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Reducing “No Decision” Outcomes: The Forensics of Selling

I read a quote the other day attributed to Sirius Decisions, the sales research organization. It stated, “71% of sales leaders attribute difficulty in revenue growth to the lack of ability of their sales people to connect their solutions to the business issues of their customers.”

If you’re in the 71% struggling to get over the goal line, there’s good news and bad news. The bad news is that sales training doesn’t solve the problem – as if that’s news to you. The good news is that Selling Forensics can.

Selling Forensics is the science of examining the work product produced by your sales team. Work products are the distinct communication vehicles developed and delivered to the customer during the sales process. They include presentations, email confirmations, proposals and the like.  Just like fingerprints can reveal who was at the scene of a crime, the work product captures the customer conversation of your sales team for each individual account opportunity, revealing insight into the selling mechanics of the sales person or the entire team if taken in whole.

However, the interesting aspect is that just observing work products can produce positive results. In applied physics, there’s a principle that comes into play whenever anything is measured. It’s called invasive testing, where the test itself can alter the results. For example, consider a scientist trying to measure the temperature of a liquid in a vat. Placing a thermometer into the solution can actually change the temperature of the liquid. If the thermometer is colder than the solution, when inserted it robs some of the energy of the liquid as predicted by the second law of thermodynamics, producing a different reading than the temperature of the liquid prior to measurement.

When a sales leader initiates a work product review, the work product will change. Instead of the laws of thermodynamics, I call this the laws of selling. They are:

  1. The energy exhibited by a sales person is equal to the amount of energy need to just barely get the job done plus the level of oversight on the activity. To improve a sales effort, oversight has to be applied.
  2. When two closed systems come in contact, a buyer’s organization and a seller’s organization, the resulting entropy is equal to the quality of communication exchanged between the two. Buyers are more motivated to change if the seller connects their solution to the buyer’s business issues and challenges.
  3. The entropy of a minimum selling effort is zero if the buyer doesn’t recognize a reason to change. This is why so many sales organizations have 40-60% no decision outcomes. Minimum selling efforts will result in fewer buying decisions.

All kidding aside, inspecting work product and identifying short falls will improve the work product, the quality of communication and ultimately the number of buying decisions made in your favor.

Years ago, a software company called Cadence Design Systems was undergoing a sales transformation. As part of the transformation a decree was made that no proposals could be submitted to a customer until it was inspected and passed the test for three criteria: the business issues of the customer were identified, the underlying people, process and technology problems were reiterated, and the impact of the customer taking or not taking action was cited. The thought was that while the sales person may not be able to access the decision maker, the proposal probably could. They wanted the proposal to sell for them in their absence.

At the beginning of this initiative, almost all proposals failed the test. By day 60, almost all proposals passed the test.  The testing itself changed the outcome of the test. But even better, their average contract value (ACV) increased 38% in just 90 days. They didn’t just close more deals, they closed bigger deals as well.

On a side note, you can imagine the number of conversations this caused that went like this: “My boss won’t let me submit a proposal until I get three questions answered that I forgot to ask. Accompanied by the reply, “ok, what do you need to know?”

If you’re one of those sales leaders that could benefit from your team’s ability to connect the customer’s business issues to your solution, then I recommend an initiative to test your work product. Ultimately, the proposal is the final communication that either captures the compelling reason to change, or demonstrates a minimum selling effort with a price quote wrapped in a gracious thank you.

Your inspection should include evidence of:

  • The current business issues identified and confirmed with the customer.
  • The top three to five underlying challenges or problems that you can solve better than other solutions.
  • The impact of making the decision in their terms, not yours. We’re trying to cite their metrics for achievement, not ours reflecting other customer successes.

I’ve implemented this Selling Forensics initiative at a variety of companies and the result is always the same: average contract values improve and no decision outcomes decrease.

Kevin Temple guides sales teams to be more agile and improve revenue outcomes. He can be contacted at kevin@enterprise-selling.com. The Enterprise Selling Group is a leader in delivering training, coaching and project oversight to improve the agility of sales teams around the world.

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Sales Agility: Selling Around I.T.

Kansas_coal_miner

Y’all a bunch of coal miners in a gold mine!”

The words stung when they first rolled off of Hank’s tongue. I felt like it was an insult to our sales team, but rather than show my irritation, I asked Hank to clarify what he meant.

Hank was a new board member brought on to help our software company revitalize its lost growth luster. He smiled his approval at my curiosity, and explained. “Every day your sales team comes the work, it’s like they walk through a long dark tunnel to spend the day hacking away at the wall to generate a few hundred dollars’ worth of coal. On their way through the tunnel, they keep tripping over these large yellow rocks, so they kick them out of the way. What they don’t realize is those rocks are made of gold.” His Texas accent only made the analogy more powerful for me.

