• Barbara Manley’s Op-Ed On Improving Sales Performance

    Sharing thoughts on sales, sales management and sales leadership. How do you generate sales effectively, efficiently? How do you translate strategy into your operations? What does execution excellence mean for B2B sales, business development, and marketing? What are the trends?
  • December 2019
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Forecasting – Finding a Better Way

The new year is off and running and for most sales organizations that means that they are chasing a new target. After struggling through 2009 this probably also means that everybody from the sales reps to senior executives are pouring over their forecasts and asking that fundamental question, “Do I have confidence in these numbers?” I thought I would take a few minutes today to share some thoughts about forecasting and what is or is not included in those numbers.

I wish I could provide a simple golden answer as to how to do forecasting.  I’ve seen lots of approaches taken by my clients, and most have some good logic behind them. Lets start with a couple of questions?

  • Why are you generating a forecast? Do you need to estimate quarterly earnings to the street? build operational plans? need to track the performance of your sales team? or all of these? Why you are completing a forecast and what you need to be able to do with the information has a big impact on how you approach the process.
  • How long is your sales cycle? Recognize that if you have a short sales cycle, under 30 days for example, you are forecasting in an environment that is very different than if your sales cycle is, say, 90 days or longer.
  • What data are you capturing in your CRM (customer relationship management) or SFA (sales force automation) system?  If you have a CRM system, there may be an opportunity to “give something back” to the sales team by automating more of the forecasting process and minimize the effort that the sales reps need to make.

A discussion about forecasting could go on for days.  I won’t.  Let me instead suggest a couple of different ways of generating a projection.  I leave it to you the reader to consider how you might merge each of these approaches to your own company.

Sales Roll-up Forecast

Almost every sales team does some version of the rolled-up forecast.  Sales reps submit their forecast to managers, often with some reference to what they will ‘commit’ to as well as what ‘upside’ potential exists. At each level, there is another level of scrutiny, and a similar evaluation until the total forecast reaches the executive team.  Often a necessary process but filled with emotion and optimism or conservative caution.  There is a lot of art in this process.

Historical Trend Forecast

This is the simplest approach for most businesses but is also probably the one that offers the least insight into current market conditions and your team’s performance.  As the name suggests, you generate a forecast by looking at historical trends for what ever period you are forecasting.  For example, how does this period compare to other periods during the history of your company.  “4th quarter is always 40% of our business.” “The second month of our quarter is always 25% of the quarter.”  With these references, you can project the next period.

Automated CRM Forecast

I have seen this done less but it can be very successful.  One of my clients regularly had their CRM analyst develop a forecast independent of the sales team’s rolled-up forecast. The analyst consistently generated a more accurate forecast than the sales team without any knowledge of what was happening out in the field.  Generating a forecast this way didn’t provide an opportunity for inspection and dialogue within the sales team, but when it came to projecting revenue to stakeholders, this was the way to go.

How do you approach forecasting?  What are your biggest challenges?

Sales Effectiveness – Lead Generation

I saw some recent study results which suggests that lead generation is a top priority for sales organizations in 2010.  Given the state of the U.S. economy this is hardly a surprise.  As the saying goes, “A rising tide lifts all boats”, and well, a sinking tide, shows you were the rocks are.  I’m sure a lot of companies are discovering that they are not as good at lead generation as they thought they were.  Here are some thoughts on what a successful lead generation effort might look like pulled from experience at multiple companies as well as reading others thoughts on the subject.

1.  Process development and sales collaboration are  necessary first step.

Whatever you are planning to do to generate leads for your sales team, an understanding of the process is critical to success.  The last thing you want, as you invest more in developing leads, is to have a process that breaks down in the middle.  Without a process you are apt to drop leads somewhere in the middle and reduce the impact of your efforts.  Make sure that the entire sales team is engaged and involved. If the sales team isn’t on board with how leads are being generated and qualified, they are much less likely to follow-up on the leads they are given.  Then we are back to the problem of leads falling through the cracks.

2. Augment leads with as much additional data as possible

As leads are generated, marketing and sales should work together to determine what additional supplementary data can be provided about the lead that will help the sales reps to qualify the lead as quickly as possible.  The more supplementary data can be provided the higher the conversion rate is likely to be.  Not surprisingly, this again needs to be a collaborative effort between sales and marketing to balance the value of different types of information with the relative cost and difficulty of gathering that information.  Consider including data like: contact details, customer information, relationship history, marketing or industry analysis.

3. Understand and develop an approach for lead nurturing

Lead nurturing is the concept that not all leads generated by marketing are “ripe” to be handed off to sales. It is a concept that is being discussed more as companies use the technology available to them today for different lead generation tactics. This may include email campaigns, direct marketing, websites, webinars and white papers.  Not every contact who expresses interest in a webinar is ready or wants to talk to a sales reps.  Lead nurturing provides a way to cultivate the relationship and foster the lead until it is ready to be handed over to the sales team. By having a process for lead nurturing, you will improve the quality of leads being handed over to sales, AND be developing a future lead.  Now isn’t that beautiful.

