Because individual sales people should operate like individual franchise owners inside of larger organizations that also means they should manage their business according to a strategic sales plan (like any other business owner). There are two key aspects of any strategic sales plan that have a direct reflection on your revenue number (and they should be very clearly spelled out):

- Marketing which should explain the activities you will engage in to find new and qualified opportunities

- Pipeline Growth & Development should explain how you move the qualified opportunities to close

Over time I’ve realized that the statement, “You need 3-4 times your revenue number, in pipeline opportunities, in order to make your number” is really a “myth” and has no empirical truth. Adhering to this type of sales behavior ultimately leads to confusing and poor results through sales people exhibiting the following behavior:

- Padding individual sales pipelines that then have to be rolled up to management

- Not understanding what should go into the pipeline as a qualified opportunity to begin with

- Having little focus on the most important aspect of pipeline development, finding new legitimate opportunities.

Because this myth has been perpetrated for so long and passed on from one hi-tech business and sales manager to the next, sales people rarely know what “real” pipeline development is and what opportunities should be added to your pipeline.

Identifying legitimate opportunities to add to your pipeline is a function of 3 things:

- Finding business pain that has quantifiable economic consequences for the prospect customer that your product or service can solve

- Ensuring funding is identified for the project and will be released (as long as a compelling business case can be made)

- Executive (C-level) sponsorship is identified and firmly behind the project and will release the funds if the appropriate business case is made

Once each one of these 3 criteria are met then you can (and should) add this “deal” to your sales pipeline. The challenge to growing any pipeline is to find enough legitimate opportunities that meet the criteria listed above.

In order to have some gauge of what level of business each sales person will bring in should be a function of the individual close rate and the length of time it takes to close a deal. Sales managers should work with their sales people and focus on identifying legitimate opportunities, the length of time it takes to close a deal and the individual close rate then you can determine the level of pipeline needed to make the revenue number.

For example:

Let’s say an individual sales person’s annual sales quota is $1M in software revenue, it takes 12 months to close a deal and the individual close rate is 75%. At this close rate, this means the individual sales person would need a pipeline of opportunities totaling $1,333M in order to meet an annual revenue quota of $1M which is a far cry from $3M to $4M that every sales manager would tell you that you need. Obviously, as the close rate goes down then the pipeline needs to go up and vice-versa.

Good selling!

The challenge that most hi-tech salespeople face is in creating demand for their products and services. In my 22 years in sales I’ve met and worked with many talented hi-tech salespeople and the greatest weakness almost each one of them had was in prospecting (that includes me) and not in closing deals. There is also a distinction between the strategies “hunters” and “farmers” use in creating demand.

The marketing strategy in creating demand for “hunters” is a little different than the marketing strategy “farmers” need to use to create demand.

Hunters are good at finding large business problems in accounts spread out in a territory. They are good at either marketing themselves or working with marketing to organize campaigns around finding customers with large business problems, painting a vision to those customer’s to solve their business problems, building a business case around those problems, and then finally closing the deals that solve those problems. They need to engage in rigorous prospecting activities to back fill all the opportunities they close so they need to spend as much time on marketing and prospecting as they do on closing.

Farmers, by contrast, work in accounts that have already been sold and a platform exists to work off of. Given that fact their task is different in growing their business and so are the strategies needed to accomplish that. Farmers don’t need to engage in the heavy prospecting activities that hunters do and instead need to focus on building relationships within an account and developing an enterprise strategy to grow the existing platform out across the account they are working in.

Compensation strategies for each sales person should also be different. You will never reach your intended revenue and / or implementation goals if you compensate a hunter to do a farmers job and vice versa. Each task is different and so should the compensation. A farmer should carry a higher base salary and be driven by clearly defined MBO’s (Major Business Objectives) one of which should be revenue. Hunters should have lower base salaries and higher commission multipliers to drive the sales behavior.

Work with your team to determine what the territory and account base warrants then hire the right sales person, rigorously train them, accurately compensate them and then stand back and let them work their magic.

Good selling!

