What Sales Leaders are Doing Now by Miller Heiman

What Sales Leaders are Doing NOW Get back to basics. Focus on the things you can control.

Copyright ÂŠ 2009 by Miller Heiman, Inc. All rights reserved. No part of this publication may be reproduced in any form or by any electronic or mechanical means including information storage and retrieval systems without written permission from the publisher. Publisher Miller Heiman, Inc. 10509 Professional Cr., Suite 100 Reno, NV 89521 1-877-678-0506 www.millerheiman.com

What Sales Leaders are Doing NOW Get back to basics. Focus on the things you can control. It is easy to become paralyzed in challenging times. The current market conditions are different from anything that most of our employees have ever experienced and the natural human tendency to avoid risk may result in not “doing” much of anything at all. Studies show that in a down economic cycle salespeople actually spend less time with clients – somehow convincing themselves that less face time might mean less bad news. What can be done to get back on track? Get back to basics. Focus on the things you can control.

Muscle Building the Sales Team By Sam Reese, president & CEO Stack rankings: three performance measurements for sales people

5 Learn from Losing: What sales and marketing leaders can learn from losing a deal By Bill Golder, Executive Vice President of Business Development Best practices for a loss review process How can we improve? Was this client a good fit?

8 Involving Executives in the Selling Process by Tim Call, Executive Vice President Get closer/deeper with top customers Ask about results

Weekly Forecast and Deal Status Calls by Damon Jones, President and Managing Director of International Improve forecast accuracy Prevent surprises, highlight situations that require attention

15 Sharing Successes by Elizabeth Vanneste, Chief Marketing Officer Highlight wins Focus on teamwork, obstacles overcome Make stories part of company culture

Muscle Building the Sales Team by Sam Reese, President and CEO

I was speaking at a client event a few weeks ago when hands started going up during my presentation. The key topic sales leaders wanted to discuss that day was my opinion on how to determine whether someone on their sales team is going to make it or if it is time to let them go. It seems this challenging economy has made it difficult for average performers to hide among the weeds. This is a GOOD THING. In high tide times, it’s easy to have a great smile and a pleasant demeanor to keep a high income sales position. But when things get tough, the pretenders fear exposure and will sometimes head for safer careers. The hard part about muscle-building the sales team is that things aren’t always what they seem on the surface. You can’t afford to make a bad decision. Performance evaluation isn’t just looking at their quota attainment and making cuts. If it was that easy, then we would have no need for sales management. Over the years, I have seen great sales organizations look at performance as a combination of three essential things: skills, activities and results. This performance triangle can be a simple way to help separate the wheat from the chaff in any sales organization. Skills are best described as the acumen and intelligence to be able to perform the duties of the job. It is more than just product knowledge and proposal writing. It pertains to the skills required to navigate complex sales situations: the ability to work within one’s own corporate structure, the understanding of how to connect company capabilities with customer requirements, and so on. Activities are the day-to-day movements that take the business forward such as calling on customers, prospecting, performing follow up

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What Sales Leaders are Doing Now

actions, organizing next steps, etc. Old school sales managers used to have a myopic focus on activities. They have this “it’s a numbers game” mentality. But over the last 1015 years, many sales managers have completely ignored any sort of activity monitoring because it seemed too invasive. You definitely need to know if activities are happening. Otherwise, you will be confused when you try to make adjustments. And results are simply the metrics that measure success - quota attainment, growth, new business, and income. Effective sales leaders need to look at all three of these factors when they evaluate their teams. The key guiding principle in this process is that 2 out of 3 isn’t too bad. If any one salesperson is capable in two of the three categories, then they should remain on the team. If they are only capable in one of the three, then it may be time to go. For example, a salesperson with high activity levels and critical skills is a keeper - even if he’s not making the numbers yet. Conversely, if a rep is making his numbers but has weak skills and low activity levels, then there is probably a huge opportunity cost associated with keeping this person in his current role. Maybe his territory is rich with opportunities or maybe the customer base continues to deliver even if the salesperson is not that strong. A motivated salesperson with strong skills and high activity levels will most likely take this territory to new heights. Inherent in this discussion is the role of the sales manager. A person who brings the right skills and activity levels to the job can succeed in almost every situation. It’s up to the sales manager to make these assessments and to stand behind them when questioned about the success potential of one of his salespeople. The sales manager needs to be the one who makes this determination of his team members. At the same time, he also needs to coach to ensure his A-players succeed. Unfortunately, there is no shortcut for muscle-building sales teams.

