A Sales Guy Consulting Blog

I see this far too often.  Sales managers and sales leaders reactively manage their people. They reactively manage because they to manage to results.  Results are a trailing indicator in sales. If you manage to results your too late.

It’s a common approach in sales.  The sales rep misses quota. The manager says that’s not good, don’t miss quota again.  The rep misses quota again, the manager puts him on a PIP (performance improvement plan), which in essence lays out goals the rep must meet in the next 30 to 60 days or be fired.  In the less agressive scenerios like this, the manager works with the rep to figure out what is wrong but even then it’s still being reactive.

I have always felt this is a bad way to manage and lead sales teams, yet it has staying power and seems to be the course of action for most organziations.

Being reactive does little for anyone.  The key is to be proactive.  Like most things in life getting ahead of the problems or preventing them entirely is far better than trying to fix them. The key is find the leading indicators of failure.

To find the leading indicators I break down sales management into 4 integrated categories; planning, execution, results and talent.

Failure and poor performance can and will be seen early in any and all of these categories. They are a barometer for failure or success.

If a poor plan is put in place, failure is imminent even if it’s executed well by a talented sales person. – Manage the plan.

If a great plan is in place but is executed poorly by a talented person, failure is just around the corner. – Manage execution.

If the sales person lacks the skill or talent a good plan won’t make a difference. – Manage talent

If it’s a poor plan, executed poorly by someone with out the talent you’re screwed. – Manage all three.

If it’s a great plan, executed brilliantly, by a talented sales rep and the results aren’t there, you’ve messed up somewhere. – See 1, 2, or 3.  The problem is there.

Proactive management requires a process that embraces and monitors all the critical elements to sales delivery.

My management process to increase sales and get ahead of the problem works like this;

1) Everyone on my team builds a yearly plan.  They share it with the entire team, peers and all.  We cut it up, attack it, challenge it, and rework it until its a solid plan.  Plans go through a rigorous evaluation process to ensure they’re sound.

2) I focus on execution.  Plans are reviewed every quarter asking the following questions: what did you say you would do, what did you do, what did you learn, what are you going to do next quarter.  The process ensures proper execution by evaluating WHAT a rep is doing and HOW they are executing to the plan.  This allows problems to be identified early and changes made on the front end.

3) I hire for talent, and coach.  The most important aspect of proactive management is talent.  I hire for talent and I coach them.  I have standing one on one meetings every 6 weeks with all of my direct reports.  During these sessions we talk about what they do well, what they need to improve on and what they need to stop doing.  These are not performance reviews.  They are coaching sessions, designed to help them grow as a sales person and as a leader.

A process that embraces all of these elements is proactive.  Problems are seen early and symptoms are separated from root cause.

Getting poor results with proactive management is almost impossible.  You see it coming long before the boat sinks.  It gives you time to course correct, limit the damage or turn things around.

If your results aren’t there, if the numbers are off, if quota is in jeopardy it’s one of 3 things; a bad plan, poor execution or lack of talent or selling skills.  

Quick can you tell me which it is?

How do you know?

This is part 7 of an 8 part series on Account Governance

A saying of a good friend of mine is “we’re at the blunt end of the stick” and when it comes to sales he’s right. Sales is on the tip of the spear when it comes to the company. They have the relationships with the customers. Sales has access to what is going on. Sales is responsible for making the revenue happen.

Knowing this, sales owes it to the organization and to themselves to communicate what is going on. To keep the company informed and abreast of what is happening sales needs to deliver robust, simple, reporting schemes to the organization.

When it comes to reporting, I don’t think there is one size fits all. However, there is certain information every company needs to track. The baseline sales data that needs to be collected, and believe it or not ISN’T in all companies, is funnel or pipeline data, closed business, and revenue.

Beyond the baseline data every sales person and company needs to have their own set of metrics and reporting.

To build a good reporting structure it’s important to know what you want to measure. Far too often sales organization measure the same things; revenue, profit or gross margin, and funnel. As I said earlier these are must haves. But, sales organizations need to go further. Good account governance adds it’s own set of KPI’s (Key Performance Indicators) to the standard metrics.

Choosing what to measure will be specific to each account and each sales organization.

