria?

How will you go about making this decision? Typically, multiple people are involved to varying degrees.  Each will want certain facts about the proposed product or service and the value that will ultimately be delivered.  Each will consider those facts and provide individual recommendations to the final decision maker who will weigh the importance of each recommender and render the verdict.  All kinds of actions and details may be involved; demonstrations, reference checks, financial analyses, etc., and an above average rep will know about them all and have them written down, probably accompanied by a flowchart.

If the customer can’t provide this information to you, they’re hurtling toward a bad decision.

What are the decision criteria? It’s got to have an ROI above 30%.  It’s got to be completed by July 10.  The lead time must be less than 24 hours.  It cannot consume more than 2 hours per week of Mary’s time.  These are but a few examples of many possible decision criteria.  A customer might have just one.  A different customer might have 20.  The common theme is that each criterion is stated in concrete, quantified terms.

If the customer can’t provide this information to you, they’re hurtling toward a bad decision.

Why are those the decision criteria? Actually, the above average rep will know specifically why each and every criterion is on the list.  The above average rep also knows the only valid reason for a criterion to exist is that it ties the decision to achievement of a specific organizational objective.  It’s got to have an ROI above 30% because the Board of Directors has set 30% as the minimum hurdle rate.  It’s got to be completed by July 10 because we need to deliver X to our customer by August 10 and we need 30 days cushion to do a quality check to ensure that we maintain our “delivered on time & working every time” corporate objective.  NOTE:  These chains of connections back to specific objectives can get quite complex.  Mom, never said it would be easy, and…

If the customer can’t provide this information to you, they’re hurtling toward a bad decision.

You can blow off getting answers to the three questions because it’s too hard or takes too much time or requires you to think like a customer (as opposed to focusing on your own and your employer’s wants and needs. )  I wonder, though, if all your competitors think that way?  And wouldn’t helping customers improve their decision processes really set you apart?

Ogilvy & Mather, IBM and Salesforce.com should be ashamed of themselves

I don’t need my cup of extra-strong coffee to get going this morning.  If you’re in sales, you won’t either.

Just read about this Ogilvy & Mather-led contest that insults the intelligence of sales professionals, managers and executives everywhere.  Selling a red brick to a panel of “executives” from Ogilvy & Mather, OgilvyOne, IBM and Salesforce.com is proof of sales skills???  I think not.

For the contestants, it’s a demonstration of cutesy manipulative skills.  For the panel, it’s a public declaration of being clueless about how to succeed in sales.

The fundamental goal of sales is to help a customer make and/or save money.  The process begins with identifying & clearly defining a customer problem and/or objective, and ends with the successful, ROI-producing implementation of a new customer process.  It does not start with the product. Hello!!!  Is this news?  Could you possibly caricature a noble profession in a more demeaning fashion?

Why yes you can.  And you did!  You tell me your goal is “recreating the noble art of ka-ching.”  I’m not kidding.  That’s a quote from the vice chairman for the British operations of Ogilvy & Mather.  It’s all about me, me, me?  As long as I get my commission check, all’s right with the world?  Delivering value to the customer has no place in your dopey contest?

Shame on you, Ogilvy & Mather, IBM and Salesforce.com!

I for one intend to contact all three firms to complain about being publicly insulted.  I think you should click on the links above and do the same.

“Funnel” or “Incubator?”

Friendly violent debates are really a lot of fun.  They’re also the best way to practice selling complex ideas.  Fortunately for me, there are lots of folks ready, willing and able to have no-holds-barred, free-for-all arguments about my allegedly brilliant ideas.  One of my favorites involves the traditional “sales funnel” metaphor.

I still hold it near and dear.  For me, it’s the bedrock upon which sales process improvement is built. A trusted colleague thinks I’m missing the boat and that an “incubator” metaphor is more appropriate.   His contention is that sales is non-linear, and needs to be able to deal with whatever new circumstances come along.

