Brad Pitt, Oakland Athletics, And Moneyball: Still The Model For Change Management, Business Transformation And Predictive Analytics
This article about the winningest team in Major League Baseball this year made it to #5 on the Forbes Most Popular list. – Ken
I started writing this article from a hotel room in Oakland, California. I’m within walking distance from the stadium used by the Oakland A’s, the only professional baseball franchise that shares their playing field with the local pro football team in the country.
The Oakland A’s changed the way the game of baseball, and all professional sports are played. They transformed an entire industry forever by using math and statistics to choose players and make decisions.
Science over 150 years of art.
They figured out they are in the business of winning.
Just how good are they?
Billy Beane, who was played so convincingly by Brad Pitt in the movie Moneyball, is the General Manager strapped with one of the lowest budgets in the country out of 30 teams, yet they are tied for the most wins of any team in the 2012 and 2013 seasons combined (94 + 96 = 190 wins.)
As of today, half way through the 2014 season, they have 59 wins and 36 losses, the top record in all of Major League Baseball.
Is it working?
Results over time don’t lie.
A decade after the original Moneyball book written by Michael Lewis shared the secrets of using math to make decisions, the strategies are still paying off.
I loved the movie when it came out in 2011.
It told the story of the 2002 Oakland A’s, with a payroll of $41 million, who had to be competitive with larger market teams like the New York Yankees, whose payroll topped $125 million the same year. They were not only competitive, they tied with the Yankees at 103 wins, won the division and 20 straight games that year, and forever changed the world of professional sports.
In 2013 the Los Angeles Dodgers started the season with a payroll of $213 million, the New York Yankees close behind with a payroll of $210 million. Oakland paid out 60 million.
If you own or run a business, watch Moneyball. If you’ve seen it, watch it again.
The Oakland Athletics, led by Billy Beane, have mastered the concept of change.
We invited Billy to keynote our 1st annual customer conference in Park City at the end of May this year. He held us spellbound for over an hour. He swore us all to silence, so I won’t breath a word about the amazing stories and strategies he told.
Not a word…
Suffice it to say he is the real thing. Business, and entrepreneurs in particular, can learn a lot from Billy Beane and the Oakland A’s about change.
A lot of skeptics have come and gone. In 2011, Sports Illustrated ran an article, “The Art of Winning An (Even More) Unfair Game” with the introduction:
“Eight years after it forever shifted baseball’s tectonic plates, Moneyball is a Brad Pitt movie, but its ethos has changed. Intellectual firepower is mandatory, but no guarantee of success now that the game’s financial giants have cracked the code. Competitive advantage: Red Sox.”
Let’s see, hmmm, Red Sox 43 wins and 53 losses so far in 2014.
Billy Beane has changed things again.
What is change? It is to make a difference, to become different.
A person changes.
A team or business transforms.
When a consultant helps a business change they call it transformation because they can charge a lot more the bigger the word or phrase they can coin. You can’t copyright and trademark simple and clear concepts.
In education change is called learning.
In religion change is called repentance.
Youth want to change the world and still think they can. Their elders worry they are too old to change, yet they often have the power and wisdom to effect big change, though young entrepreneurs who are successful often gain the power to affect big change, we just hope there is some wisdom also.
Technology is the lever of young entrepreneurs to make change. Science tries to explain why the technology actually works and whether it can continue to work.
The predictive analytics model that Billy Beane and staff use they call Sabermetrics. They find undervalued players who are much better than their paychecks indicate… using math.
Now I know what to tell my kids when they don’t like doing their math homework.
Stay tuned, this is 1 of a 3 part series on Change Management and Business Transformation
The Two Riskiest Things I Ever Did in Business
This article just appeared on page 33 of the Summer Edition of Business Q Magazine, it was an interview I gave to Brianna Stewart.
The two riskiest things I ever did were two sides of the same coin: working for myself, and working for somebody else… let me explain.
I have always been a serial entrepreneur, but in one early company I went out on my own way too early, before I knew how to run a company. I lost a lot of money. My first big adventure was when I worked with a partner in a computer consulting company and we bought out the previous owner, only to find my new business partner was not honest. I lost $70,000; about what a nice graduate degree in business would cost me.
I call it my MBA from the school of hard knocks.
I wasn’t ready.
I didn’t know what I was doing. I should have learned my strengths and weaknesses on somebody else’s dime. I figured out later that I excel at the strategic side of sales and marketing, not managing business. I went to the Naval Academy and I love military strategy. It took me a while to translate that knowledge by mapping it onto sales and marketing strategy.
It’s like when I coached 9 years of youth football. 8 of those 9 years I coached the defense, my love, my background, and my skill. I can count the games we lost in those 8 years on both hands. The year I tried being a head coach I don’t think I even had a winning season. Find your strengths and bet on them.
My second big mistake was working for somebody else too long. I started the original inside sales department at Franklin International Institute. In the early 90’s we were the 2nd fastest growing company in the US, before they merged with Stephen R. Covey’s company. I built a massive organization for them and didn’t have enough ownership equity to buy a car. I risked all of my hard work for very little. To me the biggest risk is to have somebody else in charge of your future.
My dear friend Oliver DeMille reminds me that a hundred years ago 90% of Americans owned their own farm, shop, or business. They were entrepreneurs.
They were owners.
Now 90% of Americans work for owners and entrepreneurs and control very little of the variables that affect their lives.
They are employees. To me that is very risky.
The next opportunity came and I co-founded what is now inContact. I gained enough equity to launch my future, and I was in a position to help control the variables that put that future at risk.
After that Dave Elkington and I founded InsideSales.com. I learned to join forces with an absolutely brilliant business partner that was world-class great at the things I was not good at. While I was able to bring my strengths into focus and really excel at what I am great at. It was very little risk. Being an owner when you know what you are doing is very little risk. And having a little help from upstairs is the least risk of all!
