Selling in a Down Economy in a Down Economy... · 2009-09-16 · services? Are we communicating value messages consistently? Are lead generation vehicles producing qualified opportunities?

© SALES PERFORMANCE INTERNATIONAL

6 Strategies for Success

Selling in a Down Economy

September 09

Steven Vantongelen

September 16, 2009 | © SALES PERFORMANCE INTERNATIONAL – CONFIDENTIAL | PAGE 2

From Demand-Rich to Demand-Poor

Demand-Poor Environment (Post 2008)

• Later stage markets

• Weaker economic drivers

• Comparable offerings with intense competition

• High market saturation

How are we positioned in the

marketplace?

Do our messages connect with customer

needs?

How are we legitimately differentiated?

Are we creating the right products and

services?

Are we communicating value messages

consistently?

Are lead generation vehicles producing

qualified opportunities?

More Challenges Are “Above” the Funnel

In the Funnel

Product

Marketing

Marketing

Communications

Market

Positioning

Messaging

Platform

Product

Management

Lead

Generation

W/L Ratio

Velocity

€


Context

The War for Customers and Talent

Get out of the commodity battle and shift to “selling solutions”

Moving up the Value Chain opens up new revenue sources, and requires new capabilities

• Generic services, functional processes, vertical industry processes

• Management and Business capabilities

• Leadership and culture

Scarcity of qualified resources in the labor market

Leading to a rapidly changing competitive landscape


Trends - Evolution

An attempt to secure recurring revenue streams, reduce customer churn, and attract more business from new/existing customers leads to:

The majority of companies putting a key focus on synergies, leveraging core access business

Companies entering new domains through acquisitions for scale and/or expertise

This increased complexity generates significant operational challenges and requires “New Mindsets for New Games”, and New Account Management and Selling disciplines and partnerships


The Elusive Goal - Sustained Profitable Revenue GrowthHow many of these are you experiencing?

Increasingly perceived as a commodity and

difficulty differentiating offerings

High cost per lead and lack of quality leads to

fill the pipeline

Limited use of marketing materials by selling

organizations

Productivity loss from chasing unqualified

opportunities

Closure rates too low to meet revenue targets

Steep discounts to win competitive deals

Lengthy sales cycles and frequent “no

decisions”

Wide swings in forecast accuracy

Sound Familiar?

Increasingly perceived as a commodity and

difficulty differentiating offerings

High cost per lead and lack of quality leads to

fill the pipeline

Limited use of marketing materials by selling

organizations

Productivity loss from chasing unqualified

opportunities

Closure rates too low to meet revenue targets

Steep discounts to win competitive deals

Lengthy sales cycles and frequent “no

decisions”

Wide swings in forecast accuracy

Sound Familiar?

Decreased market share

Decreased wallet share

Lower gross revenue

Lower margins

Higher cost of sales

Lower marketing yields

Decreased valuation

Financial outcomes

Decreased market share

Decreased wallet share

Lower gross revenue

Lower margins

Higher cost of sales

Lower marketing yields

Decreased valuation

Financial outcomes


Unsettling Trends

For Executives and

The Sales Force


The Brutal Facts

Quota attainment remains below pre-2000 levels for most industries

51% of forecasted deals fail to close

Sales cycle length is increasing

Ramp-up times for sales professionals are lengthening

More calls required to get to meetings/presentation

Over $5 Billion spent annually to improve top line sales performance!


Quota Attainment

Support to help reps work smarter is not happening to the extent needed

Only 37% of firms report implementing a formal sales process (note: 87% of these

organizations report that their process is having a positive impact on sales

performance)

The need to better align sales and marketing efforts continues to be top of mind for

many firms


Forecasting

Today the sin in sales is not to lose, the sin is

taking a long time to lose!

51% of the time the outcome for forecasted deals

is not a win

Companies that are world-class at lead generation

experience a no-decision rate of less than 15%,

compared to 21% for other firms

The larger the deal size, the lower

the ultimate accuracy

Sales process (with toll gates)

showing promise for increasing

accuracy


Sales Cycle Length

14% of the firms surveyed reported an

average sell cycle of 1 month or less…

Better job of qualifying and prioritizing

deals can further reduce sell cycle time

Focusing on your process can help you

see how you are lengthening the

process

Average Number of Calls Needed to Close a Deal

Buy cycles starting before sell cycles are

putting burden on reps to know more than

just “reads, feeds, and speeds”

Focus on value-add in the first call


Ramp-Up Times

In the past four years, the number of firms experiencing ramp-up times in excess of one

full year more than double

The number of sales organizations reporting a ramp-up period of 7-12 months is up by

a third

We do see noticeably shorter ramp-up times in firms that:

Have successfully implemented a CRM framework

Are providing new reps with the sales knowledge management capabilities

Are then combining technology and knowledge into a true sales process framework

(this last item helps new reps understand the specific best practices they should use

with each new prospect; the first two provide the content and access to do it)


Prioritize Which Accounts to Focus

Selling Efforts

Effectively Cross-sell/ Up-sell


Properly Qualify and Prioritize Opportunities

Regularly Conduct Win/Lose Reviews


Effectively Introduce New Products

Farm Additional Revenues from Existing Customers


Sales Process Impact on Sales Performance


Top Three Objectives for Next 12 Months


Why Aren’t We Getting Better?