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Learn from Losing: What sales and marketing leaders can learn from losing a deal By Bill Golder, Executive Vice President of Business Development

Everyone who has ever been in sales can remember the outstanding feeling of winning their biggest deal. In business, there aren’t many things like landing a big client that can create that kind of excitement and triumph within an organization. Big deals can often make a company’s month, quarter or year and put their competitors on notice. It’s fun to be a part of the team that makes those winning moments in business happen. Those involved have no trouble reflecting on how it all went down with amazing clarity: the incredible strategy, the flawless execution, the collaborative team, the competitor’s mistakes. We remember it all, and it gets better every time we tell the story. When it comes to the ones that got away, most individuals (and organizations) seem to have amnesia. In fact, it’s amazing how quickly we all move on without another word on lost deals. It’s as if they never existed. Most shocking is these deals typically take longer and use more resources than the ones we win, so they should be pretty memorable. I’m in a fortunate position to be able to see how some very good organizations capture findings and learn from both won and lost deals. It’s safe to say that far fewer have applied a real discipline toward understanding the latter. Those that do tend to be higher performing organizations and are learning things that are helping them sustain performance.

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What Sales Leaders are Doing Now

These organizations aren’t just talking about lost deals; they are incorporating a loss review into the sales process. The outcomes help sales and marketing take away key nuggets that shape overall client acquisition and relationship management strategies.

So What Does a Loss Review Process Look Like and What are Companies Learning From It? Let’s start with the meaning of a lost deal. We all tend to think about losing a deal in a very linear way – the deal moves all the way through the funnel and the customer makes a decision. In fact, most lost deals don’t work out that way at all. I’m surprised by the number of deals that fall out of the funnel long before they reach the proposal stage and how often they are “lost” to other factors such as competing priorities or internal resources versus a true competitor. Companies who understand this want to learn just as much about those that fell out of the funnel early as they do about those that follow the stereotypical pattern. It’s important to get everyone on the same page as to what “lost” means. It may also help to create other definitions such as “no interest” or “on hold” to begin understanding and categorizing what happens when you don’t win. Assuming everyone is on the same page with defined funnel stages and the definition of a lost deal, you can put a repeatable review process into motion. The best examples of clients we see executing a loss review process typically incorporate the following elements: • Criteria for deal sizes • A standard format for capturing the attributes for each deal and a scoring system to evaluate the strength of each attribute in comparison to scenarios when you win • Involvement of both sales and marketing in the process for identifying key factors that can impact how you attract new opportunities as much as how you manage existing opportunities • A culture of discovery vs. blame – candor will be critical in having meaningful findings that help to improve overall conversion and effectiveness • A mechanism to cascade key findings to sales and marketing that can benefit the organization

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What Sales Leaders are Doing Now

My observation has been that organizations with a loss review process that includes the above elements seem to be much more effective in the following areas: 1. A well-understood value proposition. Sales and marketing teams are better aligned as they learn, through a deal review process, what is resonating and when it is resonating with potential clients regarding their solutions. Sales feels better supported by marketing when this is dialed in and marketing can see its lead creation efforts making an impact – a rarity in most organizations. 2. A more strategic prospecting plan that focuses the organization on ideal profiles of potential clients. This is especially impactful on potential investments being made in both time and money for the pursuit of new business. 3. Results. A clear impact can be made on both conversion and velocity through a diligent deal review process. 4. Operational efficiency and customer satisfaction. It’s amazing what happens when you engage with prospects that are a better fit for your organization’s offerings. The organization leverages unique strengths instead of trying to make round pegs fit into square holes. Loss reviews help you understand whether or not you are chasing bad business and potentially draining resources needlessly. 5. Organizational alignment. It becomes much easier to make decisions on segmentation strategies when you know your ideal customer and prospect. Loss reviews become a critical component of understanding the types of resources and talent needed to win business, and how to avoid investing resources in prospective business that may never close. Certainly, loss reviews alone aren’t the answer. They need to be part of a much larger strategy centered on the diligent pursuit of understanding the customer. However, it is a component that I’ve seen deliver terrific value when incorporated into the rigor of your sales and marketing organization. Don’t avoid it, embrace it!