Strategic Sales Planning

The New Strategic Selling – Stephen E. Heiman, Diane Sanchex with Tad Teluja
The New Conceptual Selling – Robert B. Miller and Stephen E. Heiman

Demand Generation

Selling to VITO – Anthony Parinello
Lead Generation for the Complex Sale – Brian J. Carroll

Questioning

SPIN Selling – Neil Rackham

Solution Development

Think Like a CEO – Mark Kuta Jr.

Solution Presentation

The Exceptional Presenter – Timothy J. Koegel

Opening a Relationship

Getting to Yes – Roger Fisher & William Ury
Getting Past No – William Ury

I try to read a book a week and am also spending more time exposing myself to blogs written by authors I respect and sales trainers / sales people. In the future I will have an expanded list of books and blogs that you can read in support of your career.

For now if you read each of these books I list above it would give you a head start in implementing a sales process to follow. Being process driven is one of the keys to success in sales and each sales person and sales manager should work hard to implement a repeatable sales process that you follow.

The book takes evidence from two fields, sports and music, where practice is of indisputable necessity if you want to reach the highest levels. The two individuals cited are Mozart and Tiger Woods and a case is built around why they have reached the highest levels of performance in their professional fields through deliberate practice and not necessarily through superior DNA. It’s worth noting that both of these individuals did not choose the professions they exceeded in, they were chosen for them.

This book made me reflect on the skills necessary to be successful in hi-tech sales and also the things each individual sales person can do to improve their performance. Hi-tech sales is no different from any other selling environment in that you have to follow a predictable process that starts with a plan and ends with an order.

Deliberate practice for hi-tech sales people starts with identifying the skills that you lack and then putting a plan together to address those skills you need. That’s the first step; the next step is spending time on each skill in a deliberate way. As an example of deliberate practice, Tiger Woods will spend time dropping balls into sand traps, stepping on the ball(s) to deeply embed them in the sand and then practice hitting them out. He may only see this shot once a season but when he does he’s prepared for it.

In the same way sales people need to put together a laundry list of their talents and things they do well today and then identify the things they need to improve in and put together a plan for deliberate practice in each area. A list of things that hi-tech sales people should become more well versed in are planning, personal productivity, demand generation, stronger questioning techniques, developing business cases, and negotiating skills.

Practicing deliberately is a great area in which to engage a sales coach because a coach will help you identify your strengths and weaknesses, put together a practice plan, guide you through the execution phase of practicing your skills and then providing a feedback loop to help you grow and improve. I can think of no other profession that could benefit more from individual coaching than the profession of sales.

Remember that perfect practice makes perfect and each failure leads you closer to success: http://www.youtube.com/watch?v=45mMioJ5szc.

In hi-tech sales there are two primary selling personalities’ that exist, hunters and farmers, and the way they sell and the skills they possess are quite different. Neither personality type is better than the other when it comes to selling; the business challenge comes to light when sales managers and small business owners put the wrong selling personality into the wrong role. When that happens the individual sales person struggles and eventually fails.

Nothing can change the revenue picture for an organization quicker than a sales person, both positively and negatively. When sales people fail the costs to a company and small business can be pretty high. In the case of some small businesses putting the wrong sales person in the wrong role could potentially drive them out of business.

 When I talk about hunters in selling visualize:

 - Michael Douglas in Wall Street (http://www.youtube.com/watch?v=7upG01-XWbY)

- Alec Baldwin in Glenngarry GlenRoss (http://www.youtube.com/watch?v=0WCcKIkMp8Y)

Hunters, as the name implies, are very skilled at making “the kill”. The very best hunters in hi-tech sales are skilled in identifying customer business problems and qualified opportunities, engaging with the customer, managing them through the selling process and then closing the deals. Once the sale is complete they disengage with the customer and then move on to the next engagement.

Farmers, by contrast, are more invested in the long term growth of customers and prospects. They tend to represent companies that have a broad portfolio of products and because they have a vast array of products that can address many different company problems they become extensions of the companies they are engaged with. Farmers tend to be employed by the larger hi-tech companies (Cisco, Hewlett – Packard, IBM, Microsoft, SAP, etc.).

When hiring new sales people you have to pay attention to not only the skill sets that are necessary for each type of selling environment but also what interests the individual employee. Paying attention to both will ensure you put the right sales person in the right role.  

