Sales 2.0: The Swiss Army Knife Needs to be Expanded
Normally I leave the sales punditry to those trying to sell telemarketing services or the next greatest sales methodology. At times these sales to Sales pitches feel like the latest management fads I so often witnessed while working at A.T. Kearney. But occasionally a “sales” strategy” article motivates me to act.
As he often does, Mark Suster wrote a very intriguing article on what early stage companies need to scale their sales teams. I typically chuckle when VC’s try to “educate” start ups on sales and marketing strategy. But Mark makes some great points.
VC advice is usually well intentioned but it’s more often the Good Will Hunting version where the VC believes he or she understands sales and marketing because they read it in some book or watched <insert start up name> do it.
Mark is different because he’s actually started and sold a start up. His advice is sound but needs to be updated to reflect the Sales 2.0 realities of today’s high performing sales teams. To be successful, it’s not enough to have a scalable sales team. You need a reason to scale.
Here are ten Sales 2.0 strategies/tools you need to have along with Mark’s Swiss Army Knife in order to increase revenue so that you have a reason to scale:
1. A Social Sales Strategy
Your customers (and more importantly prospective customers) are increasingly influenced by information found on blogs, Twitter, Facebook, and industry communities. Yet most salespeople aren’t prospecting there. They’re stuck in the Sales 1.0 world of outbound calling (which still works), one to one email prospecting, answering RFP’s and praying that marketing is feeding them qualified leads.
Yet today there are decision makers that are asking for solutions to their problems on Twitter and Facebook and are not issuing RFP’s. They want advice from their peers and don’t mind solution vendors offering educational links to videos, solution content and blog articles. This is a salesperson’s chance to engage on the best opportunity playing field in history.
Yet most salespeople aren’t stepping on the field.
2. Follow the Companies in your Sales Pipeline on LinkedIn
If you’re not following companies in your sales pipeline you’re missing opportunities to learn more about furthering the sale. We’ve seen companies and people we were tracking as part of the sales process be promoted, leave the company and post new job openings. The information gained has been invaluable in determining account strategy.
It’s also valuable when researching companies prior to approaching them with your solution. We’ve recently encountered a situation where someone in my network joined a company that we had been prospecting for the last 12 months. That salesperson asked me to make an introduction and presto we were in a sales cycle with the company.
Yet most salespeople don’t realize this tool exists. This is another invaluable tool that salespeople didn’t have even 90 days ago.
3. Follow Competitors on LinkedIn
For obvious reasons you should be following your competitors as well. I’m not going to discuss how we use the information here, but it’s allowed us an advantage when competing against a competitor in a sales cycle.
4. Subscribe to a Sales Lead Sharing Site
Let’s imagine you’ve read about a Fortune 500 company executive who is frustrated with an issue they are having and that by chance your product solves. How can you quickly reach that individual?
In the past you either called the company directly and hope the receptionist puts you through or you’ve blasted your network to try and find the one individual that knows the prospect. Chances are either didn’t work well.
Yet with tools like Jigsaw (recently acquired by Salesforce.com) finding the most accurate and up to date contact information is only a few clicks away.
5. A Compensation Plan that’s Aligned with Corporate Strategy
Too often salespeople are told to get out and sell product without a clear compensation plan that reflects the goals of the business. For instance, if margin is an important aspect of your growth plans then reward salespeople for higher margin deals.
Moreover, if closing new business is more important, than provide a greater incentive for those that meet or exceed the number. The sales plan shouldn’t become so complex that no one can decipher it, but it should align with the goals of the corporation.
BTW: Daniel Pink’s Candle Problem presents a compelling case for removing variable compensation plans. Don’t buy it.
High paying sales jobs attract the best talent. Moreover, when a salesperson has to earn money or s/he doesn’t pay the mortgage, s/he will perform better and work harder. Someday I am going to write a post that lambasts Pink’s case for socialized compensation. It’s not that his research is wrong, it’s that he’s experimenting in a vacuum and using examples that are long tail anomalies.
