Текст книги "Make Winning a Habit [с таблицами]"

Автор книги: Rick Page

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The time to start this process is in the interview itself, where expectations about how you want things done in your organization can be set early.

Talent Scorecard
Best Practice, Talent	Importance	Execution
	Degree of Importance (1 = low, 10 = high)	Agree but we never do this	We sometimes do this	We often do this	We do this consistently
Individual
We have written, tested profiles for each sales position.
We have questions, assessments, and an interview process that produce consistent performers.
We generally have the sales talent in the right roles.
We have sales performance reviews that include our sales methodology and are introduced during the interview process.
New managers are trained how to hire effectively.
We have a training curriculum, built on our best practices, that includes skills, opportunity strategies, and account management.
Opportunity Management
We have junior salespeople ready for territories when they open up.
We have a pool of candidates in our industry on which we can draw when we have an opening.
We have full-time internal recruiters.
We have a high win ratio in head-to-head competitions.
Account Management
Our customer service people consider themselves part of the account sales team.
We have sales reps and managers who have earned trusted advisor status with their clients.
Industry/Market
We have industry knowledgeable sales consultants available to our sales team.
We are recognized thought leaders by the customers in our industry.

SECTION III: Technique

CHAPTER 5: Technique

Never mistake motion for action.

Ernest Hemingway

Jim Dickie is a partner in CSO Insights, a sales consulting practice that surveys hundreds of sales organizations every year and publishes an excellent benchmarking study. In their 2005 State of the Marketplace Review of 1,040 firms, he says that only 23.3 percent of companies spend more than $2,500 per year training their sales forces. And this includes all types of training.

On average, this represents the expected value generated by one rep in about two hours. And yet 84.5 percent of reporting companies in the study stated that their sales methodology either had a noticeable or significant impact on sales performance. It seems that additional investment in training would yield significant returns. But only a third of reporting firms said that adherence to their sales methodology is either structured or optimized.

Inspect what you expect. Defining a formal sales process and/or investing in sales training has little residual impact if it is not reinforced and enforced. Higher quotas and higher quota attainment do not appear to be the result of defining processes, but of using them.[3]3
  Jim Dickie and Barry Trailer, Sales Effectiveness Insights—2005 State of the Marketplace Review (Boulder, CO: CSO Insights, 2006), pp. 164–165.


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In Hope Is Not A Strategy, we detailed two sales processes that are best practices in the complex sale: The R.A.D.A.R.^® (Reading Accounts and Deploying Appropriate Resources) methodology for winning competitive opportunities and the T.E.A.M. (Total Enterprise Account Management ^®) process for managing strategic accounts.

So that this book is fully self-contained, this chapter not only will review but also will focus on advancements, refinements, new developments, and the impact of the up-and-down economy on how salespeople sell in each one of these processes. Rather than address the R.A.D.A.R. process in detail, we will provide a summary here and an in-depth appendix at the end of the book. Because readers have asked for more detail on the T.E.A.M. process, we explore it in more depth here.

We will then focus on best practices in coaching the process and increasing forecasting accuracy.

R.A.D.A.R.®: The Six P’s of Opportunity Management—Summary

The R.A.D.A.R. process is used for managing complex sales evaluations by committees. It brings together the best ideas in consultative selling, competitive selling, political selling, and team selling. It focuses on selling strategic benefits to strategic buyers and technical benefits to technical buyers. This methodology allows salespeople to control the competition, politics, and the decision-making process to increase their chance of winning.

Additionally, R.A.D.A.R. is a dynamic planning process to help you develop strategies and plans early in the sales process and revise them late in the process, when things turn emotional and political. In fact, how well and how quickly you review and revise your plan is more important than the perfection of the initial plan.

1. Link solutions to the prospect’s pain – for greater value.

2. Qualify the prospect – for best resource utilization.

3. Build competitive preference – by differentiating your solution.

4. Determine the decision-making process – for driving strategy.

5. Sell to power – by finding the key to buyer politics.

6. Communicate the strategic plan – for effective team selling.

An opportunity management process is for winning competitive evaluations either in existing accounts or in new-name prospects. Investing in account management is done to make opportunity management either easier or unnecessary by winning the evaluation before it begins.

