e-Rep: Do You Know Enough To Build One?

Are there gaps in your skill set?  Well, of course there are.  All of us have gaps.  Some of them are not so harmful.  Some of them though, need to get filled.

Are your technology skills up to snuff?  Do you really know enough to create, deploy and effectively use an e-Rep?

Do you know enough to build an e-Rep?

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?

On Funnels, Incubators & Out-Of-Context Metaphors

I’ve been in a running debate with my colleague, Stone Payton, for about a year now regarding the value and continuing applicability of the “funnel” metaphor for B2B sales.  Stone emphatically states, “Forget the funnel!”  (See this post, especially point #5 and the comments.)  I just as emphatically disagree!

And I think I finally understand the nature of our disagreement.  He and I think of “funnel” in dramatically different contexts.  I’m guessing there’s a whole lotta’ contextual confusion out there.  I’m also guessing there’s way too much reliance on over-simplified and/or passé sales process thinking.

First key point…  Thinking about people and companies as prospects is obsolete and dangerous.  It can do all kinds of short and long term damage to your business relationships.  It reinforces a “me-and-my-company-centric” focus.  (Do I really need to convince anyone that an intense customer-centric focus is critical?)   Thinking in terms of “prospects” also leads to thinking about moving human beings through a funnel; rejecting some, keeping others.  That’s nuts!

Move opportunities through your funnel, not prospects.

This leads to the second key point; consideration of a few realities of context for 21st century business.  Today’s sales pro needs to think in terms of Accounts, Contacts and Opportunities.   An Account is defined as an organization that might, maybe someday have a need for what I’m selling.  A Contact is a person, a human being who works for that organization and potentially has some role in the decision process for buying or not buying your stuff.  An Opportunity is the potential for you and your company to deliver a very specifically defined value or set of values to the Account and (at least some of) the Contacts within.

(Note the symbols in the diagram.  For any account, a rep will have from zero to many contacts and from zero to many opportunities.  Over time, the number of contacts should grow.  The number and size of opportunities will fluctuate over time.)

Accounts and Contacts are forever.  Put them into your “incubator.”

Relationships and credibility with Accounts and Contacts are hard to establish and hard, not to mention time-consuming, to maintain.  They must be nurtured with a long term mind-set.  Think about it this way…  Career time spans are really stretching out and usually involve multiple employers.  Flush a “prospect” out of your funnel today, and that same human being at the same or a different account, might just flush you into oblivion ten or twenty or thirty or even forty years from now.

Opportunities, on the other hand, are dramatically different in three ways:

  • They’re things, not people (Think of Tony Soprano saying, “It’s not personal.  It’s business.”)
  • They have a finite, relatively short life span
  • They have an “expiration date” (…calculated based on the typical sell cycle for your products and services)

I’ll take it even further.  An opportunity should have a pre-defined “expiration date” for each stage of the funnel portion of your sales process.  You want a “leaky funnel!” One that “leaks” in a controlled fashion according to your rules.

The core responsibility of a sales rep is to identify value-producing opportunities for each of his or her accounts and contacts.  LOTS of value-producing opportunities.  Some will be losers.  Those loser opportunities must be flushed out of the funnel quickly.  Otherwise you’ll waste your contacts’ time and annoy the daylights out of them.  If you don’t even have an opportunity funnel defined, how can you possibly keep yourself from wasting their time by repeatedly pushing loser ideas at them?  And damaging the hard-earned relationships you’re nurturing?

Conversely, the “winner” opportunities must be defined, sold to all stakeholders and implemented ASAP! Without a defined sales process, i.e., opportunity funnel, how on earth could anyone possibly do that efficiently and effectively?  By winging it???

So am I right?  Or is Stone right?  What do you think of the funnel metaphor?

Shut Up And Do Your Forecast

The best of the sales managers and executives I’ve had the pleasure to work with tend to demand very few things. They expect a lot in terms of results, but are generally reluctant to lay out a long list of specific requirements. The single most common demand of the top-notch sales leader? A monthly forecast.

Sales reps who have never done a forecast absolutely hate the idea. Those who have gotten used to submitting a monthly forecast are typically amazed that they ever got anything accomplished without it.

Let’s back up for second… I have yet to find a rep who did not agree that a “ToDo” related to a major current account or major new opportunity belongs at or very near the top of the priority list. Basic time management dictates that this is so. Living in react mode, responding to the requests/demands of the last person spoken to, is a guaranteed path to low productivity and poor overall performance.

