The problem of Sales and Marketing Alignment

 

I always smile privately while reading Sales-Marketing or Marketing-Sales Alignment Problems Blogs and Reports.

An exception
is the great advice given by:

http://blog.eloqua.com/sales-alignment/

However, Forrester, a respected Research and Publishing House. The author has a Marketing background, but he lacks that ‘Grunt’ experience. Having been a ‘Grunt’ that worked and educated himself to General Management, I know how essential that experience was, and I know how important to have perspective on the “Problem”.

The ‘shocking’ conclusion is:

“Sales and Marketing Alignment starts at the Customer”,

forgive me but I feel as though a Consultant has just borrowed my watch,

told me the time, billed me $500 and then kept my watch!



The Problem is in Marketing, they can’t keep up.

Marketing cannot keep up with Social, Technological, Economic, Political or Competitive change!
Sales, at the ‘front-end’ attempts to use out of date marketing content, are directed to inappropriate leads, and most importantly are blamed for failure and then discredited for their success. I long for the return of Sales and Marketing Directors, Marketing Communications, PR, Customer Events,
Golf balls and Umbrella give-away!
I would trade both my SFA and CRM for them, and settle for just MS Outlook.



Instead, I have to suffer the indignity of the CMO,
we might as well have had Sales report to the CFO, 
as at least in Finance they understood the Financial Offer!  
Marketing are there to serve the Sales-force, not the other way round!

Marketing Deliverables are the Sales-force requirements to SELL,
not a ‘price list’ with a product brochure and an inoperable website.

Then, God forbid, a plethora of Sales ‘Disablement’ content, SFA and CRM software, FAD training programs, Market Focus meetings and the fatal blow a “sales strategy” based on a (wrongly labelled) Boston Matrix,
a SWOT analysis that left out the Key Competitor and was based on the wrong Market segment
and a no longer sold Product.

Within 5 minutes of meeting a CMO, I can tell if they have any comprehension of Selling or not.  If they don’t think much of Salespeople and if they believe that Customers are naïve, then they are unlikely to align.


I have been much more measured in my assessment of their Marketing and CMO skills, waiting a full 18 months,
to see what they achieve.
In ITC my expectation is 35% year-on-year at the top line.
This is rarely achieved by CMO’s unaligned to Sales and Customers!

 

What is often achieved is the complete disengagement from both Sales and Customers;
to the point that the CMO believes that “they are in the ‘wrong market’.”

When CMO’s directly manage Sales, as “Sales” Management this has been disastrous,
with the loss of Market share, Key Employees, and inconsistent Sales Strategy of both Product and Position.

 

The outcome is OVERT Marketing - Sales - Customer misalignment.


I have reached a different conclusion, than Forester, Sales and Marketing misalignment is the CEO’s fault!

Sales and Marketing misalignment
is completely the CEO’s fault.

The structure of a ‘disintegrated’ Sales and Marketing Department is wrong, it doesn’t work. 
It’s not about ‘alignment’; it’s about “Integration around the Customer”.
Sales, Marketing and Service integration,
which delivers Customer Acquisition, Retention, Development and Substitution the FOUR Sales Strategies!

 

My advice to 'misaligned' CEO’s is  this month spend
at least 20 hours with Customers LISTENING, not talking.

Then do the same thing with the Sales and Marketing Departments,
Fire the CMO and any other Marketing person with a title that doesn’t have the word “Customer” in it.
Fire all Marketing people who do not spend at least 10 hours per month with different Customers.
Fire all Salespeople who don’t spend 40 hours per month eyeball to eyeball with different Customers.

More on integration at http://brianmaciver.blogspot.com/2010/09/sales-and-marketing-integration.html

Hold a series of Meetings with the Integrated Sales and Marketing Department,
ensure they know and have agreed the Ideal Customer Profile (ideally based on real customers),
they have agreed the definition of a Sales Ready Lead,
as well as an agreed handover and hand-back process for Sales [un]Ready Leads.

 

Good Luck!

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Failing during the down turn.

