Predictions to Results1

By Tibor Shanto – 

Magical Fortune Teller

“I may make you feel but I can’t make you think” (Gerald Bostock IA)

This post was originally prepared for a site catering to sales professionals that I occasionally contribute to. They were looking for pieces on predictions for big things in sales in 2016. I thought it would be a big thing if sales people started executing and selling, and having real forecasts rather than just predications. They decided not to run the piece, and to quote: “The premise being that predictions aren’t a super useful exercise would cast a bad light on the rest of the posts on our blog that are predictions”. Well far be it for me to cloud the issue with facts, contrast the other pundits. But having written the piece, and being convinced that there is still room for realism in predicting, I will share it here, and wait for your verdict.

Have at it, and enjoy!

This time of year brings a unique blend of traditions and rituals, mixed with a sense of urgency for ending the year right, and wide eyed anticipation for the possibilities the new year brings. Wild ass unrealistic, and never to be validated or reviewed predictions is one silly and repeated ritual; after all the pundits get busy and caught up in the season, and what’s easier when you’re behind deadline for a post or article, than to make predictions for the coming year. After all, no one ever checks to see how they turned out 12 months from now, especially if you make them “feel good” predictions with just a hint of sugar-plums scent. The challenge with predictions in sales is they lack accountability, and as a result are usually more aspirational than material.

On the other hand, predictions can be used to drive sales results by taking the aspirational, and using them to create concrete goals and action plans. Many already partially do this in the form of stretch goals. Stretch goals are used and defined in a number of ways. Here are two to help focus the discussion:

Business Dictionary: Goals “That cannot be achieved by incremental or small improvements but require extending oneself to the limit to be actualized. Expressed in the saying, “You cannot cross a chasm in two steps.””

From THE PARADOX OF STRETCH GOALS: ORGANIZATIONS IN PURSUIT OF THE SEEMINGLY IMPOSSIBLE: “An organizational goal with an objective probability of attainment that may be unknown but is seemingly impossible given current capabilities (i.e., current practices, skills, and knowledge).”

As the authors of the above suggest “stretch goals could influence organizational learning and performance”, and while they go on to explore potential paradoxes, done right, predictions can lead to positive sales results.

Predictions by nature tend to reach beyond what most would accept as normal or easily accomplished. In the sales context, they also can be used as targets, which in turn require an action plan. The fact that they may be a bit outlandish, will force reps to develop equally eccentric action plans. If what we are doing today is allowing us to get to X, then what will we need to change to achieve X plus? This will impact reps’ individual plans for their territories and accounts, as well as their execution.

Having reps reexamine their current plans against “predictions” you make as their leader, will force them to explore how they need to extend their thinking (and activities), often forcing them to develop completely new plans, or even who they may target as prospects or upsell opportunities, to maximize their selling time in order to hit the prediction.

This also serves as a great coaching opportunity. As they revise or develop new plans, it will require them to do things differently than before, to do that they will need input, guidance, and encouragement, giving you the chance to establish a culture of learning and growing through planning and execution.

So while I predict that next year will bring a slew of predictable predictions, how you action them can also bring more sales and means of selling better.

Tibor Shanto

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Please, New Is So Old Now – Sales eXchange 2361

By Tibor Shanto –


I got a note from one of the pundits in my inbox telling me things I should do for sales success in the New Year. You may expect these type of things mid-way through December till maybe January 10th, but after that it is just an indicator that they don’t really understand B2B sales at all, and the customers they get as a result, they deserve.

As a sales person your really do need to live in the future, and fulfill in the present. You need to live in the future for two simple (probably more) reasons. First, if you are going to deliver real and lasting value to your customers you need to leave “ahead of them. If you are going to deliver to and drive their objectives, you have to be where those objectives will unfold, and that is almost always in the future. Especially with business leaders, be they leading small or large global companies. If you speak to these folks and you should, (as well as speaking to everyone else in the organization, it is not one über the others), you will notice that their horizon is in the future, based on who they are it could be six, twelve, eighteen months or more in the future. The have delegated the present to others in their organization, in the case of small business, they have relegated it to a different part of their thinking.

