selling in a down economy in a down economy... · 2009-09-16 · services? are we communicating...
TRANSCRIPT
© SALES PERFORMANCE INTERNATIONAL
6 Strategies for Success
Selling in a Down Economy
September 09
Steven Vantongelen
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 2
From Demand-Rich to Demand-Poor
Demand-Poor Environment (Post 2008)
• Later stage markets
• Weaker economic drivers
• Comparable offerings with intense competition
• High market saturation
How are we positioned in the
marketplace?
Do our messages connect with customer
needs?
How are we legitimately differentiated?
Are we creating the right products and
services?
Are we communicating value messages
consistently?
Are lead generation vehicles producing
qualified opportunities?
More Challenges Are “Above” the Funnel
In the Funnel
Product
Marketing
Marketing
Communications
Market
Positioning
Messaging
Platform
Product
Management
Lead
Generation
W/L Ratio
Velocity
€
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 3
Context
The War for Customers and Talent
Get out of the commodity battle and shift to “selling solutions”
Moving up the Value Chain opens up new revenue sources, and requires new capabilities
• Generic services, functional processes, vertical industry processes
• Management and Business capabilities
• Leadership and culture
Scarcity of qualified resources in the labor market
Leading to a rapidly changing competitive landscape
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 4
Trends - Evolution
An attempt to secure recurring revenue streams, reduce customer churn, and attract more business from new/existing customers leads to:
The majority of companies putting a key focus on synergies, leveraging core access business
Companies entering new domains through acquisitions for scale and/or expertise
This increased complexity generates significant operational challenges and requires “New Mindsets for New Games”, and New Account Management and Selling disciplines and partnerships
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 5
The Elusive Goal - Sustained Profitable Revenue GrowthHow many of these are you experiencing?
Increasingly perceived as a commodity and
difficulty differentiating offerings
High cost per lead and lack of quality leads to
fill the pipeline
Limited use of marketing materials by selling
organizations
Productivity loss from chasing unqualified
opportunities
Closure rates too low to meet revenue targets
Steep discounts to win competitive deals
Lengthy sales cycles and frequent “no
decisions”
Wide swings in forecast accuracy
Sound Familiar?
Increasingly perceived as a commodity and
difficulty differentiating offerings
High cost per lead and lack of quality leads to
fill the pipeline
Limited use of marketing materials by selling
organizations
Productivity loss from chasing unqualified
opportunities
Closure rates too low to meet revenue targets
Steep discounts to win competitive deals
Lengthy sales cycles and frequent “no
decisions”
Wide swings in forecast accuracy
Sound Familiar?
Decreased market share
Decreased wallet share
Lower gross revenue
Lower margins
Higher cost of sales
Lower marketing yields
Decreased valuation
Financial outcomes
Decreased market share
Decreased wallet share
Lower gross revenue
Lower margins
Higher cost of sales
Lower marketing yields
Decreased valuation
Financial outcomes
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 6
Unsettling Trends
For Executives and
The Sales Force
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 7
The Brutal Facts
Quota attainment remains below pre-2000 levels for most industries
51% of forecasted deals fail to close
Sales cycle length is increasing
Ramp-up times for sales professionals are lengthening
More calls required to get to meetings/presentation
Over $5 Billion spent annually to improve top line sales performance!
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 8
Quota Attainment
Support to help reps work smarter is not happening to the extent needed
Only 37% of firms report implementing a formal sales process (note: 87% of these
organizations report that their process is having a positive impact on sales
performance)
The need to better align sales and marketing efforts continues to be top of mind for
many firms
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 9
Forecasting
Today the sin in sales is not to lose, the sin is
taking a long time to lose!
51% of the time the outcome for forecasted deals
is not a win
Companies that are world-class at lead generation
experience a no-decision rate of less than 15%,
compared to 21% for other firms
The larger the deal size, the lower
the ultimate accuracy
Sales process (with toll gates)
showing promise for increasing
accuracy
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 10
Sales Cycle Length
14% of the firms surveyed reported an
average sell cycle of 1 month or less…
Better job of qualifying and prioritizing
deals can further reduce sell cycle time
Focusing on your process can help you
see how you are lengthening the
process
Average Number of Calls Needed to Close a Deal
Buy cycles starting before sell cycles are
putting burden on reps to know more than
just “reads, feeds, and speeds”
Focus on value-add in the first call
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 11
Ramp-Up Times
In the past four years, the number of firms experiencing ramp-up times in excess of one
full year more than double
The number of sales organizations reporting a ramp-up period of 7-12 months is up by
a third
We do see noticeably shorter ramp-up times in firms that:
Have successfully implemented a CRM framework
Are providing new reps with the sales knowledge management capabilities
Are then combining technology and knowledge into a true sales process framework
(this last item helps new reps understand the specific best practices they should use
with each new prospect; the first two provide the content and access to do it)
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 12
Prioritize Which Accounts to Focus
Selling Efforts
Effectively Cross-sell/ Up-sell
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 13
Properly Qualify and Prioritize Opportunities
Regularly Conduct Win/Lose Reviews
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 14
Effectively Introduce New Products
Farm Additional Revenues from Existing Customers
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 15
Sales Process Impact on Sales Performance
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 16
Top Three Objectives for Next 12 Months
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 17
Why Aren’t We Getting Better?
