Last week, I wrote a post about the information sale and the importance of being an expert. In it, I shared how being an expert and having more information is the key to successful sales. Here is the key quote from that post:

Information selling is quickly becoming a must. It’s no longer a secret weapon of great sales people. Customers and clients are busy. They won’t give up their time for a “pitch.” They don’t want to do the work themselves. They don’t want to add anything else to their plate. They want sales people to bring a lot more to the table than just a “pitch.”

What makes information selling interesting is it requires a tremendous amount of information. Sales people have to know more than just their product. They have to be experts . . .

To be an expert and have the amount of information required to be successful in the “information sale” sales people are going to need help. That help will need to come from marketing and sales operations.

A new role or division needs to be created within marketing. This new role will be solely responsible for providing sales with the teaching materials required for the information sale. This role will be heavily research dependent. It will be their job to provide sales with deep, robust industry information including; where the market is headed, what’s influencing the market, what’s changing, what’s getting old and what’s coming down the pike and more. This role will need to be THE company’s industry thought leader. The role will need to supply sales and its prospects with all the data and teaching material they can.

The role will have to provide more than data. It will need to be creative. It will need to find information and solutions customers are unaware of. It has to find and provide information that is new, fresh and impacting. The role should look and feel like an internal Gartner Group. If done correctly, the company and its sales people will be percieved as a go to resource for critical, strategic decisions customers and prospects make around your products and services.

Supporting sales no longer means providing slick, glossy, product sheets or spec sheets. It’s no longer about providing a cool flash based website.  More than ever, marketing has to bring some substance to the table. Marketing needs to teach the sales team to teach the customer.

Marketing, start thinking like this:

Create videos that shed light on a major external factor such as; a Senate bill, government mandate, new study or economic indicator and how that information could effect their business and the industry as a whole.

Do a study or survey regularly to get the pulse of the industry or it’s clients and publish the results on your website. Then provide an ebook or white paper on how to capitalize on the current industry sentiment.

Produce a monthly “state of the industry” newsletter highlighting what is going in the industry and how it is affecting your customers and their customers.

Do bi-weekly “how to” webinars targeting key industry challenges and how to solve them.

Create a “company college” or resource page on the website and load it up with useful industry information and resources; videos, ebooks, white-papers, links, book recommendations, webinars, podcasts etc. Establish your site as the place to go to LEARN more about what is going in the industry with the products and services you sell AND about the business challenges your company solves.

Teach sales how to use all the information you uncover.

Sales has to change. The information sale is demanding it. Therefore, it’s time for marketing to change. It’s time for marketing to bring some substance to the table. There is still room for flash in marketing, but NOT until there is substance. The substance is, valuable, relevant information your customers DON’T have.

Build a research department. Hire some industry experts, and start teaching your sales team and your customers.

Maybe we should call it the information identification and dissemination department? Nah, but that’s what they need to do. The market is demanding it!

This is a follow up to my post last week where I wrote about the information sale and the importance of being an expert.

Getting this information takes an incredible amount of time and effort and this is why the role of marketing and sales operations needs to change.

The key is to stop moving up!

I created this video to demonstrate what a real sales cycle looks like.  It will be part of the new A Sales Guy U, coming in January. If you are interested in getting the associated white paper on how to manage a real sales cycle, send me an email and I will send one to you.

The more we know how sales cycles work and how deals move, the better chance we have of controlling them.

With all the measuring sales does, there has been one measurement that rarely shows up on our dashboards. What makes it unique is, it is one of the very few measurements that is a leading indicator. It’s not hard to track. It provides tremendous visibility into the capabilities and skills of the sales team and it doesn’t require CRM or some cumbersome process. What wonderful metric are we missing that does all that? — Forecasting accuracy.

It’s not uncommon for companies to manage the forecast. At the beginning of the quarter everyone provides their monthly and quarterly numbers and then at the end of month and quarter the numbers have been hit or not. If the numbers have been exceeded everyone is thrilled. It the numbers are missed everyone is freaked out. Forecasting, unto itself is very common. What’s missing with most organizations is the accuracy component. In other words, few organizations measure forecasting accuracy throughout the year or how accurate their individual reps and sales leaders are in forecasting their sales numbers.