In other words, a rep’s first cut at setting the priority of his or her action items must be based upon the expected revenue/profit from the opportunity related to each action item. The amount and timing of expected revenue/profit is determined by the dollar value of the opportunity, the odds to close the deal and the projected close date. (This is really simple and really obvious, isn’t it?)

Now a definition… A forecast is a list of opportunities with their dollar values, their odds to close and their projected close dates.

Now a few simple questions… How is it possible to make an intelligent choice of action item priorities without an up-to-date forecast? Can a rep claim to be following even the most fundamental tenets of time management without an up-to-date forecast? How out-of-date can a rep afford to have the forecast be?

Here are the three main objections to preparing and submitting a thoughtful, accurate forecast every month with appropriate responses:

  • I’m too busy selling – Selling what to whom? Are you busy with tasks directly related to your largest, nearest-term opportunities? Show me your “ToDo” list and explain how the items listed contribute to closing one or more of your top 10 opportunities… Shut up and do your forecast.
  • Doing this paperwork reduces my selling time – How long does it take you to update your forecast each month? Is it more than 20 minutes? It is!!!??? That means the quality of your forecast is really, really poor and therefore your time management is based on fiction and fantasy… Shut up and do your forecast.
  • You can’t forecast what’s going to happen in my territory – You can’t? What happens in your territory is due to chance only? There’s nothing you can do to make things happen? If you want, I’ll assign your territory to someone else… Shut up and do your forecast.

Perhaps you’re finding the tone of this post to be a bit blunt. I suppose it’s because I’m just so tired of repeating the iron-clad logic behind such a simple, powerful principle.

Without a good monthly forecast, good time management is impossible.

Am I wrong? How can on-time submission of monthly forecasts from every sales rep on your team not be #1 on your short list of demands? Can you really expect focus on the top, near-term opportunities if you don’t even know what the top, near-term opportunities are?

Think about it…

The Weapon

There is always a danger in focusing on the tools used to get a job done. (We all know the cliché about the six-year old with a chain saw…) That said however, a robust CRM system just might be the most powerful tool a sales team can have.

A highly functional CRM system is not the only tool required by a modern sales team (or more precisely an effective, modern sales team), but it is certainly the most central. Without one, it’s not really possible to get the most out of the other core sales tools or the professionals using them. Thinking about your CRM as “The Weapon,” that is, the key supporting infrastructure for a sales team’s process, metrics, knowledge, skills and experience can have a dramatic impact on results produced – both short and long term.

Consider the accompanying diagram starting with reports “The Weapon” can produce using “Open Opportunity” data combined with year-to-date actual performance. (down & left from The Weapon in the diagram) With that information, a valid, supportable forecast can be developed. That forecast will tell me in a heartbeat if I do or do not have enough in my funnel to reach my targets.

If I don’t have enough to get there, the “A” items in my Prioritized Action Plan will be aimed at finding more opportunities. If I do have enough, those actions will be focused on advancing deals through the pipeline.

Concentrate on those 4 boxes at the top. (Do it!) Think through and follow your work flow. Seems like exactly what the mythically ideal sales rep/manager/executive should be doing every day doesn’t it? What the heck else could be more important? (…except, of course, actually executing the action plan!)

Well OK, that takes care of the tactical stuff, but what about the more strategic & long term issues? With other reports from “The Weapon,” a sales manager (or conscientious rep) can quickly and clearly identify skill deficiencies and use your Sales Knowledge Mine to help plug those gaps. (You do have a keyword-searchable Sales Knowledge Mine that stores all of the “tribal knowledge” accumulated by your sales pros over the years, right?)

Concentrate on those 3 boxes at the lower left. (Do it!) Seems like a no-nonsense, disciplined approach to self-improvement and sharing best practices, doesn’t it?

And of course your regularly conduct Opportunity, Territory, Win and Loss Reviews to beef up action plans and peg down what works and what doesn’t. Everything you learn from these reviews – the good, the bad and the ugly – gets translated into action and also stored in the Sales Knowledge Mine. The actions that “sound great, but don’t work” get avoided and the “counterintuitive gems” get implemented again and again. Concentrate on those 3 boxes around the lower right hand corner. (Do it!) Removes all the fluff from the concept of “coaching,” doesn’t it?

At the risk of going too “liberal artsy intellectual,” I’ll quote Oliver Wendell Holmes. “I would not give a fig for the simplicity this side of complexity, but I would give my life for the simplicity on the other side of complexity.” I think this flow chart qualifies as one that made it to “the other side of complexity.”

