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February 3, 2016 / PACE Australia Pty Ltd

Building Marketing and Sales Capabilities to Beat the Market

Article by McKinsey & Company: Bart Delmulle a principal in McKinsey’s Antwerp office, Brett Grehan a director in the Sydney office and Vikas Sagar a director in the Johannesburg office. The authors wish to thank Tomas Keisers for his contributions to this article.

Consistent growth is difficult; consistent outperformance rarer still. Yet many companies still fail to develop their marketing and sales capabilities to drive performance.

The lean-manufacturing revolution profoundly altered the business world as companies reinvented how they built things to be more efficient and productive. We believe it’s time that companies apply that same level of scrutiny and commitment to marketing and sales. Our research is increasingly clear: companies with better marketing and sales capabilities grow faster. At a time when growth is not only more important but arguably more elusive than ever, companies must tap the potential of marketing and sales to deliver better results.

To help leaders understand marketing and sales performance, we recently conducted a detailed benchmarking study involving 15,000 employees at more than 140 leading B2B and B2B2C global businesses. Our findings were clear: revenue growth at companies with more advanced marketing and sales capabilities tended to be 30 percent greater than the average company within their sector (exhibit). That means in an industry growing at 4 percent annually, a company in the top quartile of marketing and sales capabilities typically grows by around 5.3 percent.


Exhibit: Companies that invest in marketing and sales capabilities drive above-market growth.

Company's Performance

Seven hallmarks of superior marketing and sales capabilities

Many senior executives still argue that the return on investment (ROI) from marketing and sales is just too difficult to assess, especially when compared with revenue-generating line businesses. So, instead of taking a systematic and deliberate approach to investing in their institutional marketing and sales capabilities, many companies choose to focus on tactical efforts that provide quick, visible results. That’s a mistake. Sustainable competitive advantage flows to companies with the best marketing and sales capabilities, and our research and deep industry experience has identified these seven hallmarks of leading companies:

  • Viewing marketing and sales as an investment, not an expense. Our research shows that, if done well, investing to build a carefully chosen group of marketing and sales capabilities can yield a massive return—as much as five or ten times that of an investment in hard assets such as factory equipment. However, companies rarely calculate the ROI of building marketing and sales capabilities. Too often, leadership looks at marketing and sales as an expense rather than an investment in top-line growth.

    It is possible to measure the ROI of building marketing and sales capabilities; in fact, it’s necessary to measure ROI to be effective. The best-performing companies focus on building capabilities that are directly linked to specific growth and margin opportunities by instilling ROI discipline. For example, a building-materials business found there was enormous value available (about two percentage points of margin) from improving capabilities in transactional pricing, sales, and local tactical marketing. Historically, the company had found it hard to fund the investment required to build those capabilities, given that it was a large expense without a return in the same year. But when executives calculated the internal rate of return of a serious and sustained performance-linked investment to build those capabilities (such as new account-planning tools, pricing software, value selling, sales-manager training, and targeted hiring), they found it was four times greater than building another manufacturing plant.

  • Knowing what needs to be fixed. It is virtually impossible to fix something if you don’t know what’s wrong with it. Yet while most businesses rigorously measure and track key performance indicators, few apply the same approach to capabilities—and if they do, they typically look at individual rather than true institutional capabilities such as tools, methodologies, core processes, and systems. Companies should not only know their marketing and sales capabilities but also how they compare against their best-performing peers.

    Acquiring this knowledge requires undertaking a diagnostic that reveals capability strengths and weaknesses—and does so with sufficient granularity and analytical rigor to allow action to be taken. When a global chemical company benchmarked the specific capabilities of its marketing, sales, and pricing functions, it found that while one business unit was strong at delivering value, its strategic marketing capabilities needed improvement to drive growth. Just as important, the company rolled out a shorter version of the diagnostic on an annual basis to gauge ongoing performance and to spot emerging trends.

  • Targeting the capabilities that matter the most. Companies tend to invest in capabilities without thinking through which are likely to have the most impact or are most important to beat the competition. This is generally the result of a faulty understanding of existing capabilities and/or decisions driven by personalities rather than a set of facts everyone agrees on.

    While there are as many as 40 clusters of marketing and sales capabilities, top-performing companies tend to focus on improving only about 6 that are important to the company’s individual goal. One leading consumer-electronics player, for example, identified the most important capability gaps it needed to close: product launches, in-store execution, tactical marketing-spend optimization, and managing sales growth at granularity. For product launches, it retooled its approach and trained the key marketers involved (for example, about 45 product-launch champions in Europe, the Middle East, and Africa). Focusing on improving these capabilities enabled it to gain up to ten percentage points in market share in targeted product categories.

  • Not trying to do too much. Building capabilities requires focused attention. For example, we know one manufacturing company that found, when working to upgrade its commercial capabilities, that any unit that built out three capabilities at once failed. However, if units stuck to two capabilities at a time, they succeeded. Not trying to do too much, too soon ensured they met their goal of improving margins by three percentage points. Another reason for keeping the scope narrow is that changing how an organization works is a prolonged endeavor. The likelihood of failing or losing momentum only increases when companies do too much at once.
  • Tailoring the approach to the company’s stage of development. A successful investment in marketing and sales isn’t just about choosing the right capabilities; it’s about choosing to develop them in the right sequence. Our research suggests that where you are on the business-performance curve should inform your decisions about which capabilities to develop:

    Stage 1: Low growth and profitability relative to market. Investment should focus on foundational capabilities that give businesses the tools to grow, such as transactional pricing, performance management, and customer-portfolio management. Without this foundation, companies will not be able to make it to the next stage.

    Stage 2: Low growth but high profits. To promote growth, companies should focus on building capabilities in branding, strategic marketing, customer life-cycle management, and customer service.

    Stage 3: High growth and high profitability. To become a market leader, businesses need to invest in higher-factor skills such as channel performance and integration as well as alternative go-to-market approaches such as inside sales or e-commerce.

  • Thinking institutional capabilities, not just individual skills. Different elements of a business often have their own perspective on the relative importance of a given capability. That can be problematic: individuals leave, but companies need to sustain capabilities over time. The only way to implement true institutional capabilities is to encourage a broad, inclusive discussion that creates a clear view of which capabilities are necessary across the entire company and how to prioritize them. In effect, companies must create a common and accepted frame of reference. For example, one company regularly surveys 2,000 of its marketing and sales people about their sense of the need to build a particular capability. While this feedback provides valuable insights, it also helps to create a single working vocabulary about capabilities.
  • Having an operating model to keep it all running. In the end, building marketing and sales capabilities alone isn’t enough. Without the right operating model to support change, even the most advanced capabilities will wither. An operating model needs to be specific and measurable, including elements such as clear annual performance-improvement goals; scheduled and formal reviews throughout the year by segment, key account, and other categories; individual and business-unit performance reviews; incentives aligned with institutional goals; and leadership role modeling to shape the culture.