In my view, he’s right about the non-linear nature of establishing and nurturing business relationships with individuals.  He’s dead wrong, though, when it comes to managing opportunities.  My job as a sales rep is to help my customers solve problems and exploit opportunities.  No touchy-feely nurturing stuff here.  This is bare-knuckle business.  Crush that problem.  Exploit that market situation.  (Yeah, exploit, not just take advantage of!)  Be disciplined, methodical and relentless about it.   To do either of those things, I need to thoroughly understand and, using a defined sales process, work through four sets of information:

  • The existing circumstances – Who, what, when, where why and how?  What – precisely what – is the “Before” picture?
  • The desired circumstances – Who, what, when, where why and how?  What – precisely what – is the “After” picture?
  • The transition – How do I help my customer progress from “Before” to “After?”
  • The “So what?” – What does “Before” cost?  What does “After” cost?  What does the transition cost?  What is the ROI, Break-Even Point and discounted cash flow associated with my recommendation?

I just described a process; a funnel management process.  Nothing non-linear about it.  Sure I need to do all that non-linear relationship and credibility building stuff, but when it comes to identifying an opportunity and selling something related to it, I’ll take the good old funnel mentality every time.

What do you think?

Watch the video!

Unintended Consequences

We’re all familiar with the “Law of Unintended Consequences.”  My personal favorite is still the plastic whistles that were packaged with Cap’n Crunch cereal back in the ’70s.  Blowing the whistle into your phone triggered a connection to AT&T’s long distance dialing AND by-passed their billing system.   Free calls!  Not exactly what Quaker Oats had in mind.  (…and Ma Bell was not pleased.)

Turns out the “law” applies to Sales Process Engineering initiatives also.  A long-time client gave us a challenge.  Reduce their sell cycle by 10 days over a 6 month period.  Off we went, and 6 months later had to report that we had taken the average sell cycle up to 78 days from 67 days.  Uh-oh…  16% in the wrong direction.

That’s when we started scrambling for other metrics in an attempt to salvage our credibility.  One was the win rate.  Up to 58% from 52%.  OK, takes longer, but we win more.  Another was  total number of opportunities in the active funnel.  Up to 515 from 394.  Better yet, the dollar value of those opportunities went up by 1/3.  Then we discovered the pot of gold.

Days to lose an opportunity went down to 75 days from 180 days.  That’s a 140% improvement.  Turns out our intense focus on qualifying was flushing the “trash” opportunities out of the funnel much more quickly.  The math’s a bit convoluted, but for this client, that lose cycle reduction translated into an additional 17 selling days per rep per year.  I love what my client said.  “You mean we now have 13 months a year to sell our stuff?  And our poor, dumb competitors are still stuck with only 12?”  Smooth, articulate me said, “Yep.”

So remember, unintended consequences will happen.  Be prepared for them.  More importantly, work hard at achieving significant improvement for one measurement of your sales process for a specific time frame.  Even if you lose, you still win.

Synchronize Your Sales Process With the Customer’s Decision Process

Timing is everything!

Editors tell authors to never ever start a blog post with a cliché. Despite appearances, I always follow that advice, and here’s why the above – when applied to selling – is most definitely not a violation of that writer’s rule. Competition is intense. Depending on luck to win is therefore foolhardy. It doesn’t matter how fervently you hope your timing is right. As a sales rep, you must make your timing right.

To ensure that the clock is in your favor, synchronization of your sales process with the customer’s decision process is essential. To illustrate the point, we’ll first briefly define the two processes and then graph them to deliver some insights.