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Involving Executives in the Selling Process by Tim Call, Executive Vice President

People ask me all the time: “How can we get our executives involved in the selling process in a proactive and efficient manner?” The first thought that comes to my mind is to answer their question with more questions: “Why do you want your executives involved in the selling process?” Is it because you need help closing deals? Because they are needed to negotiate pricing? Or because they want to feel they are being supportive? For any organization that wants to begin an executive selling program, the above questions should be asked of senior leadership. In the current climate, decisions are being pushed to higher levels within a company and an executive selling program can help establish and maintain critical account relationships between C-Suites. Many of the successful executive selling programs I have seen solicit input from all of the functional departments so everyone knows the expectations for the program and understands the criteria for success. Your organization may start down the path of establishing an executive selling program only to realize early in the process that there are perception gaps between what the executives think they know about critical accounts and what the sales teams see as reality. In Miller Heiman’s annual sales best practices study, we see a fair amount of differences between C-Level respondents and sales reps. For instance, the responses from these two groups typically indicate a wide perception gap for this simple question:

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What Sales Leaders are Doing Now

We have a disciplined process that is continually utilized to review all large deals. The C-Level is generally less likely to agree that processes are in place to review large deals compared to sales reps. A larger gap exists when we ask our survey participants to weigh in on another topic: Our executive leadership is actively engaged in our selling process. The 2009 Miller Heiman Sales Best Practices Study revealed that 66 percent of C-level executives say they are involved, but only 41 percent of sales reps say the executives are involved. This disparity stems from a misalignment regarding what involvement means to these two groups. Most executives consider involvement as an awareness of the sales representatives’ activities, knowing one or two people in the client organization, and an expectation that they will come into deals if, and when, it is necessary. In these cases, the sales force will say that executives don’t bring any value to the client relationship. Because they don’t know an executive’s role in the selling process, they are forced to leave them out of the equation because in the past they have hurt more than they have helped. Creating an executive selling program doesn’t need to take years. But to eliminate confusion, your first step to building an executive selling program is to get everyone on the same page. Discuss what happens with these large deals, and discuss how an executive’s involvement might help or hinder these relationships. Here are a few suggestions to get started now: 1. The Right Level. An executive should only get involved in relationships that are peer to peer. They should not be asked to come to a meeting with lower-level buying influences where tactical or logistical solutions are being discussed. The sales rep needs to ensure all possible bases are covered before involving an executive. 2. The Right Time. Executives are often expected to step in to try and save a sale that is in trouble. Get executives involved when they can provide the greatest value, not salvage something that is likely already beyond repair. Drawing in an executive will likely look to the customer as if you are in panic mode, and may potentially worsen the situation. 3. Maintain Schedule Integrity. Make sure executives don’t skip out of a sales call because something more important has happened in the office. If they are committing to the initiative, then they must stay committed to all scheduled meetings.