So if you are going to align and sell to them today, you need to be thinking and talking to things they thinking about, which means they have been in 2014 for some time, cranking up you preparation now, like the pundit suggest, nay, scream to the buyer, “This guy is no for you”, as my fellow Tull freaks will say he is “Living In The Past”. If you are going to step in to the roll of thought leader for these buyers, you need to recognize that you need to lead from the front.

The other reason you need to live in the future, is driven by the realities of calendars, fiscal years, invoicing and the payable cycles of your buyer. Let’s say you have a three month sales cycle (handshake to close), and you get paid when the first invoice is paid, 30 days is acceptable period for an invoice to be paid, you are going to need four months of run way for a deal to count towards your number this year. Which means anything you start after September 2, will be next year’s number. If it counts and you get paid, when the contract is signed, then that date moves to October 2nd. So if you were going to look at doing things a new way for 2014, you will have need to start that process last September or October, not January 26.

This is not to say that you should not always be adding new elements to your selling, just look at that as an ongoing part of your personal development, not an event tied to the New Year. Yes, I know the pundit needs to sell too, but you don’t have to buy if it will not help you now, or in the “now future”.

I am going to keep this mail as I am certain it is the exact same one she sent last January, with dates changed. I am not sure if I remember because it irritated me last year, or the fact that they used a stock photo used by a million other sites.

What’s in Your Pipeline?
Tibor Shanto

You Should Lead With Price – Sales eXchange 2072

By Tibor


If sales were presented as a play, the typical flow would seem to be: segment, identify, qualify, engage, discovery, gain commitment, negotiate and close. Somewhere towards the latter part of “gain commitment” and “negotiate”, the issue of price becomes central to the plot, in fact with some sellers “negotiate” is really just a code word for “price haggling”.  This would explain why so many sales these days are won or lost on price, especially when “discovery” is rushed or executed in a cookie-cutter way.

The plan (I guess), is build value (place your methodology here, ours is good too), and align to price. The frustration for many is that they may not know the relative role of price till late in the game, especially when there is a low cost provider in the mix.  Wouldn’t it be better if you could learn if price will be the breaking factor much earlier in the play?

That’s the catch 22 of selling I guess, if you don’t build value you can’t justify or rationalize the price; on the other hand, you could spend time and energy building value and be defeated by price. What’s a seller to do?

Well, why not lead with price?

Counter-intuitive, maybe? Risky? Could be, but most things worth archiving involve a level of risk.  The opportunity and skill is in managing the risk and finding the balance where calculated risk consistently rewards the risk taker.

This is not to say that your meetings should start:

“Hi I am George, with ACME Solutions, the price is $42,000, plus 20% annual maintenance fee, ready to go?”

But there may be merit to putting price front and centre much earlier in the process. There is an element of this accepted, if not always executed, by many sellers in the form of exploring budget; in terms of its existence, availability, control and commitment.   But budget is different than price, how many times have you been able to check all the tick marks around budget but still lose on price?

But what if we did introduce process earlier?  The reality in many instances, the price is based on some formula, be it unit based or other elements, and sellers have a sense of what a deal is worth early in the play.  Before you protest the last statement in an effort to seem above the fray, go look at yours or any other forecast.  So why not put it on the table, and make it a way of introducing, driving and accelerating the value discussion.  After all, if they object to the price at that point you can get to the heart of the matter by asking them what they base their remarks on.  It is a great way to go to the real value discussion.  As both price and value are relative, you can find out what they see as value in their reaction to the price.

You can then use all the tools and techniques you would normally use to build value, but this time it can be much more collaborative.  The key is not think of it as defending the price, but as a mutual and collaborative value definition.  In the course of executing it, you can uncover objectives, separate needs from wants and a range of other things that make for a successful sale.  All without the suspense of the traditional ending.

As with most things in sales, we can stick to the same old, or so called fresh techniques that are the same old in new packaging.  Or you can try something that will not only differentiate you, the way you sell, and most importantly the outcome.

What’s in Your Pipeline?
Tibor Shanto

Hanging Out with @GlobeSmallBiz: How to develop a Winning Sales strategy45

Hanging Out with @GlobeSmallBiz: How to develop a Winning Sales strategy

Last week I had the opportunity to participate in The Globe and Mail’s Report on Business’ Small Business interview series on Google+ Hangout. As the title suggests, we discussed a number of topics relating to sales, and sales challenges important for small business owners.

