Sales Force Automation (SFA) – How To Get Your ROI

I just had a chance to read “The 2009 Sales Automation Report: Best-in-Class Strategies for Increasing Returns on SFA Investments” by the Aberdeen Group. It is a good report that provides some good research and hard numbers to help companies understand what they need to do get the ROI they planned for from their sales force automation (SFA) investments. I recommend this report to anybody who has an under performing SFA system or is thinking about implementing some type of SFA system for their sales team. I would like to highlight here a few sections that made an impression on me.

Aberdeen uses a maturity model to distinguish Best-in-Class performers from Industry Average and Laggard organizations. Best-in-Class are the top 20%, Industry Average are the middle 50%, and Laggards are the bottom 30%.  The gap between Best-in-Class and Average organizations is staggering. Consider these numbers:

• Average percent of reps achieving quota:  Best-in-Class =  79%; Average =  59%
• Improved revenue year-over-year: Best-in-Class = 63% and averaged 9% increase, Average = only 35% and averaged a mere 1% increase.
• Convert more than 25% of leads in pipeline: Best-in-Class = 80%; Average = 43%

What a tremendous performance gap.  This economy appears to be separating the men from the boys.

Early in the report the Aberdeen Group identifies the Top Strategic Actions taken by Best-in-Class organizations versus All Others. I found this part of the survey interesting not because the percentages and statistics were so unexpected but because of the story they told when looked at together. Let me explain.

Here are the top strategic actions for Best-in-Class companies in descending order

1. Customize SFA/CRM to match business processes (47%)
2. Unify customer service, sales, marketing information onto a single platform (42%)
3. Unify fragmented customer/prospect data (36%)
4. Reduce the amount of time sales reps spend searching for relevant info (31%)

Now here is the stack ranking of strategic actions for All Others:

1. Unify customer service, sales, marketing information onto a single platform (50%)
2. Customize SFA/CRM to match business processes (40%)
3. Reduce the amount of time sales reps spend searching for relevant info (36%)
4. Unify fragmented customer/prospect data (31%)

The picture I see painted by this data is that Best-in-Class companies are focused on a sales automation implementation as enabling a set of business processes and prioritize that in their implementation. Because they are focused on the business process they comparatively de-emphasize the issue of saving time for the sales rep opting instead to emphasize adding value to what the sales rep is doing. In contrast, All Others are more focused on data and not emphasizing the business processes enough. Instead of engaging and adding value to the sales reps they work to appease sales reps and gain compliance with a relative emphasis on saving time.

One of the lessons learned, and re-learned by those who get involved in SFA implementation is that aligning to a company’s unique business processes is critical to success. This is a message that Best-in-Class companies have heard. Given the tremendous performance gap of Best-in-Class companies, can those who are not Best-in-Class afford to not listen to this wisdom?

Transforming Your Sales Team – It Is Hard Work

A few weeks back I attended a great discussion and presentation sponsored by the Kellogg business school alumni titled “Selling Strategies In A Challenging Environment”. The event included a panel discussion with four sales executives who answered questions about their efforts to evolve and transform their sales organizations. During the course of the conversation, a couple of  question came up about turnover – how much was there? had these sales leaders worked to reduce turnover?

Across the board, these executives had experienced turnover within their organizations, and a lot of it. Turnover in each case had exceeded 50%. I don’t think this is the answer that any of us wants to hear but I think it is realistic and a challenge that sales leaders who want to transform their organizations will need to face sooner or later.  It is not that individuals are or intend to be cut throat or malicious to successfully transform their organization, but change is hard and not everybody is going to make it. Consider:

The willing but incapable: Perhaps your transformation requires a different style of selling, a different market or product, a different level of executive conversation.  There is probably at least a few in your organization that may have the right attitude but just cannot, for whatever reason change their skills to fit in the transformed organization.

The capable but unwilling: These exist in every organization as well.  Skilled individuals who are not willing to make the change that the organization has asked them to make.

Right-sizing the sales team: Many transformation efforts include changing the structure of the sales organization.  Does an inside sales team need to be added? Is the size of the each managers sales team changing? Are two organizations merging and redundancies need to be removed?

A couple of conversations last week with family business owners, again caused me to reflect on how hard transformations can be. A third generation business owner shared his journey from running the family business to selling that business to an investor and to becoming professional management for another business owner. He shared how it had been impossible to layoff the overpaid, under-performing employee as the business owner but could recognize the need and take action when he was hired management. Transformation is hard, necessary perhaps for continued success but very, very hard.

This morning I read a blog posted by Buckley Brinkman about how difficult transformational change is.  He is in the process of making career changes and moving to a new city which has caused him to reflect (again?) on how hard change is. Buckley is a “Change Catalyst” and in the business of making change happen for companies that he works with.  Yet even this master of change, has to dig a little deeper to find the benefits that make the pain of change worth going through.

