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Sudden Death Sales – Sales eXchange – 5426

I was watching the Uruguay – Ghana game with a friend on the weekend, (wrong team won).  As they finished the overtime, and went to the penalty shootout, we started comparing the game of soccer to a sale, when he made the comment that I found interesting, he said: “It’s a good thing that sales does not end in sudden death”.   After a minute of thinking it over, I suggested that he was wrong, (after all he picked England coming into tournament) that every sale is a sudden death game.

Like the World Cup, it is not a permanent death; we all know Brazil and Argentina will definitely be back in four years; just as you will be able to revisit the opportunity in the future.  I also want to be clear that it is not about defeating the buyer or customer, but more about two specific facts.  First, assuming the buyer selects an alternative and that other product or service is not a complete bomb, it is very likely that they will be out of the market for a couple years or more.  Second, either you or the rep from the competitor goes home empty handed.  There could be a whole bunch of reasons for this, not all logical or based in fact; just look at the impact the questionable refereeing has had, any number of teams can argue that if not for the referee…, I am sure USA readers are convinced the goal against England was indeed in the net, all subjective and “might-have-been”. 

The more we talked about it the more it became clear that for the time a given opportunity is in play, it is very sudden death event.  There are a number of things you can do to change or salvage things as long as the opportunity is in pay, but once a final decision is made, and the papers signed, it is sudden death.  My comrade of course insisted that there are differences, first on the list for him was “the relationship”.  What relationship, they just picked your competitor, “you go home empty handed”.  Can you see Diego Maradona explaining human aspect of their fate, “we may have lost, but we did the country proud”; or the French coach explaining things to the parliamentary hearing?  It’s about the plan, the skill, the execution, but mostly it is about the win, in sales as in football.  Which would you rather participate in, a meeting to review why you won the sale or a meeting to review why you lost the sale?  (BTW, after July 12, count the number of former team coaches from the final 16).

Part of the issue goes to attitude and passion.  You can see the passion in the players on the pitch, and in sales you can usually spot those sales people who have the passion to deliver, for both the customer and their companies.  It shows in their preparation, practice and readiness.  You can  see who is there to win, and who is there to collect a base salary.

This attitude very much drives behaviour, if you do not play like it is win or die, you will settle for less, and do less, hoping for a bounce, or hoping your “relationship” will tilt things your way.  The flaw with that is your buyer is also accountable to someone, someone other than you, and their ultimate decision will be driven by what they need to live up to that accountability.  It is our job to make them see that we, our product and company are the ones that can deliver, before during and after making the sale.  Anything short of that leads them to buy from someone else, which is why sales is a sudden death game.

What’s in Your Pipeline?
Tibor Shanto

Time Out for Timing – Saturday Sales Tip – 2719

This being a long weekend on both side of the border, both celebrating their respective independence coming conveniently at the midpoint of the year.  (Do you think there was a consultant making a lot of money helping new countries consider the impact on future generations of sales professionals of having their independence day right at the middle of the year.  “Act now, the 4th and 1st are taken, poor France had to settle for the 14th“.) It provides a great opportunity to step back a minute, review and make adjustments for the remainder of the year.  There are a number of things that can be looked, and we won’t go through tem all because I think if you look at one and make adjustments, you will have a positive impact on most.   The thing to examine is how you are allocating your time.

In the past we have spoken about the need to not worry about managing your time, see Allocate Time – Manage Activities, but why it is more important to allocate the right amount of time to key activities, and then managing yourself and activities within the time allocated.  The goal is to understand what activities you have to execute to deliver against goal, how much of your time you need to spend on each activity to succeed, and then allocate the time and stick to the activity.  In the article cited above, the example (example, not a rule or recommendation) is:

Admin 12%
Account Management 31%
Selling 36%
Prospecting 21%

That is the percentage of time over a cycle you spend on each activity.  What we find is that if someone is not on target half way through the year, they have generally not spent the agreed on time with each key activity.   For instance in the above, it may look like:

Admin 15%
Account Management 45%
Selling 35%
Prospecting 5%

 By recalibrating, making sure that they perform things in the right proportion, they are often able to get back on track.  While we understand and appreciate the many challenges a sales professional faces, and all the reason they can be thrown off track, the goal here is not to explore each of those, but to get you to understand the importance of time allocation on each activity, and to get you to take ownership for managing.  Not managing the time, but managing what you do with it.

It is also a good idea to do this at the mid-point even if you are on target.  There could be changes in market conditions, products, etc.  By doing a quick reality check you may find that things are good as they are, or on the upside, you may find an opportunity to make adjustments that will accelerate and propel your success.

