Sales Methods & Tools

Sort by:
All
Sales Technique

August 3, 2023

Emotional Intelligence – the Secret sauce of Sales

Emotional Intelligence – essential both to Lead and to Sell!

Those with average IQs outperform those with the highest IQs 70% of the time; this strange statistic was not fully explained until the concept of emotional intelligence became widely known in the mid-90s. This discrepancy severely impacts the widely held belief that intelligence alone is sufficient for attaining one’s goals. Years of studies have established that emotional intelligence is the primary differentiator between top and average performance.

For example, a study conducted on sales professionals found that those with higher emotional intelligence were able to build stronger relationships with clients, resulting in increased sales and commissions. These individuals were able to effectively understand and address the needs and concerns of their clients, leading to higher customer satisfaction and repeat business. Conversely, sales professionals with lower emotional intelligence struggled to connect with clients on an emotional level, resulting in missed opportunities and lower earnings. With the right training and development programs, individuals can improve their emotional intelligence skills,

Brief History

Emotional intelligence is not a novel concept. Edward Thorndike explored three categories of intelligence about 100 years ago, including social intelligence, which is concerned with a person’s capacity to connect with others. Peter Salovey and John D. Mayer coined the phrase “emotional intelligence” the early 90´s to describe an individual’s capacity to understand and control their emotions, as well as their social abilities.

However, it wasn’t until Daniel Goleman wrote his book Emotional Intelligence: Why it Can Matter More Than IQ in 1995 that the phrase became popular. In the decades afterwards, the concept has evolved from a passing novelty to an everyday word that is now a key factor in many firms’ recruiting operations.

Understanding Emotional Intelligence in a Nutshell

Each of us has this “something” called emotional intelligence, often called EQ. It influences our ability to control our actions, deal with the complexities of social situations, and make good choices for ourselves. This is described by various authors over the years, in countless articles and publications. Best selling author Travis Bradberry explains this well in his book “Emotional Intelligence 2.0”, (see Forbes Article “Emotional Intelligence: EQ” from 2014 for an introduction” )

The two basic competencies that make up emotional intelligence are “personal competence” and “social competence,” each of which consists of two sub-competencies.

Personal competence is made up of self-awareness and self-management skills. These focus on you individually, rather than on the interactions you may have with other people. Essentially, this is about your ability to become aware of your emotions and to use this awareness to manage your behavior and tendencies.

Self-Awareness is your ability to sense and understand your own emotions and be aware of them when they happen.
Self-Management is your ability to use this self-awareness to react to and positively direct your behavior.

Social competence, on the other hand, is made up of your social awareness and relationship management skills. Social competence is all about your ability to understand other people’s moods, behaviors, and motives and to use this in order to improve your relationships. Its two components are:

Social Awareness is about how well you “tune in” to other people’s emotions and understand the social web that helps you understand what is really going on.
Relationship Management is your ability to use this social awareness in a good way to manage interactions successfully.

Explaining the concepts – What’s the main difference between IQ and EQ and … isn’t that just “Personality”?

Emotional intelligence (EQ) is an important aspect to consider in sales management. While IQ measures cognitive abilities and personality traits define our individual styles, EQ focuses on our ability to understand and manage our own emotions, as well as empathize with and connect with others. Developing emotional intelligence can greatly enhance a sales manager’s effectiveness in building relationships, resolving conflicts, and motivating their team. However, IQ and emotional intelligence have no connection or interdependence. It’s impossible to predict emotional intelligence based on how smart this person is.

IQ, or just intelligence, is a purely cognitive trait—your ability to learn and understand your physical context and surroundings and it’s the same at age 15 as it is at age 50.

Emotional intelligence, on the other hand, is a skill that you can learn and improve with practice. Some people are naturally more emotionally intelligent than others, it certainly seems you can develop high emotional intelligence with practice and over time, even if you were not born with it.

Personality is another term that is related to these. It’s the “style” that defines us and is the combination of hard-coded tendencies we have, for example, how introverted or extrovert you are. Similar to IQ, personality traits can’t predict emotional intelligence. The personality doesn’t change over time.

IQ, emotional intelligence, and personality each cover different dimensions of us and help explain what makes us move forward and be motivated.

Is Emotional Intelligence Linked to Performance?

How influential is emotional intelligence for your own professional success? Travis Bradberry´s firm, TalentSmart, tested emotional intelligence as compared to other workplace skills and discovered that emotional intelligence is by far the strongest predictor of performance, explaining a full 58% of success in all types of jobs.

Specifically, in Sales, emotional intelligence is even more strongly linked to performance. Individuals with higher levels of emotional intelligence are often more successful in their sales performance, as they are able to effectively manage relationships, navigate difficult situations, and adapt to changing environments. By understanding and effectively utilizing their emotions, individuals with high emotional intelligence can connect with clients on a deeper level and build strong rapport, ultimately leading to increased sales success.

Your emotional intelligence is the base for a whole system of important skills you possess and impacts pretty much everything you say and do. This makes Emotional intelligence the single biggest factor for performance in your job and the strongest motivator for leaders to develop personal excellence.

In their study, TalentSmart found that 90% of top performers have high EQ, while looking at the bottom performers, only about 20% of them do. You can be a top performer even if you are not so strong on emotional intelligence, but you have much less chance of succeeding.