Cloud Computing, Predictive Dialers, Gamification, and How We Got the Name InsideSales.com
This is section 2 of The Story of InsideSales.com
CLOUD COMPUTING AND TELEPHONY
One of the very first things we did after we started InsideSales.com and built out our technology was that we calculated how much it would cost a company to purchase this technology in-house, it came to nearly $650,000; we offered it for rent for $135 a seat plus 2 cents per minute. We handled all the headaches and hassles of security, maintenance, upgrades, and uptime. We brought enterprise class technology to any size business without an enterprise-size IT staff. We soon found that IT loved to wash their hands of those pesky salespeople and turned it over to us who do it for a living so they could focus on the core of what they do for a living.
In 2004 we partnered with my old company inContact but they had their business to run which focused more on inbound call centers rather than sales, so we decided to build everything we needed from the ground up. Dave had Thomas Purdy and Rob Christensen who pioneered a rapid application development platform that completely blew my mind. We got projects done in days and weeks, not the months and years I had seen it take at my previous companies. I would come up with an idea and Dave would have it in production in a couple of weeks. Within six months the whole platform was working.
We showed it to 5 companies, 3 of them bought it, 1 was PeopleWise, a subsidiary of LexisNexis.
Dave and I both agreed on a few main things, we hated telemarketing, and we loved the Salesforce.com model.
Telemarketing used a 30-year-old technology called predictive dialers. Aggressive marketers abused it so bad the FCC had to dramatically limit it’s use and we wanted no part of it. You know, it’s that call you get at dinner time with a pause, click, and voice comes on and says, “Please wait for the next available representative”, and you think, “Wait a minute, you called me!” It’s that call where you have to say “No!” seven times before they let you hang up.
It’s why Do Not Call was implemented. As I mentioned, “Tele” was and still is a four-letter word.
We decided to take a different approach.
We wanted to call businesses.
There was no dialer technology at all for for B2B.
We wanted B2B and large ticket B2C only, no telemarketing.
So instead of using the brute force predictive technology that predicts how many calls to make at a time in hopes of getting a live answer to route to a rep, and hanging up on anyone else who happens to answer, we decided to use a more elegant Power Dialer strategy that puts the salesperson in charge of the experience, and moves the Predictive Analytics into the database. We called it Predictive 2.0.
Then we would build all kinds of little “power tools” we called them, to leverage everything they did. Our favorite was a voice messaging tool where a salesperson could record their own voice in a library of messages for every situation, and when they got to an answering machine, they would wait until the “Please leave a message at the tone” and with a single click of a button, leave their 30 second message and already be on to the 2nd or 3rd call before it even finished. And the person at the other end didn’t realize it wasn’t the salesperson who took the time to leave them a message.
Dave and I firmly believed we could build a whole new kind of experience that didn’t burn out salespeople or their prospects.
We also decided that we loved the Inside Sales way of life: Work hard, play hard.
Put in a good day, then go home and have a life. It fit who we were, and all the Millennial’s who we were hiring. Dave and I love a book called The Game of Work. It was the story of Charles Coonradt, who consulting with companies to increase their productivity and employee morale. He noticed that the same employees who plodded their way through the day at work, would all scramble out to the parking lot during lunch hour and put their heart and soul into winning a pickup basketball game where they didn’t earn a dime. Then come back to work and trudge through the end of their day.
I had done some research while at Franklin where we were trying to find what made our best performers. I had interviewed nearly 400 people and had 70 great performers: A background in athletic achievement. Great athletes turned into great salespeople. I think it is the practice, the repetitions, keeping score, watching the numbers.
So from the very beginning we tried to use these principles to Gamify our software solution. We tried to give the data to the salespeople long before the Gamification craze came into being in 2010. We started with the Athletic model from the Game of Work, and folded in the Game Mechanics model when we realized every Millennial on the planet grew up playing Mario Cart, Starcraft and World of Warcraft.
Charles made quite an impact on our company! I recently wrote a Forbes article calling him the Grandfather of Gamification.
We needed a name.
I told Dave that the best possible name would be the name of the web category we were creating… InsideSales.com. We tracked down the guy who owned it, he first wanted over six figures. Dave put his negotiating chinese water torture techniques to work and the guy called us back right before Christmas and said, “I need $3000 today, if you can get it to me, it’s yours.”
We went out to Google and typed in “Inside Sales” and there wasn’t a single ad, it was blue ocean.
There were 40,000 companies in a row trying to hire professional inside sales people, we knew there was a serious trend building. The 1st week of January in 2005 we brought up the website and got 8 leads the very first day. Today we get 750 inquiries a day. We had built the ultimate cold calling technology, but never made a single cold call the first several years of the company, we were to busy responding to leads from the web.
Inside Sales was already a profession, but it wasn’t an industry. People like Trish Bertuzzi, Anneke Seley, Art Sobczak and many other notables had already spent years solidifying the inside sales profession.
There were people making cars by hand before Henry Ford built his assembly line and put a conveyor belt on it. But he built the profession into an industry and built the American middle class.
Our strategy was to help form an industry out of what was still perceived only recently as a 2nd class department that was taking the scraps off the table from the old timer field salespeople who had been in power for 100 years.
We saw change coming. We didn’t know that the crash of the economy in 2008 would be the biggest catalyst for change of all.
A few years later we got fully behind Bob Perkins and Larry Reeves, the founders of The American Association of Inside Sales Professionals. Their isn’t anyone with more passion and care.
We believed if there was a trade association, inside sales was an industry.
We had no idea.
Go back to read Section 1 of: The Story of InsideSales.com
Dave Elkington, Marc Benioff, Salesforce.com, Philosophy, Hyper Growth, and Shrimp Tacos
Dave Elkington and I met early in 2004.
He had graduated from BYU with a degree in Philosophy and had already been working at Deutche Bank Alex Brown, an investment bank and a venture capital firm through the dot com era. He had a strong sense that web software, and especially software-as-a-service was a huge opportunity. He had tasted a small win or two and had dipped his toes in the entrepreneurial stream with an early Bluetooth company. He went through the dot com crash and saw the future of internet-based companies but knew they would need to have a strong financial model.
We often would laugh at companies with great ideas but no way to monetize them.
He wanted to start his own company in that space but wanted to grow it out of revenues, so he went back to BYU and started a graduate degree in computer science. He had already seen ignorant founders of companies who didn’t understand enough of the technologies who couldn’t guide the outcomes of their IT staffs and who sold their souls too early to raise money and then had new bosses before they even hit critical mass.
