The first thing that has to be said is that few companies have changed their sales approach in an appreciable way over the last few decades. Yet buyers are seeking to buy and not to be sold to for over a decade.

I still see sales trainings and managers telling their sales and to look at the sales cycle and behave in an way that is inward looking. Sales force automation (SFA) and customer relation management systems (CRM) haven’t really helped to convert the front-line in an outward looking mode and helping people to buy from them instead of being sold to.

I was pleasantly surprised to see one of the outcomes of the 2009 sales conference in Miami where the buying cycle emerged as the new standard for funnel management. I trust this to be a stimulus for all  the Perpetos customers bringing this into practice since 2005. But their is still a long way to go. It is indeed the best way to get subjectivity out of your funnel, yet it demands a mind-shift of the whole sales organisation and another way for management to coach and interact with their sales team. They all must learn to ask way more questions and ‘really’ try to understand what the customer is saying.

The principle is simple: Ask the customer questions which allows you to know the readiness to buy of each individual in the decision making unit (DMU), align them all so that they move through the buying cycle in a synchronised way and adapt your actions to it.

A couple of tips to improve your funnel management:

• Stop tracking and discussing sales steps and process. Start using readiness to buy phases based on reactions and answers to questions from each individual involved in the buying process. Ideally start using the Buying Clock. Using the time on the clock is an easy way for implementing a, consistent used, common language.
• Are we asking for and tracking the next step or are we engaging the sales rep to first decide on the next objective to facilitate the buying process on a project level before deciding what the next step should be, when and with whom? Do we track this in our funnel?
• Track the pain level of the customer by also knowing the impact of the challenges on the customer. Is their a compelling reason or an urgent need?
• Has your sales rep access to the decision maker? Is he continuously involved in the process and kept up to date by the sales rep?
• Is the go-live date the most important date we discuss with the customer? Is it a fixed date and why or can it easily be postponed?  Do we know and  are we tracking the go-live date?
• Has the customer actually confirmed your solution fit and did we postpone drafting the proposal until that moment?
• Split the weight % in 2 distinct ones: project%=what is the probability of the customer actually buying and win% = the probability of you winning the deal.
• Are you tracking the most important mandatory buying criteria and what is the perceived scoring of the customer compared to the competition? Do you discuss ways to influence these buying criteria?

Finally:

• Convert your weighted funnel in a scenario based funnel on which you coach the sales rep.
• Engage in vivid 1:1 discusions with sales to set a continuous improvement process in motion.

Your benefit and result: An accurate forecast with a highly improved visibility.

The most often used funnels nowadays are still based on subjective input from sales. It’s amazing to see how many managers are using such a funnel to predict revenue and use it as the basis for budget exercises.  This is the funnel that most people use yet it is a very outdated model. This type of funnel is an artificial invention taking the eye away from the prospect and puts the focus on sales actions.

The fact that doing something is putting the opportunity on a given point in the funnel is a totally wrong assumption. The thinking is flood. You can give company and product presentations, demo’s, send proposals even when asked, etc without achieving anything. The question is am I doing something which corresponds with the readiness to buy?

Here are the biggest funnel mistakes:

• input based on subjective sales rep input. The gut feeling of sales people in terms of funnel management are seldom correct because:
  • they are to closely involved to have an overall view
  • most sales are to much influenced by the opinion of their ’sponsor’ and/or last sales action
  • they have too little visibility on what’s happening at decision level
  • not enough, if at all, contact with the ‘real’ decision makers
• individual forecast building by using a percentage win-rate on each of the opportunities. Most funnels at sales rep level and even on corporate level have to little opportunities at the same stage with too much variation in size
• defined by selling activities: performing activities is not necessarily moving the opportunity closer to a decision
• lack of common definitions
• imposed as a reporting tool and not as a day to day self-coaching tool: The funnel will never be up to date or based on careful thinking if it is not in a format, and incorporated in the way of working, which influences the agenda and behavior of the sales rep
• tracking and reviews based on must win deals resulting in starved pipelines and pushing salespeople to do the right things at the wrong time.

