Have They Broken The Code?

Here’s the scenario:  The company is a B2B distributor of printing equipment and supplies.  It was founded by a team of three people with a financial backer 14 years ago.  In 2010, their 52 sales reps brought in just over $60 million in revenue.  Annual sales growth has settled in right around 18%.  They wouldn’t divulge their profits, but I did hear about one employee’s recent vacation on the rags-to-riches owner’s 74 foot yacht.

Let those facts sink in for a few minutes.  B2B; distribution; commodity & close-to-commodity product set; solid, steady sales growth; lots-O-profit.  When you walk around the sales office, you can literally feel the “What recession?” vibe.   All of this however, is not the interesting part of the story.  The title of the guy I met with is the best summary of the really cool part.

Vice President of Sales, Marketing and Information Technology.

Huh?  I’ve met hundreds of Sales VPs.  I’ve met hundreds of Marketing VPs.  I’ve met hundreds of IT VPs.  I had never met an all-in-one before.  (Would he be a VP of SMIT???)

I thought I understood the e-Rep concept pretty darned well.  This dude put me to shame.  He not only understands the theory behind The 3 Facets Of e-Rep, he’s led the design, implementation and operation of by far the best I’ve ever seen.  He is rightfully proud of how they’ve integrated their web site, social media tools, web analytics, CRM, ERP and telephone systems.  I’ve never seen anything quite like it.  Frankly, I had never really even thought much about web analytics/CRM integration.

A non-disclosure agreement keeps me from sharing a whole lot of detail, but I can relate the three elements of their remarkably effective overall sales strategy:

  1. As much as possible, avoid hiring sales people, marketing people and IT people.  Hire people with equal parts of all three disciplines – or who are willing to learn and fill in their personal knowledge gaps.
  2. Intelligently choose and tightly integrate a set of sales tools (In this case it’s a web site, blog, RSS, FaceBook, Twitter, LinkedIn, YouTube, Microsoft Dynamcis CRM, Sales Fusion, a home-grown ERP and a robust telephone system)
  3. Maintain a sales culture that ardently embraces the disciplined, consistent use of all sales tools based on a formal, metrics-driven sales process.

Part of me wants to say this is a radical departure from the norm.  I won’t though.  The only thing radical about it is that this outfit has actually done it! Virtually every sales leader I bump into talks the talk.  You’ve either heard it or said something like it yourself…  “Members of our sales team are above average, appreciate and work closely with their marketing counterparts and are very astute with regard to leveraging technology to sell more faster.”  I say, “Bull feathers!”

This is the first instance I have seen of a sales team truly walking the walk.

How close are you?  How hard are you really trying?

Metrics – Lots & Lots of Metrics

Readers of this blog have seen a lot about the indispensable value of metrics.  First, ya’ gotta’ have a defined process.  Then ya’ gotta’ measure it.  That’s the only way to know if improvement has occurred or not, and at what rate.  It’s the only way you can prove your dedication to continuous improvement.  Show me the data!  If you don’t have data, you’re just blowing smoke.

OK, hard to debate, but…  It’s also crucial to have a lot of different metrics.  Without a variety of statistical perspectives, it’s easy to misinterpret what a given metric really means.  You might put some action plans in place that are incomplete, a bit off target or downright wrong-headed.

Here’s an example from the social/political world to illustrate the danger of using only one metric.  Consider income/wealth  inequality.  The chart on the left shows that the richest 1% of Americans have 1/3 of the money, and the poorest 50% have only 1/2 of it.  In other words, for every $1 someone in the poor group has, someone in the rich group has $676.  Or you could say $100 vs. $67,600; or $10,000 vs. $6,760,000.  One might conclude that such a big difference is just wrong, and that something should be done about it.  Like maybe taxing the rich group & subsidizing the poor one???

Let’s take a look at a different metric regarding this income disparity thing.  The poorest 5% of Americans are richer than 68% of the world’s inhabitants.  Compare the US numbers to India’s.  America’s poorest are, as a group, about as rich as India’s richest!  Is that also just plain wrong?  Should somebody do something about that too?  Like maybe taxing all Americans & shipping gigantic barrels of cash to everyone in India???

My point is not to debate what should or should not be done by whom regarding income and wealth disparity.  My point is that the way the question is framed and supported by data can have a really, REALLY big impact on the resulting action plan.  Different sets of numbers about the same thing can tell a radically different story, and lead to radically different decisions.  We need to think, discuss, debate, discover and learn just exactly what the numbers are telling us.

How do you objectively judge – using data, of course – the performance of a sales rep?  Total sales?  Sell cycle time?  Profitability?  Sales of old products to new accounts?  Sales of new products to old accounts?  Average sales size?  Number of sales to new accounts?  Number of sales to existing accounts?  (I could add the other 700 or so possible sales metrics I’ve collected over the years, but I’ll spare you!)

Is it one or two or three or fifty key indicators?  For every rep in every territory?  Regardless of rep experience or if it’s a newly penetrated geography or segment?  Is it some way cool index the MBA-toting, outside expert consultant cooked up?  Is it whatever the company president chewed out the sales VP for yesterday?

This may be a shock…  I don’t think the answer to that last set of questions matters all that much from a “continuous improvment of my sales process” standpoint.  The truly powerful value of lots of metrics is the discussion about them.

