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Sales is From Venus, Marketing is from Mars

Recently I’ve had the pleasure of working with Jonathan Klein, Founder and General Partner at Topline Strategy Group. Here is an article he wrote on the topic of sales and marketing alignment and the importance of fact-based decision making:

SALES IS FROM VENUS, MARKETING IS FROM MARS

By finding common ground, sales and marketing can join forces to drive growth to new levels.

Like it or not, marketing and sales departments are stuck with each other. Relationships are not just for customers. Knowing how to build and maintain successful interdepartmental relationships, such as between sales and marketing, is critical to overall corporate success.

Successful companies have clearly defined their target markets and aligned their sales and marketing efforts to fulfill the needs of those markets. When done well, sales discovers they have a compelling value proposition, a competitively advantaged offering, and the marketing support to make deals close faster. When done poorly, sales learns quickly that closing business is a much harder task.

TWO DIFFERENT VIEWS
Unfortunately, aligning sales and marketing around the same target is not an easy task. The irreconcilable fact is that sales and marketing are different. At its core, sales thinks of customers as individuals. They win accounts one at a time, by serving each of their customer’s unique needs. The sales department’s concerns are centered on how it can close more business within the limits of its territory.

Marketing, on the other hand, thinks about customer segments and the best way to capture that segment. When the priorities of an individual deal clash with the priorities of the segment (which they often do), watch out, because sparks will fly. If sales and marketing have a strong relationship, they can resolve these differences. If they don’t, these differences will send sales and marketing in separate directions, hurting the company’s performance.

How do two different entities of the corporate world make their relationship work? Here are some of the secrets:

1. WALK IN THE OTHER PERSON’S SHOES
2. AGREE ON A COMMON PLAN
3. MAKE FACT-BASED DECISIONS
4. BUILD A CHANGE MANAGEMENT PROCESS

1. Walk in the Other Person’s Shoes

It’s not surprising that some of the best marketing people have spent time in sales and vice versa. Listen up marketing, it’s hard to understand the pressure sales is under unless you’ve sat in the lobby of a key prospect on the last day of the quarter waiting for the purchase order to make your quota. And sales, if you’ve ever tried to put together an ad campaign that conveys your message, captivates customers, and gets praise from your company’s employees, you know that it is no walk in the park.

If you reside in marketing’s corner, discover life on the other side. Short of taking a sales rotation, spend time with the telesales group for a day and make a few cold calls to see what works and what doesn’t. Or shadow a sales rep through an entire sales cycle, from the first call to signing the papers. You’ll learn firsthand what it really takes to get a deal done. For those of you pounding the street, next time you think you are missing a vital piece of collateral to support your deal, try working directly with marketing to create it. Or, take an existing ad or direct mail piece and sit down with the marketing folks who created it and discuss together what works and what doesn’t.

Really understanding what drives the other makes it easier to make the compromises required to build a successful relationship.

2. Agree on a Common Plan

Successful companies start by first clearly defining their target customer and then developing an integrated sales, product, and communications plan to attack and win those customers. If sales and marketing are not focused on the same target, or if they have different views of what is required to win deals, there will inevitably be friction. Typically, this manifests itself in commonly voiced criticisms: “marketing isn’t giving us what we need,” or, “sales is going after the wrong customers.”

Getting real buy-in from both sales and marketing up front is vital to the plan’s ultimate success. This contributes to a culture of cooperation instead of finger pointing when things go off track. To maximize your chances of building mutual buy in, have sales and marketing work together on developing the plan at all levels of the organization. This process will demands compromise and cooperation. Coming from different vantage points and often having different measures for personal success, sales and marketing will not always agree on who the target is and what steps are required to win those customers. And it is here, having walking in each other’s shoes (if only briefly), that a winning scenario for everyone is built.

3) Make Fact-Based Decisions

While building a common plan is a great objective, it must also be the “the right plan.” Its development is determined through quantifiable data about customer needs, customer behavior, and competitive capabilities. If you have one sales person and one marketing person in the room, you’ll probably have three opinions about what the company should do to close more business. It is necessary to get beyond opinions and get down to facts so you address issues in a way that will deliver results.