Consequently, people with high EQ make more money—and according to the study, an average of $29,000 more per year than people with low emotional intelligence (2014). The correlation between emotional intelligence and earnings is in fact so strong that we can see that for every point that EQ increases, this adds another $1,300 to an annual salary. These findings hold true for people in all industries, at all levels, and in every region of the world.

Good news! – Emotional Intelligence Can Be Developed.

Emotional intelligence originates physically in the two-way dialogue between your emotional and logical “brains.” Emotional Intelligence starts in the lower brain, close to the spinal cord. This is where your basic sensations arrive, making their way to the front of your brain so you can process the information logically. But still, they must first pass through the limbic system, the seat of emotional skills. So, our initial response to situations is an emotional one rather than a logical one. Connecting your head’s logical and emotional processing systems is crucial for displaying emotional intelligence.

Neuroscientists refer to the brain’s ability to change as “plasticity.” As you learn new skills, your brain forms new connections. The transformation is gradual, as your brain cells form new connections to help improve the effectiveness of newly acquired skills.This plasticity naturally applies to emotional intelligence. By actively practicing and developing emotional intelligence, we can strengthen the connections between our rational and emotional centers, allowing for more effective communication and better overall emotional well-being.

The billions of tiny neurons that connect your brain’s intellectual and emotional centers can branch off into tiny “fingers” (similar to the branches of a tree) to connect with neighboring cells, and this process can be enhanced using techniques to improve emotional intelligence. There can be thousands of connections made for every single brain cell. This exponential growth makes it simpler to put this new behavior into practice in the future.

With consistent practice, individuals can cultivate a greater sense of self-awareness and develop stronger relationships with others, ultimately enhancing their overall emotional intelligence.

January 20, 2023

Focus! The dilemma of Prospecting or Growing Customers

Balancing act: Prospecting or Growing Customers

Finding the balance between prospecting for new customers and growing your existing customer base can be difficult. On one hand, you need to bring in new business to keep your company moving forward. On the other hand, you don’t want to sacrifice the customers you already have in order to do so. So how do you find the balance?

In this article, we’ll take a look at the benefits of prospecting and how it can help you grow your business. We’ll also explore some ways to find the balance between prospecting and growing your customer base without sacrificing one for the other.

Prospecting is about survival.

Prospecting is an essential part of any sales process, and there are many benefits to doing it effectively. Perhaps the most obvious benefit is that prospecting is needed to find you new customers and grow your business.

Even in a perfect world, we know that a small part of your customers will move away from you every year. Of course, this could be because of problems on your side, (then you are wise to fix those), but more often it is due to circumstances completely out of your reach, factories moving to other continents, rotation of contacts in the account, customers mergers or some even go out of business.

Over time, we must always be at least replacing the churn, the customer that leaves. For every account that leaves you must acquire at least one new one. If you want to replace the revenue from the lost account, you need more new accounts to compensate.

Prospecting keeps your ears to the ground

There are other benefits as well, such as:

It helps you understand your target market better. By talking to potential customers and getting their feedback, you can learn a lot about who your target market is, what they want, and how best to reach them.
It helps you improve your sales skills. The more you practice your sales pitch and learn to handle objections, the better you’ll get at selling.
It keeps you motivated. The act of prospecting itself can be motivating since it’s a way of taking action towards your goal of growing your business. And when you do make a sale, it’s even more motivating!
It builds relationships. Even if a particular prospect doesn’t become a customer, the relationship you build with them during the process can be valuable in its own right. Who knows, they may refer someone else to you down the line!

The cost of prospecting vs growing customers

How much effort does it take to sell for a million to prospects, compared to selling the same million to large repeat customers that have been with us for years?

Let’s compare 3 scenarios, prospecting, growing an existing account, and maintaining sales in a fully penetrated account

Prospecting is by far the most time-consuming process among the sales processes. First, for the successful prospects that become customers, the sales cycle is longer than for well-known accounts. Secondly, for every successful prospect sale, you will have spent time on 10 -20 suspect calls with other companies, 5- 10 initial meetings, 3-4 second meetings, and a few proposals – all with those prospects that didn’t end up buying.

Growing an account means that they buy something new, that the didn’t buy yesterday, either cross-selling new solutions or upselling advanced features or more seats. It can also be expanding to new departments, projects and sites, so that is also something new to somebody (to us) new.

Maintaining your sales with your best customers is often considered by salespeople to be the top priority. After all, that is where the money is at! This is, however, the easiest bit, since all the hard work was already done previously so to say. And this is where salespeople add the least value.

So how should I balance time between these? Is it even possible? A simple rule of thumb can be helpful here. Prospecting is 5-15 times more time-consuming than selling the same to the “maintain” or keep customers in the example above.

The problem with the “maintain” customer is that there is no more room for growth. We can not grow, or compensate for churn, by hoping that these super-good customers will buy more from us.

Growing customers require more work, but we have a working business relationship, so the cycle to introduce new things here is shorter. The hitrates are also higher than what we expect in Prospecting sales projects. This means that we can expect 2-4 times more time needed to

Qualification is key

The first thing to keep in mind is that not every prospect is a good fit for your business. It’s important to qualify prospects upfront so that you’re not wasting time pursuing leads that aren’t going to convert. There are a few key questions you can ask to help you qualify a prospect:

What need does this product or service address?
Is this need urgent?
Does the prospect have a budget allocated for this purchase?
What is the decision-making process for this type of purchase?
Who else is involved in the decision?

