Welcome to The Pipeline.

A Random Walk Up Sales Street – 2410


Move On or Hang On?

A lot of the chatter on Sales St. this week was about year end, but not the expected banter about closing the year strong or planning for next year. It was more about which team individual sales professionals are looking to be on; and from sales leaders, who they plan to have on their team going into what most believe (hope) will be a better year.

In some ways these two sides of the coin illustrate the disconnect or difference in the way reps and leaders view the profession, their roles and resulting approach.

Many leaders realize that they have people on the bus who don’t belong there, but they are reluctant to let them off at the next stop, thinking that it is worst to have a vacant territory.  It is not. Coming from the “Hire slow, fire fast” camp, I have always believed there is greater risk in having someone who is either not capable or in whom I’ve lost confidence, in a territory than to have the territory vacant. This is why as a sales leader you should always be in interview and search mode; just like your pipeline, it easier to get rid of a dud, opportunity or rep, if you know you have other prospects, options or recruits ready.

So waiting for the new year to part company really doesn’t make sense if you are a sales leader. If the rep is so bad that you want him/her off the team, how much upside can they really provide in Q4?  If you wait for the first of the year, you are not only going to have to allow for ramp up time, no matter how little may be required, but you will also have turmoil when you most want to foster teams. It is likely that you are already introducing new targets, new comp plans, maybe even new territories, why take on more at that time. Seems to me the best time to initiate a departure strategy and related actions is as soon as you realize that the rep is not a fit anymore, not long after you know the situation is far beyond salvage.

Reps are indicating that they are hanging to realize any yearend closes, “having worked on the deal for ever, I want to at least close it before I move on”.  Others are waiting for yearend bonus, or some form of monetary reward they may (or may not) get.  While this may be sound in a few instances, it is not for most.  If you are basing your success on last minute deals based on budgetary cycles or other lunar driven events, you are truly “hanging on” rather than proactively driving business. 

On the other hand let’s say you are a good rep and feel you are limited by your current organization, or feel that you have more to offer and gain elsewhere, you should still make the move now, rather than waiting.  (There is the underlying assumption here that there is somewhere for you to move to.)  If there is, it must be true that you see more potential, then why wait, if you look at it from a 12 – 18 month perspective, in most cases yes, you may leave a few shekels behind, but you will also set yourself up to make a whole bunch more by better positioning yourself in your new gig.

If you make your move based on opportunity rather than “timing”, you will be able to get those yearend closes at your new place, and at the same time tee things up for a great start to next year, I bet this will allow you to make up for what you may feel you leave behind and then some.  So just as with the advice to the sales leaders, the time to make the move is when you know you can do better for you and your organization by moving on.

As with most thing in sales it is about the quality of the execution.

What’s in Your Pipeline?
Tibor Shanto

Sales Bloggers Union – For the 20%11


It has been a while since I have mentioned the Sales Bloggers Union, but we are very much still here, and growing in fact.  We have added new members and dusted off some old ones, with the end result being a stronger group with more great insights and opinions and skills to share.  Our topic this month is “How Were Your March Sales?”, allows the bloggers to look at the importance of starting your sales now if you are to success in 2010.  While you will be reading a lot in January about what to do to start the year right, that will be too late, because you January sales, February sales have already started, and if you are only thinking about 2010 after January 1st, hmm.  The 20% of reps that hit their numbers every time, know that and that is why they are reading The Sales Bloggers Union, so invite everyone to take a look, share your thoughts, make some money and have fun.

What’ in Your Pipeline?
Tibor Shanto

80/20 – Part IV – Your Continuous Development13

Book shelf

“What was the last book you read?”

When I was hiring sales people in the corporate world, I always asked the candidate three related questions. The goal was to see the character behind the facade, and as an indicator as to whether the person in question was likely to be in the 80% or the 20% group. The questions were:

First Question:

“What was the last sales book you read?”

This would eliminate about half the candidates as they would fidget and straighten themselves uncomfortably trying to come up with a name, before finally admitting that they had either not read one at all, or it has been a long time since they thumbed through Tom Hopkins classic How To Master The Art Of Selling.