Read Buckley’s Blog Post on Change.

How have you managed challenging transformations within your sales team?

Assess Your Sales Organization – 8 Questions

I just read a GREAT blog post by Melissa Raffoni on the HBR Now blog. I have long believed that many organizations are leaving money on the table because they do not have a clear sales strategy or an effective sales organization to execute the sales strategy.  Too often as I talk to executives about sales and what they are doing to improve sales the extent of the work being done is to consider training or compensation and there are so many other elements that can to be considered and leveraged to improve the sales team effectiveness. Melissa in her blog considered the question of sales effectiveness and by asking good questions suggests some of the opportunities that are out there for companies to capitalize on.

Here are Melissa’s questions. Can your organization answer these questions?

1. “Okay, tell us again, what’s your value proposition? Why should customers choose you over the competitors?” It’s so basic, isn’t it? Yet, I continue to be amazed at how difficult it is to answer this question well. With the constantly changing competitive landscapes and customer needs, every company should take a second look at what they are pitching and why it still resonates today. I’m sure, for most, the value proposition needs a face lift.
2. “What is your sales process and how does your organizational structure map to it?”
3. “Do you think your overall cost of sales is where it should be? What makes you think that? Are you comparing to an industry standard or mapping to a projected financial model?”
4. “What key measures are you using to track sales effectiveness? Do you have a sales dashboard?” Is it cost of sales as a percentage of revenue, close ratio, sales person productivity? Something else? You can’t really optimize if you don’t know which lever you want to move.
5. “If you believe there are two ways to drive sales–increase the funnel and/or increase the close ratio–what are you doing to achieve those increases?”
6. “Is sales compensation driving the right behaviors?” Is there enough of a variable compensation component to make a difference?
7. “It’s a new world, how are you taking advantage of it?” Partners are willing to talk, new talent is on the street, customers are looking for high ROI offerings, social media is changing how people communicate. Are you experimenting?
8. “Do you have the right people?”

Check out Melissa’s entire blog post here: Eight Questions To Assess Your Sales Organization

Social Media Marketing for Business

I have been having a lot of conversations with my clients recently and with other professional service providers about the merits of social media marketing or digital marketing for business-to-business marketing. I am convinced that many of the new technologies absolutely can be used to reach business buyers.

David Meerman Scott has written a book that I have been reading and recommending: “The New Rules of Marketing and PR”. He was the keynote speaker at the BMA (Business Marketing Association) annual conference this summer. At the beginning of this video, which includes his entire speech he asks a few questions which are great to ask if you are reluctant to take the plunge or don’t see the need to move quickly into digital marketing.

In the last one to two months, have you, either privately or professionally,…

answered a direct mail advertising?

have you gone to mainstream media (newspapers or magazines) to research a product or service?

have you used the yellow pages to research a product or service?

have you used Google to research a product or service?

If online is where people are researching products and services isn’t that where you should be?

Watch the first couple of minutes of David’s talk and he makes his point quite eloquently.  If you have time, the full talk is worth taking 50 minutes to watch.

Building Relationships and Selling

“Lets be clear.”

A colleague recently forwarded to me some insights from his CEO about selling at the executive level. Selling your product or service and building a trusting relationship with an executive are not always compatible goals. Since so many of us are trying to do both and to balance the sometimes contradictory goals, I thought I would also share the observation with you.

“I met recently with John Doe, CEO and Chairman of a Fortune 500 company.

John started the meeting off by observing that we both had something to sell to each other, and that when we were in sales mode, we should just be clear and declare that’s what we are doing. Although we spent most of the meeting exchanging views on leadership, each of us did take some time to switch into sales mode, and we made it clear when we were doing so. John’s opening made it safe for both of us to do that. It also made it easier for us to have a useful and productive exchange of views on other issues because the overhang of sales was removed.

My takeaway: there is great power in simply declaring the obvious. Whether it’s asking for the business, delivering a tough message, highlighting a difference of opinion – these are all situations that call for great transparency. Too often, it feels easier to be opaque and indirect – John’s approach reminded me just how much frankness and candor can be the lubricant of a great conversation.”

Frankness and candor a great ingredients for building a relationship.  How do you use them?

It Takes Leadership: Flash Mob and Oprah

Okay, I don’t consider myself a huge Oprah fans but when this video started showing up on my friends Facebook posts I checked it out… it was cool!  Too cool to keep to myself, so if you haven’t seen it, check it out.

Of course the question that immediately comes to mind, and you can hear Oprah exclaim, “How did they do that?”.  The answer is that what appears spontaneous, didn’t happen without some careful planning.

