Everybody will have noticed that the profile of the buyer changed dramatically over the last few decades. Thus it is worthwhile to keep looking for news ways to synchronise our sales approach with buyer 2.0 behaviour. One interesting recent approach was formulated by the Corporate Executive Board. They surveyed over 6.000 sales reps across geographies and industries, and revealed that sales reps come in 5 profiles:
Hard Workers show up early, stay late, always go the extra mile- Relationship Builders: advocates across the customer organisation
- Challengers: use their deep understanding of the customers’ business to push their thinking and take control in the conversation. Challengers share even potentially controversial views and are assertive with both customers and bosses
- Reactive Problem Solvers: perceived as highly reliable and detail-oriented by customers
(e.g. strong focus on post-sales follow-up)
- Lone Wolves: sales cowboys who do it their way or not at all
One of these profiles consistently seems to outperform: the Challenger. In The Challenger Sale, Matthew Dixon and Brent Adamson show that while most companies focus on building customer relationships, the challenger pushes customers’ thinking, introducing new solutions to their problems and illuminating problems they might have overlooked.
Can you say that your sales team is exclusively staffed with challengers? You might be lucky but chances are small … most companies have one or two on board, but the majority of sales reps on average tend to perform moderately.
What can you do to turn your sales force into a Challenger team?
It is not impossible to lift average sales people to a higher level in a short period of time. If you want your team to act like Challengers, it will be crucial for them to gain insight into the customer’s buying process. One of the ways to get there, is the Buying Clock ®. Here are some capabilities you might need to implement additionally, if not yet present:
- Define your company’s DNA and replace traditional ‘competence-based hiring’ by ‘DNA-based hiring’
- Align your sales cycle with the customer’s buying cycle
- Introduce pain-based segmentation
- Develop buyer-aligned and sales-ready messaging deliverables
These support Sales to have consultative dialogues with customers
- Have sales reps interacting with real decision-makers
- Upgrade reporting to reflect the customer’s buying process and stop pushing your actions based on a sales process
- Introduce sales coaching and mentoring as part of sales management practices
As a reference: one of our clients reported these results 1 year after implementing the above mentioned capabilities:
- 37% revenue growth, compared to 12%-18% in the previous years
- Profit grew 10% faster than revenue
- Added value per employee increased from less than 150K€ to 208K€
- 81% conversion rate from pipeline to contract
- Time to productivity for new employees decreased from 13 to 7 months
Do you see opportunities to replicate the lonesome Challenger in your team after reading this post? Or do you have any doubts about the feasability? Leave a reply, looking forward to your comments
Forecasting is in general defined as a prediction of future events, based on historical data, opinions, trends, events or known future variables. The purpose being:
- To prepare Sales and other budgets
- To determine resource requirements
- To provide a basis for business planning
- To establish targets and plan investments
- To forecast cash flow and profits
And thus, forecasting becomes the corner stone for decision making.
Some common pitfalls in forecasting
The process of forecasting is often based on trends. And typically, this is the most recent trend experienced. Forecasting is a very cumbersome process and above all: a number of events tend to make the results obsolete even before the process is fully accomplished. This becomes a big challenge in a highly dynamic future environment. It becomes even more problematic when, as in many cases, we build backwards to a plan that justifies a predefined outcome.
Some companies have been combining this scenario with a bottom up approach by Sales, in order to define individual targets as well as a final budget. Yet, Sales is mostly starting off from historic numbers. Or worse: include their bonus and management expectations in their considerations.
Forecasting as a backbone in dynamic market conditions
How can we now improve our visibility? And even more important: can we use forecasting as a backbone to become more agile to the ever increasing dynamic market conditions?
The answer is scenario-based forecasting. This has recently been acknowledged by the Vlerick Leuven Gent management school in their study “Strategy execution in the aftermath of the financial crisis”. This bottom up approach is of course using all knowledge and experience as mentioned above. But it results in 3 different scenario’s: worst case, most realistic and best case scenario. Companies using scenario-based forecasting and planning can easily test their operational plan on an ongoing basis, instead of once or twice a year. A sensitivity analysis of the business can be stated in terms such as “what is the impact of …”
5 must-do’s in forecasting
- Use a rolling forecast instead of a yearly process
Divide your forecast in periods which take the typical buying cycle length into account.
You can use quarters but it may be appropriate to use 4 or 6 week cycles for more transactional business
- Test and compare with your ongoing operational results and upgrade/ add periods to your scenario’s
- Work on a fully transparent basis with Sales
- Make sure remuneration and bonuses are in line with operational expectations
Use a motivating and uncapped bonus system by e.g. using an accelerator for over-achievement.
You will thus avoid sandbagging and Sales undermining your visibility covering their own interests
- Make sure your pipeline is used on a daily basis for (self)-coaching purposes
Read my blog: How to improve your forecast accuracy for more details on this topic
The next time you work on a forecast, remember to ask yourself : “How can I use forecasting as an ongoing process that will allow me to manage pro-actively”.
The Internet has a much bigger impact on B2B sales than most of us realise. It is an evolution taking us off guard and bringing along a negative impact on our control and visibility. Hence, the B2B buying process has switched from a sales-driven to a buyer-driven process and requires the traditional sales cycle, pipeline, activities and who needs to be involved when, to be revamped. Companies need to look at Buyer Aligned Collaboration™ if they want to create breakthrough performance enhancements and stop the erosion. 5 important questions you must ask yourself:
The conversion from product to solution selling has been going on for over 15 years. Yet, a study from Mc Kinsey shows that 75% of all attempts fail. Many companies make the mistake to think that repackaging products with services makes a solution, but forget that services are products too. ‘Real solutions’ can only exist if the entire organisation understands the challenges the customer is faced with because of not having your solution in place. Do you know and can you quantify these challenges? Is your sales and marketing organsiation capable of explaining the impact of your solution and the changes in his way of working when using your solution (all of this of course without even mentioning your product)?
