Sales Forecasting Carefully, or beating Target?

 

 

Sara Catz President and CFO of Oracle reports:

http://www.morningstar.com/earnings/earnings-call-transcript.aspx?t=ORCL&pindex=2

“Now, to the guidance, and I want to remind you that last Q2 new license and cloud revenue increased 18% in constant currency. So this will be a very, very tough comparison. Though our pipelines and potential transactions for the quarter look really very exciting, our sales leaders remain very careful about what they are forecasting to us.”

The phrase that catches my eye is

“our sales leaders remain very careful about what they are forecasting to us.”

“Sales leaders, very careful, forecasting”

The word ‘semantics’, has become associated with ‘imagined’ differences, we hear the expression

“It’s just semantics”.

However, if I apply double-indexing semantics to Sara Catz’s words,
a depth of meaning appears which should be of interest to ALL Salespeople,
but specifically to the Sales Managers and Salespeople in Oracle.

 

• “Sales Leaders”,

Catz is putting the responsibility, and accountability, for Sales Forecasting squarely on the shoulders of Sales Leaders.

• “Very Careful”,

last year, Catz attributed a ‘missed forecast’ to Sales, further she attributed it to the recruitment, on-boarding and under-performance of many thousands of new Sales people, who did not perform as “Forecast”. Hence, she is NOT looking for Forecasting to “remain” [optimistic], but is in fact signalling that “careful” means “conservative” forecasts.

• “Forecasting”,

in the context used is also “targeting” as it is
performance compared with last Quarter (Q2),
and has inherent risk, as expressed by Catz, in her use of “Constant Currency”,
when her Global Market is has a Volatile Currency uncertainty.

Catz is addressing the Investment and Analyst Community,
her audience expects to hear certain messages,
Risk Management, Growth, Returns,
so she inserts “safety” through “Very Careful”.

 

 

 

 

 

The stock performance was good after her report,
so her message, to her audience, was on song.

 

 

 

 

I am curious about the EXECUTION of her message INSIDE Oracle.

“Sales leaders, very careful, forecasting”

We have over the last 40 years, repeatedly looked at Sales Forecasting.

WHO owns the forecast?

HOW should it be done?

WHAT is the forecast used for?

The consensus from meta-analysis is that Forecasting should be owned at the level closest to the forecast event.
And, I am sure that Forecasting ‘starts’ at the Oracle Sales Executive level.
Should Sales Executives forecast “Very Carefully”?

In Sales, a very careful Forecaster is known as a “Sandbagger”.
They only forecast Rain, when it has already started raining!

The opposite  of a “very careful” forecaster is a very ‘careless’ forecaster, in Sales we call them “Dreamers”.

Every Lead is already a Sale!

Sometimes they are cynically optimistic, they present “Huge” pipelines, stuffed with opportunities which never happen.

The belief that a ‘Big’ pipeline protects poor performance, this is ‘reckless’ behaviour!

“Careful”, cautious, suspicious, precise, judicious, cautious or shrewd;
these are just some of the ‘semantic’ differences using the word “Careful”.

But when you add “Very” then the meanings can bounce from:
‘Actual’ if she used it as an adjective, to ‘Extremely’ if her use was an adverb!

Let’s take the desired case scenario: Catz’s words urge the Oracle Sales force from
Top [Leaders] to Bottom [Sales Executives] to forecast accurately, to be precise, not dreaming nor sandbagging.

Let’s imagine that by so doing, Oracle delivers a good set of results, much as the Forecast. Success.

Or, was it?

Let’s take a poor case scenario:
Catz’s words urge the Sales Leadership to be “conservative”,
they believe that it is better to be accurate than bold.

Meeting Forecast, becomes more important than exceeding Target!

Care to ensure that what you forecast actually happens, then your forecast becomes the “reality”.

The illusion of “See, I told you so” has never been Sales Success,
“better than expected”, “Upside”, “BOLD”, have always been hallmarks in Sales, Corporate and Sporting success.

I have discussed Sales Leadership as a function of their “Maturity”, through the lens of Forecasting and Targeting

http://brianmaciver.blogspot.com.es/2011/01/stretch-sales-targets.html

ORACLE’s results, and its stock performance, are dependent on Good Forecasting,
but they are equally dependent on PERFORMANCE in the Market and likely future performance.

 

It’s about Expectation AND perceived Performance.

It’s about how well you did against how well you ‘might’ have done!

Managing Expectations is OK, but Managing Maximum Performance is more important!

I believe that Catz and her Sales leadership will have to communicate a clear message to their Sales force about what “our sales leaders remain very careful about what they are forecasting to us” really MEANS.

The Sales Leadership will need to turn this into HOW we want Sales Executives to behave,
as neither dreamers nor Sandbaggers, but bold and right!

Big Data, Big Numbers are made up from individuals and their actions,
getting your Sales force to do what is productive, not just careful, is in these days of BIG, quite a challenge!

Let’s just review how tough any forecasting is,

never mind ‘very careful’ forecasting!

http://brianmaciver.blogspot.com.es/2010/10/sales-forecasts-are-just-estimates.html

 

.

Sales Managers and Poor Performers

 

Making 2014 the Year of the Sales Leader

Two other blogs, were published on this:

Mike Kunkle of Richardson http://bit.ly/186uW3G

and Dave Brock of Partners in Excellence http://bit.ly/19YQJA1

Both are worth reading and thinking about.