The key is that since time is the only non-renewable resource in sales, you can impact a lot of other things involved in your sale by making simple adjustment to time allocation and adhering to the activity it was allocated to.

What’s in Your Pipeline?
Tibor Shanto

Happy Canada Day, Eh!9

You know the great thing about being in sales in Canada?  We celebrate the start of the second half of the year.  While most of the world celebrates January 1 and the start of the year, we here in the Great White North also kick off the second half of the sales year with a party on July 1.

Think of all the hope and opportunity packed into January 1, after the parties, the rewrapping of gifts, and family finally leaving for home, there is the start of a new sales year, new quota, new beginnings.  But by the time Easter rolls around, and you have sludged through winter, eked our Q1, the mid point at time can be a low point.

But not here, in the land of G20, we know July 1 is party time, hey if it works January 1, it will work July 1.  Forget the last six months, it’s the next six that count.  So get your Canadian on, and party down, Monday it’s a new day, eh!

How Much Research? – Sales eXchange – 5325

No matter what you call it, research, background, prep work, knowledge gathering, there is always a good dialogue to be had around the question of how much of it a sales person should do in advance of and during a sale.  The amusing thing about it is that in the end there are always more opinions than the number of people you asked.

One challenge is that beyond the amount of research one should do, there are also differing views of when and what should be researched.  Some feel that you must do all your research before you make the initial call, allowing them to impress the buyer into Engaging.  Others feel that there is one research activity and focus before you make that initial call, but then once you are Engaged, you need to continue the researching based on what you unfold while taking the buyer through the Discovery process.  I would certainly agree with the latter, especially given the fact that I think the seller needs to set and control the flow, and having knowledge of things in and around the buyer can only help in Engaging and extending the conversation.   Once Engaged, you can leverage your Discovery skills and your newly researched to extend the sale.

Where things get interesting, regardless of where you land on the above, is the question of how much time one should or needs to spend researching before you make the initial call to Engage with a potential buyer.  Again, let’s be clear, this is a first call to a potential new prospect, not someone you have worked with or are familiar with.  The knee jerk response is a lot, with the underlying thought being that the more you know the better.  I would argue not, the deep dive should come once you have Engaged with the potential buyer, and they have agreed to enter into the conversation with you when you meet as a result of the Engagement call.  Doing the deep dive before you have that commitment may not be the best things for a couple of reasons.

Let me give you a specific example, I was working recently with a rep who sells product is used by most B2B businesses, it is readily available but not a commodity, and could very much be sold as a solution based on how it is delivered and integrated.  His conversion rates show that he needs an average 5 new Engagements a week, which usually involve around 10 calls a day or 50 a week.  He told me that in the process he talks to about 15 to 20 people, the rest being voice mail or some other form of message. 

In our discussion he told me he doesn’t have sufficient time to complete enough calls to get to his target, instead he was averaging 2-3 new Engagements per week.  He told me it takes him 3 to 3 1/2 hours per day to complete the task.  “Why so long?’ I asked, “I need to research the company thoroughly before I call them”.  Apparently he does 15 minutes of research for every company he calls, 10 a day, 150 minutes, 2 1/2 hours just for research.

The overwhelming need to know everything about the buyer/account before you ever call them has a number of downsides.  First, this need for thorough research stems from the need “to know everything” about the person and company before you call them.  But if like me, you believe that the biggest obstacle to learning is knowledge, then knowing everything becomes a barrier rather than an enabler.   If you know everything, you will be inclined to demonstrate it by spewing your heaps of knowledge at the buyer, who will be left with no option but to run for shelter, away from the preaching.  Gaining Some knowledge in advance is right, but not an encyclopaedia;  enough knowledge to formulate good questions, to have an understanding of the situation to be able to entice the buyer to Engage is good and needed, knowing enough to bowl them over is not.

The other factor is the cost.  Based on the data, with 30 calls ending in no direct contact (voice mail, etc.), that is 450 minutes a week, just to leave a message, 7.5 hours for what?  Taking that a step further, when you calculate it from a cost point of view, it breaks down as follows:

Monthly quota:                              $75,000
Working Hours per month:       220 (22 days X 10 hours p/d)
Value of each hour:                      $340.91 (75000/220)

Value of three hours:                   $ 1022.73 (2.5 research .5 calling)
You can buy 4 very well qualified leads for that money and still eat a good lunch; I know for a fact you can buy qualified C level appointments for less than that.  So why bother?

