Is this your sales pipeline?

Bumped into an incredibly thought-provoking blog by former programmer and VC investor Jason Cohen over on his blog, A Smart Bear.

His point is simple:

If you’re an “early phase” startup, when it comes to choosing clients, never say “no,” but rarely say “yes.”

“Wait a minute,” you might say. “This is an inside sales blog, right? What’s all this about ‘choosing’ clients?”

It goes back to something I read last year on the Sales 2.0 Network and InflexionPoint blogs: there’s only two reasons a rep ever loses a sale, either he or she wasn’t supposed to be there in the first place (i.e., pursuing an unqualified opportunity), or they get outsold by a competitor.

In the original post, author Donal Daley states that one of his consulting firm’s challenges is to change the mindset of sales reps to take on fewer deals, not more.

“We discuss ways to help sales teams win 4 of 7 deals, instead of 3 of 10. This means that you pursue fewer opportunities. It’s not about ‘getting up to bat’ more often (emphasis added). In fact it’s the opposite.”

Bottom line: high-performance sales reps don’t take on unqualified prospects, or fight for deals they can’t win.

One more thing: in the same blog, Donal states that it takes the average sales rep 50% longer to lose a deal than to win one.

Think about that for a second.

If your average close rate is 25%, it means you’re spending four and a half hours on losing deals for every hour you spend on winning.

If you were to sit down and analyze your “10 best” prospects in your pipeline, is it possible you’d discover three that could be tossed out right now—and it would have a negligible impact on your performance? In fact, might it actually improve your performance?

Believe me, I understand more than anyone that sales is a numbers game—but it’s too easy for the all-powerful, sacred quota to become something other than a goal, a number on a wall. It starts to live, breathe, stalk us in our cubicles.

Its all-consuming power persuades us to fill our pipelines with something, anything, even if some (most?) of it is crap and sludge. I’m sure some companies are immune, but I suspect for a lot us (myself and InsideSales.com included), two or three out of ten opportunities actually aren’t. We’re chasing “rainbow sunshine,” half-committed buyers, and people that might say “yes” but only if the conditions of their acceptance are prohibitively in their favor.

It’s the same principle Jason Cohen is espousing for pursuing potentially disruptive clients:

Set the conditions of ‘yes’ such that:

1. If they say ‘yes,’ you’re happy because the terms or money are so good, it more than compensates for the distraction.
2. If they say ‘no,’ you’re happy because it wasn’t a great fit anyway, so it’s not worthwhile for a small return on your time and effort.”

If you’re selling into a commoditized market, you may not have much choice in who your customers are; you take whatever you can get.

But in high-touch B2B sales, don’t be too quick to dismiss the idea that less is potentially more. One very good client is often worth four mediocre-to-bad ones, in my experience—and somewhere along the line, a sales rep was involved either way.

Anyone who’s spent any time in Social Media has probably at least heard of Guy through his voluminous Twitter account(s), as “one of Apple’s old marketing gurus,” or in his role as a venture capitalist.

I haven’t read the book, though it sounds interesting but the video itself had a fascinating take on building a business. In the video, Guy and the interviewer, Brian Solis, talk about the three pillars of creating a business that “enchants”: Be likeable, be trustworthy, and back it up with a competent (or better) product.

But here’s the interesting part: Guy says that to be an “enchanting” company, we don’t have to succeed wildly at all three. Using Apple as an example (based on his first-hand knowledge), he states that contrary to some people’s perceptions, Apple is in fact a very anti-social company. They don’t actively engage with customers, they don’t go out of their way to “listen” to the public.

In Guy’s mind, the reason Apple is popular is because they hit the product portion of their business so far out of the park that no one pays attention to anything else. The products provide such a great experience that no one pays attention to the fact that iTunes is actually a really clunky piece of software, that the iPhone was saddled for a long time to the worst U.S. domestic phone carrier (AT&T), or that the iPad doesn’t play Flash video.

He goes on to say, however, that other businesses compensate for less-than-perfect product with stellar “likeability” and trustworthiness. We go to restaurants all the time where the food is only “okay,” but we “enjoy” it because the experience and service are so great. Does Zappos really have the greatest selection of shoes, anywhere, ever? No, not really, but the level of trustworthiness is so high, that Zappos’ customers don’t even think about it. Their customers’ experience is based on something other than having every possible combination of boot, shoe, and color on planet earth.

So what does this mean for us?

It seems pretty obvious, but it’s about focus. There’s very few companies producing product at the level of Apple. If it was easy to build customer trust like Zappos has, more of us would.

So—do we know where we stand? Do we have any of the three right?