Since my last post I’ve decided to take a step back and re-focus myself on why this blog exists and who my target audience is. In the couple of months since my last post I’ve also learned more about how to become a more effective blogger, what it means to tap into the exploding world of online marketing and positioning yourself to take advantage of that fact.

My target audience for this blog will be mainly hi-tech salespeople and sales managers, though anyone in sales (or operating a small business) will hopefully find something of interest in this blog. My reasons for targeting the hi-tech industry are two-fold; first, because I spent the majority of my career in hi-tech sales it gave me not only a background but over the years I also developed a keen interest in this area of business. The second reason is because I believe that salespeople in the hi-tech arena need to be much more business oriented to be successful than salespeople in other industries and my writing will focus on how that can be achieved.

The subjects I will be writing about will be the subjects that I feel salespeople need to use and exploit to be successful in their chosen profession. Some of the things I write about will be philosophical, some will be controversial, I’ll always try to be entertaining but most of all I want to be practical in order to provide timely information that you can use in your business and career.

The main topics I will write about will focus on the areas that successful salespeople follow today. I’ll focus on having a consistent sales process that you can fall back on and use over and over again. I’ll write about sales strategy and the importance of knowing where to focus your selling effort and how to out maneuver your competition to get the business. I’ll discuss execution and how that becomes the weakest link once a strategy is in place. You can have the greatest strategy in the world but if you don’t execute (and adapt) you fail 100% of the time. Productivity is as crucial to sales success as any other skill you will learn, because each of us has the same 168 hours in a week and how we use those hours will not only determine our success in business but also our success in life.

Finally, because this is my blog I will also be writing about some of the things that interest me and I will do my best to relate them back to sales and business. Some of the things I will be posting about include world travel, fine dining, arts & entertainment, politics and sports.

I welcome your feedback and look forward to hearing from you.

The term Capitalism actually comes from Karl Marx who was the founder of Communism and he meant the term as a term of derision. Marx’s basic premise is that under a system of private property only the “capitalists” would benefit versus socialism would benefit all of society. It’s a good thing we have over 200 years of history to look back on and see how well Communism fared in the world and served our fellow man. If my history is right communism killed over 100 million people and I guess that system of government / economics might work if you wiped out enough people…funny thing history.

Capitalism in its basic form is an economic system that says people can use their own property without outside interference to benefit in any way they see fit. The owner takes the risk, controls the means of production and therefore pockets any profit generated. This system of free exchange gives people the ability to choose how they will use their own private property to make income (create jobs), how they will sell (price) their products and services, and also the freedom to choose how and when they will consume. This system of production, distribution and pricing (free market) has brought more people out of poverty than any other economic system ever devised.

I’ll use a recent example of a debate I had with a friend where he was trumpeting the fact that under President Obama the rich are finally going to pay their fair share. He was also deriding the fact that his 401K had been done away with and his pay was cut 10%, which on the surface I can understand his angst. Peeling back the artichoke a bit would tell you that he still has a job and able to put food on the table, drive a car, have a roof over his head and still have expendable cash to spend on a vast array of goods and services of his choice (key word choice).

My friend was trumpeting his skill and telling me that that was the only thing keeping him employed and to a point he was correct. In a tight labor market the people with the best and most desirable skills are going to be employed, as it should be. More specifically what I pointed out to him though (and this is the crux of Capitalism, and particularly trickledown economics) he has a job because someone had an idea, decided to take a risk and started a company. In tough times this “owner” cuts corners in order to keep some or all of his labor force instead of laying them off. At the end of the day if this “owner” cannot make a profit he will shut down the business and find a better method of exchanging his hours for dollars.

In a Capitalistic society my friend has the choice of accepting the cuts in salary and benefits in order to keep his job, leave his job for another or start his own business. The fourth option, which was his argument, is that the rich need to pay their fair share so the government can make a transfer payment from someone who has legally and rightfully earned that income to someone that hasn’t. I call it the great shake down of American society.

We are at a point in American political history where we elect leaders through a process of spreading the greatest amount of misinformation in the shortest amount of time in order to whip the working poor and middle class into a frenzy with the populist rhetoric playing right into their ignorance . The facts of Capitalism and trickledown economics stand on their own merit and these economic structures have helped the poor and middle class not only here but around the world (why do you think China and India have instituted modified forms of Capitalism?). Capitalism is one of the great exports of American society and the world would be much, much worse off without it.