4) Build a Change Management Process

Sales and marketing plans are often obsolete as soon as the ink dries. Customers’ needs and market conditions change and competitors move in unexpected directions. Having sales and marketing develop integrated plans based on facts is not enough; it is also necessary to build an effective change management process.

One method borrowed from the operations department that works well is to establish a Change Control Board. In operations, a Change Control Board typically meets weekly to review the current state of affairs and make adjustments to its plans as necessary.

One way to apply this to sales and marketing is to add a marketing review to the sales pipeline meeting once every other week or once a month. At the meeting, the teams can give updates on progress, share experience from the field, and resolve issues. Just as facts are important in setting the plan, they are also critical to making adjustments. In operations, members of the Change Control Board are charged with assignments to bring data to the table to support decision-making. The same standard should be true for sales and marketing.

In the end, while sales is from Venus and marketing from Mars, it is possible to make this relationship work. It is not easy, but the benefits are something that both sides can readily agree on, faster growth and higher profits.

Jonathan Klein is Founder & General Partner of The Topline Strategy Group. The Topline Strategy Group is a strategy consulting firm specializing in high tech products and services. Their engagements provide clients with deep insights into their markets and customers and deliver practical recommendations for turning those insights into new sales. As a result of our work, our clients have captured tens of millions of dollars in additional revenue.

Russian Scientists & the B2B Sales Process

What Can a Tough Russian Scientist Teach Us About B2B Sales Process?

In his groundbreaking book “The Goal”, Dr. Eliyahu M. Goldratt tells the fictional story of Alex Roga who manages a metalworking plant that is at risk of being shut down because of its inability to efficiently drive products through the manufacturing process. Goldratt uses this story line to explain his Theory of Constraints (TOC) thinking process and how Alex could use it to dramatically improve the efficient flow of products.

For those who have not yet been exposed to Dr. Goldratt, he is a highly intelligent individual, with a heavy Russian accent and a direct communication style. He seems to bristle when asked how competing systems management theory – Total Quality Management (TQM) compares to TOC; “it’s a nice theory but unfortunately it does not work”.

 TOC postulates that ‘every organization has at least one binding constraint which limits the organization’s performance relative to its goal’. TQM’s major am is to reduce variation from every process so that greater consistency of effort is obtained. So we have one doctrine that basically says ‘realize optimal efficiency by relieving the single major constraint in the system’ the other doctrine says ‘maximize each component of the system for maximum efficiency’. Which makes more sense? In The Goal, Goldratt Advises Alex that any resources leveraged against a non constraint will be wasted since the system will just bottleneck once the product gets to machine that is the primary bottleneck.

B2B sales is very much like a plant that ‘manufactures’ closed revenue opportunities. Leads and new opportunities flow into the sales ‘system’, they hit different sales stages and produce a certain amount of closed deals. Each sales stage in the system can be analyzed for velocity, volume and conversion. And a primary constraint can be determined. Of course getting that information in an efficient manner can be painful, but that is a topic for another article.

Have you analyzed where your sales funnel constraint is? There are many companies whose sales strategy is to hire the best sales reps they can afford. Great field reps tend to shine at the bottom end of the funnel, but are not s great at prospecting. If the constraint is at top of the sales funnel then the company may be allocating resources inefficiently; it may be better to invest in the prospecting or marketing team until there are enough leads to make that expensive hire.