Every good business has to be competent, but to have any chance of “enchanting” our customers, we have to be excellent in at least one—and striving to build all three.

In Adam’s mind, he felt that the presenters of the Sales/Marketing alignment session were pushing marketing back into a sales support role, one that he felt didn’t align with the purpose of today’s Sales 2.0 demand generation strategies.

I’ve never met Adam in person, but having read some of his writing at Silverpop, Left Brain Marketing, and on his own personal blog Propelling Brands, he has always produced insightful, thought-provoking content related to B2B demand generation. Thus, I was intrigued by his conviction that marketing and demand gen were not “sales support,” but a holistic, integrated set of processes that speed and maximize business development.

In stark contrast to Adam’s ideas is an article I read several weeks ago from BNet’s “Sales Machine” blog. In it author Geoffrey James forcibly decries what he sees as one of the biggest failures of marketing departments — that they “turned from service functions into a ‘strategic leadership’ role.”

James goes on, “Marketing geeks started showing up in product design meetings, pretending that they understood the customer . . . The problem isn’t that two co-equal groups [sales and marketing] need to work together. The problem is that marketing got uppity and forgot its place.”

Hmm, so which is it? Marketing and demand gen as a strategic, holistic business practice? Or a subservient lackey to the sales team’s needs and imperatives?

As Adam stated in one of his tweets, “In a Web 2.0 world, #B2B marketing must become the leader of a holistic demand gen process — not just tactical lead gen.” Ideally marketing is about producing “closable” leads, but it’s also about branding, educating potential buyers, creating valuable content, and generating “thought leadership” in the market — all of which ultimately produces better quality leads in the future.

That said, having straddled the sales and marketing “Great Divide” for nearly six years now, Geoffrey James’ words carried some weight with me. Too often marketers get away with living in a “measurement vacuum,” and the C-level doesn’t hold them to the same level of hard metrics as sales. Marketers want to be “creatives,” with all of the associated “freedom,” without being tied down to “mundane” lead qualification rates and cost-per-acquisition.

Yet Adam’s vision of what could be ultimately seems to be the best long-term strategy. If marketing and sales need to align, it’s precisely because of Geoffrey’s point. Sales reps can no longer chase after marketing-generated “rainbow sunshine”; they have to maximize every lead they get, every minute of time they have. If marketing isn’t producing quality leads, sales reps don’t have the luxury of throwing good effort after bad, especially now. And a good demand gen strategy, based on quality sales intelligence, analytics, and processes, will absolutely provide more and better opportunities.

More than anything, the question boils down to, Who has the final say in what marketing should be doing? The CMO, or the VP of Sales?

“Subservient” might be too strong of a word, but I do think that ultimately if marketing isn’t producing quality leads for the sales team, it’s sales’ job to get the course corrected. When it’s all said and done, the buck stops in sales, not marketing.

But one of his posts last week, “No knight, no shining armor,” struck a chord with me.

He states, “Does your project depend on a miracle, a bolt of lightning, on being chosen by some arbiter of ‘Who will succeed?’”

We know who these people are, don’t we, these “Arbiters of Success?”

Consider this: Oprah has turned books that were literally out of print back into best sellers simply by speaking the book title and author’s name on the air.

Obviously that’s what we all want in sales. To have some individual, some company reach down from their lofty place on high and say, “You’re the anointed one.”

And it’s incredibly easy to get caught up in this “Arbiter of Success” myth. That if only we could get that one, single enterprise account that suddenly our lives would change radically, because we’d instantly have the “street cred” to call into any CxO we want.

But if/when we “bridge the chasm” and move to the mainstream, it’s almost always because we’ve successfully built a foundation of client accounts that are happy and engaged with what we’re offering, not because someone anoints us. “The Big One” almost always comes from one of “The Many” who already chose you, are happy with you, and just so happen to be in the right place at the right time for you when “The One” asks them.

Having “18 fishing poles in the water,” she suggests, leads to a lot of “unfocused work for little return . . . We spend all of our time running up and down the bank checking to see if something worked or whether we need to rebait the system.”

Wise words.

I’ve said it before: In today’s marketing world, narrow but deep, not broad but shallow wins the day. For most small- to mid-sized businesses, better sales performance means conquering one vertical or market at a time, rather than trying to “dip” into a dozen different markets at once.

At the same time, sometimes a net is better than a pole. We’ve discovered over the years that there’s frequently a lot of overlap between markets/verticals in terms of process and need. The terminologies are different, the products they sell are different, but the underlying need to help them connect with their clients and prospects is the same.

Thus, sometimes it’s okay to use a net to cover more than one overlapping vertical, instead of trying to catch them one pole at a time.