I wrote of my dear friend who is succeeding in the down turn, http://bit.ly/gDW2lD and he continues to thrive 15% Y on Y growth, from a changing product mix and a growing market. His Cash disciplines and customer focus continue to pay-off.
However, we play golf with another Businessman. He, and his two daughters, runs a Machine shop, Precision Engineering and Custom Chromium Plating. 18 months ago he thought the downturn would only last a year. He had the cash, so he simply bunkered down.
He kept his employees, employed.
He gave extended credit to his customers.
And, he waited!

Now he is running out of Cash, and Cash counts.

It is not too late, he still has a core business, but his material suppliers want cash up front, and not all of his customers pay, many pay late.

 

He asked me to help sell.

But, the sale to cash cycle is 7 months and he no longer has 7 months of Cash.

Bank loans? Mortgage? I had to tell him, that the way he currently operates, in his real market, he will lose his home as well as his business.

Madness, is doing the same thing and expecting different results.

How do you recover?

Cash Control is number one, both cash spend and cash collection.

He has to size the workforce to the business, and he has to stop being his Customer’s Bank. NOW.

A quick product/Market scan showed his best Customers, in Cash terms are in France, moderate Margins but good payers.
I’ve sent HIM on a sales call.
All Customers 10,000 € in arrears are now on credit stop pending payment. No shipments until the account is cleared, and future “deals” are 30% on order, 30% on manufacturing start and 40% on completion. This represents his business cycle of Material purchase, Worker hourly rate, and Margin.

I have been handling Difficult Customers, and keeping “the family” away from them.
I am, with some success, offering 10% Cash Back for less than 30 day payments,
and I do mean CASH.

The ‘will not pay’ are not getting any shipments,
the 'cannot pay' I am looking at on a case-by-case basis.

This is not “hard headed”,
they should have been doing this anyway,
but now they have to do it.

It’s a good business, they are good people,
I hope we can save their business.
Then I can tell them about Flat worlds,
Facebook, Twitter, Blogs and Selling in 2011.
Right now it’s more basic than that.

Setting Stretch Sales Targets for 2016

One of the measures we use at BMAC is a firm’s “Maturity”,

their ‘Sales’ maturity is WHEN and HOW they use:

‘Stretch Targets’

  

Firms that use “stretch targets” outperform
their expectations and outperform their competitors. 

They are High Performing Companies.

 

Our measurement is M1 through M4,
based on Ken Blanchard’s “Leading at a Higher level”.

 

What is a “Stretch” Target?

Simply put it: It is what you NOW believe Sales can achieve,
based on the ACTUAL Sales Velocity or Run Rate.

A Stretch target recognises that ‘Forecasts’ are just predictions.
That things like Markets, Products and Competitors change;
as do the Economy, Laws, Technology and Fashions.

Therefore, “Forecasting” and “Targeting” a year ahead is often inaccurate.

Within my Clients over the last twenty years,

I have seen from 50% to 200% variation from forecast.

Then, is it their forecasts that are wrong?

By their very nature, forecasts are unstable.
You predict in December the result
for December of the following year
...no mean Task.

It is far easier to predict NEXT MONTH,
based on the last 3 months,
still prediction, NOT certainty.

 

How then do I use the M1-M4 scale, and what do I do with it?

 

What is the involvement of the sales people in setting Sales Targets?

 

• M1: the least mature Firm’s 12 months forecast,
  set the Sales Target then divided it amongst the Sales people
  and they NEVER modify it.
  They congratulate themselves for achieving any monthly, quarterly or annual milestone,
  and blame any salesperson who does not.
  There are three failings inherent in this system.

  • It de-motivates sales people
  • It is sub-optimal in that it accepts the Target as success, rather than overachievement
  • It has no strategy for failure, it simply repeats month after month

• M2: set a 12-month Goal, based on a 12 month Forecast,
  divides it amongst Sales Managers,
  who accept the Target after Consultation and ask for the resources to achieve the Target. 
  The Sales Managers seek to aggregate their salespeople’s results to achieve their Target.
  This can produce either a ‘Coaching Culture’ or the ‘Blame Game’. There are still three in inherent failings at this level of maturity.

