When the company’s sales/revenues start to go off plan, as CSO/VP Sales, you start to get a lot more “help” from the CEO and the Board.
With the average VP Sales tenure only 18 months, this kind of attention is not a good sign. It puts you on the defensive. Your gut reaction is to ramp up field activity in hopes of closing some deals earlier. That may help you achieve sales budget for this quarter, but what about next quarter, and the quarter after that?
This is really the time to demonstrate corporate sales leadership, and possibly buy more time to execute a more effective sales strategy.
You know the drill, but achieving sales plan is not getting any easier
Over the years you have probably developed a go-to list of sales tactics to save the quarter or the year.
- You institute aggressive pipeline reviews by field management to re-qualify all the deals that were forecasted by the sales reps for this quarter and for the next quarter.
- You identify a list of must-win deals that sales management needs to personally focus on to close the quarter, including a list of deals that have a good possibility of being pulled into the quarter.
- You create a SWAT team to quickly react to closing larger, more complex, sales situations.
In short, you ratchet up the activity level of the sales force. However, these tactics don’t work as well as they did in the past.
Although you don’t show it, you’re really worried that this time, you’re going to miss your sales goal.
You’re either part of the problem or you’re part of the solution
Delivering a sales plan one quarter at a time does not instill a lot of confidence that the company is on the right track.
There’s a long list of potential “reasons” why your salesforce is missing sales plan. Maybe the CEO set the sales goal too high, or Marketing didn’t develop enough quality leads, or Product Management released an un-compelling product, or IT didn’t provide adequate CRM support, or the Product group had quality or shipping issues.
Whatever the reasons, with this quarter now at risk, your colleagues in the C-suite will perceive them as “excuses”. If you stoop to internal finger pointing, you’ll be perceived as defensive and unable (or unwilling) to take ownership for the company’s sales production.
As the CSO/ VP Sales, you need to come forward with a plan for the company to achieve and exceed sales budget. Asking for increased sales force expenses or headcount in the middle of a budget year may help the company increase sales next year, but it won’t help you this year.
You need an effective action plan that fully leverages “help” from the C-suite
Your colleagues on the executive team want to “help” the salesforce succeed. Their budgets, bonus, and even headcount, will be at risk if the company misses the sales budget.
Develop an action plan that clearly articulates how each of them can specifically help. Sure, some of your functional colleagues may not have been pulling their own weight regarding revenue generation, but rather than finger point, use your action plan to help get them on board with your leadership (or to clearly expose any lack of support on their part).
Your “All Hands on Deck” call to action needs to focus on activity that can help the company bridge the revenue gap this quarter, but most importantly for you, will also lay the foundation for a successful next year under your leadership.
By showing progress towards a better sales strategy, you buy yourself some time to turn the situation around.
Take your sales strategy to the next level today, not next year
There are five things a CSO/VP Sales leader is consistently concerned about:
- Enough “feet on the street” to execute the sales plan (i.e. increase Sales headcount budget)
- Sufficient “face time” with customers and prospects (i.e. get reps out of the office and in front of prospects)
- A healthy pipeline of qualified sales opportunities, reflecting at least 3 times the deployed sales quota. (i.e. more cold calls and leads from Marketing)
- A more reliable forecast process (i.e. more sales training)
- A more motivated, focused and confident sales force (i.e. effective incentive compensation)
However, these represent a somewhat biased functional view of the challenges, not a cross-functional company-wide perspective.
To demonstrate company leadership, you need to reframe the issue as a cross-functional team effort, with you as team leader. Everyone in the C-suite has an important role to play. In addition to the tactical efforts you are taking within the salesforce, consider the following initiatives:
- To increase “feet on the street” and “face time”, increase the productivity of your field sales rep. It’s at least 5 times harder to close a new logo account than to upgrade an existing account, which is the primary reason you pay a premium for experienced field sales reps. Your field reps could focus more on new logo business if you could off-load some of their existing account activities. By offloading account renewals or upgrades to a less costly telesales group, for example, you could 1/ essentially increase both the “feet on the street” and “face time” for new logo business, 2/ simultaneously increase focus on growing the existing accounts, and 3/ execute this sales strategy without dramatically increasing your expense budget.