I add mine as a a contrast to both, as Sales Management is, in many ways, all about Managing Performance

 

HOW you deal with poor performers will
define your performance and your future as a Sales Manager.

© 2013 Paramount Pictures. All Rights Reserved

 

The fastest route to Poor Performance, by a Sales Manager,
is to focus on poor performing Sales People.

This is not a casual observation by a casual observer, it is a causal analysis by a trained observer!
We have studied the roots of the failure of Sales Managers for 30 years,
and one of the recurring causes of failure is a focus on poor performers.

We use a bell curve to ‘identify’, or as an ‘indicator’ of Poor Sales Performance.

The axis that we use varies.

 

 

 

At the simplistic level it is
Current Sales Performance,

at the Revenue Generation level.

This is easy to measure, and is acceptable to discuss at C-level.

 

But, really it’s a WHAT chart.

What happened,
not “WHY is it not happening?”

 

 

 

 

We then, put the Sales force through a FIVE level filter, five, separate, charts:

 

Activity,  Skill,  Knowledge,  Sales Attitude and  Sales Strategy.

            

 

We “score” on the ‘standard nine’ scale, where 7 is the lowest ‘desired’ score,

1, 2 and 3 is poor performance,

4, 5 and 6 is needs improvement,

7, 8 and 9 is performance to excellence

Simple Performance Turn-around can be achieved if, for example,
ONLY Activity is wrong, or low, this is ‘fixed’ by Management Control and Supervision.

Great Sales Management careers have been launched on the back of Diary Management!

 

 

 

Sales Strategy, is also a relatively straightforward fix.

If a competitive situation, changed product/market, or Customer shift has NOT been incorporated into strategy formulation and execution then,

Sales Management can re-direct.

 

 

 

 

 

However,

When the Poor Performance is associated with low levels of Selling Skills,
poor Product/Market knowledge and/or wrong Sales Attitude, this then is a Business calculation.

The time/effort ‘Cost’ of fixing the performance problem,
weighed against the likely Revenue ‘Benefit’ derived from fixing the problem.

Unlike the first two areas, Activity Management and Strategy Formulation and Execution the Sales Manager does not ‘own’ Lack of Skill, Lack of Knowledge or Poor Attitude.

 

The problem ‘owner’ is the Salesperson.

 

Salespeople, NOT their Sales Managers,
are responsible for their own Selling Skills,

their Product/Market knowledge and their Sales Attitude.

Fixing these problems is the primary responsibility of the individual Salesperson,
the Sales Manager has a secondary ‘supporting’ role.

These problems affect your personal employability, now and in the future, take responsibility for them!

In order to ‘earn’ Sales Management support, Poor Performers must demonstrate progress with their Sales Skills, increases in Product/Knowledge and improvement in Sales Attitude. The time and effort put into fixing these poor sales performers primarily comes from them, not from their Sales Managers.

Sales Managers, effective high-performing Sales Managers, will be far too busy working with the top and high average performers to make investment is Sales poor performers who are not prepared to invest in themselves. 

There is no ‘Pareto formula’, to define effective time/effort usage by Sales Managers. 

There is no magic formula, no ‘right’ way.  There is only contingency, finding the right answer to your given situation, your people, their poor performance.  You will need diagnostic skills to find the cause, then flexible Leadership skills appropriate to giving the best outcome, Directing, Coaching, Supporting and Delegating.

 

 

The “Learning from other High Performers”, is a decision which calls for good judgement on the part of the Sales Manager, and the willing cooperation and coordination from the High Performer. The poor performer MUST have great Sales Attitude, high energy and a real willingness to learn.

The Hollywood construct is “Master and Padawan”, the Jedi Apprentice. In Sales tradition it was “the bag carrier” and the Senior Salesperson. The success of this is not solely dependent on the Senior’s Selling Skills, Product Knowledge and Sales Attitude as well as the ‘trainees’ observation skills, but also on Senior's Training and Coaching skills, which are very, very rare!

In science ideas are tested for their fit with reality.

In business ideas are tested for their profitability in the Product/Market.

In Sales we MUST do both, fit with reality and demonstrate Profitability!

If you reduce it all to an axiom:

“Treat Poor Performers differently, and appropriately!

  Or, like a leaking ship, you will both sink.”

 

 

Further reading on Managing Poor Performers:

http://brianmaciver.blogspot.com.es/2012/01/coaching-challenger-selling.html

http://brianmaciver.blogspot.com.es/2010/10/over-boarding-poor-performers.html

Simple Selling and Complex Selling

 

A Theoretical Foundation in Selling

 

This was the definition I used for 
twenty  years, it was based on Rackham’s research. Which he published in
‘Major Account Selling’, to distinguish between ‘simple’ and ‘complex’ Selling and then describe differences in successful Sales Behaviours. 

The multiple factors, in effect,
could be applied to almost any sale. 

 

 

In other words: ALL Selling was Complex!

By 2000 it was obvious that a Multi-factor definition was not working. 

One by one Factors which were not helpful or important were disappearing. 

First to go was “Competitive Situation”, this was not helpful in Contract Renewals with NO Competitor present, But the Sale was NOT simple! The “Long Sales Cycle” was a repetition of many meetings, in fact some Long Sales Cycles were Simple Selling, which just took a long time!

“Decision means Major Change”, yet equally Minor Change with high Impact, could have a similar effect.  The amount of change often reflects the ‘Motivation to Change’, rather than a difference in Selling Behaviour.  “Long Term Partnerships”, let’s take out the word “Partnership” and just go with Long Term Seller/Buyer Relationships. 