• It continues to be sub-optimal in that the target is success,
  and any combination of sales result that meets Target will do.
• Sales are composed of ‘motivated winners’ and ‘de-motivated losers’.
• The Strategy for failure is to focus resource on winners and ignore losers

• M3, the Goal is set based on the Forecast and ‘deep dialogue’ with Sales Managers,
  which is then agreed by consensus amongst their salespeople.
  The VP of Sales owns the overall Sales Target; it will not be simply divided out,
  but will be apportioned according to the Consensus of the entire sales force. 
  It is based on an optimal result.
  
  The VP of Sales is tasked with using the resources in an optimal manner,
  reviewing Strategy on a Monthly basis:
  optimising People, Accounts and Opportunities into a ‘most likely to succeed’ scenario.

  • The major drawback at this level is finding a VP of Sales with the skill set of:

    Leadership, Creative Thinking and Sales Management,
    who is both capable AND motivated to do it.

• M4 the goal is to “Sell As Much As Is Profitable.” 
  Forecasting and Targeting are for planning purposes only,
  in execution each person within Sales
  from VP to a Sales Rep is fully engaged on “Sales Optimisation”. 
  The true M4, in fact, everybody is involved in Sales Optimisation. 
  [Usually, you only find M4 in Professional Services:
  Legal, Accounting, and Management Consultancy.]

You would do well to look at them.

In Ken Blanchard’s Book on Leadership,
his basis is “give the people (or the firm) the Leadership they NEED”.

However, in Sales, we tend to get the Leadership they HAVE, especially from the CEO.
Hence, most Sales Firm’s have the Maturity Level of their CEO’s Leadership Style.
The Forecast, Targeting and Goals, which is the CEO’s ‘preferred’ style.

This may disconnect Sales from the Market reality;
instead Targets are based on the Risk Aversion,
Control Requirement and the “People Outlook” of the CEO.

• “Set Sales Targets 15% higher than aggregated Managers targets
  and then aggregated Managers Targets at 115% of the Firms targets” (Planning for Failure)
•  “Put up all their targets by 15% every year.”  ( High staff Turnover)
• “Set the targets low in order to meet them.” (No shareholders)
• “Set the Targets just out of reach, so we minimise bonus payments.”  (when the CEO listens to the CFO)
  
  or

• “Let’s go for it!”

How were your sales targets set this year 2015?

Based on the Market reality under an Umbrella Sales Strategy
with every Salesperson’s buy-in and commitment?

Or, were they dealt off the top
of the “Target Pack” after a shuffle.

 

Will you be happy to achieve ‘Target’ in 2016 or will you :
“Sell as Much as You Profitably Can”

BMAC Consultants offer a free Diagnostic Pack

“What is your Sales Maturity and
  What is your Sales Leadership style?”

Contact brian.maciver@googlemail.com

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Hunters and Farmers 2013

One of the most popular misconceptions in selling is:
that there are two kinds of Salespeople,
Hunters and Farmers, there are not.

 

If you believe that there are, and if you put this misconception into practice,
then you are losing much of your Revenue Opportunity and all of your Profits.

“Hunters”

e.g.  “New Business Development Executive”
“Hunters both prospecting and
qualifying sales opportunities.”

Farmers

e.g.  “Account Manager”
“Farmers servicing existing customers, identifying and closing NEW sales opportunities”

This has been used for about 35 years (maybe more).

Anyone that researches Hunters and Farmers Model finds that:

http://www.mckinseyquarterly.com/Using_your_sales_force_to_jump-start_growth_2781

By definition Sales “Hunters” take Business from Sales “Farmers”,

I would like you to think
of the whole idea differently.

It is NOT salespeople who are ‘Hunters’ or ‘Farmers’ with 'Buyers' as “food”.

In fact the TRUE MODEL is that:
BUYERS who are either “Hunters” or “Farmers”
and it is Salespeople who are their ‘meals’!

 

Do not confuse my use of the word ‘BUYER’ as a “Professional  Buyer” in the Purchasing Department,
I use the word ‘Buyer’ here in the context of ANYONE who a seller may sell to. 
ANYONE. Technical, Financial or User. 

Anyone in the Buying/Decision Making Model whatever their role,
could be either a Hunter or Farmer.

I have researched “Effective” Buyers, in Retail, High Tech, Financial Services and Government.
Using the model of “success” as the best outcome including Product Application, Cost of Acquisition and Ownership, and successful on-going relationship (for the buyer). 

