The answer is “maybe”. When strategy doesn’t deliver growth, the issue appears to be more on alignment than anything else. And yet, companies spend ample time on crafting go-to-market strategies without first investigating possible roadblocks to execution. In our experience, the number one roadblock to execution tends to be lack of commitment by senior management, typically due to inconsistencies between what the company is all about and how it presents itself in the marketplace. Here is why.
What is Strategy?
Strategy is defined as the thought process of focusing limited resources on a few well-chosen activities that are most likely to produce the best results. It is the process of deciding what to do and what NOT to do.
It turns out, however, that strategy is not a single process, but actually consists of two components that must work well together. In addition,there is arguably a right and wrong sequence to strategy formulation, and getting that sequence wrong is typically what leads to poor execution.
Business Strategy
The first component is Business Strategy, which involves the internal DNA of the business. It addresses the following questions: What are we really good at? Are we a product company, an operationally excellent company, or a highly customized service company that provide unique services to a very select clientele?
These three types of companies require very different strategies. A company cannot excel at all three—nor will it need to. Mac buyers are not in the same market as Dell Inspiron buyers, for example. They buy different things and are willing to pay different prices for what they want. Neither are BMW and Toyota buyers in the same market, or DHL and UPS customers. Each company has a different value proposition based on its DNA.
Market Strategy
The second component is Market Strategy, which deals with the questions: Where do we want to compete? Who cares most about the issues that we are the best at addressing? It is about finding the right customer for whom the company’s value proposition is a painkiller (must have) rather than a vitamin (nice to have).
Go-to-market strategy deals with the selection of a market segment with a specific compelling need that the company can address. That means specifically targeted competitors, partners, and distribution strategy. It also entails a carefully selected pricing model that works for that market segment, as well as a positioning that guides all communication. Though all of these factors may be carefully assembled, they may still not be aligned with the core business strategy of the company, which can result in friction and hurdles.
Getting these two equally critical, very different and yet complementary facets of strategy right is not trivial. Executing flawlessly on both is extremely challenging. The companies that figure out a highly viable strategy (for both business and market) and execute well on this strategy will have the best chance of becoming market leaders.
The Challenge of Strategy Execution
Strategy seems to work best when it starts internally (business strategy) and works outward (market strategy).
Most likely, the biggest reason why execution fails is due to lack of commitment—financial and emotional. This lack of commitment arises when senior management is not in agreement on how to proceed. Sales and Marketing managers? are typically externally focused and want to execute on go-to-market strategies that may not be in alignment with the core identity of the company. Because product companies are quite different from service or operations companies, their go-to-market strategies need to be different.
Misalignment occurs most often when a highly accomplished senior executive is hired and asserts his or her will to shape the company after an image this executive understands very well—the go-to-market strategy that he or she has previously executed with great success. The question here is: Is the go-to-market strategy the right one for this company’s DNA?
For example, in the 90’s, manufacturing companies tried to hire ex-Toyota managers in hopes of achieving zero quality defects and operational efficiency. However, in a number of instances, this tactic didn’t work well and was frustrating to both the hiring company and the ex-Toyota manager. How a product company achieves zero quality defects may radically differ from how an operations company achieves it–and strategy is always about answering the “how” with the resources available to the company.
Executing strategy requires discipline, which involves a commitment to do certain things and not others. Operationally excellent companies make different choices from product excellence companies. The entire management team needs to be in strong agreement on what those choices are, which is what business strategy is all about. With that in place, the work of finding the right market in which the company’s competencies allow it to dominate becomes more intuitive.
Market Strategy Flow
However, things can break down at this step as well. Market strategy has a certain flow to it. It starts with identifying a compelling need that a company has the best chance of solving more effectively than alternatives. Again, the idea is to find a market space where the company’s capabilities provide a painkiller (must have) rather than a vitamin (nice to have).
It then examines market segments with that compelling need and determines which one is the most accessible in terms of its decision makers and decision making process. Understanding the value chain of how goods and services flow from the company to the end user helps the company see how many stakeholders must be convinced to make a sale. The level and type of competition has significant impact. There are always competing alternatives. The question is how entrenched these are and how hard it will be to dislodge them.
With that knowledge, the company can position itself attractively against both a direct and market alternative. Whatever distribution channel is selected must meet the aforementioned requirements . It must be able to access the decision makers and know how to support the entire product that the customer wants to receive. Moreover, it must be able to do this at a cost that leaves a healthy margin for the company while simultaneously showing strong ROI for the customer.
What we have described above is how to arrive at the right strategy for your business— one that is practical and executable. While this process is not easy, it aims to avoid major hurdles that can turn out to be showstoppers.
The SOMAmetrics Approach
At SOMAmetrics, we help our clients define a coherent strategy that is built on who they are and focuses on target markets with compelling needs that our clients can fulfill better than their competitors. Furthermore, we supplement our client’s resources with additional ones—from building marketing content to lead generation and qualification, and then delivering these sales qualified leads to our clients’ sales teams.
Our approach of aligning strategy with best practices makes execution smoother by shortening sales cycles and improving closing ratios, which leads to accelerated revenue growth.
Contact ustoday for a short conversation to see how we may be able to help.
Companies that have complex sales solutions have additional challenges in meeting their revenue targets because it is even harder to predict if a deal will close. Anything can go wrong to delay or even stop the deal from closing. This is a major problem that many of our clients struggle with. SOMAmetrics specializes in helping clients address a number of issues related to complex sales and this article discusses some important points executives should think through.
For discussion purposes, we will define a complex sale as one that typically targets large organizations (fortune 2000 companies and government entities); poses significant risk and cost for the customer; involves at the very least a handful of key stake holders besides the final economic decision maker; many times involves a CEO, CFO, or CIO (a CXO); where decision making process is complex; and is usually the result of a company or division-wide initiative.
To complicate things further, even among similar companies, different tiles may be in charge of the same initiative or drive, making it difficult to determine where to begin the prospecting process. Hence, a complex sale involves significant research time to uncover the many moving parts and weave together a coherent sales opportunity assessment:
What is the driving issue/initiative behind all this?
Who are the key stakeholders that must be involved? What are the key pain points and concerns of each?
Who has the most urgent pain and therefore wants to see this taken care of sooner than later?
From where is the funding going to come for this? Is it all in one place (department or division), or will it be shared, and how?
When all is said and done, who is the final decision maker?
These are only some of the early questions that must be answered to even understand if there is a viable sales opportunity or not.
Using Sales Reps to Prospect is NOT a Good Idea
Often, we find that companies rely on their field sales reps to prospect and find viable opportunities in complex organizations from scratch.
We don’t think this is a good idea. This task is very different from what sales reps are very good at–calling on prospects who have agreed to see the sales rep. It requires making 10-15 dials just to reach John Doe who may or may not even be the right person to start with. Then, John only has time for a quick conversation and suggests the rep call Jane Smith. Another 20 dials later, the rep finally reaches Jane, who adds more to the story and suggests that the rep also give Maggie and Mike a call. And so on.
And this is only the first round of calls. There will be follow up calls to one or more of these stake holders to find out more about one or more issues.
It is not unreasonable to expect that 500 or more dials might be made into a single account to determine whether or not there is a viable opportunity to move forward.
The question here is: who is better at quickly and cost effectively uncovering viable sales opportunities? A field rep that will, on average, make 10-20 dials a day, or a professional Teleprospector who regularly makes 70-80 dials a day?