T.E.A.M.: The Eight “Ates” of Managing Strategic Accounts

When managing large, strategic accounts, you want to maximize the revenue, relationships, and “referenceability” potential based on the account segmentation you have determined is best for your company strategy.

The methodology that follows includes the best practices that we have seen and produces an account management map to effectively sell between the sales. These elements are not sequential but rather form a planning loop—which should be reviewed at least quarterly—and are often executed simultaneously.

Penetrate

Penetrating an account may be achieved in several ways: through winning the first piece of business in a competitive evaluation, as a result of demand-creation selling rather than demand-reaction selling, through another business partner or division, or through corporate headquarters that results in a client-vendor relationship of some sort.

Once you have penetrated the account and won the business, you have to be ready to deliver. The first piece of business is usually based on price, proposal, and product.

Demonstrate

Clients often take credit for successes and blame vendors for failures. You must demonstrate your value by going back to the client and documenting the effects of having chosen your organization and solution. What outcomes, benefits, metrics, and gains have been achieved by having used your firm in the first place? Clients rarely write a paper that describes how wonderful a vendor is. You have to do that yourself. But make sure that you can back it up. And if you haven’t delivered value, then that becomes your strategy – account repair.

Evaluate

Segmenting accounts for future investment is a critical step in account management. It’s a waste of time to try to partner or earn preferred partner status with everyone. Some company cultures are that of a commodity buyer. They always have been and always will be, and it will only change at the top. In this case, you need to evaluate whether you should invest additional resources in this account in an effort to gain preferred vendor status or should you stay on a transactional level.

I once had an opportunity to sell to Pepsi, one of our competitor’s best customers. They called me and said that they wanted a national account agreement with us. I was young and excited and flew out to meet with them. I asked them, “What does it mean to be your partner?”

They said, “You have to offer us the same discount your competitor offers.”

In return for the discount, I asked them if they would put us on a short list for future purchases so we wouldn’t have to fight for every piece of business. I also asked them to promise us a yearly meeting with their IT department. They said “no” to both. They wanted a 50 percent discount just for the privilege to compete.

I walked away.

We decided not to be their partner, but to go after other pieces of the business at the local level. As it turned out, our competitor didn’t spend much time on the account because the discount was so great. We stayed at the transactional level and did fine. If corporate couldn’t help us, they weren’t going to hurt us.

Radiate

If you decide to invest in growing an account, you need to radiate to power sponsors early in the game. Radiate from those who know you and like you to those who need to know you and like you – before the next formal buying process breaks out. Use one executive sponsor to take you to another. Ask each who else in his or her area/industry you can be doing this for.

Unfortunately, too many people either get too focused on delivery of the first project to radiate out or they havethe hall pass and get stuck in their comfort zone, calling on people who are already sold. In addition, sales “hunters” hurry down the road to the next prospect company because what is qualified for long-term account management is not qualified for a short-term quarterly-driven “hunter.” This is why “hunters” usually don’t make good account managers.

Collaborate

One way to elevate your value from commodity to strategic is to collaborate with the client on product or strategic initiatives. This requires working on issues other than just your product. It may mean logistics, marketing, codesign, new markets, integration, or innovation.

This is a very powerful model for raising value and has led to technology tools for product configuration, change orders, design, and collaboration through an entire supply chain.

I meet a lot of sales managers on airplanes. I remember flying into Minneapolis, sitting next to a sales manager for a paper company.

Of course, I asked him, “Isn’t it hard to sell a commodity like paper these days?”

He responded, “I have about 1,200 other salespeople in the commodity division. What I do is co-design specialty papers for clients with unique needs. I’m meeting with 3M tomorrow to collaborate on papers for products that we will both produce two years from now. The margins are much higher.

Likewise, later that year, I sat beside a carpet salesman, flying into Washington, D.C., who was meeting with Marriott Corporation to design special carpets for hotels they would build throughout the world over the next few years.

