Finally, finally, finally – someone in CRM-land is thinking about the salesperson, and not just about management.  There appears to be an emerging recognition by the CRM (particularly the SFA) market that CRM should not be just about data collection, where sales people are just data entry clerks for management reporting purposes. I’m encouraged by the awareness of this in the recent Magic Quadrant for CRM from Gartner.

According to that report, additional functionality to help the salesperson is important. (Hurray!)  According to Gartner …

…  critical to meeting the needs of a maturing market … opportunity management; sales effectiveness capabilities, such as guided selling, sales coaching, sales configuration, quote management and content management; sales performance management, including incentive compensation, quota management and territory management  … (Disclosure: The items in bold are supported by The TAS Group’s Dealmaker product for each of the vendors in the Leader’s Quadrant.)

This awareness is long overdue, though the list is still incomplete.  What about Account Management and Accurate Sales Forecasts?  (I’ve written before in a post about the appalling state of sales forecasting and the impact on the economy.)

Still even though this is imperfect, I’m really pleased to see that progress is being made, and of course I’m delighted that Dealmaker is a significant sales effectiveness component for each of the leaders.

The founders of Yahoo! are purported to have said, “You Always Have Other Options”. It might be one of those apocryphal stories – but it’s a good one. And there’s a great and salutary lesson here for sellers.  When you’re on the receiving end of procurement pressures, negotiation nightmares, or buyer bad behavior, it’s good to know that you always have other options.  Or do you?  Well that depends on what your pipeline looks like, how you’re doing so far in the quarter, and what value your product really brings to the customer.

Later in this post I’m going to address the pipeline issue, or rather the “how do I know if I’ve enough in my pipeline?” question. But first I’d like to consider why it’s always good to have other options.

When I wrote the Select Selling Sales Fieldbook back in 2004, I used an acronym called BATNA.  BATNA is a term coined by Roger Fisher and William Ury in their 1981 bestseller, Getting to Yes: Negotiating Without Giving In. It is the acronym for Best Alternative To a Negotiated Agreement. It is your other option. Having a BATNA lets you know when to walk away from a negotiation without a deal. If the negotiation has arrived at that point where the deal on the table is less attractive than your alternative (your BATNA), you know that it is time to walk away. Your BATNA tells you when you should make that choice – it’s the yardstick against which you should measure any negotiated agreement.

Your BATNA is really the fulcrum on which the power of negotiation balances. If you are the preferred supplier to a customer, they have chosen you because you meet their needs better than any other vendor. If you walk away, they will lose something. Your BATNA is strong. Your negotiating position is strong. When the buyer has multiple vendors, who can offer similar products that don’t seem terribly differentiated, then the buyer’s BATNA is strong.

Sales executives sometimes feel that they don’t have a strong BATNA. They think their walk-away position is weak and that the buyer holds all of the cards. As quarter-end approaches, the buyer knows that you’re keen to get the deal done. But it probably doesn’t make a difference to him whether the purchase order is signed at the end of December, or in the middle of January. For you, the sales professional, the easiest way to have a strong BATNA is to not need the deal. A full pipeline helps you get to that position. A strong BATNA turns your need into a want. Yes, you would like to close the deal in the current quarter but, if the buyer knows that you don’t need it, your confident attitude will compel him to negotiate more reasonably to meet your interests.

What your sales pipeline should look like

So, let’s talk about your pipeline. You know that maintaining a strong sales pipeline, with enough qualified opportunities at each phase in the pipeline, is the only way to avoid the quarter-end crunch.  But how do you know when you’ve enough deals, at the right value, at the right stages in the funnel? Remember, your pipeline is a better predictor of the medium and long-term health of your business than your sales forecast – and they are two very different indicators.