Helping management and the VP sales to more accurately predict the revenue is to convert the funnel into a buying funnel which tracks the readiness to buy of the opportunity. This is even more true in more complex sales with quit an amount of people involved in the decision taking. Because each of the involved people have their own agenda and readiness to buy which must be synchronized in order to move the opportunity closer to a decision in the quickest way possible.

The mental stages a buyer is going through: These phases are universal and cultural independent.

• execution of existing solution and not interested in any information or offering in that area
• executuion and interested: something triggered the person to want to know more about something
• Field of Tension: Starts with an admitted pain which evolves over time into an urgent need. This results in the decision to buy something
• Market Research: The prospect goes out to the market to search for potential solutions and vendors
• Hesitation: This phase starts when the prospect thinks to be convinced to buy what from whom. At his point the focus shifts from looking to the benefits and advantages of acquiring the solution to all what can go wrong after having bought.
• Implementation: This is the period during which the solution is being implemented.
• Execution: The solution is in full use until the cycle starts all over again.

Perpetos has converted these phases into a 24 hour buying clock™.

Some of the reported results you acquire by this system are:

• a true shift towards customer focused thinking and acting
• an objective pipeline with a much better accuracy
• improved internal communication based on the hours of the clock
• lower cost of sales (i.e. less multiple people meetings because sales and pre-sales exactly determine when their presence is needed)
• improved hit rate
• more balanced pipeline

Let my know your experiences!

1. take excessive actions on their existing opportunities. They hope or are convinced  to influence the outcome and decision date. These sales reps are typically faced with a starved pipeline. They will never experience the benefits of a balanced pipeline because of this. Moreover, they risk on ruining good opportunities by their behavior.
2. call on more and more potential customers. They will take massive actions on each of them willing to have a meeting. This will lead to too many unqualified prospects in the pipeline and create time shortage at the same time. It will lead to a lot of good actions on the wrong prospect and/or wrong timing.

So in other words, both actions will never deliver consistent resolution in the long run.

5 strategies to overcome typical quota issues:

1. Continuously qualify your opportunities:Is this really an opportunity?  Will I be able to differentiate myself. Woun’t I be used to put pressure on the preferred vendor? Do I see a lot of similarities with already won projects? Will I be able to influence the buying criteria? Is a budget available or can it be made available. Can I get in contact with most or all decision making people? All of these are examples of qualifying criteria to make sure you spend time on the right accounts.
2. Reduce your sales cycle: Stop using a sales-process. Use the buying clock. Think in terms of readiness to buy and adapt your actions and time between 2 actions. Who should be your next step contact? Use a structured way to prepare yourself. Think and report based on the outcome of your next steps instead of tracking the content of the next step. Keep all DMU members synchronized on their readiness to buy. Figure out typical time delays in the buying cycle and work ahead of time to overcome them.
3. Increase your actual selling time:Figure out a way to decrease your admin time. Stop writing visit reports but send bullet-based short emails to your contact. Save them in your CRM and ask for feedback in order to stay in sync with your contact. Use CRM as your central repository allowing you to self-coach and become more effective.
4. Build a pro-active opportunity pipeline over time:Make sure you work with marketing to create leads early in their buying cycle. This will allow you to educate them on their specific needed capabilities and link them to your differentiation. This will put the competition on the defence. It will lower your overall time spend per opportunity and increase your hit-rate at the same time.
5. Improve your hit-rate: Get to know the impact your solution has on different people. Find the link between their specific problems, needed capabilities, benefits and results. Use that knowlegde to adapt your questions, value proposition and sales pitch to each of the individual contacts. Make sure you talk to decision makers (Source of Power), people negatively impacted by not having your solution (Source of Dissatisfaction) as well as influencers. Don’t make the mistake of  having the project manager as your main contact. This is another reason why you need to get in early in de buying cycle. Add strategy 2 to the equation and you will experience massive improvement in your hit-rate.

