I spoke at InsideView’s Insider Summit meeting in March 2012. The topic was about sales metrics that you might measure to calculate your sales velocity – the revenue you can achieve every day – and some ideas about what you might do to improve your sales velocity, and also achieve accurate sales forecasts.

The video has been edited to remove the Q&A and to make some of the slides easier to see. Click play to view the video. It runs about 25 minutes.

This is my first video blog, and I’d welcome any comments on the format, or comments or questions on the content.

The Dealmaker Index has been running now since early November 2011 and we have been learning a lot from all of the participants. Here is sample report so that you can see the kind of information you can get if you participate in this free study. The report comes in four parts: Summary Infographic, Executive Summary, Detailed Analysis and Personal Dealmaker Index Report. The Executive Summary and Detailed Analysis components each relate to the company Dealmaker Index score, and the Personal Dealmaker Index Report is tailored to the individual who completed the study.

Summary Infographic

The infographic is a quick summary or dashboard of the results for each participant and their company.  On the left you can see the results for the participant’s company, starting with their Dealmaker Index overall score. In this example, the company scored well, and was graded at 77%, placing them in the High performers category.  This is an absolute score.  Below that Sample Co received 70% on the Peer Group Relative Performance scale. This means 30% of the peer group who participated in the study scored better. Immediately below that are the four sub-indices that together make up the overall Dealmaker Index score. As you may know, we measure sales velocity (i.e. the amount of revenue achieved per day) by more factors; the average deal Value, the Number of qualified opportunities, the Win Rate of those opportunities and the Sales Cycle.  The four sub-indices measured here, represents how well the participant’s company performs against the elements that determine whether they are optimizing their performance in each of these areas.

On the right hand side of the graphic are the absolute and relative personal Dealmaker Index scores for the individual who participated in the Dealmaker Index study.  Jane Smith did really well (89%), and is classified as a Dealmaker Ace.  Consequently she is at the top of her peer group.

You can participate in the Dealmaker Index Global Sales Benchmark Study yourself for free here.

Executive Summary

Based on the data provided, Sample Company has an overall Dealmaker Index of 77% which places the company in the High Performer category of participants in the Dealmaker Index study.

• Dealmaker Value Index: 76%
• Dealmaker Number Index: 76%
• Dealmaker Win Rate Index: 75%
• Dealmaker Sales Cycle Index: 80%

The level of revenue that is generated by any company in any sales period is a function of the number of deals or qualified sales opportunities that are being worked; the value of each sales opportunity; the percentage of those deals that are closed; and the inverse of the length of the sales cycle.

In the case of Sample Company, based solely on the information provided, the analysis of the attributes that contribute to the performance across each of the sub-indices provided the following insight. The initial analysis here is supplemented by detailed analysis later in the report.

Many factors influence the effectiveness of your sales organization, or the sales velocity you can achieve. If you can increase your performance in each of the metrics above the line by just 10%, i.e. grow the number of deals, the average value per deal, and the percentage close rate by 10%, and decrease the length of the sales cycle by 10%, you will increase your sales effectiveness by 48%. That’s equivalent to increasing your number of sales representatives by half, without making one additional sales hire.

Dealmaker Value Index: Value optimization doesn’t appear to be a major problem for your company. This of course means that you need to close fewer opportunities to achieve your revenue goal, and it is likely that the profitability of your deals is pretty good. Bear in mind – I’m making this assessment based on the information you provided me. Check that real differentiation is being well articulated consistently – particularly in a competitive situation. Look for avenues of expanded value offering to further optimize the return from each customer. [Minimal revenue increase potential]

Dealmaker Number Index: Based on the information you have provided, you’re better that average at finding good opportunities. Stay on it. Make sure the value you articulate is mapped to the buyer’s needs. Develop and replicate refined qualification processes. Shorten the ramp-up time for your new sales hires by incorporating – in an optimized sales process – the ‘best practices’ that are working. Look to the detailed analysis later to see areas where you might improve further. [Minimal revenue increase potential.]

Dealmaker Win Rate Index: The company would appear to have ingrained ‘closing’ behaviors, practices, and departmental interrelationships that support above average close ratios. Your company’s score – based solely on the information you provided – place you well above average for your ability to close deals. Make sure that the factors that govern this performance are further institutionalized in your company. [Minimal revenue increase potential.]

Dealmaker Sales Cycle Index: Now is the time to institutionalize the best practices you have developed to manage the length of your sales cycle. It would appear that your company’s performance in this area is quite a bit better than average. Make sure you have a living sales methodology, a buyer-centric sales process – all supported by technology to maintain your above average performance in this area – and facilitate continuous improvement. This will keep you at the top of the pyramid. [Minimal revenue increase potential.]

First Action: 5 Key Areas to Focus On: Keep, Change, or Stop

KEEP: I’m pleased to see that you have a well defined sales process. Hopefully it reflects the customer’s buying process. Our experience, and that of our customers, would suggest that having a well defined sales process, mapped to the customer’s buying process, and then executing well on the process, is a powerful accelerant to any company’s progress. Stay on it.

STOP: As the saying goes – companies don’t buy, people buy. Failing to gain access to key influencers in a deal is definitely one of the main reasons why deals are lost – and unfortunately it seems your company has some work to do here. You’ve said you’re not effective at gaining access. First, you need to identify who the real influencers are; and then consider things from their perspective. If you were in their shoes, why would you spend the time? Usually senior executives – who are often the key influencers – will only take a meeting if someone in their internal organization asks them to. The second key most likely to open the door is a referral from someone in their industry, perhaps a peer at a similar company. Unless you figure out how to gain access your win rate will definitely be sub-optimal.