Randall Isaac is the CEO of Bluetide Management. Bluetide builds software products that support B2B sales people in their efforts to achieve quota. Sales Clarity is an AppExchange certified Sales Forecasting Software that helps B2B sales managers track, inspect and guide sales activity in real time. More information at www.bluetidemanagement.com

Sales 2.0: Why the Recession is Making it Imperative To Change the Way We Sell

More and more continues to be written about the shift to Sales 2.0 in this difficult economic climate. With the Sales 2.0 Conference coming up in San Francisco on March 4th, I thought I’d share this great article I received today from Anneke Seley, coauthor of the new book: Sales 2.0: Improve Business Results using Innovative Sales Practices and Technology. I’ve published it here:

Sales 2.0: Why the Recession is Making it Imperative To Change the Way We Sell

Though the slow economy is having a negative impact on sales in many companies, an improved approach to sales called “Sales 2.0” can help companies avoid disastrous business results in the coming quarters.   Sales 2.0, defined as “the use of innovative sales practices, focused on creating value for both buyer and seller, and enabled by Web 2.0 and next-generation technology” reduces cost, increases productivity and improves sales effectiveness.

Sales 2.0 produces measurable business results. One software division that is part of a $1 billion company increased its sales 12% while decreasing headcount 17% and increasing its sales team’s productivity 15% after reinventing its sales organization using Sales 2.0 practices. After embracing a Sales 2.0 philosophy, a medical device company increased its qualified lead volume by 20% and generated over $7million in incremental revenue, while increasing its average sales price by 25%.

Sales 2.0 requires a change in mindset and then a rethinking of strategy, an assessment of sales people’s skills and the implementation of a measurable sales process, enabled by technology. A Sales 2.0 mindset includes recognizing that sales is not just an art – it can be a measurable, predictable “scientific” business function when the right processes are implemented that focus on what our customers need to achieve by buying our products.

Data from CSO Insights’ Sales Performance Optimization Report (source: csoinsights.com) show that surveyed Chief Sales Officers in companies that practice Sales 2.0 are the best-performing companies in terms of percentage of company revenue achieved, percentage of reps making their sales quotas, and percentage of deals won.  Sales 2.0 practices include implementing consistent, dynamic sales processes, establishing long-term, trusted relationships with customers, and using the Internet in the sales process. Venture-backed companies with Sales 2.0 business plans are also having an easier time securing investments from venture capitalists. Gordon Ritter, founder and general partner at Emergence Capital, says, “Those companies employing Sales 2.0 practices give me the confidence I need to provide initial funding as well as continued investment.”

Furthermore, in many business-to-business companies, the cost of selling traditionally, using expensive field sales forces that travel, is no longer justified when many customers prefer to research and even buy products using the Web and phone.  One highly-effective Sales 2.0 strategy is partnering face-to-face salespeople with inside sales professionals that serve customers in the early parts of a sales cycle and build a pipeline of qualified leads.  This frees up the field sales professionals to work with only the largest, most profitable customers that are most likely to buy.  In this way, Sales 2.0 decreases costs and accelerates sales cycles, which improves revenue and profit.

IDC’s 2009 Sales Barometer and Top 10 Predictions report (source: idc.com) highlights the need for organizations to adopt Sales 2.0 best practices quickly. It states,  “savvy organizations will use the economic downturn as justification to replace direct sales “laggards” with well enabled inside sales. Customer (and employee) satisfaction and sales productivity will rise accordingly.”

Sales 2.0 – a rethinking of sales strategy, people and process, and enabled by technology – is a proven approach to improving business results especially in slow economic times.

Anneke Seley is the CEO and founder of Phone Works, a consultancy that helps large and small businesses build and restructure sales teams to achieve predictable, measurable, and sustainable sales growth. As the 12th employee at Oracle, she designed the company’s revolutionary inside sales operation. Her book, Sales 2.0: Improve Business Results Using Innovative Sales Practices and Technology, is available at online retailers including amazon.com, bn.com, booksamillion.com, and borders.com. For more information, visit www.sales20book.com.

If you’re interested in the Sales 2.0 topic, you may want to join one (or all) of these these LinkedIn Groups:

• Sales 2.0
• Sales 2.0 Community
• Sales 2.0 Network
• Sales Management 2.0

IDC 2009 Sales Barometer & Top 10 Predictions

I posted this presentation from IDC’s Lee Levitt on the LucidEra blog and wanted to post it here as well to ensure maximum exposure. It provides an excellent overview of what’s ahead in 2009 for sales organizations and some great executive guidance.