While doing this he started a web development company and began doing all kinds of projects as he zeroed in on what he wanted to focus on.
He knew he wanted to use machine learning, artificial intelligence, and what he called “set theory” to do things that had never been done before in business. He had seen many companies’ come and go and was especially watching Marc Benioff plow the deep snow in application service provider platforms (ASP) just when the phrase Software-as-a-Service (SAAS) was being tossed around from the waves being made by saleforce.com.
Dave would talk about his philosophy degree and how it had taught him to think. That was one of the strongest things we both held in common; philosophy, and how to think. I was amazed out differently we thought, but we agreed on many common areas. Though we disagreed strongly on others. Dave believes strongly in what he calls “pragmatic relativism,” he has some pretty compelling arguments and has almost convinced me… almost.
He and I have warmly debated that topic from about the first few days we met each other. I believe much more strongly in universals principles and laws; I worked under the guidance of Hyrum Smith and Stephen R. Covey during my days at FranklinCovey, and my philosophic mentor had been Dr. Chauncey Riddle since I was just out of college. I had moved my family to Provo, Utah, and audited his last BYU class; the only class I ever took without getting a grade. I remember I felt my brain hurting from the rigorous Socratic method and System Thinking and strategic methodologies he shared. I regard it as more valuable than everything I studied at the University of Utah and the Naval Academy combined to help me be successful as an entrepreneur.
It was from this that I distilled the Systems Model we use:
Analyze > Design > Implement > Evaluate.
Or in one word: Test.
Dr. Riddle challenged me to learn how to think, not just what to think and when to think.
Dave had gone through a similar level of rigor and the two thoughtful backgrounds combined to make very animated discussions. We found when we could both engage we would distill things down to almost their very essence and spent many late nights doing just that.
I had gone to the Naval Academy and when we started this company in 2004 I had already been in the world of sales and marketing for 16 years, I had pioneered the use of inside sales at Franklin Day Planners when they were the 2nd fastest growing company in the US. My plans had abruptly changed from being a Naval Aviator and flying the space shuttle to pioneering professional sales over the phone and through the web. I had learned through sad experience that hyper growth was a unique animal all it’s own. We would set appointments and invite training directors at 115,000 companies with 100 employees or more to see a Franklin seminar and turn it over to the field sales teams. Then we started proving we could close them ourselves.
Our department was gaining the nickname “Telesales,” but I recoiled at anything with the phrase “tele” in it. To me it was a four letter word. We coined the phrase “Inside Sales” which was just beginning to be used.
I told them I would stay 5 years or until we did a million dollars in a single month. I knew I had a long way to go, when my first month sales was just over $27k. I told them we would use college kids on the phone for 60k to sell what their 300k salespeople would sell. We started with six phone reps transferred out of the call center on old furniture out of the warehouse. I researched to see what new outside sales Account Executives would close in the first six months…
We beat it by 127% at a small fraction of the cost.
They closed at two to three times better ratios, but we made seven to eight times more contacts. Sales was a numbers game, and still is.
We made a ton of the old timer outside sales people very mad at us. They first tried to crush us, then control us, then cooperate with us. It was so stressful I would wake up in the mornings with what seemed like little pieces of rock in my mouth; the edges of my own teeth. But much of the problem was me, I needed to grow up and so did my people.
We were dialing by hand but still doing great. Franklin struggled so badly with technology at the time they actually made us dial a 10-digit account code in the phone system after every phone call to track and charge us for any personal calls. It was a policy of the accounting or “sales prevention” department and it drove me nuts. I initially wanted a dialer technology just to store that dang account code under a single button, but I remembered my earlier days at Quota Marketing Centers where we invented one of the very first “power dialer” technologies as we generated leads for Toshiba copy machine dealers all over the country.
I had all kinds of ideas to leverage inside sales, but no technology, just a big leather book. I would go to lunch with Mike Shelton, the Telecom Director at Franklin and we would brainstorm new ways to save time. Next thing I know, he had left the company with some developers and built many of the very things we had talked about. He sold it for millions of dollars; I never got my dialers.
I left Franklin four years later to the day when we did our Million Dollar Month. I left with my dear friend Paul Jarman, who was one of my first two sales reps at Franklin to start what became a long distance company. After being there about 5 years I went to a meeting one day to buy another company and there was my old telecom guy from Franklin seated across the table. He had already sold his first company and was working on rewriting the same code to be the first call center technology in the cloud. He wanted to launch the first SaaS telephony company.
We saw the possibilities and a year later we bought his 2nd company and eventually changed the company to what is now inContact, the top inbound SaaS contact center company in the world. But I hated inbound, I loved going outbound; causing sales… not catching them.
Talk about destiny, now we owned the very technology I had sketched on napkins in the Franklin cafeteria. Within weeks I started pulling together the single most powerful inside sales technology ever invented. The problem was we didn’t have a way to handle all of the leads. We tried embedding the dialer technology into Act!, then Goldmine, but it took them right to their knees. I had a consultant helping me and he called me and said I needed to go to Springville, Utah and meet Dave Elkington, who had just finished a massive lead management database in the cloud.
I called and we went to lunch at Bajios, we had shrimp tacos and horchata.
We soon realized he had the database technology, the drive, the financial expertise, a crushing discipline, and an ability to execute with charisma like nobody I had ever seen before. I had the dialer technology, the strategy, a clear vision for the future of inside sales, and way of buffering to hold it all together.
We soon decided to build the world’s first customer database with built-in dialer tools in the cloud (though the phrase ‘cloud’ hadn’t been used yet.) The database had the qualitative data, the call center tools had the quantitative tools and we had a feeling that the two together would open up a whole new world by letting us see things in a new light… the light of data.
Dave and I both knew this synergy of predictive analytics, big data, and artificial intelligence would change sales and marketing forever.
Social Nurturing: 7 Keys To Acquire Contacts Through LinkedIn, Twitter, Facebook And Google+
How do you get to know influential people using social media? We have developed a very powerful new model that does this very thing and brings amazing results, we use it at InsideSales.com.
We call it Social Nurturing. Think of it as the phase the comes before lead nurturing, where you build awareness and turn it to curiosity.