    Culture, in particular, should not be underrated. Top-performing companies actively build a culture that’s customer-focused, managed for the long term, creative, confident, flexible, and fast moving. One consumer-electronics company, for example, revitalized its sales in Europe by focusing on a program to deliberately build a growth culture. It reorganized teams so they spent more time with customers, became more focused on execution, and enforced stronger accountability both for teams and individuals. In addition, executives worked to become more agile through faster decision making, creating cross-functional teams around specific initiatives and using technology to collaborate virtually.

Questions to get started

While transforming marketing and sales capabilities to drive growth is not easy, many companies have difficulty simply knowing where to start. In our experience, CEOs and senior executives should ask the following three questions to get the process moving in a fruitful direction:

  • How good are our marketing and sales capabilities today compared with best practice?
  • How much value is at stake in radically improving our marketing and sales performance?
  • What’s the ROI on our current capability investments?

Starting with these questions will help ensure that your company focuses on building capabilities that improve the business’s financial performance and help it beat the market.

Article by McKinsey & Company: Bart Delmulle a principal in McKinsey’s Antwerp office, Brett Grehan a director in the Sydney office and Vikas Sagar a director in the Johannesburg office. The authors wish to thank Tomas Keisers for his contributions to this article.

 

 

May 12, 2015 / PACE Australia Pty Ltd

Do you really understand how your business customers buy?

Article by Oskar Lingqvist, Candace Lun Plotkin, and Jennifer Stanley. Oskar Lingqvist is a principal in McKinsey’s Stockholm office; Candace Lun Plotkin is a master expert in the Boston office, where Jennifer Stanley is an associate principal. www.mckinsey.com

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B2B purchasing decisions increasingly trace complex journeys, challenging the long-standing practices of many sales organizations.

The CEO of a major supplier to the telecom industry was frustrated. An initiative to increase sales volumes and shift the company’s product mix to higher-value components was stalling, and not for lack of effort. With support from a marketing campaign that emphasized a slew of new product features, frontline sales managers had stepped up calls to their purchasing contacts at OEM customers. Yet they reported that buyers weren’t buying. Impediments appeared to include tough new requirements from chief purchasing officers, negative chatter on social media about postsales support, and skeptical questions on a product-rating site about an offering’s fully loaded costs.

Welcome to the new dynamics of B2B sales. Decision-making authority for purchases is slipping away from individuals in familiar roles—often those with whom B2B sales teams have long-standing relationships. Just as the digital revolution has transformed once-predictable consumer purchasing paths into a more circular pattern of touch points, so too business-to-business selling has become less linear as customers research, evaluate, select, and share experiences about products. More people within (and, thanks to digital engagement, even outside) the organization are playing pivotal roles in sizing up offerings, so the path to closing sales has become more complicated.

The best response is to embrace the new environment. Sellers who are ready to meet customers at different points on their journeys will exploit digital tools more fully, allocate sales and marketing resources more successfully, and stimulate collaboration between these two functions, thereby helping to win over reluctant buyers. Our experience with upward of 100 B2B sales organizations suggests that while the change required is significant, so are the benefits: an up to 20 percent increase in customer leads, 10 percent growth in first-time customers, and a speedup of as much as 20 percent in the time that elapses between qualifying a lead and closing a deal.

The consumerization of business buying

Marketers have long drawn a bright line between consumer shoppers and business purchasers. Consumers, after all, care deeply about brands and are more readily influenced by advertising, media messages, special deals, and coupons. In addition, they often turn to friends and family for advice on what they are buying, are susceptible to impulse shopping, and can switch from one brand to the next with little cost.1 Business purchasers, by contrast, do a lot of research, look carefully at specifications, follow a formal buying or procurement process, can experience high switching costs, and usually worry most about functionality.

Yet an explosion of communication vehicles and interaction channels has ratcheted up the expectations of business purchasers. Many more influencers and decision makers are now involved in the purchasing process, and business buyers too have been shaped by their consumer shopping experience. As a result, their behavior has become more consumer-like. There is no longer such a thing as a simple cold call: customers expect a sales rep to be extremely knowledgeable about their business and perhaps even their own individual profile—at least if the purchaser is a millennial who has grown up sharing his or her life online. In other respects, as well, the purchasing process is becoming more fluid.

More social. Business customers are exposed to the same dynamics of peer-to-peer networks and opinions that influence individual consumers. The equivalent of Facebook’s “like” button also applies to B2B sales. Many of the one-to-one relationships with key decision makers that sales executives historically relied on to close sales are shifting to one-to-many relationships. Moreover, the actions of important influencers (including senior executives) in the purchasing process are often less visible to suppliers. Customers may be “liking” or “not liking” a prospective offer long before the sales rep has even presented it. For example, an expert blogger with a wide following among, say, electrical engineers can shift perceptions of which supplier has the best next-generation networking equipment. Or a speaker at a trade show—her message amplified by her listeners through digital channels—may have an outsized impact on a CEO’s perceptions of market trends and their implications for different B2B suppliers.

More real-time. Flows of digital information have further democratized business procurement. Our research indicates nearly 50 percent of all B2B purchases will be made on digital platforms by the end of 2015, and expenditures for B2B digital advertising are expected to double by 2018. Empowered purchasers increasingly demand real-time digital interactions supported by tools such as product configurators and price calculators. And they are doing all this while texting, e-mailing, and talking regularly with on-the-ground sales teams, distributors, behind-the-scenes inside sales groups, customer-service call centers, and technical reps. Our research shows that, on average, a B2B customer will regularly use six different interaction channels throughout the decision journey, and almost 65 percent will come away from it frustrated by inconsistent experiences.

More modular. The game also is changing for closing deals with requests for proposals (RFPs). At one company, operations executives were looking to improve process efficiencies and assure better after-sales service. To increase their options, they overrode the purchasing department by requiring six rather than three bids for a product. They also demanded modular RFPs, so cross-functional teams could examine an offer’s details, such as service and financing. With so many gateways of influence, our research not surprisingly shows, two-thirds of B2B deals are lost before a formal RFP process even begins.