These three criteria determine Buyer Success

• Cost, Application and Relationship.

Using the terms “HUNTER” Buyer and “FARMER” Buyer is not pejorative it is descriptive,

BOTH of these Buyer Types are doing a great job for their Company (and themselves!).

“Hunter Buyers” are predators; they are always looking for new ‘victims’. 

Their staple diet is inexperienced sales people, who think they have “found” a sale. 

The Buyer commences to eat the ‘Seller’ for breakfast!

 

 

“Farmer Buyers” have found their
‘meal ticket’ and nurture their
Account ‘Manager' with small gifts
(small orders). 
Meanwhile, ‘training’ the Seller to bring
best offer best pricing, special deals and
‘all in costs’ to “Keep the Relationship”.

 

When you run a Customer Profitability Analysis across your Customer base,
then some of the poorest performers are:

Long term Customers with a ‘Farmer’ (long tenure Account Manager)

or the new accounts brought in by your ‘Hunter’ sales people on a “Loss leader sale”!

Profitability ‘Pereto’ usually shows that 20% of your Customers are delivering 80% of your profits.  These Top Performing Profit Accounts have a newly appointed “Account Managers”,
or a Margin incentivised Hunter-Gatherer Sales people!

I have carried out extensive Behavioural Analysis on Buyers (3,000) sales calls.

Their Behaviour, verbal behaviour that is, follows clear patterns.

I have devised 4 categories over the years Hunter, Farmer, Poacher and Skinner.

The real question is:
how do I match my Sellers
to these Buyer profiles?

I will continue to Blog on this.

The Philosophy of Sales Pricing

It was with some amusement that I read in CSO (Chief Sales Officer)

http://www.csoinsights.com/Topics/Sales-Strategy

that:

· 80% of sales opportunities are LOST to lower prices by the competition,

but ONLY

· 20% of sales opportunities are WON by lower pricing than the competition.

This, as a statistic, does not make sense.
To make sense they would have to be similar.

Instead, they are a Pareto:
80% of the time, I lose on price, and 20% of the time I win on price.

How would we rank this salesperson? 
Wins 1 deal in 5, and wins that deal on price?

Unless they have 500% pipeline to target coverage, they never make target.
As a Company, we cannot be growing market share,
in a vibrant market but losing four out of five deals.

We cannot work with focus,
because we do not know which deals we will win or lose
until the pricing quotation is made at the end of the sales process!

The report includes these statistics too,
Poor Sales Process execution is a factor in 20% of losses, and
Sales Execution is a factor in 35% of wins.

Product ‘superiority’ accounts for 75% of wins,
yet is only a factor in 25% of losses.

These combined would suggest that if you have

the cheapest and the best product you succeed

in sales, with the process of selling only playing
a secondary factor!

Finally, a statistic that makes sense:

• 44% of deals are won by the best Customer Relationship and

• 55% of deals are lost by a poorer Customer Relationship

Conclusions

• You do NOT need salespeople and sales process
  to sell your superior product at the lowest price.

• you DO need skilful Salespeople to sell
  your similar product at a similar price,
  because Buyer Relationship counts!

• You need a Sales Process which WORKS and
  you need skilled Salespeople
  to sell your product in a market where
  you are perceived disadvantaged by product or price!

“WE NEVER LOSE ON PRICE” doesn’t mean you are the cheapest,

it means you have a perspective on the secondary importance of Price

BMAC Consultants specialise in developing skilled sales people
with a powerful sales process that builds strong Buyer Relationships.

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What makes a 2016 Top Salesperson?

An old colleague and friend Chris Windley asked and then answered this question on his blog
http://bit.ly/fGyO1z
Here is my take.

 

Activity, Skill and Knowledge the three ‘sisters’ remain at the core of Sales Performance.
Even after 25 years of research, they remain constant, unshakable.
Simply by measuring activity, skill and knowledge at BMAC Consultants then,
we can Predict, with accuracy, future Sales Performance. 
However, 25 years of research have shown that
what we mean by Activity, Skill and Knowledge have changed dramatically.

 

Activity

Sales ‘Activity’ in 206MUST include web2.0 tools, if you let Sales Force Automation run your day,
week, or month you will be a SALES FAILURE not a sales success. 