The term ‘Social Nurturing’ was coined by my dear friend Thomas Oldroyd.
Is Social Nurturing just for prospecting or sales?
It is a useful model whenever you want to get to know influential people whether they be entrepreneurial gurus, prospects for your business, influencers in your industry, partners in a business channel, readers on a blog or column, friends in the ‘cool’ clique at school, potential employers, or just followers on social media.
Is Social Nurturing the same as Lead Nurturing?
It comes before lead nurturing, and by definition, uses social media only.
Lead Nurturing is the process of progressing interest into need, or leads into qualified prospects.
So what comes before interest?
Think about it, there are several stages somebody goes through before they are interested in you, what you do, or what you have to offer. Social media offers tools and access to people like never before in the history of the world.
How do you use social to meet influential people?
Here at InsideSales.com we have been testing the use of LinkedIn, Twitter, Facebook, Google+ , Blogging, Klout, and many more social media platforms in a model we call ACQUIRE.
The steps to ACQUIRE influential social relationships are:
- Awareness: They have to know you exist.
- Curiosity: They have to be curious about you and what you do.
- Qualify: You need to decide if it is worth building a relationship with them.
- Understanding: They need enough information to know roughly what you do.
- Interest: What you do must be intriguing to them.
- Relevance: Both parties should have meaningful value for each other.
- Engage: This is where active commitment begins: whether it be an influencer, a target prospect, a customer, a friend, etc.
We call this process Social Nurturing. And there are three best practices I’ll reveal later (when we have polished and tested them) that really make the ACQUIRE model work.
Social Nurturing is a cool phrase that Thomas Oldroyd on our team here at InsideSales.com coined to describe that process that sits in front of Lead Nurturing and uses social media to turn awareness into interest.
How do you actually use the ACQUIRE model to make influential contacts using social media?
We have lots of ideas and testing in process (in other words, this is so new we are still learning.) We have had absolutely incredible results so far. For example, we were able to use the ACQUIRE model in September to set appointments with 1230 people who were going to be at a trade show in San Francisco to come and meet with us at the show (we did it before the show even began.)
For perspective, years past with traditional methods we had around 50 pre-set appointments at the same show.
My Forbes readers may want to reserve a seat for my webinar where I’m sharing our first findings. Then my team is putting it into a downloadable eBook in a few weeks you will have access to also. The price of admission is your feedback and comments as you try it yourself personally and in your business.
‘Testing’ means we honestly don’t know the outcome, we welcome your help.
As our testing concludes I will share the tips, tricks, best practices, and your feedback, ideas, and stories of social nurturing in part 2 of this article, probably right after the holidays.
Stay tuned – Ken
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What is an Entrepreneur?
What is the difference between an entrepreneur and someone who just runs a business?
As is often the case, I may not exactly know what it is, but I know what it is not.
What is the difference between a leader and a manager?
A leader worries about her people; a manager worries about his boss.
Leaders walk in front and show others the way. They lift the heavy boxes first and, like Tom Sawyer, they start out by painting the fence better and faster than the crowd who gathered to watch them. It is awe that makes the crowd members pick up a brush and join in. But unlike Tom, they stay involved through the process and keep recruiting others. (Entrepreneurs figure out vinyl fences don’t need paint.)
Leaders don’t stop for nearly as many breaks or gather around and watch others, unless they are learning and comparing. They always hoe to the end of the row, even in heat, a rainstorm, or when supper is calling.
Leaders begin to sing out when the song begins, because they know the other voices will soon blend in and hide the fact they are slightly off key.
Leaders seek out the one lagging beyond, find what makes them tick, then challenge them to keep up and to keep time.
Leaders are like the Marines… first in… last out. They don’t punch a clock, they get a job done, even if they mop up what’s left behind.
Leaders work on the system, managers work in the system.
Leaders like exempt over non-exempt. They demand a fair salary, they don’t ever want to be measured as just an hourly wage. But they will work hard and long under one if they have to, even if they get sent home by their manager before overtime rules kick in.
A manager never quits a job until they find one that is better.
Leaders rarely get fired. But they often get fired up. They will quit any job that asks them to do something they don’t believe in. But they will work at any job if the reason is strong enough or they have given their word.
Leaders are shepherds with a staff who call out with their voice, not sheep herders that ride horses with lots of smart dogs that nip at your heals.
Entrepreneurs know you need to be both a leader and a manager… in that order. They always start with a leader, and then find a manager.
They know a great leader is the ultimate solution to any problem. They pay ten to a thousand times more money for a great leader than a great manager… in a heartbeat.
What is the difference between finance and accounting?
One is a tool with leverage, the other is a method with scrutiny.
One puts the world at your feet, the other keeps the IRS away.
Finance finds the money at all costs. Accounting finds the cost of money.
Finance uses predictive analytics and statistics to gauge the odds of success. Accounting uses bookkeeping to track success and report to finance.
Accounting hears there is a recession going on. Finance finds counter-recessionary trends and catches a wave.
Finance steers through the land mines and sees trends on the rise. Accounting reports on the cost of running aground.
Entrepreneurs practice both and hire both. And pay much less for Accountants.
What is the difference between sales and marketing?
Sales are the Navy Seals, the Green Berets, the Rangers. Marketing is the Air Force that rides high and sees far. They can’t win a war by themselves, but they sure look good to the folks on the ground kicking door to door.
Sales seeks out and solves need.
Marketing causes awareness and turns it to interest.
Sales wishes Marketing would educate interest into need before it gets to them, so they don’t have to. But they do if they need to. It just takes longer.
Sales knows that interest is the counterfeit of need.
Sales yells at Marketing for not generating enough good leads. Marketing yells back for not calling them all before they get cold.
Sales makes a way, marketing finds a way.
Entrepreneurs know they are both right, but that sales is the last to ever turn off the lights.
What is the difference between a statesman and a politician?
A statesman, or stateswoman, wades into the fray, a politician maneuvers through it.
A statesman fills his hand against the odds. A politician feels the odds against his hand.
Ethics and law are a statesman’s guide, with greater good as the motive. A statesman is honest when nobody is looking. He speaks up even when he is the only one in the room who is willing to.