Beyond the sales funnel

These dynamics are undermining the traditional sales approach of pushing products to customers along a linear funnel comprising lead generation, lead qualification, proposal, negotiation, and close. In that world, funnel metrics kept track of what the sales force was up to and tallied daily win rates. The problem is that many of today’s customers no longer buy this way. Nor does the tracking approach shed much light on what drives purchases or cements loyalty.

The proliferation of decision influencers—along with the growing amount of data about them and their behavior—reverses the funnel logic. It’s now possible to follow the lead of customers rather than force them to follow the sales organization. Armed with state-of-the-art information, suppliers often find new buying patterns that defy well-trod linear paths.

Although challenging, this world of 24/7 multichannel customer experiences creates additional opportunities to influence purchases. More complex interactions reflect strands of customer behavior—previously hidden—that companies can evaluate using big data and analytics. Those proprietary insights, in turn, can form the basis of much more targeted sales actions.

Three priorities for reshaping the sales organization

B2B companies across industries are moving toward journey-based sales strategies. We’ve seen success among organizations as varied as industrial-equipment manufacturers, software firms, professional-services firms, telecom providers, and basic-materials companies. Three actions are decisive:

  • charting decision journeys by customer segment and drilling down on customer expectations and needs at each stage of the journey
  • tackling the difficult process of reallocating sales and marketing resources to the activities most likely to influence decisions
  • changing organizational structures to ramp up collaboration between marketing and sales

As B2B executives in marketing and sales organizations push ahead with these moves, they will also need to reach across the enterprise and sharpen the customer focus in every business unit and function.2

1. Map journeys and influencers by customer segment

Charting decision journeys by customer segment requires soliciting input from multiple sources and understanding the industry context. For example, in sectors with a handful of big customers (like mining, shipping, or the public sector), there’s no substitute for actually meeting them to analyze how they really make decisions (as opposed to how they say they make them). Large companies with thousands of customers may need data-driven market research (by mining social media, for example) to gain deeper insights. These findings can be paired with knowledge gleaned internally from sales, logistics, product marketing, and other functions to develop a hypothesis on how different variables—such as price, delivery times, or product features—affect purchase decisions. In this way, many suppliers have identified previously submerged customer segments.

Disciplined mapping often turns up counterintuitive insights. For example, one industrial company found that its most profitable customers were the “no frills, no hassle, lowest price” buyers who just wanted to fly through their journeys quickly, with minimal fuss and interaction. Once marketers and analysts have similarly drilled down on understanding segment preferences, they can chart a course of action, as one energy company did.

This company had long given customers three or four standard offers of pricing and service. Sales reps typically delivered or mailed brochures and other materials and followed up to qualify leads. Only after deregulation, when new entrants began siphoning off customers, did the company realize it needed a new approach. Senior executives therefore asked marketing to lead a research initiative combining direct interviews with data on energy use from customer billings. It turned up three clusters of customers, each with different sets of influencers:

  • The companies in one segment, typically large ones in energy-intensive industries, like chemicals, were “high touch, high value.” They wanted a supplier that could not only handle complex RFPs covering contingencies for downtime but also provide advice on optimizing energy use. Interviews showed that manufacturing—not purchasing—executives were the key influencers. Marketing and sales subsequently worked together to redesign the company’s RFPs to include a library of contracts it could readily customize. In addition, they assigned executive sponsors to work with manufacturing managers on-site when problems arose. The company also increased the skills of sales agents, so they could act as advisers on energy usage, sometimes in concert with technical specialists.
  • Another cluster of customers had specific goals for their emissions footprints and wanted regular consumption data and benchmark comparisons. By setting up programs to meet such requirements, the supplier increased these customers’ loyalty.
  • The third segment consisted of mom-and-pop businesses, such as dry cleaners and convenience stores. These price-sensitive customers were most likely to jump ship. Interviews showed that they sought to make apples-to-apples comparisons of standard offers for rates and billing-cycle options. The decision maker was typically the business owner, who was more concerned with price than after-sales service quality. In response, the energy company built a web-based rate-comparison tool to assure these customers that they were getting the best deal.

Consider as well the experience of a large manufacturer of technology equipment. Realizing that the company was losing share in highly competitive markets, it began scrutinizing what was happening in different customer segments and found stark differences among them. At large customers, cost-conscious teams caring little for the technical specifications of products and typically led by a finance chief were the key influencers. They paid special attention to how RFPs spelled out the total cost of ownership, particularly maintenance expenditures. By contrast, smaller operators, often owned and managed by technology experts, were active and engaged researchers on the company’s products and coming innovations.

In response, the manufacturer revamped its RFPs for large companies to expand the number of financing options. It overhauled its website materials to highlight cost efficiency and built a sophisticated price calculator with what-if scenarios to help finance executives justify their purchases with the CEO. Meanwhile, the company invited business-owner purchasers to beta-test new versions of its products and to attend events where they could preview its thinking about the direction of technologies and mingle with R&D executives.

2. Reallocate sales and marketing resources

When companies map customer journeys in the ways just described, they often turn up evidence of how traditional sales practices misallocate resources. But as our colleagues have described elsewhere,3 shifting spending to align it with new realities often meets with stiff internal resistance, requiring cultural changes that transcend the sales organization.

Beyond the golf outing. After mapping five customer segments, one industrial OEM found that nearly 70 percent of its marketing dollars and sales efforts across them were not directed at what mattered most to customers. For example, the company had invested heavily in customized demonstrations to roll out next-generation equipment. The demos were available to all customers, but only those in two of the segments—product enthusiasts and R&D innovators—really cared about participating in them. The rest, comprising over half of the customer base, were happy to visit a plant only occasionally, receive information remotely, or wait their turn for a technical specialist to visit with a standard demo kit.

Similarly, to encourage repurchases at the end of product cycles, each sales rep had the same per-user travel and entertainment budget. Yet many buyers didn’t enjoy or get much value from the golf outings historically lavished on the company’s largest customers—however hard that was for most of its sales teams to accept.

In a major rethink, the company began focusing its efforts more sharply on the activities that the most profitable segments liked best. The point wasn’t so much to cut the budget as to make it work better in these segments, and in ways that would step up customer engagement across decision journeys.

Another example involved a large, struggling materials company that reconsidered the sales approach for one of its big vertical segments: government. After tracking decision journeys, it found that the public-works executives targeted most often could rarely make spending decisions on their own. Instead they relied heavily on local distributors for advice on product costs, innovations, and warranties. Armed with this insight, the materials company worked to strengthen relationships with these independent dealers and pulled back on its largest marketing expense—trade shows geared to government buyers. The on-site distributor demos developed with the funds saved proved an effective way to get products into consideration for final purchase.