Asking these questions will help you determine whether or not a lead is worth pursuing. If they don’t meet all of the criteria, it may be best to move on.

How to Grow Existing Customers Without sacrificing Prospecting.

There are a few key ways to grow your existing customer base without sacrificing prospecting:

Offer additional products or services to existing customers – upselling and cross-selling are great ways to do this.
Get involved in referral programs – word-of-mouth marketing is still one of the most powerful forms of marketing there is.
Run targeted campaigns – create targeted content and campaigns specifically for your existing customers to get them to refer friends or family members.

Time to balance

When you’re trying to balance prospecting with growing your customer base, time management is key. You need to make sure that you’re spending enough time on each activity, without letting one suffer at the expense of the other.

Tips for Time Management for Prospecting

Here are a few tips for managing your time when prospecting:

Set aside a specific amount of time each day or week for prospecting. This will help you stay focused and ensure that you’re making progress. As a rule of thumb, think 8-10 times the time for each new customer you acquire.

It’s hard work to get 10 no’s for each yes, only for a meeting. Make it fun through competitions and group calling exercises.

Use a CRM system to track your prospects and customers. This will help you keep organized and prioritize your time accordingly.

Take advantage of automation where possible. There are many tools available that can automate repetitive tasks, freeing up your time for more important activities.

Tips for Time Management for Growing Existing Customers

Similarly, when you’re trying to grow your customer base, effective time management is essential. You need to make sure that you’re spending enough time on activities that will directly impact your bottom line, without neglecting other important areas of your business.

Here are a few tips for managing your time when growing your customer base:

Invest in customer relationship management (CRM) software. This will help you keep track of your customers’ data and interactions, so you can better understand their needs and how best to serve them.

Segment your customers according to buying behaviour or other criteria. This will allow you to focus your attention on those who are most likely to grow your business or have the highest lifetime value.

Give attention to customer surveys to detect attitudes among your growth-accounts, focus on selling to those with good feedback from stakeholders, and work to improve the perception of the others

Give less priority to accounts that already buy all they can from you. This may sound contradictory to many – where most of your current money comes from, is where your sales team adds the least value. Go for an excellent customer experience here instead, and let other teams create this.

Create targeted marketing campaigns based on smart customer segmentation. This will ensure that you’re using your resources efficiently and reaching those who are most likely to respond positively to your message.

Use data from past campaigns to inform your future marketing efforts. This will help you fine-tune your strategies and better allocate your time and resources.

Conclusion

If you’re like most business owners, you understand the importance of both prospecting and growing your customer base. However, finding the balance between the two can be difficult. Too much focus on prospecting can result in losing customers, while too much focus on existing customers can prevent you from acquiring new ones.

The key is to strike a balance between the two. Prospect without losing customers, and grow existing customers without sacrificing prospecting. By doing so, you’ll ensure that your business continues to thrive.

October 7, 2022

Tradeshows and conferences – 5 simple steps to double the effect

At certain times of the year, we find ourselves in a “Trade fair season” in full bloom. After a few years of pandemic downturn to the event market, we are now back into meeting up at events again. Millions and again millions are invested in creating links between people and companies.

The fact that trade fairs are still around when in theory you could do the same thing in virtual meetings and social media networking, proves that real live face to face meeting is still important and needed.

5 steps to boost the return on invested time & money

If your company has decided to invest in your team going to a major trade fair, what should you do? As with any investment, your job is to maximise returns, go there and totally smash the audience and get the hottest prospects with you home as ever possible. Right?

Events are very expensive, your company pays a lot to have you at the fair. But most of all, teh opportunity cost of having you away from your normal job and customers must pay off!

Here are 5 simple steps that can help you maximise your return:

Set Objectives for yourselves

Set some very concrete goals, think about what are your primary targets with the event. Are you there to canvas for new prospects? Are you there to meet up with existing prospects or are you there to deepen existing relationships? Maybe you are there to develop channel?

Write down your goals and communicate in your team. Use your sales meeting to align the team around the purpose and goal of the event.

Rehearse effective responses

Go through and rehearse responses to some of the most common blockages. Make sure to write down a line that you can practice. Roleplaying is great to rehearse a standard answer that otherwise would feel awkward.

Typical situations could be:

The first opening line when someone gets close to the stand
The “elevator pitch” – answer to “what do you people do?“
Objection – figure out the most common objections and write down answers
Rehearse a short demo many times, make it look really smooth

Also rehearse how you interact and pass prospects between yourselves, sales to sales, sales to product specialist and back.

Prepare contacts and meetings ahead

Prepare before the event. Ask your team to set off some time to go through the participants lists, see which potential customers are there, which of your existing customers are there, competitors, partners. Try to leverage the event to set meetings with people that otherwise would be difficult to meet. Don’t fill your calendar with meetings that are easy to get any time you like. Set targets and follow up with your team before the event. Who has the most high value meetings planned?

Lead and support the team during the event

At the event, be present, coach and help, help your team do the right thing, and to get all encounters captured in short reports and notes to help you remember who was who after the event. Tactical tips:

Keep mobile phones away. Make it a rule. People who stand with their phones are not likely to make any targets, at least not at the fair. Potential prospects will not approach a booth while the reps are speaking on the phone or texting.
Have prepared some tool or template that are easy to fill in and staple a business card to. Register everything!
Make little fun competitions out of the whole experience, on number of business cards or the number of letters of the titles of contacts or whatever. Have fun in the team.