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What Sales Leaders are Doing Now

4. Thorough Preparation. The sales team needs to take the time to review the customer relationship, current opportunities, and the meeting objectives with the executive before a customer meeting. The better prepared an executive is, the more value he or she can add to the relationship and the better the coaching s/he can provide. 5. Provide Strategic View. Without a strategic perspective, executives will not bring much to the client in the way of value. Don’t let the executive talk about a product or service. They should be asking questions or providing high-level industry knowledge during these meetings. Clients love it when you bring new information or introduce new ideas related to the important issues they face. 6. Get Things Done Internally. It is easy for an executive to go back to the office and delegate all of the next steps to the rep. But executives need to own at least one of the next steps. Ideally it should relate to the point from the meeting that is of strategic value to the customer. 7. High Level Information Conduit. Most executives are aware of changes in the company before everyone else. Make sure that new and relevant information is shared from one executive to another, as this type of knowledge has the potential to undermine their authority if divulged by someone on a lower tier. 8. Mentor or Coach. The executive should be the person in these critical deals providing coaching and mentoring sales reps. This should not be the same type of coaching the reps might receive from their sales manager, but coaching on highlevel issues, industry intelligence, and solutions important to the customer. 9. Hold Executives Accountable. The executive should be held responsible for his role in the success of the customer relationship. Without a certain level of accountability, resentment may build and potentially jeopardize future internal interactions. It’s crucial to remember that rep and executive are on the same team and need to pull their respective weight. 10. Share Success Stories. When executives stay involved with clients, it can be perceived as a positive opportunity for your company. Take advantage of the publicity that can be generated by promoting and sharing the success stories as a result of executive involvement.

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11. Maintain Executive Status. Many reps may jump at the chance to tout their executive at a social call, but this is not the best use of their time. Unless a client specifically requested it, bringing an executive may seem a thinly veiled attempt to solidify a client relationship or secure additional commitment. 12. Avoid Exclusive Meetings. Executives should not attend sales meetings alone, unless a request has been made. The goal is to develop the standing and credibility of the rep, and sending an executive in alone makes him or her the de facto rep, undermining that goal. An effective program will ultimately serve to bring clients closer to your organization. But the most important contributing factor to a successful executive selling program is the dedication and commitment to stick to it.

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Weekly Forecast and Deal Status Calls by Damon Jones, President and Managing Director of International

Getting accurate forecasts has been a quest for many organizations for some time, but in the current economic climate, this subject has increased in importance and in many instances, in difficulty. All sales managers will probably relate to the following dialog: Manager: “Joe, how are we doing on that big deal with XYZ?” (Slight Pause) Salesperson: “Great boss. I think we’ll have it signed in the next week or two.” Quite often this conversation carries on for the next few weeks until the manager abruptly learns the account has been lost to a competitor when the expectation was that the rep was close to securing it. Suddenly the poor sales manager is faced with taking this out of the forecast and having to explain to his boss what went wrong. The good news is that there are some things you can do to avoid this situation in the future. I’d like to start by talking about some of the problems that contribute to this and provide some ideas on what can be done about it. Some of the problems that cause poor forecast accuracy and what you can do. • No standard definition for the opportunity or deal. Everyone in the team needs to work from the same definition. At a minimum, you need to include the deal size, your solution, the customer and the expected close date. The closer the opportunity

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What Sales Leaders are Doing Now

moves to closure, the more important it becomes to confirm the accuracy of information. Managers should check the accuracy of deal sizes, ask questions about expected close dates and make sure they feel comfortable with where the opportunities are moving and how they are being dealt with. • Lack of common understanding of the sales and buying process. This is one of the biggest issues I see in organizations: the definition of both the selling and buying processes. Most organizations only focus on the former. But this is only looking at half the picture. You need to understand what the customer’s buying process looks like and more specifically, what actions the customer has to take to move the opportunity through the funnel or pipeline. There will be multiple, definable steps an opportunity will go through from the starting point up to winning the sale. This is often the root of the biggest disconnect. The sales rep believes the opportunity is farther down the funnel than it is in reality. Unless you also have a screen that looks at where the customer is in the process you run the risk of forecasting business that is far from certain. • Poorly qualified deals. When I talk to customers about forecast accuracy the typical challenge is that forecasts are too optimistic or aggressive. In essence, the forecasts over promise and under deliver. One thing you can do to prevent this is to ensure you only forecast adequately qualified deals. This means you need to develop and apply consistent criteria. Many companies develop some form of criteria for defining what an ideal customer looks like. Any deviation too far away from that ideal customer presents a red flag and should be investigated. • Lack of understanding of the opportunity. As a manager, it’s unlikely for you to be close to every deal belonging to each of your reps. To scale your opportunity management, you need some type of system for determining which deals you will get close to. Deal size and proximity to closing are good starting points. Once you have decided which deals you want to zero in on you can ask some simple questions. You can keep these consistent for every deal. Your reps will soon catch on and will be better prepared with answers once you have done this a few times. Here are some questions you can ask: • What is the customer trying to fix, accomplish or avoid? • How will our solution address that and how does it sound different from other options the customer has?