Why should accuracy matter?

I’ll answer that question with a question. How valuable would it be to you as the head of sales, the CEO, COO, V.P. of sales etc, to know within 95% accuracy, EXACTLY what the team is going to sell every month and quarter? How valuable would it be to know which sales reps are consistently 98% accurately forecasting their number and which reps never seem to be able to be anymore accurate than 80%?

Having the ability to accurately and consistently forecast is a key sales requirement. It ensures the sales people have strong grasp on what is happening in the sales cycle, how they are going to bring in a deal and when. Accurate forecasting removes the “thumb in the air” forecasting most organizations are subject to.

This is how I track forecasting accuracy by quarter:

This is for a team. I also track by individual rep this way. The goal for most organizations is to be with in 5-10% accurate on either side of the commit number. I encourage my clients to measure accuracy by quarter and by month. At the beginning of each quarter, each sales rep is required to give their manager a monthly and quarterly “Day 1″ commit. The Day 1 commit is what the final accuracy number is generated from. The managers then role up their commit, the VP’s etc. The goal is for each layer in the organization to consistently meet the accuracy numbers monthly and quarterly.

Holding sales people accountable to what they’re going to do each month and quarter minimizes the vicious swings sales organizations are prone to. It provides an accurate, forward looking indicator. When accuracy is being measured, exceeding the number is just as bad as missing it. Sandbagging is no longer possible. Sales people become more engaged in their business. They focus more on the trends and the buying habits of their customers. Sales reps understand if they don’t, they won’t be able to accurately forecast. They will miss their commit and missing commit is not OK.

Having an accurate, leading indicator like forecasted revenue is gold. Yet, few companies have it, fewer track it, and even fewer hold their sales teams accountable to it.

How accurate are your sales forecasts? Do you know who the most accurate sales reps are? You should, they know their business.

Sales People: How much are you going to do this month? How do you know? How sure are you, 50%, 75%, 100%?  What data are you using to make the call? Are you using the CRM to tell you? Do you use a discounting or probability adjustment method? Do you track your accuracy? What level of accuracy do you try to achieve? How often do you get it right? Can your sales leader count on your forecast?

The best sales leaders and the best sales people know ahead of time how much their going to do each month and each quarter. They know with a high degree of accuracy.

What is your forecasting accuracy; over the past month, quarter and year? Do you know?   You should.

personally i dont think you need to incentivise sales people at all, you dont pay a developer for every line of code.

It was from @dr_sales

I completely disagree with @dr_sales. I think, if possible, every position and every job should be structured similar to sales. Everyone should have a quota! Sales is one of the only jobs I can think of where there is very little subjectivity to measuring success. In sales you are measured against quota. You are making it or you aren’t. Unlike most other jobs sales people aren’t allowed to hide behind “effort”. Effort is where most under performers hide. My kids are pros at this. “Dad, I tried.” “Trying” being the end goal. If we try and try really hard, then hey what else can you ask for.

Incentivising people rewards them for accomplishing critical tasks, objectives and goals. It takes the focus away from trying. To suggest people aren’t already incented is missing reality. Incentives exitist whether or not they are consciously put in place. They are subliminal and overt, implicit and explicit. The desire for promotions, pats on the back, additional responsibility, accolades or the feeling of a job well done are all forms of incentives. It’s the alignment of motivation with effort that makes incentives so valuable. When we don’t provide deliberate incentives we default to varying incentives that are different from person to person and don’t align motivations.

The key to successful organizations is motivated employees. When employees are motivated in a deliberate and explicit direction productivity increases. I think organizations of all types need to consider how to create positions that have definable and measurable goals that can be compensated against. I don’t think all of someones salary should be performance based or variable, but like sales, a good portion of it should be. I also think if folks can exceed those goals they should be able to make more.

