5
Mar

Plan on Six Months Before New Sales People Produce Meaningful Revenue

ISVs should plan on at least six months preparation time before new sales people start producing. Better not to hire new sales people than to bring them in under an unreasonable expectation of how quickly they will start selling.

New sales people must be trained before they start working with prospects and customers. A good sales training program includes:

  • a technical introduction to products and services
  • all of the information required to write sales
  • a review of the sales plan, territory or industry assignments
  • a review of the business plan
  • a review of any restrictions on selling to prospects working for regulated organizations in the private, public or not-for-profit sectors, along with proper etiquette guidelines

Tests should be included in the training program to make sure important points have been correctly understood. Any sales people failing tests should be kept in training until they pass. Sales people are often the only representatives of your business prospects meet. They need to communicate your message and accurately represent your company. If you aren’t sure they are 100% ready for the job, don’t put them in front of prospects.

Assigning new sales people to existing territories is a good way to pay for the training time. You already have a stream of revenue coming in from existing customers. New sales people with the right skills and experience can be safely trusted to manage accounts. An account manager spends a lot of time exercising customer service skills. Usually these skills are the same across an industry.

If account managers are expected to provide technical support to customers, then it makes sense not to place new sales people in these roles until they demonstrate correct understanding of technical procedures specific to your products.

Start ups and early stage ISVs have a tougher time finding a way to pay for new sales people. Usually these businesses do not have established territories requiring account managers.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

1
Nov

An Important Additional Feature of Successful Enterprise IT Software Sales Personnel in 2012 is Comfort with Cold Calls

As recently as no more than 5 years ago, cold calling was looked upon with disdain by most firms in the IT software market. Cold calls were considered the type of tactic employed by the lower tier of companies in this market. After all, a cold call is an effort to directly reach out to engage with marketplace participants without an invitation to do so.

Even today in 2012, best practices for opening opportunities to engage with legitimate sales prospects are still controversial. Some of our competitors speak about sales lead generation methods where marketing communications (MARCOM) personnel retain authority over opportunities to engage with marketplace prospects until a much later point (where, presumably, these prospects will somehow be riper for legitimate sales contact) when, finally, it will make sense for sales personnel to take over the engagement.

We do not agree with this assessment. On the contrary, we think that the type of lead generation that they are describing is, in fact, an outbound direct marketing approach that includes telemarketing — often in the form of teleprospecting, which we have written about, at length, elsewhere in this blog. We do not advocate utilizing MARCOM staff to generate this type of lead. Any direct, outbound attempt to engage with the market, in our opinion, should be the exclusive responsibility of sales personnel.

Of course, the precise type (or profile) of a successful sales person for this type of direct outreach effort, is markedly different than the profile of the type of individuals who formerly were very successful at this type of role. We have just written and published a post on this new profile for sales success; therefore, there is not need to delve further into the specifics of the profile here.

Nevertheless, the important point is that this type of staff member must be, nevertheless, a sales person. The inevitability of this conclusion is driven that much further home when one considers that the true value of an address book has also changed. Having an address book no longer increases the likelihood of sales people closing business as was the case in the past. Return on investment (and in a precise form that is, necessarily, very customer and opportunity specific and, therefore, cannot safely be generalized) is very important to successful selling of expensive software solutions to enterprise IT customers. Therefore, whether or not a sales person is familiar with a specific individual within a target organization, or not, does not mean anything, necessarily, as to whether or not it is likely that this individual will close the business, or not.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved

16
Mar

Establishing Sales Quotas can be an Effective Motivational Tool for Sales Staff

CEOs at innovative tech businesses usually think about implementing a quota system as a method of building revenue. We think that the real value captured by implementing a sales quota system, regardless of whether or not revenue targets are ultimately attained, or not, is staff motivation to meet or exceed targeted quotas.

We have considerable experience working with a type of sales person who maintains a high sense of urgency. Our typical sales person operates in a highly stressful environment. True, compensation targets are ambitious and rewarding, but day to day operation requires a personality comfortable with making solid commitments, exercising patience and dedication, and, finally, competing for prizes. Our type of sales person responds well to sales quotas. After all, a quota is no more than a target. Highly competitive individuals can even enjoy the work required to attain targets, not to mention the related payout and financial reward.

But for businesses looking to accelerate revenue, to take a major step forward from one level of activity to a new and much higher level of activity, establishing quotas cannot be the sole method of attaining objectives. Rather, a sales quota program works well alongside complementary marketing programs that do the job of successfully positioning the business brand within striking distance of market perception and, through that congruence, contribute a lot of value to the effort to move up on the revenue scale.