Think about it…

It Frustrates You And Annoys The Pig

As a guy who helps organizations design, implement and execute a sales process, I hear it all the time; “Don’t tell me how to do my job.”  It’s a hoot to watch the reaction when I reply, “I have no intention of even trying to do so.”

There’s no way an outside consultant, or even a VP of Sales for that matter, can tell an experienced rep how to do his or her job.  It’s like the old joke about trying to teach a pig to dance.  It frustrates you and annoys the pig.

Start with “what” and continuously improve the ‘how.”

There’s a better way to approach implementing a consistent sales process across an entire sales team and constantly making it better.  Start by defining the “what.”  It’s surprisingly easy to get a group of fiercely independent, strong ego sales types to agree on it.  It takes two or three serious debates, but group after group in industry after industry agrees on the same basic core process:

  • Identify An Opportunity – Identify a specific individual in a specific account that might maybe someday buy something from me
  • Gain Attention – Get some sort of meeting or conversation scheduled with that individual
  • Earn Interest – Maybe you’d prefer to call it “qualify.”  Earn enough interest in your stuff to convince the prospect to actually do something to help advance toward an possible purchase
  • Conduct Discovery – Learn, learn, learn.  Clearly define and quantify the customer’s objectives and/or pain, and understand the decision process and criteria.  Paint the “Before” picture.
  • Recommend – Tell ‘em what you recommend they do, why and the $$$ impact.  Paint the “After” picture.  (I used to call this “Propose,” but that’s another story.
  • Close – Get the order

The terminology might be different and maybe there are a few more or less steps, but what needs to occur is fairly universal.  It’s the reps themselves that fill in the blanks about how.  Stated differently, “how” is the set of best practices to accomplish each “what.”  These practices vary a lot more from company to company and industry to industry, but usually not as much as folks expect.

In fact, the degree of uniqueness really doesn’t matter.  What matters is measuring the effectiveness of each “best” practice. Over time the pretender best practices get dropped and replaced with better ones.

This continuous improvement of your sales process thing really is that simple.  The hard parts are getting started and sticking with it.

Forget One & You Fall Down

It’s quite instructive to examine the nature of offerings from the hordes of sales consulting and training firms.  The overwhelming majority of them are focused on developing sales skills.  Clearly, what sales managers are demanding is precisely that.

All well and good.  I’m the first to violently agree that selling skills are fundamentally and critically important.  Ya’ gotta’ have ‘em.  Without ‘em, you’re dead meat.

What concerns me is the near total lack of training regarding sales process and metrics.

Every business school known to mankind and virtually every consulting/training firm for other business functions  teaches with a three-legged stool philosophy.  It’s skills, it’s process and it’s metrics.  Tools supplement and help with the coordination of the three essential legs.

Lets’ say you make your living managing a baseball team.  Let’s also say you have the world’s greatest living all-around athlete signed to a 10-year, no-way-out contract.  Now let’s say that athlete takes the field and does all the things required to win a basketball game.  In other words executes a basketball process.  Let’s measure the athlete’s performance in the context of what wins basketball games; by counting rebounds, percentage of shots made and defensive steals.  Goofy to even consider, right?  That awesome set of skills is so badly misapplied, that it’s totally useless.

Let’s say you make your living building cars.  Let’s also say you have the world’s greatest living plant manager signed to a 10-year, no-way-out contract.  Now let’s say that plant manager goes into the factory and does all the things required to build laptop computers.  In other words executes a laptop manufacturing process.  Let’s measure the plant manager’s performance in the context of profitably building laptops; by counting percentage of hard drives correctly installed, number of copies of Windows sold and number of machines built with more than 2 USB ports.  Goofy to even consider, right?  That awesome set of skills is so badly misapplied, that it’s totally useless.

Let’s say you make your living selling stuff.  Let’s also say you have the world’s greatest living all-around sales rep signed to a 10-year, no-way-out contract.  You want that rep selling your stuff right?  Not doing the things that make a great baseball player or get a bunch of high quality cars built.  You want that rep executing a sales process; your sales process.  Not a basketball process or a laptop production process.  And you want to measure performance in the context of revenue generation; things like sell cycle, close rate and average deal size.

Time to state the obvious.  A sales rep – even the greatest in the world – cannot execute a sales process that doesn’t exist.  And, by the way, if the process is not written down, agreed to and executed by the entire sales team it does not exist.  And if the process does not exist it cannot be measured.

Please do me a favor.  Promise yourself to be totally objective, hard-nosed and honest, and re-read the previous paragraph.  Are you solidly based on a three-legged stool?  Or are you more like The Great Wallenda, balancing precariously on the skill leg only?