This was not only a great use of the technology, but we covered a number of key issues potential pitfalls, and opportunities for small business owners.

Take a look, comment, enjoy, and profit.


What’s in Your Pipeline?
Tibor Shanto

Take Control!19

Wednesday I posted a piece about the importance of working your sales cycle, not the calendar.  I had a call from Bob, a director of sales with software company.  While he liked some of the ideas, he felt it would be difficult to follow some of the discipline proposed, because they “we’re a different type of company, and being public, puts additional demands on us, especially at month end and quarter end.”  I have heard this type of argument before, I just don’t buy it.

I had a friend who was a VP of sales, who cancelled a lunch during the last week of their quarter, telling me “you know how it is, last day of the quarter, we’re closing”.  When we did meet I had to ask what they do, the rest of the quarter if they spend the last week closing, he told me they are busy selling.  Apparently not, as closing is part of selling; as is OPENING, without that, you have nothing to close.

I know people don’t like the math side of sales, it takes all the emotion and excuses out of things, leaving you with just the facts.  As highlighted in the piece Wednesday, if you need to deliver four deals a month, and your closing ratio, from initial engagement to close, is 4:1, you are going to have to engage with four people a week, or 16 people in the month.  The reason you have the end of quarter derby, is that most sales people don’t prospect or close enough along the way, and as the finish line nears they go into closing mode.

But what if you know you cycle was 10 weeks, and you diligently added four new viable opportunities to your pipeline every week, and continued to close one a week, would it really matter if it was the first day of the year, last day of the month, last day of the quarter, or February 29.  No, not at all, put sufficient amounts of raw materials in predictable amounts, apply your process, and you have a predictable amount of output at the other end.

It comes down to two things, first knowing the length of you cycle, and your specific key conversion rates at critical junctions of your cycle.  This easy to achieve with or without the latest tools or apps, all you need to know is a crayon and some paper, as long as you poses the second element, accountability.  If you are willing to take accountability for your actions you can achieve a much more predictable sale, disciplined, and I would argue more fun.

More fun, because you actually have a sense of what has to happen, in what proportions, and how you will do it.  This frees up a lot of bandwidth in the old cranium, allowing you to focus much more on the client, their objectives, and how you can help them, and your company achieve their objectives.  If you choose to play the end of quarter derby, you will not only be knackered at the end of each quarter, but set yourself up to repeat it again and again.  If you spend the last week or 10 day of a quarter “closing”, limiting or skipping all other aspects of the cycle, what will you close 10 weeks after the quarter:

  1. ___ Discounted deals
  2. ___ No deals
  3. ___ Haven’t a clue

What’s in Your Pipeline?
Tibor Shanto

Work Your Cycle not the Calendar5

Here we are at the start of a new year, fresh faces, prospects and places to engage, and with what most would lead you to believe, a blank slate, ready to conquer sales all over again.  However, is it a blank slate, has the clock rolled back to the start, allowing you to start things a new, or did we just cross a marker in a continuing trek forward?  I tend to go with the latter, while we may need to mark time for a number of purposes, for sales professionals, and for actual sales, the sales cycle is somewhat indifferent to the artificial rhythms that accompany our travels through the years.

While corporate fiscal years are 12-months, and in many cases align to the 12 calendar Jan. 1 to Dec 31, decision cycles don’t, and as such sales people need to align and manage their cycles not their calendars.  Add to that the fact that budget cycles, including planning, like decision cycles don’t align to the calendar.

Read On…

What’s in Your Pipeline
Tibor Shanto

Sales Alchemy15

The Pipeline Guest Post – Gary Hart

Our mission as salespeople is simple, drive revenue. Our singular task is to pump money out of a sales pipeline. We are expected to convert leads into money, like alchemists who turn lead into gold. With the right tools, measuring the right variables, we can become sales alchemists.

Pipeline reporting tools are falling short of meeting the wide array of sales executives’, sales managers’, and frontline sales professionals’ needs. Sales activities are converted into metrics that generate one and two dimensional charts and graphs. These frozen moments in time are static snapshots of a dynamic sales life that are individual frames extracted from a movie.
Reliance on these views can make us both near and farsighted.