Traditional approaches to setting the desired pipeline value usually went something like this. “We need 5x in the pipe.”  If that sounds too familiar to you, and that’s how you’re calculating your target pipeline value – then stop now.  It’s completely meaningless, and a complete waste of time.  It doesn’t account for your sales cycle. It pays no heed to your closure rates.  You need an algorithmic measure for each stage of the pipeline to determine whether you have enough opportunities at each stage. Consider the time to close, the probability of closure, and the target revenue to calculate the value you need.

Consider this graphic.

First things first.  The earliest you can close any opportunity that is in your pipeline is today, right?  And the further back up you go in the funnel, then the close date will typically be further out into the future.  In fact, if you take the fat part of the bell curve – for all your sales opportunities – you should have some predictability about how long it takes a deal to progress through each stage of the funnel.  Then, if you’ve a clear history of progression percentages from stage to stage, you can infer both a ‘time-to-close’ and a realistic ‘closure probability’ for each pipeline stage.  Now, if you know your average deal size (you do, don’t you), and you know your revenue target, you can figure out what the revenue target should be for a period equal to your average sales cycle, and hey presto! you can calculate what should be in each pipeline stage for you to hit your numbers.

(If this is a little hard to follow you can take a look at the video on the DealmakerMagic channel on YouTube, or call someone at The TAS Group.)

Make sure you always have other options

Negotiation is hard.  It’s good to want a deal to close in this quarter, but it not good to need it too.  The only way to avoid this is to have enough deals on the go, enough opportunities in your pipeline, and enough deals closed to place yourself in a position of strength.  I know this is much easier to say than do, but at least if you understand what you should have in pipeline, you will have an opportunity to understand early if you’re setting yourself up for a hard time.

And just two final points about pipeline management:

1. Pipeline stages have no inherent value in terms of deal progression.  It’s only the customer related actions tied to each stage that gives meaning to the progression of deals through the pipeline. Clear deliverables (based on evidence of customer actions) must be linked to each stage.
2. Deals that are inactive (have not been worked on for more than 60 days) should be cleared out of the sales funnel and sent back to marketing.  Otherwise you’re given a false sense of the value of your sales pipeline.

Just when you thought it was getting easy …

This post is mainly for the non-quota carriers out there. Or maybe it’s for quota carriers looking for a little help from their friends!  We’re all in it together, right?

If you accept that nothing good happens until someone in your company sells something, then it might be worth your while thinking about how you help to make that happen.  This was how a CEO of one of our customers (I will call him Jim) explained to me how he gets everyone in his organization fully aligned and supportive of the sales organization.

Jim’s perspective was simple. He’d ask each of his employees to describe their value proposition to the sales team. Jim felt that unless each of his employees in marketing, product development, customer service, operations and finance, understood that at least part of their job was to support the sales team, then something was wrong; and the way that he would test it is that periodically he would ask each person to articulate his or her value proposition to the sales team as their customer.

I love the simplicity of Jim’s approach.  It’s an extension of the old saw ‘Everyone is in sales’ but applied in a practical way that gets everyone to understand why in fact that must be true.  So, I thought I’d try to extend Jim’s approach just a little bit. Before the sales person asks his colleague “Hey, what did you do for me lately?”, it might be worth calling out some of the areas where the sales team might need help.

[For the purpose of this post, I'm going to assume that the sales team is perfect .  Okay, you can get up of the floor now.  It wasn't that funny, really it wasn't.  But if I try to explore the foibles and inadequacies of how sales interacts with their colleagues .... that's for another day.]

Here instead I wanted to adopt the voice of the sales team, set out some hypothetical problems that many sales organization face, and ask my imaginary colleagues in Finance, Customer Service, Product Development and Marketing for their help. If any of the  issues mirror yours, then you might like to forward this blog post to your (non-sales) colleagues.  It might prompt some discussion,

• Voice of Sales to Finance: Please know that if I ask for approval on a discount, or special payment terms, it’s not because I don’t want make the effort to sell the value of our solution, but because I’m finding it difficult to get the buyer to accept our standard terms.  You could help me perhaps by working with me to develop a statement of ROI for my buyer that you would be happy to walk through with the customer.  And, on the special payment terms item, I’m not clear about what is important to you – total revenue, recognized revenue, cash-flow, or profit.  If you could help me understand your priorities, then I will manage my negotiations with the customer with your priorities in mind. You spend a lot of your time negotiating with vendors? You probably understand my customer’s financial statements better than I do?  How can you help me close more deals, at a higher margin?