We worked with the final two factors “Committee Decision” [not an individual] and “The Solution is Complex” from about 2000 until 2005, as it met most of our needs.  However, in 2005 we were offering some highly “Complex Solutions” in the Voice over IP and ‘Hosted Voice’ arena, and Buyers had NO interest in the Complexity, rather a desire for simplicity. “I don’t care how it works, Does it DO what we want done?”

in 2005, we wrote the final Definition of Simple and Complex Selling:

 

Selling is a Communication Process, an Interactive Competence,
which becomes increasingly COMPLEX as the number of Participants INCREASES.

 

 

 

 

One to One
is Simple Selling.

One to Many, or
Many to One,
is Complex Selling.

Many to Many is
VERY Complex Selling!

 

 

 

Observing Sales Behaviours in One-to-Many Sales Calls the level of INTERACTIVE COMPETENCE required for Successful Selling increases alarmingly.  Even the Observer is stretched identifying Behaviours. 

The Salesperson MUST have a Sales Behaviour Fluency many times higher than selling One to One.

If two Buyers means Complex Selling, then what if there are MANY Buyers?

 

A Sociogram of Big Telecom with a Major Bank Customer may look like this! 
Some Sales were simple Products, some were Complex Solutions. 
Some Sales had a Sales Cycle measured in minutes, some lasted for more than a year. 
Some were Major Changes [Telephone and Internet Banking], and
some were ‘Partnership’ projects with shared risk. 
There was a constant Competitive threat. 

 

Yet, the determining factor was Selling one to one or one to many!

 

 

 

 

 

 

Today in 2013,
this definition of

Simple and Complex Selling
is crucial

 

 

 

 

Predicting Future Sales Performance

 

MacIver’s Algorithm

 

The most accurate predictor
of Future Sales Performance,
and it is FREE, my gift to you.

 

It can be used to Recruit and Select, to Promote

or to Identify your Future Top Sales Performers.

I am prepared to state that this is more accurate
and has higher validity than any Psychometric ‘test’
or any Recruitment Agency.

 

 

This simple three-factor algorithm will substantially out perform any and all ‘Tests’,
and will do at least as well, but usually far better,
at predicting Future Sales Performance than any Expert.

a.) Average (%) of Annual (actual) Performance against target (last five years.)
                (Reduce the total by twenty per cent for each year less than five years)

b.) BEST Quarter’s (%) MINUS WORST Quarter’s (%) Sales Performance (last five years)

c.) Current Sales Velocity (%)   (Last quarter´s Performance against target)

EXAMPLE:

Average last 5 year Annual performance = 87% 

Best quarter 137% minus worst quarter 48% = 89% 

Current Sales Velocity = 115%

 

(A times B times C) 87% times 89% times 115% = 89%

   

Then, 89% is the PROBABILITY of this Candidate achieving Target in their first 12 months; redo figures to predict year two when year one actual figure is achieved.

 

Thanks to Jeff Michaels of Intended Results (@IntendedResults) for encouraging me to Blog this.

 

Update 04/2013:  I have received a number of direct comments, and I am always happy to receive them here as well.  Based on this feedback and in particular some of the questions I have to caveat the USE of the Algorithm, not the Algorithm, but its use!

Possible fundamental limitations of predictive model based on data fitting

1) History cannot always predict future: using relations derived from historical data to predict the future implicitly assumes there are certain steady-state conditions or constants in the complex system. This is almost always wrong when the system involves people.

2) The issue of unknown unknowns: in all data collection, the collector first defines the set of variables for which data is collected. However, no matter how extensive the collector considers his selection of the variables, there is always the possibility of new variables that have not been considered or even defined, yet critical to the outcome.

3) Self-defeat of the algorithm: after an algorithm becomes an accepted standard of measurement, it can be taken advantage of by people who understand the algorithm and have the incentive to fool or manipulate the outcome.

Wikipedia

.

Managing Sales Attitude for Success

 

Attitude, “Positive” Sales Attitude
is one of the five “leading indicators”
of a Sales person’s likely Sales successes.

We know this from repeated research.

 

Attitude is linked to motivation and if all other things are equal,
the more motivated Salesperson sells more than the less motivated Salesperson.

Adverts for Sales jobs frequently ask for “positive” Attitude,
every job Candidate claims to have it, but how do you measure it?

There are several Validated, and Reliable (in expert hands) Psychometrics,
which give insights into a Sales person’s likely attitude
to their Product, Company, Manager, Customers and to themselves.

Here is a simple exercise, which is a good indicator of a Salesperson’s Sales Attitude.

1. List the five most important tasks you completed last year.

2. Now, put them into two groups:

· Group 1 Tasks you did to avoid negative consequences or to receive promised reward.

· Group 2 Tasks you did because they had meaning for you or your company in the longer term.

You can now “measure” their engagement, the number of Tasks in Group 2;
which will give a percentage of their optimal Motivation, intrinsic motivation.
Sometimes this is called “Self-motivated”.

The number of Tasks in Group 1 which,
were sub-optimal motivated by external events of Punishment or Reward
show their Ratio to External or Manager-based Motivation.

During interview this exercise,
and YOUR subsequent inquiry,
will give insight into how the Salesperson works.

It applies equally to your current Sales team!

Repeat the exercise with every individual.

