April 1 is right around the corner and I want all of you reading to avoid being this year's fool.
Recently, during a consulting session with a client's president and sales manager, we discussed two points that I thought would be good items to bring up in this week's blog.
The first point, which is not an unusual one, was to ensure both the president and sales management were in agreement as to weekly priorities. Often, I find the sales manger focused on important activities during a their hectic weekly schedule -- putting out fires, solving administration issues, coaching/mentoring, recruiting...oh, and trying to ensure sales are being achieved. Meanwhile the president is frustrated that other key objectives are not being completed.
While time management is a major topic for sales leaders, what I almost always recommend is that on Friday afternoons, the president and sales manager meet to agree on the priorities for the coming week and to discuss the achievements/problems of the past week. This is what I call "managing your sales manager." The whitepaper "How to Manage Sales for Predictable Revenue," which you can download on my site, was created for this specific purpose. It defines the 40 top actions that sales managers must work on to achieve predictable revenues. By following this simple recommendation everyone is focused on the agreed-upon priorities.
The second point is about summer. I don't mean vacations -- I mean being forward-thinking. In my discussions this past week, it was obvious both the president and sales manager were thinking week-to-week. While that is important to attain revenue goals, it becomes a treadmill that brings exhaustion, both mental and physical. I recommended the following actions:
- Know what your revenue objectives are for the next five quarters and make sure you match your hiring plans to achieve the goals. Know when you need to hire salespeople in time to be trained to achieve your sales objectives.
- Prepare a planned organizational chart that extends over 18 months. This will help in No. 1, but also provide you an awareness of your resource needs.
- Create your sales dashboards for a weekly, monthly, quarterly and even year-to-date analysis. By doing this you will see a better trend analysis and you will be paying attention to both short- and longer-term results.
- Plan and define your sales training plans quarterly, with topics, dates/times and people responsible.
- What sales promotions, contests and sales games do you have planned for the second quarter, and even this summer, to maintain revenues and to create fun?
Advanced or forward-looking planning will greatly reduce the stress and improve the functionality of the sales manager. It will also reduce the natural stress that is created when managing a sales organization and working with the executive team within your company.
Posted by Ken Thoreson on March 29, 2012 at 11:59 AM0 comments
During the past few months, the stock market has taken off and the papers have started shouting about positive economic indicators: Rents are heading up, monthly job creation rates hit 200,000, et cetera. What is your perception? More importantly, what are you doing to lead and manage your organization and prepare for better times?
In today's economic times, the companies most likely to thrive are those that invest time in scrutinizing their strategic sales-management plans. They review everything from their forecasts to their pipelines, looking hard at important numbers such as cost of sales, percentage of market share, salesperson-effectiveness ratios and customer lifetime value.
When we see companies struggling, it's often because they lack such blueprints. Effective plans require combining an organization's goals and individual salespeople's business plans with a set of metrics designed to gauge everyone's progress in meeting those objectives.
Following are what we believe are the fundamental metrics that partners should include in "dashboards" for measuring their sales teams' effectiveness:
- Accuracy percentage for monthly forecast by salesperson
- Dollar value of pipeline by stage; number of opportunities by stage
- Dollar value of pipeline ratio to future monthly quotas
- Actual sales activity compared to a defined set of standards
- Average order value
- Win/loss rate percentages by salesperson
Beyond the Basics
As you continue developing your company's dashboard, you may wish to build in additional metrics such as the following:
- Value of net new account sales as percentage of total sales for month and year to date
- Existing account sales as percentage of total sales, month and year to date
- Rev salesperson profitability to sales volume
- Revenue per current customer per year as percentage of total sales
- Cost per lead by source
- Sales-cycle time from initial contact by salesperson to decision
- Number of days with sales outstanding, goal versus actual
- Blended billing consultant rate, goal versus actual
- Realization consultant rate, goal versus actual
- Utilization consultant rate, goal versus actual
- Consultant backlog days, goal versus actual
- Direct sales expense as a percentage of volume, margin and quota
Looking Ahead: Leading Indicators
In addition, smart sales leaders increasingly rely on what we call "leading indicators." These are activities or ratios that can predict revenues at least 60 days out. While simply looking at future pipeline values can provide a similar forecast, growth-focused partners may find these indicators useful as well.