KEEP: You’ve said that you are confident that your sales team is good at uncovering the customer’s business problem. That’s really good, and the alternative is not pretty. As you know, without understanding the customer’s business problem, there is no way you can know the value your offering will provide, or indeed even how to apply your solution to solving the problem. Then it becomes a feature or price battle, and that’s an abyss that, thankfully, you seem to be able to avoid.

KEEP: It’s evident from your input that you’re comfortable that the sales team is effective at differentiating against the competition. You seem to have this in hand, but is possibly worth revisiting the factors that would get in the way of this being untrue. There can be only three reasons for a sales team to fail this effectiveness test. (1) You don’t understand the Unique Business Value (See above) you provide, (2) You don’t know your competition – a grievous sin, or (3) You can’t position competitively. You have to be competent in the first two before you address the third. One more thing – I’m assuming that you understand the specific problem the customer is trying to solve (See above) because without that any effort spent on competitive differentiation is a waste of time.

KEEP: Our research suggests that sales people spend on average two and a half hours a week on sales forecasting. Yes, that’s right -150 selling minutes. And then the deals that are forecasted don’t close as forecasted. Thankfully you’re bucking the trend. That is really valuable to your company, as the alternative is one of the most damaging aspects of some sales teams’ behavior. You’re probably aware that there are evidence based sales forecast tools available, and you might be already using one. As you know you will achieve much greater sales forecast accuracy if the team follows a well defined sales process – one that is designed to map to the customer’s buying process (See above). Good work.

You can participate in the Dealmaker Index Global Sales Benchmark Study yourself for free here.

Detailed Analysis

Strategic Alignment
It’s good that you think that sales and company strategies are aligned. Selling against the corporate direction is hard, but it doesn’t seem like that is the case here. ~ It would be better if there was enough evidence for you to be clear that the sales and marketing functions worked well together. You’re saying you’re not sure about that. Sales and marketing alignment is crucial. Think of it this way: You’re supposed to be working together to beat the competition. Get everyone behind that goal with a shared purpose and common resolve. ~It’s good to see that you believe that the leadership of your company looks for strategic input from the sales organization. This is one up for the good guys. Nothing happens until someone sells something. The sales function is strategic, and so must be part of the overall strategic picture. Make sure those who need to know this, actually know this, and always consider what is going to ease the buyer (your customer) / seller (your sales organization) relationship. ~ When a company’s culture encourages support of the sales organization, it usually means that the focus is right on target. Congratulations, you’re in a good place, as it seems that the sales function is getting the support it needs. The sales team needs to hold up its end of the bargain and make sure that reciprocal respect is forthcoming.

Sales Process Analysis
I’m pleased to see that you have a well defined sales process. Hopefully it reflects the customer’s buying process. Our experience, and that of our customers, would suggest that having a well defined sales process, mapped to the customer’s buying process, and then executing well on the process, is a powerful accelerant to any company’s progress. Stay on it. ~ Read again what I said earlier regarding the importance of a well defined sales process. I’m pleased to see that you believe that your sales process is well understood and executed by the sales team? Assuming it is a well defined process – one that is mapped to your customer’s buying process – then you’re optimizing your chance of success. Well done. ~ Sometimes it is hard to get all of the company to understand that they are a critical cog in the sales machine, so I can understand why you’re uncertain about the ‘non-sales’ people’s understanding of their role in supporting the sales team’s execution of the sales process. Perhaps you might try this. Take out a piece of paper, or get to the white-board, and sketch out all of the touches a customer has with your company; this should cover how the phone gets answered when the customer calls; the product or service being used, the response time on queries; the stories in the press; your presence in the Social Universe, and so on. Then think about the steps in the sales cycle, and consider how each of these interactions might impact the execution of each step. That might help everyone understand the role they play. Understanding is usually the hardest part of this task. ~ Understanding sales process is fundamental. It’s as simple as that. The only long-term alternative is organizational pain. I’m glad that you recognize this. How can you arrive at the right destination if you don’t have a map? You’ve indicated that you think this is a Very Important competency for your company. I’d probably like to see it in the Essential category.

Sales Velocity
It is very positive that you feel good about the sales team’s ability to effectively qualify opportunities. I remember a wise experienced sales professional asking me one time why I was working on unqualified opportunities, when I could be making money. It is good that the team is focused on the latter. Continue to make sure that the definition of a qualified opportunity is clear to everyone and that the sales team has the skills, and inclination, to ask the hard qualifying questions. ~ You’re not confident that your sales close ratio is satisfactory. You need to ask yourself three questions. What is the underlying cause? What is the impact? What can you do to improve it? And then perhaps consider how you define win rate. Close ratio is one of the four main factors in the Sales Velocity Equation and a critical component of profitability. It costs real money (and of course time) to pursue each deal, and when you’re not achieving an acceptable win rate, both revenue and profitability suffer. There are really only two reasons why you ever lose a deal; (1) You shouldn’t have been in the deal in the first place – in other words you did not qualify correctly, and perhaps your offering is not suitable. See comments above on qualification. (2) This was a qualified opportunity, but you were outsold. Think about it and consider whether your sales process is truly aligned to the customer’s buying process, and whether the sales team has the right supporting tools to present the right value proposition to the customer at each stage in the buying cycle. Only then will you be able to guide the sale in the direction you need, thereby increasing your win rate. ~Being comfortable with the sales cycle duration is a very healthy indicator. You said that you think the sales cycle is about the length you think it should be. This is one of the fundamental factors in the Sales Velocity Equation, and a strong predictor of success.

