Leading Sales Indicators

Selling a complex solution is a lot like running a marathon. To be successful, you can’t just walk up to the starting line and start running. Success in the marathon takes months of preparation. For each mile of the marathon, a runner might run 20-30 miles in direct preparation. Similarly, a good enterprise sales person will dedicate 10-20 hours of preparation (research, discovery, planning) for each hour of face to face with the prospect or customer.

The successful marathoner will have a comprehensive race plan, mapping out the goal pace for each mile. Many apply these plans as temporary “race tats” on their arms, so that they can keep track of their plan while on the road. Similarly, good enterprise sales people develop detailed opportunity or pursuit plans that include both their actions and those of their teammates (other sales people on the account, sales engineers, etc.).

Marathoners carefully watch the leading indicators that help them to determine whether the individual race will be worthy of a Personal Record (PR) or perhaps just a long, slow run. For the runner, some of these leading indicators include their Heart Rate Variance (HRV) and sleep patterns in the days leading up to the race, the temperature and humidity on race day, how they feel at the start line and more.

If the racer sticks to their race plan (slower pace in the first half of the race, faster in the second), a good day is possible. Toss that race plan, run too fast in the first half of the race, and all the prep in the world won’t save you. Trust me…I know!

Similar dynamics exist in the complex enterprise sales environment. While sales management typically watches portfolio coverage as a primary indicator, it is not a leading indicator. Pipeline coverage will tell you that you are in trouble. It won’t tell you why you are in trouble…and it doesn’t give sufficient warning for early correction.

The Acelera Group Sales Productivity Framework incorporates ten rep-focused leading indicators, along with a single first line sales manager (FLSM) indicator. These indicators provide the early warning signs for a decline in sales performance, at the rep, group and region level, and point strongly to specific actions to be taken for course correction.

The ratio of prep time versus face time, as mentioned earlier, is one of these leading indicators. Depending on the specific business problem, level of prior customer intimacy and complexity of the environment, the sweet spot may be 5 or 10 to 1. When reps (or teams) diverge from the sweet spot, we can expect a looming drop in sales results.

A second leading indicator – whether a business value analysis (BVA) has been conducted – holds a similar power of predictability. Curiously, despite its significant positive impact on customer intimacy and satisfaction, deal profitability and overall sales results, the BVA is not widely used.

Complex enterprise selling should not be an ad hoc series of unrelated activities. Good preparation and effective plan execution will help the runner to complete the race and the sales rep to drive great sales results.

What are your leading indicators telling you?

Thanks!

Got a Plan?

How Are You Treating Your Largest Accounts?

Strategic accounts warrant investment and relationship rigor. They spend more, have been customers longer, and have made specific long-lasting platform, technology and relationship commitments. A company’s top five customers alone may account for 22% of all revenues and 21% of  annual profits! (Source: Sales Executive Council).

Most large companies have a strategic account strategy, providing additional technical, business, product resources, and occasionally targeted investments in those accounts. Some provide “concierge” access to technical or development resources. Executive sponsors are assigned to these accounts.

Yet day to day management of the relationship is largely left to chance. Few companies hire true strategic account managers (SAMs), choosing instead to promote their “best” individual reps into a role that requires significant team and process management skills.

While SAMs may be compensated on multi-year revenue attainment, share of wallet gains and occasionally customer satisfaction scores, the other sales people on the account, called specialist, pillar, or portfolio sales people, typically retain their quarterly and annual quota targets, and frequently are re-assigned year to year.  These portfolio sales people don’t typically report to the SAM, usually have competing business imperatives for their own product sets and may even compete with one another, as multiple products from the vendor may solve individual business or technical problems.

In short, a primary driver of disappointment in strategic account programs is that the planning process typically focuses on sales planning rather than relationship planning. 

Developing a Plan Isn’t Sufficient

SAMs are typically expected to develop an annual account plan, and some collaborate with their portfolio sales people to do so. Others just wing it. In most cases, the output is indeed a plan…a written document that is revisited annually…an artifact that provides no guidance for the day-to-day governance of the account. It is a sales plan with detailed lists of potential opportunities, alignment of products to perceived business or technical problems. The plan typically lacks a thorough analysis of the influence map within the account or any plans to bolster relationships with important internal and external (partner) stakeholders.

A recent survey conducted by the Strategic Account Management Association (SAMA) found that, even within their membership, a mere 11% of account plans are “effectively executed.” That’s a pretty dismal adherence rate, given that these plans should be the primary pathway to better customer relationships and higher revenue generation! 

What to Do?

If your organization is serious about strategic accounts, the first step is to ensure corporate support for a multiyear investment in the process of account planning, management and governance. While results will appear almost immediately, the full impact of an effective strategic account program will not be seen until the second or third year of the program. If the program is maintained, those results should be long-lasting!