In most cases, sales events occurring early in the sales cycle are most likely to lead to high-percentage sales opportunities. If these begin to fall, future pipelines and revenues will probably follow the same pattern. Potential leading indicators include the numbers of:
- New-prospect calls made per week
- Face-to-face sales calls made per week
- Subject-matter expert or presales tech-support calls made per week
- Discovery calls made per month
- Demonstrations and executive presentations made per month
We also recommend creating graphs comparing these numbers to dollars booked or margins generated, which can help salespeople see the relationship between indicators and results.
Finally, remember that the ultimate goal is improving your ratios and results each month and each quarter -- not simply tracking them. That's the real reason for developing a dashboard, and the real route to success.
Posted by Ken Thoreson on March 19, 2012 at 11:59 AM0 comments
First of all, the title of this blog is misleading. Second of all, even if it weren't, it wouldn't be a good thing.
No matter how big their sales organizations are, sales leaders who assume they are responsible for solving every problem generally fail to achieve the ultimate objective.
Generally, new sales managers want to make their sales teams feel they are delivering value and are determined to help salespeople on their various tasks, problems and complaints. These sales managers often attempt to become the main cog in their sales organizations. Nothing can be further from the primary goal.
First, sales managers must recognize that it is their job to make salespeople independent of them, not dependent on them. Whenever I find that the sales manager is the first and last person to leave the office, I sense an issue.
Second, when I review "to-do" lists for sales managers and find topics that don't belong there, I again suspect a problem with lack of salespeople dependence.
The ideal sales manager shows up on time, takes a nice lunch break and leaves before his or her sales team. How does this happen?
- As I've written before, focus on hiring only quality salespeople.
- Sales managers must recognize it is not their job to make quota every month -- it is the salespersons'. Once this is clearly understood, the next elements fall into place.
- Every six months, each salesperson must create a personalized business plan. This is more than a simple forecast, but a plan on how they will achieve their quota. In fact, I like to suggest they forecast three times their quota.
- The 90-day sales training plans are prepared each quarter, with dates, times and topics carefully designed. Salespeople or other individuals within the firm are assigned the responsibility for delivering the training. The sales manager only plans the training.
- Individual salesperson reviews are held once a month, formally each quarter.
- The Monday morning sales meetings follow the pre-planned agenda/format and are positive events.
- Sales contests are fun and are planned on a yearly basis.
- Individual salesperson coaching on sales skills occurs during regularly scheduled sales calls, not just whenever it happens.
- The sales manager has figured out the recipe for the business. They know what metrics to measure to comfortably predict revenue and each salesperson knows and measures these metrics themselves.
The main theme is: Be under control. There are systems in place, the salespeople know the plans, they are held accountable and fully understand that management is there to support them, not take care of them.
If you want a more complete list and to help you develop a prescriptive approach to sales management, go to our Web site and download a free whitepaper "The Job of Sales Management."
Posted by Ken Thoreson on March 12, 2012 at 11:59 AM0 comments
I was at a sales conference in Puerto Rico several years ago. While I was waiting for my return flight, I started to converse with another flier. He was British and just finishing his holiday. We discussed mutual occupations and experiences. When he learned that I had just addressed a sales conference, he asked about the topic and purpose of the event. After I explained, he said to me, "Take advantage of the opportunity of a lifetime, during the lifetime of the opportunity!" I loved that comment and I have used quite often ever since.
As I approach another birthday, that quote is even more important to me. Each of us only has a certain of number of "opportunities of a lifetime" to experience. These opportunities can be professional as well as personal. The challenge I see is that too many individuals are simply moving through life rather than experiencing life. I am firmly convinced that learning to impact the lives of others through service, trying new things, being kind and simply having fun put more zest in your life and a bounce in your step.