Now spending a few minutes on each target; organizing your calls so you can use and recycle what you have researched will allow you to be much more productive.  Let’s say you were going to call 25 companies this week from the same or similar vertical or group.  You can probably do 15 minutes of research to learn about industry trends, etc.; a couple of minutes if need be on each of the targets’ site to learn about them.  When all is said and done, a total of 65 minutes, or 2.6 minutes per company called.  Much more reasonable cost per Engagement, and an infinitely better use of time.

Again, once you have secured and Engagement, you do need to do the deep dive, learn about the opportunity.  But as stated above, learn to formulate questions, learn in order to better position your solution and company based on the buyers objective, and be able to educate the buyer in the process based on you industry expertise and specific understanding.  Which ROI would you want?

What’s in Your Pipeline?
Tibor Shanto

Did iPhone 4 Hang Up On Customers? – Saturday Sales Tip – 2622

One of the key lessons every sales professional has to learn and accept (and the earlier in their career the better), is that perception is reality, and the only perception that counts is the buyer’s.  Once you learn this lesson you can begin to focus on communicating and delivering value, the right experience and the right perception to you customers.  Few can escape or buck this reality.  The ones that do, and usually they can’t do it ongoingly, are companies that achieve cult status with their followers and can risk occasionally taking them for granted , most companies can’t.  One company that can is Apple, and it would appear that they may be doing just that.

If you are a read of this blog you know I had an interesting experience with Apple earlier this year.  I don’t dislike apple, the stock has made me money, their phones look nice, and I was considering getting one till the launch of the iPhone 4 this week.  While early reviews were good, users began to complain about dropped calls and a lack of signal.  IPhone 4 flaw can cause loss of cell strength

Most companies would have to respond in a considered way, ensuring that the news and rumours don’t get ahead of the facts and that a viable resolution is offered.  Which is why I was surprised to see the initial response from the manufacturer, here is what Apple put out:

“This is a fact of life for every wireless phone. If you ever experience this on your Phone 4, avoid gripping it in the lower left corner in a way that covers both sides of the black strip in the metal band, or simply use one of many available cases.” Wired.com June 25, 2010

Or as the headline in the above story suggested “you are holding it wrong”.

OK, so what can we do about that?

Apple’s suggestion: The problem can be resolved by getting a case for the iPhone, cost $29.

Now don’t get me wrong, $29 makes for a good lunch, but it is the attitude towards that customer that makes this response amazing.  Can you imagine if this was Ford or some other mortal company was faced with a similar scenario?  They would not only have to deal with the recall, but bear the expense of the fix, i.e. the cost of the case.

While this is not likely to unravel Apple and the success of the iPhone 4, it is a good example of how even a small whiff of complacency and customers being taken for granted or even ignored can cost immediate business and potential long-term impact.

While it may be tempting to ignore customers, even if the issue is small and easily resolved, it is not advisable.  It is much better to deal with things, even when it may just be perception, than potentially dealing with the reality of a scorned  customer.  Speaking of perception, what’s you perception of the HTC Android phones?

What’s in Your Pipeline?
Tibor Shanto

The Right Pipe Equals Options22

I had a call from the rep in a quandary; she had a client who was running her around, being very demanding and at the same time being less than straight with her.  Having worked with her in the past, I know that she was not prone to panic so this had to be a real problem for her.  The challenge or problem for me was that I saw her predicament as different from the one she saw.

As we continued to discuss the sale, I felt that there were a number of things she could try, but was it really worth her time, effort and emotion?  While the opportunity was a sizable one, it may not be worth the aggravation, especially if it does not happen; if there were integrity issues now, they are likely to continue and so will her strife.  So I asked “maybe it’s time to walk away, move on and work on something else and revisit this another time?”

She confided that she can’t, because they were one of only a handful of prospects in her pipe (four really), and this was the largest.  This is what I felt the problem was, not the buyer’s attitude or demeanour.  You can’t always change people, and there is really no way to determine what is behind their stance.  But you can always turn to other prospects and move forward.

It was clear to me that her challenge was that she needed to close this deal if she was going to make plan.  Looking at her track record in the last few quarters, she had a conversion record of 25% of those opportunities at Discovery stage.  Of the four currently in her pipe only three were at Discovery, even if she closed her belligerent client, she would be short of quota, and would need to close another deal, even if it was small.