Question two:

“Why that one?”

Straight forward, allowed me know if it was part of their routine to focus on self development or it was an anomaly. A lot people ask candidates about self development and they get the standard blurb, I wanted to see it in action. This usually pruned another 20% or so of the heard.

Last question:

“What did you learn from it?”

They were able to impress me with almost anything here, especially if I hadn’t read the book. Of course the ones that said “nothing, I knew most of it already”, went no further.

To this day it strikes me odd that so few sales people actually read sales books regularly. In fact how few embark on a program continuous of self development. Sure there are those that are required to accumulate continuous education credits to maintain their licence. Real estate, insurance, financial advisors, but even these are not all sales courses, many are just product related courses provided by vendors, thinly disguised product pitches. What’s even funnier is when they refer to sales training as soft skills, ha, don’t these people realize sales is a contact sport!

Even in those instances where a book does not present anything new, it still is a positive experience to read it. Last year I was invited to attend a Brian Tracy presentation. When I came back my wife asked me if I had learned anything new. I said no not new, but I remembered a whole bunch of things I stopped doing that I should start doing again. So I did and it made a difference.

What’s in Your Pipeline?
Tibor Shanto

80/20 – Part III – Clients11

Man over computer

Continuing on with the dismantling of the 80/20 rule for sales, we now look at the clients.  Another widely accepted aspect of the rule is that in B2B sales, 80% of your customer support resources, time, and attention get sucked up and consumed by those customers that generate only 20% of your revenue.
On the upside, the small group of customers who do generate 80% of your revenue are generally so much less dependent and demanding that one can usually still service them and satisfy their minimal requirements when we should be doing so much more.
Many of the “demanding 80″ are the clients you knew would be a problem even before you closed them, in fact you know you shouldn’t have even closed them, but you did and now you find that you are spending disproportionate time, energy, and emotion on them.  All that bandwidth would be better spent growing the 20% who generate 80% of your revenue, and finding others like them.
So how do you move to the 70/30 space?
Well this time of year is a great time to review, measure and fire those clients that don’t stack up.  What’s the worst that can happen; they go to your competitor and waste their time, resources and opportunities.  With your new found bandwidth you can concentrate on replacing the deadwood with fresh clients that look and act like the 20% you love.
With the many outputs available in today’s CRM’s, it is a simple process to create straight forward and meaningful benchmarks.  Margins are good, cost of sale, payback period, and ongoing profitability.  You can also include factors such as support and payment records, and more.  Once you decide on which metrics make sense for you and your company, the rest is easy.  Fire the bottom 10%, bottom 20%, or if you are feeling queasy, start with 5% now, and do another round in June, just start.

You should also review and take a good look at the 20% that are your bedrock.  Study them, know them so you can take your new found bandwidth and reinvest it into finding more like them.  Find out what they like about you, your company, and why they selected you in the first place.  Then you can develop an action plan to find more companies like them, willing to pay, even a premium, for those same attributes, and have fun doing it.

Once you grow these accounts to be 30% of your account base, the exponential growth in revenue will more than make up the revenue you fire.  The opportunity for solid referrals and other dividends are just a bonus. 

It is easy to be busy putting out fires dealing with the 80% of customers that hold you back, but once you fire that bottom bunch,  you can get busy having fun filling, executing and monetizing your pipeline.

What’s in Your Pipeline?
Tibor Shanto

80 20 – Managers19

Manager room

Yesterday we started the focus on changing the 80/20 rule, which I should have correctly attributed as the  Pareto Principle, to the 70/30 rule, or what someone today kindly coined the Shanto Principle, (a bit too soon and flattering I think).  Well leading that march needs to be the front line sales manager.
We often tell clients that a dollar invested in improving the effectiveness of their sales manager is worth five invested in skills training for the front line reps.  Further, I was recently shown a quote attributed to the Harvard Business Review which stated that increasing the effectiveness of your existing sales team by 8% provides the same lift as increasing their size of the team by 25%. This just confirms the power and opportunities inherent in sales managers, as they are responsible for the improved efficiency.
Unfortunately many front line sales managers are thrust in to the position without much preparation or ongoing development. All too often new sales managers are successful sales people who are promoted as a reward or as a means of retention, not because of their management skills. (See Management by Osmosis)  Given the fact that I believe the role of the sales manager is to manage the sales process and coach their teams to consistently execute that process, this type of promotion is fraught with potential challenges.  These challenges are often evidenced in the fact that 80% of sales managers are ill-equipped to succeed, usually through no fault of their own.  Addressing this takes effort by both the individual and the organization, preferably in synch.