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What Sales Leaders are Doing Now

• What is the customer’s decision-making process? Have we met all the decision makers? • What are the biggest red flags that would stop us from winning this deal? I’m sure you can see a common pattern from my previous thoughts. Getting some common standards and language is really important if you want to get more consistency and accuracy in reports. If you’re thinking this sounds like a lot of work and doubt if it is truly worth it, let me answer that. It doesn’t have to be complicated. You should try and keep it as simple as possible to encourage these check-ins to continue because the value goes well beyond more accurate forecasts. Once you work with good information, you can start to make much better decisions. You will start to see more quickly where your reps need help and which deals you should get personally involved with. For many organizations, resources have become more scarce, so it is vital to ensure you have a solid basis for determining where you should direct those precious resources. One of the worst things an organization can do is spend considerable time and resource on the wrong opportunities. Losing slowly is something that should be avoided at all costs. The difference between losing and winning a deal can be the correct allocation and timing of resources on a deal. Finally, make sure this information comes to you in one format and is the same from everyone. You don’t have time to learn what different reps and managers mean by, “It’s close to closing.” You need them to tell you where it is in the selling and buying processes and what needs to happen for the deal to close. A standardized process and common language will buy you more time, time that you can use to help get business closed!

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Sharing Successes by Elizabeth Vanneste, Chief Marketing Officer

One of the biggest challenges during a difficult economic cycle is keeping your salespeople focused. People who may have been your superstars, or at least consistent players, may now be struggling because what used to work for them isn’t working anymore. And it’s easy to start sharing war stories around the water cooler (or at the nearby watering hole) so that pretty soon most of the salespeople are convinced that, “it’s the economy,” “it’s happening to everyone,” or “we just have to wait it out.” Well that is, to quote the CEO of UnderArmour, “Loser Talk.” As the sales leader, you need to stop the “loser talk” quickly because it can become a cancer that will kill your organization. Now more than ever, it is important to celebrate the good news. People are still winning. I hear success stories everyday. There are sales organizations having great quarters, startup businesses that are surpassing their competition, and companies that are launching new products to avid consumers. Yes, the world has changed, but that doesn’t mean there aren’t opportunities. Students of history (and those of us old enough to have lived through a few economic cycles) will tell you that there are always individuals and companies who do well, even excel, during challenging times.

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What Sales Leaders are Doing Now

Look around your company. Are you touting the success stories? Every new deal should get some internal PR. What was the client’s business issue? How did the salesperson approach the deal? Who else was involved (engineering, operations, finance) to pull together the right solution? In times like these, everyone can become a salesperson. Did you overcome a competitive threat? Was there something unique about your company’s offering that differentiated you? Tell the stories! At your all-hands meetings, team huddles, and staff meetings. On your internal website. In the company newsletter. On the break room walls. Make sure everyone involved gets recognition. Identify deserving poster children – examples you can refer to - and use them to rally the troops. Get the salespeople thinking, “Hey, if other people are closing business then maybe I can too.” The great thing about strong salespeople is that they’re naturally competitive so if they hear that someone is doing better than they are, they act! Share best practices. What are top performers doing that is repeatable? How can their wins be leveraged to close other deals? Have you checked in with prospects you lost in the past year? Have you spoken with “dormant” customers lately? Keep people focused on what they CAN do to encourage action instead of atrophy. Action alone determines your value in the marketplace.

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