He would serve for a single dollar, and often does. He would love to put down the heavy burden, but only does so when those he loves and is duty-bound to uphold are out of harm’s way.
Entrepreneurs are the statesmen (and women) of business.
What is the difference between faith and belief?
Faith is action, it is of the body. Belief is thought, it is of the mind.
Faith comes after hope, which is the fuel of the heart… desire… purpose… motive.
Faith is an assurance that what you have seen happen before, though you don’t see it now, will happen again… if you act and work.
Faith knows it’s enemy is doubt.
Belief hopes to become faith someday when it grows up.
Faith is based on truth. Belief may not be based on anything.. It doesn’t know.
Faith will risk it all and is willing to pay the price for every blessing. Belief flees because it isn’t sure, and wavers when things get really difficult.
Others look at faith and say “I get it!”
They look at belief and wonder if they get it.
Faith only wonders why.
Belief worries how.
Entrepreneurs know that belief turns to faith based on truth, assurance, and action… always action.
What is the difference between church and religion?
Church is a place you go to, on the outside. Religion is within.
A church is a building you go to worship on a specific day each week. Religion can be found on a mountaintop… alone.
Religion may or may not be had in a church.
A church is what you identify with. Religion is who you really are.
Some religions believe in God or god, or no god. But they live it.
Religion is the sum total of your habits. Habits are the true garb of religion.
Entrepreneurs hire people from all churches, but look deeply for those who live their religion, whether it includes a belief in God or not.
What is the difference between learning and understanding?
Learning goes to the source by itself, practices and rehearses, engages, memorizes and teaches back, and walks away with a treasure.
Understanding watches the teacher do the problem on the board and gets it then, but can’t figure out the ciphers in the textbook at home in the evening.
Learning goes to Lynda.com for $25 a month, where every software package lies at its fingertips, and in six months figures out how to start a company building websites.
Understanding gets a degree after four years, finds a job, and then works for somebody else for six years to pay off student loans.
Understanding is the counterfeit of Learning.
Learning goes to school to sit on the front row and ask questions.
Understanding takes notes to pass a test.
Learning cares much more about the quality of the question.
Understanding cares more about the completeness of the answer.
Training is what the trainer does. Learning is what sticks.
Teaching is what a teacher does. Learning is what a student does.
Learning is the valuable residue that is left over after Teaching occurs.
Learning counts only if it is measured and can be applied.
Learning leads to an education. Understanding leads to a degree.
Learning leads to an entrepreneur. Understanding leads to an employee.
Entrepreneurs don’t spend much of their time as an employee.
Only long enough to learn on somebody else’s dime, and from somebody else’s understanding.
Entrepreneurs don’t usually have an MBA, but they hire as many of them as they can.
15 Hot Sales Tools and Sales Acceleration Technologies
This article comes from an interview with and original research led by James W. Phillips, Business Intelligence Analyst for my company, InsideSales.com, about a research study entitled “2014 Sales Acceleration Technology Market Size Study.”
The research will be formally released next week at The American Association of Inside Sales Professionals Leadership Summit in Chicago.
Sales Acceleration is defined in detail in a prior Forbes article entitled “What Is Sales Acceleration? Start By Picking Up Your Phone.” It outlines categories that include new and emerging software applications and services that fall under this new market category.
The 15 cloud-based categories listed are as they appear in the study:
- Contract Technology
- Data Visualization
- Business Intelligence
- Presentation Technology, including Slide and Screen Share
- Predictive Analytic Tools and Technology
- Sales Intelligence Tools
- Email (designed specifically for the sales function)
- Sales Communication tools
- Video technology
- Voice technology
- Social selling technology
In summary, sales acceleration means to increase the velocity of the sales process.
James gives some background, “Over the last 10 years, the sales industry has witnessed a disruption. Due to the innovation of Internet cloud-based business transactions and an upsurge in sales technology development, the sales profession is in a state of rapid modernization.”
He continues, “The ‘Sales Acceleration Technology’ industry is the business space between CRM and marketing automation which facilitates, and thereby accelerates, all processes pertinent to the sales pipeline.”
The study addresses the following questions:
- How much spending is currently going towards sales acceleration technology in North America?
- How much spending occurs per sales rep?
- How big is this new market?
- In what categories is the spending occurring?
- What should we expect in the future about the growth of sales acceleration technology?
James collected information from 439 companies for this study, which was segmented by type of sales function (retail, inside sales, outside sales) as well as size of company and industry.
U.S. Census data presents a total of 13.98 million sales reps in North America. Analyses through this research shows there are 8.357 million in sales people employee retail sales, and 5.622 million inside or outside sales professional sales reps.
- Census-based forecast of professional sales rep jobs until 2020
Of this 54.4% or 3,064 million are inside sales (professional sales done remotely), and 45.5% or 2,558 million are outside sales or field sales representatives.
By 2020 there will be over 6 million inside and outside salespeople in North America.
In the sample, companies allocate 3.5% of total budget towards sales acceleration technology, with spending ranging from 1% to 24%.
- Spending on sales acceleration technology by category
Given considerations of current sales rep adoption rates, North American businesses spend $2,280 per rep, per year, on sales acceleration technologies in the following allocation:
- Spending per sales person on sales acceleration technology by category
From the same Census and the sample data from this study, estimations are able to be made showing current spending in North America for sales acceleration technology to be $12.8 billion annually in the world of professional sales with the following by inside sales and outside sales:
- Current spending on sales acceleration technology in North America in 2013, compared with inside sales versus outside sales channels
NOTE: This estimate is conservative by at least two accounts. James omitted “Sales Training Technology” which could be considered a sales acceleration technology, and the entire category of spending for retail sales was not included. The $12.8 billion would increase to roughly $15.8 billion if Sales Training Technology were included.
Spending by industry varies widely, with Software and Education leading, and Finance and Telecom bringing up the rear.
- Sales acceleration technology spending per rep by industry
Size of company, in this case by employee size, correlated to a massive difference in spending:
- Spending on sales acceleration technology by company employee size
The next interesting item in the research is the assessment of four favorable business outcomes and the associated correlated patterns in sales acceleration technology spending by the following:
- Bigger deals
- Faster sales cycles
- Higher close rates
- Stronger overall company revenue
The average deal size in the sample was $12,500.