- Have I packaged differentiation in a way that is directly linked to customer impact?
Is sales capable of influencing decision criteria before the customer is asking for a demo or quote? And this in such a way, that it kills competition even before the real comparative battle begins?
- Do I take buyer experience into acount in my approach?
To what extend is your messaging adapted to your customers’ challenges in relation to their experience with your product? Challenges and buying critiera will be different for a customer who is unhappy with a similar solution in place, compared to someone having no experience what so ever in buying your type of solution.
- Are sales & marketing supporting one another along the entire buying cycle?
Is marketing measured on the amount of revenue they are generating? Is sales involved in the lead generation proces? Is marketing building lip loading deliverables for sales? It’s simply impossible to create a good operating sales & marketing organisiation without the prior way of working in place.
- Does management walk the talk?
It’s amazing to see how little time management is spending in the field, talking to prospects & customers as well as supporting the sales organisation. There is always plenty of work at the office as an excuse for not going into the field. Yet one has to set the priorities right. A couple of recent cases showed that it’s possible to free up management time up to 25%. A couple of tasks to evaluate: time spent with sales in the office, analysing reports, developing management reports and powerpoints or being part of the escalation path instead of managing it. The last one is by far having the biggest negative impact on field presence.
Take action before it’s too late and let me know what works best.
At Perpetos, we see an increasing demand for support in establishing better pipeline visibility and more reliable forecasting. Isn’t this surprising, as many companies have implemented a sales process and CRM over the past 15 years?
They were driven mainly by the following challenges in random order:
- Visibility on pipeline and forecast
- Centralised database of prospects and clients
- Marketing searching to add value and better understand the market
- Streamlining pre-sales, sales and marketing activities
Above all, managers were looking for a repeatable process to improve their hit-rate and decrease the cost of sales.
But most of these companies have been facing a couple of negative implications along the way:
- Inward looking organisation
The ‘process’ forced people to compare and analyse which actions led to deals won or lost. To create a successful repeatable process, companies started pushing actions that presumably have a positive effect on the sales cycle. But those companies who already measure pipeline velocity and decision date visibility, know that the opposite is true in complex buying cycles. Sales will eventually loose focus on the prospect.
- Subjective status and success probability
I sometimes see implementations where ’sending a proposal’ is being linked to the degree of probability to win the deal. Could anyone explain why sending a proposal after a demo will increase chances, let alone give an indication of the prospect’s decision date? This is another myth created over time by people designing processes.
- Unreliable management reporting
You only have to look at the amount of deals expected to be closed the last day of a quarter according to CRM data to see what I mean. A CFO recently told me that he is typically using between 22 and 28% of the sales forecast for his budget ..
- Sales management increasing pressure on their team
Opportunities being created upon or just before closing, is only one of the many symptoms I see time and time again. Sales are hiding opportunities: they are afraid of what full openness might do tho their targets and/or pressure from management.
The sum of all the above is that co-workers in many organisations are:
- Managing spreadsheets and reports
- Managing the end of the pipeline instead of the entry
- Under pressure for unrealistic hit-rates because of a starved pipeline
I will come back with some simple remedies and solutions for the above issues in future blog posts.
What is your experience?
The way people buy has changed dramatically through Internet and globalization. Prospects are spending more time on the Web doing independent research, obtaining information from their peers and other third parties. Companies are therefore meeting prospective buyers earlier than ever. What are the implications for marketing and sales?
Sales & Marketing can no longer afford to operate as departments that happen to work for the same company. Whereas many organisations have been trying to create alignment for the past 15 years, I have seen very little improvement. Here are some continuing statements, despite all efforts:
- Marketing is not delivering sales-ready leads, says sales. Sales is not following up on leads, says marketing
- Marketing is spending a lot of money but does not measure ROI
- Sales has very little impact on marketing spend and vice versa
- We are unable to sell value over price. We are unable to differentiate ourselves in the market
Let it be clear that sales-marketing alignment has failed. So it’s more than time to start looking at a new approach of Buyer aligned collaboration. What does it take to implement Buyer aligned collaboration?
- Convert your marketing campaigns into continuous conversational marketing
- Take control by marketing a vision (in role and pain-based messages) for each of your segments
- Adapt your language to readiness to buy and use lead-scoring based on the same foundation
- Involve sales to double check on readiness to buy & let them decide when time is right to take over from marketing
- Measure and benchmark all activities along the buying cycle and implement incremental improvements
In practice that means: increase revenue performance by making the buying cycle the centre of your corporate universe. Apart form synchronising Sales & Marketing targets, here are a few tips to make a start maximising Lead Development in your company:
- The buying cycle is key for every action taken by Sales & Marketing!
- Marketing develops sales ready deliverables synchronised with the readiness to buy
- Implement a tool to help track your prospects’ readiness to buy (assuring company wide acceptance)
- Product input is problem based, not feature based
- Use CRM to track the above, as a pragmatic cross-departmental tool. Correct information is more vital than lots of it.
Just remember: you can no longer neglect the buyer if you want to make a difference in today’s market!
Looking forward to reading your comments.