Sales 2.0: A “Need to Have” Philosophy to Weather the Economic Storm

I just received a copy of the new book,  Sales 2.0: Improve Business Results Using Innovative Sales Practices and Technologies and added it to my Holiday Reading List. Today I also received a great article by one of the book’s authors, Brent Holloway, which provides a very thorough, yet concise, summary of Sales 2.0. As most sales people are out trying to close year-end business, I thought it would be worth sharing with the Salesforce Times readers. Here’s the article:

Sales 2.0: A “Need to Have” Philosophy to Weather the Economic Storm

By Brent Holloway, co-author of Sales 2.0: Improve Business Results Using Innovative Sales Practices and Technology

What is your sales organization doing about the current economic downturn? What will make a difference for your company? While the economic forecast may be “uncertain,” it is certain that our customers are reducing their budgets and spending more carefully, forcing their vendors to do the same. This economic challenge will accelerate the adoption of Sales 2.0 from a “nice to have” to a “need to have” philosophy. Companies that continue to sell the way they sold in the past will become less profitable or fail altogether. Customer preferences, the ever-rising cost of sales, and the availability of next-generation technologies are making change mandatory for companies that want to outperform the competition and minimize the impact of the economic slowdown.

What is Sales 2.0?

Sales 2.0 is not a new technology. It is the use of innovative sales practices to improve business results, creating value for both the buyer and seller, and is often enabled by Web 2.0 or next-generation technology. Sales 2.0 initiatives typically center on process and customer-engagement improvements to increase sales productivity. Sales 2.0 practices combine the science of measurable, process-driven operations with the art of collaborative relationships, using the most profitable and expedient sales resources required to meet your customers’ needs. The goal of Sales 2.0 is to produce greater, predictable, repeatable business results, including increased revenue, decreased sales costs, and sustained competitive advantage.

Sales 2.0 initiatives require changing mindset and adjusting sales strategies. A relatively simple Sales 2.0 practice involves selling more through video or web conferencing. This can be done by inside salespeople or by field salespeople who perform more of their jobs from their desks. Selling more efficiently should also mean selling more effectively, as many buyers now prefer to meet remotely via conference calls with video or web conferencing, and salespeople benefit from additional selling time that otherwise would be spent traveling. A traditional sales process that included three or four onsite visits might now have zero or just one face-to-face visit. The financial impact of reducing travel expenses can be significant and is easily measured, but the economics of giving your most expensive sales resources — your field salespeople — additional selling time is even more compelling.

Many products and services, especially those of relatively small to average value, can only be sold profitably with a remote or low-touch sales model. The definition of “small to medium orders” is different for every company, but they are generally those that fall into your bottom 50% in value. If ignored, these mid-market customers or transaction types are missed opportunities for organizations that rely solely or too heavily on a field-based sales model. And when they are sold through field sales, these smaller opportunities can derail focus and drain the organization’s profitability.

Another Sales 2.0 practice uses some “science” to accurately capture key market information and metrics such as average sales cycle, average deal size and sales-cycle conversion rates. By using a defined sales process and data analytics, you can determine how your sales force should be structured and which customers and transaction types justify the assignment of field account executives, inside salespeople, channel partners or no selling effort at all. Data analytics in this sense can range from rudimentary (pen and paper) to moderate (spreadsheets, CRM, and most reporting systems) to advanced (dashboards and on-demand sales intelligence). Rather than simply measuring the final result (revenue), a Sales 2.0 approach measures the effectiveness of every stage in your sales process by salesperson, giving managers the opportunity to provide targeted coaching. Data analytics also can be used to correlate and analyze the specific characteristics of your most profitable customers (size, industries, locations, buyer types, etc.) that produce the most revenue and profit. Sales and marketing leaders can then use this information to fine-tune your sales model and activities to ensure the loyalty of your most valuable customers and find more prospects like them.