Our experience repeatedly shows that field sales reps engage in early prospecting ONLY when their pipeline dries up. This in turn makes it very difficult for companies to reliably forecast what their revenues look like more than 3-4 months out. Since the sales cycle for most complex sales products tend to be six months or more, this means that a company cannot reliably predict revenues outside of the current quarter.
Our recommendation is to use Teleprospecting to build the sales pipeline for the field sales. This avoids the yo-yo effect and makes revenue target more reliable. In this scenario, a senior Teleprospector will do all of the initial research to gather the coherent sales opportunity story and pass it on as a Sales Qualified Lead. This opportunity story is a synopsis of what the key initiatives are; which departments or divisions are directly involved; who the key stake holders are, which CXO is driving this initiative; what the individual pains, concerns, and desires of the various stake holders are; and what a reasonable timeframe looks like for making a final decision on the solution to this set of challenges.
Choosing the Right Person for a Complex Sales Role
The right type of Teleprospector to successfully perform this would have the following qualities:
Was quota-bearing field or inside sales professional who understand sales and particularly complex sales into enterprise account
Is very comfortable and successful at accessing and selling to CXO’s
Has the right temperament to work alone as well as to enjoy interacting with others
Is an avid learner, always trying to learn more about his/her industry and what the pain-points and new concerns for the targeted CXO’s are
Understands that this is painstaking work that will require hundreds of dials and many dozens of conversations that may or may not lead anywhere, and still enjoys the hunt
And finally, the right senior Teleprospector is results driven and has a strong sense of urgency
This is a specialty area and the right person must be matched to the job.
SOMAmetrics helps clients build quality pipeline for their complex sales by assembling all of the various components necessary to deliver the desired amount and quality of pipeline including: project management; best practices; marketing and sales automation; expert Teleprospecting; and clearly defined metrics against which performance is measured each month.
Alicia Assefa is intimately familiar with building quality sales pipeline for complex sales. As VP of Global Teleprospecting for a global software company, her team of 35 Teleprospectors supported five Business Units: Enterprise Management Solutions (EPM; Workload Automation; Project Portfolio Management Security; and Mainframe). Each Teleprospector carried a SQL to Sales Funnel Quota of $10M and a SQL to Closed Deal Quota of $4M. One division with eight sales reps generated $80M in Sales Funnel and $32M in revenue from the SQLs provided by Alicia’s team. The same resulted for the other business units.
As General Manager of the SOMAmetrics Sales and Inside Sales Practice, Alicia brings her expertise in helping clients design end-to-end solutions for building quality sales pipelines for complex sales.
Read Alicia’s latest book on the topic, “Teleprospecting for Executives who Sell Complex Solutions“, detailing Alicia’s experience, knowledge, and philosophy on building highly effective Inside Sales and Teleprospecting Organizations.
Please contact Alicia Assefa today at 510 206 9263 or email her at Alicia@somametrics.com
Recently, we posted an article on the top reasons why companies miss their revenue targets: Not setting effective revenue targets at all; Low quality of sales pipeline; Insufficient size of sales pipeline; Low closing ratios; and slow conversion of sales to revenue.
In this article, we will explore in some depth the first of the five reasons: Not setting effective revenue targets.
It has been our experience that the degree to which CEO’s are directly involved in setting effective revenue targets and how much effort and time senior management spends on this critical issue make the difference between meeting revenue targets consistently and missing them more often than not. This becomes more apparent as we investigate the process for effectively determining and defining the:
Ideal growth rate for your company over the next 1-2 years
Key Market Segments
Foundational targets for each segment
Operational numbers and metrics
Schedule (Timing) of these Numbers
Right Type and Amount of investment required
Organization-wide commitment necessary
We will discuss each of the above in some detail next.
Determine the Growth Rate to Set Your Effective Revenue Target
We believe that the first mistake many companies make is in what they choose as their benchmark revenue year. Most automatically set their previous year’s revenue as the new benchmark. Others set a rolling average of the past three or five years.
Our recommendation is that a company should always use its highest historical revenue year as the benchmark, regardless of when that occurred or what special circumstances led to that. Such a policy re-enforces a mindset that if a company was able to achieve something once, not only can it achieve it again, but can also surpass it next time.
With the benchmark set at the highest historical revenue, the next step is to decide the rate of increase over that revenue base to discover your effective revenue target.
For discussion purposes, let’s say that a Company ABC did $50 million in its best year some years back, and the executive team decided to surpass that by 20% this year, or target $60 million in revenues.
Define Key Market Segments
Most companies sell a wide variety of products to a wide range of customer. At the same time, they tend to see these customers as a single large market.
We can usually tell that a company sells to a number of different market segments when we tend to get ambiguous answers to simple questions. For example, when we ask, “What is your average selling price?” and the response is, “It depends. It can vary anywhere from $10,000 to $500,000”; or “What is your average sales cycle?” and we hear responses like, ”Well that depends too. It can vary from 3 months to 24 months…” we know the customer base is made of more than one segment.
This typically happens because, initially, the company built a capability aimed at a specific group of customers, but later sees that the same capability can be sold to more customers outside of the original customer group. From the company’s point of view, it is essentially the same capability. However, customers use that capability for different purpose, have different levels of need for it (for some it is mission critical while for others it is back-up, and still others use it for convenience), and even different buyer roles. Hence the wide range of average sales price, sales cycles, and closing ratios.
A firm should to be able to confidently say, “For customer group A, we will target our average deal size to be X, and our average selling cycle to be Y, and our closing ratio to be Z”. Segmentation of its market is the key to such precision.
SOMAmetrics helps companies analyze their data and arrive at clear segmentation of their market.
Determine the Foundational Targets for Each Segment
The next task is to set the foundational targets for each market segment. Below is a sample list of foundational assumptions:
Segment
A
B
C
Total
Targeted Revenue ($)
30,000,000
22,000,000
8,000,000
60,000,000
Avg. Selling Price ($)
100,000
50,000
10,000
53,333.33
Avg. Sales Cycle (months)
9
6
4
6.33
Avg. Closing Ratio
25%
20%
30%
25%
Sales needed
300
440
800
1,540
Sales Qualified Leads needed
1,200
2,200
2,667
6,067
From the above chart, the company knows it will need 1,200 sales opportunities or Sales Qualified Leads (SQLs) for Segment A in order to reach its $30million effective revenue target based on a $100K average sales price and 25% closing ratio.
The question here is where will these 1,200 new SQL’s come from.
Determine Operational Numbers
For most b2b companies, revenue has long lead-time measured in months if not years. The longer the sales cycle time, the more a company must frequently track and know its operational numbers so it can make adjustments early enough to make any difference.
Revenue is the final output that results from the interactivity of number of chained input factors. Before revenues happen, many other output factors must happen—each with its own interacting chain of events.
The tough part is usually getting the right quantity and type of the input factors at the right time at each link of the chain. For example, if the company doesn’t get the right amount of SQL’s, it will not make enough sales to reach its effective revenue target. SOMAmetrics uses the Four Funnels Framework to manage these operational numbers.
Traditionally, companies try to reach their SQL numbers with the combination of leads sent from Marketing, and sales reps doing their own phone prospecting. The hope is that somehow, from these two activities, the sales reps would generate their own Sales Qualified Leads to stoke their sales pipelines.