Organizationally they can look at two simple things, and please remember the goal here is to move the dial a little towards 70/30, which means small steps to gain momentum, and then you can build on it.  First is a High Performance Individual Program, something done by some companies with various degrees of success.  The degrees are often determined by who is running the program, HR or sales.  The problem with HR is they tend to focus on the generic aspects of managing, rather than the specifics of sales.  The challenge when sales runs the program, is they often have the previous generation “80 percenters” is running it, which just perpetuates things.
But done right you can ensure a long stream of dividends by investing in potential future sales manager long before they assume the role.  By teaching them the importance of a sales process, defining, adhering while it is their job to execute it will better position them to manage and coach around the process when they step in to a management position. 
The second thing they can do is to actually have a defined, documented, and clearly communicated sales process.  (Perhaps this should be the first)  Without that you can’t really succeed in sales, and it goes without saying you can’t indoctrinate up and comers to believe in and benefit from it so that they will then pass on the habit to the next generation.  Changing the heritage from the old “80 percenters” to the new “30 percenters”
On the individual front is to understand the difference between truly managing a sales team and being super sales guy.  Many step in to the role feeling that they have to be all things to all their people and spend very little of their time actually managing and/or coaching.  They continue to get involved in deals, salvaging them rather than developing their teams.  (Although at times they should be firing them).  Depending on the studies you read many sales managers spend less than 50% of their time doing what sales managers should be doing, and doing things the sales people should do, juggling things hoping they don’t fall between the cracks.  In the process their team rarely develop or evolve and they themselves ware out and become disillusioned, pining for the days when they used to close deals and earn full commission for the work they do.  It is not uncommon to see teams where the reps bird dog leads and the manager runs around being super-closer!

By taking the steps on both the individual level and the organizational level, progress can be made and in the process of developing and leading a proper sales process you will likely see more High Performance Individual surface, more efficient sales teams, and a definite movement in the direction of 70/30.

What’s in Your Pipeline?
Tibor Shanto

A Random Walk Up Sales Street – 2315


80 – 20 This!