There is a lot of hard work to be done in the months ahead while the economy continues to languish.  Strong lead generations practices will serve companies well now and in the future.

What is your digital age? What is the digital age of your customer?

I did some research this week on differences and similarities of how people are using technology and more specifically social media. I thought I would share some of this data with you today.  Some of it is sort of obvious and intuitive, and some of it starts to shed a little light in to the different habits that people have.

Wells Fargo completed a survey which I thought provided some good insights.  Their survey digs a little deeper than many to uncover different levels of understanding and comfort with technology.  Based on this information they categorized people as “digital novices”, digital teens”, or “digital adults”. What is the digital age of your customers?

  • 92% of people have a cell phone, only 22% use an internet-based phone service like Skype
  • 80% of respondents pay bills online, only 38% manage a 401K or IRA online
  • Perhaps most interesting… the most ‘adult’ group of the survey was thirty-somethings, not twenty-somethings (who are more focused on entertainment)

For those of us in the B2B sales world these insights from Forbes may be on interest:

  • 64% of C-level execs conduct 6 or more searches per day to locate business information.
  • Sources of information that the C-Suite finds valuable:
    • Internet = 92%
    • At work contacts = 87%
    • Personal networks 73%
    • Newspapers 54%
    • Magazines 57%

Slack Barshinger did a study commissioned by Google which found among other things.

  • 77% of small business owners use search engines to find business suppliers
  • 80% find search engines to be the most effective tool for finding suppliers

And finally, LinkedIn passed the 55 million user mark in October 2009.  It took them 477 days to get their first 1 million users and only 12 days to get a million users this past October. At that pace they should be well past 60 m users by now.

Okay, so these are some interesting statistics but so what?  I wish I knew.  Social media marketing and digital marketing are all the rage, and rightly so.  People are changing how they use technology and how they gather information so how companies communicate their marketing message better change too.  What I am not hearing a lot of discussion about though is how all these changes in the online word is impacting the way things are done in the offline world – i.e. the world of sales. How is (how will) the C-Suite using online tools to manage their personal and professional contacts? How does that impact the buying and decision making process and therefore by extension the sales process?

CRM Success? or Failure?

“What does it take to make my CRM project a success?” I get asked this question all the time by executives that I meet.  They are usually either, (a) contemplating a new CRM (Customer Relationship Management) implementation or (b) trying to figure out how to make an already implemented system more ‘successful’. My blunt answer isn’t what they or you want to hear. Most companies, after all these years, still don’t see the success they are looking for.

I’ve been selling the promise of CRM for years. I’ve made it my career and I’ve drunk the cool-aid as well if not better than most. The results vendors and consultants will quote when trying to close a deal are indeed dramatic. And some, a few, companies will get those results, but not most.

Why? Because our eyes are bigger than our stomachs. Consider this statistic: 42% of CRM functionality is unused. This is the first challenge. Most CRM software contains more functionality than a company needs or can use.  Time and time again, companies choose a CRM solution with capabilities they couldn’t imagine when they started the process. Just think about the other tools on your desktop.  How much of the functionality do you use in MS Word? in MS Excel? Do you even know what the functionality is that you are not using?

CRM requires a tremendous amount of change for an organization. It is a change in behaviors and expectations. Too often it requires more administration for the sales team without a clear benefit from the effort. Most organizations are not up to driving the change that is required over the duration of a long period of time.  Other priorities start to intrude.

In a recent survey of several hundred companies nationwide regarding their focus on customers revealed that two years ago, the percentage of companies that put themselves in the category of “extremely” customer-driven was 48 percent. Today, it’s 63 percent, and looking into the future two years down the road, 81 percent say their organizations will be “extremely customer-driven.” (NFI Research) If this is true, it should help companies improve their success rate with CRM as a stronger ‘customer-driven’ culture aligns well with CRM.  But I am skeptical.  As they say, we cannot all be above average.

So what hope is there for the rest of us, being companies of mere mortal capabilities? Be realistic and honest about what your company is ready for. Perhaps be a little more than honest, be skeptical – you’ll end up closer to realistic after being wooed by the various CRM solution vendors. Second, make sure you know what will make the biggest difference. If you are only going to implement 60% of the solution, you want it to be the right 60%.

Sales Management: Selling to Your Sales Team

Last week I had the pleasure of attending a Business Marketing Association (BMA) lunch where John Maples, vice president, sales, PepsiCo/Quaker Foods and Snacks spoke about Pepsi’s business-to-business sales and marketing efforts. It was an interesting talk and insightful to hear how their business-to-business efforts with convenience stores, Starbucks and sports franchises are coordinated with their direct to consumer marketing. After listening to John for a while one could hear that there was a definite trend in the way Pepsi approaches its businesses sales, which is to say that they do NOT leave it up to the power of their brand, but they do a lot of what John described as “a best practices spreading” approach.

Each instance of this “best practices spreading” had a similar plot line. Pepsi had a goal and some ideas for achieving that goal, one example might be selling oatmeal through convenience stores. The next step was to find an outlet that was willing to work with Pepsi. With this partner, they could test the idea and measure the results. Only after there were measurable, quantifiable results, could the real selling begin. Armed with these results Pepsi then shared the results with other outlets to explain the benefit of the new program and concept, in this example, increasing sales by having oatmeal beside the juice and coffee. In this way, Pepsi was able to test each concept and scale quickly because they had the insight and the facts to support their proposition.