Insert your answer here: ____________________________________

• Voice of Sales to Customer Service: I spend a lot of time finding and closing new customers.  I really care about each one of them.  I could ask you to not screw up the relationships that I’ve built – but that would be insulting, and I know you will not do that.  However, as you know selling more to an existing customer is sooo much easier (and profitable) than finding a new customer, so I need you to wow them.  If I’m setting inaccurate expectations – please tell me how you think I can do a better job.  I think what we do is awesome, and you guys are amazing, so sometimes I might get a little carried away.  So, what can you do to help me sell more to our existing customers, or ensure that each one of them wants to be a zealot reference for me?  How do we set the bar high, and then really exceed it?  How can you help me?

Insert your answer here: ____________________________________

• Voice of Sales to Product Development: Look, I know you want me just to sell what we have today.  You don’t like me asking for new features, or making promises to customers that you can’t live up to.  I’m cool with that.  I do think our products are the best in the market, but sometimes there might be a feature or two that the competition has that creates FUD, and I need to really understand deep down why we’ve chosen not to deliver that feature.  I know this might be marketing’s job to help me understand that – but your perspective would add value.  But you’re really smart.  You know why you’ve built the product the way you did, and I know you take a customer perspective, but can you please tell me how you can help me sell more?  What’s your value proposition to the sales team?

Insert your answer here: ____________________________________

• Voice of Sales to Marketing: Ok, we’re joined at the hip.  Some of my colleagues would say that the difference is ‘Sales is measured and marketing is not’ but that’s not my perspective.  I depend on you.  Here are my current challenges.  I don’t have enough opportunities.  I don’t mean leads, I mean opportunities.  I can’t get access to C-level executives. Is that me, or is it our messaging.  As you know, I’m doing ok YTD, but I’m worried about H2.  You done Trojan work putting all of the marketing materials on the marketing portal, but I’m not sure what to use or when to use it.  I’m not looking for a silver bullet (well, I am but …) but how can you help me solve these specific problems; more opportunities (not leads), C-level access, what marketing docs to use, and when to use them.  If these are my problems, what’s your value proposition to the sales team?

Insert your answer here: ____________________________________

*****

I’ve been thinking about this issue for quite a while, (in fact, we will shortly announce a new edition of Dealmaker that improves overall organizational alignment around sales) and I’m a firm believer that once (1) you get the whole organization aligned around sales, (2) and sales values that fact, and (3) everyone realizes that effective sales starts from the customer’s perspective – then you can achieve uncommon organizational productivity and velocity.  At The TAS Group, we call this rightful impatience, and I think it’s at the core of whatever success we achieve.

I’d love to hear your thoughts on this, particularly if you share it with your colleagues, I’d be really curious to know if it makes a difference.

This is a fabulous book! Tony Hsieh (pronounced Shay), CEO of the phenomenally successful online shoe and clothing retailer Zappos, shares his perspective about what I think of as more about the ‘happiness of pursuit’ more than the ‘pursuit of happiness’. His perspective, and their underlying principles, are at the core of what Hsieh lived by in his amazing success in building Zappos (which was acquired by Amazon in 2009 for $1.2 billion).  Happiness is that elusive concept that most of us all strive for in work as well as play. Happiness sells, as evidenced for example by an immensely successful TV advertising campaign run by a UK cigar manufacturer toward the end of the last century, with the tagline, “Happiness is a cigar”.

For readers of this blog, the question might be “What’s the happiness blueprint for the selling organization?” In selling, the traditional view was that sales people are motivated solely by money.  The more they sell, the more they make, the happier they become, the more they sell, and so on in that supposedly virtuous circle. As regular readers will know, that’s not been my view, and research shows that perspective to be erroneous. I’ve debunked that myth in a previous post.