In response to @dr_sales, yes coders should be incentivised. Why shouldn’t they be paid on how quickly or efficiently they can code, or how few bugs their code has or how flexible or elegant the code is. I’m not a coder, wish I were, but I bet there is a simple and effective way to build an incentive program for IT organizations. With a lot of creativity and commitment, I can see incentive programs in Finance, HR, Marketing and other operational organizations. I’m not talking “bonus” programs that deliver bonuses over and above base salary, but real, incentive, variable compensation that can be tied to specific employee performance.

Aligning incentives with performance changes the playing field. Trying no longer is the goal. It ensures complete consistency in objectives and goals. It puts the entire organization on the same page. It minimizes the politics and the grandstanding. It makes it harder to hide. I realize this is a difficult effort for some positions and in some companies. But before we say it can’t be done, a little creativity might be in order. Incentives work. We have 100′s of year of sales data to prove it. So, what’s every so afraid of? Oh, yeah. They’d have to be accountable.

Prospect>Qualifiy>Opportunity>Propose>Evaluation>Negotiate>Commitment>Closed/Won

The words can vary, but almost all sales processes or pipelines are linear and offer very little in the way of actually selling value.

Most sales processes are simple and clean phrases designed to tell management where a deal is in relation to closing.  What they should be is an outline of the specific steps, decisions, requirements and processes that are part of your customers buying process.  Every company, product and service is naturally bound to a buying process or a set of steps that are almost always present during the selling process.  A good example of this is the test drive.  If you are a car salesperson, what do you think the chances are you will sell a car without a test drive?  I suspect the probability is rather low.  Therefore, the test drive is a critical step in car selling, sales process.   Not understanding the importance of the test drive in evaluating the probability of selling a car is a huge handicap.   In the example above, where is the “test drive”  What stage should it be in?  Why?  Without the test drive specifically called out in the sales process the pipeline model above does very little to give context to the actual selling elements.

If you want to build a really good sales process, you have to understand how your customers buy.  You have to know what’s most important to them, how they evaluate new products and services, how and when they allocate budget, who needs to be involved, how decision are made, how terms and deals are negotiated, etc.  Knowing how the customer buys gives you the ability to map your sales process with the buying process of the prospects.

If you know that 80% of the time you sold your widget, you gave a demo, it was put in the customers lab, marketing had to sign off, and you had to get procurement to buy off, you have the beginning of your sales process.  These real world, buying triggers can now be put into a stage like above, taking a linear process and making it vertical as well.   Demo could be under “Qualify,” preventing any unqualified customer from moving to an opportunity that didn’t get a demo.  Lab implementation could be part of the evaluation phase. Marketing sign off could be in the propose phase.  Each phase consists of real world buying actions or triggers that outline HOW the actual buying steps prospects and customers take occur.

A well crafted sales process provides more insight about the customer than it does about your sales organization. It measures how well your sales organization is aligned with the buying habits of your customers. It prevents sales from selling the “wrong way” to the right people.

We’ve spent years with a narrow, introspective view of a sales processes.  They’ve been designed to help sales organizations get a handle on close rates, probabilities of close, forecasting etc.  The problem is, they rarely map to how the customer buys.  They haven’t aligned with the customers buying process. Customers buy the way they want. They have evaluation and decision processes. They have authority hierarchies. Therefore, to have a sales process that truly provides the accuracy and data to run an efficient sales organization, requires a sales process that looks exactly how your customers buy.

Know how you customer buys. It makes all the difference.

When code is released early and often users have a say. The product isn’t created in a vacuum and the entire process is more agile.

Sales can learn from this.  Sales is often plagued with similar challenges.  We tend to think we know what the product does and why our customers want it.  Scripts are made. Collateral is created.  Value propositions are taught;  all of which are hard coded, offering no flexibility in message and story.   In these environments, sales becomes dependent on their message and loses the ability to see things their users want or need.  They lose buyer involvement.

Every customer has different needs and buys for different reasons. The original value proposition doesn’t work for everyone. Like developers, accepting this in sales increases the probability of success.