Diagnose their level of Engagement, by using the two lists.

The more Group 2 items the Higher their engagement,
they have the Positive Attitude to do the Task.

The more tasks they have in Group 1 the less engagement they have,
the more variable their Commitment and their Attitude.
Then, the more work YOU will have i.e. to manage them by punishment and reward!

 

As a Sales Leader, the Sales Manager’s role
is to connect the Salesperson’s work to meaningful outcomes.

The lowest form of motivation [the least effective] is Carrot and Stick; people are not Donkeys.

Understand and share the meaning of work, FOR yourself,
WITH your Salespeople and FROM your boss.

“Cutting stone is just poorly paid, hard, exhausting work,
  but, being part of building a great building that then brings meaning!”

 

.

Putting the Challenger Sale to Work (Five)

 

A USP is NOT
a Challenger Insight

 

The CEB research clearly shows that Challenger Insights work.

However, few Salespeople are actually using them!

 

Let´s review briefly, what USP´s are:

“The Unique Selling Proposition (a.k.a. Unique Selling Point, or USP) is a marketing concept
that was first proposed as a theory to understand a pattern among successful advertising campaigns
of the early 1940s. It states that such campaigns made unique propositions to the customer and
that this convinced them to switch brands.

Wikipedia

Marketing produces USP´s by the gazillion:

Faster, bigger, smaller, easier, cheaper, and on and on!

HOWEVER, do they work?

  USP:

The Gas ‘free’ car

 

 

We have known for years, in Sales, that USP´s DO NOT SELL.

Rackham’s Research published as SPIN Selling devotes a chapter to it (Ch.9)

“The Myth and Magic” of the Initial Benefit Statement
and the USP in “Opening the Sale” is just another rod on Sale’s back!

“It’s the fastest on the Market!” offers the novice Salesperson.

“We do NOT need more SPEED, we need more reliability,
and faster usually means LESS RELIABILITY!” Retorts the cynical Customer.

This really is stepping off on the wrong foot,
from push “benefit” to Customer Objection in less than 10 seconds!

“We do not want your USP of speed;
we believe that might damage the reliability that we really need.”

The brochures promote SPEED, the adverts promote SPEED,
and the Call-centre is calling trying to book appointments for salespeople to talk about SPEED.
It is another failed Marketing Campaign, but Sales is going to get the blame.

“They didn't sell the USP: SPEED!” laments the CMO.

 

Opening the Sale refresher
http://brianmaciver.blogspot.com.es/2012/02/three-great-selling-skills-that-really.html

 

How do we construct these Challenger Insights?

From the MARKET, not MARKETING!

Get together with some customers, product specialists and ….

OK some marketing people
(but have an equal number of Salespeople present).

DO NOT let Marketing seize the White Board
or write-up the minutes of the meeting.

Have a Customer Engagement;

see their world through their eyes.

Ask Customers to design your next product,
or to modify your existing products.

Find out where “Speed”, size, or cost etc. is on their priority list.

From the meeting develop and test a variety of “insights”,
this is the beginning of Challenger Insights. (And the end of the USP! fiasco)

 

.

Three Times when a Salesperson MUST involve their Sales Manager.

 

1. Before a “walk-away” from an Opportunity

 

2. Before “No-bidding” an Opportunity

 

3. Before recommending a Competitor for an Opportunity

 

 

 

 

Over the last 3 years, all of these issues have arisen with BMAC Clients

and what was missing was the conversation between the Salesperson and the Sales Manager.

 

No Salesperson is allowed to take these decisions on their own, ever!

 

These three Decisions are Joint Decisions where the Salesperson “recommends”
but the Sales Manager “decides”.

 

This more than just a “sanity check”, it is good Business practices. Taking the Decision on your own is not only Bad practice; it can lead to your dismissal.

 

 

1. The walk-away.

Learning when to walk away from an Opportunity is a key skill common to all Top Sales performers (and Professional Gamblers).
It’s a complex formula of Cost/Reward based on you “Likelihood to Win” the deal. If the odds are stacked against you, then it makes no sense to throw good money after bad. The common failure of Poor Sales Performers is to waste huge amounts of time on “No Hopers”, because they have a near empty Pipe line!
The walk away review with the sales manager should involve a Joint Customer visit, to confirm the facts. A bold move is to inform the Customer of your intended walk away and your reasons for it. Again, this should happen if it needs to, but it should not happen on a whim! 

Sometimes we have to change the Salesperson and reallocate the account.

2. No-Bidding an opportunity.

This should be done during a “special” Opportunity review. It is based on risk/reward, pursuing “no-hopers” COSTS our Company money for no reason, no reward!  Bids are expensive processes, the biggest cost is the other business lost while using key resources on the bid! It is reasonable to expect a win possibility of better than 50% before bidding an opportunity. The no bid special review occupies the 20%-50%, range. Below 20%, why are you bidding? The no-bid decision should be reviewed with both the Manager and the Customer. Strangely, the no-bid announcement can have a dramatic effect on the Prospect, increasing the likelihood to win greatly!

Again, the Sales Manager may have to reallocate the opportunity to another Salesperson if there is a particular need for Skill or Knowledge which would bring the opportunity to a “likely to win” status.