6. Sales Scorecards
I could write an entire post on how to determine what to measure. But let’s assume you have a good idea of what metrics you need to measure to determine salesperson effectiveness. You’ve mapped out the end-to-end sales process and put metrics in place across the entire
You simply must give your team a monthly (at worst quarterly) scorecard on how they are measuring up against their peers. This is a critical tool to deploy and will pay off in revenue, salesperson development, and will help Marketing determine areas of focus.
7. Sales Dashboards
Similar to the Scorecard above, the dashboard provides management with a daily/weekly/monthly report on key sales metrics which give you the overall health of “team revenue.”
The transparency will allow you to take quick, decisive corrective action when things go off course.
If you’re using a CRM system from SugarCRM or Salesforce.com to these dashboards are already in place. If you’re not using a CRM system (big mistake) have an assistant build these reports for you weekly.
8. Role Playing
I once read that Tom Brady spent 30 hours a week studying game film of his opponents before every game. Is it any wonder Brady is one of the best in the game?
So role play as customer and sales person. Practice in a group and on video (so they can review later). When acting as customer, use examples from the previous week or examples where you’ve lost a deal. This is your team’s chance to take risks and learn from mistakes.
Don’t underestimate this valuable tool. You’ll learn a lot by going through the process.
9. Proper Forecasting Tools: Understand When to Invest
How do you know when to scale your sales force? When do you hire more resources or promote existing ones? The answer is in the forecast. I’ve typically used a three part forecasting system that has served me well for the last 10 years. I’ll briefly explain each:
- Sales pipeline – You should know on average how big your pipeline needs to be in order to close $X in the next 90 days. If you’re just starting out, look back four quarters and determine how big your pipeline was on the 1st day of the quarter and how much revenue actually closed 90 days later. Do it for the remaining three quarters to determine an average percentage of pipeline that you close in any 90 day period. Use this figure as a rough guide (along with the others below) to help shape your forecast.
- Factored forecast – This forecast takes each opportunity in your pipeline within a date range and multiplies it by the corresponding probability to determine an overall factored forecasted number. For example: If deal A for $100 has a 30% chance (probability) of closing and deal B for $200 has a 50% chance of closing then the factored forecast for both opportunities is ($30+$100 = $130). If you set your stages and probabilities accurately (again by looking backward 4 quarters) then you have a fairly good idea of what to expect in revenue for that time period.
- Marketing/Sales Funnel - This “forecast” let’s you see how leads are working their way down to the sales pipeline. If leads at the top of the funnel are increasing and your funnel conversion rates are staying the same, you should expect greater revenue long term (dependent on your average sales cycle). One way to increase revenue in the short term is to discern the levers towards the bottom of the funnel that increase conversion rates. Not easy to do, but every percentage point can mean hundreds of thousands in increased revenue.
You then reconcile the three reports to get an idea of what to expect in terms of revenue in the short and long term. Then with increased confidence, work with the CFO and CEO to request more resources or redeploy existing ones.
10. Sales Automation and Prospect Pattern Recognition Tools
Do you know exactly the process(es) your customers buy and in what order they consume content to make an informed decision? Probably not. But Sales 2.0 teams do. They have tools like Marketo that alert your sales teams to buyer like activity.
These tools also allow the sales team to set up notification alerts for certain buyer behavior (like an email click or open) in real time. Sales can then quickly pick up the phone and reach the prospect as they are navigating your landing page or website. The tools also notify salespeople via mobile or online when a prospect does certain high scoring activities. For example, if they download a whitepaper, demo your product and read 2 blog posts (if these happen to be buying precursors).
Better, this process can be automated so that when buying precursor activity is detected, a set of processes automatically kicks in. For example, the process may be:
1. to send out an email to the prospect, or a request to chat appears if the prospect is on your website
2. the salesperson is notified in real time
3. A tweet is broadcasted asking the prospect to follow the company
4. a series of emails is scheduled over the next few weeks to help guide the prospect to a decision.
Any process can be defined. You need to determine what works for your company.
The ten above are of course not a comprehensive list but in the interest of keeping this post shorter than a small novel, I’ve cut it off. There is so much more to cover in this area and it’s changing every day. If you’re interested I’ll try to cover more in the area of Sales 2.0 – just let me know.
P.S. I’ve left off a few of my favorite strategies for a later post. They’re part marketing, part evangelism and part sales but they work. They work extremely well in fact.