Both of these approaches tend to have shortcomings. Marketing should and will generate leads. However, there is very little to indicate whether these leads are hot, warm, or cold. It now becomes the sales reps responsibility to first determine that before proceeding.
At the same time, most sales people we know hate making cold calls and avoid doing so. They are even reluctant to call on leads provided by Marketing because many of these are rather cold.
Contrast that with a professional Teleprospector who actually loves making 60-90 dials a day, sees it as a challenge to break into an account, find the decision maker, engage her in a two-minute conversation to get her attention and interest, schedule a call with the sales rep, and then moves on to the next call.
Now, this is very different. This is a warm or even hot lead and the sales rep will jump on it, preferably within the next 48 hours.
The ideal best practices would be for Marketing to send warm leads to the professional Teleprospector whose main job now is to qualify these warm leads and makes sure it is a Sales Qualified Lead before passing on to the sales rep. Now, sales reps have a steady, well-stocked pipeline of qualified prospects on which to call at any given time.
Assuming that only 10% of the leads that Marketing provide turn out to be Sales Qualified Leads (SQL’s) ready to be passed on to sales reps, then the company must generate five (5) Marketing qualified Leads for each SQL.
The completed operational numbers look like this:
Segment
A
B
C
Total
Targeted Revenue ($)
30,000,000
22,000,000
8,000,000
60,000,000
Avg. Selling Price ($)
100,000
50,000
10,000
53,333.33
Avg. Sales Cycle (months)
9
6
4
6.33
Avg. Closing Ratio
25%
20%
30%
25%
Sales needed
300
440
800
1,540
Sales Qualified Leads needed
1,200
2,200
2,667
6,067
Marketing Qualified Leads needed
12,000
22,000
26,667
60,667
Marketnig Impressions needed
600,000
1,100,000
1,333,333
3,033,333
Are you setting effective revenue targets? Download this checklist to find out
Now that we have determined the Operational numbers the next step is to make sure the right amount of the right type of numbers are available at the right time. This is about scheduling or timing, and probably where many companies lose control over their revenue targets.
Marketing has its own lead-time. Prospective customers will likely need to see quite a bit of a company’s message before they start doing anything about it. Teleprospectors typically have to make several calls into a company before they reach a decision maker. These two cycles together can take up anywhere from six to twelve weeks before a Sales Qualified Lead emerges from a given campaign.
Also, personal selling is a labor-intensive process. It takes a certain time out of each day for a sales rep to make a sales call on a prospect, send out a summary letter and next step statement, arrange for demos and other proofs, prepare proposals, and take care of any other steps necessary to turn a prospect into a customer. Also, depending on the closing ratio, this must be done with many prospects in order to produce one customer.
What typically happens is that activities tend to be done in bunches rather than steady streams. Marketing spends months preparing for a large campaign, launches it, collects a ton of leads, and then sends to the reps. However, the reps can only call on so many leads at any given time. The rest get cold and hard to work with.
Scheduling the Operational numbers means that marketing campaigns go out on a regular schedule feeding Marketing Qualified Leads to the Teleprospecting team, which feeds Sales Qualified Leads to the sales team on a regular basis.
Determine The Right Amount and Type of Investment Required to Reach Effective Revenue Targets
As many executives know, revenue is not free. It is typically purchased—either through acquisitions, hiring of more sales reps, increased marketing presence, or some combinations of these. To earn more revenue, a company will likely need to spend more.
But more importantly, it needs to make the right spending decisions.
One thing we come across often is that companies believe that if they hire more sales reps, then they will build more revenue. They justify this saying that they need the “presence” and that hired sales reps will also be required to prospect their own leads.
We question this line of reasoning. Our experiences tell us that most sales reps do not like to prospect and will likely not be productive unless they have a full pipeline of well-qualified leads to work on. The company has just added to its fixed cost without really looking at the return on that investment.
We believe that there is significantly better return on investment when a company reallocates its budget to Teleprospecting activities, thereby significantly increasing the productivity of its smaller sales team.
In the example below, the first column shows the cost of a single sales rep assigned to the fictional Segment A we looked at above. The rep has a base salary of $60k/year, which comes to $72k/year when fully burdened. The rep sells $900K of goods per year and earns $90K in commissions. This brings his total selling cost to $162K/year, and the net contribution to the company is now $738K for the year.
Lets assume that there are five sales reps assigned to Segment A and their totals are shown in the second column.
Sales Rep (Quantity)
1
5
Base Salary ($)
60,000
300,000
Burden
20%
20%
Total Cost ($)
72,000
360,000
Commission
10%
10%
Avg. Sales/year ($)
900,000
4,500,000
Commission paid ($)
90,000
450,000
Total direct sales cost ($)
162,000
810,000
Total contribution ($)
738,000
3,690,000
Next, let’s explore a different sales strategy.
Let’s say we want to determine what would happen if the company let go one of the reps and instead utilized the services of a professional Teleprospector. At this point, the company released $162K per year it would have paid to the fifth sales rep, but also lost the $900K it would have received from that rep, or net negative of $738K that year it would need to get somehow to come to par.
Teleprospector Fee ($)
96,000
SQL/s per month
8
SQL’s per year
96
Avg. Pipeline ($)
9,600,000
Deals
24
Revenue ($)
2,400,000
Commissions to sales reps
240,000
Total contribution ($)
2,064,000
The new numbers are dramatically different. We paid the Teleprospector $96K and obtained about 8 Sales Qualified Leads each month, or 96 for the year, resulting in a sales pipeline of $9.6 million. Recalling that the closing ratio for Segment A was 25%, this pipeline converted into $2.4 million in sales.
The company was able to realize 267% increase in revenues by better utilizing the remaining four sales reps, since they were adequately fed quality pipeline by the single Teleprospector.
The company spent an extra $24K and increased its revenue by an additional $1.5 million ($2.4million-$900k). That is a 6300% return on that extra $24k—a smart investment.
While there is a point of diminishing return here as in all things, this example illustrates how companies can significantly increase revenue by shifting their costs to where they can get better return on the same dollars spent.
Make the Commitment to Reach Your Effective Revenue Targets
The analysis has been done, and the plan has been written and re-written.
What is left is the commitment to make the hard decisions, choices, and changes necessary to execute the plan and reach your effective revenue targets. It is always hard to make changes. People are affected by change, and many people have been with the company for a long time.
Conclusion
None of the steps outlined are easy or quick and dirty. They will likely take weeks of planning, sharing notes and ideas, and careful preparation to ensure that the management team has fully thought through the steps and stands confidently behind the numbers. And, in the end, act decisively and boldly.
There is a significant difference between a Sales Playbook and a Sales Saybook, as we will discuss in some detail below. But, to quickly give you the key differences… A Sales Playbook is a complete discussion of how a company plans to go to market with its various products to achieve very specific sales goals.
There are two hidden competitors that stall sales pipeline development more than any other—and they are not the ones you are probably thinking of. In fact every company, every product, faces these two hidden competitors. You can’t escape them. Not only that, they are the first barrier you face—before you encounter any of the competitors
One of the first things we look at when working with a new client is their sales pipeline strategy. And, we are often surprised at how inadequate their sales pipeline strategy is. All the more surprising because these are typically highly experienced sales leaders. Don’t get me wrong—their sales strategies are detailed, well-thought-out, and comprehensive.