You’ve been non-committal in your assessment as to whether your company is effective at maximizing the potential from your major accounts, or maybe you’re just unsure, or you don’t think it is applicable. If your major accounts are indeed ‘major’ then you can’t do this on your own, and you need corporate level buy in, and sustained commitment. Major account development takes time before it provides the return, and there is no point in trying to develop major accounts unless your company has the infrastructure, inclination and ability to apply the necessary resources to make it work.

Coaching and Getting the Basics Right
The first line sales management job is really difficult. But it is also particularly important. Managers should most of their time coaching. The answer you selected would suggest that this is the case. There is abundant research that supports the fact that sales teams who are frequently coached will dramatically over perform those who don’t receiving that kind of guidance. If the managers are spending their time chasing details of sales opportunities, there is very little value added to the sales person. Make sure that your company continues to do what it takes to make this embedded practice in your company. ~ It was Albert Einstein who said – never stop questioning. He might not have known it at the time but he was articulating one of the key commandments of the sales profession. Alongside listening and presentation skills, these are really basic skills that every salesperson should master. You’ve indicated that you’re pretty happy with this, and that is great. The good news is that if competencies begin to slip, this is one area that is pretty easy to fix. Keep up the good work. ~Efficient utilization of company resources is always important. You are in the happy position where you believe that the company efficiently allocates resources to well qualified opportunities. This means that resources are applied to the ‘most-deserving’ opportunities, and investments that you would like to see in other supporting functions, such as product development, marketing or support, are not being wasted. The sales organization should care deeply about this. ~ It is always healthy to retain an adequate focus on the basic skills. I am pleased that you view Level 1 Individual Selling Skills as Very Important. These skills are foundational. ~ Demonstrable Level 2 Selling Skills (Gaining Executive Access, Discovery, and Understanding Customer Needs etc.) are some of the most common skill deficits that lead to missed revenue. Recognizing the importance of this is crucial, and I’m pleased to see that you share this perception. Now, just be sure that your program to embed these skills is sustained.

Social Media
Whether we like it or not, social media is here to stay. Twitter, LinkedIn, Facebook, company blogs, YouTube video channels, self-service capabilities on the Internet like Dealmaker Genius and Dealmaker Index, and community sites are examples of just some of the facilities in the Social Universe being used by your customers, and your competitors – and it’s not just for consumer focused businesses. If your company is not really leveraging social media it is undoubtedly developing a competitive disadvantage for itself. Not all social channels need to be used, but to use an off-line analogy, this is where your customers are ‘hanging-out’. This is an increasingly important destination for your customers, and it’s where they are increasingly having conversations. If you’re not part of the conversation, then it is less likely that you will be the person they call when a business opportunity arises. It’s that simple.

Keeping Customers
You’re not ready to say that your customer retention rate is satisfactory, and that is a concern for me. Customer retention is an issue you must address if you’re to pursue a sustainable growth strategy, or even if you just need to achieve a healthy profit margin. Perhaps somewhat surprisingly, customer retention is not usually a result of price pressure or product features or capability. More often customers switch to an alternative supplier because they are unhappy with the service being provided. Now armed with that knowledge, what actions can you take to improve your customer retention rates? ~ You must be pleased that your company understands that effectively developing and maintaining long term customer relationships is the key to achieving an optimum renewal rate for your recurring business. You’ve said that you believe renewal rates are satisfactory. Keep effectively communicating with your customers and continue to elevate the renewal conversations to a business level, demonstrating the true benefits of renewing from a customerÆs perspective.

Competitive Differentiation
Differentiation is key. There is just so much noise out there. And clearly your company has figured it out. You said that your sales team finds it easy to differentiate your offering. While everyone else is talking about USPs or Unique Selling Proposition, your team is more likely thinking in terms of a Unique Buying Proposition, or a Unique Business Value, or they might call it a Unique Value Proposition. In any case, you’ve figured out that it should be considered from the buyer’s perspective. That works. ~ As the saying goes – companies don’t buy, people buy. Failing to gain access to key influencers in a deal is definitely one of the main reasons why deals are lost – and unfortunately it seems your company has some work to do here. You’ve said you’re not effective at gaining access. First, you need to identify who the real influencers are; and then consider things from their perspective. If you were in their shoes, why would you spend the time? Usually senior executives – who are often the key influencers – will only take a meeting if someone in their internal organization asks them to. The second key most likely to open the door is a referral from someone in their industry, perhaps a peer at a similar company. Unless you figure out how to gain access your win rate will definitely be sub-optimal. ~ You’ve said that you are confident that your sales team is good at uncovering the customer’s business problem. That’s really good, and the alternative is not pretty. As you know, without understanding the customer’s business problem, there is no way you can know the value your offering will provide, or indeed even how to apply your solution to solving the problem. Then it becomes a feature or price battle, and that’s an abyss that, thankfully, you seem to be able to avoid.

Your company clearly understands that the key to crafting solutions aligned with the customer’s need is to first understand the customer’s business problem. (See above) You’ve indicated that the sales organization is good at designing solutions. This is a very valuable asset in your company. To ensure that you maximize this advantage, you might consider using collaborative techniques with the customer to ascertain specific, and I mean very specific, features or attributes of your product/solution/offering that can be applied to solve very specific aspects of the customer’s problem. I know you would never do this, but the temptation is often to pitch your entire solution to solve the customer’s entire problem, and that approach rarely provides adequate insight for the customer as to how you bring real differential advantage. ~ It’s evident from your input that you’re comfortable that the sales team is effective at differentiating against the competition. You seem to have this in hand, but is possibly worth revisiting the factors that would get in the way of this being untrue. There can be only three reasons for a sales team to fail this effectiveness test. (1) You don’t understand the Unique Business Value (See above) you provide, (2) You don’t know your competition – a grievous sin, or (3) You can’t position competitively. You have to be competent in the first two before you address the third. One more thing – I’m assuming that you understand the specific problem the customer is trying to solve (See above) because without that any effort spent on competitive differentiation is a waste of time. ~ Harking back to an earlier comment, we know how important it is to be able to effectively describe the value that you can bring to a customer. You’re clearly comfortable enough to say that this is something that your sales team can do well. That’s not as common as you think – so, well done. Many organizations struggle with this. I’d strongly recommend that you maintain a deep focus on this. Here’s what I would suggest. Go to your CEO, Head of Product Development, or Head of Marketing, and ask them a question in two parts. Firstly – would your customers care if your company went out of business? Next – what is it about the products or service you offer that they would miss most? If the answer to the first question is no, then you’ve got a bigger problem than I can help you with here; but if it’s not, then the answer to the second question should be illuminating.