Not only is this a great example of using data in business-to-business sales but it is a great example of how to approach transformation of a sales organization, whatever you are trying to get your team to do.  When I work with sales teams, I am frequently working with sales managers, or those outside of sales who are entirely frustrated with trying to get the sales team to change their stripes.  When I have been successful it has been from following a plan very similar to Pepsi’s.  Start by understanding how your change is going to impact the sales team.  How is it going to help them with their goals?  Find somebody, or multiple somebodies, to test the concept on. Measure the results.  Learn from the process and make adjustments if you need to.  Then and only then, when you are armed with the results, go out and ‘sell’ the new approach to your team.

Strengthen the Relationship Between Sales and Marketing – Part 3: Build the Process

So you want to strengthen the relationship between Marketing & Sales?

  • Step 1:  Establish and build agreement on common goals, then…
  • Step 2: Define roles and responsibilities, finally…
  • Step 3: Build the process for working together

I discussed the importance of establishing common goals and defining roles and responsibilities in my last two posts and consider these initial steps to be the hard work of building a strong foundation.  Step 3: Build The Process, is now about doing the hard work of building the house on top of that strong foundation.  The framework for building this house has three components to it.

Outline the process / operating model

Simply put, we need to define how the work gets done. What steps will be taken and in what time frame? Think of it as a checklist.  On NPR this week there was an interview with Dr. Atul Gawande during which he discussed his research about the power of checklists in manufacturing (Boeing), aviation (citing Capt. Sully who landed the USAir flight on the Hudson River last year) and operating rooms. Having a process, a checklist, can help in almost any situation by clarifying for everybody involved what needs the happen in what order.

Establish metrics Establishing metrics goes hand-in-hand with building out your core processes. How are you going to measure your results? How are you going to set expectations and know if you met them? How are you going to identify what is working and what is not? When you are determining what to measure, keep your overall goals in mind.  You metrics should related to your goals.  If you are trying to expand your customer base, you would be better off to measure the number of new customers instead of say revenue per customer.

Close the feedback loop Finally, make sure that marketing and sales continue to provide feedback to each other. To be successful this is going to be an ongoing and iterative process.  If you are going to be successful then you need to build a close-loop process. What this means is taking the results from the work that you have done and using it as feedback into the next iteration. Capture your lessons learned, you success and your failures pour this information back into Step 1.  Revisit and refine your goals, your roles and review the processes in your business.

Good luck with growing your business in 2010.  Making continuous small changes everyday in how you work together will add up to a big difference.  Even if you think things are going well.  Isn’t this a great time to take a moment to talk to you counterpart and validate that you share common goals.  It’s a great place to start.

Strengthen the Relationship Between Sales and Marketing – Part 2: Defining Roles

Last week I started a conversation about how to improve the relationship between sales and marketing because I am of the humble opinion that these two functions should be working collaboratively within your organization.  It can be dizzying to try and define what marketing is versus what sales is.  I’ve heard every definition imaginable and most are feasible, although not necessarily in agreement with each other.  In Part 1 of this series, I talked about defining goals as the starting point for a solid working relationship.

Today, I would like to talk about DEFINING ROLES AND RESPONSIBILITIES

Okay, so perhaps you are sitting there thinking, “Hey, what’s the big deal?” And, in part, you are right.  It isn’t a big deal to define roles and responsibilities for about 80% of what you do. It is sales’ responsibility to call on customers, to get contracts signed.  It is marketing’s responsibility to develop and execute marketing campaigns, to work with creative to design promotional material.  The challenge is that last 20% or so where collaboration and cooperation make all the difference.  It is the last 20% where things are no longer black and white but some shade of gray.

  • What is marketing’s role in helping to generate and qualify leads?
  • What role does marketing or sales play to define what a qualified lead is?
  • What is sales responsibility to act on leads? or provide feedback on the leads being provided?
  • What is sales role in strategic marketing decisions? And, is sales committed to taking time out of the field to participate?
  • What is marketing’s responsibility to go out on customer calls with sales to understand the customer and the sales reps world better?

It is this last 20% that will define how marketing and sales will work with each other.  When was the last time that you had an explicit conversation with your counterparts to discuss this?  Did you come to an agreement?  Did you write down your agreement so that you could reference back to it later?  Did you commit to what you agreed to, or slide back into old habits after the meeting?

Both establishing goals and defining roles and responsibilities are about opening up the lines of communication.  Good communication is the foundation of most solid relationships. Sales and Marketing are no different. Good communication is a simple concept.  Achieving good communication, and reaching agreement on these areas is not at all simple.  In fact, reaching agreement may require major negotiation.  My hope here is to provide a logical progression of topics to cover, so that progress is made and negotiations do not stall out in a total impasse.

Coming next week, the final installment: “Strengthen the Relationship Between Sales and Marketing – Part 3: Build the Process”