 

3. Recommending a Competitor.

(This would be a Firm which competes with you directly in the same Product/Market, not a Complimentary Product which you don’t have!) For many of my Clients this is NOT allowed. However, during the last decade, the rise of the “Trusted Advisor” has led to this occurring more and more often. There are two reasons, why salespeople may recommend a Competitor. The first is in a reasoned way, in the hope of winning TRUST and credibility with the Prospect which will pay off in a big way later. The second reason is because the Sales person is CRAZY. Both are really good reasons for NOT taking this decision on your own, but involving your Sales Manager to review your recommendation and for the Manager to agree or disagree, i.e. The Sales Manager makes the final decision. A key question which must be discussed internally is “What if I am wrong?” The consequences of giving your Competitor Account access AND your endorsement may have devastating and long term consequences. If the Competitor performs well, you could find yourself “locked-out” for years; if your Competitor performs poorly you may share the blame, thanks to your Recommendation! Lose, lose!

BMAC Consultants believes this is ALWAYS wrong.
If you are using it as a “technique” to gain trust, ultimately the prospect will realise you are manipulative. If you are foolish or crazy then you are likely to lose your job.

 

DON’T DO IT.

No-bid, or Walk-away.......
come back to fight another day!

 

Further thoughts on difficulties with Trusted Advisors:

http://brianmaciver.blogspot.com.es/2011/12/dont-trust-trusted-advisor.html

 

.

Selling is life or death.

I have been asked by a Sales Manager who I mentor,

"What’s the best way to sell life insurance?"

 

In the old days it was

“Reverse a hearse into their drive way, and then let them smell the flowers!”

 

Life Insurance was sold on a “Peace of Mind” Value,
“think of how your loved ones would be able to cope after you’re gone”. 
The Policy Holder inevitably, paid in but was not paid off.

I had identified with the Sales Manager his staff member with most success. 

She was a New Hire a Graduate Trainee, selling the product well. 

What was her secret? 

“I focus on women with new babies!” 

Every time a Pram comes in I ask
“Have you thought of increasing your own and your husband’s life cover to include the new baby?”

The most frequent answer is “We hadn’t thought about it yet.” 

Then, I give them a short overview on Fatal Illness and Life Cover. 

She was having the most success in the office!

There are a couple of really useful points. 
When “Change” happens we are more open to other “Changes”. 

Responsibility is just as good a “motivator” as fear. 

AWARENESS is the first stage in any Buying Process. 

Spot the market, prepare the offer, give the insight,
construct the Value and let the Customer Buy.

We reviewed “CHANGES” in people’s lives that might provoke an Insurance review, we found 7. 

We ran a short workshop for five staff,
on identifying changes and when identified how to introduce an “Insurance Cover Review”. 

The most successful "change" now is “empty nesters”,
over-insured Parents whose children are no longer dependant on them. 

The product?  
A reduced cost policy which meets their current reduced needs.

 

Insurance really is a cradle (or Pram) to grave business. 

So too, I think, is Selling!

Ignoring the Sales Forecast and missing Targets

 

The first Monday of the Month is when we “review” last month’s Sales Performance at the weekly Sales Review. It’s a bigger than normal audience with “guests” from Marketing, Tech Support and Finance. We were honoured today by the attendance of the CFO and the CMO, the meeting was chaired by the CEO.

Why such an illustrious audience?

Because we have missed two consecutive Month’s Sales Targets and
we are NOT on track to hit the quarter’s Target!
This gets the attention of the Investors and the Board.
There was a smell of fear in the room.

They say wolves sense the fear of their prey and that’s when they start howling!

What the wolverines in the room didn’t know was the Sales VP and I had spent three days preparing for the encounter. We knew it was going wrong three weeks ago.

The early signs were “weak signals” an unusual Discounting Campaign from our prime Competitor announced in December, launched on Jan 1, was beginning to bite.

Despite Sales giving Both Finance and Marketing early warning, the signals were ignored.

Marketing decided they were NOT going to respond, Sales were told to SELL VALUE not discount.
Along with the Price Discounts, the Competitor offered great financial terms,
90 day payment terms with installation and setup charges delayed for 12 months.

Their offer was keen pricing and easy payment terms,
both very attractive in these “Frugal” times.

At the First Monday Monthly Meeting in February we had Presented Marketing and Finance with a list of 14 identified “at risk” Sales Forecast opportunities. They had stonewalled and not responded, we had escalated this to the CEO as a Valentine present of a visit with the CEO to an “at risk” Prospect.

“I like your Product, functionally its better, we have a great relationship,
BUT I can’t justify the extra cost. Comeback when you can compete financially!”

We lost the order.

The Sales VP and I had reviewed 6 lost opportunities during February, and a further 14 which were forecast for February close which were being delayed or postponed. The Competitor’s Disruptive Pricing had been a well executed Marketing Campaign, into a Product/Market with reduced budget and a drive for Cost Reduction.

So, “Who lost the Sale?”

Sales had brought early warning of the Competitive Threat to the table in December. Marketing and Finance had ignored them as “weak signals”. Sales had brought “proof” in February, Marketing and finance wanted to “wait and see”. The CEO had first-hand experience, a real time “Battlefield Intelligence”, but he had not reacted.

 

We closed the Presentation with the January and February “WINS” despite the competitive Disruptive Pricing. Sales had a 100% success where that Competitor was NOT present, Sales had only lost one time in five (20%) when the Competitive “Offer” was present.