- If you have an inside sales group, you need Marketing to help them design and execute collateral for immediate campaigns that are designed to increase renewals, upsells, and upgrades that can close this quarter.
- If you don’t have an inside sales group, assign a sales District to conduct a quick proof of concept to validate that an inside sales would be a good investment. This will help increase sales, plus provide ammunition for a full roll out next fiscal year.
- To shorten the sales cycle for new business, sales reps need corporate resources to be available to help with the “big deals”. A call from the CEO to the prospect, a visit by the VP Engineering, a presentation by Product Management, or increased financial flexibility by the CFO could make all the difference in closing a deal this quarter.
- Coordinate all requests through your Sales Ops manager to ensure that the initiative is well managed, that actions are clearly documented, and that a weekly status report is sent to the CEO (with a cc to C-suite colleagues).
- To increase the pipeline, have Marketing increase their number of leads. This may not result in significant business this quarter, but could demonstrate a healthy pipeline going into the next quarter. You will need to commit to a fast response from the sales force for every lead, and consistent detailed feedback, to avoid any finger pointing. If Marketing can deliver quality leads, you’ll get more business and Marketing might get an increased lead-generation budget next year. If Marketing can’t deliver quality leads, then you have the opportunity to “help them” improve lead generation as part of the next fiscal year plan.
- If you have an inside sales group, have them pre-qualify the marketing leads before they are sent to your field sales rep. If you don’t have an inside sales group, have each District assign a person to qualify all marketing leads. This will ensure fast response with consistent feedback, while allowing the other sales reps to focus on qualified near-term opportunities.
- If you sell through partners, get Marketing to help the partners convert their enormous list of customers and prospects into leads. With the help of Field Marketing and or Partner Sales, they could develop and launch “canned lead generation campaigns” for selected partners to implement. Companies that have done this have greatly increased partner production and improved partner forecasts. Let Marketing take it on as a pilot, since you’ve already initiated other pilots in the sales force.
- To demonstrate forward progress, increase the pipeline of sales opportunities for next quarter. Assign this to the sales reps that don’t have a full plate of forecasted business to close this quarter. If your reps are still doing a lot of cold calls, they need to transition to doing “warm calls” by leveraging social selling techniques.
- While effective cold calling can demonstrate some great sales skills, it represents a very unproductive way of generating leads versus other sales methods. “Over 80% of decision makers absolutely will not buy from a cold call.” according to a study by Kenan Flagler Business School. Only 0.3% of cold calls result in an appointment according to a study by Keller Research Center at Baylor University. In contrast, American Association of Inside Sales Professionals (AA-ISP) believes cold calling has a 1% to 3% appointment success rate. Any way you look at it, a sales rep has to make 100 to 300 calls just to get one prospect appointment. Ouch!!!
- In contrast, over 80% of decision makers begin their buying process with a referral, not a cold call, according to Edelman Trust Barometer. Since over 80% of the buyer team is on social networks, social selling can be very effective at cultivating relationships and referrals to potential buyers.
- Social selling skills must be properly trained and managed; otherwise, it can quickly become a huge timesink that is as unproductive as cold calls!! Consider hiring a consultant to do a narrowly-defined, quick pilot program in one of your districts with the potential of a full roll-out at “next year’s” sales kickoff meeting.
- To increase sales force motivation and focus, fully leverage sales incentive compensation techniques. Much more on incentive compensation in future articles.
Lay the foundation to Exceed Sales Plan next year
The buyer decision process has changed significantly over the past 5 to 10 years due to internet, mobile, and social. By the time a prospect team is ready to meet with a vendor, they have already completed their research, selected a solution and a favorite vendor, and are 50% to 70% through their buying process according to Sales Benchmark Index.
Some of the symptoms of using an outdated buyer decision process and outdated target personas (i.e. the behavior profiles of the typical decision makers, recommenders, and influencers within the company’s target market) include the following:
- Product Management is not effectively releasing products that provide a “compelling business case” for the targeted prospect buying team, resulting in poor account penetration and longer sales cycle. Even technical products have to be more than just technologically advanced; they need to solve a high-priority business problem.