The routes to happiness in work and play, however, have been considered separate, because they encompass such different things.  We more or less sleep for 8 hours, work for 8 and play for 8, and we preserve the division to keep our sanity and health.

Until now, perhaps.  I was fortunate to receive an advance copy of ‘Delivering Happiness – A Path to Profits, Passion and Purpose’, which went on general sale yesterday.  In this book, Hsieh argues that building a company culture around the pursuit of happiness for employee and customer alike is the true route to long term success for business.  Hsieh’s book is essentially autobiographical, and charts the life of a born entrepreneur, starting as a nine-year old breeder of earthworms and moving onto other projects as soon as the interest had waned and the motivation had gone.  Throughout his life Hsieh has worked hard and played hard, but as you read the book you realize that the secret of his success is that he has taken what makes him happy and made it the basic condition of his working life.

Whether it’s rave parties, playing poker, or the bonds forged as college students, Hsieh has taken the good things from what has made him happy and put them to work.  Delivering Happiness is a joy to read.  Mercifully free from graphs or tables (until the very end where he gets into the science of happiness), it brims with personal highs and lows and flows in a jaunty, chatty narrative which is ideally suited to its subject matter.  The book is (Malcolm) Gladwellian in the simplicity of thought which got the author, and gets the reader, to the ‘aha’ moment. The book is the gift that keeps on giving, with a wealth of pay-it-forward and give-without-expecting-a-return resources to help us recreate a happy blueprint and achieve a higher calling, and they don’t come much higher than the Zappos calling of delivering happiness to the world.   And let’s face it, the world includes companies, customers, employees, investors, managers and directors.  According to the lessons Hsieh has learned and shares with us, if you don’t have the long-term alignment of all your stakeholders, you won’t find happiness.

So while planetary pleasure may seem beyond our purview, most of us have lofty goals in our own lives and business.  The ‘Delivering Happiness’ trick is to make being happy the endgame, and to establish a culture where we can follow through on our happiness goals, stay true to them, and not lose sight of them, time and time again.  So for the sales person, what matters less is the path you take.  It’s where you want to end up that counts.  And if you keep asking yourself why you want to end up there, the answer is always happiness.

It’s an overused phrase these days, but this book could change your life.  I recommend you read it, so that you make happiness your long term selling and life goal, not just your end of quarter target.

If this floats your boat, you might also be interested in posts I’ve written about ambition and trust.

For those who care about CRM, Social CRM is one of the hot-topics of the moment. Indeed there is so much written about Social Anything, you’d be forgiven for wondering how you ever survived without Twitter.

However, as with many new technologies – on their way to ubiquity – the applications that are most readily identifiable relate almost exclusively to B2C engagement, and there’s little written that is readily applicable to B2B interactions.

It’s fairly easy to see how both consumers and brand owners can impact buying behaviors and customer engagement with Twitter.  On Facebook, if you’re in the business of selling fizzy drinks, then it makes sense that you’d rather be Coke with 5 million fans than Pepsi with 600,000.  Facebook can be used effectively as an interactive billboard, cultivating and engaging consumers as part of the holistic brand experience.

But what of the B2B SCRM problem? If you’re a B2B sales person – already fed up with using your CRM system – what can you expect?  Or what should you request?

There’s been much brouhaha from the traditional CRM vendors about the importance of Social, but their own practices don’t give much evidence of SCRM at work.  On their Facebook fan pages, they’ve fewer fans that they have employees.  Even salesforce.com – with its stated position of “The Facebook Imperative” – has less than 1,000 fans of Chatter on Facebook (May 4, 2010).  That’s a fraction of the company’s own employee base. Maybe they’re not all fans!

Something is amiss. What’s a B2B sales person to do?