Follow up fast – turn into Opportunity

It cannot be stressed enough, take care of the leads within few days after the event. We are all exhausted after the event, but your leads and all those thrilling conversations start fading away from peoples memory very fast. You only have a few days before the probability to close something has fallen by at least half. Because you will be tired after the event, you may want to plan the following already before the event:

solid plan with assigned responsibilities for who should follow up which leads and how soon after.
meeting the day after getting home to “kick off” the sales campaign on the new leads. If you do, plan this meeting already ahead of the event.

Conclusion

This is a very simple process, but as the manager of the team, your role and active leadership and coaching during the event is very important for the success of the team. There are many distractions, and leaders who leave it up to the team members to manage time and contacts by themselves are often surprised by how different people act, and many times come back home disappointed.

September 17, 2022

Don’t sell to those who can’t buy – Decision makers and stakeholders

Don’t sell to those who can’t buy

A golden rule and common wisdom says:

“don't sell to those who can't buy”.

As one of our highly appreciated colleagues at IBM used to put it,

– There are a few people in the buying process that you need to say “yes,” everyone else involved can only say “no,” so go sell to the former, but make sure the latter likes you.

In complex B2B sales situations, when:

- you are selling at premium price,
- implementation of your product implies major change or a transformation
- implementation involves many users and stakeholders

.. in the customer, then it is adamant that the perceived benefits must outweigh the pain, i.e., the cost of the implementation.

Regardless of your price, the real perceived cost to say yes is high—much higher than your price. Therefore, we need to spend our time talking to the people who can appreciate the business benefits—those who can say yes.

The real cost of saying yes

When we are selling value, we solve business critical problems for the customer, and the customer appreciates the value of this. Often the solution is a combination of a product or technical solution, and a transformation project. This implies a change process that is far more costly than any product we could ever sell.

Even if we gave the whole solution away for free, in Value Based situations, the customer may still refuse or stall the decision. It is not a price issue!

As we approach the purchase signature, concerns about the whole project rise. This is absolutely normal. Price is almost irrelevant at this point. Doubt and the perceived risk weigh over on the “reasons not to buy” side of the balance together with the internal cost of the change project, making your price a minor issue in comparison.

Never try to compensate customer concerns by lowering your price!

In the article about why pipeline deals slip and are delayed, we discuss what to do about this, but for the moment, we just need to understand who the key influencers and decision makers are, and that they are crucial to us to approve the project.

Otherwise, they can stop, scrap, or stall our deal at any time between now and the order. We have to make sure they don’t.

A major business decision is very rarely taken by one single person. If we want the customer (the company) to go ahead with the deal, we need to acknowledge this fact and make sure we know who is who in the company, and work to secure the deal in multiple fronts.

Decision makers and Influencers

Who should we look for?

Most companies within the same industry have similar internal structures (titles tend to vary much more between industries). This makes it a good idea to map out the typical decision chain and decision-making structures for the industry you are about to campaign or approach. Describe the decision-making personas for the industry vertical, write them down, and then go search for them. This is helpful later when you create account plans for specific companies and put real names to the personas.

The influence circles

Some personas we often encounter and that you may want to start off with are listed below:

Decision maker – power sponsor

Has the ultimate YES/NO decision to make
Often merely a formal approval
Can go against recommendations of the team
Well protected and sometimes almost invisible

Things to consider

Qualify that the person is the true decision maker
If you can’t get direct access, what other players have the ear of this guy?

Influencer – expert

Sees things from a functional point of view
A filter in the process
Can say NO, but not really the YES we need

Things to consider

Engage influencer early in the process.
Is the offer presented in a way that the influencer understands and backs?
Do we know what their attitude towards us is?

The user

In general, very many of them in the company, professional roles.
They propel who will use our solution, and the support agreements that came with it.
Influence decision making if asked, not always considered though.

To consider

Reach out to at least a limited set of users and consult them.
Ask yourself what users will likely say about us if they are asked.
Consider the effort and return of engaging with them.

The Sponsor

A sponsor wants us to succeed, as this makes them look good within the organisation, or get the task done better.
Not necessarily in the leadership teams, can be outside the traditional contact surfaces, but should be influential enough.
A sponsor will support us informally with information, advice, etc.

To consider

Do you have a sponsor for the opportunity at hand?
Is the sponsor powerful enough internally to drive the business forward?
Do we understand the sponsors pains and the benefit from our solution?

Beware: Just as you can find sponsors who back you, there can also be sponsors for our competitor with the same powers as the sponsor, but who will work against us – we call them anti-sponsors!

The Stakeholder map

Pains flow throughout the organisation

For both decision makers and important influencers, you need to understand the professional and/or personal motivators so that you can build an individual value-based argument for them. What keeps the these people awake at night? What would they be really enthusiastic about?

It is a good idea to think a little extra and try to map out the “who is who” in the company. To get you started, here are some examples – typical professional motivators associated with different roles.

Some examples:

- A CFO will have financial and cash flow considerations; he will listen to arguments focused on productivity gains, lower costs, less stocks, less CAPEX, payment terms, and subscription models.
- The operations director will look at productivity, less risk for downtime, efficiency, less personnel rotation, job satisfaction, delivery precision, and quality.
- A project manager will be interested in holding the deadlines, meeting requirements, strict budget control, etc.
- Asking the right things to the right people is always important, and to do so we must understand them, who they are, and what they do and think. It is as easy as that.