NOTE: Read this ONLY IF your team is having difficulty consistently hitting their quotas. The number one factor that affects the ability of sales leaders to hit their numbers is high quality sales pipeline. In fact, as the sales pipeline goes, so does revenue growth. Sales leaders that focus on building high quality sales pipelines
Over the past 20 years of working with some 100 small and medium sized companies, we have found that the top six reasons why companies miss their revenue targets are:
Not setting Valid Revenue Targets
Poor quality of sales pipeline
Insufficient size of sales pipeline
Bad fit between What you sell and the Sales Team’s skills
Poorly Defined Sales Structure
Misuse of Sales Quotas and Sales Incentives
Slow conversion of Contracts to Revenues
Some of these are quick fixes. Others may take some time to address. We also recommend that companies tackle this issue in the order listed above, as some are interlinked and are prerequisite steps to the next.
1. Not setting Valid Revenue Targets
Yes, this one surprised us too, but many CEO’s and their executives don’t clearly know what revenue targets they want to achieve. When we ask, “What is your revenue target for this year?” some say they don’t know; others answer vaguely; still others give inconsistent numbers from one executive to another within the same company.
Even when companies do set revenue targets, the question is whether these are valid. A valid revenue target is one that has its foundation in data. It is composed of what is possible, but it stretches the company to live up to its full potential.
Recommended Solution
The first criterion for A Valid Revenue Target is that it is based on data. You must first do the analysis necessary to know what is possible. You should look at the various products you sell, then set different targets for your customer base versus new customers. They add all of these to come up with the total for the company.
2. Poor quality of sales pipeline
The next reason for missed revenue targets is low quality sales pipeline. This means that sales people are engaging prospects that are not likely to buy anytime soon, for a number of reasons. Poor quality of sales pipeline shows itself primarily in two ways:
Deals that don’t close (low closing ratios), and
Deals that don’t close for a long time (long sales cycles)
Both of these are symptoms of poor quality sales pipeline and they typically manifest together. The end result is a Sales Organization that works hard to produce little and is demoralized.
Of these two, the second is a bigger problem. Companies seem to accept the delay as being their “sales cycle”. When we ask our prospects, “What is your average sales cycle?” we get responses such as, “Well, that depends…” or “It varies anywhere from 3 months to 18 months…”, and other similar responses. Such ambiguity regarding sales cycle length tends to indicate poor quality of the sales pipeline, rather than indicating the true sales cycle period.
There are many reasons why a company may have a large but poor quality sales pipeline.
The first is that marketing leads are being passed straight to Sales people without being properly qualified, and the Sales Reps begin working all of them in the order they are received, rather than in quality-prioritized way. So, the Sales organization may be working hard, but it is not producing much.
The second reason is that marketing leads may be qualified by a telemarketing team, but the company thinks that this is an entry level job and hires very junior people to qualify leads. What typically happens in this case is that these junior telemarketers prospect to their own comfort and skill level—i.e. junior level people in the prospective company—rather than to real decision makers. Then they pass these as “qualified” leads to the Sales Team. Sales Reps will find out that these are not the right prospects ONLY after they talk to these “qualified” leads. Again, Sales works hard, but not smart.
Use a Teleprospecting team to further Qualify the Marketing Qualified Leads before passing them on as Sales Qualified Leads (SQLs)
Don’t have your Teleprospecting cold call to find SQLs. This is very slow, very expensive way to prospect. Instead, market continuously to your target market and pass on warmer leads or Marketing Qualified Leads to further qualify.
Have a healthy mix of marketing campaigns designed to interest both decision makers and line managers so you have the business line managers recommending you, and the decision makers finding sufficient business return to make the purchase decision.
Use the Four Quadrants to guide your Marketing and Sales efforts. Marketing and selling to your existing customers is very different from marketing and selling to non-customers. And, even getting existing customers to buy new products requires a different kind of marketing and sales than asking them to buy more of what they already buy from you.
Some Additional Quality Points
Teleprospecting is the Quality Assurance (QA) “department” when it comes to Sales and Marketing. Just as companies would test their products to make sure they are of sufficient quality before bringing them to market, so must companies check the quality of the leads before passing them on to Sales.
It is also important to understand that Teleprospecting is NOT an entry-level position. It is a business process that requires very skilled and experienced telephone sales professionals who have the competency and confidence to talk to senior level decision makers.
If a company is not using experienced Teleprospectors to qualify the marketing leads before passing them on to Sales, then the company is probably wasting money paying junior level people to do a very difficult and sophisticated work.
Download the diagnostic checklist to see why you may be missing your revenue targets
The next reason why companies fail to achieve their revenue targets is because they don’t have sufficient size of sales pipeline.
If Sales reps do not get sufficient number of Sales Qualified Leads (SQLs), then they tend to start thinking “scarcity” rather than “abundance”. Insufficient Quantity then becomes Poor Quality (Reason #2 above) as Sales Reps start hanging on to opportunities they know will not close, trying to artificially inflate the size of their pipeline.
And almost just as bad, even when reps close any of these leads, they tend to have done so by offering deep discounts, since they cant walk away from tough negotiators.
Any sales rep afraid to lose anything on his or her pipeline exudes that fear and will be quick to either offer or agree to a deep discount. Experienced buyers can smell that fear and wring out price and other concessions before agreeing to sign the contract.
The worst of this is when a shrewd negotiator uses one of your sales reps to provide him with a low price quote, which he then takes to the vendor he had chosen all along to get a better price from that vendor.
Recommended Solution
The solution is to keep the Sales pipeline stocked with sufficient size of well-qualified sales leads. This process starts with reverse engineering the numbers to arrive at the required size of the pipeline, starting from the sales target.
Let’s say your target is to achieve $25 million in new sales and your average sales price is $25,000. That means you will need to close one thousand (1,000) new deals to achieve this revenue target, on average.
If your average closing ratio is 20%, then you will need five times as much in sales pipeline, or about $125 million in sales pipeline.
Obviously, you have to build that pipeline throughout the year. Without adjusting for seasonality and/or ramp-up period, this assumes that you would need to build roughly $31.2 million in new sales pipeline each quarter, or roughly $10.5 million each month. We highly recommend that you pad this pipeline by another 20% to ensure that you will achieve or exceed your revenue target.
4. Bad Fit between What You Sell and Your Sales Team’s Skills
Assuming that you have set valid sales targets, and that you have provided your Sales team with sufficient size of high-quality sales pipeline, why would you miss your revenue targets?
Often, companies simply grow their sales force by hiring anyone they consider to be a “closer”. After all, that is what a Sales Organization is for—to close deals. So, what could be wrong with hiring more “closers”?
The problem with this is similar to a hospital hiring anyone who is a licensed MD. Sure a hospital needs doctors, but how many doctors of what kind are needed? A heart surgeon is not the optimal substitute for a kidney ailment, and an Optometrist can’t fill in for a podiatrist.
In the same way, a closer is not a closer. A talented sales rep who always blew her numbers selling $200,000 complex enterprise solutions will struggle to sell $500 licenses. A sales rep that is a genius at explaining very complex concepts simply and getting the sale, will struggle selling simple products that don’t need much explanation. The top sales guy at a construction company selling construction projects will flounder selling a consulting service to the construction industry.
Simply because a sales reps resume said she did over $1 million in sales selling for her previous company doesn’t mean she can do it for your company—unless the sales skills required are a match.