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 18
Why Aren’t We Getting Better?
1. Many misconceptions about sales process and methodologies
1. Process is “what” to do – methodologies are “how” to execute the process
2. Buyer alignment is more critical than ever – companies have not adapted
2. Sales training that is “event” oriented versus a continual learning framework
1. Skill needs and training curriculum not driven by defined process and methodologies
2. Absence of on-going reinforcement and incremental learning vehicles
3. Limited (if any) measurement linking training to business outcomes
3. Management system and disciplines are often ad hoc
1. Sales managers lack the requisite knowledge and skills to be effective coaches and mentors for
the sales force
2. Sales managers fail to apply a common, defined sales process consistently
3. Pipeline management and forecasting not based on verifiable outcomes in each step of the
sales process
4. No formal process for aligning key market messages with practical sales tools
1. 1 in 10 sales people effective at assembling key value messages
2. 80% of companies have no formal vision for marketing and sales alignment
5. Technology not aligned with sales strategy, process, and supporting methodologies1. Process and methodologies (how-to’s) not integrated with CRM
2. Focus on management reporting versus sales enablement
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 19
Breakthrough Depends on “Institutionalizing” the Overall Process
#Deals in pipeline
+5%
Win Ratio
+5%
Size ($) of wins
+5%
Length of Sales Cycle
-5%
X X
=22% sales
improvement
(SYNERGY EFFECT)
Level 1
Ad Hoc
Level 2
Informal
Level 3
Structured
Level 4
Dynamic
Gains Are Not Linear
(Multiple factors create SYNERGY EFFECT)
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 20
Strategies for Success
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 21
Why Selling in Today’s Economy is Challenging
Phase I:
Determine Needs
Phase II:
Evaluate Alternatives
Phase III:
Evaluate Risk
Needs
Cost
Solution
Risk
Risk
Price
Solution
Needs
Buying Phases
Time
Leve
l o
f C
on
ce
rn
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 22
Six Strategies for Success
Sharpen TargetingTarget and allocate time to
highest potential opportunities 1
Sharpen MessagingCreate problem-focused
messages and tools2
Create UrgencyFind and elevate latent
business issues with prospects4
Get Credit for ValueDeliver value and reduce risk at
every step of the selling cycle3
Sharpen Competitive TacticsDeliver customer-perceived value at
every step of the selling cycle5
Leverage RelationshipsOptimize revenue potential from
existing accounts6
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 23
Right Positioning Is More Important than the Right Strategy
Exclusive
Customer
Customer
Needs a
Solution
Value Added
Customer
Has a
Choice
Service Innovation
Knowledgeable
Customer
Power Diagonal
Low
Low
High
High
Relative Cost-to-Serve
Value
Diagonal
Value
Beating
the Commodity
Magnet
Sharpen Targeting1
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 24
Sharpen Targeting
a
D b
Current Relationship
Bu
sin
es
s P
ote
nti
al
Low
High
High
Little or no near-term
revenue contribution or
insufficient data to
accurately assess potential
Low level of current
relationship
Territory marketing
coverage
Moderate to low business
potential
High level of current
relationship
Opportunistic sales resource
investment
High future business potential
Highest priority for sales resource investment
Sharpen Targeting1
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 25
Talent Index
Job Engagement
Low
High
Organizational CommitmentLow High
Dedicated
Detached
Engaged
Belongers
Relationship between employee
satisfaction & retention
Sharpen Targeting1
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 26
A Tale of Two Strategic Account Managers Sharpen Targeting1
Rough, to-the-point
Former military
Intense, focused
No personal intimacy
Relationships are weapons
Suave, cosmopolitan
Multi-industry experience
Works internal channels
Relationships are natural
Which one do you want more of?
Why?
On what basis can you decide?
On what basis should you decide?