If this is a big contract, spending time anchoring the decision with as many as we can from these people is absolutely key.

If the deal is smaller, perhaps we have to rely on our sponsors to do the internal selling. We have to use our common sense to judge the reasonable effort.

September 16, 2022

Trust is a must – Personal styles, DISC, and matching in sales

In other posts, we discuss sales techniques and methods on selling value. To sell value, and be able to charge extra for that value, the value must be fully perceived… felt.. by the customer. Whether we get across with our message or not is influenced by our styles, our behaviors in different situations, and how well we fit. Sometimes this personal fit is simply referred to as the personal “chemistry” between people. Let’s have a look!

Trust – a must

When we meet new people, our brain reacts by asking two questions immediately and subconsciously. The first is about how we will communicate – considering openness, warmth, and trustworthiness, and the second is about competence and knowledge. “Is this someone I will get along with and trust?” and “Is this someone I can respect and understand?” Entering into a personal relationship with the person, the first always trumps the other. If we don’t feel we will get along with the person, the competence dimension becomes irrelevant.

In sales, it is generally the customer side that determines the level of trust that is needed in the relationship for the sale to take place.

To generate trust, we need to do the following:

Understand how others perceive and appreciate our behavior
Know how to read the behavioral style of our customer
Learn how to adjust our style to the customer

There are many models and tools that help us understand styles and behavior. But few are as simple and as well documented as the DISC model. The reason why the DISC model is so suitable to apply on sales is because DISC simplifies the reality and allows us to take quick decisions.

The DISC model

It is out of the scope for this manual to provide all the details of the model, but we encourage the reader to learn more about the theory and the tool to gain a good understanding of the personality styles and how to adapt our behaviours.

The DISC model dates all the way back to the 1930s and is based on William Moulton Marston’s findings and thinking. Although far from complete, it provides some basic insights into our ways and how it is likely that we react and behave in certain situations. It is one of the most used instruments, and while it does not really measure or evaluate personalities, it does describe basic human behaviors.

The DISC model identifies four different behaviour styles (D. I. S. and C). Too make the model simpler and more accessible, it uses individual color codes for each style, and tells us four different ways in which we usually react to a given situation.

D – DOMINANCE STYLE (RED) :

People with a dominant style in their base behavior will see themselves as strong in a non-friendly (e.g., professional) environment. This is why they tend to try to dominate the situation and the meeting. They are straight forward in their ways, not afraid to speak their mind, and find it easier than many to see how to overcome different obstacles. They are challenge driven and goal oriented. They are willing to change, but normally only if they think it can help them to get what they set their mind on. A dominant style person will perceive himself as powerful, energetic, innovative, goal oriented, and resolute. By others they are perceived as arrogant, pushy, aggressive, and insensitive.

I – INFLUENTIAL STYLE (YELLOW) :

Individuals with a strong influential style will see themselves as strong in a naturally friendly environment. In general, they feel they have nothing to fear from the environment and people around them. Therefore, they want discuss things, have others share their opinion, and try to influence them through friendly persuasion. Their primary goal in any situation is to be understood, accepted, and involved. A person with high yellow will see himself as convincing, confident, generous, inspiring, and open. By others, this person can be seen as selfish, superficial, egocentric, and unserious.

S – STEADY – STABLE STYLE (GREEN) :

People with a predominant stability style often see themselves as weaker than others, and when given the choice, they prefer to be in a friendly and conflict-free environment. They are concerned with not upsetting or changing this environment, and they want to preserve it to continue to feel safe and good about themselves. On the other hand, to change, they must first be convinced that they don’t risk losing anything at all. As a salesperson, this style is often perceived as a bit passive with difficulty getting to a close with the customer. A stability-style person will perceive themselves as loyal, a good-listener, encouraging, and calm. But at the same time, others can see them as stubborn and reluctant to change.

C – COMPLIANT STYLE (BLUE) :

A strong compliant-style person tends to think that their surroundings are generally hostile and thus they feel weaker. Because of this perceived weakness, they don’t exercise much influence. They tend to prefer working by themselves and take great care to fit into existing and predetermined structures and rules to reach their goals. To avoid risk and conflict, they will analyze each situation carefully before deciding to do anything that would change the given structure. A person with high blue will see him/herself as fact-seeking, knowledgeable, systematic, diplomatic, and reflective. On the other hand, this person can be perceived by others as pedantic, avoiding, indecisive, and reserved.

May 23, 2022

Leading Indicators tell you the future

… and lagging indicators tell you what just happened.

Leading or lagging KPIs?

As managers, it is our job to have a good view of our business at all times. For this we look at our processes and define some key measures along the flow. The measures that tell us how much or how well we do things are referred to as KPIs, or key process indicators. Often you will see that any process is split into a sequence of process steps. This way, it is easier to isolate and consider each step separately and to study their charateristics.

When we measure things that go into a process step to predict what will come out on the other side, this is known as a leading indicator. Leading indicators are generally more difficult to measure, but they make it possible to influence the future result. Typical leading indicators will be focus around activity and capacities, e.g., number of visits, meetings, and proposals made.

When we measure on the result that comes out of a process, we talk about a lagging indicator. Results are things that already happened. They are easy to measure, but are generally very difficult or impossible to influence. Typical lagging indicators are sales revenue, profitability, and quantity sold.