I’ve never been a fan of sales managers that focus most of their energy on closing deals because that places too much emphasis on the last stage of the selling process at the expense of the other steps that come before that are just as important, if not more so. Success in sales follows a predictable process, just like every other profession, and when that process is not followed correctly is the reason why sales people fail at their profession.

The challenge with focusing all your energy on closing deals pre-supposes sales people have opportunities to close in the first place. Managers, and sales people, need to focus their energy on implementing a predictable sales process and when they have the process in place following the steps to close.

In a sound sales process, demand generation happens first which results in qualified leads so the salesperson has something to follow up on to begin with. Once you have a lead then contact has to be made and a business problem identified. The business problem identified must be something you can solve and large enough that it results in a business case that shows a payback of a year or less. Once these other steps are completed correctly then, and only then, should a sales person work on closing a deal.  

I firmly believe if you follow the other steps in the selling process correctly then closing should be a simple as saying, “Hello”. The real work happens in the steps leading up to “closing a deal” and that’s where the real work should take place. Companies that invest in implementing a sound selling process and managing their people according to that process will realize a competitive advantage.

As a salesperson and also trainer and coach I’m a big advocate of not only planning for success in your business but also your life and I feel they go hand in hand. Each year I put together a life plan focusing on eight individual areas:

- Career
- Community
- Family
- Financial
- Intellectual
- Physical
- Social
- Spiritual

In each area you should pick one to two major objectives that you want to accomplish within the next year and lay out a plan including the strategies and tactics to help you reach those objectives. Not only is it fun to do it also helps you learn how to plan which is a great tool in the success of any business.

Each plan should follow the SMART formula:

- Specific – Each Objective, Strategy and tactic should be very specific in what you want to accomplish
- Measurable – In that you must set up each objective in a way that you can measure your progress
- Attainable – The objectives you set must be high enough to stretch you beyond your comfort zone but not so out of reach that you become un-motivated
- Relevant – The goals must move you toward some greater purpose or vision you have for your life
- Time oriented – A goal is a specific plan with a deadline, if you have no deadline then you just have a dream

Putting together a life plan in this respect is not only profitable; it’s also fun and productive. I always tell everyone I coach if you get up and don’t drive the actions of the day then you are just reacting to life as it happens and not directing the profitable activities that bring about true and lasting change in not your business but you life.

Good planning and have a great year!

Since most prospecting methods will bring you between a 1-5% hit ratio you have to make sure you utilize a multi-modal approach to increase your odds of reaching your ideal customer. If you have defined your target audiences specifically, built a database of names, created sound messaging and then only utilize one or two methods to reach that audience then you are stacking the odds against yourself and your organization. Since time is also a finite commodity you need to use the concept of leverage to help you in your effort.

What I suggest is that you focus on the things you can do well and enjoy doing and outsource the rest. There are plenty of organizations out there that can do everything from direct mail and telemarketing to sending out greeting cards on your behalf and they do it for very little cost. The key to success in this area is to spend the time putting together a sound self-marketing plan which lays out the methods you plan to use and then investing your time and resources in those areas, constantly measuring your success and adapting your plan as you do.

An example of a self – marketing strategy would be something along the lines of the following:

- Personal email / telemarketing campaign
- Telemarketing outsourced 
- Direct mail outsourced 
- Personal networking
- Individual blogging
- Personal referrals

The goal of each of these efforts is to generate pre-qualified leads and using leverage to help augment your individual efforts. Email is simple and straight forward and an individual can usually send quite a few in a short period of time, with auto-generation email can be used to reach vast numbers of people. I caution against this approach though and suggest you target specific individuals in organizations that are decision makers and then use a combination of email and telephone to reach them on your own. When you do this you should always have a pre-call planning script that you fill out so it guides you in your effort.

There is a strategy and expertise around each one of the methods I list above so I wouldn’t suggest rushing head long into each of these until you have defined your own strengths and weaknesses, determined the resources you have available and put together a plan to execute against. If you follow a self – marketing program you should be able to generate enough qualified leads to make a measureable difference in your business.