Recommended Solution
The solution is to always hire the right skills for the right job.
The Prospecting Myth – understand and accept that Prospecting and Selling are two different but related phases of making a sale. The work is very different. Prospectors make 60 or more calls a day in the hopes of connecting with maybe 4-5 people a day and hopefully getting one Sales Qualified Lead a day. The Teleprospector is on the phone all day long, never meeting anyone, and hardly leaving her desk except for short breaks here and there.
Sales reps, on the other hand, are great at building rapport and engaging prospects—once they have them in a meeting. Sales reps don’t do well with a 30 second conversation. They are far better at a 30 min to 2-hour conversations.
Far too often, we see companies hiring sales reps to do their own prospecting and justifying this by saying, “That’s what the base salary is for…” It may sound like smart use of money, but it is actually the opposite. It is a waste of money because the end result is a highly frustrated and unproductive sales rep.
The “Selling is Selling” Myth – selling is NOT selling. Selling cars is very different from selling homes. Selling homes is very different from selling enterprise software to the global financial services firms. Selling telephone headsets is different from selling telephone equipment, which is different from selling telephony services.
There are many differences in the sales of each of these. The work ethics is different. Some require lots short, low-priced transactions as in sales of cars. Others require skill in simplifying complex concepts and reducing them into easily provable business benefits. Still others require the ability to talk to very senior people in large global companies, while others require talking to the foreman of a construction project.
Where one skill was the key to success can become useless in another.
Always determine what kind of skill you need for a given role, then how many of that role you need to fill. Don’t start hiring until you do.
Then interview very carefully to make sure you have found the right candidate.
Lastly, put in place the early flags that will tell you whether you have hired the right person or not, much sooner than later.
5. Poorly Defined Sales Structure
Having identified the right sales talents and having hired them, it is critical to place them in the right roles. Too often we see those with very good service instincts required to hunt, and those with very good hunting skills required to nurture and grow accounts. Again, these are very different types of skills and personalities and your company will likely need both. Just make sure you place the right person in the right role.
It will be very difficult for you to achieve your revenue targets if you don’t properly optimize the structure of your Sales Organization to align with the intended prospects.
Quadrant 1 is the domain of the Hunter and the Teleprospector. You need a professional Teleprospector to find the right door into the account, and the Hunter to find a way to get into that door. Don’t waste the Hunter’s talents in finding the door. Assign a skilled Teleprospector for each Hunter—even one Teleprospector 2-3 hunters is a much more cost-effective organizational structure. And don’t look for service-oriented people to do a hunter’s work. In Quadrant 1, impatience is the virtue, and you need professionals that consult and then tell the prospect it is time to make a buy decision.
Quadrant 2 requires light selling and heavy marketing. Therefore, you can use junior level order takers in training to be hunters or account managers. Their job is to assist customers in ordering more.
Quadrant 3 requires significant account management and relationship building skills. Make sure you place a service oriented sales rep who enjoys working with her accounts to determine what they need and when, and gradually increase the size of each of her accounts. In Quadrant 3, Patience is virtue.
Quadrant 4 is pure New Business Development. You need someone with an entrepreneurial spirit, someone who likes to go where no one has gone before (at least in your company). The challenge here is to find the first key customers that don’t mind being the first to use your products in quite that way. And each of these have to be total success so you can obtain the reference-able customers necessary to get more. At some point, you will start adding your Hunter-Teleprospector team from Quadrant 3 so as to get more customers, and this new market will need to be segmented into three other quadrants.
The Four Quadrants of High Growth provide a highly effective way of segmenting markets enabling you to create the right territory assignments that are a fit for the appropriate sales roles and talents.
6. Misuse of Sales Quotas and Sales Incentives
One of the worst understood and often misused sales management tools is a sales quota. The first and worst offender is having different sales quotas for different sales people, not because they sell different products and/or to different customers, but because they just bring in different levels of sales.
As an example, one company we work with set their target for new incremental revenue to be $10 million. While we couldn’t see how they arrived at that number, other than a straight increase over the previous year’s $9million, that was not the real issue
The real issue is how they decided to allocate “quota” to the team. The company has six sales people. Management first announces the incremental revenue target and then announces the “quotas” for each rep.
Their top producer was to bring in $4.8 million of the $10 all by herself—or 45% the new revenue
Three other reps had their quotas set to $1.5 million (15% each)
The last two were assigned half a million each, or 5% of the revenue.
When we asked if these six reps sell different products or to different customers, the answer was “No, they all sell the same thing…”
The reason the first sales rep was expected to sell nine times as much as two others was only because she was good. So, she was being punished for being a great sales rep by having her quota raised, yet once again.
Using quotas in this way is punitive to your best people, possibly forcing them to look for less stressful position in another company, while allowing your worst performers to continue to perform at a low rate with no repercussion. Obviously this is not what you want.
The Right Approach to Setting Quota
The appropriate use of Sales quota is to establish the floor or minimum of what a sales rep must bring in to justify the expense of keeping that sales rep on the payroll. In the example above, since the company would never let go of their top sales rep, then the continual raising of the quota would only drive this rep away due to the intense stress that creates.
The right approach would have been to set a quota of, say $400,000 which means that if any has trouble meeting this number, then it is not cost-effective for the company to keep this rep and should let her go.
Also, quotas should be exactly the same for all reps who sell the same thing in equivalent markets or sales territories. Otherwise, you can expect a sales rep to think it unfair if his or her quota is higher than others who are selling the same product(s) in an equivalent territory. The above-mentioned Four Quadrants provide a systematic methodology for assigning selling territories for a given sales role.
The right Way to Incentivize Reps
Quotas should never be used to incentivize sales reps to produce more.
The right way to incentivize sales reps to produce more is to give them financial incentives to do so. Now that you have set quotas for the minimum productivity you need to justify the cost of keeping a sales rep on the payroll, the rest is to provide a combination of commissions, short-term rewards, and recognition to drive productivity.
Rather than having a straight commission rate no matter how much a sales rep sells, provide a variable one that increases every time a sales rep achieves a new sales production level.
Lets illustrate these two improvements over the bad practice of misusing quotas to try and increase sales productivity.
Scenario 1- Misused Quotas
In this scenario, a company pays a straight 7.5% commission on sales. The company also has also awarded different quotas to their sales reps as indicated above, with the top rep struggling to make $4.5 million in sales. The two least productive sales reps each are told to achieve $500,000—which they may or may not achieve, and it is not clear what would happen to them. In fact, these two sales reps typically bring in around $300,000.
Scenario 2 – Proper Use of Quotas and Variable Commission rates
In this case, the company has the same quota for all sales reps selling the same products in equivalent territories—say $300,000. If any sales rep brings less than that, then the sales manager will have to seriously consider letting this sales rep go and look for a better-suited sales professional.
Commission rates are 5% for achieving quota ($300,000); then 6% for sales of $301,000 to $400,000; then 7% for sales of 401,000 to $500,000; then 8% for sales of $501,000 to $700,000; then 9% for sales of $701,000 – $900,000; and 10% for sales over $900,000 to $1.2 million; and so on.
Let’s see the effect of this variable commission rates on those two least productive sales reps.
Under the old model, if the sales rep sold $300,000 she would make. The increase in commission to get this rep to sell $301,000 is another $75 only.
Under the second model, this rep will see a jump in commission of $3,060 for selling one more $1,000 because of the 1% increase in commission on ALL $301,000.