Changing the culture. For many of the B2B companies we know, the biggest hurdle to reallocating budgets isn’t identifying the new opportunities; it’s having the courage to test them. Seasoned executives and sales leaders often struggle to accept the reality that long-standing “truths” about how to best serve customers no longer apply. Shifting mind-sets to focus on maximizing influence and then rallying stakeholders around new directions can often take more time and energy than mapping new journeys. One company addressed this problem by holding debates among its marketing and sales teams to discuss findings from its decision-journey research. It then called in functional leaders from the finance, customer-service, supply-chain, and technology organizations to help bring objective rigor to discussions about what a new allocation of resources would mean for its performance and strategy. The exercise might have looked like a time sink when viewed from the outside, yet it proved crucial in creating the collective will to take the risk of trying new ways of serving customers.

3. Forge a partnership between marketing and sales at each stage of the customer decision journey

Moving from a sales-forward funnel to a customer-back journey requires the marketing and sales organizations to think more like their customers. We often see marketing units do customer research without seeking frontline input. Sales organizations often say that they understand the importance of better data but complain that proliferating information isn’t helping them navigate the situations they face on the ground.

At advanced companies, marketing and sales are both involved in deciding on the right ways to attack touch points. Those techniques might include search-engine optimization to help build customer awareness, white-glove treatment that makes the RFP process more customer friendly, or loyalty programs that automatically replenish supplies and track customer satisfaction. Better collaboration can have the following advantages:

  • Clearer priorities. One medical-device company developed an iPad app powered by its marketing research. When sales reps enter updates, the app reorganizes companies by customer segment and indicates specific items to cross-sell, pricing parameters, and service options.
  • Quick wins. At a B2B seller, evidence from marketing analytics showed that leads for small and midsize companies were converted into product sales at higher rates when telephone calls or direct mail preceded e-mail interactions. The customer-relationship-management system was subsequently adjusted to provide such reminders.
  • Improved response times. Seeing signs of aggressive new competition in one product area, and fearing a new round of discounting, a global industrial company’s sales team alerted its marketing colleagues. They quickly dug into customer data and identified purchasers that often bundled multiple products with their orders and were therefore most likely to demand discounts. Working with finance and supply-chain colleagues, marketing and sales devised new ways to improve ease of ordering and fulfillment speed—faster credit checks, for example, and automated reminders for customers whose inventories were estimated to be low—which delivered extra value for this segment. Such moves allowed the company to sidestep a possible price war.

The ground is shifting in B2B buying behavior as customer-directed journeys replace the traditional funnel. This is new and promising territory for organizations that embrace data, reallocate budgets, and do the hard work of bringing more collaboration to sales and marketing. Knowing what really makes customers tick may be the cure for the slow growth many suppliers have experienced during the tepid global economic recovery.

Article by Oskar Lingqvist, Candace Lun Plotkin, and Jennifer Stanley. Oskar Lingqvist is a principal in McKinsey’s Stockholm office; Candace Lun Plotkin is a master expert in the Boston office, where Jennifer Stanley is an associate principal. www.mckinsey.com

November 17, 2014 / PACE Australia Pty Ltd

Your First 90 Days As A Sales Manager

Businessman on Start Line of Running TractThis article is one of a series of white papers for Sales Managers written by PACE Australia. Contact us on 03 6234 7485 for more information.

Politicians get 100 days to prove themselves and business leaders get 90, according to Harvard Business School’s Michael Watkins. 

“The actions you take during your first three months in a new job will largely determine whether you success or fail,” he says in his latest book, The First 90 Days – Critical Strategies for new Leaders at all Levels.

The stakes are obviously high. Failure can spell the end of a promising career. But making a successful transition is about more than just avoiding failure. Some leaders derail, but for every senior manager who fails outright, there are many others who survive but do not realise their full potential. As a result, they lose opportunities to advance in their careers.

In an ideal world, sales management roles would be filled by well-trained sales and marketing achievers, singled out for promotion and thoroughly trained for the job ahead. Is that what happened to you? Probably not.

Often new sales managers are promoted prematurely, hurriedly and with no special qualifications. They happened to be the best available to fill a surprise vacancy and were able to be spared from the field.

Interviews with newly appointed sales managers reveal comments such as:

  • “Suddenly I am supposed to be the expert at everything”
  • “It’s hard to get out and talk to the clients”
  • “The paperwork and reports are overwhelming”
  • “I can’t spend enough time with my reps”
  • “I have great trouble managing my friends and my previous peers”
  • “The management politics are foreign and intimidating”
  • “I’m trying to do too much myself”
  • “Sticking to my priorities is near impossible”
  • “I need more coaching and support”

Sales managers find that in the first few months they are confronted with a barrage of Questions. It’s suddenly all about them.

Sales management often seems to be all about questions. Questions from you, of you, about you.

  • “When can you see me?”
  • “Who’s covering the Smedley account?”
  • “Have you signed off on those expense claims yet?”
  • “What’s your revenue forecast for the week? The month? The year?”
  • “Why did we lose the Gilfroggin account?”
  • “When can you proofread this proposal?”
  • “When did Harry have his last counselling and appraisal? Never? Oh”.
  • “Why are we shipping two weeks late?”
  • “Who authorised this freight credit?”
  • “How do we get approval for airfreight delivery?”
  • “How many calls with sales people have you made this week? How many planned for next week?”
  • “Can you make a meeting with the managing director at 2 tomorrow? Why not?”
  • “When can you help me with this account?”
  • “Why didn’t I get your job?”

Keep your cool 

How do you handle the pressure? The first rule is to keep your cool. Stay a bit aloof from the clamour. Don’t be flustered into rushing things or making poor decisions. You will find it critical to your performance – and probably your sanity – to have some quality time alone every day. Alone means with none other than yourself. No-one. Not the team, nor the family. Nor the radio. Just yourself.

You need time to think. Time to prioritise. Time to plan and schedule. Make the time. First thing in the morning. Or perhaps last thing at night. Maybe during your daily walk or run. Whenever, just be sure it happens.

Analyse the situation 

The second rule of surviving and prospering during your first 90 days is to bring your analytical skills to bear on the situation. What have you inherited? A well-oiled, smooth running sales machine with adequate good staff, plentiful prospects in the pipeline and revenue backlog to last all year?

No? Funny that. So what you need to discover as fast as possible is what’s good about your new operation and what’s bad. It won’t be simply black and white. There’ll be shades of grey.