Hank was explaining that selling to IT was like coal mining. He continued by pointing out our own IT department had a budget equal to 1% of the company’s planned spending, while our sales department had 26% of the overall budget. His point was well made. We were working like dogs to scratch a living out of selling to IT. And they never had a kind word for us in return.

I spent the next nine months leading our sales team to be more agile in selling to the real stakeholders in their accounts. It didn’t happen overnight, but the results were mind blowing. Our largest deal size before Hank spoke up were in the $1M -$3M range. Within a few months we were booking $15m – $20M deals.

Although selling to General Managers and CEOs seems like a no brainer, we had to overcome years of ingrained habits to succeed. Here’s a short list of the challenges we faced in this particular situation:

  • Our messaging was tailored to I.T., not CEO’s.
  • I.T. did not have the mojo to sponsor us to the business side, nor did they want to.
  • Most of the business leaders who would benefit from our solution had no idea who we were.
  • Our sales people lacked the confidence to take on a new stakeholder conversation.

Sound familiar? Almost every technology company I’ve helped since then faced the same set of challenges.

Here’s how we overcame these challenges and became gold miners.

  1. We profiled the problems faced by the executives in our major target verticals. This means capturing their business issues, underlying problems, potential impact of changing in dollars, and the connection to our solution. We drilled this into our sales team, even requiring them to become certified in this type of dialog.
  2. We created new messaging that focused on the business issues, problems and impact that we could deliver to these new stakeholders with stories to illustrate real life examples.
  3. We went through an exercise to calculate how much value we contribute to the world on an annual basis. Without an exception, every sales rep came to the same conclusion. We delivered billions in cost savings and revenue acceleration, yet we were only billing about $200M at the time. We implemented this exercise to build the confidence within our sales people to carry their message to more powerful stakeholders.
  4. We challenged our sales people to take this message to three senior leaders in their accounts. We tracked and measured the initiative. Almost every sales person uncovered an opportunity that over shadowed previous projects. This alone fueled their appetite to prospect even more opportunities outside of IT, and created a workforce of gold miners.

In addition to the deal size growing tremendously, we had several other benefits emerge as well. Our discounting practice dropped by over 30%. Our breadth of products per transaction jumped dramatically, and our services bookings jumped from $2M the year prior to over $98M in less than nine months. This initiative revitalized our growth to the 30% range and took us to the billion dollar revenue mark in a few short years.

Although changing a culture to target business leaders outside of IT seems like a sales challenge, it’s really a leadership challenge. I’ve worked with many technology companies on this challenge, and the one common denominator for success with this level of agility is leadership.

Do your sales managers need to become sales leaders?

Kevin Temple guides sales teams to be more agile and improve revenue outcomes. The Enterprise Selling Group is a leader in delivering training, coaching and project oversight to improve the agility of sales teams around the world.

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Sales Agility: How To Tailor A Sales Message

The first quarter of the year is usually a slow start for most enterprise focused sales organizations. But it also tends to kick our behinds into gear as we grasp the required ramp to reach the year end goal. If this resonates with you, I’d like to focus you on one initiative that will produce better sales results, and provide the fuel for your accelerated ramp requirements. The best part is it’s easy to implement, especially for time strapped sales people and sales leaders.

We’ve been hearing it for a few years now. CEB’s research says the top performing sales people tailor their sales messages to their prospects. If you’re not tailoring your messaging, there’s a potential windfall waiting for you.

On the other hand, if your team is using the “spray and pray” model, where one message fits all audiences, you’ll find the result of not tailoring sales messages is a high ratio of “no-decision” outcomes. I’ve run across numbers as high as 60% of the pipeline in some businesses, while the norm is about 40%. As a subset of this, delayed decisions are also costly when it comes to improving sales productivity, and also relate to a lack of tailored messaging. Bottom line, if the prospect has trouble understanding the need to change given their situation, or can’t clearly articulate it to their colleagues, they either can’t make a decision to change, or it gets delayed. Tailoring the sales message around their specific situation is critical for delivering better sales results.

Before we get started, let’s narrow the task down to a manageable and productive thrust. There are several levels of tailoring: You can tailor to the industry, tailor to the company, or tailor to the job title or function. You can also tailor to the individual, but that requires insight into their personal values, focus, passion and more. For this article, I’ll focus on tailoring to a company. This level of tailoring helps with the first step, getting in the door. It also helps the contact identify and more clearly articulate the reasons for change to their colleagues, resulting in fewer no decision outcomes.

The place to start is with the Internet. I start with three basic research tasks:

  1. Identify any recent changes to their operating results, good and bad.
  2. Take a look at their press releases for good or bad news.
  3. Perform a specialized Internet search on their company name combined with a few chosen adjectives.

