Sales Modeling

Discussing pricing with customers should be the sole-responsibility of Sales.  My suggestion is a pricing taboo which prohibits all but Sales to mention anything about pricing.  Nothing has the potential to convolute  and disrupt a sales cycle like errant pricing.  Consistency is one thing, but the big reasons are timing, control and leverage.  Savvy sales people intentionally withhold certain bits of pricing information until the right moment.  Executed properly, the pricing negotiation will be utilized to expedite and close business.

Best practice: sales rep owns all pricing discussions

Sandbagging, often used as a term to describe someone who under-performs, is synonymous with sales behavior.  Whereas the practice is frowned upon, it beats the alternative of over-promising and under-delivering.  At no time during the fiscal year is there more pressure upon sales quota attainment and forecasting accuracy than Q4.  Tension during Q4 reaches its apex which trickles from the top down across the enterprise.

Since a majority of companies adhere to a January-December fiscal calendar, yesterday probably marks the final day of Q4.  I presume congratulations are in order.  Hopefully, you avoided sandbagging as well as the potentially disastrous combination of over-promising and under-delivering.

Have a great new year!

Targeting large corporate accounts with enterprise solutions requires consensus of many.  The larger the company often the more lines of business.  However, don’t ignore your “blind spot” consisting of blessing from the technical side of the house.  Keep in mind; IT organizations these days (think job security) are not always receptive to 3rd parties who have technical consultants.  That being said, to be successful selling into a complex enterprise you need to know who’s who plus their influence.  An organizational chart seems the obvious answer where to start.

However, published org-charts are by default static and often dated.  What you really need is something more dynamic complemented with “inner circle” secret insights.  Therefore, per your “coach” at the executive level request an “internal” org-chart and review it with them.  These typically exist, but are not frequently shared.

Don’t believe me?  In a sales capacity, I once managed a global account relationship with 3M Company.  Although I would describe my role as a “program management office” my charter was sell, sell, sell.  By establishing “trusted” rapport with a then “rising star” vice president from the largest of 3m’s six business segments, I obtained an “internal” org-chart which thoroughly broke down all the pertinent players (with pictures) across 100+ business units.

A list of names would not have dramatically increased likelihood of success; however my “coach” highlighted specific areas of opportunity within strategic business units as well as corresponding executive sponsors.  With his help, propagating success was predictable and expedited.

File this under “intelligence marketing” and through this best practice realize the adage “time is capital.”

To what extent do your reps conduct “business intelligence” before and after leads are converted into opportunities?

Business intelligence can loosely be defined by qualifying as “good or bad” business.  Prospects (or shall I say “suspects”) should be subject to “scoring” prior to dedicating significant sales resources.  Many companies use A|B|C nomenclature to establish priority, for example.  Other variables such as “three-year revenue horizon” offer strategic insights.  Again, more goes into qualifying business than just potential revenue.  There is after all business that should be avoided.  Business intelligence should help expedite that determination.

Business intelligence also leverages myriad sources of information from internet search to annual reports and beyond.  In the current information age there is almost too much information.  Therefore, protect against being paralyzed by excessive business intelligence.  Used wisely it plays to your advantage, but otherwise not.

With current economic times, lean FTE resources place greater emphasis upon your coverage model.  Gone are the days of “overlay” models and double-commission compensation.  Divide and conquer has become the predominant approach.

On a positive note, this does hold people accountable at the individual-level and should by default reduce redundancies.

However, there are drawbacks such as the following:

1. Subject-matter-experts (SMEs) are hard to find since everybody has seemingly been thrust into a sales role

2. Non-sales-skilled individuals have “been thrust into a sales role” such as consultants

3. Team sales collaboration is mandated which is often less than harmonious when selling into a shared installed base

Divide and conquer is an intelligent design, but requires savvy sales leadership and company-wide consensus.

Can you identify your “raving fan” customers?  Do they receive special treatment and participate in advisory boards, product and modification feedback programs?  More importantly, are your best customers a source of plentiful leads?

The best “sales” movie beyond a doubt is Glengarry Glen Ross.  If you’ve already seen it, watch it again as nothing reinforces the trials and tribulations of being a salesperson like this movie.  It also highlights the perceived importance of quality leads…“I need the good leads!”

Too many unqualified leads and you have a problem; too few leads and you also have a problem.  In terms of “good leads” nothing compares to referrals from satisfied customers.  Referral leads have a greater likelihood of converting into qualified opportunities.

Therefore, your blend of lead sources should include referrals.  If your sales and/or marketing organization lacks a specific initiative in this area, go proactive!  Nothing prevents you from asking your happy customers “who do you know that could benefit from our (company’s) products and/or services?”

If you accept “time is capital” should you waste time leaving voice mails?