All sales pros are familiar with the funnel or pipeline concept. Although your definition of stages may be slightly different, what follows is good generalized model:

  • Identify Opportunities – Figure out who might, maybe someday buy something from me.
  • Gain Attention – Schedule a face-to-face appointment with the decision maker.
  • Establish Interest – Get the decision maker’s commitment to deploy time and resources to investigate and evaluate my offerings.
  • Conduct Discovery – Find out everything I need to know about the prospect’s business to write a compelling proposal.
  • Present/Propose – Write a compelling proposal and if possible, formally present it.
  • Close – No definition necessary…

Surprisingly few in sales have spent a lot of time thinking about the customer decision process. (Isn’t it a bit embarrassing for so many of us to have ignored something so obviously important?) Here’s a bit more detailed outline of a good generalized decision model:

  • Develop Strategic Plan – Based on the organization’s vision and mission, top executives examine their strengths, weaknesses, opportunities and threats. They then lay out strategies for each of their major functional areas along with an organizational structure and means to measure and control operations.
  • Design, Implement and Execute Business Processes – In great detail, functional and operational managers determine exactly how each and every employee, tool and asset will be deployed to efficiently execute strategy and achieve desired results. In addition, they develop and track performance against budgets which ultimately get rolled up into Income Statements and Balance Sheets.
  • Respond to Problems – Murphy’s Law is still in force. Quality of strategy, plan and tactics notwithstanding, stuff happens. It must all be addressed …NOW!
  • Define Needs – Operational level managers figure out what they need to carry out the “C-level” plans, execute the VP-level business process designs and react to everything that Murphy throws at them; keeping everything within budget.
  • Identify Alternatives – Those same managers apply their personal knowledge skills and contacts and that of their subordinates to research what is available to help them fulfill all those needs.
  • Evaluate Alternatives – Everybody (at least it usually seems like everybody…) gets involved in tweaking, asking, changing, criticizing, measuring, judging and gagging at the price of all aspects of all alternatives.
  • Decide – No definition necessary…

With the basic definitions in place, let’s take a look at how all the pieces interact. Note how the vertical axis in the diagram below shows the sales process from bottom to top and the horizontal axis shows the decision process from left to right.

Assume that a sales rep is currently in the “Identify” sales stage for a given opportunity at a given account.  If the customer is at the “Plan” or “Execute” decision stage, the rep’s timing is great, and thus those two squares are green.  If the rep is at “Identify” and the customer is at “Decide,” the rep is very, very late to the game and has little or no chance to win.  That square is red.  He has a chance (i.e., a yellow square) if the customer is still figuring out exactly what is needed, but he better get cracking!  If the customer defines needs without the rep’s involvement, the rep is stuck with being in react mode and is headed toward a price war.

Along the top row of the diagram, the rep who is trying to close a deal while the customer is still defining needs will be at best be viewed as too pushy and at worst really annoying.  It would be much better to start closing while my customer is still looking around for alternatives.  That means I’m out ahead of my straggling competitors and have already had the opportunity to frame the decision criteria in my favor.

Take the time to think through the situation for every one of the boxes in the diagram.  Then think through each of your current opportunities.  How good is your timing?  What actions do you need to take to get back in sync with your customer?

In particular, think through the implications of finding yourself in the single most commonly occupied spot – right on the border of “Attention/Interest” while the customer is at “Evaluate Alternatives.”  Sales managers see this over and over.  The customer has already figured out what is needed and is already familiar with multiple sources of supply and is now evaluating alternatives.  Out go the phone calls to the suppliers.  In come the reps trying to establish the customer’s interest in helping them gather facts and study the situation.

Well, the customer has already completed Discovery and already “knows” what you should propose.  The customer wants a proposal now.  And the customer wants your best and final price, NOW.

As shown in the diagram below, the customer has forced you to skip over several critical steps of your sales process.  The customer has made one of your green squares red.  You are hopelessly caught in react mode.  You can either compete on price or walk away from the deal.

The diagram provides a visual aid to make it abundantly clear that a rep must get engaged much earlier in the decision process in order to stay inside the green, proactive zone.  More specifically, if the customer has a crisp answer to the question, “What do you need?”, the customer is into identifying and more likely evaluating alternatives, and you had better be delivering your proposal; which means your Discovery is finished and you have long since gained a thorough understanding of their strategic plans, business processes and problems.