 

Finally we offered the meeting this thought:

Consider the case of Bertrand Russell's Inductivist Turkey

“The turkey found that, on his first morning at the turkey farm, that he was fed at 9 a.m. Being a good inductivist turkey he did not jump to conclusions. He waited until he collected a large number of observations that he was fed at 9 a.m. and made these observations under a wide range of circumstances, on Wednesdays, on Thursdays, on cold days, on warm days.

Each day he added another observation statement to his list. Finally he was satisfied that he had collected a number of observation statements
to inductively infer that 
“I am always fed at 9 a.m.''.
However on the morning of Christmas eve he was not fed
but instead had his throat cut.''

You cannot predict the future from inductive reasoning on past data,
a key lesson for Turkeys, Marketing and Finance.

Now, stop being Turkeys!

 

Here are TWO excellent blogs on why Forecasting does NOT work:

http://wp.me/p1pSwe-as

http://awareci.com/2012/03/05/analysing-weak-signals-for-competitive-intelligence/

 

Learn why the “Competitive PRICE Campaign” was so successful?  

http://brianmaciver.blogspot.com.es/2012/09/selling-against-value-with-price.html

Can a 21st Century Sales Methodology be built on Proverbs?

 

I had the great fortune to know my wife’s Grandmother. Born in 1900, at the province of Soria, Castile and León, Spain. She lived to be 93 years old. She left her village Castillejo de Robledo for the first time when she was 65 years old. Leaving behind the three story house which had been the family home for 4 generations, without the benefit of running Water, Gas or Electricity. The family had lived off the land for 200 years, a few acres of Vines which made the fine Ribera de Duero Wine, a few pigs, chickens and goats in a “corral”, a Burro to help till their wheat field and a “huerta” to grow vegetables besides the river.

It would be easy to label her a Peasant Farmer or even “Peon”, and she had had no formal education being unable to read or write.  Yet she and her husband had raised and ensured that her three children were well fed and educated. All of her children left the village and they came back to take her and her husband with them when they were able to. The house now with all utilities including Broadband, has passed, along with Vineyards, to her son who summers and harvests the grapes with some of his family.

http://www.cellartours.com/spain/spanish-wine-regions/ribera-del-duero.html

I met “Abuela Germana” in her early eighties, by turns she could be talkative or silent. She was a very interesting Old Lady.
Although she had no formal education, she could neither be described as ignorant nor un-educated. She was wise.
Her wisdom was expressed by Proverbs.

“You know a person by the company they keep.”

She repeated this to her Children, her Grand-children, and Great-grandchildren.
She would deliver the saying then explain what it meant, and how to apply it to life.

We reckon, for nobody ever counted, she had more than 500 proverbs. I first noticed that her “recipes” for Cooking were expressed this way, to give the ingredients and their ratios. She recounted Proverbs for Life, for married life and family life, for Farming, relationships with the land and water, when to sow and when to harvest, the best time for the “matanza” to turn Pig into Chorizo and Jamon, for relations with friends and neighbours:

“Good walls make for good neighbours!”

Many sayings were derived from the Biblical Book of Proverbs,
but even more clearly came from folk wisdom,
garnered through centuries living and working in the same part of Spain.

You will be glad to know that I will spare you from lists of examples,
mainly because she spoke them in Castilian Spanish, but often in a dialectal form.
They were understood by her and were “her way of thinking”.

So, I am no stranger to Proverbs.

My question is “Can a 21^st century Sales Methodology be built on Proverbs?”

We could use expressions like :

· Haste makes waste

· A stitch in time saves nine.

· Ignorance is bliss

· Better late than never

· You can catch more flies with honey than
   you can with vinegar.

· You can lead a horse to water, 
   but you can't make him drink.

 

 

 

 

· Those who live in glass houses shouldn't throw stones.

· A bird in the hand is worth two in the bush.

· A little learning is a dangerous thing.

And easily make them apply to Sales and Selling,

“People who live in glass houses shouldn't throw stones” could apply to relationships with the Competition.

A commonly used proverb is “Don’t knock the Competition”
but what does that mean in a 21^st century “Modern Selling” setting.

Is it glib? Has it become a cliché?

Does “A bird in the hand is worth two in the bush” mean that in Sales we should only pursue “sure things?”
or only take small deals or stay out of the sales underbrush and beware of Poison Ivy?

Could a Salesperson justify keeping damaging information from a customer by declaring
“Ignorance is bliss?”

Can unethical behaviour by Salespeople be justified under cover of Hyperbole
“All is fair in love and war [or sales]”

Or should we use the nemesis to successful Selling “ABC Always be Closing!”

In these “modern times” the anti-proverb is more widely used:
"Nerds of a feather flock together” could describe Facebook or perhaps better Twitter!

My answer to the question is NO!

A 21^st Century Sales Methodology,  CANNOT be based on Proverbs.

 

It leads to Sales Myopia and a Dysfunctional Selling situation.

Sales time and energy is wasted on a simple quick answer inappropriate to a Complex Selling. The basis of all FUNCTIONAL Sales methodologies is in Sales Behaviour. DOING the right thing, in the right way, at the right time, during the right circumstances not regurgitating a cliché.

 

Evidence Based Selling Skills

rest in Identifying FUNCTIONAL Selling Behaviours,
in LEARNING how to execute those Behaviours
and in actually DOING them.

Here is a little evidence, a BMAC Study of 150 Salespeople identified as Sales “Poor Performers” by their Manager and Peers’ opinions, as well as by their actual Sales Results and confirmed by the results of Sales Skills Assessment;

90% described themselves as “Skilled in Sales Methodology.”

