Sales, Sales Management, Sales Strategy

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Presentation I have done in a Sloan software class on sales, sales management, and sales strategy. Particularly applicable to companies doing b2b selling.

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  • Strategy, Sales, & Sales Management

  • Strategy, Sales, Sales Management

    B2B Sales Management 101B2B Sales Strategy 101 B2B Sales Case Study: GrooveSales & Strategy Reading List
  • B2B Sales Management 101 -- Harsh Reality

  • B2B Sales Management 101 The Number
    Quarteritis

    The sun rises & sets on the quarter

  • B2B Sales Management 101 Sales Representatives

    Sales Rep Profile

    Personable, builds trust

    High energy

    Aggressive/edge

    Street Smart (v. book-smart)

    Listeners/nonverbal

    Motivated by money

    80-20 ruleCompensation

    Base $90k - $100k

    Commission $125k (plus draw)

    0%-50% quota = x%; 50% -100% quota = 2x%; > quota = 3x%

    Stock options less important

    Presidents Club

    Top reps pay > CEOs

    Measurable & Accountable high turnover tolerated

  • B2B Sales Management 101 Strategic Selling

    Nuclear unit

    SR, SE, Cnslt, Mgmt

    Power Selling

    Champions

    Coaches

    Economic Buyer

    IT, LOB IT, LOB, Prchsg

    Legal, Finance, BOD

    Find Pain, Find $Ask questions/listen/non-verbal
  • B2B Sales Management 101 Predicting The Future

    PROSPECTS

    (Email, URL, Source, HI-IQ Email Nurture)

    LEADS

    (Phone #, Lead Conversion Event)

    NEW CUSTOMERS

    (CC# and Authorization)

    Satisfied

    CHI > 70

    Unsatisfied

    CHI < 70

    Marketing

    Sales

    Customer Service

    HubSpot HI-IQ

    SalesForce.com

    OPPORTUNITIES

    (Demo/Trial, 3 per day per rep)

    SalesForce.com

    SUSPECTS

    (HubSpot, WSG; PPC MVT)

  • B2B Sales Management Predicting the Future
    The Funnel

    Visitors

    Prospects

    Leads

    Opts

    *

  • B2B Sales Management 101 -- Predicting the Future
    The Forecast

  • B2B Sales Management 101 -- Other

    Accounts Reviews

    Recruiting (profile)

    Territory Distribution

    Compensation Plans

    Sales Rep Development

    Sales Process & methodology

  • B2B Sales Strategy 101
    Segmentation = Profits

    1 Total churn rate (not shown) is calculated as cancelled customers (all time) divided by total customers (all time). Monthly churn

    rate is total churn rate divided by average customer lifetime of 4.16 months

    All CustomersAvg. Trans. < $3kAvg. Trans > $3kSMBs28108VSBs2128Total185Cancelled CustomersAvg. Trans. < $3kAvg. Trans > $3kSMBs37VSBs117Total28Monthly Churn Rate 1Avg. Trans. < $3kAvg. Trans > $3kSMBs2.6 %1.6 %VSBs12.6 %6.0 %Total3.6 %

    *

  • B2B Sales Strategy 101
    Crossing the Chasm

  • B2B Sales Strategy 101
    Model Comparison

    Source: Rethinking the Sales Force

    TRANSACTIONALCONSULTATIVEENTERPRISEProduct or service characteristicsWell UnderstoodReadily substitutableStandard itemsDifferentiatedCustomizableHidden CapabilitiesHigh Strategic and/or cost importanceLimited substitutabilityKey buyer concerns and decision criteriaPriceAvailability riskEase of acquisitionImportance of problemSolution fitPrice-performance tradeoffsPlatform fitValues fitSustainabilityTime horizonEventPurchasing streamStrategic planNature of relationshipCost - basedBuyer-sellerConfrontationalBenefits basedClient-advisorCooperativeTrust basedBusiness equalsInsiderBoth parties change fundamentally Prerequisites for successAccess to decision makerAccess to influencersAccess to strategyNature of saleDoing the dealProblem solvingAgenda settingBoundaries blur- unclear who is selling and who is buying
  • B2B Sales Strategy 101
    Reason for shift to consultative model

    Sales 5

    Resource commitment

    needed for consultative selling

    Sales 4

    Sales 3

    Sales 2

    Sales 1

    $

    Cost

    Source: Rethinking the Sales Force

    Sales 5

    Sales 4

    Sales 3

    Sales 2

    Sales 1

    %

    Return

    0%

  • B2B Sales Strategy 101
    Consultative Model

    Listening and gaining business understanding are more important selling skills than persuasion; creativity is more important than product knowledge.The only single truth that seems to be holding true for all sales forces is that they have to create value for customers if they are to be successful. Just communicating the value inherent in their products isnt enough.Its a risky strategy in a consultative sales to go to a senior-level decision maker before thoroughly understanding the issues and problems where you can create value. Most good consultative salespeople will first do their homework by working with those influencers in the buying organization who have the best knowledge of the problems and opportunities where the selling organization hopes to create value.