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 27
Improving the Talent CurveSharpen Targeting1
McKinsey: War for Talent
“A” players grew revenue by 52%
“B” Players grew revenue by 4%
“C” Players shrunk revenue by 15%
“C” Players Level of Performance
% o
f W
ork
forc
e
“B” Players “A” Players
Sales Executive Council
Top 20% outperform next 60% by
60%
Top performing sales teams
outperform average teams by 180%
Huge upside to shifting B up to A
performers
The more complex the selling
environment, the larger the gap and the
higher the potential for return
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 28
The Science of Designing Excellent Performance
Sharpen Targeting1
Align with KPIs
Identify Key
PerformersIdentify KPEs
Design “New
Role” KPEs
Key Performers Exist
No Key Performers Exist
Staff Readiness
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 29
Align with KPIs
Business Strategy Alignment
Review business drivers and strategy
Review Execution Plan
Review project plan timelines
Review time-to-competency expectations
Review timeline and expected results curve
Determine key contributions of each role in executing strategy
Determine Success Criteria for Roles
Identify specific KPIs
Determine measurement approach
Sharpen Targeting1
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 30
Identify Key Performers
Identify Existing Standards of Performance
Which results to be measured
How results are reported and rewarded
Identify Consistent High Performers
Review performance results
Review organizational perceptions of key performers
Selection Challenges
Organizational recognition
Functional representation
Sharpen Targeting1
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 31
Design “New Role” KPEs
Model Expert Performance
Outcome analysis
Mental model analysis
Develop and Review Existing and New Roles
Identify role accomplishments and critical actions
Identify key performance elements
Draft model of role profile
Develop Learning Plan
Training designs required to develop KPEs
Sharpen Targeting1
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 32
Sharpen Messaging
73% of CMO’s say value messages not reaching customers
90% of sales people don’t position value effectively
70% - 80% of marketing materials unused
Sources: CSO Insights, Sirius Decision, Aberdeen & Primary Intelligence
COMPANY
Value PropositionVALUE PERCEPTION GAP
CUSTOMER
Value Perception
DECISION TO SELL DECISION TO BUY
Sharpen Messaging2
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 33
Problem-Focused Messaging Approach
Field Marketing
Step 1:
Develop
Problem/Solution
Mapping
Step 2:
Document
Defensible
Differentiators
Step 3:
Build Critical
Business
Issues Menu
Step 4:
Develop Solution
Messaging Cards
Step 5:
Build Sales
Tools (and other
Marketing tools)
Segment BSegment A
Website
Collateral
White Papers
MarComProduct
Marketing
Sample
Customers
Sales
Overlay
Indirect
MarCom
Sales Tools
Proprietary
Comparative
Holistic
Sharpen Messaging2
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 34
The Value CycleGet Credit for Value3
• Refined Value Proposition
• Value Justification / Analysis
• Initial Value Proposition
• Success Criteria
MEASURE LEAD
VERIFYCLOSE
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 35
Creating Urgency
Of all the people who could benefit from your offering…
What % are actively evaluating?
Power person driving evaluation
Business issues defined
Requirements documented
Evaluation team in place
*
Create Urgency4
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 36
Requirements
How Organizations Evaluate and Buy
Company A Company B Company C
“COLUMN FODDER”
Power person driving
evaluation
Business issues defined
Requirements documented
Evaluation team in place
85 – 92%
win rate
8% - 15%
win rate
Create Urgency4
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 37
Understand Your Differentiators
High
HighLow
CUSTOMER VALUE
U
N
I
Q
U
E
N
E
S
S
Cool,
Nice to haveDifferentiators
Commodity /Core
Junk
Sharpen
Competitive Tactics5
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 38
Competitive Strategy Selector™
Strategy Selection Questions Strategy Tactics Pros and Cons
Did you identify latent pain?
Has high priority pain been admitted by a customer key player?
&
Can you establish business impact on others & establish
initial requirements?
YPRE-
EMPTIVE
•Develop needs & decision criteria
•Bond through joint discovery
•Establish impact upon others
•Create exclusive visions
•Articulate value of offering
Pro: High win odds
Con: May extend the sell cycle
Latent or
Admitted Pain
Vision
orActive
Evaluation
N
Disengage
N
Will you be able to address the
requirements / decision criteria and/or form relationships with power in the future?
Y STALL
•Understand requirements / criteria
•Assess potential to win later
•Assess exposure if delayed
•Highlight potential value of waiting
•Establish additional support of key players while waiting
Pro: Keeps the opportunity alive
Con: May be perceived as not focused on customer issues
N
Can you address part of the
requirements / decision criteria?
YDIVIDE
AND CONQUER
•Understand requirements / criteria
• Identify components you can address
•Highlight quantifiable value and advantage of addressable component
Pro: Possible base for future growth
Con: Reduced revenue potential and presence in opportunity / account
N
Can you create differentiated value
and alter the requirements /
decision criteria?
YEND
AROUND
•Understand requirements / criteria
•Neutralize competition
•Reengineer original vision
•differentiated requirements
•unique, quantifiable value
Pro: Rapid go / no go decision
Con: May have difficulty gaining access to power
N
Is the decision criteria defined?
Budget? Timeframe?
Can your offering address all or most of the criteria?
&
Do you have an established, apparent (3:1) advantage from
the customer’s perspective?
Y
HEAD
TO
HEAD
•Prioritize requirements / criteria
•Capitalize on superiority of:
•Offering
•Reputation
•established base
Pro: Possible short sell cycle
Con: May be won at a high cost of sale
Sharpen
Competitive Tactics5
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 39
Finding White Space in Accounts
Pain(A Reason to Act)
Your Offering(A Way to Obtain Vision)
Initiative(A Desire for Action)
Bridge
Leverage
Relationships6
September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 40
Where to Start?
© SALES PERFORMANCE INTERNATIONAL
How to contact us:
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Questions