The next step is to set up a framework for success, including:

• Hiring SAMs with strong team management skills
• Developing programmatic analysis of customer financials, industry growth trends, key stakeholder profiles, installed base, competitive SOW and more…
• Enrolling management of each portfolio sales organization in the process and creating a consistent set of rules of engagement
• Developing a process for thoughtfully identifying the strategic opportunities and challenges within the customer organization
• Installing a team governance process to ensure success on an ongoing basis

Team Governance?

In my experience…and I’ve driven strategic planning for more than $2B in revenues…the last item in the framework is the real challenge. Teams gather to conduct the planning process…and then scatter to the wind. Individual reps receive conflicting directives from their management, sometimes in conflict with the team. Occasionally they go “rogue” in an effort to land revenue this quarter or fiscal year, upsetting a much larger, more strategic deal.

To address this issue with one very large software company, we established the concept of sales team “program management” for their Account Team Unit (ATU). Initially, the function of program management was handled by an existing team member, with the goal of providing dedicated headcount to take on that function as necessary. As we developed the strategic account program at another company, one core team member owned team facilitation and took on governance as necessary to support the strengths (and challenges) of the strategic account manager. 

Thing One – Visibility

The SAM must have visibility on the activities of each portfolio rep (and their sales consultants), ensuring consistent team/account messaging across all initiatives and engagement; and whether individual reps are engaged. That visibility would also help the SAM to know where a rep needs help with access or organizational support. Reps gravitate to where they see opportunity, leaving broken promises of supporting the SAM and the strategic account. “If it’s not closing this quarter, I’m not wasting my time pursuing it.” 

Thing Two – Customer Participation

However, even if your organization successfully designs and implements a strong planning and governance framework, this only provides the “inside-out” view. It’s a series of hypotheses around “what we think the customer might be interested in…” And here’s where most companies fail in their strategic account planning process. They neglect to include the single most important stakeholder in the process — the customer.

Sure…it can be challenging to include the customer in the process, and sometimes the customer’s strategic focus doesn’t align with what we want to sell. Go figure! Yet, deep engagement with the customer in the planning process leads to more involvement by the customer, better “time and access” for discovery and relationship building, faster decision cycles, larger, more profitable deals, and higher customer satisfaction. That planning process, by the way, is a cycle rather than an event…a series of regular engagements with relevant resources, and commitment to action and investment on an ongoing basis.

Many companies leave the participation of the customer to be handled by the SAM. A few formally drive a “co-creation” process with the customer, ensuring that the customer has a seat at the table in the planning process. I’ve facilitated strategic account planning in F100 customers’ boardrooms, with active participation of key customer stakeholders throughout the process. Their participation provided valuable direction for our sales investments and led to the identification of significant new opportunities. Once a good context is established for the joint team, everyone looks forward to the regular discussions. We’re helping our strategic stakeholders to address significant business challenges and they have a sense that we’re “in the boat” with them, that we are truly committed to their success. 

Strategic Account Planning and Governance as Competitive Advantage — Actions to Take

If you believe that your strategic account program could drive more value for your organization (and for your customer), a key area of focus is individual sales rep activity, messaging and governance. We are exploring a new approach to better manage this area and am interested in partnering with a couple of organizations to pilot that approach.

And the second key area is customer involvement. If you’re not actively, routinely involving your customer in the strategic planning process, you’re leaving significant money on the table and wasting valuable time and resources on unqualified opportunities.

Thanks!

Alignment or Collaboration?

IDC and Lattice Engines recently hosted a diverse group of executives with a wide range of responsibilities and interests, including: corporate marketing, industry marketing, demand generation, sales operations, business operations, and customer intimacy. The following is a brief thought piece based on our conversation.

Tom Barrieau, IDC sales enablement analyst, provided a foundation for the conversation with his comments on how the buyer’s journey has changed and the impact of those changes on the disciplines of marketing and selling. Technology has enabled better, more effective, contextually relevant marketing and selling. Yet marketing and sales organizations are finding it difficult to collaborate at a high level because the processes for doing so are still being thought out…

For those of us who started our sales careers in the days of “feature and benefit” selling (how quaint!), we remember that sellers held the information and the power. Buyers were reliant on their vendors for most product and much usage information. Sellers would conduct extensive discovery about their prospects while providing that education. White papers provided a primary vehicle to educate prospects on how to acquire, implement and derive value from technology purchases.

Today, in both the B2B and B2C worlds, buyers may engage prospective vendors after having completed much, perhaps most of their research and due diligence. Buyers will leverage third party sites, forums, social media, events, etc., where they gather information (not all of it accurate, by the way!). The buyer or buying team may then initiate an RFI or RFP process based on what they’ve learned from this research.

This new world presents several challenges. A buyer or buying team may go through the process of evaluating, purchasing and implementing a specific product or service no more than once or twice in their careers and may not know all of the issues to consider or how to prioritize and value the information they gather.

Here’s a personal example…

A few years ago, as an active road cyclist, I decided to take up the sport of cyclocross racing. Long popular in Europe, cyclocross has an active community in New England and in other parts of the US. This flavor of bike racing takes place in fields and on singletrack paths, occasionally requiring jumping off the bike and running up a slope with the bike on one’s shoulder or bunnyhopping a 12 to 18” tall obstruction on the course.