KPI’s I’ve found valuable in the past:

Wallet-Share
Forecast/Outlook
Key Programs
Competitive Wins
New Product Wins
Losses
Product % of revenue (what % of revenue comes from what products)
Key Deals
Dependencies (things the sales team depends on to make or close a deal that another functional group is responsible for)
Linearity (the consistency of sales, does sales come in evenly or in major swings?)
Forecast accuracy (does the team actually meet their stated forecast goals, what is the % of forecast accuracy?)
Net New Customers
Lost Customers
Upgrades
Customer Satisfaction
Demo’s

When it comes to reporting the thing to walk away with is; it’s extremely important to identify the critical components of your sales environment and business and report on them. Build a dashboard that allows a quick snapshot of where you are. This should be done at the management level as well as the account level. The most successful account managers I’ve seen create their own account dashboard and KPI’s. They act as a guide, a benchmark, allowing management and account managers to see where they are going and what needs to be addressed. It allows for proactive management.

In addition to a dashboard and KPI’s, there is an internal reporting cadence that is a must have. It’s the quarterly business review or account review. To me there is only one way to execute a QBR. Each member of the team has 3 hours each quarter to update the entire team on what they said they would do, what they did, what they didn’t do, what they learned and what they will do next quarter. This approach to quarterly business/account review drives tremendous accountability into the process. Traditionally, QBR’s waste everyones time while the presenters regurgitate the same old information of what they did, regardless of whether or not it’s what they said they were going to do, they avoid calling out failures, or missteps, they don’t address what they will do moving forward etc. Traditional QBR’s lack accountability. I make them as simple and straight forward as possible. We only address what it is we said we were going to do, what were our goals and objectives, did we make them or not. Why? Where does that leave us? Can we make up the losses? If so, how? What are we going to do different? How do we know that’s going to work? What are next quarters goals and objectives? etc. The QBR’s are solely focused around the goals, initiatives, and tactics committed to at the beginning of the quarter.

Reporting is two things, what is being reported, (the information) and how it’s being reported, (the cadence.) Successful sales teams and account teams pick the right things to measure and have an internal reporting cadence of accountability. It’s that simple.

Previous Posts in the series:

Part 1: Account Governance - [The Ultimate Sales Process]

Part 2: Account Governance - [Vision]   

Part 3: Account Governance - [Account Plans] 

Part 4: Account Governance - [Relationships]

Part 5: Account Governance: [Account Cadence]

Part 6: Account Governance: [Account Strategy, G.S.I.T.'s]

I get a lot of questions about building sales processes. It’s one of the things I most help companies develop. Sales process is often misunderstood. Most sales people and companies describe sales processes something like this:

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.

I was in my first executive role, V.P. of National Sales. It was my first week on the job. It was a new company and I was at a conference. The first day on the floor, one of the territory reps asked me if I'd be willing to meet with one of her prospects. She said she was about to close the deal and wanted my help to get her over the final hump. Ten minutes into the conversation, not only did I realize the deal wasn't going to close, but that I had a least one bad sales rep and if the rest of the team was anything like her I was in trouble. It also suggested I had manager level challenges.

During the meeting it was apparent the prospect was no where near making a decision, never mind a decision to buy from us. They were still in the discovery phase. The customer didn't understand our unique value. They were still evaluating their technical options and most importantly they were struggling with budget. There was absolutely NO EVIDENCE to suggest this deal was going to close.

Sales can be emotional. The reasons for poorly forecasting a deal close are many. There is pressure on the sales people to tell the manager what they "think" he/she wants to hear. There is fear of failure. There are missed objections. There are missed buying signs. The competition makes a last minute push and steels it away. The reasons are countless.

To stop the insanity, ask for evidence. When it comes to getting a better understanding on whether a deal is going well or not and if it is going to close ask for evidence. Leave the emotion, and "I thinks" at the door. If sales people are specific and deliberate in customer conversations, the evidence will be clear. Little will be left for interpretation.

Clarify deal closing questions with: "What evidence do you have that it's going to close?" Responses need to be factual. They need to be rooted in specific, measurable, relevant information.

Answers such as;
"We are the front runner.", "My contact told me we are going to win it.", "We are positioned well." etc. lack evidence. Your job as the sales leader is to dig deeper. Ask probing questions that provide the evidence to support the claim.

Questions such as:
"Why do you believe you are the front runner?", "Who at the organization shared that with you?", "Are they the decision maker?", "Why is it going to close on X date?", "Why do they have to buy NOW?", "Can the competition cut their prices or offer additional services free and cut us out?", "Why don't you think they will?", "Why do you think the prospect won't change their mind if the competition gets aggressive?" etc. The objective is to get as much evidence as possible on why the deal is going to close.

Some of the best sales advice I was ever given was to ask for evidence. As sales leaders it's your job to hold your team accountable. Requiring evidence is key to doing just that.

Evidence is crucial. In strong sales organizations deals are "lost until proven closed."