 The nice thing about these 5 strategies is that they create a snowball effect if you work on all of them at the same time. Make sure you share these ideas with your colleagues and help each other to become more effective with these strategies. Get pre sales support and marketing involved and create a value chain instead of trying to do all things by yourself. After all sales has become a team-sport.

1. Pitch their company story on how big, great, superior, experienced, financially stable, oldest in the market,…. they are.
2. Can’t wait to demonstrate their product convinced that the product is so good it will make the difference.

This is the best way to decrease your hit-rate and create a bad corporate brand despite the money and energy you put in corporate branding.

This is why:

This picture clearly shows the impact of field-driven activities on your brand in a B2B environment based on research

by sales & marketing management in 2006

So what should one do to increase your hit-rate and improve your brand perception:

Telling a story was definitely the right way. We all know that stories, pictures and metaphors are a great way to communicate a message.

Yet the story should be on ….. a customer.

So here’s a great way to open a first face to face meeting:

• Present the goal of the meeting and get buy-in
• Propose an agenda (and check available time dependant on the country culture)
• Present yourself

This is the part where the story kicks in. The story starts with your value proposition adapted to the prospect in front of you. followed by telling a story about a customer (don’t use the name)who was faced with several problems,…….. Together you found a solution which would enable him to ……..  and this resulted in an improved…. decreased by ….. (use numbers!) after a certain time of use. This story should be adapted to the prospect and the role of the person in fromt of you.

• Transition into needs analysis through questions

The story you just told is proof of your expertise and shows the prospect that you’re used to hear and handle confidential information. That’s why you should not give the name of the reference at this time since you would otherwise implicitly say that you will use his confidential information to other prospects in the future. It will create enough trust for the customer to start telling his story and explain the specifics of the problems their faced with. A better insight in the specifics will allow you to create a vision of an improved future based on capabilities they will acquire without mentioning your product nor its features. You need to wait to speak about your product until you get confirmation on the vision. We call it getting Vision-Lock.

Tip: Check your PowerPoint’s used by sales and adapt them in a way to facilitate the above scenario with quotes and pictures. It’s a great tool to be used in meetings with multiple people for the first time.

Remember what happens in a doctors cabinet: First diagnose then prescribe!

2 immediate problems jumped out:

• Different metrics: Marketing had a lead gen KPI and Sales a conversion KPI. Both in itself good metrics’s but meaningless if measured in a separate way.
• Sales and Marketing were using a different definition for ‘a lead’

Here are some tips to improve the lead conversion rates:

1. Write a common definition (universal lead definition) for ‘a lead’ and make sure it’s known by all concerned.
2. define a process describing ‘who does what’ and ‘what needs to be reported’ to one another.
3. Make sure Marketing talks to Regional and Country Sales about their lead generation programs prior to decisions. This allows the creation of an integrated approach and making sure Sales will be ready with an adapted approach to be part of the process.
4. Define a common dashboard to track the results and attack funnel frictions from a corporate point of view instead of departmental.
5. Implement a process and reporting mechanism based on the readiness to buy, such as the buying clock™,  instead of a process based on steps already taken.
6. Make sure that sales is using the same buying cycle mechanism for their forecast and plan of actions. It will allow them to
   1. Be focused on the customer and adapt their next step accordingly, instead of following a pre-defined series of steps;
   2. Adapt their next step in function of buying readiness of each individual person involved in the decision making process;
   3. Get all their contacts synchronized avoiding them to be the reason for complications (i.e. a DMU member you didn’t meet yet who becomes a non-supporter because of  some wording or content in a proposal that was send too early in the overall buying cycle);
   4. Avoid doing the right type of action at the wrong time and maybe the wrong contact.

The Buying-Clock is based on the mental phases a buyer is going through from happy user over admitting pain all they to buying, implementing and using a  new solution. The 24 hour of a clock represents a full cycle .