I’ve been bike racing for a long time and I’m comfortable purchasing bike goodies on eBay. So I purchased a used cyclocross bike on Ebay, from one of the top builders in Europe. Got a pretty good deal. The only problem with the bike was its color – an unattractive mustard yellow. I visited a local bike builder, Toby Stanton of Hot Tubes, who offered frame refinishing services and asked him to repaint the frame in my favorite color – a deep blue.

Toby asked why I wanted to have the frame repainted.

I responded: “Because I don’t like the color…”

He responded: “Well sure, I could paint it for you, but it still won’t fit you properly…

As an uninformed buyer, I made the incorrect assumption that a cyclocross frame should be the same size as my road frame. A knowledgeable seller, if I had engaged with one rather than venturing out on eBay, would have caught my mistake early in the engagement process. Fortunately Toby didn't follow me down the path; instead he offered to build me a sweet custom deep blue cyclocross frame, which I'm still riding and racing 15 years later!

It’s the job of knowledgeable sellers to guide their buyers through their process, to help them avoid the mistakes they would otherwise make because they simply lack the experience of evaluating/acquiring a specific type of product or service.

Technology allows us to conduct some of that buyer discovery independently of any specific interactions with the buyer. Today, when a B2B buyer first visits a website, data augmentation techniques allow us to build a comprehensive profile of the buyer’s organization – all of that company’s firmographics, technology stack, prior engagements with the company, even a propensity to buy based on the company’s success model. It’s even possible to append specific psychographic information to an individual visitor.

Contextual Relevance

This capability allows companies to respond via their marketing automation platform with contextually relevant information.

Hospitals use different language than insurance companies. Buy side versus sell side. Public sector versus private. Discrete versus process manufacturing. Consulting versus professional services. Large company versus small. Hierarchical business model versus federated. Open source versus proprietary. Cloud versus on-prem. VC funded versus family owned.

Use the wrong language, the contextually incorrect information, and you will be moved to the bottom of the list. “That company just doesn’t understand us…”

Most companies understand this requirement, and many are moving to implement the capability. The challenge is not technical; it’s a process problem. Who’s going to create all of the contextually relevant content? Who will keep it fresh? How do we know we’ve got it right? And organizations, aware that much of their externally facing content is never consumed, are reluctant to create more. Just think of all the permutations…size X ownership model X industry X tech stack X growth rate…

An Early Warning System

Technology also helps companies to identify prospects just starting out in their buying journey, months before they first visit the company’s website or engage with a sales person. Consider the case of a midsized financial services firm, whose board has just mandated an active focus on security and specific actions to be taken within the current fiscal year. Senior executives, managers and individual contributors will start researching security issues and options – DDOS, managed security, mobile device management, personnel background checks, etc.

This activity will rise beyond the “normal” level of casual browsing…more people at a given company conducting research, a concentration on specific topics, search terms, vendors, etc. A buying group is in the process of forming. And their online behavior is signaling “intent.”

Intent monitoring allows a provider to identify this early interest and to act accordingly. In a few cases, due to prior history or target company status, it might be appropriate for a sales person to place a call directly to the Chief Information Security Officer. More commonly, the proper response is for the provider to implement (or expand) a targeted nurture marketing campaign with contextually relevant display advertising, marketing emails, etc. If done correctly, the campaign will both inform and steer the nascent buying committee, perhaps making the case for managed services or sharing a well thought out security evaluation process published by an industry analyst firm.

Mind the Gap

The unknown ground, the gap, so to speak, is how to effectively include/engage/enable the sales team in this process. The buyer (or the buying team) is undertaking a potentially lengthy buying process or journey, one that might take months before they, organically, initiate contact with any vendors. So, how do we enable the sales person to follow the buyer in that journey, to engage at the proper time, and to be on the same page, so to speak, as the buyer. Or…to be slightly ahead of the buyer and be just a bit provocative (provocation based selling) or challenging (the challenger model) in their approach. In this case, the sales person must have a good grounding in the customer’s business, their industry and the lessons learned from other customers.

Actions to Take

If you’re a savvy marketer or sales operations executive, you already know that you can accelerate your revenue flow with the proper application of technology.

The devil is in the details…so sit down with your sales or marketing counterparts, select a bite size opportunity, map out the processes, content and technology required for success.

Engage with your trusted vendors for their advice and counsel; they’ve been through this before and they can help you identify best practices and potential pitfalls. Make sure you have executive sponsorship and support, sales leadership buy-in, and enough runway that you can actually prove your hypotheses.

·       Give up the concept of marketing and sales alignment. Alignment simply means “agreement or having common goals.”

·       Adopt the context of marketing and sales collaboration. Collaboration requires both alignment and relevant, shared action to further those common goals.

And remember, you’re not the only one facing these challenges and opportunities!

Thanks,

Lee