Sales people and Sales Managers must learn how to drive technology,

NOT be driven by technology. 

Revenue Generating ACTIVITY today is NOT about
Cold calls, or First appointments or Thank You notes.
Managing a Sales Team last year, we measured Activity “Net Cash Generation”,
which had no correlation to cold calls, first appointments or Thank you notes!

Today, activity is about lead Generation, lead nurture by Marketing NOT Sales!  Sales are about Opportunity Management.

see my blog http://brianmaciver.blogspot.com/2010/06/sales-energy.html

 

Skills

Skills, well Closing is out, big time. 
There is no correlation between Closing ‘Ability or Skill’ and Sales Success.

If you are great at “Handling” Objections,
then I bet you spend most of your time on the golf course in Sand Bunkers,
I prefer to putt on the Green instead!

The ways in which we meet, present and propose to Buyers have all changed beyond recognition.
Face-to-face, conference calls and Tele-presence meetings, PowerPoint without bullet points,
managed ‘try before you buy’ demonstrations are part of are part of Selling today.

If you only sell ‘Solutions’ to people with ‘Problems’, then you can still SPIN®.
However, you will miss the biggest part of the Market, those Buyers who do not have problems
but who are looking for ‘OPPORTUNITIES’, and that’s a completely different Sales Skill set!

Successful Selling is still about Interactive Competence,
except that with smarter, better-informed Buyers than ever,
then Sales people need a broader, deeper range of behaviours than ever.

In 2013 Salespeople must be able to influence
their Buyer’s thinking, their emotions and their actions.

“Psycho” selling is gone, replaced by Neuroscience research into WHY and HOW people buy.
‘Stimulation’ and ‘Choice’ which can be tested by biometrics give us greater insight into BOTH Buyers
and Successful Sales Behaviours than ever before.
Insight Selling, based on the research of The Challenger Sale, is having an impact on Top –end Selling.
http://brianmaciver.blogspot.com.es/2012/05/putting-challenger-sale-to-work-four.html
Value CONSTRUCTION is an essential Part of B2B selling.
http://brianmaciver.blogspot.com.es/2012/04/putting-challenger-selling-to-worktwo.html

 

Knowledge

Sales Knowledge in 2013 is based on ‘self directed learning’.

With web 2.0 it is inexcusable for a Professional Salesperson to be ignorant of their own products, their Competitor’s products and their Customer’s business.

Ninety minutes on the net, Google, Blogs, Facebook and Twitter should give the basics.

Product Training is sadly becoming out-dated.
Now we need to Train on how to Learn quickly!

 

Activity, Skill and Knowledge, the Sisters,

have two cousins Attitude and Strategy.

 

Attitude

You CANNOT succeed on Attitude alone (watch ‘The Apprentice’ for proof),
yet you will not succeed without the ‘right’ Sales Attitude either!
http://brianmaciver.blogspot.com.es/2012/11/managing-sales-attitude-for-success.html

Strategy

I have seen more sales lost through poor, or NO strategy, than any other cause.

The only way you beat IBM, Microsoft, Accenture, or HP,
is by having a better Account and Opportunity Strategy than they do.
http://brianmaciver.blogspot.com.es/2010/08/sales-strategic-success.html

 

The Balanced Scorecard, the Sales Dashboard, still has five dials:

Activity, Skill, Knowledge, Attitude and Strategy;

and these dials still describe selling;

it is what we mean, measure and develop that has changed in 2016.

Is Sales Enablement really ‘Disabling’ Sales?

I have expressed concern over the use of Sales Force Automation (SFA), which are de-skilling salespeople. Today, I want to express deep concern over a Non-Sales ‘conspiracy’ to disable salespeople by making Salespeople use “sales enablement”.

The practice of Sales Enablement developed by Non-salespeople is simple:

Selling is an activity, like walking.

Selling like walking requires no skill, have a route planned then go.

Sales Enablement is “routes” prepared previously by Non-Salespeople to make Salespeople sell more often and sell more effectively.