“We will be geared towards the average rather than the exceptional”
Gerald Bostock/Ian Anderson (take your choice)
As we approach the home stretch in 2009, most of us are looking to 2010 as a fresh start in more ways than one.  But that also brings the challenge of what we will do differently, what will we take in to the New Year to help us move forward and win.  If we don’t change how we do things, we are not likely to change results.  With a month out, I am hearing some tepid optimism, but when pushed for strategy or plan of execution, there seems to be adherence (if not clinging) to the same old same old.  When I ask why not embrace change, we hear different reasons, one that comes up often is that no matter what you do, you can’t change the fact that in sales you have to live and deal with the 80/20 rule.  Really scary thing this passive acceptance of the 80/20 rule as the status quo; especially since the status quo is the mortal enemy of every sales pro. 
The quote at the top unfortunately rings true for many in sales and in many aspects of sales.  While many strive to improve and move the science and art form forward, all too many are quick to not only accept but preach the mediocrity so aptly and sadly captured by the quote and the 80/20 rule.  A rule that not only allows for but rationalizes the fact that many in sales are allowed, no, encouraged to wallow in the “average”. How else would you explain this casual acceptance of 80/20?  Even if it were true, you would think and want sale professionals and leaders to want to defeat and slay the beast, but instead it is used to deflect the accountability required to evolve and win.
I am for ever amazed at the how the 20% that “do”, those that are credited and recognized for driving 80% of the revenue, tolerate the fact that they have to carry the excess weight. I am almost as amazed that the “80%” is content playing the role of the paper weight in sales department. I am also at loss to understand why an organization carries the 80%, especially since they say salaries are one of the largest expenses a corporation has.  Seems to me that if you have a non-performing asset you get rid of it, yet sales managers and organizations are reluctant to deal with their non-performing assets.  I know it is a tough decision, I know we are dealing with human beings, but I think everyone would benefit from tough but clear decision. 
If in fact the 80/20 rule is prevalent, it would make more economic sense to just let 80% of the team go, adopt some Sales 2.0 or 3.07 tools and reap the margin improvements.  I don’t buy the BS that it is better to have someone in the territory than to have it neglected; better neglect than long term damage.  If you know they are not good enough, then so do your customers and that will reflect on you as the manager or the company.  I can see it if one is actively looking for a replacement, fine, but usually they are not.  I used to work with colleagues, directors, who would admit the ineptness of their team members, but insist that it was only a question of time before they improve or leave of their own volition.  Sure, they get a weekly check when they know that they are the 80%, and they are going to leave?  OK, and if I click my heels three times I will be in Kansas, and get frequent flying points to boot.
So this week I want to look at how the 80/20 rule continues to present itself in sales an a few small steps that can be considered, taken, to tilt things.  What if, and go with me here, in 2010 we change things to get to 70/30?  After all, all we need to do is impact 20% of the 80% and we could make great strides.  Over the next few posts I’ll look at some areas where we can take a bite out of the 80%.  It will not cover everything, but I will look at a few areas to consider and act, so as I do, I invite you to not only take inventory in your sales world, but share with us ideas where we can change the balance, so everyone can have a chance to abandon the 80%!
What’s in Your Pipeline?
Tibor Shanto

Cold Calling – No Pain – Just Gain!11

laser phone

In his post “Cold Calling: Pain or Raw Business S&M? Tony Johnston states “it is best that organizations first resolve the question of whether or not cold calling is right for them and who should do it.” 

In my humble opinion, very few B2B organization can afford not to include cold calling as part of their on going effort to engage with potential buyers.  While it may not be the end all and be all, it has been continuously shown that cold calling, based on pre-qualified leads or sources is a cost and time effective way to engage with potential buyer to qualify them as potential prospects.

The last part goes some ways to answering the question as to who should do it, and “doing it” can be divided in to two areas, first the strategy and plan behind the campaign that includes cold calling among other activities.  Second the actual execution of the call.  The former is best achieved through a cooperative effort between sales, marketing, product and other groups.  The latter, is probably best left to sales.  With in the sales group you could choose to have people solely dedicated to setting appointments for their outside sales counterparts.  You can have one person carry the entire sale from cold call, social media interaction, other prospecting activities, through to close, be they inside or outside sales reps.

There is a lot more involved in successfully prospecting but when it comes to the question posed by Johnston, and all the related issues he raises in his post, I believe it comes down to Yes, cold calling is always part of a new business generation plan; Sales should be the ones doing it regardless of whether marketing designed or assisted in designing the program. 

What do you think?

What’s in Your Pipeline?
Tibor Shanto

The WOW Approach to Price Negotiations14


You need to sharpen your pencil!

I would if I used a pencil, I use a pen.

Negotiating is not a favourite of many sales people, but when it comes to negotiating price it seems to be even more stressful.  Even more so when the person doing the “negotiating” for the buyer is really haggling.  In their attempt to beat the price down as far as they can without much basis; we all understand that budgets are tight, but beating the seller into submission rarely accomplishes long term good.  This is why as a seller you need to have a plan so you can remain objective, unemotional and clear headed to deal with the facts when you face this type situation.

The WOW approach allows you to make decisions based on what is best for the deal, your company and the buyer; allow you to look past the heat of the moment and make more solid deals you don’t regret in the morning.