Almost all long-term “Poor Performers” describe themselves as able to sell,
yet the evidence is overwhelming that they cannot!

 

The use of Proverbs as a Sales methodology
I would simply describe as:

“A little learning is a dangerous thing.”

Does Sales Training increase Top Line Revenue?

 

a) What is the effect of Sales Training on Revenue?

b) Is there any evidence that Sales Training impacts on Revenue?

 

 

Evidence Based Sales Training, when completed by Sales Coaching, can change the Sales Behaviours of the Salesperson. There is ample evidence based information (e.g. SPIN(r) and The Challenger Sale) to show that SOME Sales Behaviours are more effective than others.

Also, we can show from an evidence basis that some Sales Behaviours are Ineffective (waste of time) and finally that some Sales Behaviours are counterproductive (Dysfunctional).

 

 

 

 

By reducing or eliminating ‘Dysfunctional’ and ‘ineffective’ Sales behaviours
and by increasing the use of Effective Sales Behaviours
the following “effects” can be measured.

 

 

 

a) Increased Pipeline (more opportunities)

b) Better Qualification (eliminating no hope-opportunities)

c) Improved win rate

d) Shorter Sales Cycle (from Lead to Close)

e) Increased Revenue

f) Improved Margins

In 2013, all of this and much more “real time” data can be pulled off of your CRM or SFA, quite easily.

When writing my MBA Dissertation “Performance Measurement and Management of a Sales force” (1999)
I found that there is always difficulty of proving ‘cause and effect’,
especially when using ‘Proxy Measures’ and ‘Success Indicators’.

Instead, we often have to use factors “associated with success”
to plough our narrow furrow!

Evidence Based Sales Training has the following Flow:

a) Identify Behaviours associated with Sales Success and Failure

b) Measure the presence or absence of these Behaviours in the Sales force

c) Complete a Training Needs Analysis (PDP at the individual level)

d) Design the Behaviour Based Sales Training Program

e) Run the Training and the associated Coaching to modify their Sales Behaviour

f) Internal Validation – Did the Salespeople LEARN the new Behaviour?

g) External Validation – Are the Salespeople USING the New Sales Behaviour?

h) Evaluation – is the new behaviour producing the expected results?

You could read more about this in Leslie Rae’s Book
http://www.amazon.com/Assessing-Value-Your-Training-Evaluation/dp/0566085356/ref=ntt_at_ep_dpt_1

Or by using the Kirkpatrick Model

http://www.kirkpatrickpartners.com/

All of BMAC Consultants’ research, and the measured outcomes,
is bound by non-disclosure agreements with Clients.

But, from experience and exchanged anecdotes from other Evidence Based Sales Trainers
the expected Group or Line of Business Revenue result during the year of Sales Training
is between +15% to +30% improvement to Top Line Revenue.

At the individual salesperson level, a fully trained and competent (Evidence Based) Salesperson
after 3 years of planned curriculum (at an 80% Competence) can be expected
to perform at +200% to +300% more Revenue Performance
above the “average untrained” Salesperson.

 

How can we “prove” that
Evidence Based Sales Training
delivers Revenue Improvement?

Personally, when asked to do so,
I ask for 6 “stuck” deals from the current pipeline and
then I DEMONSTRATE the capability of the Sales Skills
to UN-stick or Close the Deals.

If you will settle for two anecdotes [not sourced] :

a) A deal worth £17M in Revenue and £4M in Margin had been “stuck”
or more accurately “lost” for
370 days at ‘Proposal made – Decision pending’. 
I reframed, we constructed and wrote a new Value Proposition
(reducing it from 103 pages to 4 pages),
presented the new Value Proposition and Closed the deal all in 10 days.

b) A €4M Revenue Renewal Negotiation “stuck” by the Customer’s demand
“for a 30% discount to match a Competitor’s offer”,
it was rated as a “Lost” deal in the pipeline!
I met with the Decision Maker, we reframed the deal increasing its Value to €7M,
and then we discounted by 12% against a Delegation of Discount Authority maximum of 15%.
From meeting the Account Manager, Planning the Call and Agreeing the Deal - 180 minutes!

This fits because People just want the success secret;
they just want the recipe to imitate success.

.

Don’t Trust the Trusted Advisor.

 

I have just read TAS Group’s white paper “Moving from Vendor to Trusted Advisor.”

http://www.thetasgroup.com/whitepaperdownloads/new/The_TAS_Group_White_Paper_Moving_from_Vendor_to_Trusted_Advisor.pdf

It’s well written. It is a typical piece of Marketing ‘Content’ designed to excite and to promote their “Product” TAS Deal Maker. However, it falls between two stools.
It neither excites, nor was I left gagging for a demo of the Product!

What struck me was The Story of “Salesman Matt”, published by the CEO of The TAS Group
Donal Daly’s “Select Selling Sales Field book” - about a man called Matt.

 

Daly describes Matt as: “the ‘personification’ of the Trusted Advisor.”
And, it is Daly’s detail of
what a Trusted Advisor actually DOES that disturbs me!

A lot!

“Over the 15 or so years we’ve known Matt,
he has had three different employers,
but he has always retained the same four major customers.”

They don’t say that Matt left Employers to join Competitors taking the “HIS” customer with him or not.
But, it is clear that Matt as a “Trusted Advisor” to ‘his’ Customer
should not be treated as a “Trusted Employee”.