Use the Six Ps to get a snapshot of where your team is at. Look at:

Plans 

Understand in depth what the company’s plans are – business plans, marketing plans, product/service launch plans, long-range plans, short-range plans, channel pIans, e-commerce plans and any others.’

You need to know where the goal posts are, and where your contribution will fit into this. Use this part to get a real clarity on what is expected of you by your manager

Participants 

“You need time to think. Time to prioritise. Time to plan and schedule. Make the time. Whenever, just be sure it happens.”

Successful managers know they’re useless without good people reporting to them. Your first meetings with your key people are not to be about sales performance – or the lack of it. And they certainly should not be counselling and appraisal sessions: it’s far too soon for that. It’s about getting to know them.

Ask about things you mightn’t be expected to know. Are enjoying your job? What are your interests outside this office? How do you see our image in the market? What are your customers saying about us – and the product? Is there anything urgently on your mind that you’d like to talk about right now? What sort of things motivate you? What upsets about your job?

By all means tell them your plans, but above all, make sure you have listened to them. Then get out in the field with them. You have to see how they sell and work their client relationships. You won’t be able to coach them if you haven’t seen their strengths and weaknesses.

Pipeline 

Now it’s time to assess the potential business. Chances are it looks bleak. Many sales management replacements occur because the sales performance is under par. Ask your reps for their current pipeline forecasts. And then ask penetrating questions. The sooner they know you won’t tolerate fantasy or speculation, the sooner they’ll stop serving it up to you.

Get each person to give you a detailed run down on each of their top three key accounts. Look for how they approach this task – it will give you feedback on how strategically they are working with the company’s main source of revenue and profits.

Ask them what they believe are any blockers in the business. If you can give them some ‘quick fixes’, then you will straight away start to become a hero.

Procedures and processes 

Look at the procedures and processes you’ve inherited. They might be imperfect and you might want to see them changed somewhere down the track, but for the moment you need to know a number of things:

 What is the current sales forecasting regime?

 When are the forecasts due from your team?

 When are yours due upstairs?

 What are the disciplines associated with quoting, bidding and tendering?

 What activity reports do the team have to provide?

 What key accounts plans are used?

 What sales plans do the team have and how are they used?

 What do you need to pass up the line and how often?

 What are the parameters of your financial authority?

 How does the sales incentive and reward structure work?

Products and services 

You need to know if your products and services deliver what they promise. Is there feedback from customers or clients? Be sure you understand the good points and the bad points.

Playing field 

What do you know about your share of the market? How do your products’ features and benefits and your value proposition compare with market demands? How’s your pricing? Who are the target customers and why? Knowing the playing field also means keeping current with industry trends.

Once you have assembled all your data, you should do a SWOT (strengths, weaknesses, opportunities, threats) analysis to look at how you can grow the business.

Consolidate the good, fix the bad 

The bottom line on your first 90 days is you need to consolidate the good and fix the bad. In your review, you will have uncovered the issues. You now need to cement your good people into their jobs. You need them.

Go and meet some of the key customers on your own – take the time to really understand how they feel about your organisation’s offering and delivery.

It is time now to iron out their problems and personally supervise a program to fix them. The customers will be instantly impressed with your concern. Remember, you can’t afford to lose them either.

This article is one of a series of white papers for Sales Managers written by PACE Australia. Contact us on 03 6234 7485 for more information.

March 21, 2014 / PACE Australia Pty Ltd

Making executive sales calls less intimidating

Businessman Giving out CardArticle by http://corporatevisions.com. Corporate Visions is a leading marketing and sales messaging, tools, and skills company that helps global B2B companies create more sales opportunities, win more deals and increase sales profitability by improving the conversations salespeople have with customers.

A client sales leader recently expressed frustration at the excuses she hears why her team doesn’t call higher: “takes too much time,” “executives don’t want to talk to us,” “we get referred down.”

She then shared her real suspicion:  They’re intimidated.  They’re not sure what message to deliver.  They lack confidence having the right conversation with the right person.

The necessity for engaging higher within accounts has never been greater.  Approval for even modest investments now often rests at executive levels, and deals are much more likely to stall — or worse — when  you’re unable to confidently engage customer executives.

Preparation Breeds Confidence

Preparation is the best way to build confidence for any sales call. When selling to executives, remember, it’s all about them, their business and their business performance.

Here are 3 ways for applying business acumen to help you feel as confident having business conversations with CXOs as any other decision-maker:

1.  Know the executive’s prioritized business initiatives.
Initiate executive conversations around the customer’s stated business initiatives.  This demonstrates you’ve taken the time to understand their business.  Your objective is to validate that the initiatives you’ve identified are priorities relevant to the target executive’s direct area of responsibility.

Asking executives to “tell you about their initiatives” is the fastest way to end the conversation.  Executives aren’t interested in being interviewed.  Prepare using management presentations, earnings calls and other available resources to expedite gaining customer insights.

2.  Participate in quantifying the value of your solutions.
Too many salespeople mistakenly believe that computing a project’s projected ROI is something the customer alone must own. This type of hands-off  ”let the customer compute ROI” is a flawed approach.

You’ve sold your solutions many more times than the executive has bought it — leverage that experience.  Prepare by getting comfortable talking about the positive financial impact you can deliver. That’s what executives want to know.

3.  Role play your executive conversation
If you’re not comfortable with role playing, get over it. It’s the best way to simulate the scenarios that can derail any well-rehearsed executive conversation and foresee how to effectively respond when the dialogue digresses.

When you role play to prepare for executive engagements, you develop the ability to deviate from your plan, yet still have a successful business conversation.

Business acumen and financial acumen are essential skills for today’s sellers.  When you understand what success looks like from your customer’s perspective, deals flow that much easier.

Article by http://corporatevisions.com. Corporate Visions is a leading marketing and sales messaging, tools, and skills company that helps global B2B companies create more sales opportunities, win more deals and increase sales profitability by improving the conversations salespeople have with customers.

 

October 25, 2013 / PACE Australia Pty Ltd

Why do we loose deals?

Burned-Out-Business-Man-538x218Article by Graham French of gfa Sales Improvement. He is a specialist b2b sales and sales management coach www.sellingcoach.co.uk and references CSO Insights  www.csoinsights.com

Sales Coach Graham French looks at some of the reasons why we lose business to competitors… and why we win….

Why do we win business?…. why do we lose deals? Is it price? Superior product or service features? Are we kidding ourselves as to the real reasons? Does it matter if we don’t really know? Let’s not suppose that we do know exactly why we win and why we lose. We’ll see later that the perceived reasons are contradictory and riddled with assumptions and in house “tribal wisdom”.