“It’s the only way we could get out of the commodity business,” he said.

Elevate

Elevate your executive relationships to trust and your solutions to the strategic.

ELEVATING TO STRATEGIC PAIN

A few years ago, one of our principals, Jon Hauck, was in a presentation with a sales rep who was presenting to the president of a major division of MCI and two of his lieutenants.

The lieutenants had prepared and coached them for the presentation, which was to last an hour. This was the big day! They thought they knew the president’s key issues, which could be addressed by their slick sales dashboard that would provide significant visibility into the forecast.

But just 20 minutes into the presentation, they could see that the president was tuning out. Though the rep was doing a very nice job, unfortunately, the only heads that were nodding were his and those of the lieutenants. Jon reached over, closed the laptop, and asked the president if visibility into the forecast was what really concerned him most.

“Yes,” he said. “But you’ve missed the issue. In the Telco space, forecasting revenue is not about when it’s sold, but when the switch is turned on. That’s what I need to forecast. I already know what my sales are going to be.”

With that, they immediately changed direction and probed a little deeper into his actual issue.

He cordially explained it, and they artfully created the linkage from the benefits of their solution to solving his true pain. This took about 13 minutes.

When they told him they could do what he needed, the deal was done. He told his sales operations manager to get with them, define the scope, and tell him how much to spend.

Two weeks later, they had a contract for over $500k.

STAY INVOLVED—DELIVER WHAT YOU SOLD

Early in the implementation of the State of Texas payroll system, Joe Terry, then the salesperson on the account, ran into a potential two-week delay to get the system installed because the client’s database manager was going to be on vacation and would miss the installation training class.

The next class was not to be held for another month, but the database manager refused to change his vacation schedule. At the project level, the project manager had chosen to simply let the delay stand.

Joe went to the deputy controller and explained the hidden cost of having the 30 people on the project team stand idle for a month while the project was on hold: $720,000.

That was a pretty expensive vacation.

The controller interjected himself in the process to prevent the delay, but just as important, Joe gained trusted advisor status with the controller. This access proved to be crucial as the project ran into the normal problems that can sometimes escalate out of control.

Many salespeople reach the executive level to get the sale and then leave the support team to work at the lower levels of the account. Sometimes the problem is actually the customer’s. By maintaining the access and relationships at the executive level, after the sale, Joe was able to save the customer from themselves without going over the project team’s head—he was already there.

He elevated the relationship to trust by staying involved in delivering what he sold and saved the executive from embarrassment.

HELP THEM DEFINE THEIR REAL PROBLEM

One client executive of Deloitte’s came to them and said, “We need to do something about increasing revenues.”

At the time, Deloitte had developed a process called a Value Map that allowed them to break processes into different areas. When they mapped the client’s problem to the Value Map, they saw that none of the projects the client wanted done addressed revenue at all.

The real initiative was that the client needed to cut costs. The client was asking Deloitte for the wrong thing.

When dealing with someone from a strategic standpoint, before you ask, “Are you doing the thing right?” you have to ask, “Are you doing the right thing?”

Dominate

Dominate doesn't mean manipulating the client. It means changing the client's decision-making process to give you the inside track as a preferred vendor. This will occur only because of lowered risk through superior performance and relationships. It means building company-to-company trust, in which the client doesn't have to put you out for competitive evaluations every time, or if they must, you get the inside track or high ground before it begins.

Inoculate

To inoculate means to provide solutions that are «sticky» – solutions that have a high switching cost so that moving away from your organization is not easy. This moves you out of the commodity relationship into a symbiotic relationship where you need each other.

What is qualified for long-term account management is not qualified for a short-term quarterly-driven «hunter.»

It also means building allies and listening posts for competitive intrusions because competitors will try to penetrate your account the same way you did in the first place. If you do account management well enough, you may not have to do opportunity management at all, or if you do, you are well established on the issues and have powerful people who prefer you before a formal buying process begins.