 

 

The flaw in this ‘Trusted Advisor’ thinking is that Matt “OWNS” his Customers.

 

HE DOES NOT!

“HIS” personal ‘relationship’ is bought, and paid for, by his Employer.

Those ‘Customers’ are Customers of Matt’s Employer;
Matt simply has stewardship of the Account.

I have had the pain of Managing Salespeople like Matt;
they withhold Key Data about “their” Customers,
while spending Company money on developing “their” relationship “Trusted Advisor”.

Trusted Advisors accept both a Salary and a Bonus,
but reserve ‘their rights’ to act in their own “best interest”.

They are really ‘self-employed’ Agents,
earning their living from exploiting an Employer to fund ‘their’ Business and
their Employer’s Customer to pay a second time for ‘their’ results.

Trusted Advisors should not be trusted.

Not trusted by their Customers as their income depends upon their “Sales”, not their advice.
Not trusted by their Employers in whose interest they are paid to act, to sell,
not to give ‘Trusted Advice’ to a Customer.

Thankfully, we have some Evidence to base our Sales Decision on.
The evidence based models of The Challenger Sale,
would show that the “Trusted Advisor” is in fact part ‘lone wolf’ in ‘relationship’ clothing.

The Secrets of Sales Success in 2015

 

Many of you will be planning your 2015 Kick-off,

here is your BIGGEST Challenge for the sales Year

A 12% Sales Target hike!

 

“In 2015, you are going to have to produce
the work of 9 Salespeople from 8 Salespeople!”

So, BMAC what are my options?

There are only TWO options
Train or Coach your existing team!

 

Your are going to have to make existing Salespeople
both More Effective and More Efficient.

 

I suggest that you begin by Sales Assessment of your current Team,
what do you think?

Here are some ideas of what to look at:

http://brianmaciver.blogspot.com/2010/12/what-makes-top-salesperson_01.html

 

Having Assessed your Team into Top Performers, Average performers

and Low Performers, then I suggest you overboard poor performers:

PRESS HERE

 

http://brianmaciver.blogspot.com/2010/10/over-boarding-poor-performers.html

You will fail to meet Target again in 2015 if…. 

You do not take this action NOW!

http://brianmaciver.blogspot.com/2010/09/how-long-do-we-as-sales-managers-accept.html

Organise the Sales Training they need, but don't do it yourself,

unless you happen to be a Sales Trainer working as an interim Sales Manager.

Here is WHY YOU should NOT be the Sales Trainer:

http://brianmaciver.blogspot.com/2011/10/major-problem-in-selling-has-been.html

 

After the Sales Training YOU MUST do the Sales Skills Coaching

Here is how you can be a GREAT Sales Coach:

http://brianmaciver.blogspot.com/2011/10/true-secrets-of-sales-coaching-for.html

Well if you stuck through all that,
things are looking a lot better for 2015:

You will have finished ALL your Recruitment by August 2015

You will have a performance improvement of 25% by June 2015,

You should easily make your Sales Target by November 2015.

 

Congratulations and
HAPPY NEW YEAR in 2015!

Is a Sales Methodology needed? Only if you want to succeed!

From Dave Stein's research area five of
The Real Reasons Sales Training Fails and What To Do About It

#5 Is an inadequate or completely absent Sales Methodology

(the organising principles underlying Selling)

In more than 20 of my Clients medium and small I have discovered that there was no methodology at all to their selling. They had a Sales Department, a Sales Manager and Salespeople but NO methodology for Selling. That is usually why I get called in because: “not having a Sales Methodology”
like “not having a Sales Strategy” means that you usually fail!

Dave Stein’s ESR site has a good enough definition of Sales Methodology and how it differs from Sales Process on http://davesteinsblog.esresearch.com/2009/12/02/more-excuses-for-not-doing-...

In my view, it is also about having a Sales Process that is driven by
YOUR Product/Market BUYING METHODOLOGY.

That is Selling the way your Market wants to Buy.

“Easy to Buy From!” is always the highest rated characteristic of a Supplier in the eyes of the Buyer when you survey Buyers.
“Trusted Advice” scores low at 30%.

How do you know if you have a working Sales Methodology,
a broken Sales Methodology or no Sales methodology at all?

Well, you can retain a Sales Consultant like me, or you can ask your Customers:
“How easy are we to buy from?”

Ask some of your Lost Business Prospects:
“Were we easy to buy from, or did the difficulty in dealing with us play a part in why we lost the deal?”

Fixing a broken Sales Methodology (or a partly working Methodology), really does need a Consultant (internal or external). The output is ‘This is what we do wrong and why (PROOF),
and this is HOW through Changes we will put it right and these are the measures to prove its improving’.

Perhaps the toughest part of SALES METHODOLOGY is when you finally realize you cannot BUY one,
you have to CONSTRUCT one. Some great Companies like Huthwaite (SPIN is only a Part, you have to buy the Package), Miller Heiman, TAS, or Holden will sell you the components, BUT YOU will have to do the Assembly and the heavy lifting IMPLEMENTATION.

You can, if you are smart enough even mix and match
getting the Right, not just good enough, Components.

Sales Training without a Sales Methodology doesn’t work.

 

IBM (referring to their Structured Selling Methodology)
calls them their Cash Generating Machines!

So, save all your wasted expense on novelty courses
and one day training events, daft books, sales blogs and sales tips.
And, invest the money and time to build a Working Sales Methodology.