At the R&D facility at The TAS Group, our goal is to help B2B sales people sell more effectively, and then provide intelligent solutions to help them manage their business. We will shortly announce a solution that we think will leverage social networks to further that goal in a way that supports everyday selling activities and encourages buying activity.

With a paradigm that is evolving as quickly as Social Networks, I think it’s too early to have established ‘best practices’. But I do believe we have learned some lessons on our own journey, and we’d like to share those here.  Think of these 10 steps as a guide that might help you to establish your own roadmap, or provoke some thinking about how you can leverage this (yet immature) movement.

1. Empathize – Put your finger on the pulse: Social networks are a wonderful way to ‘get a sense’ of what’s going on in your marketplace, with your customers, and with your competitors.  Use Twitter (or other social network) to listen to the conversation by selecting some key influencers in your market that you might follow.

2. Engage – Cultivate the customer ‘where they are’: Where do your customers ‘hang out’ online? In the traditional world you’ve learned to socialize at the industry events, participate in trade associations, and network with influencers.  If you’ve worked hard at it, you’re probably quite successful at what you do.  But now those events will change. You’ve got to figure out where your customers ‘hang out’ in the Social Web, and engage with them there.

3. Be generous – Give something first, expect nothing in return: I think the correct ratio is nine parts giving to one part getting. Or put another way, you need to love your customers a lot first and then look for a little love in return. What can you do to help your customer? Are there resources in your company that you can provide?  Can you share how other customers have learned how to best apply your product?  Have you insight into trends in your customers’ industry? This is about your establishing yourself as the go-to-person when the customer is trying to figure out where to go next.

4. Influence – Be part of the “Recommendation Chain”: Remember when you used case studies and client reference calls to sell? Well now, customers will use the Social Web to ask “Does anyone out there know anything about [YourCompanyName Here]?  You need to be part of the “Recommendation Chain”. (Credit: In this context, I read that term first in a post by Axel Schultze.]

5. Authentic – Be yourself, Stay the course: This is not a one shot marketing program.  Return is not short term.  If you’ve something to say, speak your mind. If your opinion is worth something you will begin a conversation.  Above all else – be authentic.

6. Collaborate / Co-create – Play in (or start) a community: The playground is more fun if there are many people playing.  Invite conversation, collaboration and idea co-creation.  Consider first your immediate community – your peers, your manager, your customers – and learn what community means to them.

7. Follow – People, networks, opportunities, and accounts: Follow John, the LinkedIn group, the 100k deal you’re working on, or the key account you manage.  This is important.  It’s not just about who you know. It’s equally about what you know.

8. Integrated Resonance – Community, CRM, Methodology: Seek out integrated resonance – the space where what you know from your social network, integrates with what you’re told by your [traditional] CRM data, and is informed by the expertise of a sales methodology, to strengthen the relationship and progress the sale -or more aptly put – the purchase.

9. Measure – Use Klout, Grader etc., to monitor progress: I don’t need to tell you that if you don’t measure progress that you’re wasting your time.

10. Learn – impossible to predict all dynamics: It’s still uncharted territory, and remember that one year ago we didn’t know about half of the social networking products that exist today.  Listen, engage, and learn.

As I mentioned above, this post is a precursor to a solution we will shortly announce that we think goes some way to providing Intelligent Social CRM for Sales. We will also publish a much more detailed framework that will document the business challenges that we believe such a solution should address, and suggest approaches that might merit consideration.

If you’re interested in learning about either of these please check back here, follow me on Twitter for updates @sales20network, or email me directly at ddaly@thetasgroup.com.

Better still, we’d love to hear from you to help guide the final shape of these two items.

1. What’s important to you?
2. What Social CRM challenges are causing you most trepidation?
3. What’s your experience with Social Networks so far?
4. Do you have specific requirements that you think are mandatory for a Social CRM solution?

Our decisions thus far have been informed by our own usage, interaction and brainstorming with our customers, and consultation with other subject matter experts. But we’re not finished, and the dynamics in this area continue to accelerate – so we’d be very grateful for your hindsight, insight or foresight.