Refinements and Advancements

Coaching: The Key to Organizational Sales Discipline

Additionally, the salespeople who grew up in the 1990s are now sales managers. In many cases, we've taken our best salespeople and made them managers with little preparation. You can't afford to take two years to send them away to earn an MBA, and that wouldn't work anyway. In MBA school, they teach you how to be a vice president and how to analyze problems—not execute solutions.

What sales managers are really asking for at this stage are tactical skills and training for new managers on how to hire effectively, coach performance, weed out weak people, and develop future leaders. Otherwise, you are taking sales-people—whose strengths as salespeople not only may not work for them as managers but might actually work against them – and promoting them.

As managers, they then clone more salespeople with bad habits. At the same time, there is a whole new generation of salespeople out there who not only need the fundamental skills of selling but also need to understand the complexities of committee sales and major accounts.

Sales managers have an even more difficult challenge than others because the skill sets they need to coach their people are much different from what is needed to coach a deal, yet they are intricately entwined. The trap is that many managers become “inspectors” instead of coaches, doing deal reviews without asking the tough questions or adding value by improving the strategy.

Many sales executives are figuring out that they can no longer grow with the sales techniques that have gotten them to where they are now. While coaching deals might have been an option in the up economy, it is essential in a down or flat economy. The new managers who were salespeople in the up economy may never have learned how to really analyze and coach a competitive deal.

Today’s Economy Affects the Way We Sell and the Talent Pool

One discovery we’ve made since the last book is the impact of an up economy and a down economy on the way sellers sell and the way buyers buy. The change in the economy has had a significant impact on the talent pool for salespeople and managers and the competencies they bring with them.

In the boom economy of the 1990s, a lot of bad habits were allowed to continue. As Jim Dickie, of CSO Insights, says, “In a hurricane, even turkeys can fly.”

There were some poor role models among salespeople and managers and a lot of mediocrity in selling that still resulted in high sales because it was a seller’s market.

These poor selling habits came back to roost when the market turned down. Many of the “one-year wonders” could not compete effectively in the new, tougher selling environment.

Several things began to happen. First, in the consulting world, salespeople had gotten used to proposal lobbing—answering 10 RFPs, throwing them over the castle wall, and winning two, which was enough to keep people off the bench.

In the down economy, there was no longer enough business to keep consulting firms busy. Our phone began ringing off the hook as those firms realized that they needed to get more competitive and better at selling in order to win their share or even grow.

Many consulting firms began to develop sales processes, hire outside business developers, and focus on sales training. While making significant improvements, one challenge still remains in the consulting industry—and that is the lack of an overall sales hierarchy and sales management and accountability infrastructure, as well as a hiring profile that leads to a competitive culture.

The Lost Art of Prospecting

In the rest of the sales world, we began to get a lot of calls from sales executives who said, “You told us how to win deals, but we don’t have enough deals to work on in this economy. Our pipelines aren’t full enough.”

Salespeople had forgotten how to prospect because they didn’t need to for the past 10 years. Instead, they had let marketing handle this responsibility. They had forgotten how to pick up the phone and call a stranger or felt that they were past that in their careers.

At the same time, executives today are barraged by more people than ever trying to get to them—through e-mail and voicemail—so the clutter is even greater. We work with a number of firms to help them refocus their prospecting efforts and demand-creation selling: how to get to executives, how to do research before you get there, and how to identify their top two or three issues so that the chances of a voice-mail or e-mail creating a 30-minute meeting actually may have some chance of working.

The goal is to identify an executive who will sponsor a project and find a budget in the absence of an evaluation.

Procurement Grows Stronger – Commoditization

Another impact of the down economy is that procurement has gained more power. Procurement has always been a stakeholder, with greater strength in government than in the commercial sector. In the down economy, though, its strength has grown as efforts have increased to drive cost out of companies so that they can compete globally.

As a result, sales cycles, after the vendor-selection decision, have developed a second crucible for the approval cycle, which can be as difficult and lengthy as the process for winning the business itself. This means that after earning the business, we need to better equip our sponsors with a business case for the economic buyer.