The nearsighted perspective presents quantitative information including the number of sales opportunities, the stages they are in, and the expected revenue from each sale. Tools that measure relationships, sale velocity, and other soft variables are lacking.
The farsighted view is guestimated monthly, quarterly and annual revenue projections based on equations developed from limited, subjective data.

Expected Income Per Sale X Probability = Total Revenue

Part of the problem is CSOs and Sales VPs want revenue projections. Since they are the primary buyers, sales tools are built for their priorities. Nevertheless, the inaccurate results projections are an axiom that frustrates everyone from the top down to the frontline salespeople.

This equation in its various forms never sat well with me, so I added qualitative factors that many sales professionals call instinctive, yet are measurable.

The sales pipeline is a living organism that needs dynamic representation to give us a complete picture. Qualitative measurement is the missing dimension from what should be an organic equation. As a sales executive, sales manager, or frontline sales rep, you can breathe life into your 2 dimensional pipeline reports that will satisfy the myriad of needs including the ultimate goal of more revenue.

Measuring soft intangibles will deliver better opportunity management by salespeople. The same information will help sales managers pinpoint coaching and training needs, leading to better performance management.

Quality scoring of every objective, every meeting, every stage, every relationship, sales opportunity value, resource investment, and the other “squishy” variables are the missing frames from this moving picture. Regardless of time constraints or tool limitations, brutally honest diagnosis of every sales opportunity is critical. Reporting of the quality changes that occur during the sales progression are equally essential.

The result of adding qualitative measurement is better performance management, more accurate forecasting, and increased revenue that consistently meets sales goals.

About Gary Hart

Gary Hart’s career as an advertising, marketing, and sales executive began in 1971. As VP of Sales & Marketing; Gary led an 800% sales increase for a high-tech equipment company to $20 million per year over a 5-year span. Hart’s accounts included Toyota, Avis, and Cartier as well as small and medium businesses.

Gary has a passion for building high performance sales teams by simplifying and streamlining the sales process. Hart is currently the president of Sales Du Jour.  He is also involved in non-profit organizations with children oriented missions.

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Who to Hire – Sales or Product Guy?19

Hiring the right people to sell your offering is trying at the best of times, it gets even more challenging when markets and resources are tight.  As products get more involved, clients getting more demanding and arming themselves with preconceptions about the solutions they want, all in an environment where managers are asked to deliver more with less headcount, managers are faced with tough hiring decisions.  Do they hire a someone who is a product expert, spending time, energy and opportunity teaching them to sell; or are they better off finding a proven sales expert and ramp them up on the product side?

Here is what I said, see if you agree.


What’s inYour Pipeline?
Tibor Shanto

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Sales Options Exchange18

Sales Options ExchangeAs much as sales people are alike, they also differ in so many ways.  One way they differ is how their outlook on sales and selling is impacted by what they sell and who they sell to.  This brings me to a great conversation I had with my friend Josh who sells into the financial community and is therefore exposed to some creative thinking.  Beyond sales, the other interest Josh and I have in common is a fascination with derivatives.  Neither of are studied enough to get into some of the exotic instruments and strategies, but we both follow and talk options.

As we were talking about pipelines, pipeline management, which included a laugh about closing probability, and sales people’s odd love/hate relationships they have with their deals or sales in progress.  It was one of those moments where a throw away statement leads to deep discussion.

The statement, made by me during my third pint, “Hey Josh, imagine if sales reps or their manager, or their companies could write or buy options on opportunities in their pipeline.”  After a good laugh, we started thinking about the possibilities.

At first, we looked at it from the stand point of managing cash flow for good sales people, sort of like factoring for manufactures.  You feel good about your pipeline, a specific deal, cash in your commissions now for a bit of a discount, (assuming you can find a buyer); deal comes in, they get the commission everyone is good.

