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Have You Ever Asked Yourself, 'Is My Company Experiencing a Sales Breakdown?'

Written By: Dave Stein
Published On: February 25 2003

Introduction

No matter how strong or experienced you are as a sales professional, sales executive or smaller company CEO, if the infrastructure supporting your sales effort is not in place, achieving your revenue targets will be like attempting to climb Mt. Everest wearing running shoes.

One of the challenges strong sales people face is being part of an organization that is stumbling along from a sales support perspective. If you are one out of let's say 25 reps and six of them underperform, regularly losing to competitors, resorting to end-of-quarter panic discounting or selling business that will result in unhappy customers, the impact on you will be substantial. You'll get dragged down in many ways, from many directions.

Sure, some sales reps will underperform no matter how strong the team supporting them is, but even the best reps and sales executives will never achieve their full potential unless all the pieces are in place.

I should mention that a lot of hardware, software and services are still being acquired. Sure, the economy is down, there are fewer opportunities and the average deal size is lower than in the past. But companies with a strong sales operation are finding and closing business and building a solid and loyal customer base, their long-term asset for the future.

Here are a number of the key components of an effective sales operation. If your company is not tuned up and ready for action, you'll be left exposed, under-supported or find yourself wasting your precious time on unproductive activities. You'll be the victim of a sales breakdown.

1. Marketing Support of Sales

  • Approach to target market, pricing and fee validity. There is no question that most people who sell technology will tell you that oversupply and a down economy have contributed to what they see as a buyers' market. With that in mind, here are a few questions: Is your company approaching its market correctly, today? Can it specifically state what that market is and the market's key characteristics? Has it validated the demand for the unique value your products or services provide? Are your prices and rates relevant to your market's demands and conditions?


    These are tough questions that need to be asked and answered. Pointing a sales force in any direction without answers to those questions is irresponsible and fruitless.

  • Clarity and consistency of value articulation. Once Marketing validates what the marketplace needs, they'll have to provide messages that state what general value your products and services provide to that market. The next step is to provide the sales organization with the templates, tools, and processes so they can create a value proposition that is unique for each customer at a specific point in time, based upon a comprehensive situation assessment.

    If you attempt to sell generic value, your products and services will be commoditized and you are thereby inviting your customers to buy on price.

  • Effectiveness of press/analyst coverage. Is your company, however large or small, doing what is required to assure that it has the name recognition and reputation necessary to advance, not inhibit your selling efforts?

    Ask sales people to describe a key role of marketing and some will say, "I want the prospect to know the name of my company and have a good impression of us when I make first contact." Since advertising is expensive, it can easily be relegated to a nice-to-have during tough times. But press and analyst relations are a must. If your company is ignoring or under investing in this area, you are working at a disadvantage.

  • Lead generation activities and initiatives. Is your company generating sales leads for your products and services so that your time can be spent properly planning and managing the opportunities? If not, it needs to. And by the way, the glut of solutions on top of the limited time that IT and corporate executives have these days requires new levels of creativity and persistence in generating leads. What worked in the past just doesn't work the same any more.

2. Opportunity Management

  • Sales planning methods, practices and processes. Does your company employ a standard sales process? If not, performance consistency across the sales team will be limited. Personally, I don't care which sales process a company uses—so long as they use one. Enterprise software and services is a tough sale. I would challenge any sales professional to plan, execute, and measure the progress of two or more complex sales campaigns without writing it all down. (It's been said that the dullest of pencils is far better than the sharpest of memories.) A lot has been written about this subject. Suffice it to say you are at a serious disadvantage if you don't approach each sales campaign with a unique, competitive, strategic sales plan. If management doesn't require you to adhere to a formal (not necessarily complex or bureaucratic) process, you'll benefit from doing that yourself.

  • Qualification processes. Does your company provide you with a set of current and relevant qualification criteria that reflect not only the prospect's situation, but also the prospect's market conditions and the impact of those on buying tendencies? This is so critical that I am listing it separately from the point above. Business conditions are changing so rapidly that only constant scrutiny of a prospect will alert you to situations that may threaten—on enhance—your ability to secure an order.

  • Forecasting methods and effectiveness. Do consistent forecast shortfalls leave you in the position of having to heavily discount for your company to make its numbers? If the forecasting methods that are employed by management are not effective, the results can often be catastrophic.

    I should mention that forecast failures are often not that at all, but rather the result of unachievable targets set by someone outside the sales organization.

    I was called into one company a few years ago to help them retain a few key salespeople who were on their way out the door. It seems that management parachuted into a number of deals just before the end of the quarter, offering severe discounts to make up for other forecasted business that wasn't materializing. (Goals were set too high in my opinion.) The salesreps were frustrated, had been disrespected in front of their customers and to make matters worse, lost a substantial amount of commissions they worked smart and hard to earn. It wasn't rocket science to fix the broken process, including a reassessment of the sales targets.