Of course, every sales model (you are unique) is different which may dictate phone vs. email vs. in-person.  However, keep in mind people buy from people and email is not especially personal.  In-person is most desirable, but you have to consider cost of sales.  Ultimately, you have to build rapport to move any deal forward and not many deals are consummated over email (sidebar: I am not a fan of Email Marketing strategies.)

Back to the question of voice mails…yes, leave a voice mail.  In fact, leave many voice mails.  More often than not multiple email messages (executed with professional integrity) to the same person will beget a returned call (i.e. positive results.)  A proper voice mail strategy enables savvy sales persons an opportunity to distinguish themselves and their company.  Subsequent voice mails can help establish “equal business stature” and impart knowledge and relevant experience.  Don’t get me wrong, your messages should be short and sweet; be concise.  If you sound the least bit desperate (i.e. used call salesman) you are done.  If you come across disrespectful, you are toast.

You will often reach the point where you must give up (trust your instincts) and accept “sales is synonymous with rejection.”  But, before you reach that point demonstrate professional persistence.  Leave voice mails which suggests you will keep calling until they return your call, but say it with humor and be light-hearted.  To your surprise and amusement this action will often foster a rapid response (returned call) with an apology and compliments to your tenacity.

I am skipping strategic subtleties, but you get the gist.  Be competitive; make voice mails a game where “losing is unacceptable!”

Importance of a well-structured price list can not be overstated.  Your price list consists of products and prices.  Therefore, discounting and related approval processes will be governed by your price list.  Smart companies have circumvented entire discounting impasses and ultimate fiascoes by building discounts into the price and messaging customers to the extent “discounts have already been applied.”  There can of course be some wiggle room here, but suffice to say smart companies have adopted derivatives of this approach to significantly reduce cycles related to contract modifications and time-consuming sales management approval cycles.

Consistency is key, as well.  Your customers will talk and if they discover inconsistencies it can be detrimental.  A related challenge is managing pricing across multiple channels.  One thing your customers will greatly appreciate and therefore correlates to loyalty is an easy to understand and easy to administer price list.  Given these times of tight budget controls any surprises related to price and subsequent investment are frowned upon.

An often overlooked aspect of pricing is how easy it is to explain for the sales person.  If your product mix is bundled, it is much easier.  However, if it is unbundled there is potential for upsell, later.  There are trade-offs to each approach.  Keep in mind a funny factoid about price lists: the more products you have on your price list the more you will sell.

Again, smart companies know this and often rename the same product multiple times.  For example, they may list the same product under multiple vertical solution-oriented names.  With today’s economy, many customers are contractually avoiding anything that smacks of multi-year commitment without language that permits early exit without penalty.  Therefore, your pricing should potentially reflect this current trend.

More complex sales opportunities (versus tactical, small ticket) demand “executive bridging” protocols and methodologies.  If nothing else, these exercises dramatically increase close rates.

How is this accomplished?

Step 1 (usually conducted by the sales person) is creating an organization map or matrix which is based upon an organization chart.  For example, matrix identifies titles, roles and influences which clarifies executive sponsor as well as ultimate decision maker (i.e. person who signs the contract.)

Step 2 is mapping executive sponsor(s) from your company with appropriate counterparts per step 1.  Essentially, the sales person will identify a corresponding executive sponsor from his/her company to interface as dictated by opportunity.

It is really quite simple, but elegant in execution.  But, there is an important mutual communication dependency.  It is advised to have sales person properly debrief his/her company’s executive sponsor(s) and then afterwards (be it in-person, phone, or email interaction) have sponsor reciprocate with debrief which states clear and relevant action items necessary for sales person to close deal.  Obviously, a proper debrief document which is concise and delivers articulate talking points and summary is critical to success.

The pitfalls of deploying CRM are well-documented and CRM failure rates are lofty.  Your marriage has a much greater chance of success.  However, there are ways to mitigate what are for the most part are well-understood risks.

For example, measuring ROI is highly correlated to CRM project success.  Setting and measuring return on investment creates tremendous focus and discipline before, during and after implementation.  ROI should be measured at sequenced intervals against consensus-based performance baseline.  Having been privy to literally hundreds of CRM deployments, I am consistently amazed at how many companies fail to even consider a practice which includes establishing a baseline and tracking improvements.

Another best practice is proper executive sponsorship with strategic imperative alignment.  For example, messages from senior executives enforce accountability and motivate change which correlates to “all-important” user adoption.  Executive sponsors should articulate specific business rationale such as increasing market share and achieving annual revenue targets.

Lastly, small “pilot” projects will provide insights to ensure success upon broader rollout.  Again, setting MBO-type milestones will create positive energy and generate momentum for holistic CRM effort and galvanize bottom-line impact.