It’s the series of deep, intelligent, challenging, painful, heated, gloriously rewarding coaching conversations that matters.

Collect the data.  Analyze the data. Debate the daylights out of what the data really means.  Then go sell more.  Go sell it faster!

Value, Value Stream, Flow, Pull, Perfection

Originally published at Dreamland Interactive.

Manufacturing executives said it didn’t apply to them. (They were dead wrong.) Software development executives said it didn’t apply to them. (They were dead wrong.) Business & technology services executives said it didn’t apply to them. (They were dead wrong.) Sales executives, managers and professionals KNOW FOR SURE it doesn’t apply to them. And of course they are right. Right?

Right off the top… If you already know that “Lean” management concepts don’t apply to sales, STOP reading right now and go do something else.

If you’re still with me, you have at least a vague inkling that a visceral understanding and application of Lean principles can have a dramatic effect on sales effectiveness. (…and, oh baby, can it!!!) Think about your sales process in terms of the 5 Lean basics:

  • Value – Answer two questions about each activity you perform. What value does it provide to the customer? What value does it provide to your company? If your answer to both is something like, “not much,” stop wasting time on that activity.
  • Value Stream – Write down the key milestones that must be reached to win a deal. Take it from identifying a potential opportunity through verifying that the customer is satisfied with what you delivered. Put them in the proper sequence. (In other words, write down the stages in your sales process.) Consistently follow the steps in sequence.
  • Flow – Identify the major factors that keep an opportunity from flowing smoothly and continuously through your sales process. Work with your colleagues to figure out ways to reduce the impact of those factors.
  • Pull – Identify a few situations where it was the customer that drove your sales process. Why did that happen? What caused it? What can you and your company do to re-create those circumstances? Does this thought process suggest any changes that should be made to your value stream?
  • Perfection – Repeat the above four steps until your sales process is perfect. (Obviously you will never attain perfection, but you just might achieve excellence if you do it well and keep at it long enough.)

As soon as you get comfortable with “Lean” thinking applied to your sales process, start applying it to the customer business processes affected by your products and services. Your customers already familiar with Lean will be impressed. You’ll be one of the few sales reps with that kind of knowledge. Those not already familiar with Lean will see in you a whole new source of value. They will see a sales rep that genuinely adopts a customer perspective and is dedicated to making them more efficient and effective.

Click below to get a copy of Lean Thinking by Womack and Jones. Read it. Apply its principles. Become more valuable to your customers.

“Death Of All Sales Reps”

Arthur Miller’s Death Of A Salesman has been one of my personal favorite plays for years.  The tragic figure of Willy Loman has always been inspiring to me in an “anti-hero” sort of way.  Someone as sharp as me can easily spot Willy’s weaknesses and flaws of course, and avoid them!

Then I read Have We Been Witnessing The Death Of Professional Selling? on Jonathan Farrington’s blog.  He and I exchanged perspectives, and now I’ve got this “Death Of All Sales Reps” theme banging around in my head.  The more I think about it, the more I become certain that sales as we know it is about disappear – evaporate – go the way of the dodo bird.  And it’s going to happen in the not too distant future.  Like over the next three to five years.

While the examples in Jonathan’s post refer to items toward the commodity end of the scale and are B2C, it doesn’t take much imagination to see the trend.  (…and trends tend to pick up a lot of speed quickly!)  Ten years ago not one of the transactions described would have been possible.  More and more stuff can purchased online every day.  You could easily add 10 or 20 examples of your own.  The B2B examples are pretty easy to dream up aren’t they?  (Assuming of course you’re willing to take your head out of the sand!)

Want to scare yourself?  Take thirty minutes.  Think about your biggest, best customer and begin to list all the products and services they buy.  Put a check-mark next to each item that could potentially be intelligently purchased with nothing more than information made available on the internet.  It’s not the least bit outlandish to check virtually every item.  Especially if you consider the use of not only text, but also images, audio and video.

Right now, I see only two intelligent paths for sales professionals who intend to survive and thrive to pursue.  (The best and brightest will pursue both!)

  • Become a trusted, respected (albeit honorary) member of the customer’s senior management team
  • Create, maintain and continuously improve an electronic version of yourself, an “e-Rep” (i.e., Get out in front of the inevitable trend.)

To achieve the first, executive-class strategic planning, leadership, financial, communications, political and analytical skills are required.  Most times a lot of practical business experience will also be a prerequisite.  It’s one heck of a tall order; and one that to a significant extent leaves younger folks out in the cold.  Ouch!  I won’t go so far as to say that a formal MBA will needed, but MBA-level knowledge and a commitment to ravenous, continuous learning are different stories.

Achieving the second is easier, but entails development of a whole range of non-traditional talents.  Writing heads the list.  (Writing skills, at least in the US, are generally abysmal.)  “King Writing” is followed closely by the ability to very succinctly articulate extremely highly customized value propositions not only in written form, but also in recorded audio and video.  Obviously, audio and video production skills (including talk radio style interviewing skills)  will be essential, along with the information systems savvy to publish it all.  That in turn implies a deep understanding of blogs and the growing range of social media tools.

Too extreme a view?  I don’t think so.  What do you think?