Recently, I conducted this exercise on a prospect and it took a total of about five minutes. But the results were invaluable.

I’ve decided not to disclose the name of the company that I’ll use to illustrate my results as they are an early stage prospect for my business. I can only imagine the number of my competitors calling them after reading my post, and since I don’t have the contract nailed yet, I’ll take the safe route.

The first place I visited was their “Investor Relations” section of their website. Like most public companies, they post their financial results for their shareholders. Not three days before, they released their 2014 annual report.

I quickly scroll down to page 33 where I find their operating results. The first thing that catches my attention is they have almost quadrupled revenue from $12M to about $44M in one year. That’s impressively good news, but I didn’t stop there. Looking further down, the next eye catcher is operating expenses. The cost of sales has almost doubled from $32M to $62M, outpacing their revenue generation. This also indicates they’ve probably hired a lot of sales people from one year to the next. Their General and Administrative (G&A) costs have also doubled from $9M to $19M: Another indicator of hyper growth and an expansion of employees in other departments.

Since an annual report is a comparison of one year to the previous and may already be out of date, my curiosity compels me to check their current job postings to see if their hiring pace has changed. As it turns out, they are still in a rapid expansion mode. There are over 20 open sales openings listed in a variety of locations with around 100 postings in all categories combined.

I scan the remainder of the annual report to see if anything else catches my attention. As with all public companies, they are required to compare their shareholder return to a general investment in the stock market. The graph catches my eye. It shows their IPO price of a year ago, $40 per share, compared to the current price of $7.81. This causes me to conclude there’s probably a good deal of pressure on the executive staff to address this problem. (Even Elon Musk has to pay attention to this fundamental eventually.)

Next I turn to their news center. This doesn’t turn up anything useful to me. Like most companies, this is more of a marketing take on the trends and opportunities in their industry. It’s not really focused on their issues or problems. However, I never overlook it because sometimes something useful pops up like a recent merger or new regulatory requirements that may impact their business.

Lastly, I perform a problem and opportunity oriented Internet search. I like to use their company name and combine it with positive and negative adjectives. I’ll use words like “problem”, “issues”, “concerns” and the like. If that doesn’t pan out I’ll try some opportunity oriented business words like, “merger”, “partnership”, or “regulations”. I typically look only on the first page of results as any past this point are probably dated. This time, an article dated a few months earlier pops up. It details their announced partnership with a complimentary leader in their market. Although not too interesting to me, it would be interesting to other sales professionals selling collaboration tools. I make a note to pass a lead on to my customer, Polycom.

Not a bad return for a five minute investment. I now know they have a shareholder return issue, which is probably putting pressure on cost management or revenue growth, the latter being my hope. I also know they are spending more on sales than the company is generating in revenue, so I’m confident they should be open to ideas about reversing this ratio. I also found they have scaled the sales organization rapidly and are continuing on a fast clip. Combining this with the diverse locations of their job postings, I’d venture to bet they have a ramp up challenge, something I can help with in many ways.

This simple step arms me to have a productive conversation with their Chief Revenue Officer. Although I could have easily put this person on my standard email nurturing cycle and check in with them after they followed a link to some valuable content on my website, I find a much higher hit rate if I find something compelling and use that to start a conversation directly.

But I don’t stop there. I’ll use this information throughout my sales campaign. In the event I’m invited in to deliver a presentation to a larger stakeholder group, I use it to frame my presentation and drive a dialog to uncover related or additional problems. I also use it to frame my proposals. Even though I specialize in teaching sales professionals how to access decision makers more effectively, I’m also impacted by geographic separation or the calendars of overwhelmed CEO’s or other decision makers. In this event, I want my proposal to sell for me, framing my solution around the global, high level problems every executive in their organization would like to see addressed.

In short, I tailor my message to the issues they currently have on their table.

So why don’t more sales people make this simple investment and improve their results? I think it has to do with habit and an ill placed value on the shortest path to closure. They mistakenly believe the sooner they can talk about their product or service, the faster the decision will be made. However, as in Aesop’s fable, going slower can make you the winner.

If you’re a sales leader, I suggest a simple assignment to prove the value of this minor change in modus operandi. Ask your team to perform this level of research on just three prospects each and share the results at your next staff meeting. Chances are, most will find something compelling which puts your solution in a more strategic light.

LIMITED OFFER: I am offering to demonstrate this process for a select number of sales leaders and their teams using your own prospects. If you’d like to have a web demonstration at your next staff meeting, please contact me with the information below.

Kevin Temple guides sales teams to be more agile and improve revenue outcomes. He can be contacted at kevin@enterprise-selling.com. The Enterprise Selling Group is a leader in delivering training, coaching and project oversight to improve the agility of sales teams around the world.