But when in doubt, stick with one market, dominate it, find the next one, wash, rinse, repeat.

But a few months ago, sales productivity guru Paul Castain had some interesting advice in a blog post entitled, “For Those About to Rock, Show Up First!”

If you haven’t read the article, you might think that the title follows along with what I’m espousing—that we need to “show up first,” be the first person on the scene, be faster than the competition, etc.

In reality the point of Paul’s article wasn’t about being the first person to show up—the point was to show up at all.

Too often we barricade ourselves into a place where we know we can be comfortable.

Comfortable and barely productive.

We tell ourselves stories about how “These prospects aren’t really going anywhere,” “That cold call approach will never work,” or “They’ve never heard of us, why would they listen to me?”

We come up with every reason not to put forth the effort to get ourselves out there. Because it’s risky. There’s a chance we’ll be rejected. A chance that there’s going to be an emotional backlash because some prospect is having a bad day and doesn’t want to talk to us.

As much as I believe in the power of immediate response, a lot of the time in sales, the choice isn’t how quickly we show up, the choice is to show up at all.

Now let’s be clear—given the opportunity with a prospect, the best choice is to “show up first” and be the first one there. Research from MIT shows that immediate response to Web leads within minutes, combined with consistent, proactive follow-up increases contact and qualifying rates over 21x over waiting even a day.

Furthermore, most sales industry studies show that the first respondent to a new inquiry gets the sale between 30 and 40 percent of the time, because they typically create a sense of “loyalty” with the prospect. If there’s one change you could make today that would have immediate impact on your business, it would be to get in front of the prospect first, do it within minutes, and do it over the phone. You’ll have a serious competitive edge in your market.

But before you can “show up first” you have to “first show up”—and if you can’t manage that, all the sales advice and business strategy in the world isn’t going to help.

(One shot musket) X (lots of shots at the same time) = a better weapon.

And when Salesforce.com issued a press release last week discussing the integration of its recently acquired Jigsaw contact database into the Salesforce family of applications, it served as a fascinating reminder of how in business, the same concept applies:

An old, treadworn idea can take on new life simply by recombining, or re-imagining it from a different perspective.

In the interest of disclosure, our own lead generation team uses Jigsaw’s contact database, and we’ve been impressed with the results. Our dialer software is an incredibly powerful tool for sales and prospecting, but it requires as much good “ammunition” as our marketing team can provide. Without good leads, making prospecting calls becomes an exercise in luck, rather than sales skill and science, and Jigsaw’s database provides powerful ammunition for our dialer “gatling gun” that has helped our team qualify more leads. Jigsaw also continues to be a client of ours, using our PowerDialer for Salesforce system as part of their own outbound sales initiatives, so if I sound like a fan rather than an objective observer, forgive me.

However, setting my personal biases aside, it’s not much of a stretch to see why Salesforce would be interested in Jigsaw’s product—it gives Salesforce users access to a massive, on-demand contact database that can prove invaluable for prospecting.

But even more interesting is that none of Jigsaw’s “core concepts” are new ideas, they’re just old ones recombined.

At its bare bones, Jigsaw is a giant, online Rolodex—but it takes that decades-old idea and turns it on its head by making it hosted, user-generated, and real time. On their own, none of these ideas is particularly compelling; put them together and it’s a home run, as Jigsaw’s 14 million active contacts and $142 million purchase price attest.

Another example: when we built our PowerDialer for Salesforce software, we realized that by itself, a dialer is a good, but not altogether compelling tool. But mix a dialer with a management database and the results are dynamite. Our PowerDialer for Salesforce is the #6 most popular app on the Salesforce Appexchange, which we’re rightfully proud of—but the true value isn’t the dialer itself, it’s the synergy between the two elements (and now we throw in some Jigsaw “dialer ammo” and increase the synergy even more).

Ultimately, the real lesson of Jigsaw is that it gives us 142 million reasons to think about how the best ideas aren’t always “new” or “groundbreaking,” but a re-imagining of something that’s more than the sum of its component parts.

My initial thought was, “Good for them.”

My second thought was, “I hope they know how to successfully target local businesses’ technology needs to get the results they want from the initiative.”

I say this because one of the biggest challenges InsideSales.com has faced has been differentiating our offerings between enterprise and small-to-mid-sized businesses.

In a perfect world, we’d never have to have our sales reps working both enterprise and small business deals. We’d separate the sales team by deal size, and “big account” closers and “small account” closers wouldn’t ever have to cross channels.

The reality, however, is that sales reps often have to work both types of accounts—and in technology sales, one of the biggest mistakes reps make in this situation is that they fail to adapt to the differences in technology readiness of smaller accounts.