Josh played out a few scenarios, mostly poking fun at the fact that if they are willing to bet on sub-prime, why not on a software sales rep’s commissions.  Imagine if you could hedge your deals, he kept saying, “I’d hedge my whole 2011 Q2”.  You see he has some fairly big deals that will close at that time, little doubt, “so why not write some calls, pocket some of the cash, by some puts just in case, and voilà”

I began to look at it from the a pipeline management point of view, what if instead of dealing with probabilities, sales people had to deal with the financial accuracy of their forecast.  Now, on the one hand they already do, but only in a simple way, they either do or do not make their commission.  But in the context of the overall success of the company, there is a bit of misbalance, while a rep who delivers only 70% of a reasonable quota, may make less money, the impact on the company is entirely different.  When you consider that according to CSO Insight only 51.8% of sales reps made quota in 2009, down from the previous year.  (It’ll be interesting to see what the numbers for 2010 will be.)  Much like when a rep discounts as little as five percent of a deal, the impact on commissions, minimal; the impact on the company’s margins could be dramatic.  Given the circumstances, why would a company not want to buy some puts.

Another potential upside involves deal times.  While shortening sales cycles may be an ambition for many is sales, there is a point beyond which you can’t expect to accelerate or shorten your cycle.  On the other hand,  most sales leaders would settle for predictability, rather than doing some thing in less and less time, they would much prefer to have deals done in a predictable timeframe.  Not only could they count on it, more importantly it would indicate that they are able to communicate their sales methodology, and have their teams consistently execute.

Options have a finite life, as do sales.  Man sales people don’t buy that, they don’t distinguish between the active part of a sales cycle and the over all client acquisition cycle. Things would change if there was an expiration date.

In the end it was all good fun, but both Josh and I went back and reviewed our pipeline, looked at what we would keep, what we would dump.  What we would cover, and which deals we would write or buy puts on.  I am sure we did not come up with a new pipeline management process, but we did get a new appreciation for selling and our pipeline.

What’s in Your Pipeline?
Tibor Shanto

BTW – for those of you at Dreamforce in San Francisco, I will be presenting at the InsideView booth at 11:30, stop by, there some other great presenters.  See you there.  TS

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If you look to the left, you’ll see that I am also a nominee for two categories in the annual Top Sales Awards. Please take a minute to vote. Thank you in advance.

Sales eXchange – 50 – The Churn17

As you know we have a big focus on conversion metrics and numbers.  I have become accustomed to many front line reps and managers not being fully aware of key conversion rates, but there is one that most tend to ignore that severely impacts their success, and their ability to plan for success.  That number is the(ir) churn; usually expressed as a percentage, it is the amount of revenue that disappears from the base year in year out.  It varies from industry to industry, caused by various factors, and clearly fluctuates with real world events. 

Most reps and front line managers are aware that there is churn; the problem is that they do not know what the churn is at any given time, year over year, or how the current levels stack up against the trend.  By not focusing on this number, and not taking it into account durum their planning, they run the risk of missing their goals despite better intention.  As a result they usually end up dealing with churn on a case by case basis rather than proactively in a holistic way. 

Let’s look at an example where your base revenue is $2 million, if you are given a goal of 8%, you need to grow revenues by $160,000 for a year end target of $2,160,000.  But if at the same time you are experiencing 15% churn, there is a hidden $300,000 you have to deliver by year end just to stay whole.  The reality for the rep on the ground is that by the end of the year they have to generate $460,000 by year end.  This is a dramatic number if you are not planning for it.  Again the suggestion here is not that it is unattainable, but that if you are not planning for it, you could do well hitting you $160,000, even exceeding it and selling $210,000; your territory will still be under quota.

Of course one thing you can do is work on managing our base, thereby reducing churn, but the reality is that there is a point of diminishing returns.  Companies go under, merge or get bought, or opt for a cheaper alternative, while would recommend you chase the price based loss, it is a loss nonetheless.

The key is to be aware and proactive, first understand that the elephant is in the room, and in your pipeline.  Once you’ve done that, factor the impact into your planning, in to all your sales activities.  It is not just a question of doing more; it is a question of being more strategic.  You don’t have to settle to do more, I would much rather you plan to sell different accounts, selling more with your original sale, so you can leverage you efforts early.

You should also understand in great detail why certain accounts tend to leave.  This will a) allow you to anticipate better; b) pursue accounts that have attributes of those that tend to have longevity; c) avoid those that tend to leave early.  The more you can recognize this the better you will deal with it.  One other opportunity once you become better at predicting who maybe at risk, is to fire them early; this usually has the effect of clearing the air and allowing you to create bandwidth you will need to make up for lost revenues.

What’s in Your Pipeline?
Tibor Shanto

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