Recently, a man named Jim whom I knew only slightly passed away; the comments everyone made about Jim were wonderful. One that I recall was that whenever Jim met someone, he always asked them, "Now tell me what you have been up to." What a nice way to express warmth.
In our sales management workshops we spend time coaching, mentoring and teaching communication skills. The one idea I like to stress to attendees or during a consulting relationship is when working with your sales team and a salesperson calls you or walks into your office, the first thing you should say is "How can I help you?" Make sure you express that warmth and demonstrate you care. It will go a long way toward building a trusting relationship and a motivated team.
Take advantage of the opportunity, I have a short video for you on this concept here.
Have a great March and finish the quarter strong!
Posted by Ken Thoreson on March 06, 2012 at 11:59 AM0 comments
While in the process of writing a magazine column on the future of sales and social media I interviewed three people and posed several questions in order to get their views. I thought for this week's blog I would also introduce you to my current thinking and I would really enjoy hearing your thoughts on the direction of sales and the use of social media.
In the traditional sense of a new product introduction, social media is moving through various stages. It is my opinion we have obviously crossed the chasm from Stage 1 into full-blown Stage 2 product acceptance and, in most cases, salespeople and sales leadership have accepted and become comfortable in using forms of social media for their personal lives as well as in a limited business environments.
It is also my belief that if you aren't actively using a variety of social media applications in your sales process/organization it is critical you begin to learn to use them and become comfortable with the current social media tools. Lauren Carlson describes the top five uses of social media in sales very clearly in her recent blog here.
Individuals use social media -- Twitter, Facebook, YouTube, texting, et cetera -- for their personal use, and corporations use it in marketing and even building their internal social networks. The thinking is that current clients and prospects will begin to accept social media more easily in their sales relationships.
The question becomes, where do we go from here now that social media as we know it has been generally accepted by individuals and corporations? The answer is Stage 3.
Jay McBain, from Channel Eyes, a social media/network company focused on the IT channel, commented that based on his research on the topic, "social [media] would overtake Web sites as the No. 1 source of information and online engagement in 2012." Jay believes there will be a split -- a movement to enhance personal social media and the trend to create a "business social media" set of software solutions.
This is exactly what I believe to be the direction we will move. As CRM applications improve and as more cloud-based applications are developed, there will be a greater integration and utilization of business social media. Salespeople will uncover more prospects, prospects will accept this kind of communication and both parties will interact comfortably. As Peter Watts from Solutionize, a software business collaboration services company, predicts, so-called sales collaboration networks (SCN) will eventually be deployed. These are highly integrated applications that will easily allow the salesperson to offer the right solutions with an interactive approach, generating huge value to the buyer, rather than simply data sheets or a nice Web site.
Leadership must focus on this changing sales process. The business outcome must be beneficial to the buyer, seller and vendor. It is my belief that this more highly communicative process will make decision-making easier and faster by removing any heavy lifting. SCN will allow salespeople to reach more prospects and work at a pace commensurate with today's current demands and profit measures.
What changes do you believe will occur with more business social media solutions? The world continues to change -- are you? Is your sales process? Let know your thoughts below.
Posted by Ken Thoreson on February 27, 2012 at 11:59 AM0 comments
This week's blog is a review of a book titled Executive Toughness: The Mental-Training Program to Increase Your Leadership Performance by Dr. Jason Selk and published by McGraw Hill.
When it comes to reading, I like to switch between business books focused on some aspect of my profession and then another book for personal enjoyment. Why did this book catch my eye? After writing four books myself, I found Executive Toughness to be a terrific read that can reveal to new managers or experienced business leaders something new to improve upon.
As each page flew by, I found myself underlining sentences, circling ideas and folding over pages as concepts and tools were introduced. Selk introduces each new idea with a story of a person that defines his message, nicely personalizing the concepts in ways the reader could relate to. And at the conclusion of each section, he included tools so the reader could begin to build their own personal "training" program. This allowed the reader not only to read and understand the topic, but to put the information into their personalized action plan!
