SECTION I: BIGGEST PROBLEMS, BEST PRACTICES

CHAPTER 1. MANAGERS, TELL ME WHERE IT HURTS

How does a sales organization measure its true potential anyway? Making quota is an arbitrary measure; it just keeps your job in most places. But how much of the pie could you have gotten if you had performed to your full potential? What if each rep had made goal? What if all the reps had won every deal they pursued? Why don’t they? What if discounts had been one percent less? What if new people got up to speed faster? What if they knew when to qualify out of bad deals? What if new products had been launched better? What if you had retained all your best reps? What is the gap between what you did do and what you could do?

And if there is a gap between what you know to do and how your organization is actually performing, then what is causing this weakness in execution, and how can you get better?

My first book, Hope Is Not A Strategy, generated more than 150 speeches and gave me the opportunity to evaluate hundreds of sales organizations worldwide. In meeting with these sales executives, three recurring themes surfaced:

(1) common knowledge is not always common practice,

(2) some sales executives are satisfied with merely catching up to the state of the art 15 years ago because it’s what they are comfortable with, and

(3) very few sales organizations are closed-loop continuously improving systems—instead, they improve in fits and starts.

There often seems to be a gap between what companies know to do and how they consistently perform. Although there are processes in place, many have fallen into disuse. Moreover, what sales managers really want to know is, how do we compare? What are the differences between what we’re doing and the best practices of great sales organizations? How do we make anything stick? Finally, what innovations do we need to get ahead? And then how do we stay ahead?

Sales managers are unique among managers because they are almost always evaluated by four levels of performance:

1. Are you executing well enough what you already know how to do?

2. Are you at least executing the best practices of others in your industry?

3. What “next practices” and innovations can you do right now to get ahead of your competitors?

4. What feedback and continuous improvement processes will make these initiatives self-correcting organizational habits that drive perpetual advantage?

So what are the universal tools that executives apply to sales managers? That’s easy — more pressure, flog the forecast, cheerlead, and maybe a little more money.

This is what most do, but not what the best do. They do it differently. To discover how they do it, you will need to take a little journey with me through this book. We will look at your practices, the practices many of our clients have used successfully, and the practices that are executed well by the very best in the business. And as we do it, we will explore a transformational map that can institutionalize those practices that you most need right now.

So let’s get started. To begin, see if you can find yourself anywhere in the dozen most common problem areas that sales managers face.

The Deadly Dozen: The 12 Biggest Pains Sales Managers Feel Today

When we talk to sales executives and managers at organizations and ask where they are weak, their responses generally fall into 12 categories.

1. Unclear Sales Process, No Common Language

“It takes forever to discuss an account around here. It takes almost an hour just to tell the ‘story’ and then I’m not sure if we’ve covered everything or have a clear strategy. We don’t know what we don’t know. There’s got to be a more efficient and effective way to strategize deals on a global basis.”

2. Missed Forecasts—Happy Ears, Surprises

“We understand that a positive mental attitude is good, but it can interfere with sound judgment. Some of our salespeople and managers are habitually overoptimistic about their chances of winning. How do we make sure that deals are being coached and evaluated by our more experienced managers?”

3. Qualification, Chasing Bad Deals

“We agree that there’s a fine line between qualifying out and quitting. Everyone in sales knows that you don’t get into a deal you don’t think you can win. But who decides what is winnable? We don’t have agreed-upon criteria that constitute an unworthy deal.”

4. Selling Too Low—We Can’t Sell to Executives

“We have heeded the words of marketing and moved our offerings from ‘products’ to ‘solutions,’ requiring our salespeople to sell higher in the organization. The solutions have moved up to the strategic level, but many of our salespeople are still selling products and transactions too low in the organization.”

5. Lack of Effective Messages, No Differentiation

“Our salespeople and marketing department don’t talk. In fact, most of the time, they don’t even like each other. Sales reps receive tons of brochures, but have to sift through it all to find the right message. And the broader the product line, the longer it takes new salespeople and product launches to get up to speed.”

6. Competition—Lost Sales Opportunities

“We’re getting outsold and surprised in too many deals. By the time we get to the presentation, we’re in reaction mode. It seems like the competition is getting in control earlier.”

7. Commoditized Pricing—We Need to Move Up the Value Chain

“Too many of our salespeople are transactional. They don’t look at the bigger picture. Their attitude is to just get the deal off the table instead of growing it into a larger solution sale.

We’re not building value in our solution early in the buying cycle, and as a result, procurement is treating us like a commodity in the end. Plus, for years, we have trained our clients how to buy from us at the end of a quarter.”

8. Selling to the Wrong People—Politics and Relationships

“My people have taken courses on pain discovery and linking solutions, but they spend too much time doing this with people who don’t really have much influence when it comes to selecting a vendor. They’re not finding out who the real decision makers are. We’ve even been blindsided by people we didn’t know were involved in the decision.”