In past quarters she always kept an eye on the front end of the pipe, she traditionally allocated enough time to prospecting to have at least 10 real prospects on the go, which gave her a cushion based on her conversion rates.  Q1 was good and bad at the same time.  Good: she landed a couple of big deals, doing that kept her busy, and when she was able to Engage with the client in question she felt it would help her maintain momentum into Q2.  Of course, this was before the prospect in question grew fangs and talons.  Bad: because of the above she got a bit and cocky, and stopped Proactively Prospecting, to make sure the deals closed in Q1, and because she was distracted by the potential size of the opportunity in question.

While it may sound overly simplistic, a proportionally filled pipeline gives you options.  Proportionally means packed with the right things, not everything.  Just stuffing it is no better than having too few opportunities in it; you don’t want to clog your pipeline and have an “Opportunity Arrest”.  You do want to have a blended pipe based on size, length of cycle and other factors, one being enough opportunities to deliver the number of deals you need based on your conversion rates.  For an easy way to determine this read Working Backwards From Your Goal To Get Ahead.

As a not so wise short New Yoker once said, even the best sales rep can’t do his thing without a prospect.  The challenge our friend was having is if she walked away from the opportunity in question, she would have virtually no prospects.  Instead, she was faced with some bad choices, put up with the client’s crap knowing that it was her only hope to salvage the quarter, and knowing that they were bound to become a problem client.  She could forfeit the quarter, not good for career or rent. 

Alternatively she could prospect really hard between now and the end of the week and hope to close something by next Wednesday. Sure.  Not only do we have half the city out of commission due to the G20 meeting here in Toronto, but July 1st is a holiday and half of Toronto will disappear mid-day Wednesday.  She could always offer discounts to the other three prospects, but that would just be stupid, right?

At the end we agreed that this will be avoided in the future by ensuring that she did in fact have the minimal number of opportunities flowing through to ensure that she can make rational decisions rather than being forced to make emotional choices for the wrong reasons.

We also agreed that she would meet with the prospect in question, and professionally discuss what she sees as “obstacles” and ask the client to articulate where they are, and in the process either clear the air and have a productive prospect, or make the unfortunate choice of walking away.  Keep you posted.

What’s in Your Pipeline?
Tibor Shanto

Beyond Value18

There is no shortage of talk in sales about benefit and value. While it may have taken a bit of time to get sales people to focus on value, not as defined by a “value proposition” crafted by your marketing department, but value as perceived and defined by your buyer. This is why we teach sellers to use the Discovery phase of the EDGE Sales Framework as a mutual process; mutual meaning both discovering things about the buyer, and allowing the buyer to discover things about your offering and in the process mutually defining the common value.

Read On…

What’s in You Pipeline?

Value Propositions – Sales eXchange – 5226

I always struggle with the phrase and the delivery of “The Value Proposition”.  I understand what is meant when people use the phrase, and what it purports to do, but in most instances, usually due to execution, it just ends up being a pitch, a higher quality or level pitch, but a pitch nonetheless.

In many cases the “the value prop” by nature are canned, are developed by marketing; while they may include input from ‘focus groups’ or actual clients, they are usually devoid of direct input from the actual prospects the sales reps is Engaged with at a specific point in time. By virtue of that fact it negates or limits the Discovery process so necessary to real Engagement and specific value the buyer may or may not realize.

This is not to say that sellers should not be aware or know the value they offer, and delivered to buyers, it is a question of how they use it in the process of a sale to specific buyers, rather than assuming that the same proposition will mean the same value to all buyers.  The balance many sellers try to achieve while executing the sale, is one between presupposing and pitching and using their knowledge to Engage; to entice the buyer rather than overwhelm the buyer.

This is especially a risk early in the process when the seller is usually ahead of the buyer in their respective processes. While the seller sees and is genuinely excited about the possibilities, the buyer, having been approached may still be trying to weigh factors to see if they should Engage or not.  At times we proceed to hit them with our “value prop” way before it is time, before they are ready or Engaged.

A better use of the knowledge of how we can deliver value is to use that knowledge to create questions that will drive the Discovery process and lead the buyer to the same point in their buying cycle that we are at in our selling cycle.  Use the understanding of the value to develop questions that establish our credibility, and our expertise, so we can be seen as a resource by the buyer.

There is also the reality of self-discovery by the buyer; no, not discovering one’s self; but discovering by themselves how valuable our solution is based on their specific circumstances.  We have all heard the statement: “Knowledge is the biggest barrier to learning”.  So if we enter into the sale knowing the “value prop”, it may leave little room for “learning” the specifics of each individual buyer. While there are likely many similarities, there are also differences between buyers, not the least of which that each buys in their own way. By taking your knowledge and using it to create questions that involve and Engage the buyer, you’ll do a much better job of asking the type of questions that will get the buyer thinking, and give them the sense that you are an expert because “you understand” as demonstrated by your questions as opposed to you canned “value prop”.