Again, the average spending per sales rep is $2,280 per year, but in companies with the largest 50% of deal sizes, the average spending is 89% larger, or $4,319 per sales rep per year.
- Average spend per salesperson per year on sales acceleration technology by average size of sales opportunity at the company
NOTE: Greater sales acceleration technology spending does not necessarily cause bigger deal size, there is only a notable correlation from the sample data. The study goes into much greater detail with further regression analysis of this interesting correlation.
The average sales cycle in the sample is about 60 days.
Interestingly, the Communications and Intelligence technology received a greater proportion (28% more) of spending among companies with the fastest sales cycles, compared to the average.
- Spending on sales acceleration technology was notable in the categories of Business Intelligence and Sales Communications spending for companies with the fastest sales cycles
From the companies surveyed, the average close rate is about 20%.
The four notable technologies correlated to higher close rates were Sales Communications, Data Visualization, Business Intelligence, and Voice technology.
- Sales acceleration technology categories of Sales Communication, Data Visualization, Business Intelligence, and Voice Technology spending were notably higher in companies with higher close rates
Companies with higher than average close rates spent 17% more per sales rep than the average.
Companies with average revenue over $3,000,000 had a 78% more being spent on sales acceleration technologies than the average with an average of $4,052 per rep versus the previously mentioned $2,280 per sales representative.
- Average spending on sales acceleration technology by company revenue size
NOTE: This correlation is similar to the size of company by employee size section already mentioned, but now illustrated by company revenue.
The ends with the question to respondents about how their sales teams with grow or shrink over the next two years.
There was a promising increase of team sizes from an average of 12.8 reps in 2013, to a 45% increase of 18.5 reps in 2014, and a 41% increase to an average of 26.1 sales reps per team in 2015.
The Day The World Of Sales Changed Forever
It’s pretty rare when you can remember an exact day when the world changed.
I remember 9/11… The day the twin towers fell.
I was meeting with my client, the Department of Defense, a mile away from the Pentagon. Luckily we had received a call the night before asking us to move our location. We had just finished our very early meeting and were walking out of the conference room in the basement through the cafeteria when we saw the first of the twin towers burning; we were transfixed to the television screen.
Then the second tower was hit and the jet fuel erupted outward in a yellow and black surging cloud.
When I saw them start to fall later that day I knew the world had just changed.
My parents Dave and Sheila Krogue both remember where they were the day John F. Kennedy was killed, and the day Neil Armstrong declared his first small step for man… on the moon.
Mark the day…
March 27, 2009…
Five years ago yesterday… The day inside sales became an industry.
It was the day that Bob Perkins and Larry Reeves launched the American Association of Inside Sales Professionals with a press release from Minneapolis, Minnesota, dedicated exclusively to advancing the inside sales’ profession:
“Over the past two decades the inside sales profession has undergone a remarkable evolution. Not long ago, inside sales was perceived as annoying telemarketers or unsophisticated ‘order takers’ who smiled and dialed. “
How wrong the world was. Bob continued:
“Today, inside sales is an integral part of many organizations’ overall sales strategy. Customers accept and sometimes prefer virtual communication through e-mail, internet and the telephone. It’s not unheard of for inside sales representatives to build and manage multi-million dollar accounts and close six-figure sales.”
He knew it wasn’t the use of the telephone that started inside sales, that is what started telemarketing, which is most definitely not inside sales.
It was web conferencing… Webex and GoToMeeting: the ability to simulate a face-to-face sales call remotely.
I hadn’t met Bob and Larry yet the day the world of sales changed. But it was January 10th, 2010 that I wrote an article that went viral called “What is Inside Sales? – Our Definition of Inside Sales” and stated:
“Inside Sales is “remote sales,” most lately called “virtual sales,” or professional sales done remotely. Where Outside Sales or traditional Field Sales is done face-to-face. Telemarketing is a single, scripted, unprofessional phone call you get at dinnertime where you have to say “No!” seven times before you hang up.
In fact, Inside Sales Professionals regard “tele” as a four-letter word.
Taken in this context, the majority of all sales is done remotely, and the numbers are growing.“ Bob finished, as he started hammering in the coffin nails to the traditional world of going door-to-door.
Dave Elkington, our amazing CEO, and I were still recovering from the crushing blow of the crash of 2008.
Our little company, though profitable, had just had our credit line yanked by Wells Fargo and we thought we were like Billy Crystal said in Parental Guidance: “lights out Alice.”
Without enough money to smooth out not enough water over the rocks our managers rallied and went without pay, then we started to grow… in the worst economy of our lifetime.
Wondering what had just happened we called several of our brand new clients and asked them why they were buying our technology when everyone else was laying people off.
They answered that they were laying people off also, their $300,000 outside sales people to be exact, and hiring three $80,000 inside salespeople with our leveraged technology and others and still doubling their new sales revenues. The crash had forced them to look deeply at where the sales efficiencies and effectiveness were both really happening.
Bob and Larry had called it right.
What had once been a second-rate department taking the crumbs off the table from the outside salespeople was now a counter-recessionary growing industry, an answer to companies who needed answers.
We knew the world had changed when Dr. James Oldroyd who had already researched the power of responding immediately to a web-based lead also analyzed survey data offered by infoUSA and found that inside sales was growing at a rate fifteen times faster than outside sales, to the tune of what would be 800,000 new jobs.
Did I say 15 times faster?
We realized four years later that it was the counter-recessionary surge that caused companies like Apple, Cisco, Fedex, IBM, Google, Dell, Sprint, and ADP to hire thousands of inside sales reps, and join the American Association of Inside Sales Professionals or the AA-ISP. Bob and Larry gave a voice to those who were now the dominant, though very young, players in the sales space.
Another study came out in 2013 showing inside sales was now only growing 300% faster than traditional outside sales, and the same study demonstrated there were now more inside sales than outside sales reps, if you removed retail salespeople.
And inside sales was expanding at the rate of 42,400 a year now, great paying jobs, when American wasn’t quite believing the economy was really standing on it’s own again without the Federal Reserve’s quantitative easing money printing practices. (And still isn’t I might add.)
