There I was, standing in a large corner office on the 42nd floor of a city high-rise waiting for my weekly Monday morning ‘proctology examination’… euphemistically described by the CEO as the forecast review. I had all my CRM reports, key opportunity summaries and various notes ready to discuss any number of issues within the sales organization. I was ready but as I looked out the window at the city below I reflected on what my flying instructor taught me concerning the word confidence: “The feeling you have just before you understand the situation.”
I was Sales Director for a public corporation and the CEO was typical of others in his role – frustrated with his ‘black box’ sales division. In his opinion, no-one really knew how it worked but he poured huge sums of money into the sales machine only to have it deliver unpredictable results. Forecast dates were a crap-shoot with large deals often slipping. By contrast, the finance department ran with predictability and so did support, service, marketing and operations. Manufacturing could deliver predictably even with the complex inter-dependencies of the supply chain – but why was this not the case with many sales operations?
We sold high-end complex software solutions to large enterprise and government markets. Long sales cycles, marginal business cases built on compliance and productivity, many stakeholders to cover and in a market sector that was rapidly commoditizing. It was in this environment that he hired me to 'sort out the sales operation' with the right strategies focused on differentiated value while driving disciplined execution. He imparted great wisdom in our first meeting: “Instead of employing sales magicians, build a great machine – good execution is usually the best strategy.” He was right.
This situation was very real and in my 30 years of selling and leading sales teams, and then companies, I’ve come to understand what it takes to be successful in complex business-to-business (B2B) selling. Even though professional selling is evolving faster than ever before, there are universal and timeless truths that can guide us through turbulent and changing times.
Buyers today are better equipped than ever to drive suppliers toward commoditization. Information is no longer power – it’s freely available. Insight is the new currency of differentiation and sellers need to elevate their conversations and their level of business acumen and professionalism. Instead of being clichés, 'strategy' and 'value' need to become the obsessive focus of the sales and marketing teams, recognizing that relationships alone are no longer enough.
The cost of making the sale is rising, margins are shrinking, and value is being defined differently. The era of the ‘professional visitor’ is passing and more than one-third of B2B field sales people won’t have jobs five years from now… relationship sales people need to evolve or they will become extinct. Relationships PLUS insight, value and partnership are what's needed today in complex enterprise selling.
In 1955 the average lifespan of Fortune 500 corporations was 80 years, nearly 60 years later the average life is just 18 years! Professor Richard Foster from Yale University estimates that by 2020 more than three-quarters of the S&P 500 will be companies that we haven’t heard of yet.
The barrier to entry for new competitors has never been lower; and the process of switching suppliers for customers has never been easier. What’s the secret to prosperity in rapidly changing markets and a globally competitive economy? It’s the same as it always been – innovation and great customer service combined with flawless execution of well-conceived strategy, driven by leaders with good values.
Most businesses do a good job in segmenting their markets, customers and products but what is often missed is the insidious impact of commoditization. Every product or service becomes a commodity over time as features that once differentiated drift back to parity as competitors catch up. According to Corporate Executive Board research, 86% of the time that sellers pitch their ‘compelling value,’ buyers perceive it as neither unique or compelling but merely features also offered by other suppliers. Every business needs to look at itself from the outside – how do customers really view us comparatively? If you sell a commodity, then face the awful truth rather than cling to expensive sales models where customers are unwilling to pay for the low value and high costs associated with a field sales force.
Sales people need to fund themselves from the value they create rather than from the margins that the product or service delivers. There is no such thing as a high margin commodity and the value they offer must stem from insight and wisdom rather than mere information and service. The first law of selling is that people buy from those they like and trust. They then seek best value and lowest risk. The key for every seller is to understand that‘value’ and ‘risk’ are all defined by the customer. In selling, we are delegated down to people we sound like and this means that salespeople need to learn the language of leadership if they want to engage at senior levels. They need to be equipped to discuss the business case, delivering outcomes and managing risk.
If a product or service is a commodity then the sales model should be engineered accordingly; make it easy for the customer to obtain information, become convinced and then transact in a way that’s easiest for them including web, phone or channels. For products and services that actually are high value solutions then force the field sales team toward value through insight. Support them in developing domain expertise, genuine insights and business acumen to enable them to operate at a higher level. Product marketing needs to focus on differentiating what is being sold; and sales people need to differentiate by how they sell.
With all this in mind, what are the critical elements of sales enablement? How do you create a framework for effective sales execution? There are three essential ingredients plus the catalyst of sales management leadership. The three ingredients are sales methodology, sales process and technology platform.
Few people can articulate the difference between methodologies and process yet these elements are distinctly different in complex B2B selling.
Methodology is the framework for formulating strategy and tactics to win; it’s also how you create your competitive deal strategy, identify risks, cover the political power base within the relationship map, and identify the best way to create compelling value for the buyer. But which methodology should you use? There are a number of well-proven methodologies including TAS, Miller Heiman, RSVPselling, and others. Success with methodology does not depend on which one you select but simply on how well you use it for opportunity coaching with the team.
Process is how you build a sales funnel and execute the sale; it’s how you qualify opportunities and progress through the deal stages with discovery, proposal, demonstration, closing, contracting, on-boarding and then doing win/loss reviews and case studies. Process steps need to be supported by the right tools such as a call planner, qualification tool, discovery questionnaire, proposal templates, win/loss review forms, and territory and account plan templates.