BMAC Consultants have just finished an audit of “Sales Enablement” for a blue chip, Hi Tech Company. My initial analysis was straightforward. Sales results before the adoption of Sales Enablement, compared to Sales results after the adoption of Sales Enablement. Since the claimed benefit of Sales Enablement was to sell more and to sell faster. Clear Order intake and Revenue improvement were the expected results.

The actual result was a performance dip, about -12 % on average.

Sales sold 12% less after being ‘enabled’.

I asked for a third group, the control group, which had not adopted Enablement.
There was not one I was told, Enablement is compulsory. It is our new way of working!
I conducted semi-structured interviews with more than 40 sales staff, salespeople and sales management. I found a group of people who had ignored Sales Enablement. They were, in the main, Top Performers, with a few average performers. Their Sales figures had improved slightly or remained the same. I interviewed at length several Top Performers who had experienced performance dip after adopting sales enablement. “Difficult to use”, “not fit for purpose”, and “cumbersome” were the criticisms, while “good in specific situations”, “saved me time” and “it really helped me” were the compliments.

1. Content Creation

a. Customer Intelligence: this was often story board based, based on previous “wins”
The Sales consensus was it didn’t work
b. Product Content: Sales complained about a lack of Product Training, instead they were being giving mini aide memoirs and Product stories.  The Sales consensus was Buyers now knew as much or more about products than Sales knew.
c. Vertical Marketing Content: There was universal appreciation of this. There was particular praise for events which had Customers talk about Key issues and Market Sector drivers in Customer Engagement Workshops
d. Solution Content: There was universal criticism of this. Out of Date materials, irrelevant materials, Issues with Customer Confidentiality (unapproved Case studies) and simply not working or useless content.

Buyers had also stated these were not fit for purpose especially as
RTT (Response to Tender) or RFI (Request for Information) responses.

2. Content Management: is poor or very poor; everyone, yet no one, was responsible, it had become a potpourri. Initially Top Marketing Management had been responsible, but the ownership had dropped to Marketing Operations Executives. The current content owners, were inexperienced, had had little or no Customer contact and were being used for their PC skills (Data Base Management) Storage not ‘Content’ creation, development or distribution.

3. Content Governance: this was the most worrying area. Senior Management had made substantial investment in Sales Enablement; they expected to see two things; usage of the new systems and sales results. Sales managers were enforcing usage with ‘Enablement Police’ ensuring compliance. The use of materials was being checked during sales calls, the use of Knowledge Data bases were being reported automatically by the system with details on access frequency by individual salespeople, by groups and as a whole. IT is driving sales!
Sales ‘Propositions’ were being checked for content and “Standardization” against ‘winning’ models. The whole area of governance was being abused. Some salespeople were going to extreme s in appearing to use the system, while in fact defeating the checks and measures. Other salespeople were in complete compliance, but were seeing their sales results dropping; this dissonance was causing a great deal of stress.

4. Content Delivery: This was an area of innovation. Many Corporate Presentations had been remodelled into Video, Storyboards, White boarding, Podcasts and state of the art Interactive Websites etc. Attempts are being made to use social media, Facebook, Blogs and Twitter and there was a willingness to explore all of this on the part of salespeople. Sales major complaint was lack of Training and no Coaching on these innovations. Buyers had also complained about some of these innovations when inappropriately used, and had rated poor content delivery as a major factor in Lost Business Reviews.

Conclusions

If you really want to ENABLE your salespeople, then listen to them.

• Customer Engagement workshops with Sales, Marketing, and IT in conversation together with Customers is the most productive source of Sales Enablement Material. What Content do Customers value? How do Buyers want in delivered, where and when do Buyers want it.
• Sales Enablement appears to work best when it is specific, build an Ideal Customer Profile then work through a Competitive strategy.
• If you value Selling Time, a repeated criticism by Buyers of Salespeople is that they do not have time! Consider reintroducing some of the Sales Administration Support that was ‘Cost Cut’ in order to pay for Sales Enablement.
• The cheapest way of increasing selling time and gaining sales results is Sales Admin. If you are short of expense, then fire the Senior Marketing Manager who introduced, then abandoned, Sales Enablement.

BMAC Consultants audit Sales Enablement and make recommendations putting enablement to work. We also have a unique Customer Engagement Workshop process that puts the Buyer’s Voice right to your ear!
Contact brian.maciver@googlemail.com