3. Sales Tools & Resources

  • Corporate presentations. Have you or your team been provided with an updated corporate presentation targeted for the industry, level of audience, and business issues your prospects face? If you are wasting time creating (rather than customizing) PowerPoints, you'll need some assistance from Marketing. A good corporate presentation should be leveraged like the valuable capital it is. The best sales professionals use it to gain access to executives, to differentiate themselves, to build credibility, and to prove to prospects that they are worthy of serious consideration.

    Just to be clear, it is the responsibility of the individual sales rep to deliver that presentation in a believable, professional, and compelling way.

  • Collateral materials. Do you have collateral materials that articulate the value to be gained by the different constituencies within your prospects' organizations, by industry?

    The days of generic market materials are long over. If I am a CIO, I need to see a different view of your product or service than users or the VP of Manufacturing. And I don't want to see a brochure written for process manufacturers if my company makes barbeque grills. Each person to whom you give a piece of collateral material needs to understand the value that your roduct or service will provide to them in a clear, concise, and compelling way.

  • Competitive tools. Does your company provide you with up to date and relevant information about your competition—at the company, product, and rep-on-the-street levels—and exactly how you and your team should use that information? So many sales professionals are underprivileged in this area. The companies that sell most effectively have resources responsible for gathering, analyzing, and disseminating competitive intelligence as well as—and this is important—recommending specific strategies and tactics to use against those competitors.

  • Customer proposal quality and value articulation. Are the proposals you provide to your prospects of sufficient quality to be credible at the board level? Proposals are being seen and approved by people much higher in customer organizations than in the past. If a proposal provides too much detail (use an appendix under a separate cover), doesn't reference the customer's specific high-level goals, challenges, and strategies and doesn't provide a strong business case or ROI assertion, it might very well not be taken seriously.

  • Customer case studies and testimonials. Do you have a list of customer testimonials that you can provide or talk to during your sales campaign? Do these testimonials highlight the benefits your customer has received from your products or services?

    Has your company made the investment in gathering and producing case studies to provide you with the additional credibility you need to establish your company as a contender? If you work for a smaller company this is mandatory. Customer testimonials are a key factor in solidifying your prospect's vision of success.

  • Resources. Does your company provide company executives, domain and technical experts, and administrative help to assist you in winning business? It is the rep's job to lead a "virtual sales corporation" whose goal is to win a specific opportunity. As part of that job, they are responsible for deploying those resources prudently as specified in your documented, strategic sales plan.

4. Sales Execution

  • Process improvement mechanisms. Does your company employ a feedback mechanism so that what is learned from each win or loss is used to build a more effective operation? Lost business, drastic end-of-quarter discounting, and forecast slippage are all fixable. But first you need to understand the conditions under which they happen. Is it against specific competitors, or with certain sales reps, or for certain size deals? Those questions and many more need to be answered and addressed now, before the problem gets worse.

5. Ongoing Account Management

  • Transition from pre- to post-sales. How smoothly and efficiently does your organization transition a company from prospect to customer at the time of sale? Some companies employ the hunter-farmer model, where new account reps bring in the deals and then pass control on to ongoing account managers. In other cases, the rep that sells the deal owns it forever. Both models can work and both can fail. If your company hasn't figured out how to manage that transition it will be difficult to build happy customers, solid references and predictable revenue streams going forward.

  • Customer base classification and approaches. Your company must be able to generate ongoing revenue by providing continuing business value to selected segments of your customer or client base. All your customers are entitled to receive the benefits as represented when they bought them. However, some customers will, over time, provide more long-term value to your company than others. Having a way to identify those customers and a long-term approach for meeting their needs and requirements will result more business at less cost. Short-term opportunism doesn't work well, as in, "Let's see how much we can get out of the base, since we are looking at a revenue shortfall this quarter."

Summary

I've presented a number of key components that must be in place to support an effective sales operation. By no means is this list intended to be complete. However, if you, as a sales rep or sales executive determine that any of these components are not in place or are not being effectively handled, you owe it to yourself and the very survival of your company to formulate and present a business case that will be heard and acted upon.

About The Author

Dave Stein, an expert in selling and marketing enterprise software and services, has over 20 years executive management and consulting experience in technology. He provides vendors with insights and strategies around ethically positioning the business value that their offerings provide, especially in fiercely competitive situations.

On the user side, Stein guides buyers through the specific vendor-caused risks associated with the acquisition of enterprise software and services in today's environment of hypermarketing and hyperselling. He assists user companies in effectively mitigating those risks.

Dave Stein has sold to and consulted with companies from $10 million in sales to the Fortune 100 - in 48 of the 50 states as well as more than 20 countries.

THE STEIN ADVANTAGE, INC.
69 Woodland Road Mahopac,
NY 10541
Phone: +1 (845) 621-4100
Fax: +1 (845) 621-3723

e-mail: dave@thesteinadvantage.com

 
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