Based on research conducted by The YPS Group, most industrial sales reps live in the red and yellow zones at the bottom and right of the diagram.  The key indicator of this is the percentage of potential deals where price is one of, if not the key decision criteria.   At the risk of becoming repetitious, if you are constantly getting beaten up on price, you are entering the game too late in the decision cycle.  Customers are forcing you to omit the phases of your sales process that enable you to shine; to clearly demonstrate your “value-add.”

So what are the eagles doing?

Perhaps not surprisingly, the best performing sales reps (i.e., those closing the biggest deals with high margins and total territory sales exceeding $3 million) spend the bulk of their time in the “super green” zone at the center-left of the diagram.  Their focus is on cross-departmental communication regarding the thought behind, the nuances and the implications of the customer’s strategic plan, business processes and problems. Let that thought sink in for a minute or two…

The eagle reps are providing a service that is extremely valuable to the top customer executives.  It is a service that has literally and absolutely nothing to do with the products and services provided by that eagle rep’s company.  It’s all about cross-departmental communication within that customer.

Re-read the definition of the “Develop Strategic Plan” stage of the decision process.  How many of a customer’s employees spend a lot of time thinking about those issues and how they can, do and should affect day-to-day activity?  Not very many, if any.

Re-read the definition of the “Design, Implement and Execute Business Processes” stage of the decision process.  How many of a customer’s employees spend a lot of time thinking about those issues and how they can, do and should affect day-to-day activity?  Not very many, if any.

Further, how many folks in one department thoroughly understand how their actions affect folks in other departments?  (As an example, think about how a “simple” change in a manufacturing process could wreak havoc in maintenance.)  Not very many, if any.

Ditto the above for the “Problem” stage.

Customer executives know that internal and inter-departmental communication is crucial.  Look at all the executive management books written on the subject!  But do they really have the time to communicate well?  Do financial or production or procurement executives have anywhere near the communication skills of a polished sales professional?  Isn’t it obvious who could be really effective leading the charge for better internal communication?

Back to the diagram to reinforce the point…

Eagle reps understand customer strategic plans, processes and problems so thoroughly, and communicate them so well, that they enable customers to leap-frog over significant pieces of their decision process.  Eagle reps use their knowledge about customers to define their problems, what they cost, their root cause and how to address them before they even realize they have a problem.

How could a top executive not be impressed with a sales rep who consistently proposes money saving and money making solutions to problems nobody even knew existed?  Why bother with identifying and evaluating alternatives?  The eagle makes those steps superfluous.

Not that it’s easy…

Don’t get me wrong.  I’m not suggesting that implementing any of this will be easy.  The effort it takes to get to the “super green” zone for even one account is significant.  It’s also a different kind of effort that requires broad, general management knowledge.

On the other hand, differentiating your products is getting harder and harder every day.  Maybe it does make sense to focus more selling time on those early stages of the customer decision process.

I Was Wronger Than I Realized (…about proposals)

Back in January, I blogged about an epiphany I had regarding proposals.  It was quite an eye-opener, since I’ve been exhorting sales reps to improve their proposal-writing skills for years (…actually it’s decades now.  Yikes!)  So two short months ago I converted to “Recommendation Summaries” that reflected the thinking of the team of folks consisting of me and customer personnel.

A BIG improvement, and one that very quickly led to an even bigger one.  Read on to see how the process evolved.

The initial shift from Proposal to Recommendation Summary was quite simple and consisted of two things; using a new name for the document and noting which parts of it reflected the concepts contributed by which team member.  I was still the one writing the whole thing.  And logically organizing it.  And adding touches to make it more compelling.  And proof-reading it.  And polishing it.  And re-writing it.  And making it look professional.  (As the King of Siam once said, “Et cetera, et cetera, et cetera and so forth.”)

Then it re-occurred to me that the power of this new-style document stemmed from the fact that it reflected a team effort.  Team?  What team?  I asked all the questions, dug up all the research, did all the really, really time-consuming writing, et cetera, et cetera, et cetera and so forth and (happily) gave most of the credit to others.  I found myself asking, “What’s wrong with this picture?”