How do I begin a Sales 2.0 initiative with limited staff and budget?

A key Sales 2.0 tenet involves experimentation, often through testing new process ideas and piloting new technology. Testing a new sales message, pricing options, new technology, or even a new sales process enables the organization to be innovative with minimal risk. Small pilot programs that use minimal resources enable ineffective ideas to fail on a small scale, while good ones can be rolled out more aggressively.

Becoming a Sales 2.0 organization requires that we proactively adapt and continually improve so we can become closer to our customers and weather the economic storm better than our competitors.

©2008 Brent Holloway

Author Bio

Brent Holloway is an inside sales manager for Verint Systems. He has more than a decade of experience in sales and sales management with high-technology companies. He co-authored Sales 2.0: Improve Business Results Using Innovative Sales Practices and Technology, published by John Wiley and Sons in December of 2008, available at Barnes and Noble, Amazon.com and other retailers. For more information, visit www.sales20book.com

What’s in Store for Business Intelligence in 2009

Ken Rudin has published his annual predictions for the business intelligence industry. There are definitely lots of SaaS Clouds in his forecast. His predictions are:

1. Cloud computing will cause a shift in the BI balance of power from IT to business users.
2. Simplicity will be the driving mantra for both consumers and vendors of BI.
3. The continued drive for simplicity will cause a shift towards prebuilt analytic solutions with best practices built in, and away from generic toolsets.
4. Data interpretation will become a significant challenge for new BI users.

You can read and comment on the full post here.

Sales 2.0 Book Coming Soon!

Hungry for sales best practices in difficult economic times? Two Silicon Valley insiders have been working on a book 100% focused on the topic of Sales 2.0. You can pre-order a discounted copy ahead of the December launch here.

Anneke Seley is the founder and CEO of Phone Works, a long time Salesforce.com partner. She was the twelfth employee at Oracle and the designer of the company’s revolutionary inside sales operation. Brent Holloway is a practicing sales manager with more than a decade of experience at high-tech companies. According to their website:

“The book will show readers how to redeploy their sales teams for greater bottom-line results, and reveals all the differences between Sales 2.0 and traditional selling. Through real world case studies, readers will learn how industry leaders achieved phenomenal results and competitive advantage. Applicable to sales teams in any industry, Sales 2.0 presents the future of sales today.”

Looks like it will be a good holiday read.

SaaS Business Intelligence Community

This week the B-Eye Network published a comprehensive article on Data Warehousing in the Clouds. The article does a nice job of defining the difference between cloud computing and SaaS applications and goes on to outline how “data warehousing will do to the cloud what it did to web services – raise the bar.”

The conclusion is that cloud computing, “will push the pendulum back in the direction of data marts” and that “it will deflate the inevitable hype being generated in the press.”

If you’d like to discuss this article, the business intelligence / analytics market shift to software-as-a-service, and/or your experiences with business intelligence in the cloud, be sure to join this new SaaS Business Intelligence Community.

You can add your comments to Lou Agosta’s article here.

Can You Answer These Questions About Your Sales Pipeline?

For most of us, we’re nearing the end of Q3 and the all important 4th quarter is looming large on the horizon. If you’re managing a highly transactional sales organization, you may be starting to wonder:

• “How’s my pipeline changing?”
• “Which deals should I focus on?”
• “Where does my team need help?
  
• “What patterns are emerging?”
• “Where do we need to invest?”

In sales it’s critical that you have visibility into what’s coming into your pipeline, what’s moving out, and what’s changed. And you need to be able to see the trend over time. Without the ability to get answers to these and other questions and take the appropriate action, revenue growth opportunities will continue to be missed and you’ll risk being hit by nasty surprises throughout each quarter. 

Here’s a list of the types of questions you need to be able to answer in order to ensure your sales pipeline is not based on fiction or fantasy:

New Pipeline Since the Beginning of the Month, Quarter or Year

• What’s new in the pipeline since the beginning of the selected time period?
• What % of the pipeline is new for this period?
• What % of the new pipeline has closed within the same quarter historically?