Marc Benioff, former inside sales rep from Oracle, and the founder of salesforce.com, was one of the early disruptive game changers of sales models when he went the first six years in his company using the remote sales model before hiring his first sales rep out in the field.
How do I know? We hired Dave Orrico, who was the Vice President of Enterprise Sales at Salesforce.com. For seven years he built the team that finally lived in the field and went face-to-face at the cloud-computing juggernaut.
Check out my summary of Marc’s book, Behind the Cloud, or go to Amazon and download it to your Kindle app right now. He tipped over an entire industry with a bunch of young upstarts full of vision and incredible passion and was finally recognized as the most innovative company in America.
My old company, FranklinCovey, was an even earlier pioneer when they asked me to roll out an inside sales model in 1993, and became the 2nd fastest growing company in the United States a year later. We had just coined the phrase “Inside Sales” because we hated anything with the word “tele” in it.
Like Avis, we may have been second, but we tried harder!
Those were the glory days, but I don’t miss them.
The political battle for position against the entrenched veteran field salespeople who first wanted to crush, then control, then collaborate, left me waking up every morning with what I thought were little rocks in my mouth…
Bits of my own teeth I had ground off the night before.
Now outside salespeople are realizing they better learn the methods of selling remotely we pioneered.
Many are embracing a hybrid-model of selling that still goes remote once or twice instead of four to five times, but spends most of the time on the phone and GoToMeeting saving both buyers and sellers much valued time and money.
Thanks to Bob and Larry I get to keynote for the fourth time at Leadership Summit 2014, the worlds largest gathering of Inside Sales Leaders in Chicago on the 8th and 9th of April. If you are anywhere near Chicago, or really need a shot in the arm of your career…
If you aren’t a member of the AA-ISP you are missing out on my favorite event of the year, and the best bunch of people I’ve ever been a part of other than my family, my plebe company at the Naval Academy and InsideSales.com, my company.
Thanks to Bob and Larry, I get to see all of my dear industry friends several times a year: Trish Bertuzzi, Steve Richards, Art Sobzak, Kraig Kleeman, Koka Sexton, Mike Smalls, Chad Burmeister, Peter Ostrow, Kyle Porter, Bruce Lewolt, Sean Burke, Anneke Seley, Antarctic Mike, Lori Richardson, Kelly Molander, Josiane Feigon, Jill Konrath, Jamie Shanks, Liz Gelb – O’Conner, and tons of new friends.
Thanks to Bob and Larry, I get a fun and friendly place to rub shoulders with companies like Oracle, Vorsight, Factor 8, Clearslide, LinkedIn, Hoopla, Xactly, Kitedesk, Salesloft, Frontline Selling, Tibc, Aslan, PGI, LexisNexis, Salesloft, Acton, and Marketstar.
Thanks to Bob and Larry even competitors come together to grow an industry that has room enough, and for all (but I don’t have to mention them in my article, now do I…)
Here’s to another five years!
Where are we going from here?
Now it’s all about what my friend Mick Hollison calls Sales Acceleration…
First star on the right, and straight on ‘till morning!
Author: Ken Krogue | Follow me on Google+
Summary of Ken Krogue’s Forbes articles
What Is Sales Acceleration? New Research Highlights Sales Acceleration Tools, Technologies, Market Size, And Top Sales Acceleration Companies.
This article on Forbes went to #2 Most Popular. The title they settled on is What’s Sales Acceleration? Start By Picking Up Your Phone – Ken
A decade ago, when Dave Elkington and I started InsideSales.com, which is mentioned in this article, salesforce.com was the big 800-pound gorilla in the sales automation space. They still are, and they keep getting bigger.
Salesforce.com pioneered the concept of renting customer relationship management (CRM) software instead of selling it. Software-as-a-Service (SaaS), or software in the cloud as it is so lovingly called now, has become the de facto standard that is disrupting the traditional software companies who still sell software in a box.
Sales automation was the name of their category, which added technology to the age-old practice of selling. As always, sales was the last to figure out the power of new technology offered by computing and the Internet, but arguably sales is once again the most impactful influence on business.
My dear friend Barry Trailer, one of the founders of CSO Insights, had just released the landmark research study in 2005 that answered the question about the actual impact on revenue that CRM software had. They studied roughly 1,300 companies, half using CRM software, the other half not. Everything else was similar.
Companies using CRM software had 17% more revenue.
You see, CRM organizes the sales process, it doesn’t necessarily accelerate the sales process. Unless you call 17% speed increase acceleration. Nevertheless, CRM is critical, even foundational, to our discussion.
The productivity increase of 17% wasn’t the only providential aspect of having your customer database in the cloud. CRM was and is the foundation upon which other applications build to increase revenue far more than 17%. Salesforce.com has added a bunch of additional apps since then and opened up a massive ecosystem to other providers that promote sales. They call it the salesforce.com AppExchange.
A customer database for sales is like having a website for marketing … absolutely critical. It’s where you begin. It’s the Henry Ford assembly line that put automobile manufacturing on the map. But we have come a long way from an assembly line cranking out Model T Fords.
Enter Sales Acceleration.
Sales acceleration means to increase the velocity of the sales process.
It’s the technology that fills the gap between established categories known as Marketing Automation and CRM.
New research we release tomorrow shows that companies spent $12.8 billion on sales acceleration technology last year in North America, which is $2,280 per sales rep. The potential market size is even larger. The study estimates that North American businesses could spend as much as $6,790 annually per representative on sales acceleration technology by 2017 — making the total addressable market in excess of $30 billion.
Other findings of our study include:
- Inside sales teams spend slightly more than outside sales teams on technology and significantly less on compensation.
- Inside sales teams close deals in 69 days on average compared with 144 days on average for outside sales, representing a 109 percent difference in closing times.
- More than one-third of sales leaders believe they should be spending more on technology.
You see, you can speed things up by shortening the sales cycle.
Many accelerate by using inside sales. My definition of inside sales is professional sales done remotely, as described in one of my most popular Forbes articles. This is where you respond in seconds to leads generated over the web, make more calls in less time, and use web conferencing to avoid traveling and taking lots of time away from busy buyers. Bob Perkins, founder and CEO of The American Association of Inside Sales Professionals (AA-ISP), often says that Inside Sales is sales.