For sales level of $401,000:
Under the first scenario, sales rep will earn $7,575 in additional commission compared to sales on $300,000
Under the second scenario, the sale rep will earn $13,070 more (because of the 2% increase in commission over the entire $401,000).
What we have done differently is that both our stick and our carrot are stronger and clearer in the second scenario. Sales people could lose their job if they produce under $300,000 and the upside for them for continually increasing their productivity is significantly higher under the second scenario. Both are hard to ignore for any sales rep.
The key is to first determine how much of revenue you are willing to allocate to compensating your sales force, and then designing the commissions to incentivize increased sales productivity.
7. Slow conversion of Contracts to Revenues
If your company cannot invoice a customer until certain conditions are met, and you have significant time lags in meeting these conditions, then you will likely miss your revenue targets, even if the “booked” revenue is equal to or exceeds your revenue target.
For publicly traded companies, this is a legal requirement that must be met to recognize revenue within the specified accounting period. However, even for a private company, pretending a deal is closed when the signing of the contract is contingent upon the deliver of conditions within a specified time frame is a recipe for missed revenue targets.
At best, the customer simply will not pay until all conditions are satisfied—and though you will receive the funds at some point, this puts significant cash-flow strains on your company.
Even worse, the customer will get out of the contract if you don’t satisfy the conditions and you will have wasted significant resources to get a contract without receiving any funds in return.
Far worse would be if that customer was upset enough to give your company bad reviews. Then future prospects might be skeptical about signing up with you.
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The first step is to monetize this issue so you know how much money you are not collecting as a result of the time lag between signing a contract and delivering what is expected so you can invoice the customer.
If your business model is a recurring revenue model where customers pay a certain amount each month, each month that you have not yet delivered is what you are forgoing.
As an example, let’s say you charge $5,000 a month and it takes you roughly 60 days to get a new customer to be ready to be invoiced. That means that you have foregone $10,000 due to this delay. Let’s say on average you close five such deals a month. That means, on average each month, you are losing about $50,000 in opportunity costs (money you could have earned that you are not).
Next, let’s say you figured out a way for cutting the time from 60 days to 30 days. That means you are now saving $25,000. Therefore, you can spend up to $25,000 each month to reduce this to 30 days and it would be a wash from a cash-flow perspective.
However, the real gain comes with increased new customer satisfaction—customers want to start seeing the benefits of their purchases as soon as possible. After all, that was the reason they decided to buy. Therefore, speeding up the process of realizing the benefits would significantly increase customer satisfaction.
If you can get customers to write great reviews, agree to be references, and in other ways provide you with positive testimonials, then this will go a long way in enabling your sales people to close more deals in shorter time.
Conclusion
Your company may not have all of these issues. However, if you are having difficult meeting your revenue objectives, it his highly likely you have at least one of the above seven challenges.
Having worked with over 100 companies, SOMAmetrics has developed the tools, resources, and expertise to help your company overcome the challenges that prevent you from consistently achieving your revenue targets.
The first step is to conduct an Assessment of your company to determine which of the above challenges you may be facing, and what the root causes are. The next step would be to look at some options of how to address these challenges and begin to consistently achieve your revenue objectives.
SOMAmetrics provides a one-week assessment service that enables you to quickly identify where the bottlenecks are in achieving your revenue targets and develop viable options to address this.
Please contact us today to determine how we may be able to help.
If a company cannot provide its Sales Force with a full pipeline of high quality leads, then it is forcing its sales reps to do what does not come naturally to sales reps—cold call to find prospects. The end result is low productivity, demoralized sales force, and exodus of the best sales reps leaving only the mediocre to continue in unproductive work.
If you don’t have sufficient pipeline of quality leads, you are better off shrinking your sales force, freeing up cash to build your leads pipeline, and then hiring more sales reps only if you can feed them with a strong pipeline of sales leads. Here is why.
Sales Reps are no Good Cold Calling
Prospecting–calling to find prospects–is what we refer to as a high-volume, low touch interaction. The sales rep must typically make 60-90 dials a day just to get 4-6 connects, of which perhaps one or two may be qualified prospects. Most of these dials go either to voice mail, or to a receptionist. The few conversations typically last 1 minute or less, just long enough to make an appointment for another time.
This in direct contrast to what most Sales Reps are good at, which is low volume, high-touch interaction. Most sales reps are very good at meeting with, building rapport with, and engaging prospects through the sales lifecycle, hopefully to a successful close. They can do maybe 8-10 of these per month.
Asking Sales reps to make cold calls in the hopes of finding their own leads is like asking a 10K runner to win a 100 meter dash. Both may involve running, but they are very different kinds of running and success in one will not directly translate into success in the other.
They typical sales rep hates cold calling and will likely not spend more than a couple of days a week making a handful of dials. What is this rep doing the rest of the time?
Live at the Mercy of Precious Few Prospects
If your sales reps don’t have a strong pipeline, then they tend to think “scarcity” instead of “abundance”. They start thinking that they can’t afford to lose any prospects. Now, they are at the mercy of savvy decision makers who know they can get a lot of information and help from the sales rep without having to pay for it—all they have to do is make the rep think that she still has a chance of winning a deal.
Nothing wastes a sales reps time than to be strung along like that. And nothing burns through a company’s funds than payroll for non-productive people who are working hard, but not adding any meaningful value.
Sales Exodus
While the average sales rep may stay because they need the job, acting busy when he or she doesn’t really have much in his or her sales funnel, the good ones will leave because they are used to making real money–salary alone won’t be nearly enough for them. The really good sales reps expect and need to make big commission checks, and these won’t come unless they close deals regularly. If they have to cold call to find leads, they will leave for a company that provides them the leads they need.
In the end, the company is left with the most mediocre sales reps, and still paying salary for sales that don’t materialize.
On the other hand, if you feed your sales reps with high quality leads and provide them with solid pipeline, then they spend their time doing what you hired them to do—work with interested prospects towards a successful close.
Why do people work? Do people work only to earn money, pay bills, and live in some comfort? Or might they also work for a more inherent reason?
We all need money to live in comfort and to support our families. However, I believe that most human beings thrive in environments that provide recognition for their accomplishments. While you can assist your roommates or family members at home, whether or not they will notice and appreciate your efforts is often a crapshoot.
On the other hand, I believe that a place in which we can be recognized consistently is at work. When we are at work, we are measured for our contributions toward revenue growth, or for our efforts that increase net profits. Revenue growth and net profits can be measured, and their increases are easy to appreciate because increases in these areas impress investors.
It is important that all individual employees be given a set of metrics or Key Performance Indicators (KPIs) that they can be measured on. If everyone is held accountable for their jobs and measured accordingly, they have a framework by which they can be recognized.
Once you have created the metrics and KPIs, you have the framework to build a consistent recognition process for every contributing member of the company which can be implemented across the organization. As I mentioned earlier, I believe that people thrive on recognition. To help your employees thrive, your company should consider building a continuous recognition program.
A continuous recognition program may recognize those individuals who consistently meet their objectives. This is an easy place to start. To get your entire organization to flourish, however, your company might consider recognizing employees who have made incremental improvements. You may want to recognize people who contribute to the greater community, for example. The continuous recognition program can be run as often as you’d like — monthly, quarterly, semi-annually, etc.