Sales Methodology & CRM
Most sales methodologies are poorly implemented, the training books gathering dust on the shelf. One of the ways to address this problem is to tightly integrate the sales methodology into your CRM System. When I say tightly integrate, I mean surfacing the methodology in context when the deal is being worked. I don’t mean just adding the fields to the CRM or adding a ‘dumb’ (read not intelligent) data entry form. The integration should be smart enough to identify for you vulnerabilities in the deal, acting like a sales coach always there to help while proactively offering suggestions. You say that your sales methodology is effectively integrated with your CRM. Does the integration provide you with all of these benefits? If not, it is a missed opportunity (pun intended). ~

You can refer to them as Key Accounts, Strategic Accounts, or Major Accounts, or whatever you want; but when a company is successful at penetrating large accounts, it is usually because they’ve followed a structured account planning methodology. Based on the level of importance you’ve assigned to this competency, you’ve clearly identified this. But, as you know, Key Account Planning and Management is not for every company, or sales person, as it requires significant resources and a certain type of business model or level of product maturity. Make sure that this is the optimum time for your company to allocate resources in this area, or if other areas should receive your focus. ~ It’s a positive statement that you’ve selected a sales methodology. I’m not going to comment here on the usage levels of the methodology in your company, as I want you to step back with me for a second and make sure that we’re setting the bar high enough. Implementing a sales methodology is not a trivial initiative. It is expensive to do and expensive to sustain. But when it is done well (an all too infrequent occurrence) it can deliver dramatic benefits. Here are a few principles to consider: Don’t think that a tactical sales training event will have a strategic impact on your business; Do give your sales team the credit that they deserve – they do want to apply sales methodology to be more successful, it’s just that in many cases in the past it’s just been too hard to do; Don’t waste your money on sales methodology/sales training unless you’re prepared to set quantifiable business results that you want to achieve; Do measure yourself against those goals; Give adequate time to consider the role that technology has to play in sustaining the effectiveness of your sales methodology. Recent developments in this area are very exciting.

As your business develops you might give some thought to the strategic nature of the CRM, and examine whether your current CRM system approach will get you to where you need to be. Consider the reason why you purchased the CRM in the first place. Less than one in five CRM installation succeed in driving revenue for the customer. When intelligent sales process, sales methodology and CRM are well integrated, significant revenue advances occur. As you probably know, there have been considerable advances in CRM capabilities in recent years – particularly in respect of integration capabilities. Make sure you are taking full advantage. ~ Now that you’ve had the CRM in place for more than five years, you’ve had the opportunity to get all of the best practices embedded, and, in terms or organizational effort, there are really no excuses for a sub-optimal implementation.

Revenue Performance Management
Our research suggests that sales people spend on average two and a half hours a week on sales forecasting. Yes, that’s right -150 selling minutes. And then the deals that are forecasted don’t close as forecasted. Thankfully you’re bucking the trend. That is really valuable to your company, as the alternative is one of the most damaging aspects of some sales teams’ behavior. You’re probably aware that there are evidence based sales forecast tools available, and you might be already using one. As you know you will achieve much greater sales forecast accuracy if the team follows a well defined sales process – one that is designed to map to the customer’s buying process (See above). Good work. ~ Congratulations on the fact that you have and use a clearly defined process for managing your sales forecast. If you don’t have a defined process, then any degree of accuracy you achieve is pure chance and down to the individuals who are the component parts of the rolled-up sales forecast. The subjectivity inherent in that approach is your enemy. It is not an approach you can trust, and it’s certainly not an approach that can scale if your business grows. Stay true to the discipline. It will serve you well.

I’m not sure I even know why I asked this question – but there were many that disagreed. It defies me to understand how a company could operate in today’s fast moving world if sales forecasting is not at the heart of the business. You strongly agreed with the statement ‘Our sales forecast is a critical component of the overall business planning’. It just has to be. ~ There are a lot of myths around pipeline management. The most dangerous one is that bigger is always better. People talk about the need for 3x, or 5x, but in reality that rarely considers sales cycle duration or funnel velocity. One of the most important attributes of a pipeline is its integrity. The opportunities in the pipeline need to be real and active. That’s the only way for the pipeline to give an accurate picture of future business. Thankfully in your case, you agreed with the statement that the sales pipeline gives an accurate picture of future business. Continue with your pipeline management practices. Continue to qualify hard and clean out dead deals.

The hardest thing to deal with in business is a surprise. There are revelations, bluebirds and bombshells, but whatever the form, any surprise usually causes business disruption. When one materializes in the form of missed revenue, or inaccurate sales guidance, then the pain can be severe. You can end up with too much inventory on the shelves, too little stock in the stores, disgruntled shareholders, or dissatisfied customers; all because your sales forecast was inaccurate. And that’s without considering the productivity impact on the sales organization referenced elsewhere in this report. Clearly you understand this, and I’m thrilled to see that you think that a competency in sales forecasting is Essential. ~ While many companies’ financial quarters force measurement in four financial quarters, few customers’ buying cycles maintain a similar rhythm. Focus on this competency is all too rare, and you should be proud that it’s getting the attention that it is at your company. Maintaining a strong pipeline is the only way to constantly have enough deals in hand to avoid a sinusoidal revenue profile. Pipeline management can be a complex endeavor, but, as you know, it merits prioritized attention, as without it you end up in what feels like an almost circadian pattern of surprises. And you know what that means.