Why Aren’t We Getting Better?

1. Many misconceptions about sales process and methodologies

1. Process is “what” to do – methodologies are “how” to execute the process

2. Buyer alignment is more critical than ever – companies have not adapted

2. Sales training that is “event” oriented versus a continual learning framework

1. Skill needs and training curriculum not driven by defined process and methodologies

2. Absence of on-going reinforcement and incremental learning vehicles

3. Limited (if any) measurement linking training to business outcomes

3. Management system and disciplines are often ad hoc

1. Sales managers lack the requisite knowledge and skills to be effective coaches and mentors for

the sales force

2. Sales managers fail to apply a common, defined sales process consistently

3. Pipeline management and forecasting not based on verifiable outcomes in each step of the

sales process

4. No formal process for aligning key market messages with practical sales tools

1. 1 in 10 sales people effective at assembling key value messages

2. 80% of companies have no formal vision for marketing and sales alignment

5. Technology not aligned with sales strategy, process, and supporting methodologies1. Process and methodologies (how-to’s) not integrated with CRM

2. Focus on management reporting versus sales enablement


Breakthrough Depends on “Institutionalizing” the Overall Process

#Deals in pipeline

+5%

Win Ratio

+5%

Size ($) of wins

+5%

Length of Sales Cycle

-5%

X X

=22% sales

improvement

(SYNERGY EFFECT)

Level 1

Ad Hoc

Level 2

Informal

Level 3

Structured

Level 4

Dynamic

Gains Are Not Linear

(Multiple factors create SYNERGY EFFECT)


Strategies for Success


Why Selling in Today’s Economy is Challenging

Phase I:

Determine Needs

Phase II:

Evaluate Alternatives

Phase III:

Evaluate Risk

Needs

Cost

Solution

Risk

Risk

Price

Solution

Needs

Buying Phases

Time

Leve

l o

f C

on

ce

rn


Six Strategies for Success

Sharpen TargetingTarget and allocate time to

highest potential opportunities 1

Sharpen MessagingCreate problem-focused

messages and tools2

Create UrgencyFind and elevate latent

business issues with prospects4

Get Credit for ValueDeliver value and reduce risk at

every step of the selling cycle3

Sharpen Competitive TacticsDeliver customer-perceived value at

every step of the selling cycle5

Leverage RelationshipsOptimize revenue potential from

existing accounts6


Right Positioning Is More Important than the Right Strategy

Exclusive

Customer

Customer

Needs a

Solution

Value Added

Customer

Has a

Choice

Service Innovation

Knowledgeable

Customer

Power Diagonal

Low

Low

High

High

Relative Cost-to-Serve

Value

Diagonal

Value

Beating

the Commodity

Magnet

Sharpen Targeting1


Sharpen Targeting

a

D b

Current Relationship

Bu

sin

es

s P

ote

nti

al

Low

High

High

Little or no near-term

revenue contribution or

insufficient data to

accurately assess potential

Low level of current

relationship

Territory marketing

coverage

Moderate to low business

potential

High level of current

relationship

Opportunistic sales resource

investment

High future business potential

Highest priority for sales resource investment

Sharpen Targeting1


Talent Index

Job Engagement

Low

High

Organizational CommitmentLow High

Dedicated

Detached

Engaged

Belongers

Relationship between employee

satisfaction & retention

Sharpen Targeting1


A Tale of Two Strategic Account Managers Sharpen Targeting1

Rough, to-the-point

Former military

Intense, focused

No personal intimacy

Relationships are weapons

Suave, cosmopolitan

Multi-industry experience

Works internal channels

Relationships are natural

Which one do you want more of?

Why?

On what basis can you decide?

On what basis should you decide?