WOW stands for:                 


WISH – Is simple to understand, but not always to get.  Regardless of what you sell, this could be your list price, ‘rate card’, what have you.  If you are in transportation, it may be the ideal price for a particular lane, the odd time you may get it, and that’s great, but usually you find you have to make some concessions.  At times it is not a bad thing, you may do the load for a slightly reduced rate because the client is high volume, gives you multiple lanes, and you can make up for the concession on another lane, and in the end you are whole; other times you may have some inbound freight that will balance things, etc.  Other times the client just wants a lower price because they know the market is soft and wants to take advantage of you, first time you give in you are on a downward spiral that neither you or your company will ever recover from, no matter what (promises or prayers).  If you can regularly get your WISH price you are doing good, and likely not in an industry with heavy competition.

OPTIMAL – Is the price where things are at a balance where everyone can feel they are getting the best possible value.  The true win-win where your company is able to derive margins that allow it to grow and continue to innovate and develop products and service need to meet client demands.  The point where the client is getting full value, maximum ROI and a provider who is pleased to service and support the clients’ objectives.  If you are doing most of your deals in this range, you are still likely facing negotiations, but they are of the sort that makes for good business.

WALK AWAY – Can’t make it any clearer than that.  If the negotiations deteriorate to where the buyer will only buy if the price is at or below this number you have to WALK AWAY, no ifs, ands, or buts.  You need to know this price before you leave your house in the morning, if you don’t, your beat before you even show up.  You need to be able to take the emotion right out of the process, negotiate in good faith, but if it hits and crosses this line, politely WALK AWAY.  If you don’t you are doing everyone involved and most of all you a disservice.  This should be a conditioned response, once it goes below the predetermined level, WALK.  It may seem hard at first, but as stated above, you will never recover and you will be stuck with a non-productive account that you will hate and that will always remind you of a weak moment. 

Keep in mind that the goal is to work together with the buyer to achieve a mutually valuable deal.  There are many ways to achieve that in a way that allows you to maintain price integrity and the respect of the client.  But if the client does not respect you enough to find that mutual point, you should not think twice WALK.

What’s in Your Pipeline?
Tibor Shanto

Like It or Not – Looks Count13

ToExec copy

I was in a reception area today, being an old runner I needed to have a bone scan, this required me sit in the waiting room for a while between tests on my leg. I began to notice the person behind the desk (not sure if she was a qualified nurse or a receptionist), and how she was reacting to and treating the people she encountered.

While she was professional and polite with everyone she dealt with, there were definite differences. Most obvious for me sitting a couple of seats away (next to a stack of year old People magazines), was that she reacted differently to people based on their looks. Not being a behavioural scientist, I do believe that depending on general looks and clothing, she was much warmer, human and friendlier to “good looking” people.

What I mean by “good looking” wasn’t that they looked like models or the beautiful people on TV, but more how they presented themselves.  Men wearing suites, women in smart attire, people who well groomed and made up.  Again, people in sweat pants or jogging outfits just did not get the same attention, smile or help in filling out the necessary form.  When you think about it is this latter group that was better dressed for the occasion, a nuclear bone scan.

It got me thinking about the work I did with a company that sold directly to such labs, and their frustration in getting past this front line.  What struck me is that many of them wore casual clothing while selling, they would argue business casual, but casual is casual.  Many sales professionals have bought into the “casual” look that came to be popular a decade ago, it is not that cool anymore, if it ever was.  That may work in some cases but for the most part if you are in B2B sales, and yes a medical office is a business, then you need to dress and act the part.  I ware a suit and tie on every call, and my clients know from the moment I walk in that they are dealing with a pro, it lends weight to my part of the discussions.

First impressions count for a lot with people, and prospects are people, influencers are people, gatekeepers are people.  If you are in sales you are asking people to have confidence in you, your judgement, your recommendations and your product.  So if you want to create a buying impression, you have to give that impression.  It will not only help you look the part of success, but will give you the confidence to be the part.  It doesn’t take much, or need to cost more than good business casual, but looking tight and smart will allow you to gain an edge over others who want to look “cool”, but what I saw at the lab today confirmed that “cool” does not sell.

So you can dress like they did in the “dot com” days, but I am told we are now in the days of Web 2.0, past Business 2.0, and to succeed you need to you should get a Suite 2.0.

What’s in Your Pipeline?
Tibor Shanto

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