The best practice is to become more proactive in this phase of the process rather than leaving it up to the client.

As the economy declines, companies focus on cost cutting rather than on innovation or revenue-generating activities. This has been reinforced by the global impact on prices from low-cost producers in Asia. As a result, procurement has more power, even over strategic purchases.

By nature, procurement is inclined to ignore value and focus on price. In fact, procurement managers are measured and rewarded for it. The end users are the ones who understand value. This is why procurement people try to separate you from them at the end of the sale. Commoditization is not only a sport to these people, it is also a way of life. Even when they understand strategic value, they are trained to ignore it – at least in front of you.

They will say such things as, "I don't know. You all look the same to me, but you're more expensive. What can you do for us on the price?" Left unchecked, these people will drive you to the door and then catch you by the coattails.

Also remember that there is a mirror image of client relationship management (CRM) for procurement people called supplier relationship management (SRM). Also called strategic sourcing, procurement best practices call for segmenting suppliers into different categories based on the importance of their value and the availability of substitutes.

This gives them four segments:

• High importance, low substitutability – strategic

• High importance, available substitutes – preferred vendor

• Low importance, low substitutability – manage risk

• Low importance, available substitutes – commodity

Many procurement people actually know the difference between buying strategic solutions and buying commodities, but they often pretend that you have less value to their firm than you do. Moreover, ERP systems for the bigger firms now provide procurement with information about global spending with your organization, as well as prices your firm has quoted elsewhere in the world. This is information the sales reps themselves often don’t have. And information is becoming available through consultants about what prices were quoted to other firms.

While they focus on price, you must continue to refocus on value. They will argue over thousands while you may be making them millions. Where do you find this value? From the initial discovery and linking your solutions up the value chain.

At the same time, the attorneys are paid to imagine the worst possible outcome – litigation – and many want to prelitigate in the contract. You need the powerful executives who will be using your products and services to explain what is normal risk, what can and cannot be achieved, and your competitive differentiators and their value. Without their involvement negotiated early in the sales cycle, you will find yourself in a battle of wits with lawyers and procurement—unarmed (see Figure 5–1).

In our negotiating classes, we teach that the best practice is to bargain early in the sales process, while you have something to trade, to get your sponsors to advocate for you with procurement. Why would they do this for you? Remind them that their future depends more on the success and risks of the project or product than on negotiated price—and that a degree of partnership will be necessary for the future give and take.

Remind them that the relationship includes the negotiation. And you can’t go from partnership to abuse and back to partnership—especially if you have taken all the margins out of the deal. If they don’t agree to arbitrate value on your behalf later, you might seriously consider not investing further resources if you see a price beating coming in your future. We have a commodity buyer who has called us every year for six years. We have fired the buyer as a prospect every year. We know the company won’t pay for value in the end. We spend a little time to see if the company’s culture has changed or if the company representative person has enough power. If not, we move on.

Understand your value, continuously refocus the discussion around it, and never go to procurement alone. (Although you actually may have to physically go by yourself, your sponsors should have paved the way and be in the background, supporting your value.)

Value-Based Account Segmentation

There are many ways to segment accounts in a market. Since you cannot and should not invest in all accounts equally, deciding in advance which accounts will yield the greatest return on investment of additional time and resources is obviously a key decision. Traditionally, among the factors usually considered are historic revenue streams, reference-ability, account profitability, and quality of the relationship.

In Hope Is Not A Strategy, we defined six levels of buyer-seller relationships that have evolved over the years (see Figure 5–2). On the right side of the figure we define six levels and roles of sales talent that can be committed to an account. We also identify six different types of buyers based on the way they buy.

For firms selling value-added solutions rather than commodities, a developing best practice is to allocate resources and define strategies based on the way the customer is willing to pay for value. For example, if you commit partnering resources to commodity buyers, you will partner yourself broke lavishing attention on firms that will still put you out for bid.