Improving the Talent CurveSharpen Targeting1

McKinsey: War for Talent

“A” players grew revenue by 52%

“B” Players grew revenue by 4%

“C” Players shrunk revenue by 15%

“C” Players Level of Performance

% o

f W

ork

forc

e

“B” Players “A” Players

Sales Executive Council

Top 20% outperform next 60% by

60%

Top performing sales teams

outperform average teams by 180%

Huge upside to shifting B up to A

performers

The more complex the selling

environment, the larger the gap and the

higher the potential for return


The Science of Designing Excellent Performance

Sharpen Targeting1

Align with KPIs

Identify Key

PerformersIdentify KPEs

Design “New

Role” KPEs

Key Performers Exist

No Key Performers Exist

Staff Readiness


Align with KPIs

Business Strategy Alignment

Review business drivers and strategy

Review Execution Plan

Review project plan timelines

Review time-to-competency expectations

Review timeline and expected results curve

Determine key contributions of each role in executing strategy

Determine Success Criteria for Roles

Identify specific KPIs

Determine measurement approach

Sharpen Targeting1


Identify Key Performers

Identify Existing Standards of Performance

Which results to be measured

How results are reported and rewarded

Identify Consistent High Performers

Review performance results

Review organizational perceptions of key performers

Selection Challenges

Organizational recognition

Functional representation

Sharpen Targeting1


Design “New Role” KPEs

Model Expert Performance

Outcome analysis

Mental model analysis

Develop and Review Existing and New Roles

Identify role accomplishments and critical actions

Identify key performance elements

Draft model of role profile

Develop Learning Plan

Training designs required to develop KPEs

Sharpen Targeting1


Sharpen Messaging

73% of CMO’s say value messages not reaching customers

90% of sales people don’t position value effectively

70% - 80% of marketing materials unused

Sources: CSO Insights, Sirius Decision, Aberdeen & Primary Intelligence

COMPANY

Value PropositionVALUE PERCEPTION GAP

CUSTOMER

Value Perception

DECISION TO SELL DECISION TO BUY

Sharpen Messaging2


Problem-Focused Messaging Approach

Field Marketing

Step 1:

Develop

Problem/Solution

Mapping

Step 2:

Document

Defensible

Differentiators

Step 3:

Build Critical

Business

Issues Menu

Step 4:

Develop Solution

Messaging Cards

Step 5:

Build Sales

Tools (and other

Marketing tools)

Segment BSegment A

Website

Collateral

White Papers

MarComProduct

Marketing

Sample

Customers

Sales

Overlay

Indirect

MarCom

Sales Tools

Proprietary

Comparative

Holistic

Sharpen Messaging2


The Value CycleGet Credit for Value3

• Refined Value Proposition

• Value Justification / Analysis

• Initial Value Proposition

• Success Criteria

MEASURE LEAD

VERIFYCLOSE


Creating Urgency

Of all the people who could benefit from your offering…

What % are actively evaluating?

Power person driving evaluation

Business issues defined

Requirements documented

Evaluation team in place

*

Create Urgency4


Requirements

How Organizations Evaluate and Buy

Company A Company B Company C

“COLUMN FODDER”

Power person driving

evaluation

Business issues defined

Requirements documented

Evaluation team in place

85 – 92%

win rate

8% - 15%

win rate

Create Urgency4


Understand Your Differentiators

High

HighLow

CUSTOMER VALUE

U

N

I

Q

U

E

N

E

S

S

Cool,

Nice to haveDifferentiators

Commodity /Core

Junk

Sharpen

Competitive Tactics5


Competitive Strategy Selector™

Strategy Selection Questions Strategy Tactics Pros and Cons

Did you identify latent pain?

Has high priority pain been admitted by a customer key player?

&

Can you establish business impact on others & establish

initial requirements?

YPRE-

EMPTIVE

•Develop needs & decision criteria

•Bond through joint discovery

•Establish impact upon others

•Create exclusive visions

•Articulate value of offering

Pro: High win odds

Con: May extend the sell cycle

Latent or

Admitted Pain

Vision

orActive

Evaluation

N

Disengage

N

Will you be able to address the

requirements / decision criteria and/or form relationships with power in the future?

Y STALL

•Understand requirements / criteria

•Assess potential to win later

•Assess exposure if delayed

•Highlight potential value of waiting

•Establish additional support of key players while waiting

Pro: Keeps the opportunity alive

Con: May be perceived as not focused on customer issues

N

Can you address part of the

requirements / decision criteria?

YDIVIDE

AND CONQUER


• Identify components you can address

•Highlight quantifiable value and advantage of addressable component

Pro: Possible base for future growth

Con: Reduced revenue potential and presence in opportunity / account

N

Can you create differentiated value

and alter the requirements /

decision criteria?

YEND

AROUND


•Neutralize competition

•Reengineer original vision

•differentiated requirements

•unique, quantifiable value

Pro: Rapid go / no go decision

Con: May have difficulty gaining access to power

N

Is the decision criteria defined?

Budget? Timeframe?

Can your offering address all or most of the criteria?

&

Do you have an established, apparent (3:1) advantage from

the customer’s perspective?

Y

HEAD

TO

HEAD

•Prioritize requirements / criteria

•Capitalize on superiority of:

•Offering

•Reputation

•established base

Pro: Possible short sell cycle

Con: May be won at a high cost of sale

Sharpen

Competitive Tactics5


Finding White Space in Accounts

Pain(A Reason to Act)

Your Offering(A Way to Obtain Vision)

Initiative(A Desire for Action)

Bridge

Leverage

Relationships6


Where to Start?

© SALES PERFORMANCE INTERNATIONAL

How to contact us:

3 OrchideeënlaanSteenokkerzeel, 1820

t: +32 2 252.5004 | f: +32 2 252.5014

Questions

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Selling in a Down Economy in a Down Economy... · 2009-09-16 · services? Are we communicating value messages consistently? Are lead generation vehicles producing qualified opportunities?