You can participate in the Dealmaker Index Global Sales Benchmark Study yourself for free here.

Personal Dealmaker Index Report

Based on what you’ve told me, I’ve calculated you have a Personal Dealmaker Index of 89%. I’ve assessed both your approach to sales and your execution ability, and you’re in the Dealmaker Ace category.

There are a number of elements that are factored into this analysis, but clearly there are some things that I have not been able to consider. I hope that as you review the analysis you will get some ideas that will prompt action and will help you increase your sales performance and reach your full potential.

Sales Engagement
You will generally make more progress and gain more insight talking to customers than in any other activity. I’m not entirely sure you are having enough customer meetings. Step away from the computer and call someone. ~ Analyzing why you won or lost a deal is possibly the most valuable insight you can get to what you should change (or keep) about your approach to a customer. How else can you uncover such deep market insight? If you’re doing it less than half of the time – you said 25-50% – you’re missing out on more than half of the insight. That’s not my recommended approach. ~ As you know, I’ve said before that a sales process is fundamental, and I’m glad to see that you’re on the same page. If you could nudge your application of this discipline from ‘Most of the time’ to ‘All of the time’ I believe you will see a noticeable difference in your results. ~ There is conclusive evidence that a referral from a peer is one of the most effective ways to gain access to busy executives, and get the chance to explore business opportunities. If you have delivered value to one customer and built up some credibility, then you’ve earned the right to ask for a referral. You say you are asking for referrals more than half of the time. If so, you know that this is one of your most valuable sources of leads and opportunities. Try to improve on the ratio. ~ You’ve selected ‘Needs Analysis’ as the most important stage of the sales cycle, and you are absolutely correct. Well done. Unless you can figure out what the customer really wants, all of the rest of the steps are less valuable. ~ I’m glad you selected ‘Needs Analysis’ as the most difficult stage in the sales cycle. Based on my experience it is the area where most sales people fail – and then everything else falls apart. In my opinion, Needs Analysis is both the most important and the most difficult. Getting behind the customer’s business problem is a skill very few have mastered.

Personal Perspective
So, you’ve figured out that in most cases customers will only buy from you when that is a best choice for them. Usually that means you need to be able to differentiate your product from your competitor’s offering. You’ve indicated that you’re pretty effective at this. It is always good to check that you are doing the best job you can here. Perhaps you might take the time to validate your perspective with your customers or colleagues. You may well learn something. ~ In a competitive situation most sales people fail. That is a mathematical certainty. Developing a competitive strategy for an opportunity means that you consider the people involved, the problems they have and the relative strength of your solution compared to your competitors’ – all in the context of the customer’s decision criteria. Most sales people don’t craft a competitive strategy, though – based on your input – I’m pleased to see that you are an exception. Keep it up. ~ You really only have control of two things; who you meet, and what you do when you meet them. It’s clear that you appreciate this. You’ve said that you’re always clear about what you want to achieve in advance of a meeting. That’s great. You might also think about considering why you might not achieve your call objectives, and develop a ‘Plan B’.

You have indicated that your negotiation skills are well developed. Make sure that you are not just negotiating at the ‘negotiation stage’ in the sales cycle. In truth, how you position your solution right through the sales cycle sets up the negotiation landscape. ~ As you know, you need to be having business conversations with business leaders if you are to be a successful sales professional. Based on your input it would appear that you know that this means you need to understand how to read an Income Statement, understand a company’s 10K filing, and look for strengths and weaknesses in a Balance Sheet. When executives want to discuss ROI, understanding the underlying fundamentals that the financial calculations are based on is the key. Perhaps you might check your skills level with your CFO or other executives. ~ Communication with your peers enriches the fabric of your knowledge – always. I’m glad that you understand that your success is tightly linked to how well you communicate with your peers. We all need help. ~ Your job as a sales person is to deliver value to your customer. At least that is my opinion. It’s the only way I know how to maintain long term relationships and build a personal business portfolio. Sometimes that requires tough love. I take it from your answer that you’re in agreement with that. I’m pleased to see that. It underpins the integrity of the relationship.

Leveraging Infrastructure and Systems
You seem to have a healthy relationship with your CRM. It is not always fun, but effectively used it should help you to better manage your personal business. ~ There is a direct correlation between consistent usage of a (good) methodology and revenue performance. You seem to be on the right track here. ~ LinkedIn is a good source of networking insight. With the recent additional capability (following etc.) it can be a valuable resource. Your usage appears to be quite healthy. ~ Facebook has not yet penetrated the business world enough for it to deserve the same focus as LinkedIn. In my opinion, it has value in a pure social networking sense, but you need to manage the noise levels well. To get the ‘network benefit’ you probably need to participate a little more than you are currently doing I think. ~ If you’re looking for up to date information on what is happening in you marketplace, Twitter is the place to ‘hang out’. If you do nothing else except listen to the conversation it can be a truly valuable resource. You’ve recognized that, and that’s a plus. Remember the shelf life of a tweet is really short, so frequent visits are necessary.

You can participate in the Dealmaker Index Global Sales Benchmark Study yourself for free here.