Of course, sales people always have an opinion about the reason and many firms ask for a win/loss form from the salesperson after the event. One US sales VP I knew included a box on the Win/Loss Report under “Reason for Loss” labelled “Poor Selling”. His wry comment: “You can imagine how many times that box got ticked”.

Some companies request a formal interview to see ask the customer why they bought from another vendor. This is good practice because it’s critically important to discover what lessons can be learned that can help shape our selling tactics and indeed our policy going forward. It’s too important to be left to the sales team, too easy to reach for the tribal wisdom, to make assumptions that the deal went the way it did because “our price was too high” or “we didn’t have all the bells and whistles that they needed”.

Customers don’t always tell the truth. If the salesperson has a good relationship with the contact person in the account, this person may want to let the salesperson down lightly by telling them that the decision was made on price or some other factor outside the salesman’s control. This is a lot easier than saying that the buying team was unimpressed by the way that the salesperson’s firm conducted their selling.  More often than not we simply get outsold by our competitor when we lose. Sales directors must get as close to the truth as possible.

All significant forecasted opportunities should be subject to a win/loss analysis – ideally conducted by an external, objective agency to eliminate sales spin, any bias and self-serving. Failing that, have an executive unconnected with the account make the call. Management needs feedback which is objective.

Some interesting light on why firms think they got the outcomes they did is shed by CSO Insights, the US based sales performance measurement consultancy. In their 2008 report –   based on responses from 1500 firms, cross-industry and worldwide – they asked sales VPs, among a host of other questions, why they believed they won and lost deals.

The results give some fascinating clues as to why firms perceive that they are successful and why they don’t win. Of course, all of this is based on the company’s own perceptions and, as we will see, there are contradictions in these perceptions that point up the fact that people tend to lay the blame for losing deals on convenient factors.

Before we get into this, let’s just face a fact of life that outcomes don’t always divide into two clear cut categories – wins and losses. There is a third category, we need to examine closely if we want to improve our sales success – opportunities that have not been closed as per forecast, stalled deals. Let’s call them “no decisions”.

These, according to CSO Insights, represented 21% of all respondents’ forecast opportunities.  In my experience this percentage is often higher.) Adding stalled deals to the deals which were lost to competitors (30% of all forecast deals according to CSO Insights) we see that over half of forecast deals, didn’t materialise as expected.

The knock on effect of this is huge – on revenue and profit forecasts and cash planning, to say nothing of the reputation of the management team as far as their understanding of what is going on in their business is concerned. But let’s leave ‘no decisions’ for the moment.

CSO Insights’ respondents rated the top three reasons why they won deals and the top three reasons why they lost deals. The results are instructive but contradictory.

Why did we win? The highest percentage (56%) believed that existing relationship was one of the top reasons for winning.

The next were:

  • level of support/service ( 42%)
  • product superiority (35%)
  • brand/reputation (35%)

It is interesting that the next reason firms believe that they won business is the quality of their support or service with, in joint second place, product superiority and brand or reputation.

Price was thought by only 22% to be one of main reasons why they won with, more surprisingly to my mind, return on investment justification coming in at 19%. (I personally expect this last selling tactic to become more important as the economic crisis deepens)

OK, so it’s clear why people think they win.  Let’s now have a look at the top three reasons these same respondents said they lost deals.

Bearing in mind that only 22% firms think that price is a key reason for winning, in a surprising contradiction, 63% (the highest percentage) see competitor’s price – presumably lower than theirs – to be one of the top reasons they lost! So price is not a reason for winning but it is the main reason for losing?

Expect consistency? Think again! Perversely, only 11% of firms rated competitors’ product superiority as one the main reasons for losing whereas 35% rated their own product superiority as a key winning factor.

Other areas of apparent contradiction surround support and service which 42% said was a prime reason for winning. Yet this is also thought by just 10% to be one of the top three reasons for losing.

Competitor’s marketing message was thought by 23% to be a top three reason for losing but just 10% thought their own marketing message was a strong factor in winning.

Consistency comes to the rescue, however, with relationships. This figures highly among the reasons for both winning and losing. 60% of firms (the second highest percentage – just below “price”) rated their competitor’s existing relationship as being one of the top reasons for losing deals whilst  56% (highest again) believe it to be a key reason for why they won.

One conclusion, therefore, is that firms should spend time, resources and money building and enhancing their relationships. This is going to be easier for established companies. But there are implications for start- ups which won’t have strong relationships in place.

The relationships that win are not the simple relationship of the account manager with an individual in the prospect’s organisation.  Deeper, broader relationships involving trusted partnership are what drive winning performance.

The second conclusion that I draw from this part of the report is that companies need to really understand the reason they win and lose business and make changes to improve their selling effectiveness based on solid evidence rather than tribal wisdom. Lastly, find out why that fifth of all forecast deals – the ‘no decisions’ – don’t close as forecast. Do these things better and you can expect to improve selling performance.

Article by Graham French of gfa Sales Improvement. He is a specialist b2b sales and sales management coach www.sellingcoach.co.uk and references CSO Insights  www.csoinsights.com

August 28, 2013 / PACE Australia Pty Ltd

“I Need My Team To Step-Up!”

business people stand excitedArticle by Paul Donovan, Director, The Change Company

Ever felt this way?  I need my team to step-up!  This sentiment is something I hear from clients, well, fairly regularly.  They are feeling the pressing demands of the business on them, and in response, need their team to take more responsibility and initiative, display a greater sense of urgency, be more aware of wider business constraints or challenges and/or simply deliver more.  These clients are requiring their team to lift, usually because they have in turn been required to deliver more in some way. To do this, they require their team to do likewise.

Here is a short list of things to attend to if this is your situation, or you have a manager whose rhetoric is now sounding a little like that described above.

1.  The manager is in large part responsible for how work is done and should avoid blame and accusation associated with it.  Therefore the manager must begin by acknowledging their role in creating and supporting the existing pattern of behaviour, or practices within the team.  Their means of interacting, (or not interacting), and rewarding, have been instrumental in facilitating the current reality, even if she/he is at first unaware of exactly how they have done that.  Acknowledging this may help the manager to avoid sounding patronising while he or she asks their team to “step- up”.  As a general guideline, honour the present if you want to make a successful transition to a different future.

July 2013_Article 1_Quote 1_2

2.  When a “step wise” jump is required, putting more pressure on individuals to deliver more often gives disappointing medium term results.  Generally, individuals already carry a significant workload and a good ‘pep talk’ may get a bit more done, but probably not the jump you need.  Instead, consider providing a bigger challenge to the collective team.  Ask; “what project could they tackle together?  How could they work together as a team to meet the challenge you are now facing?  Could they together investigate solutions to the problem and propose a solution?  How could they enact that solution as a kind of ‘project team’?”  In general, research suggests that individuals are overloaded, but teams are under challenged.