Somebody hatched the idea and choreographed the dance. I’m not a choreographer, or a dancer but that seems like the easy part compared to figuring out how to get 20,000 fans to execute your dance, especially if you figure half of us have 2 left feet? Remember these numbers  20, 800, 20,000. It starts with teaching 20 professional dancers.  Then 800 ordinary people who liked to dance are recruited through Facebook and Twitter. The 20 professional dancers have a day to teach 800 amateurs.  These 800 volunteers go out into the crowd before Oprah’s show to teach 20,000 people.

20, to 800, to 20,000

The Black Eyed Peas and the Oprah team were able to create something that was really amazing and cool.  They couldn’t do it without 20,000 fans delivering for them.  But the amazing lesson for us in business is that they had a plan for leading and communicating. They knew what their goal was (20,000 fans dancing). They figured out a way to leverage a limited skill set (20:800: 20,000) and then they used technology – Facebook and Twitter – to find communities of dancers quickly and spread the word.

In your business, perhaps you don’t have 20,000 fans on Michigan Avenue but you have communities of customers, partners, resellers.  What do you want to accomplish with those communities?  How can you communicate that with them?  How can you find the influencers and get them to help spread the word into your crowd?

Accountability – To Improve? Or Humiliate?

I read the blog this morning by Rosabeth Moss Kanter at the Harvard Business School.  She was discussing accountability and the many challenges that organizations have with accountability and providing feedback. One line in particular caught my attention:

“In contrast, high-performing organizations use information to help people improve, by giving people abundant, timely, and helpful data about their performance on a regular basis, individually and as a group.”

How often does this perspective get lost when working with sales organizations.  Is it any wonder that the sales teams grows to hate a CRM system that has been implemented to capture met. Metrics that are used to find blame. And there is no engagement with the team, no understanding of how to use the metrics to support the sales team to do a better job.

I couldn’t agree with Rosabeth Moss Kanter’s comments more.  Metrics are fabulous and essential to improving performance but managers need to be trained on how to use them, how to coach their teams with the metrics. How to help engage the team and use the metrics to gain insight to improve and not to simply blame.

Read her full article:  Four Tips for Building Accountability

“What You Publish Online Is Who You Are”

I went to a great talk last night given by Gary Slack discussing the role and use of digital marketing in B-to-B marketing. He made a compelling case supported in part by a simple statistic:

92% of C-Level executives consider the internet their most valuable business resource.

This is over at-work contacts (87%) or trade publications (76%). The obvious conclusion (at least for me) is that businesses  better be where their customers are if they  want to engage with them. On a lighter note, Gary also made his point by sharing this clip from the BMA conference that was recently held in Chicago. The first man you see sitting in the chair is re-enacting a classic ad from McGraw-Hill to promote print advertising in its publications.  Enjoy.

Thought Leadership Marketing

I have over the years done a lot of work with consultants and other professional services providers. It is an interesting crowd to work with in the area of sales and marketing. Many scorn “sales” even while they recognize the need for “business development”. Marketing doesn’t necessarily get much respect either if it has been equated with advertising. On the other hand, “Thought Leadership Marketing” is a concept that is well embedded in many of these more conservative organizations. For years (decades?) they have recognized the importance of speaking engagements, of getting papers published and generally finding ways to be recognized as leaders in the field.

Now we live in an age where more and more business people are recognizing that adding content and adding value is a key component of getting your company noticed and engaging with potential customers. I keep hearing that CONTENT is important, whether you are doing an email marketing campaign, blogging or tweeting. Wait a minute? This is sounding an awful lot like a professional services firm “Thought Leadership Marketing” or maybe Thought Leadership Marketing jazzed up and updated for 2009.

Thought Leadership Marketing is an area that is changing rapidly, has some great potential and also some pretty big pitfalls for companies. No longer is it just about speaking engagements and white papers. These can still be, and should still be, an important component but there is so much more that companies can do these days! It is critical that companies integrate the speaking and white papers with a digital marketing campaign that leverages the web and social media. One of the big step changes that has happened is that people can now use the internet as a key research tool to educate themselves before they ever make a phone call. It is imperative that ‘thought leaders’ are engaged in the conversation online because you need to be there when somebody starts looking for information.

The challenge of course is to do all of this smartly. All that social media is ‘free’ until you add up the man hours it takes to participate and do it well. There is marketing automation software which do amazing things to help nurture prospects as they engage in a discussion but as with any technology – the business needs to know what it is enabling and trying to accomplish.

Are You Sales Phobic? The Less Glamourous Role For Entrepreneurs

I just came across a good article in INC about the role of selling for Entrepreneurs.  As many sales people know, so much of selling, and selling successfully is what goes on in your head.  Entrepreneurs, take heart, if this is not your favorite role.  And know that yes you can do it.  Isn’t it worth learning how, if it means being able to pursue your dream?

Are You Sales Phobic?