Most sales organizations focus on the lagging indicators of the business,. i.e., orders received. These are often easier to measure and tend to be available through accounting, ERP, and CRM systems. However, it is important that we also look at the leading indicators of our business to establish that we are undertaking the right amount of activities, of sufficient quality, and in the right direction that will give us the results we need.

Activities drives sales

We should always look for leading Indicators when we want to see how we will be doing. Lagging indicators, such as last month’s sales numbers, tell us what already happened (was sold last month). They say nothing about our coming months. When we are looking for predictability and to plan our work, we need to look elsewhere for guidance.

Many companies analyse the sales pipeline to predict future results. But the sales pipeline is just a static snapshot. It tells us how many opportunities there are right now in every sales step. In other words, what work we have invested to move each opportunity to where it is now. If we do not spend a minute of work on any of the opportunities at all for a month, our sales pipeline would look exactly the same a month later. The deals would just be delayed a month, except we would probably lose some.

If you use pipeline data, look at the change in pipeline rather than the absolute numbers. Examples of forward looking pipeline KPIs you may want to consider are listed below:

New opportunities in the last 30 days (value and # of opportunities)
Time opportunities are in same stage (per stage)
Number of transitions, forward movement between sales steps

These are the direct results of the amount of customer interaction that is done and how well the interaction went, thus indirectly measuring quantity and effectiveness of activity. We recommend that you work with activity data in an active way to complement these more traditional views. For this, it is important that calls, video, and visits are registered. In our opinion, it is preferred that all activity gets at least a quick mention and an entry into the system. Prioritise getting at least some information about all activity, rather than asking your team to write long visit reports, as this almost guarantees that very few will be made.

March 29, 2022

Today, you need more leads than ever!

4 reasons you need more leads now than you used to need

You probably already have a pretty good idea about your team’s performance by monitoring basic sales processes and metrics. You know how many leads enter in one end, and you know how many turn into qualified prospects then deals. You are controlling your conversion rates, and you are constantly trying to find ways to improve them.

Just increase the conversion rate and you will do well” is the common recipe.

Yes, increasing your conversion from lead to actual sales is of course important. But a “conversion rate only” strategy depends on individual skills and introduces a serious scalability problem. Why? Here are a few things to keep in mind:

Diminishing benefit per transaction

First, the benefit you get from every transaction is not what it used to be, especially in software. With the introduction of SaaS models, initial deals are smaller, and you may find that the initial benefit/margin from the first contract doesn’t even cover your transaction costs. Over time and with Customer Success management, you will win it back many times over, but in the meantime, you need to finance your activity.

B2B sales remain complex

Before, a customer would need 5-6 months and 8 signatures to pass you an order of 100,000 Euros, but today, that same guy pays a subscription fee of 2,000 Euros/per month. At least one could expect the purchase decision to be easier for the customer. This is often not true. The decision to implement a software solution is STILL associated with great risk later on in implementation and usage.

For the customer, the main part of the actual transaction cost is not in the price but in the implementation of new processes, adoption of new technology, the product cost over the whole lifecycle, the perceived risk of cloud hosting, etc. So, even if your contact could sign off on the initial contract, he or she will not take the risk without doing all the evaluation work, proofs-of-concept studies, and anchor the decision with his peers and managers, just like before.

The “educated” lead

Additionally, today your leads already come to your “shop” well educated. They have studied your offerings on the web, as well as your competitors’ offerings. They understand the basic benefits of the product, etc.

They find plenty of information on the web before you even get a chance to talk to them. Even if you have gotten the lead through outbound activities, your leads will browse around to educate themselves before buying anything from you. This makes traditional selling even more difficult than say 20 years ago, and your transaction cost (“cost of sales”) increases.

Sales conversion takes sales skills

Increasing your win rate, or conversion rate, from the leads that you have essentially depends on the skills of your sales reps, meaning their personal skills on how to create a buying vision, how to meet objections, how to manage the process, how to turn a sceptic prospect into a devoted believer, etc. These skills take time to develop, and only a few reps will become real stars.

A long learning curve and total dependence on your key seller(s) doesn’t really sound like a very scalable model to build your business on, does it?

Get the Lead-Machine working, and qualify well

You need more efficient ways of increasing sales than to just hire more and “better” sales reps:

Lead generation is key – Build a lead strategy, get enough (online) qualified leads for your sellers. Traditional cold calling to people is dead, so you need to find other ways of reaching out. You need to create an abundance of good leads coming in. If you have few leads coming in, you risk having those in sales spending their days calling the same leads over and over, “loving them to death” but not selling anything. There is a lot of truth to what SaaS-sales gurus Aaron Ross and Jason Lemkin say in their bestseller Predictable Revenue: “Lead generation drives growth; salespeople fulfil it.”
Work pipeline efficiency rather than conversion. Get skilled at early qualification! (Or rather disqualification.) It’s all in that first sales call. If you can, specialize a group of reps for this phase, qualification, and make others good at follow-through, negotiating, and closing the deals. Provided your lead generation phase provides you with working material, your qualifiers will do a real qualification, and use the right questions. See my article on ”Qualification and Pipeline Efficiency.”
Be “data driven” – Make everything measurable so you actually know when you are improving and when you are not. Today, there are plenty of good CRMs and marketing automation tools out there, from which you can get all kinds of statistics that help you work your efficiency. (Also make sure you work the 100% adoption of these tools in your teams. See “Love your CRM.”)