Stay tuned over the next coming weeks for more sales efficiency and demand generation tips.

Discuss and take the decision with the involvement of people from sales, marketing  and management to come up with your specific universal lead definition. A good universal lead definition should consist of 5 levels. Example:

Level 1:
A response from an individual to a marketing campaign or someone who has taken proactive steps to demonstrate interest in your message or solution.

Level 2:
A meaningful interaction (phone or e-mail) with an individual meeting the requirements of a fully qualified company. Thus the company belonging to one of your market segments.

Level 3:
Level 2 + the individual demonstrates a specific need for, and interest in, your offering.

Level 4:
Level 3 + the individual is in the process of defining requirements for a solution such as you can offer.

Level 5:
Level 4 + the individual is a key-contact in the decision making process. Add Buying-Clock™ time past 6 o’clock for those people already using the Buying-Clock.

I deliberately did not mention a defined timeline for the purchase and budget availability in level 5 as these are part of long debates in companies when going thru the process of building a universal lead definition. There is no need for those 2 elements, in my point of view, as long as the key-contact admits a pain (problem) on KPI level. (i.e. VP marketing: too low ROI on marketing investments) This is the definition of 6 o’clock on the Buying-Clock.  The mental buying phase should be the key driver in deciding next steps. Elements such a strategic account or not, size of the company and type of solution will determine whether or not it is time to have a meeting with a sales rep. This type of lead allows you to have a pro-active approach and influence the requirements before the market research phase is started. This is the moment when the key-contact has a budget available and will start contacting multiple vendors for comparison.

Good luck in your process of defining and implementing a universal lead definition. Remember to make sure that the lead definition is well communicated to all concerned.

• People had to be trained on specific vertical knowledge and product knowledge leading to long ramp up times for people in a multi offering company
• Sales & Marketing facing difficulty to match specific needs in a vertical to the product offering
• Sub optimal Product/technology innovation due to conflicts in priorities
• Product releases not adapted to market readiness leading  to a high cost of sales and low hit-rate
• A frustrated sales force and an unhealthy tension between departments because their concerns are left unanswered by management
• Sales loosing a lot of time in finding the “needle in a haystack” prospects

A lack of “scalability” throughout the entire value chain is the root cause . The impact on scalability of an organization should be taken into account in each decision you take.

Let me propose how to use segmentation as a way to better align marketing and sales thus improving the scalability of your organization:

• Get to “really’ know your customers by understanding the problems their faced with.
• Define KPI-level pains a prospect should be confronted with in order to seek your leadership. (i.e. VP-Sales- not meeting sales target or too high cost-of-sales)
• Map your differentiators and delivered capabilities to those pains.
• You will now be able to create a set of “pain-based segments”
• Plot your segments in terms of size, solution awareness in the market and level of differentiation.
• You will now be able to prioritize your pain-based segments
• Identify the impacted people in their organization as high as possible on the org-chart which could or will be involved in a buying cycle (key-contacts)
• Map above information for each of them and rank them in terms of impact. The most impacted person will become key in your marketing and sales approach
• You should now be able to write a value proposition for each of the targeted segments. This value proposition is the foundation for all buyer-aligned deliverables such as white papers, solution briefs, case studies, product collateral etc.
• Build a sales kit per segment covering the quantified pains, their causes, needed capabilities, quantified results, ideal buying criteria, benefits and unique features per key-contact
• Populate and qualify your database with suspects based on their pains and readiness to buy and launch a lead generation and/or lead nurturing program to start generating qualified leads for sales.

Above will result in an increased focus:

• More engaged employees
• A lower time to productivity as low as 6 to 7 months for complex solutions
• Increased hit-rate up to 75% and more depending on the level of differentiation you can proof
• Decreased cost of sales by at least 22%

Above shows how segmentation can have an important impact in terms of a better sales and marketing alignment.

Write a comment or question to dig deeper into this improved way of segmentation.