For commodity buyers and repetitive buyers buying noncompetitive add-on sales, the strategy is to make it easy to buy and keep the cost of sales low using the Web or telesales. For buyers who buy in competitive evaluations, “hunters” who can manage and win these political battles are a necessity. If you put your “farmer” up against their “hunter,” you will get creamed.

A solution buyer will allow you to collaborate, understand his or her needs, and co-develop a customized solution with a consultative seller. This obviously takes a significant investment of both time and talent. A demand creator can find a dormant business problem and create a vision of a solution. Then he or she finds a sponsor who is a change agent with enough political power to drive the proposal into buying activity.

A danger exists in investing these resources and valueadded strategies if you are then going to be shoved down to procurement, only to have the value stripped out of your deal. The gamble is that you will have gained enough differentiation through collaboration that you are uniquely qualified to provide the solution and that your sponsors have enough power to arbitrate for you with procurement.

Partnering is obviously a powerful company-to-company business model, but fewer than 10 percent of your candidates can achieve this special relationship, which must reach all the way up to the CEO level.

Size is not the issue. It’s a matter of their culture. It’s how the organization buys and sells value. You can judge it by the way the organization treats other vendors. If the organization doesn’t partner with anyone else, it isn’t going to partner with you.

ROI Alone Is Not Enough

In the area of pain, one observation we’ve made over the last few years is that in a down economy, return on investment (ROI) alone will not compel an opportunity to close. Many training programs that address selling to executives focus on the financial benefits exclusively by teaching how to calculate the benefits of your solution and then calculate a stream of cash flow and an ROI on that assumed cash flow.

One of our clients was selling new point-of-sale systems to Wal-Mart. In their eight-store pilot, they determined that, using their systems, Wal-Mart could save $2 million a year, spread over eight stores, or $250k per store per year.

But, since they didn’t link the savings to any strategic opportunities for Wal-Mart, it was no surprise the pilot went on for two years with no closure.

In the grand scheme of things, they failed to recognize that $250k per year per store wouldn’t get anyone’s attention.

For a company that does almost $300 billion a year, a $250k annual savings is merely a rounding error.

There weren’’t enough zeros in their value proposition to be compelling.

ROI is now a requirement to get in the game. It is no longer a differentiator but a satisfier. We can look at forecasts and tell you which deals are going to stall. Where your solution is not linked to compelling value (emotional and political pain associated with a powerful person), it is probably not going to close anytime soon. Logical arguments alone are insufficient. It takes a crusader – a powerful person inside the organization who wants it to happen – to get resources from other projects or money in the budget and assume the risks of any new procurement.

Jack Barr tells a story of when he was competing to win the Hershey account while at SAP:

“I was involved in a very competitive situation, selling manufacturing/order processing software to the Hershey Company in Pennsylvania.

My competitor and I were called in to present to the executive committee. Before the meeting, I went through my presentation with my internal coach to make sure it hit the mark. My coach told me that, as a company, Hershey was very focused on children.

Milton Hershey, the company’s founder, never had a formal education.To him, providing this opportunity to others was an important priority. He and his wife established a school for orphans and made sure that the town of Hershey had the finest elementary and secondary schools possible. Every year, millions of dollars are donated to the Hershey Foundation, which continues to fund the orphanage and schools.

‘Everything is about the children when it comes to Hershey,’ my coach said. ‘A percentage of our net profit goes to the Hershey Foundation every year. So before we do anything for the business, we always ask ourselves,Will it benefit the children?’

Based on that conversation, I added one slide to my presentation that figured how much our solution could save the company in inventory costs. I was able to show them how much this savings would add to their bottom line and how many additional millions of dollars could be donated to the Hershey Foundation, by the Hershey Company, as a result over the next five years.

Though my competitor’s solution would also have saved them in inventory costs, he didn’t present it with the same linkage to the emotional and personal benefit to the Foundation that I did.The feedback I got, after I won the deal, was, ‘Jack really understood what we are all about.’ ”

Someone (or a group of people) with power needs to see the vision and opportunity of how a solution can help his or her organization defeat the competition, enter new markets, regain and/or capture customer share, produce significant shareholder value, or provide a competitive advantage to the company.