It has been a while since the last post in this series.  We’ve been really busy with the launch of the Dealmaker Index global sales benchmark study.  The data that we’ve gathered from that study underlines the need for sales and marketing to be on the same page.  In my post The Actual Cost of Sales and Marketing Misalignment, I draw from the Dealmaker Index data to show that there can be a difference in quota attainment of up to 25% between those organizations where sales and marketing are singing in harmony, versus those where these two interdependent functions are just singing their individual tunes.

You can find the earlier posts here:

• Blueprint for Sales and Marketing Alignment – Part 1
• Select the Customer: Blueprint for Sales and Marketing Alignment – Part 2
• The Buyer’s Perspective: Blueprint for Sales and Marketing Alignment – Part 3

In the last post in this series, I focused on qualification of opportunities, to help both sales and marketing identify which deals you could win. By qualifying opportunities well, you know where to spend your time to meet your quota each month or quarter. But while many companies’ financial cycles force measurement in four financial quarters, it’s rare that a customer’s buying cycle will start and end every three months. Maintaining a strong pipeline, with enough qualified opportunities at each phase in the pipeline, is the only way to avoid the quarter-end crunch that often results in unnecessary discounting.

Pipeline Structure & Management

It is often difficult to decide how many stages you should have in your sales pipeline. At The TAS Group, we have seen different companies with their pipelines segmented into anything between three and 12 stages (we recommend no more than six) in the pipeline. Every week, or month, sales managers then ‘manage’ the sales force by working through each individual’s sales pipeline to determine how many opportunities are at each stage, and what probability to apply to each opportunity. More often than not, this is a fruitless exercise for two main reasons.

First, subjectivity plays a large part. In most cases, the interpretation of how to categorize the opportunity is left to the salesperson’s discretion. The buying cycle is often ignored, and there is usually little linkage between the key qualification questions used, and the stage of the process. Clear ‘customer-evidenced’ deliverables are linked to each stage of the sale, and overall productivity increases.

Second, it is futile to determine the value of a pipeline by multiplying the value of each opportunity by the probability of it closing. You either win the deal or you lose. Having 10 opportunities at 10% probability mathematically may be the equivalent of one full opportunity – but it is not the same as having a signed contract.

Keep the Funnel Full

You mightn’t want to do it, but sometimes, as a sales person, you’re going to have to generate your own leads. You can’t always rely on marketing. Getting appropriately-targeted customers into the top of your sales funnel is the source of your raw material. Without that raw material, you can’t build a pipeline. When there are gaps in your pipeline, pressure builds on the few opportunities you have. You’re tempted to try to progress a specific deal too aggressively.

The likelihood of finding a good opportunity is dependent on the type of activity you undertake. If you’ve got your act together, if you are truly a sales professional, you have a broad network of contacts who are potential customers. They respect you and the value you can bring to their business. Your existing customers can provide you with further business within their company, and referrals to their counterparts in similar companies. Strong relationships with industry consultants and analysts are a good source of recommendations for new business opportunities.

Your own market assessment and development activities will always provide the best quality of sales leads, but be sure that the folks in marketing aren’t working in a vacuum. Make sure they are in lock-step with your needs. Help them understand what’s exciting the customers. Together, you can craft effective seminar programs, social media activity, telesales, or emarketing campaigns for your territory. Marketing often bemoans the fact that they generate leads and the salesforce ignores them. Get them on your side, and help focus their activity by telling them what you need, and then by showing them how you are responding to the good work that they do.

Rocks and Stones and Pebbles

If you want to fill a barrel with rocks and maximize the capacity of the barrel, you have to fill the gaps between the rocks with stones or pebbles. It’s the same with your pipeline. Experienced sales professionals will understand that relying on a small number of big deals is risky, and they will balance their opportunity portfolio with smaller deals. While waiting for the big deal, no one is making any money and desperation levels increase if there isn’t a backup plan. Your negotiation position weakens, and that major opportunity turns into a minor profit deal. Rocks, stones and pebbles make for a full barrel.

The Pipeline Value Factor

There are four factors that determine the health of a sales pipeline:

• Integrity of data
• Deal value
• Number of deals
• Balance across pipeline stages.

The information in the pipeline system must be pristine, continually updated to reflect progress, wins and losses.

How long is your typical sales cycle? How much time passes during each phase of the buying cycle? To keep the pipeline balanced, and maintain a steady deal flow, you need to have an adequate number and value of opportunities at each stage in the pipeline. In Dealmaker we use the Pipeline Value Factor, or PVF, to help gauge the value.

To achieve 100% of, say, a quarterly target, consistently over consecutive quarters, PVF is the measure of what multiple of that target number you would need to have in each stage of the pipeline, at any point in time.

Determining what opportunity value you need to factor into each of the pipeline is best calculated by reference to historical data:

• On average, how long does it take for an opportunity to progress from initial engagement to closure?
• How many of the customers that you had identified this time last year have progressed to further stages of the pipeline?
• How many have closed?
• How many were lost?

An effective pipeline management system, consistently executed, provides clarity and visibility which, together, gives both sales and marketing greater control. A true pipeline provides an early warning system; it shows where you are strong and points to areas that need attention. Use our system or develop your own. Use it well and it will bring you an uncommon freedom to focus on what you have to do today in order to achieve your revenue targets consistently, without the interminable stress that accompanies uncertainty.

There are few distinct viewpoints in business that are as polarized as those of marketing and sales professionals. Marketing is glamorous, sales less so. Sales are measurable, marketing less so. The uneasy relationship between sales and marketing is widespread and infects almost all types of businesses, particularly technology companies that provide high value solutions to large corporations. Marketing folks decry the poor sales conversion rate delivered by the sales team, who in turn abhor what they would characterize as the risible value delivered by expensive marketing campaigns.