July 2013_Article 1_Quote 23. Engage the team to consider what capabilities they might need to build to fulfill the challenge.  Research now suggests that a good deal of learning is done collectively, as opposed to the traditional notion where individuals, as separate entities, somehow acquire skills they require.  Instead, learning and skills building is most likely co-created by people working together.  (How do you do that?….that’s the topic of our next newsletter)  The individual and group learn and change simultaneously.  Creating detailed lists of competencies that individuals must build does not adequately reflect the reality of how we learn, change and become.  Instead, consider what collective capabilities might help.  Ask; “What shared ability is required?”  In that context, individuals will more likely develop the skills required to make the collective growth possible.

July 2013_Article 1_Quote 3_2

I hope you have enjoyed and found helpful these three ideas, which are based on the latest research.

Article by Paul Donovan, Director, The Change Company

July 23, 2013 / PACE Australia Pty Ltd

Always tell people what they want to hear!

communication level meterArticle by Matthew Coleman – Director, Coach, Facilitator and Public Speaker at Serious Clarity

By that, though, I don’t mean for you to be a “Yes Man”(or woman). What I mean is, talk to people in their “language” or their preferred mode. This is one of the most powerful lessons I have learned as a manager, coach and trainer.

If someone doesn’t speak English, it is not very useful speaking it to them. Conversely, as much as I might try, if you speak to me in Cantonese I am going to struggle. Fruitlessly.

Even when you ARE speaking the same language, people use language differently. Another example is when you call an I.T. company or a Telco and the person you are talking to waffles on a about gigapixels and terrablocks, but even that is not actually what I am talking about…

Have you noticed that when you speak in PLAIN ENGLISH that sometimes people either go blank, lose concentration, or simply don’t get it? Probably you are not giving them the type of communication that they want. So, if you want to get people on side (or simply get them to do your bidding!) here are a few tips from one of the many models out there, the NBI Whole Brain Thinking model. I love this one because it applies easily to one-on-one as well as group scenarios. It also works well with the Six Core Needs. And you can use it without a profile.

The NBI whole brain thinking model, once you have done a profile, breaks down your “thinking preferences” into quadrants of the brain, and aligns each with a colour. Each quadrant has some characteristics. We all have these in some measure but the profile breaks it down for you

Blue – Results oriented, Factual, Blunt, Analytical, Critical, Focussed

Green – Detail-oriented, risk-averse, conservative, organised

Yellow – Holistic thinkers, visual, unstructured, future-focussed

Red – People focussed, attuned to non-verbal queues, sensitive

So, what is unsurprising when you think about it, is that these types of people all have different wants and needs in communication, and if you don’t hit the right note or provide the right details these people will switch off.  So here’s what I have found:

People with a high preference for “Blue” thinking basically want you to answer the question “what’s in it for me”. If you don’t have a good answer for that they aren’t interested.  (Note: I said this works well with the six core needs… Anecdotally, I have found that people in my training sessions with a high blue score have a high need for significance. Not a single one of my “blue” participants has ever argued that point with me…and they are the MOST likely to argue!) They also like you to get to the point. Quickly. The Executive Summary was invented for “blue” managers.

“Green” people like LOTS of detail and they like to know the history of something. You will probably recognise this by the way they tell you the WHOLE STORY of a situation before they ask you a question. Likewise, that’s what they want to hear. If the Exec Summary is written for the “Blues” then all the footnotes and tables are in there for the “Green” people. They will often ask “but HOW do I do it?” and “What worked in the past”. They like clear guidelines and directions. (Read: Certainty)

“Yellow” people are the opposite of “Green”. They look to the future and are happy to take risks. They also bore easily and like colourful language and pretty pictures. They like things to be “fun” and they want to know The Big Picture. (Read: Variety)

So who’s left? “Red” people. And you definitely don’t want them to feel left out if you want to get anything constructive out of them. In Six Core Needs speak, these are our people most in need of Connection an they want to feel the love. When making a decision they will want to know who is impacted. To keep these people engaged, tell them how much you appreciate them.

As I said, you can use this one-on-one and in groups, and you don’t even need the profile to do it (although I do recommend getting a profile to all of my leadership communications clients and it helps you to understand better where you are coming from). Just look for clues in how someone communicates and try and feed a bit of that same style back to them – they will lap it up! And the more foreign it is to you, the more you probably need to learn it!!

One of my favourite moments in training is when a hard-ass, bottom-line, results-focussed “blue” person realises that by being “nice” to a “red” person they will actually get better results! It’s not just “touchy-feely crap” anymore. Something almost snaps in their brain and I watch on, smirking in my very red way…

Communication really is the key to success. If you get better at this, you get better at everything!

Oh..and to use this in a group setting, like a meeting, just make sure that you are ticking all the boxes: Visuals/Fun, Bottom Line Results, A Story, and making people feel like part of the picture. It takes practice, but it works, and it will MASSIVELY improve your meetings/training.

Article by Matthew Coleman – Director, Coach, Facilitator and Public Speaker at Serious Clarity

July 12, 2013 / PACE Australia Pty Ltd

Time Management: 5 Rules for Managing the Monkeys on Your Back

monkeys1Article by Mike Bohlmann . Mark has more than 10 years of experience as a Web developer and an IT manager. He is an IT manager at the University of Illinois, where he is in the process of completing work toward his master’s degree. His research is focused on IT management, leadership, and services.

Leaders and managers in smaller businesses struggle to make do with scarce resources. It’s a condition of being smaller, but the one resource that smaller businesses have in exactly the same amount as large enterprises is time. Having the same quantity doesn’t make it any easier to manage.

Several years ago, William Oncken Jr. and Donald Wass wrote an article for the Harvard Business Review about time management called “Management Time: Who’s Got the Monkey.” Oncken and Wass used the metaphor of monkeys to approach the issue of time management. The point is that we can’t really manage time. We can manage how we use our time, but there are not any ways to increase the amount of time, move time around, or buy more of it (though we’d all certainly like to buy some once in a while). Time management is really more about priority management and delegation.

Monkeys are a metaphor for taking the initiative on tasks and responsibilities. A user’s printer problem is a monkey. Setting up new user accounts for the staff members is a monkey. Reviewing server logs to troubleshoot the backup software is a monkey. Monkeys live on people’s backs and they can be exchanged and moved around from person to person. The question is: how do you manage the monkeys so thing get done? Oncken and Wass proposed five rules for managing monkeys.