March 29, 2022

Sales efficiency – the art of disqualifying in time

Efficient sales – pipeline control

If we knew from the beginning which deals we would actually win, I think all would agree that we would only be working with those deals. So, the earlier we can qualify opportunities and the better we do it, the less time we will spend on deals that will not be closed. The larger the opportunities, the fewer transactions we need to juggle simultaneously, and the better our life will be. Easy! Or…?

As the teams sales manager, one of your most important tasks is to improve and identify challenges in your team’s pipeline management and opportunity control. Pipeline efficiency should be your mantra.

Introducing pipeline efficiency

How much of your team’s time is spent on deals that will never happen?

Let’s say you get 300 online-qualified leads from marketing, and from those you close 10 deals on average. Great! But now look at the effort spent to get from 300 to 10!

Look at the picture below. All three curves start at 300 and end at 10. The conversion from lead to deal, win-rate or conversion rate is the same in all cases. The hours you and your team have spent getting there (the area under each curve), however, is very different…

You probably will have other names for your pipeline stages. These names are merely for illustration purposes.

The green rectangle in the bottom represents the work you do on the opportunities that actually become deals. If you had perfect information on who will buy from you and who will not, this is the effort you would spend. Needless to say, this will merely be your theoretical optimum cost of sale, but it will be useful to us as a reference for calculating our own ratios.

Consequence 1: Waste our time on “no-hopers”

The farther away from the green box you are, the more time is spent on deals that weren’t successful. The red curve represents a more inefficient pipeline, and the green line represents a more efficient one. The green line drops earlier in the process, because qualification is done better and earlier in the process. The red area, the difference between the curves, represents the improvement potential!

This is how much time someone at the red curve could save with better qualification.

You get the idea? Your pipeline should have the shape of a trumpet horn.

The earlier it falls off downwards, the better. For every inch above the green line you are in any part of the process, you are wasting time and resources that you could have used on more leads, more prospecting, more sales…
If your rep’s curve is very flat, only to drop off in the very late stages (the red curve), they are seeing the world though “rose-tinted glasses”, meaning they are hanging on to a bad qualification.
The time spent on following up on no-deals is obviously lost time. This has a cost for the company, direct costs through salary and other costs, indirectly through the frustration for the sales rep, who may end up leaving (or get fired) when they never reach the expected numbers.

But, even more important, is the sales YOU COULD HAVE HAD if time was spent more wisely. If you manage to liberate 1/3 of your time for productive sales, you potentially will sell 50% more!

Consequence 2: Bad qualification makes bad forecasting.

There is also another reading you can make out of this. The red curve is common, because in sales, we tend to hope that everything will close, so as salespeople, we tend to hang on to old opportunities and bring them up month after month in our forecast, especially if we have few inbound leads to work with. This tends to give us a systematic forecasting error as well, as it will be very difficult to determine exactly HOW overoptimistic we are, and on HOW MANY deals.

Ever had sales tell you they would sell so much by the end of month, only to end up selling less than half? Bet you thought you were fine until the last week…. Beware of the rose-tinted glasses!

Up next…

If you want a few ideas on how you can calculate your own pipeline efficiency, have a look at our article “How-to guide: Pipeline efficiency.“

March 29, 2022

Selecting a CRM that rolls itself out

CRM tools are fantastic! They help us manage opportunity and activity, coordinate ourselves, and be efficient with our customers. As managers, CRM data is our map to navigate. It is our eyes to see with. Yet most companies struggle to advance past the point where we use the system as little more than an online version of an opportunity/deal list in Excel.

When you select your tool, we recommend you put special attention to ease-of-use and integrability to standard company calendar and mail tools. There are areas to focus on:

Ease of use – registering data should be super simple, and as much as possible automated via calendar and communication (mail) systems.
Make it a multi-department tool for all customer-facing activity, sales, support, trainers and consultants, installation people, etc.
Choose a tool that provides a means to integrate, share, and extend data with other systems.

Lets look at these in more detail:

EASE OF USE

Choose a very easy-to-use tool. It should look good and have all sorts of drag-and-drop functionalities when updating pipeline. It should be dead easy to register and log everything.

If you have field sales, an excellent smartphone app is important. Always prioritise ease-of-use over a few more functions.

- - Any ”reporting” that takes more than a minute will be saved for later, normally for Friday – “admin-day.”
    - - A seller should be able to log a meeting, take a picture of a whiteboard, and scribble down a few bullets while in the meeting. Even a voice memo is better than nothing.
      - It should be done during or immediately after the activity. The more fun ways of logging activity at minimum or zero effort, the better.
      - Make sure the system can receive mails and attach to deals. Then bcc: the CRM on every customer mail you and the team send.
  - It is better to have a little information on ALL your activities and deals than to have lots of information on few or NONE of them. Don’t make too many fields mandatory. Don’t try to be perfect.
  - Look for useful plugins that allow your sellers to get instant company background and contact person info from external sources on the same screen. This will make it impossible for your seller to not love the handiness of having all info in one screen.
  - Look for automatic call logging tools, email integration, social media integration. This way you monitor activity while letting people use their favourite tool for each type of activity.
  - Look for gamification opportunities. Why not put a realtime dashboard on the wall. Find fun challenges every day or every week that can be followed on the screen.

COMPANY-WIDE COLLABORATION:

Make all customer-facing areas use the system (CRM) to document and manage customer interaction.