Give Managers the opportunity to do “spot” recognition, on the fly and in front of their teams. This type of recognition will prevent complacency. Imagine how you might feel if, out-of-the-blue, your manager recognized you and gave you the rest of the day off because of your contribution to the company.
The method of recognition can take many forms. As a company, decide if you will give days off, gift cards, cash, etc. However, don’t let these be the only forms used for recognizing your team members. A nice letter, on company letterhead, or a note of thanks can go a long way in motivating your team and building a “thriving” organizational culture.
Once you design a continuous recognition program and implement it, you will watch your team members and organization prosper
Unless you came from another Galaxy, you realize that we on earth have big problems facing us.
Rising debt, banks unwilling to lend, increased foreclosure rates, increased bankruptcies, increased taxes headed our way, etc. I’ve painted a somewhat bleak picture here, but quite frankly I’m not the first person to tell you this. Your customers, suppliers, financing sources already know this and have their own problems to fix.
So in this worst economic climate since the 1970’s or even The Great Depression, how do you protect yourself and continue to grow or sustain your business? Everything resides around a robust sales pipeline and closing opportunities. Think about it, that forecast you review is meaningless if your sales management doesn’t know how to effectively use it, your sales staff sees recording prospect data as a waste of their selling time, nothing backs up those numbers.
Keep in mind company management has gone to jail for less than publishing sales stats which are unrealistic. For one, your investors won’t like it. If you want to do well in a lackluster economy it all starts with you. Why are some companies having heftier revenue and profits? Perhaps they better understand the recipe for success…they got control of their operations, they hired the expertise to help gain a strategic advantage, these companies spent their budget to improve the sales report and sell functions of their business, while also driving down their administrative and production costs.
If you find nothing working the way you expect, perhaps you need to go outside of your organization to a company that has the focus and commitment to work for you for positive change. The one deal you missed might catapult you to the success you are seeking.
That’s what It Takes To Win, even in a tough economy!
I’ve been involved in sales for many years, but still seek advice from the “Strategy Masters.” Let me boil strategy down to its core. Here it is:
Strategy is what we use to do more smart stuff and do less stupid stuff.
We make decisions everyday and support our competitive advantage in the market, but then we do the stupid stuff like activities that can erode our competitive or sustainable advantage. Many will say that it is strategically impossible to do everything right, that 50 percent of hitting your sales target is not bad, that not calling your prospects in a timely manner is acceptable, not looking at your sales activity or pipeline is OK, not knowing how to align your sales to the markets available to you is common practice, that salespeople don’t need to do a good job, etc. They often ask “How do we really know that we are not doing a good job as a company, anyway?”
If you are in the business of looking into organizations you quickly discover the mistakes these companies are making and what change is required. They need a strategy, a vision, a decision filter…the tools may be there, but they’re just not using them correctly.
Ask the question yourself, “What can I do to make more smart stuff and less stupid stuff.” If you can’t answer this question, seek help! You might even find that by getting help you improve on the smart stuff you are already doing.
If you are planning to build a Teleprospecting organization, to qualify leads, there are a few items that need to be in place, before you get started. First, make sure that you have a flexible and easy to customize CRM that will support the daily activities of your Telemarketing team. The CRM should allow the easy build of management reports and dashboards, so that you can manage your team by the key metrics that ensure success.
Next, work with Marketing and Sales to design an effective lead qualification process. At a minimum, an effective Lead Qualification Process should include the following:
Qualification questions or the key questions that are used to qualify prospects
The disposition of each lead, as the qualification process progresses
Lead touch rules that monitor the number of times a lead is touched before it
is abandoned or sent back to a “nurture” program
Next step details that outline what needs to happen to fully qualify the lead
to make it “sales” ready
A quality control process that enables sales management to review the
quality of each lead to ensure that they are quality leads
Qualification Questions
The lead qualification process starts with the questions that the Teleprospectors will need to ask to uncover need and interest in your solution. The right questions will uncover:
Need: Does the prospect have a need for your
product or solution?
Authority: Is this particular prospect the person
who can make a purchase decision?
Decision Maker: What is the name and title of the person
who can make the purchase decision?
Budget: Does this prospect have money to make a
purchase or CAN they secure the funds to make a purchase?
Timeframe: When is the prospect planning to solve
their problem and purchase a solution or product like yours?
Decision Process: How will the decision be made? Will there be an evaluation committee or
will some other process be used to make a decision?
Understanding of Solution: Does the prospect understand the problem/issue your solution or product
resolves?
Next Step: If the prospect is interested in your solution, what is the next step to move the lead from an MQL to an SQL?
Determine the minimum number of completed questions you require to meet the expectations of your Sales team. It is highly unlikely that your team will get all of the key qualification questions answered every time. Decide on the minimum amount of information you
need to give a lead a “B” rating. If a lead has fewer than the minimum, the lead is still a work in progress and should stay in the Teleprospectors pipeline until the minimum standards have been met.
Lead Disposition
The Lead Disposition is the label you assign to leads as they go through the qualification process. The dispositions help Sales
Management to quickly identify the progress of each lead, if a Teleprospector is having trouble qualifying leads and to zero in on leads that are ready to go to Sales. Here are a few of our favorite Lead Dispositions:
Untouched: This disposition tells the Teleprospector that this is an MQL that has never been contacted. This disposition helps Managers to see if the team has enough new MQL’s to contact. It can also help a Manager determine if MQL’s
are being called in a timely manner.
Pursuing: When an MQL is in the pursuing disposition, it means that the MQL has been called, however, no contact
has been made with this prospect.
Contacted: Once a call has occurred and contact has
been made with the prospect, MQL’s can be moved to the disposition “contacted”.
Key Conversation: Not all connects are created equal. If important information or Key
information was gathered during a connected call, this should be listed in the disposition. Managers should report on this important disposition, during their meeting with Sales. Key conversations are the conversations that move the sales process forward. If Teleprospectors aren’t having a number of Key conversations, each week, there may be something wrong. This disposition enables the Manager to identify problems with the MQL’s, target list or Teleprospecting skills.
Potential SQL: A potential SQL is a lead that has a definite interest and need. The Teleprospector
may need to gather more information to turn this lead into an SQL; however, this is a hot target. Over
time, Potential SQL’s build, creating the Teleprospecting pipeline. Managers keep track of these leads
because these leads are likely to become SQL’s fairly soon.
SQL: SQL’s are ready for the Sales organization. They have the information required to make a highly qualified lead.
They are the leads that will go into the Sales Funnel.
Bad Data: You can try your best to get leads with the most accurate information. Sometimes, prospects leave their positions and move to another company. Sometimes prospects give false information on registration pages. Sometimes the data is incorrect and you may not know why. It doesn’t matter. If the data is bad, the Teleprospector won’t be able to reach the prospect. Take the lead out of the leads area of the CRM and have someone work on the lead to get better data.
Unable to Reach: If the Teleprospector has reached the limit on the touch rules and has had no response from the prospect then
the lead disposition becomes “unable to reach”. Your CRM administrator should take these leads out of the leads area and put the lead into a nurture program.
These dispositions will help your Teleprospectors to effectively manage their call activity and enable the Manager to track lead
progress and identify issues quickly. These dispositions will enable Marketing to get a pulse on the success of their campaigns and the quality of the MQL’s that they are creating for the Teleprospecting team.
