Are Your Numbers Down?

Our numbers are down, can you help?

Many conversations with new clients typically start with this statement. Those numbers may include close rates, pipeline coverage, quota attainment, deal size, deal profitability, share of wallet, renewal rates, customer satisfaction, even sales rep retention rates.

In my experience, the problem is rarely sales skills or fundamental product issues. Almost always, the decline in sales results is driven by one of two critical issues:

• Sales people do not align with critical business issues when they first engage with their prospects. Instead, they are unconsciously positioning for a features & benefits slugfest with their competition. These top of funnel activities drive mediocre conversion rates (second meeting, third meeting, etc.), limit access to other key stakeholders and ultimately leads to the downward spiral of “who’s willing to sell more cheaply.”
• Sales people do not have the resources to be successful, including alignment with the buyer’s journey created/curated by marketing, business value analysis resources, detailed customer implementation stories, or the training & background to effectively engage in business value discussions. Sometimes they simply need more time to prepare (less administrative load) or more/better/targeted sales coaching from their manager.

In conducting root cause analysis to identify the source(s) of the problem, we work closely with the sales operations team. Sales operations has access to all of the data necessary — extensive sales metrics, personnel information, customer demographics/firmagraphics — that tell the story of success versus failure. This analysis helps to build a map of effective pursuit strategies and detailed profiles of “good” versus “bad” prospects & customers.

With the results of the data analysis, we then take a look at sales enablement practices. Typically we find gaps where the data shows weak or declining conversion rates. Occasionally this is driven by external market forces — new competitors coming into the market, customers shifting internal strategies or structural (economic) factors.

More often, we simply find a disconnect between need and investment, as many (perhaps most) sales enablement investments are focused on addressing symptoms rather than root cause.

Fixing the Symptoms

I recently spoke with executives at a fast-growing midmarket cloud security company. In a quest for continued growth, they initiated a focus on enterprise accounts…and ran into a more mature, educated, complex set of buyers. As a result, their enterprise deal close rates are lower and less profitable than midmarket. Their initial response was to seek help with negotiating skills. But lack of good negotiating skills isn’t their primary problem…they weren’t establishing business value with the right set of stake holders in the early stages of conversation.

And their sales metrics reflect the difference:

• Higher conversion rates and velocity at top of funnel for midmarket versus enterprise
• Lower connection with C-level enterprise executives
• Lower access to VPs, directors, perhaps even managers for mid-pursuit discovery in enterprise accounts

Improved negotiating skills won’t fix their weak value foundation. They must address the fundamental problem — modifying their engagement approach for enterprise customers. And when they do so, they will also see an uptick in results for an increasing portion of their midmarket customers as the market matures.

Fixing the Problem

We’re in the early stages of a sales productivity project for a large technology vendor. Analysis of their quarterly earnings reports provides early indicators of the problem:

• Declining product revenue
• Declining service renewal rates
• Fundamental changes in their market (which they’ve helped to drive)

When we dig into their SFA data, I expect to find declining engagement and conversion rates at the top of the funnel. I also expect to find higher levels of success with certain types of customers — those who purchase “as a service” more frequently. This analysis will help to identify the specific changes needed in their existing sales enablement processes.

Win/Loss Analysis…Why Bother?

Interestingly, few companies leverage win/loss analysis to help identify the problem(s). It seems there’s little appetite for understanding why a specific company said “no.” Yet an understanding of what went wrong during the engagement can provide tremendous insight into how to fix the problem!

And if done properly, the information has the weight of statistics to help ensure appropriate investment to solve the problem.

The issue of sales productivity has many levers…and knowing which levers to push is not easy. It takes both a strategic approach and good pattern matching abilities.


Thanks!

If the Purpose of Sales Enablement is to Improve Seller Behavior...

If the goal of sales enablement is to improve the behavior of sales people (and drive increased sales productivity), how should we observe or measure rep skills and success? How do we improve behavior?

Some managers accompany their reps on calls to observe the rep in action. However, these "ride-alongs" fail for two reasons:

• Most managers cannot avoid "rescuing" their rep when they get into trouble
• More importantly, the presence of the manager causes the rep to behave differently and the observation yields inaccurate or misleading feedback

Image by Erik Aavatsmark via New York Magazine

To avoid manager interference, perhaps we should try the approach of putting the manager on a tall chair in the corner (watch the cult movie Kitchen Stories to judge for yourself how well this observation approach might work!)

More importantly, how...and when...should we focus on improving behavior?

Current approaches to both measuring and improving behavior are inadequate

Typical measurements provide a "look-back" at what happened, with no direct connection between measurement and improvement techniques. Even with good performance and success metrics that accurately measure sales effectiveness, efficiency, pipeline coverage and velocity, close rates, customer satisfaction and retention, we are largely collecting trailing indicators.

Today we act on those trailing indicators. We build hypotheses of why things happened the way they did, modify the environment in some way (different content, better coaching, etc.) and wait for new trailing metrics to reflect changes in performance.

Unfortunately, this process spans multiple sales quarters and opportunities. There's no immediate feedback loop between action, result, correction, new action, new result...and without that immediate feedback, the repeated behavior is reinforced rather than corrected.

The best time to make a course correction is before you're seriously off course

When sailing a boat or riding a bike, the best time to make a correction is before you run ashore or fall over. Sailors and cyclists make dozens of tiny, imperceptible corrections --  small movement of the tiller or angle of the front wheel -- all the time, without conscious thought.

For sales enablement to be effective, we need to be able to measure the success (or performance) of the rep as he or she is engaging with a prospect or client and act on that information in realtime, with corresponding small, timely course corrections.

What we need is "in situ" measurement and sales enablement -- delivered in place, at time of action. Perhaps a "sales Fitbit" that provides realtime feedback and guidance. Measurement, feedback and course correction as the rep is doing his or her job.

Image by DC Rainmaker (Link)

When I'm training for an upcoming race, I don't wait to see my elapsed time for the race before I choose to modify my training activities. I periodically check my running watch as I'm running in training, in realtime. How's my pace? Am I in heart-rate zone 2 or 3? During recovery between Yasso 800 sprints, does my heart-rate return to a reasonable level?  With these realtime metrics, I can choose to make an immediate modification to my next training sprint rather than wait to see how I eventually perform in the race and choose to run faster sprints before the next race.

Similarly, we need to be able to measure the effectiveness of a rep as he or she is engaging with a customer. The following are some of the "realtime" measurements we need to monitor:

• Is the rep following a thought-out path of engagement?
• Is the communication in line with the customer's business needs, language of value, results expected?
• Is the rep connecting at the right level in the organization?
• How responsive is the customer?
• How timely is the rep in following up?
• Is the engagement moving along an expected path, at an appropriate pace?

And given this in-process measurement, we need to provide a learning environment that doesn't require the rep to step out of their existing work flow (day-to-day selling processes). The rep needs constant, ongoing feedback and course correction that guides the improvement of their messaging, timeliness, targeting, listening, etc., while they are undertaking the activities of connecting with prospects and customers.

Some Good News

Companies that implement a "sales Fitbit" approach of monitoring & improving sales activity see immediate, substantial and persistent improvement in customer engagement, revenue and other results. Conversation conversions double or triple. Outbound contacts double. One company saw margins increase by 25% in four months.

This in situ approach doesn't work for all companies. It requires sales organizations to revisit their messaging and to trust their sellers to learn as they go. For companies that are interested, a proof of concept will give quick feedback on whether the approach has broad applicability.


Thanks!

Lee