Release early and often in sales means more conversations with prospects and clients before you’re trying to make the sale. Releasing early and often in sales is creating feedback loops for prospects and customers.  It’s free early beta trials.  It’s robust cross functional governance plans. It’s engaging more often about business and less often about selling or buying. It’s engaging more, selling less.  Releasing early and often in sales is about embracing the buyers experience as much as you can. Releasing early and often in sales allows sales to stop pitching value propositions that offer little value. It allows new, unidentified, value propositions to be identified and leveraged. Releasing early and often in sales leverages the buyer experience.

Techies have figured out that success comes from understanding the user experience as early and as often as possible. Sales should learn from techies and recognize sales success comes from understanding the buyers experience as early and as often as possible too.

Who ever said techies can’t teach sales anything?

At Socially Booked, I’m learning that selling something new is hard. Selling something that no one has ever used or that the industry is unfamiliar with is tough.  Selling something new creates an additional step in the selling process.  When selling something new, that no one in an the industry uses or has ever used requires you sell the idea first.  It requires you create context.  You have to educate prospects on what it is they are buying and why they even need to consider it.  When selling servers, sales training, phones systems, aluminum siding, solar panels or a car, buyers have context.  They know what the value is.  They know what they are buying.  They don’t have to be educated on what it is they are looking at.  Everyone knows what a car does, what sales training can do, what a phone system is etc.  The decision when we know what it is we are buying focuses around whether or not we need it.  Not what is it.

When selling a new product or service that didn’t exist, no one is looking for it.  There is no aware market.  Prospects don’t have predefined decision criteria.  Prospects don’t know have success criteria.  They aren’t considering what you sell, because the don’t know it exists.  This environment has a huge impact on the selling process.  Why?  Asking the traditional questions first are lost on prospects as they have no context for the discussion.  In sales we are trained, and rightfully so, to ask questions, get an understanding of what the customer is looking for, how they operate, what their challenges are etc.  Asking these questions out of context irritates the customer and turns them off, trust me I know.

Socially Booked provides ski and snowboard schools with a social media platform embedded right into the resorts website.  Socially Booked gives ski and snowboard school instructors their own social media pages (think Facebook for ski instructors) where they can upload pictures, video’s, blog, status update etc. in order to market themselves and the mountain.  Socially Booked is a fully functional social media platform that embeds into a ski resorts current website.   This concept is completely new to ski resorts.  With few exceptions, the concept is completely foreign to the resorts.  Therefore, the traditional approach of discovery does not work well. The lack of understanding and knowledge requires we take a dual approach, with a heavy emphasis towards education.

We’ve learned that creating context through education is the first step in the process.  Jumping to discovery turns off prospects, because they are just too busy to engage without knowing why it matters.  They don’t have time to answer questions, when they don’t understand what it is we offer.  We have to talk more in the beginning.  We have to educate.  We have to provide information that gives them a foundation to work with.  Once we educate, which can take sometime, we can then discuss their needs, and the decision process.  We can then have conversations around their business challenges and goals.  However, even in those discussions, context is critical because there are no case studies or proof of success.  No one has used it yet.

We expect to have Socially Booked in a couple of summer ski camps this summer.  That will help a lot.  We’ll be able to point to successes.  We have a number of resorts who want to implement for the 2011/2012 season.  Once a few mountains have used it with success, things change.  It’s not new anymore.  Context is less important.  Resorts know what it is we are selling.  Once this happens the sales process returns to normal.  But until then, we’re learning a lot.

Selling something folks have never heard of is hard.  It requires breaking the rules and doing more telling than selling.  It requires education. It requires time.  It takes patience. Prospects don’t want what they don’t know exists.  Getting them to understand what is even being sold is key.  No one has time to talk about how they accomplish what your product does, if they don’t know what your product is.

I’ve learned a lot Starting Socially Booked and I don’t expect that to stop anytime soon.

I have my thoughts on sales processes but I’m not going to into them specifically.  What I do want to talk about is why they matter.

Fighting sales processes is a losing proposition.  They exist, whether you chose to accept it or not.   The question is NEVER, do we have a sales process, or don’t we but rather does our process work for us and do we like it?   If you insist on asking if you have a process, let me help you out.  The answer is YES! Processes are omnipresent.  If you do a job with expected outcomes, processes exists.   The real question is; is it a good process and does it IMPROVE your ability to reach your goals.