That’s when I stumbled on a other new best practice by accident.  A customer decision maker asked me deliver a Recommendation Summary a week early because he was going to be out of the country for a while.  “Would you mind if it’s just a draft?” I ask.  “…a pretty ugly, really rough draft?”  Sure, no problem,” he says.  “I just want to get a general feel for where we’re headed.”  So he gets the semi-organized draft complete with logical gaps, typos, bad grammar, a few quasi-snarky comments about how things at the customer are currently done and a note to myself about needing to tighten up the ROI calculation.

So what shows up in my e-mail three days later?  Would you believe a note thanking me for confirming his suspicion that an aspect of their sales compensation plan was way out of whack and needed to be changed?  (That was one of my quasi-snarky comments.)  AND, a suggestion about how to do the ROI math?  AND an attached, heavily edited update of my draft?  Believe it.

Based on that, here’s my new, new set of recommendations about proposals:

  • Stop submitting proposals  (Do I need to remind you about how dumb price quotes are?  Again?)
  • Start circulating rough drafts of Recommendation Summaries among all the customer decision makers and influencers requesting their insights
  • Include a deadline for the final Recommendation Summary (Since everybody can see that everybody was copied, everybody will assume that everybody provided input to every version in timely fashion so “we” can meet the deadline.  That, by the way, is called building consensus and obtaining buy-in.)
  • If possible, use wiki technology, like Google Sites, instead of e-mail to collaboratively build the document
  • Include stray thoughts about future projects and extensions to this Recommendation Summary (Get ‘em all thinking about the longer term implications and the value of your continued participation as an important member of the team.)
  • Continue to do a great job with all the pain in the butt writing stuff for the final version

Try it.  Add this set of best practices to your repertoire.  Let me know what you think and how it works out for you.

If only we knew what they know…

In getting prepared for a meeting with a client’s sales VP, I spent some time analyzing the performance numbers of their 64 reps.  There it was again.  The same lopsided bell curve I see over and over and over, and no sign of the 80/20 rule either.Performance DistributionAs always, most of the reps are below average; 60% of them this time.  One is 3 1/3 times better than average.  Three others are more than twice as good as average.  Another eight sold more than 1 1/2 times the average.  The top 10 of 64 delivered fully 1/3 of total sales.

How can this be?  As I mentioned earlier, this same unbalanced distribution of performance is not the exception.  It’s the rule.  Thus my muse, “If only we knew what they know.”  Clearly these few top performers know and therefore do things the rest of the sales team doesn’t.

That’s the main reason a Sales Excellence Council invests considerable time identifying, documenting and promulgating best practices.  Now make no mistake.  This focus on spreading the word about how to execute activities that produce results is quite effective.  It does generate continuous improvement.  In fact, the weakest performers tend to show the greatest increases.

Oddly, though, the shape of the curve never seems to change much.  Even though the whole thing shifts to the right –  a really good thing – it’s still lopsided and the data still tells me most reps are below average.  There’s something else about those top performers…

Something tells me even the eagles themselves are not consciously aware of what makes them eagles.  I wonder what we (and they!) could learn if a few of them would write a blog post two or three times a week about “A Day In My Life As A Sales Rep.”  Would that help us & them figure out the secret sauce?  What do you think?

Cultural Difference = Competitive Advantage?

Yes, I think so.

Several very unusual things happened during the day and half Sales Excellence Council kickoff meeting that concluded this past Friday.  Actually it was the same phenomenon repeated six times.

We were scheduled to begin at 8:30 Thursday morning, and as is my habit with a new client and/or an unfamiliar meeting room, I showed up 60 minutes before that.  I figure, hey, they’re paying me good money, so I better have my act together coming right out of the chute.

By 7:55, the PC, projector, flip charts, tables, etc., etc. were all set and ready to go.  At that point, I poured myself a cup of coffee and turned to mingle with the early birds.  Oddly enough, not a single person was milling around in “chat” mode.  The entire group was present, seated and looking at me.