(As an aside, Selk's conversations and stories with famed coach John Madden were terrific.)
The topics of the book that I particularly enjoyed were those on accountability (readers of this blog know my feelings on accountability, discipline and control), self-evaluation, improving execution and consistency (in my sales leadership workshops, I frequently state that execution is the key element in high-performance sales organizations), mental work (this section pays for the book!), and optimism.
And to make the book even better, the last 12 pages gives you a handbook to move forward with your personalized program.
Selk hits a key point: You must be personally in balance, know what you want and take action to achieve high performance. Buy the book, read it and take action -- you will be a better person because of it.
Posted by Ken Thoreson on February 14, 2012 at 11:59 AM0 comments
Hiring. It's the No. 1 job of sales management but it's also the most difficult.
If you hire effectively, the job of sales management becomes much easier. But if you hire the wrong salesperson, it may cost you four times what you ended up paying that person while they were on your team.
If you are serious about building a high-performance sales team I have something special for you; I will train you on the aspects of building a recruiting process that will improve your odds of only hiring the best salespeople -- not the best available. You can register for my webinar here. In this webinar, I will teach you how to remove emotion from the hiring process and improve your odds for hiring salespeople who will produce. You will learn:
- Five techniques to increase interviewing effectiveness.
- How to evaluate the traits of high-performers.
- How to create a sales recruiting scorecard that "takes the emotion" out of hiring decisions.
- How to use and create a sales case study specifically designed for your business.
- How to build an interviewing process to hire the best, not just the best available.
- How to separate the average from top performers.
This webinar, which takes place on Feb. 28 at 1 p.m. EST, is perfect for sales managers, executives, business owners, HR professionals and anyone who is involved in the sales hiring process.
Posted by Ken Thoreson on February 06, 2012 at 11:59 AM0 comments
After giving a keynote program called "Gourmet Living" recently, an attendee came up to me and discussed her challenges as a sales manager. The last three years have been tough and she was looking for new ideas for 2012 to excite her team and also to simply change up the routine.
Since my keynote program had been about creating a "menu for your life" and used many cooking metaphors, I started thinking about what her sales management recipe should be. If 2011 left a bad taste in your mouth, use the following ingredients to create a new recipe to make 2012 your best year ever.
Become a Detective
In sales management workshops, we always talk about "inspect what you expect." Once a week, review your sales team's CRM system to ensure they are using it properly and casually ask each team member about their certain activities within their key accounts. Once they know you are actually reviewing their accounts they will be more precise and begin to be more accurate. Next, make two extra sales calls per month with each sales rep. Confirm that hey can sell your firm and they are using the proper sales tools. These actions are not micro-management -- they are designed to provide you greater opportunities to coach and grow your team.
Recognize your sales team might be tired or somewhat challenged based upon the last three years of tight budgets and stress. Fire them up with new products or packaging/pricing, change the game with new times for sales and sales training meetings, or even rearrange the sales offices. Once a month, take your sales team on a field trip to visit a customer and let the customer "sell" your team on your products/services.
Find Creative Dust
Read a book on creativity and share it with your team. The truly great salespeople are the most creative and it is true that creativity can be learned. As a sales manager, creative sales strategies will push you over your quota. Get your entire team into a creativity fix.
Become an SOB (Student of Business)
Invest in sales management training, books and DVDs. Create your own network of other sales managers where you can discuss ideas, learn what is working for others and explore new sales management concepts. Push yourself to become a professional in 2012. Consider visiting other offices and view how their sales managers run their sales teams. At our Web site you will find free videos on "hiring and training salespeople" and other articles I have written on sales management. You might also go back and skim through the blog to look for other ideas.
While these are just a few ideas, I would enjoy reading your reactions or other recipes for success below. As a team of readers, let's build up a complete recipe for each as we work to make 2012 a feast we will always remember.