- Marketing is not effectively communicating a “compelling message” to the right target personas, resulting in a low volume of leads and referrals. While average firms generate 12% of their leads online, high growth firms generate over 62% of new business leads digitally, according to a recent study by Hinge Research Institute, Society for Marketing Professional Services and Association for Accounting Marketing.
- Marketing is not effectively moving prospects from one stage of the buyer decision process to next, and therefore, is delivering leads that are too early in the sales cycle to warrant direct Sales involvement. High growth companies have 47% of their forecasted pipeline generated from marketing leads according to a study by Aberdeen Group. High growth companies with a strong collaborative relationship between Sales and Marketing had 75% of sales reps achieving quota (versus industry average of 50%), 99% of companies achieving sales budget (versus industry average of 61%, and 13.1% annual growth of corporate revenue (versus an industry average of 4.3%).
- The salesforce is overly reliant on “cold calling” and is not effectively executing social selling to develop new business via “warm calls” (i.e. trusted referrals). Sales reps who have leveraged social selling in their sales process are 79% more likely to attain their quota then ones who don’t, according to Aberdeen Group’s study on Social Selling.
- The Sales forecast has become increasingly less reliable. Your team is getting into too many deals in the 11th hour. More deals are “disappearing” at the end of a quarter. This suggests that your field sales process hasn’t evolved as fast as the buying process. Companies with a well-defined and understood sales process that mirrored the current buying process achieved 18% more sales growth according to a recent study by Hubspot and the Sales Management Association.
- Product Management, Marketing and Sales are still trying to address customer buying requirements separately, rather than acting as cohesive revenue generation team with a common integrated playbook designed to effectively convert prospects into loyal repeat customer. Incentive compensation is the most effective, and least disruptive, technique to drive team behavior. Much more on this in future articles.
The pilot projects that were identified earlier will help you make the case that, to successfully achieve sales budget, you need the active support of Marketing, Product Management and others.
However, be prepared for push back from your own line managers about participating in any pilot programs during a tough quarter. Some will have valid reasons (based upon their real quota opportunity this quarter), but most will just be “tree huggers” (i.e. those that like the status quo and don’t like change of any kind). To be successful this quarter, and even more successful next year, you will need to have fewer “tree huggers” and more sales leaders on your team. You can’t afford to start the year with a quarter like this one!
The Critical Need For CSO Leadership To Exceed Sales Plan
If you’re starting to fall below the sales budget, don’t assume it’s just a one quarter problem. Simply ramping up field activity is not the whole answer. If it turns into a two or three quarter problem, then you will have missed an opportunity to get ahead of this issue and demonstrate sales leadership. You need to come up with a better Sales Strategy and fully leverage cross-functional support.
CSO Next Steps
You need to lead the sales force into battle and make this quarter’s sales goal. You don’t have the time to create a better sales strategy, work the cross-functional issues, and execute the plan. Nor can you simply dump it on the desk of Sales Ops; they’re even busier supporting you and the field sales organization this quarter. This is also too important of an issue to bring in consultants whose main contribution is to drop off a thick Powerpoint presentation when they are done. Even if their plan makes some sense, who’s going to lead the transformation effort within your organization and cross functionally?
This is the time when you should bring in the right consultant as your “lieutenant” to help you effect sustainable change within your organization and within the company; Someone who can work the short-term cross-functional elements of your recovery plan, but also help you actively secure C-suite budget approval for an upgraded company sales plan for the next fiscal year.
Your consultant should of course have functional experience in Sales; preferably someone who has “walked in your shoes”, understands the sales process and has a track record of accelerating corporate revenue. For this particular situation, the consultant needs more than executive sales experience to get the other functions quickly on board in support of your strategy. The consultant needs to proactively help the other functions design the right set of initiatives that can be executed within your timeframe. Therefore, the consultant also needs to have real world executive experience leading the Marketing function and proactively executing cross functional initiatives at the CEO and C-level. Someone with proven Product Management experience would be an added plus.
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