Being the quick-witted, articulate professional I am, I said, “Ummmm…   Ahhhhhh… since we’re all here, should we just get started?”  That’s when the entire group gave me a “what else other than start could you possibly suggest we do?” look. In my 34 year career, this was a first; a sales education meeting that started 33 minutes early!

The next shocker came at 9:35.  I suggested a quick 5 minute break at 9:30 and then had to scramble to restart the meeting.  Seven sales reps heard “five minute break” and were actually seated, ready to go 5 minutes later!!!

Then lunch in the company cafeteria.  Chicken, rice, beans, nopal (cactus leaves with tomato sauce and cheese) and a Coke in a returnable glass bottle.  The plan was to restart at 2:00, and we restarted promptly at 2:00.  And so on…  You get the picture.

In every way other way promptness, focus and country of origin, these were typical of sales professionals I’ve worked with.  Smart, confident, articulate (in English and Spanish, although being a mono-lingual, ugly American, I’m only assuming the Spanish part), ready, willing & able to challenge the out-of-town “expert.”  We learned from each other, earned each others’ respect and established the basis for a mutually beneficial business relationship and personal friendship.  Oh, lest I forget; after a day and half, we were well into “Sales Excellence Council Day 3 Afternoon” material when we wound things up.

My conclusion: Talking about the competitive threat posed by cheap manufacturing labor in China and other third world countries is a waste of time and a lame excuse for lack of sales growth.  Look in the mirror, Sales Rep, Sales Manager and Sales Executive.  Start worrying about your ability to compete with the seriously serious work ethic of your sales pro counterparts from our Mexican neighbor.

Think About It…

Couldn’t have said it better myself

Actually, I have been saying it myself; for over ten years now – for my whole career really.  “It,”  in this case being this blog post.  It talks about process, it talks about metrics, it talks about best practices, it talks about CRM – daily use of CRM, it talks about sales and marketing working together seamlessly, and my absolute favorite:

“Sales management will use your CRM data to help you get better, it will be a science.”

As I read Chad Levitt’s post for the third time, I began to wonder, “Who is this guy?”  I figured he, like me, must be a crusty old veteran of the sales wars.  Somebody that’s been around the block a few hundred times AND is obsessed with continuous improvement, continuous learning and continuous experimentation with new tools and technologies that can help me sell more faster.

Mostly, I pegged him right on the money.  Except for the “crusty old” part.  …and it’s the fact that he’s a “millennial” that makes his post that much more compelling.  He grew up immersed in all this “web 2.0″ stuff.  For him, using it is as second nature as shaking hands or using the phone as a sales tool.  He’s not hung up on “that’s the nature of the business and the people in it.”  He’s focused on finding new and better tools and best practices to exploit all available resources.

Sometimes I grow weary of being up my soap box preaching at the subset of you 30-40-50-somethings that are hell-bent on using only the same tools, techniques and technologies you learned to use 10-20-30 years ago.  You know who you are!  Get with the program!  Of course, use your experience and most of the traditional tools.  Just keep adding to the that expertise and tool box.

Does the cartoon apply to the customer?  The sales rep?  Both?

busy

Spanish SPE – El Delfín y la Vaca

Later today, I’ll be flying to Monterrey Mexico to kick off a Sales Excellence Council.  The YPS Group has done work in Canada and Bermuda over the years, but this is the first foray south of the border and I’m quite excited about it.

Only real difficulty is that my Spanish is …ummm… pretty much non-existent.  Despite my good intentions, I didn’t do any studying.  Ah, well.  Good thing the client is ahead of me.  They’ve generously translated my first book.  Take a look!

El Delfín y la Vaca
Cómo Vender Más y Más Rápido con Ingeniería del Proceso de Ventas

…or if you’re an “Ugly American” like me, there’s still the English version.

The Dolphin And The Cow