    Quotes from Rethinking the Sales Force. Neil Rackham & John DeVincentis

    Your IT audience will have one or more of these pain points. They may have all of them

  • B2B Sales Case Study: Groove Networks

    P0: Evaluation

    P1: Validation

    P2: Initial Rollout

    P3: Enterprise Rollout

    REVENUE

    COST OF

    SALE

  • B2B Sales Case Study: Groove Networks

    2 months

    2-3 months

    6 months

    ongoing

    P0: Educate

    P1: Validate

    P2: Initial Rollout

    P3: Enterprise Rollout

    SALES ACTIVITIES

    IT call(s)OrientationLOB/LOB IT callsValidation

    2 Track Pilot Trial:

    - IT validation

    - LOB pain project

    Implement seats & gather metricsPenetrate new LOBsEngage enterprise appsHorizontal bus processesGroove as standard desktop DNAIntegrate w/ Ent AppsGroove broadly deployed and used throughout value chain

    LOB Pain IDd

    IT Champ

    Validation Process

    Pain Validated

    IT Validated

    $100k+

    Multiple Pain/Lob

    IT Service Offerg

    $500K+

    MSLSA

    $1m/yr

    Every desktop

  • B2B Sales Case Study: Groove Networks
    Q1 (P)hase Movement

    P1s

    Lowe $46K

    ESP $50K

    AMEX $40K

    Mattel $35K

    Intermec $22K

    P2s

    HP Mktg$770K

    OCPA$691K

    Siemens$111K

    SAIC$142K

    Praxair$100K

    Novartis$86k

    VLH$522K

    Army $154K

    HP C&I $106K

    KPMG $100K

    P0s

    SPAWAR $18K

    Hitachi $10K

    CARE $7K

    DuPont $7k

    Verizon $6K

    ServiceCo $16k

  • Further Reading

    Your IT audience will have one or more of these pain points. They may have all of them

  • Questions?

    BOD

    CEO

    LOB

    LOB

    LOB

    LOB

    LOB

    IT

    Finance

    Purchasing

    Legal

    VP Enterprise Apps

    Bus IT

    Bus IT

    Bus IT

    Bus IT

    Bus IT

    VP Enterprise Infra

    CTO

    Etc

    Closed

    Likely

    Upside

    Q+1

    P

    E

    D

    D

    I

    C

    C

    RD%

    VP%

    Fcst

    Upside

    eCommerce

    248,405

    47,250

    15,000

    10,000

    9,025

    9,000

    Inside Sales

    207,900

    10,000

    -

    -

    1,000

    -

    Salva

    Army: Stryker 125th TF Olympia

    151,662

    -

    -

    -

    -

    -

    McPartland

    KPMG - Services

    150,000

    -

    -

    -

    -

    -

    Black

    BAH / Centrix

    78,183

    -

    -

    -

    -

    -

    Okada

    NG / State Near East Bureau

    62,894

    -

    -

    -

    -

    -

    Okada

    CARE

    60,266

    -

    -

    -

    -

    -

    Foster

    Tyco - software

    56,389

    -

    -

    -

    -

    -

    Marcus

    CA Dept of Justice

    56,279

    -

    -

    -

    -

    -

    Wilson

    Microsoft

    54,856

    -

    -

    -

    -

    -

    37,021

    -

    -

    -

    -

    -

    Smith

    SPAWAR-DM,B/U Svr

    36,794

    -

    -

    -

    -

    -

    Black

    DARPA (SAIC/Hicks)

    32,218

    -

    -

    -

    -

    -

    Tyre

    EDS

    28,265

    -

    -

    -

    -

    -

    Foster

    Praxair

    23,977

    -

    -

    -

    -

    -

    Marcus

    State of FL

    22,943

    -

    -

    -

    -

    -

    Shartzer

    LDS - Deseret Mgt

    18,483

    -

    -

    -

    -

    -

    Shore

    P&G

    17,987

    -

    -

    -

    -

    -

    Manniso

    VA - Infrastructure (Albany NY Buyer)

    15,120

    -

    -

    -

    -

    -

    Tyre

    Shell - trial extension

    15,000

    -

    -

    -

    -

    -

    Smith

    SPAWAR Europe/Ivan(2)

    14,075

    -

    -

    -

    -

    -

    Salva

    Army Corp. Of Engineers

    -

    1,808,559

    -

    -

    Y

    Y

    Y

    Y

    Y

    Y

    Y

    50%

    50%

    904,280

    -

    McPartland