9. Silo Selling, Poor Team Selling

“Too often, we have multiple reps from different divisions calling on the same client. Our customers want one point of contact, but our salespeople at the local level can’t see the big picture. Our divisions don’t even talk among themselves, and that leads to conflicting strategies and embarrassment.”

10. Account Selection/Segmentation Investment

“We don’t know how to decide in which accounts to invest. It doesn’t make sense to cover them all equally. Which ones can we dominate? Who can we grow and who do we just maintain? Which ones can we partner with? Which ones are a waste of our time? How do we decide?”

11. Poor Deal Coaching

“My salespeople are not getting the strategy help they need from my front-line sales managers. Either they don’t have time or don’t know how to coach deals. This affects our win rate and forecast accuracy.

We promoted our best salespeople to be managers, but the skills are different, and they get no real training.”

12. Poor Discipline, No Consistency

“We’ve tried several initiatives in sales training and CRM with moderate success, but we’ve had a hard time making anything really stick.”

SiriusDecisions, a sales effectiveness research and consulting firm, says:

It is all too common to see senior executives look at a longer sales cycle as something that can be controlled solely by changing internal behavior; for example, teaching their salespeople to sell more aggressively.

But in a world where buyers have more power than ever before, a sales cycle doesn’t elongate because a sales team forgets how to sell; it elongates because buyers have changed the way they buy, and sales and marketing together as a tandem don’t adapt.

In its “2005 Sales Benchmarking Study,” Sirius Decisions defines the top five sales challenges as:

1. Need to be more effective selling to senior-level buyers

2. Need to do a much better job at generating both leads and new business

3. Need to do a better job forecasting effectively

4. Need to improve industry knowledge

5. Need to adopt a more formal “way of selling” (sales methodology)

John DeVincentis and Neil Rackham sounded the early warning years ago in McKinsey Quarterly: “Almost everywhere, transactional sales forces have unsustainably high cost structures; consultative sales forces don’t sell deeply enough to win business; and would-be enterprise players lack the cross-functional capacity to create enough value to cover the huge costs of this approach. Most sales forces are in no-man’s-land.”[1]

While some progress has been made, many sales forces still face the same challenges today.

Now that we have defined the problems, what are sales managers doing to solve them and achieve consistent sales performance? While we obviously haven’t talked to every sales force, we have talked to hundreds, as well as leading consultants who have surveyed hundreds more, to identify many of the best practices in sales effectiveness.

It is helpful to think how sales executives have approached the problem in the past compared with how we must address the problem in the future.

From the industrial revolution, when professional selling was born, to the 1970s, sales training was based on price, product, and personality. The first major change came with the birth of consultative selling for discovering needs and creating preference and action with individuals.

1970s: First Generation—Training Courses

In the 1970s, sales training and methodology consisted of a large number of small vendors in a fragmented market. The sales training at that time consisted of point solutions, mainly aimed at skills—Xerox professional selling skills, presentation skills, time management, and discovery and linkage skills from individual companies.

Prior to 1970, in addition to product training, sales training consisted largely of motivational speeches and awareness in one- to two-hour bursts, which had a wide range of effectiveness but usually a short shelf life.

1980s: Second Generation—Curriculum Coordination

In the 1980s, since the market was highly fragmented, sales managers and training executives realized that they needed more than one training course—they needed an entire curriculum of training courses. This was so especially after companies moved from selling products to selling solutions. The birth of consultative selling, linking solutions to business issues, was the standard of this decade.

During that time, vendors often would be asked to meet with their competitors to build a coordinated curriculum for their clients, sometimes internally branded under the client’s label.

1990s: Third Generation—Integration

As buyers moved to companywide solutions, selling to multiple buyers on a committee required competitive and political opportunity strategy management in addition to basic skills courses of how to win individual preference.

Also in the 1990s, sales training moved to an era of tailoring and integration. Buyers wanted materials and processes customized to them and integrated into their CRM systems, training programs, and compensation plans.

Sales managers realized that if they didn’t manage the interferences from the rest of the infrastructure, they would be training salespeople to do one thing while paying them to do another—with obvious dismal results.

Inconsistent attention was still being paid to adoption and change management issues, resulting in spotty execution.

2000: The Future: Fourth Generation — Perpetual Advantage

Improved metrics and visibility into the pipeline—along with integration with sales infrastructure, better deal and performance coaching by front-line managers, and a feedback system that refreshes competitive messaging every 48 hours or less — can result in a closed-loop sales and marketing system.

Only with such a closed-loop system—one that integrates sales, service, marketing, design, and perpetual innovation — can you achieve perpetual competitive advantage.

Only then can we lengthen the average 24-month employment span of sales executives.

Some of these are new ideas; some are not. Some of these pains have been around for a long time. So then why are they still pains? You already may be aware of these best practices, but the real challenge is, “How well is your organization actually doing them?”