Posted by Ken Thoreson on January 24, 2012 at 11:59 AM0 comments
As a sales leadership consultant, I think this article by Lauren Carlson, "SFA 15 Years Later: Now Every Rep's Best Friend," hits on many valid points. The cloud and CRM usability are key elements in the acceptance of CRM, as is the price/cost issue, especially for the SMB market. The marketing campaign features are extremely important and the interface to accounting/ERP systems greatly improves the customer service aspect, as well as gives a more 360-degree view. They make CRM more than a salesperson's tool.
One other element that should be recognized is the "tech savvy" nature of reps today versus even 10 years ago. This has made CRM acceptance so much easier.
However, what is interesting is that forecasting accuracy is still a challenge for the reps/sales managers. Also, training and implementation of CRM is still greatly under-emphasized, and I find many organizations with salespeople using the same CRM system differently and not following a sales process properly. Third, this lack of discipline leads to inaccurate pipeline and activity reporting.
These few issues are the direct result of sales leadership and are training and management functions. The mistake I see in many CRM systems and vendors is that they focus on the salesperson, not on the needs of the sales manager or organization. Sales leadership requires a more forward-looking approach to build predictable revenue. With a greater proactive approach and sales management focus, the three topics I mentioned above would help the sales manager take greater charge of the CRM tool and it would be more of a useful tool for sales leadership.
Posted by Ken Thoreson on January 17, 2012 at 11:59 AM0 comments
Strategic sales management is often a weak link in solution provider companies. For the past 14 years, I have been working all across North America and internationally, meeting, speaking and consulting with organizations of all sizes and areas of focus. While every client engagement is unique, some problems are common to many corporate cultures and tend to prevent a company from reaching its business potential.
This month, let's take a walk through a hypothetical client site that illustrates many of the problems I've encountered over the years. We'll use "Law and Order" rules: "Although inspired in part by true incidents, the following story is fictional and does not depict any actual person or event."
Walking into the front office, there are a few chairs and a few outdated vendor awards on the walls, and employees pass visitors without offering a greeting or showing much expression or enthusiasm. This is not a good indicator for the type of reaction the office evokes from prospects who visit.
I ask for Bill, the president. I am warmly greeted and taken to the back office, where we begin to chat about his business, his vision, his frustrations and the lack of business profitability. My experienced ears hear: "They" just don't get it, "they" really don't work hard enough, "they" really don't know how to sell what we do and "they" don't seem to care about the business like I do. Bill is also concerned that his sales manager is focused on functions that have nothing to do with sales.
Bill introduces me to his vice president of professional services: During the first 10 minutes of a 45-minute interview I hear a lot about how much time the sales engineers have to take to help the salespeople in every engagement and that the sales teams get all the credit. "They never take the time to learn the products. If it wasn't for my team and their expertise we would have no sales." When I ask when the VP last held a training session for the sales team, I get a shrug.
As I conduct interviews with each member of the sales team, either face-to-face or on the phone, I begin to connect the dots between what they're saying and my meetings with the president and the vice president. The salespeople say things like: "Management always seems to dominate every opportunity; they're always micro-managing what I do; the sales meetings are brutal, everything seems so disorganized; proposals are a joke; management seems to change what we do every 90 days; and they never seem to know what is going on."
Something else emerges from my recordings of each salesperson. Every representative tells a different story when asked, "Why do people buy from you?"
Assessing Your Own Company
While these scenarios are exaggerated, these are conversations that sadly take place among many clients we have served. Does anything here ring a bell about your company? As you read this in January 2012, it is an excellent time to assess the morale within your current organization and create a plan for the remaining portion of the year to fix elements in your company that need to operate more effectively.
A few concrete steps can go a long way. Create an ongoing sales training program; run monthly company meetings for all employees to bring teams together, increase communication and recognize achievement; make sure management meetings are organized to improve the focus on achieving corporate objectives; and make "soft" cultural improvements to increase morale and teamwork. In some cases, the list of projects can be quite long. Take a few each quarter and focus on those topics.