Platform is the technology you use to enable and automate your sales methodology and sales process. It is where you have a single source of truth about customers and opportunities. It must also be your coaching platform where there is transparency concerning pipeline depth and opportunity quality. Customer Relationship Management (CRM) software is the ideal platform but CRM needs to be a strategy, not just a technology and reporting tool. To be implemented successfully, it must go beyond the mere functions of accounts, opportunities, pipeline and forecasting; it must instead enable the mapping of relationships and force discipline in deal stage progression with qualification scoring and action tracking. It must also include close plans with customer validation of critical dates. Finally, CRM needs to incorporate tight integration with both marketing, social (such as LinkedIn) and after sales support to provide a single view of the entire customer lifecycle from targeting, marketing, lead nurturing and selling through to account management, support, service, satisfaction and upselling.
This approach uses CRM to place customers at the heart of everything you do and provides the platform for being truly customer-centric. It also delivers transparency with deal quality and revenue predictability. It’s where sales people manage their opportunities and the tool that sales managers use to coach their people. This approach is designed to serve the sales people in improving their efficiency and effectiveness. Because it provides them with value and enables their manager to coach for improved win rates, they actually populate the systems with accurate and useful information.
When CRM is implemented with customers and sales people as the priority, and when it’s the platform for deal coaching and the enabler for sales process; then system success is assured. The synergistic outcome for management is accurate reporting and revenue predictability. The corollary of this is that CRM failurecomes from implementing it as a reporting tool with poor alignment to sales methodology and sales processes. Many CRM implementation fail and it has nothing to do with the technology provider; here are the critical success factors for successful CRM:
- Obsessively focus on the system serving sales and customer support staff
- Integrate with social platforms such as LinkedIn and InsideView (for easy sales research and insight into Trigger Events)
- Integrate with marketing for lead nurturing (to build sales pipeline)
- Create a single view of customers and prospects (to be informed)
- Embed methodology and process coaching (qualify, call plan, close plan, etc.)
- Simplify reports and KPIs which can actually be managed (activities)
- Support customer lifecycle post sale (cases, complaints, renewals, etc.)
With accurate data in a CRM the next issue to decide is what metrics provide meaningful reporting. A common mistake made by management at all levels is to seek to manage by results. Jason Jordan writes insightfully on this topic in his book, Cracking The Sales Management Code, highlighting that only 17% of the 300+ possible sales metrics measured are actually manageable. As an example,you cannot manage revenue, but you can manage the activities that create it. Rather than command sales people to bring in more revenue, they need to be guided in which activities are most likely to create the type of revenue you are seeking. Managing activities is the key to delivering the right results and this leads us to the catalyst that brings methodology, process and platform technology together for successful sales enablement – the sales manager.
Sales management is without doubt the most important link in the revenue chain for any organization. The right sales manager creates emotional commitment and belief within their team, they coach and mentor for sales success, they develop the right strategies to focus effort where the team can competitively win and they drive the right conversations with the right roles within the right targeted prospects. They also create organizational alignment with upstream marketing and downstream delivery, support and service to build a business with quality customers.
Sales management leadership is the catalyst that brings it all together: people, process and technology within the right strategy and a culture of excellence in execution. The type of person capable of delivering all this is an engineer rather than a warrior, they have empathy yet hold people to account. But the best sales manager in the world cannot be successful if their boss has them endlessly in internal meetings and reporting up. The sales manager needs to be a coach rather than an administrator. She needs to spend more time in the field than in the office, and more time strategizing and reviewing opportunities with sales people than managing reports. A great coach does not jump in and take over, nor do they do the sales person’s job for them. They don’t feel the need to rescue people and instead understand that people are best motivated by reasons they themselves discover. They focus on planning and debriefing to create constant improvement.
Here are the seven sins of sales management to be avoided:
1. Hiring or retaining the wrong people
2. Managing by results rather than activities
3. Failing to utilize the right methodology and driving sales process
4. CRM implemented as a reporting tool to manage up
5. Lack of strategy and a disconnect from marketing
6. Allowing field sales people to transact commodities rather than sell value
7. Failing to invest the majority of their time in the field with their sales team, coaching and mentoring
The Holy Grail of sales enablement is the seamless integration of the right methodology, efficient sales process, all enabled by Social Selling 3.0 and CRM technology used to coach sales people by an effective sales leader focused on strategy, execution and building a positive team culture.
The very best sales operations bring people, process and technology together to be obsessively customer-centric. The truth about CRM is that you cannot be efficient or customer-centric without one, yet implementing CRM is one of the most difficult projects an organization can undertake.
Choose the right partner, appoint the right leader internally, and consider the whole picture – technology is the easy stuff! CRM is a business application rather than IT infrastructure and therefore needs to be owned and controlled by the sales leadership in partnership with marketing and customer service to support the entire customer life-cycle and drive all aspects of the sales machine.
If you valued this article, please hit the ‘like' and ‘share’ buttons below. This article was originally published in LinkedIn here where you can comment. Also follow the award winning LinkedIn blog here or visit Tony’s leadership blog at his keynote speaker website: www.TonyHughes.com.au.
Main Image Photo by Flickr: CucombreLibre