As I’ve met with many sales and marketing professionals, the polarity of perspective was striking. “Sales people are just quick-talking, quota-driven snake oil dealers” was the cant of the marketing quarter, while the sales constituency responded, “Sales draw the picture and marketing color it in!”

Like many opposing forces, however, their true interdependence is understated and sometimes unclear. The strategic marketing function (not marketing communications) believes that it sets out the game-plan, sometimes only to find that there are no players who understand the strategy. Sales execute plays, without understanding where the corporate goal is. On today’s playing field, successful selling, and the leading sales professional, encapsulates the best of strategic marketing, but at an individual customer level. Today’s sales winners eschew their previous role as vehicles for value communication and take responsibility for value creation, delivered to carefully chosen prospects – to convert them to customers.

Principles, once seemingly engraved in stone, now reveal themselves to be more fluid than rigid. In a world where ‘value creation’ is a necessity, and the foundation upon which profitable sales relationships are built, activity alone no longer suffices. The old adage of ‘sales is a numbers game’ rings hollow in a world where information is everywhere, and customers are frequently as knowledgeable as you are about your products, and those of your competitor. Unless you create – rather than just communicate – value, customers will look elsewhere. Professional selling has evolved beyond a “Go get ‘em, Tiger!” approach, and a good listener will beat a fast talker anytime. Customers now look to a sales professional to be their partner in developing a future vision for their organizations. They expect actions – not just words. The winning professional salesperson is becoming a customer confidante, a trusted advisor in his industry, and the person who leads his colleagues to President’s Club, year after year.

Bringing Sales and Marketing Together

For sales and marketing to work together, there must be a common framework, a blueprint of the deal, a shared perspective of the ideal customer, and single understanding of typical problems that customer is trying to solve. The function of any such blueprint should be to equip anyone selling or marketing high value, complex products to large corporations with a defined process that can be molded to an individual salesperson’s style but which also takes much of the uncertainty out of the sales process.  I tried to do that here. It combines high-level, strategic marketing principles to draw the map, with focused tactics to complete each journey, addressing the practical stops along the way.

Its purpose is to help you grow revenue. We have all spent too many hours in airports, traveling to sales calls, to focus on anything else. Selling is an honorable profession – but a tough one. Marketing is no less honorable, but is absent the rejections in sales that are many and varied, or the highs which are sometimes not as frequent as the lows. But when sales is good, when you close that big deal, or win a really competitive bid, there is almost nothing to compare.  If we can construct an environment where sales and marketing are fellow travelers on this journey, sharing the same map, and headed to the same destination, it is more likely that the destination reached will be a treasured one.

I have set out here a defined repeatable sales process that is pragmatic and usable. It is focused around the sales process and highlights what the sales person needs to do, and how the marketing organization might think about how to support the sales process, each step of the way. The process sets out key principles, and arranges them into a series of six manageable, actionable steps – a framework that you can adopt to aid your efforts:

1. Select Target Customer.
2. Understand Buyer Need.
3. Qualify the Opportunity.
4. Plan and Manage the Pipeline.
5. Execute the Sales Plan.
6. Negotiate and Close.

In following posts, I will go into detail on each of these steps in the sales process, outlining the respective and interdependent tasks for sales and marketing.  But, in the meantime, if you want to create a customized sales process for your own company, you can do so for free at DealmakerGenius.

Update: You can now read the second post in this series here.

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The tagline on their website says Success is never an accident … it is always a result of passion.

When, on a recent webinar, Imrana Ghani and Tarek Khalifa of ITS told their story about how they dramatically improved the sales performance at ITS, their passion comes through at every turn; and the remarkable results they achieved were indeed no accident.

In this (edited) transcript from the webinar you will read about sales issues that I think you will find familiar.  Facing CRM and sales process adoption challenges, Imrana – an MBA graduate from Halifax, Canada, but now based in the Middle East – led a carefully choreographed initiative that has delivered dramatic results for her company. Tarek, in his sales management role, embraced and informed the activity, and guided his team, and others to reap the rewards.

The results, in terms of improved win rate, growth in average deal size, increased number of opportunities and reduced sales cycle, are all very impressive – an aggregate 400% improvement in sales velocity.  I think it is worth reading this story to the end to see the actual numbers they achieved, but also, and more importantly, to learn how they got there.

I’ve edited the transcript for brevity, but hopefully I’ve not edited out any of the passion that has fueled this tremendous success story.  So, here, in their own words are Imrana and Tarek.

Background: International Turnkey Systems – ITS, is a leading integrated information technology solutions and software services provider based in Kuwait. It was founded in 1981 and has 3000 employees, and 350 satisfied customers in 45 countries.  ITS services the Telecommunications, Financial Services, and Education industries, as well as other large enterprises in Oil & Gas, Government, Defense, Utilities, Transportation and Healthcare.

Imrana Ghani: At beginning of 2007, the executive team at ITS assessed and evaluated the company, set a specific revenue goal for 2015 and developed an action plan to get there. They decided that we needed to introduce a formal sales process.  Prior to this, each of the teams had been following their own sales processes and there was no unified language. The other thing that was key was to adopt a CRM system, so that all the information about the customer was retained in the organization.

We had poor adoption of salesforce.com, even though we had invested quite a lot into the technology and into the process.  The team felt they were not getting value from the system.  There was a lack of understanding of the sales process and poor communication between sales, services, and marketing, which meant we could not best position the company for selling to an account.

Earlier Efforts: Prior to this project we had developed a sales process in which a number of sales tools had been created; paper tools, worksheets and a process guide. We expected the team to record their opportunities in salesforce.com. We thought we could retain information about opportunities, understand the length of the sales cycle, and establish how many opportunities the team was working on.  We had tried to get another system that would help us integrate with salesforce.com. It was a desktop based system – but many of the users did not have access, and those who had access found it difficult to do both activities on desktop and to add additional activities in salesforce.com.