What’s in Your Pipeline?
Tibor Shanto

Be A Trader – Saturday Sales Tip – 2522

Selling at its best has always been a game of trading, a balance of give and take.  This may be more obvious and used more often in the context of negotiations, especially price towards the latter part of the deal, but you can barter and horse trade throughout the cycle not only to achieve your objectives, but as a means of accelerating the deal.

As with most things in sales, execution is key, and key to execution is planning, an activity many in sales don’t much take to.  I suppose you can succeed by reacting on the spot and trading something for another; but you can leverage it so much more if you plan it in advance.  By planning and knowing it in advance you will be able to work towards it with the way you conduct your Discovery and Impact portion of the sale.  By planning in advance you can set the flow and move towards objective with more conviction and velocity.

There are a bunch of subtle thing you can “trade” to achieve results.  Many think it has to be tangible but it does not.  One thing you can trade is “personal validation” in the form of an ego stroke.  You can educate a buyer or you can lecture to a buyer, we prefer the former.  To do that the first thing you have to do is open their mind and create the opportunity to learn.  At times, the easiest way to do that is to allow the buyer to teach you something first, to give them the opportunity to be “the man”, to be right.  You’ll find that when you do that they will be more open to “learning from you”.  So plan ways to introduce subjects where you are willing to concede on so you can use it early to Engage and involve the client.

You can also trade access to either people, resources, or things like events.  One simple example would be a trade to meet your executive in return to the buyer bringing executives from his/her (so PC) company.  Other examples would be access to a resource, a buyer could use or has expressed interest in a technician or expert, of equipment, trade that for concrete solid commitment that specifically move the sale forward.  Events would be industry or process events, not hockey or basketball games.

The obvious is trading related to price, but even here you can plan in advance and get not only forward movement, but accelerate commitment time, so even when you are put in a position to make concession, one gain is completing the deal soon, and being able to invoice now vs. the future.  No matter what you choose to trade, make sure it is planned in advance, and moves your agenda forward.

What’s in Your Pipeline?
Tibor Shanto

The Engaged Manager16

If you have followed this blog you know that I have always advocated that a front-line sales manager needs to lead from the front, not from the back or a remote location.  This applies to all aspects of their leadership, while they may be managers, they are not above the fray.  So it is disappointing to see managers who fail to lead and use their title or role as a justification.

While I may have a bias, I think the most egregious example of this is a sales manager who does not participate in sales training programs and workshops their teams are participating in.  Most of the time they are sitting in their office, moving paper from one pile to the next, check some e-mail, do some real important things.  Must be really important, other wise they would be in the room with their teams, participating, reinforcing, and generally leading the process in a hands on way.

What is the message to team members when a front-line sales managers does not participate?  In effect he is saying that “I am not that invested in your development, things will not be that different after you have been trained”.  This is even worse when the same manager is not even aware of the content, and has not prepared for the follow up needed to ensure adoption.

In most cases we work with managers in advance not only to help them get familiar and comfortable with the material about to be presented to their teams.  We also use the opportunity to develop a structured Follow Through Action Plan, this integral to the success of the program as it goes to ensure adoption.  Most managers see this as an opportunity to not only ensure that the learning experience is a positive one for all involved, and that they, their team and their company realize a real return on their investment and objectives; but they also have a chance to evolve their coaching skills.

But then occasionally you run into a manager who belies that they are the end all and be all, while their teams need all the help they can get, they are great and need no improvement at all.  It will not surprise you to learn that in most cases these are the very managers who could use the most help, and usually are not serving their teams or leading them to improvement.

There are a number of reasons for this, usually it is a case that the individual was not suited to be a manager to begin with, likely got the job because they were a good rep, and got the pat on the back, and in an effort not to lose them the company promoted them.  This usually leads to two problems, a territory that lost a capable rep, and having a manager who neither leads, coaches or manages the team, just plays the role.

At the same time lets not forget that the manager ha a leader as well, and the manager usually gets his signal from them.  If training is just a check mark on a list of KPI, and is discussed in those terms at management meetings, it is likely that the manager will have a laissez faire attitude towards it, and reflect that to their teams.  On the other hand, if improvement and development is part of the sales culture, supported right from the top, that is what will cascade down.

What’s in Your Pipeline?
Tibor Shanto

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