Sales acceleration is not just about sales automation, although it most often uses sales automation.
Some companies actually use our sales automation tools but don’t make any more calls than before. Their culture is hard to change. They made 22 dials a day before they used our power dialer, and they make 22 dials after. It’s crazy. That isn’t sales acceleration. 170 calls a day is sales acceleration. 22 dials is like buying a nail gun and shooting one individual nail at a time and resting in between because of all the thought that goes into using compressed air to drive a 12 penny nail.
Start dialing people!
Sales acceleration is also about working smarter.
It’s gathering real-time sales intelligence from LinkedIn, InsideView and ZoomInfo. It’s having something relevant to talk about when you call a new prospect besides just the weather. It’s connecting with social media, lowering costs, raising visibility, and generating leverage.
Sales people are rediscovering email again. But now it is email designed just for them. It can tell them when people open their emails and can even trigger an immediate call back. But the thing they like the most is that it now attaches their email to the person’s record in salesforce.com as a note so their sales manager can see they are actually working.
Sales Acceleration is the conveyor belt that keeps the assembly line moving. It’s the power tools, the specialists, the knowledge workers, and the robotics. Now it’s the predictive analytics, big data, and artificial intelligence that are really advancing things since old Henry did his thing.
Sales Acceleration is also about the people.
Two days ago I gave a one-hour seminar in Provo, Utah. I quoted some research that has recently changed. For nearly a decade the single biggest obstacle for inside sales departments was finding more leads.
Now it’s hiring and training good people … fast. Leads are second. Our company’s mantra, for example, is that if we grow the people, they grow the business.
Inside sales is one of the few higher paying professions that is still growing in this crazy economy.
Sales Acceleration is the science of sales. It’s using math and statistics. It’s split testing with A and B options and continually improving through iteration. Yes, salespeople are now using math, don’t act so surprised. (We figure it out eventually.)
It’s about responding to web leads in less than five minutes like we learned with our research with Dr. James Oldroyd.
- Dr. James Oldroyd released landmark research with our own Dave Elkington in 2007 about the incredible effect that accelerating response to web leads can have
It’s about making 6 to 9 phone calls to respond to a lead instead of just 1 or 2.
It’s about using predictive 2.0 technology that can determine who and when to call for optimal contact and qualification rates. It’s about calling into local calling markets with a local Caller ID because people answer local phone numbers 57.8% better than blocked numbers, toll free numbers, or even long-distance phone numbers.
Even I know when a salesperson is calling if they are dumb enough to tell me.
It’s about finding the actual ingredients your sales people tell you make up the perfect sale and enhancing your database with those factors. It’s about scoring leads and prospects with statistical predictive significance.
Instead of guessing.
It’s about nurturing prospects and customers, not just the marketing automation practice of nurturing leads.
It’s about tracking velocity metrics. How fast you respond. How persistent you are. What percentage of leads get contacted. The length of your sales cycle. How engaged your prospects are. How fast an appointment decays if it is set 4 days out instead of 1 day.
It’s about speed.
It’s about execution.
Venture capital firms are constantly courting us in our space; high tech is pretty hot right now. One of the biggest and best brought us some data where they shared their research on the tools, technologies, and top companies making up what is now being called the Sales Acceleration space.
Our research team helped me with the task of categorizing these top sales acceleration applications. See if you can figure out the order I put the categories in:
- Recruiting Technology: Monster, Jobvite, CareerBuilder
- Sales Training Technology: CallidusCloud, TeamVisibility
- Sales Compensation Technology: Xactly, CallidusCloud
- Gamification*: Hoopla, Bunchball, Badgeville
- Data/List Services: Data.com, Zoominfo, Hoovers (D&B), NetProspex, OneSource
- Sales Intelligence Tools: LinkedIn, InsideView
- Video Conferencing: PGI (iMeet), Cisco
- Sales Email*: Hubspot (Signals), Yesware, Toutapp
- Live Chat: LivePerson, Boldchat
- Social Tools: LinkedIn, Radian6, FlipTop,
- Texting*: SMS Magic
- Remote Sales Presentation Technology: Citrix (GoToMeeting), Cisco (WebEx)
- Sales Quote and Proposal Tools: Apttus, Quosal
- Contract Technology: DocuSign, EchoSign
- Predictive Analytics Technology*: Lattice Engines, Infer
- Data Visualization*: Domo, Tableau
Our own platform category is Sales Communication Tools, which, residing upon the assembly line of the Salesforce.com CRM platform, is like Henry Ford’s overlying conveyor belt that ties these applications together and keeps things accelerating toward sales growth.
If we have missed applications that are notable for sales acceleration, please comment and we will do our best to highlight them also. We probably should include Twitter, as it is actually starting to be effective in the sales acceleration space, as I discuss in what will soon be my 2nd most popular Forbes article called 31 Twitter Tips: How To Use Twitter Tools and Twitter Best Practices For Business.
*NOTE: As a disclaimer, InsideSales.com, my company, also offers sales acceleration applications in the categories indicated*. Some, like predictive analytics, we have offered for 6 years with our Predictive 2.0 technology. Also, as an additional disclaimer, Domo is run by a member of our Board of Directors, Josh James, the legendary CEO of Omniture, which was sold to Adobe.
And lastly, A few years ago we gave a seminar in Boston on what we called High Velocity Selling, which is roughly the same concept as Sales Acceleration. The term came from a blog article that went viral by our own Board Member, Lars Lecki, of Hummer Winblad. We laughed when one of our favorite competitors immediately changed their name. Sorry, I already checked… Accelify.com is taken by a cool software company in Brooklyn who helps schoolchildren. – Ken
Why I Haven’t Written Much Lately
People are asking me where I’ve been.
I’ve usually written a new article or two every week for several years. I’ve been lucky to write my thoughts once in a month or two.
Haven’t felt like there was much that I hadn’t already said.
So I’ve been learning new things, gaining answers to hard questions. I’m taking everything in, not giving much back recently.
But I’ve embarked on a new adventure to get back to my roots.
What are my roots? (more…)