Pipeline Fluctuations in the Current Period

What moved out? What’s stuck?

• What % of the current period pipeline moved out to future periods?
• Is there a pattern? (e.g. particular sales reps, products, industry verticals, etc.)

Where has the pipeline shrunk?

• What % of the current period pipeline shrunk?
• Is there a pattern? (e.g. particular sales reps, products, industry verticals, etc.)

Where has the pipeline grown?

• What % of the current period pipeline grew?
• Is there a pattern? (e.g. particular sales reps, products, industry verticals, etc.)

Pipeline Velocity

• What % of the current period pipeline is stuck in its current stage?
• What % of the current period pipeline has progressed to subsequent stages?

Pipeline Size and Shape

What are your conversion rates and sales cycle times?

• Lead to opportunity
• Opportunity to demo
• Demo to quote
• Quote to close

What % of your current period pipeline is above and below the thresholds of average days to close for deals that end up being won?

• By industry vertical
• By sales rep
• By competitor

What % of your current period pipeline is nearing the threshold of average days to close for deals that end up being lost?

• By industry vertical
• By sales rep
• By competitor

What is the pipeline for the remaining month, quarter or year?

• Next 30, 60, 90 days, etc.?

What is the % distribution for early stage vs late stage opportunities?

• By region
• By sales rep

Are there some possible quick wins?

• What are the dynamics of new versus repeat business?
• What are the days to close for new versus repeat business?
• What is the current period pipeline for new vs repeat business?

And if you’re wondering what other companies are doing to become what Thomas Davenport refers to as “analytical competitors,“ be sure to download this new research from Aberdeen, called “Sales Analytics: Hitting the Bulls-eye.”

You may also want to register for this new Sales Management 2.0 community centered around best-practice sharing.

Introducing: The Funnel Principle

And now for a sales book every salesperson should read:

The Funnel Principle: What Every Salesperson Must Know About Selling

There’s two things I immediately liked about The Funnel Principle, a sales book I recently read by international sales consultant and expert Mark Sellers:

1. I could begin using many of the concepts immediately
2. I could apply many of the new concepts using our existing CRM: Salesforce.com

To simply say I enjoyed Mark’s book would be an understatement. Frankly I couldn’t put it down and afterwards, I went through it,  jotted down all the major points and began working on implementing his ideas into our own funnel – the ideas are practical enough that in most cases you can begin using them right away.

One of the key questions the Funnel Principle continually gets the reader to ask himself is the fundamental question: “What’s my funnel’s ability right now to close enough business to hit my quota?” One of the main points of the book is that in order to properly answer this question (upon which your sales success rests), you need accurate insight into the value of your funnel at any given point in time. The problem is that the traditional methods of funnel valuation come up short and produce unrealistic measurements for sales people and managers.

The reason traditional funnels under perform is that they focus on selling acitivities instead of how customers buy and where the customer is in the buying process. To solve this problem Sellers introduces the Buy Cycle Funnel. The BCF is a process that defines your sales funnel according to how your customers buy and provides you with insight into where a particular opportunity is at in the funnel at any given time.

Each stage in the BCF is defined by customer commitment. What this means is that instead of determining what stage an opportunity is at based on your last activity (e.g send proposal), opportunities move down the funnel based on commitments customers have made – you never leave an interaction with a customer open ended – there is always a commitment of some kind made in order for the opportunity to progress.

If you’re used to the traditional model of funnel valuation and management, the ideas in The Funnel Process may take a little getting used to at first – change is always tough – but the value in Seller’s message is clear: if you can more accurately gauge the value of your funnel then you can focus your time and energy on the activities that are needed in order to achieve your quota at any given point in time.

The Funnel Principle is one of those books that should be in every top performer’s library. Ideally sales people will read it and combine the new way of valuing and managing their funnels with a proven sales process for maximum effect.

Thanks for the wisdom and for a great read Mark!

To learn more about The Funnel Principle, visit Breakthough-Sales.

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