Touch Rules
Part of the lead qualification process is determining the number of times a lead will be touched before it is abandoned or put into a
lead-nurture program. You don’t want your prospects to feel as if they are being “stalked” by your Teleprospecting
team. Keep the rules simple, which will enable compliance. Here are my touch rules:
First call: Touch #1. Leave a voicemail and send an email. Wait 2-3 days before you make another call attempt.
Second Call: Touch #2. Move on. Wait 2-3 days before your next call.
Third Call: Touch #3. Send an email. Wait a week before you make another call.
Fourth Call: Touch #4. Leave a voicemail. Wait a week before you make another call.
Fifth Call: Touch #5. Move on.
Email: Touch #6. Send an email stating that if the prospect has a need that they should call the Teleprospector
back, at their convenience.
After Touch #6: Change the disposition to “Unable to Reach” and put prospect into a nurture program.
Your business may require different touch rules. What we have found, working with over 100 Software companies, is that if a prospect doesn’t return calls or reply by email after 6 touches, they usually aren’t interested. They may have interest, in the future and may respond at some point in the nurture process.
Next Step Details
In our experience, a Teleprospector will touch a prospect 3 to 4 times before they get all of the information they will need to turn an MQL
into a viable SQL. After each good connection with a prospect, information is acquired and the Next Step details should be updated. The Next Step field details the requirements to move the sales process forward. For example, a next step might be to provide the prospect a private web demo. The Next Step is not just a callback. It is an action that moves the sales process forward.
QA SQL’s
Once a lead is qualified, fully, the disposition becomes “SQL”. Before the SQL is passed to Sales, the Manager should review and approve the SQL, to ensure that the SQL meets the minimum qualification criteria. CRM’s, such as Salesforce.com, provide workflows that can trigger an action, such as when a Potential SQL moves to an SQL. We have set up workflows for our clients that trigger an email to the Manager, who takes the action of reviewing the lead before it is converted to an opportunity for Sales. Once Sales has reviewed and contacted the lead, Sales should “Approve” or “Reject” the lead, before it is converted to an opportunity. The QA process enables the Manager to keep close tabs on quality and provides the team instant feedback, as Sales reviews and processes leads. If more than, say 10% of the SQL’s are rejected by Sales, there may be a problem. This process ensures quality leads and instant feedback for the Teleprospecting team.
Define the Qualification Process Before You Hire
You will save a lot of time and frustration if you develop the Teleprospecting infrastructure, before you hire your first Teleprospectors. Make sure that you:
Select a CRM that effectively supports a Telemarketing
team
Design a leads process that has buy-in from both
Sales and Marketing
Map your leads process into your CRM to track
the status of each lead
Build a QA and Lead Hand-Off process into the
CRM to ensure lead quality
Take the time to define the lead qualification process to ensure success from the start. It will be well worth your time.
About SOMAmetrics
SOMAmetrics enables clients to revitalize their Sales and
Marketing organizations, so that they meet and exceed their revenue objectives
each and every quarter.
If you aren’t reviewing your CRM structure at least twice a year, it is likely outdated for your current needs—not to mention future ones.
Almost every one of the 100 plus Software and SaaS companies that we have worked with over the past 20 years had some sort of sales automation tool which they used to manage their sales operation. Most of these companies used their CRM to track sales activities and to manage their sales funnel. Some use their CRM more intensively and at the cutting edge, while many use the CRM out of the box and just scratch the surface of the power of their CRM.
Most CRM’s out of the box are designed to be flexible, powerful and extensible—which means you won’t get much out of them unless you customize them extensively and adapt them to your needs. One critical omission, we found with many of our clients, is that they hadn’t mapped their lead qualification process into the CRM. Most often, it was because they didn’t have a well-thought-out lead qualification process, to begin with. While other times, if they had a defined lead qualification process, they hadn’t thought to map this process into their CRM.
At a minimum, an effective Lead Qualification Process should include the following:
The key questions that are used to qualify prospects
The disposition of each lead, as the qualification process progresses
The number of times a lead is touched before it is abandoned or sent back to a “nurture” program
Next step details that outline what needs to happen to fully qualify the lead to make it “sales” ready
A quality control process that enables sales management to review the quality of each lead to ensure that they are quality leads
Lead Qualification Process
You’ve done your Four Funnel™ Math and know how many impressions (the number of times you touch your target prospects utilizing a pre-determined marketing-mix, which can include email campaigns, social media programs, webinars, content placement, tradeshows, etc.) you need to generate the right number of Marketing Qualified Leads (MQL’s) for your Teleprospecting team. Once you know the number of MQL’s required to support your Teleprospecting team, you are ready to create the process that your Teleprospecting team will utilize to generate Sales Qualified Leads (SQL’s) that will build the required pipeline to support your revenue objectives.
What Are Qualification Questions?
The lead qualification process starts with the questions that the Teleprospectors will need to ask to uncover need and interest in your solution. The right questions will uncover:
Need: Does the prospect have a need for your product or solution?
Authority: Is this particular prospect the person who can make a purchase decision?
Decision Maker: What is the name and title of the person who can make the purchase decision?
Budget: Does this prospect have money to make a purchase or CAN they secure the funds to make a purchase?
Timeframe: When is the prospect planning to solve their problem and purchase a solution or product like yours?
Decision Process: How will the decision be made? Will there be an evaluation committee or will some other process be used to make a decision?
Understanding of Solution: Does the prospect understand the problem/issue your solution or product resolves?
Next Step: If the prospect is interested in your solution, what is the next step to move the lead from an MQL to an SQL?
If your Teleprospectors gets the answers to all or the majority of these questions, you have a solid, highly qualified SQL for your Sales Team. If you agree with that statement, the next question is: Wouldn’t it be good to capture this data in a format that will allow you to run reports and track the answers? We believe the answer is “Yes!”
However, most of the clients that we have worked with didn’t capture this information in their CRM. These clients didn’t have fields in the CRM that captured the qualifying questions or the answers. They forced their Teleprospectors to put the answers to these questions in the “Notes” field in their CRM.
Not everyone is good at taking notes. Not all notes are created equally and not all notes fields allow enough characters to adequately capture the information that we listed above. Notes are difficult to read and it is nearly impossible to report on data in the notes field. If you are forcing your Teleprospecting team to put this important information into the notes field you are missing out on gathering extremely valuable intelligence that your prospects are telling you. You are missing important intelligence that could help Marketing build better demand generation programs and to improve marketing strategy or messaging.
It is an execution mistake that will keep your Teleprospectors from generating highly qualified Sales Qualified Leads (SQL’s). Our advice is—collect quantifiable data (as captured by checkboxes and dropdowns, for example) when you can and augment with notes fields.
Otherwise, you are likely to be wasting money with a Teleprospecting operation that cannot provide you the actionable intelligence you need to improve sales.
About SOMAmetrics
SOMAmetrics enables clients to revitalize their Sales and
Marketing organizations, so that they meet and exceed their revenue objectives
each and every quarter.
Over the past ten years, we have worked on a variety of
Salesforce.com CRM implementation projects including: new implementation;
significant upgrades and optimization projects; data cleansing and migrations;
and integrations with other cloud-based tools.
We have assembled a team of experts ranging from marketing
and sales consultants, to business analysts and programmers to assist with Salesforce.com
or other CRM implementation project.
Contact us today to find out more of how we can help you
meet and exceed your revenue objectives quarter after quarter.