Ask:

Services team to log trainings, projects, and consultancy tasks they are performing,
Presales team to add their demos, and the outcome and questions.
Delivery and warehouse to register deliveries

TIP: Suggest to your service/consultancy and pre-sales teams to bcc the CRM on all customer mails. Most CRM systems have this feature.

When you manage to reach this goal, you will see how all teams will start putting more effort into their logging. It starts making more sense to log all, since other people will talk to the customer without asking first. If many roles touch the same customer, it becomes a necessity to coordinate ourselves via the notes in CRM.

Other things that will help you integrate between teams:

Make the CRM tool reflect EVERYTHING that has anything to do with your customers, customer records, payment terms, purchases, and support contracts.
- Make sure integrations work with other departments tools, so that a sales rep can immediately scan through issues, support interactions, deliveries, cash collection problems, credit problems… It should all be easy to access.
- Organise your integrations to marketing, so that you get all online-qualified leads automatically into the CRM as a “contact” and an “activity” and/or “lead.” Organise your data so it becomes useful for segmentation for your online campaigns. (For instance, make it easy to separate existing customers from prospects, etc. You don’t want to send introductory promotions to old customers, or loyalty program promos to recent new leads.)

EASY TO INTEGRATE

- Look for automation plugins, and integration to other tools in used by the other areas in your company. For instance, if your customer support uses desk.com, or Zendesk, or similar, then find ways to make tickets visible, at least by title, in your CRM. Or why not have your support system bcc the CRM?

- Look for a tool that offers a decent API so you can use integration platforms such as Zapier or similar to push and synchronise information from one system to the other. In the worst case, you may have to spend a few thousand on your own integration if needed, but at least it will be possible.

Remember, people will not use a tool just because we tell them to.

You will have results when your team truly believes using it is time well spent.

May 12, 2021

Pipeline Efficiency – More time on good deals! My favourite KPI

KPI – Share of your time spent on successful deals!

We discuss the time you open on your SUCCESSFUL deals as the share of all sales time you invest. The higher the ratio, the better you are doing, but there are different lever to pulll to improve. Early qualification is one.

More important than getting the exact right formula is to consistently applying the same formula month after month to compare progress.

You may want to have a look at this previous article for the discussion of pipeline efficiency and why it is so important. In short, we are looking for a way to measure the effort we have spent on all deals that were lost and problems we could have avoided if we had done a better qualification in the first call with the prospect.

First, examine the typical successful sales cycle, look at the deals that were actually closed, look for patterns, and try to establish what “it takes.” Try to quantify the effort. This will be the yellow rectangle in our picture on the left side.

Then compare it to the total time your team spends on sales, prospecting, qualification, value demonstration, and negotiation. This will be your own “curve” in the diagram. Remember that you need to include all the calls and mailings done to prospects that did not become customers, your total time employed, and the time spent from people in other parts of your company, such as technical sales, admin, development, support team, etc.

If you do good and reliable activity tracking in your CRM system, then you are only a simple query away from an automated report; otherwise, you could do this as a team exercise on your next sales kickoff. (Have a look at our article on CRM adoption in your company, “Selecting a CRM that rolls itself out.”)

The two effort meters

There are basically two pieces of data that you need.

Effort you spend in successful deals
Effort you spend in total – (i.e., worked hours)

It is as simple as that..

1. Effort in successful deals

First of all, take the deals you and your team closed during the last month, and do a “post mortem” on each. You should have at least 10-15 deals; otherwise, select a larger timespan, such as two months or a quarter—whatever makes sense for you.

How much effort went into each of these deals? Who was involved? Were tech sales, development resources, support personnel, admin, or any other part of the company involved? Did you need to meet physically? Did you place phone calls and have video conferences? Try to quantify it.

Map out the average successful sales cycle, and look for pattern.

Don’t jump to conclusions on what to improve just yet. Try to state the facts, and establish your current sales cycle and sales stages as they look today. How many hours of work, from which resources, were needed? Which were the obvious stages that you seem to need every time?

Effort per successful deal = Hours/€ spent on average in your successful deals

And … while you are at it, try to register some other interesting metrics to compare over time:

Sales cycle length = Average time from first contact (lead) to closed deal
Sales cycle complexity = Average number of touches/activities you needed to perform with/for a customer in order to close a deal

2. Total sales effort

Then, look at the same month (the same period during which you made the deals in the first exercise), but now look at the total resources employed during that period. Try to limit yourself strictly to sales and directly related activities. Try to estimate in the best way you can how many hours you needed. This will give you your total cost of sale, or sales effort.

Whatever concepts and hours you choose to include in your calculation, and the period you examine, is fine, just remember to include the exact same items month after month to give you a base for comparison. After all, it is the improvements you are after, rather than an absolute number.

Sales Pipeline Efficiency

Sales pipeline efficiency = Effort spent on deals won during the period / total sales effort during the same period.

The ratio between these two numbers will give you a notion on your pipeline efficiency. If every lead turned into a deal, this would be close to 1, and the more time your team spends on prospects that do not convert, the lower the number will be.

Once you have this overall measure controlled, and with data you feel you can trust, there are lots of exciting insights you can get playing around with the sales stages in more detail. Is there any particular stage that takes more time? Where do you normally lose a deal? Do you see different behaviour between sellers?

We hope you found this article useful. Best of luck with your pipeline work. Happy selling!