Rule #1: Monkeys should be fed or shot.
Although you should absolutely not micromanage, it’s important to check in with your people to make sure they are feeding their monkeys with the appropriate attention. If a monkey isn’t getting attention, it will eventually get angry and demand more attention than if it were addressed immediately. At the same time, it occasionally becomes necessary to shoot a monkey because it’s no longer important or required. If you have a monkey that’s been sitting around for weeks, maybe it would be better to just remove it as a to-do and move on.

Rule #2: The monkey population should be kept below the maximum number that the manager has time to feed.
Your people will only work on the number of monkeys that they have time for. A monkey that has been well maintained should only take five to 15 minutes of care to maintain. If your people have too many monkeys, you’re going to have too many monkeys to care for and feed, too. It’s important to know the team and yourself so that no one becomes overloaded. Otherwise, the monkeys will get to be overwhelming.

Rule #3: Monkeys should be fed by appointment only.
If one of your reports walks into your office with a monkey, it’s sometimes a good idea to send them away to schedule a time to come back. With the intellectual style of IT work, sometimes we just need a little more time on our own to figure out a problem. It might be a good idea, though, to feed the monkey a treat by giving the person a thought that might get them approaching the problem from a different angle by which they take care of the monkey themselves.

Rule #4: Monkeys should be fed face to face or by telephone, but not in writing.
If someone sends you an e-mail about a monkey they’re carrying that requires a response, who now has the monkey? That’s right — you do! The monkey is on the back of the person who has to take the next step. If you’re asked a question about someone else’s monkey, you want to be careful that they don’t get you to take the monkey for them. Even some phone calls can move a monkey to you, so be careful how you talk. You want to help the person take care of their own monkey, not let them give the monkey to you.

Rule #5: Every monkey should be assigned the next feeding time and a degree of initiative.
Although not every monkey is going to be long term or require weeks of work, it is possible that a monkey isn’t a task that can be completed short term. In that case, you want to check in and feed the monkey on a regular basis. By assigning how much initiative is needed, you also can set expectations about how much progress should be made before the next feeding. If you just check in to see how things are going, then maybe nothing will happen. If nothing happens, that could allow the monkey to jump onto the manager’s back.

Though these rules are a bit extreme when taken strictly, I think it’s definitely important to think about who has the monkey on a task. It can become easy to just say you’ll take care of something because you know exactly what needs to be done. But, before you take on a new monkey, consider how it will affect the rest of the monkeys you already have on your back.

Mike Bohlmann has more than 10 years of experience as a Web developer and an IT manager. He is an IT manager at the University of Illinois, where he is in the process of completing work toward his master’s degree. His research is focused on IT management, leadership, and services.

July 9, 2013 / PACE Australia Pty Ltd

How To Set Reasonable Sales Goals

This article is based on an interview conducted with Andris Zoltners, as well as his presentation “A Top 10: Insights that Lead to Sales Success” at the San Francisco Sales 2.0 Conference on April 8, 2013.

Ninety percent of all sales organizations set target sales goals for their salespeople, according to research published by ZS Associates in the book Building a Winning Sales Force. But how do you know your target sales goal is the right number?
 
Sales reps want goals that are attainable. Sales managers and corporate execs want goals ambitious enough to propel the company to greater financial success. But the difference of opinion on what is attainable and ambitious can be substantial. “Setting the right goal is an essential component of good sales management,” said Andris Zoltners, Founding Director of ZS Associates and recent speaker at the San Francisco Sales 2.0 Conference, “but it’s not always easy to get it right.”
 
According to Zoltners, the effects of poor goal-setting can be disastrous, especially for sales forces that tie a larger percentage of incentive pay to goal attainment. Two of the most common scenarios occur when target sales goals are set either too high or too low. Each situation has at least three negative effects.
 
When sales goals are set too low:
  1. Company pays out needlessly high incentives.
  2. Salespeople become complacent.
  3. Sales fall short of potential.

When sales goals are set too high:

  1. Sales force earnings decrease.
  2. Salespeople become angry and disengage.
  3. Sales suffer.

Notice that in both situations, the outcome includes a negative affect on the sales reps’ attitude. That is the opposite of what incentive pay is designed to do.

“The cost of poor goal-setting cannot be underestimated,” says Zoltners. “The fairness and difficulty of the goal will directly influence the salesperson’s level of motivation, which in turn will affect the amount of effort and work he or she puts in to meet the goal. And you can see all of those elements reflected in your revenue results.”

Unfortunately, sales managers don’t always have the final say over the sales goal, and C-level executives are not always in tune with the psychology of motivating a sales force. “Very often, corporate executives don’t understand the impact of a sales goal that challenges a sales force too much or not enough,” says Zoltners. “They pick the number they want to see, not the number that’s going to help the sales force achieve success.” Executives’ unrealistic expectations, poor forecasting, unforeseen internal changes, and market shifts can complicate the question of where the bar should be set for sales goals.

What’s the best way to correct sales goals gone wrong? When it becomes clear that a sales goal is too challenging, Zoltners recommends setting a new, more realistic goal. This isn’t always a popular solution; many companies believe it shows more integrity to stay the course. Remember the larger picture, however: the point of an incentive plan is to motivate reps to succeed. Reps will likely appreciate the choice of committing to a more reasonable goal.

If you really want to stick to a goal even though it’s too challenging, announce instead a plan to reward reps who meet a certain percentage of the original number. Base the contingency plan on past sales data, as well as market trends. If these factors indicate that most reps could reasonably make 80 percent of the stated goal, for example, then add a bonus for anyone who achieves that 80 percent.

If you realize your number has been set too low, Zoltners advises taking action based on the length of time left in the incentive period. If the incentive period is short (a quarter or less), it’s better for morale to leave the goal as is and instead prepare the sales force for an increased number for the next incentive period. On the other hand, if the incentive period is significant (one year or longer), the best approach is to increase the sales-force goal sooner, rather than wait for the period to end.

As Zoltners told the audience at the Sales 2.0 Conference, sales organizations are better off establishing target sales goals within a certain range, rather than holding the team accountable for a hard number. In most cases, this flexibility allows reps and sales leaders to strike the right balance between ambition and attainability.

– Selling Power Editors
This article is based on an interview conducted with Andris Zoltners, as well as his presentation “A Top 10: Insights that Lead to Sales Success” at the San Francisco Sales 2.0 Conference on April 8, 2013.

 

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