The problem typically reveals itself in two related ways:

1. Reps consistently overestimate small business’s ability to provide high-level technical expertise.

Especially in today’s market, where many typical business services can be easily and cheaply outsourced (payroll, legal services, tech support, CRM), many small and mid-sized businesses purposefully go out of their way to avoid potentially costly IT expenses—but the rep still approaches the sale as if the prospect had their own IT department standing by to take care of their every technology whim.

2. As a result of #1, reps fail to do an appropriate needs analysis, because they forget / don’t recognize how many other “touch points” their technology solution requires.

Because reps assume small businesses have access to technical expertise they don’t have, they lose sight of the fact of just how much IT infrastructure will actually be required.

For example, even something as seemingly simple as our PowerDialer system requires a correctly installed and configured phone system (which anyone in telecom will tell you can be a total crapshoot based on the type of equipment used), a PC with the right software and add-ons, a working knowledge of basic Web architecture, and a “scrappy manager” willing to mold the system to produce the best levels of results—and that’s just for a relatively basic technology that increases productivity while making outbound sales and marketing calls.

If the product or service is even more complex than that, it only exacerbates the problem.

]]> http://www.kenkrogue.com/best-practices/quick-sales-tip-dont-forget-the-gap-in-big-account-vs-small-account-technology-needs/feed/ 0 http://www.kenkrogue.com/best-practices/sales-management-disconnect-bad-performance/ http://www.kenkrogue.com/best-practices/sales-management-disconnect-bad-performance/#comments Wed, 07 Jul 2010 16:45:50 +0000 Ken http://www.kenkrogue.com/?p=526

I bumped into this post on The New Sales Economy, and thought it was a worthwhile read on inside sales best practices (thanks to Trish Bertuzzi for the link).

Using The Bridge Group’s data, author Chad Levitt asks nine highly relevant, incisive questions about the current state of professional inside sales.

I was particularly interested in one of the questions—”Is there a disconnect between sales management and front line sales reps?”—because in my experience, even the best organizations occasionally have holes, or disconnects in their sales process.

For example, when we did our 2008 Lead Response Management Study, we were shocked to discover that 45 percent of the top 500 companies in terms of Web marketing budgets didn’t even respond a single time to a Web-generated lead.

So why do disconnects like this happen?

Most of the time the root causes are very simple:

• Organizations simply don’t understand the value of the action they’re not taking (e.g., immediate response to Web inquiries = dramatic increase in qualified leads).
• There’s no incentive for someone in the organization to monitor the activity (i.e., because no one understands the value, there’s no expectation of accountability).
• The process they have in place is too inefficient to get the expected benefit (lack of automation, inability to get information to the parties fast enough).
• Changing the process seems like it “takes away” from “more important” activities (i.e., “We need our sales reps and managers selling, not managing leads”).

The bottom line becomes massive disconnect, sales reps not hitting quota, and managers griping about sales performance.

]]> http://www.kenkrogue.com/best-practices/sales-management-disconnect-bad-performance/feed/ 1 http://www.kenkrogue.com/inside-sales/bridge-groups-inside-sales-2010-inside-sales-continues-growth-trend/ http://www.kenkrogue.com/inside-sales/bridge-groups-inside-sales-2010-inside-sales-continues-growth-trend/#comments Tue, 22 Jun 2010 17:30:34 +0000 Ken http://www.kenkrogue.com/?p=472 First of all, let me be up front and say that Trish Bertuzzi is a colleague and a friend of mine, so take that for what it’s worth.

That being said, her company, The Bridge Group, Inc., recently released a fascinating research study on the state of inside sales organizations in 2010.

Even the shortened, “highlight reel” version on Bridge Group’s blog, found here, shows some keen insights into the direction that companies are going with their sales teams.

A couple of highlights:

• Per-rep quotas are up across the board—but the percentage of reps hitting their quotas is low (40 percent or less).
• The average number of calls to marketing-generated lead has dropped 43 percent. Think there’s any correlation to this and the fact that reps aren’t hitting their quotas? (Our ground-breaking MIT research study has some answers to why fewer phone calls = a bad, bad thing for sales teams.)
• Of the 115 companies surveyed, the average organization’s inside sales team had grown 280 percent since 2007, in terms of total people employed.
• 89% of respondents said outbound phone calling was a primary function of their inside sales teams.

What does it all mean?

Mostly what we’ve been saying for for a little while now, that inside sales is quickly going to become Inside Sales—no longer just an “outlier” sales department whose primary function is lead gen and nurturing, but will be the heart of the 21st century sales team.

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