Eli Whitney and Henry Ford figured this out.  There had always been a process for manufacturing, it just wasn’t a good one. They realized by tweaking existing processes in a way that was more predictable and consistent, they could get more done; faster, better cheaper.  Sales processes are no different.  Sales processess matter because they force you to look at what you’re already doing.  They force you to assess the actions that are affecting your desired outcome.  Sales processess require situational and contextual expertise.   You have to know a lot about everything you do to build an effecitve process.

My Dad used to ask me all the time; “Do you know what your doing?”   Usually, I didn’t.  I had hunches, ideas, and was aggressively trying to make things work.  I was using brute force, perseverance and determination to get things done. It worked a lot.  I got things done, most of the time.  But, it was taxing.   It wasn’t until I started accepting the idea of process that I actually began to “know” what I was doing.  When that happened, I still got things done, but they became easier.  It wasn’t as tiring.  Brute force was no longer required and perseverance paid off in exceeding the goals, not just meeting them.

We hate process because we don’t know what we are doing OR because it’s a shitty process.   To fix; figure out what your doing OR create a process that works or BOTH.   Sales processes work.  You can’t be as effective or as successful without a good one.  Remember, you have one, whether or not you want to admit it.  Stop fighting it, create a good one and enjoy the benefits.

Related articles

• The Lie of a “Better” Sales Process. (customerthink.com)
• The Sales Process: Assignments (mrhessemarketing.wordpress.com)

I wrote a guest post on commissions for Fred Wilson last year.  You can read it here, so I’m not going to rewrite that again.  But, I am going to talk about commission alignment.

Alignment is when we pay or commission sales people on what we quota.   Lack of alignment is when we commission sales people on one thing and quota on something else.  I know, it sounds weird just writing it down.  Why have a quota and not pay on it?  Great question, but you’d be surprised how often it happens.

What does a mis-aligned commission structure look like?

Imagine a sales environment where quota was the number of new customers closed, BUT commission was paid on the revenue those customers created.   Let’s say the quota is 10 new customers a month, but you get paid 10% of the revenue those customers bring in.   What should the sales rep do?  How is success defined in this scenario?

This lack of alignement creates a numer of challenges for both the sales person AND management.

1. What should the sales person focus on?
   1. If they make quota, but the accounts aren’t creating the revenue they aren’t getting paid.  That’s not good.  What good is it to be at or about quota and not make any money?
   2. If they haven’t made quota, but the accounts they have sold are killing it, why keep trying to sell more accounts, that may or may not drive more revenue?  The rep is making good money.
2. What should the sales manager do?
   1. If a rep makes quota, but isn’t creating revenue, is that a successful rep? It’s nice they’ve made quota, but the company isn’t making any money.
   2. If they rep is driving tons revenue from only a small number of accounts, and not making quota, should they be fired?  Does it makes sense to discipline someone making good money for the company if they aren’t making quota?
   3. How should ranking be determined?  Who is the number one rep?  The rep who exceeds quota or the rep who is driving the most revenue?
3. How does the company plan?
   1. How can the company forecast?  How does it know if it gets 10 new customers a month, how much revenue that will actually be?
   2. Where should it focus marketing and support dollars, on getting new customers or on getting more revenue out of existing customers?
   3. What happens if the sales team exceeds quota by 50% but revenue is down?
   4. What happens if the sales team is way off on new customers, but revenue is through the roof?

All these question are created when commissions and quota aren’t aligned.  When sales people are paid on quota these problems don’t exist.  A one to one environment exists.  If the goal is to bring in more customers, quota AND pay on bringing in more customers.  If the goal is to increase revenue, pay AND quota on revenue. If the goal is to improve margins pay AND quota on margins.   If the goal is to introduce a new product or service, pay AND quota on sales of the new product.

It’s OK to quota and pay on multiple things, as long as it doesn’t get too complicated.  But, it’s not OK to quota on one thing and pay on another.  The only thing this accomplishes is schizophrenia and that’s not good for any sales team.