Creating a great organization takes time, vision, energy and a commitment to continuous improvement -- which, by the way, is the definition of leadership.
Posted by Ken Thoreson on January 10, 2012 at 11:59 AM0 comments
It's a little late to begin planning your 2012 sales plan, but in a conversation last week with a reader of this blog, I realized there may be others who have not formalized their 2012 plan. Here are some questions you should consider when you start:
- What went well in the past year?
- What did not go well?
- What are the key drivers?
- What are the key metrics?
- What are the risks?
- What are the opportunities?
- What are some of the specific factors you will be facing in 2012?
- What assumptions are you making about the market in 2012?
- What assumptions did you make about your offerings in 2011? Still true?
- What assumptions did you make about your company capability in 2011? Still true?
Posted by Ken Thoreson on January 03, 2012 at 11:59 AM0 comments
At the end of each year, I write down my personal and business goals for the new year in seven different categories. The challenging part of that exercise is I have to review the goals that I had set from the past year and grade my performance. I have saved these sheets from the previous 20-plus years and it's a telling experience: I have found there are always good goals, but sometimes unrealistic timeframes.
Review your performance over the past 12 months. Ask yourself, "Have I changed or improved my organization?" If you are a new reader make sure you review all of my previous blogs for ideas and tips to improve your personal or professional performance.
As I look ahead into 2012 and think about potential blog topics, it occurred to me that asking you to evaluate your current status on a few basic sales management categories might be a great was to get ready for the new year. Rate each category below on a scale of 1 to 5, with 5 being the highest:
- How comfortable are you that you know what percentage of the pipeline in the current category is required to ensure the sales budget is exceeded?
- How comfortable are you that you have enough pipeline potential in the 30, 60 and 90 categories to exceed future monthly quotas?
- Can you visually see all of your top 10 dollar potential forecasted accounts from your desk?
- How well are all key accounts targeted? Rate your plan to attack them.
- How high well does your interviewing process ensure the best candidate -- not the best available candidate -- is selected?
- Rate the quality of your three-month sales training program. (Is it defined and implemented? Do you have a salesperson development plan to improve the professionalism of your team?)
- Rate the quality of your CRM/SFA system. (Is it being used effectively? Is it up to date? Is it backed-up?)
- Rate how your compensation plan works. (Are your company's goals aligned with the compensation/quota programs?)
- How well are your sales leading indictors defined? (Are they measured, posted, graphed, analyzed?)
- Do you have regular scheduled and unscheduled "coaching" sessions with each of your salespeople?
- Rate the effectiveness of your sales contests and business games. (Are they planned to promote revenue and build teamwork?)
A score of 45-55 means minor tuning may be required.
A score of 35-44 means you should consider several projects.
A score of 25-34 means you need to take multiple actions.
A score of 0-24 means major assistance is required now.
Many of these topics are critical for building a high-performance sales team as well as increasing the predictability of your revenue. It's critical that a sales manager or owner know a few basic ratios of their business, such as the ratio of potential revenues in the pipeline to the defined sales quota versus actual attainment. If you track this information for six to nine months, you will find your closing ratios, the value of how much potential revenue must be generated each month to enter your pipeline, and what you need at the beginning of each month to attain your sales quota.
I also like the idea of "out of sight, out of mind." If you have major accounts, you must have a written plan of action, for each account, for at least three months. If you have major sales opportunities to sell each month, you must have their name and action plans visibly defined on your wall or desk. This will ensure you are consistently aware of your important prospects.
Since recruiting and interviewing are the most important aspects, making sure you do them right becomes critical!
Stay tuned to this blog as we move into 2012. I will be touching on many of these topics and others in greater detail as the year moves along. If you would like to suggest specific topics for me to cover in one or over several columns, please send me your ideas!
Posted by Ken Thoreson on December 29, 2011 at 11:59 AM0 comments