The other concern was there was no real formal team selling approach, although our sales process did have account planning activities.

A New Approach: When we looked at those concerns we felt that we needed something that would make it easy to gain the advantages of the tools we had provided them.  The team had to perceive the value not just in salesforce.com, but also in the other tools.  We needed a single system and it had to be easy enough to use so that they could see the value in all of the tools that we had provided for them.

Starting in August 2009, we went through an extensive evaluation process, and came across Dealmaker.  After a few meetings with the team it became clear that this was the solution we were looking for. We found that it gave us not only help with our sales process, but we found that it added value in account planning and forecast management.

We began implementation in November and completed it in a month. In December – supported by the Dealmaker team – we were able to arrange for 5 sessions in Bahrain, Egypt, Kuwait, Jordan and Dubai. By mid-December all teams had completed the pre-work as well as the formal training, and we were confident the team had what they needed.

At the start of February 2010 we had an Opportunity Management initiative, followed by one for Account Management at the end of that month to make sure that the team had a good understanding of the tools and system, and we helped them get into a routine of using the system.

The Benefits and Outcomes: At the beginning of this project we had certain goals to we wanted to achieve, related to the ROI in salesforce.com. If anyone is a salesforce.com customer they understand the type of investment it takes. We had invested quite a bit in developing a customized sales process in salesforce.com – though we ended up moving away from that. Actually, though one of the original reasons we selected Dealmaker was its ability to easily customize the sales process to our business, in the end we decided to go with the standard process that came with Dealmaker during the implementation because we found that it matched the process we needed.

The main Return On Investment for us was seeing the team using the system through their daily activities, and actually spending their limited time on the opportunities where they were going to find the best value.

We use the RACI model, and Dealmaker made it easy for us to implement this model where we could track who is Responsible, who is Accountable, who should be Consulted, and who should be Informed. In Dealmaker on the web, it was much easier to do and we did see improved win rate overall. (We will talk about the numbers later.)

There were other benefits that we had not planned for, and one was guided change management. Having tools like the Customer Success Charter from The TAS Group helped us to put together some measurable goals to evaluate our success and continue to manage and track our goals.

Part of my role in Sales Operations is to ensure that our audit of the sales team is managed successfully.  We have a number of internal audits through our quality department and we also get certified on ISO for our sales processes.  And having a system (Dealmaker) where the documentation, the cycles, and the sales process is integrated reduced the number of non-conformities and improved the overall results.

In my experience the majority of organizations have a reactive approach to selling and it’s very hard to be proactive. Having tools like the Dealmaker forecast management and account planning has helped us to move to more proactive selling.

The Results

Tarek Khalifa: I look at this from a field sales view, not operations. I’m passionate about the sophistication of the enterprise sales process. We deal in multi-million deals, in big companies with big (buying ) teams.  I consider Dealmaker to be the platform that supports us.

Usually you find that a lot of sales people follow their feeling on how they assess they opportunities. Sometimes it is good, but I believe that in sophisticated sales this will not work and will not take you to the end of the sale. Dealmaker really gave us a very structured way that we can apply and share throughout the whole sale to manage an opportunity through the whole sales cycle.  We do this across

45 countries with virtual teams and many corporate functions. This was very hard before Dealmaker.

Account Management in Dealmaker gave us a good way to share information.  Many of our accounts have operations in the different countries and we used to treat them as separate accounts. Dealmaker helped us have a single view and become a better partner with our customers.

How Dealmaker Helps ITS Manage Better: The way that the forecast management in Dealmaker represents what has been closed, the pipeline, the projection, the distribution of deals over time, and the number of deals each account manager is working, is very impressive.  Also, we used to look at the total funnel; some account mangers had $6m in their funnel, others had $8m, or $10m.  Dealmaker gave insight into managing the funnel and we could see if one account manager had the $8m in one deal, or another in 40 deals. Dealmaker gave us a chance to balance the size and number of deals and distribute them among the account managers.  In Dealmaker we could track how deals were being moved from one stage to another, and also highlight deals that are inactive for say 30 days.  If a deal (in a late funnel stage) is inactive then we can identify it and help the account manager make progress.

Financial Results

Imrana Ghani: I think it is important when we are looking at these numbers to gauge the success of the project.

We were really looking to see the value that the sales team would gain, not just at the executive or operational level, but also the ‘on the ground’ team.

• Numbers of Deals: Up 47%
• Average Deal Size: Up 26%
• Win Rate: Up 58%
• Sales Cycle Length: Down 27%

Just looking at these numbers you can see the type of growth we achieved.  I know they look large and you can see the impact. As much as I am happy with these, I have to take into account there was a lot of information that had not been entered so that might impact the results.

When we started out we had 37% of management going in to the system. A little over 50% of the sales team was putting in their opportunities.  At begin of the year we had an initiative for top down adoption and all presentations are done through Dealmaker and salesforce.com. We now have 90% of managers reviewing their deals through Dealmaker.

Conclusions

I think you will agree that the approach taken by ITS to this important initiative was the correct one.  The proof I guess is in the results.  When we asked a little about what lessons were learned Imrana and Tarek shared the following observations.

1. Take a top down approach with technology or process Implementation
2. Involve the sales managers so that they can support their teams
3. Be pragmatic, and implement incrementally, gain incremental benefit and then implement the next phase.

I think they avoided to mentioned the hard work and passion they brought to the project, and I don’t think that can be undervalued.  Having read their account, what other lessons do you think can be taken away from this story.  Please share your thoughts.

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