To reiterate: the marketing job, as we see it, is to align the intended business brand with the actual market perception of the brand. The closer the alignment between what a business promotes and what a survey of a correct market segment indicates is being perceived, the quicker the path to revenue growth. In fact, many of the related methods become that much more plausible as a direct result of overcoming any market gap. If market perception of a business brand is far removed from an intended message, then steps need to be taken–via any available means–to narrow the gap. Sales will certainly benefit from this type of healthy brand marketing.

Nevertheless, sales quotas generally stimulate the creation of regular, persistent sales activity on the part of sales personnel, which is certainly beneficial to tech businesses targeting enterprise business markets.

Along with implementing sales quotas, a tech innovator should have a CRM system in place that includes a method of ranking lead quality as well as a set of milestones that correspond to a “typical” timeline for the lead development and sales cycles. With lead quality and timing in place, management will have the information required to predict near term revenue and plot the business course of the near term.

We have considerable experience in these areas. We welcome opportunities to discuss requirements with innovative businesses with technology products for enterprise business markets. Please call Ira Michael Blonder at +1 631-673-2929. You may also email Mike at imblonder@imbenterprises.com to further a discussion.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved

14
Mar

Rank sales leads by value while tracking position in your lead maturity cycle to obtain a realistic picture of opportunities

We use a lead ranking system built on:

  1. Lead Value and
  2. Lead Maturity, meaning the position of a lead in a specific lead maturity cycle

We implement our lead ranking system to provide clients with a realistic picture of sales opportunities over time.

Let’s look at the second of these factors first, lead maturity. Our maturity plan for leads includes the following stages:

  1. Initial conversation with an unqualified contact
  2. Follow up conversation about some information that has been exchanged with this unqualified contact
  3. A conversation about a point of interest expressed by this unqualified contact. This point of interest is somehow related to information already exchanged
  4. An unspecified number of conversations with additional contacts at the same prospect business to determine whether the unqualified contact is someone who can make a decision about a purchase for your product or service
  5. An unspecified number of conversations with additional contacts at the same prospect business to determine areas of interest as well as potential requirements for products or services offered by your business
  6. Assembling a list of contacts at the prospect business who should participate in a discussion about your product or service as a solution for requirements either formalized or at some informal stage
  7. Meeting with a group of contacts at the prospect business who would like to discuss further points of interest or potential areas of need for your product or service. These contacts should be selected from the individuals unearthed through steps 4 and 5 above
  8. Meeting with a contact, or a group of contacts who have been verified as decision makers for a purchase requirement that has been budgeted by the prospect business that calls for a product or service that corresponds to what your business offers

Once the 8th step in this process has been successfully completed (meaning that the prospect business would like to proceed further with the discussion) then the lead can be said, per our system, to be mature and ready for transition to sales for further development as a bonafide sales opportunity.

Our experience is that telemarketing teams present an excellent opportunity to progress leads through our maturity cycle to step 8. The time required to move a lead through each of these stages in development is a variable. The process can be faster or more retarded depending on the type of product and target market. What is important is that enough information be collected through each of these steps to make a best possible effort to ensure that time is not wasted on what Jeff Thull refers to as “Dry Runs.”

Obviously there are many steps within the progress of a lead through our 8 stages of maturity. We would be happy to elaborate on our model upon request. Please call Ira Michael Blonder at +1 631-673-2929. You may also email Mike at imblonder@imbenterprises.com to further a discussion.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved

12
Nov

Sell Broadly through Partners, Channel Resellers, White Box Manufacturers, and Direct — or Die

Strong words but true. Consider how the big boys do it. Here’s an excerpt from Cisco’s Annual Report filed with the US SEC, dated September 14, 2011: “A substantial portion of our products and services is sold through our channel partners, and the remainder is sold through direct sales. Our channel partners include systems integrators, service providers, other resellers, distributors, and retail partners.” (quoted from Cisco Systems Annual Report, 2011). Further, here’s Cisco on Alliances: “We pursue strategic alliances with other companies in areas where collaboration can produce industry advancement and acceleration of new markets.” (quoted from Cisco Systems Annual Report, 2011).

Dissect the meaning of “acceleration of new markets.” Strategic alliances (joint marketing deals) make sense for this business where striking an alliance with a complementary product can hasten Cisco’s entry into markets where they have little share, if any, of sales. In other words, Cisco uses alliances to widen the throat of the product “bottle”, to increase the velocity of sales, or else, Cisco does not pursue alliances. Handy dictum. But alliances have another value to Cisco, they can “produce industry advancement.”

The mysterious process of advancing industry that Cisco notes, to my mind, results in a better alignment of technology with palpable market needs. This industry advance sweeps away every “solution without a problem” within its reach, ensuring that products are not engineering-heavy and marketing-light. In part, then, Cisco chooses to use strategic alliances to keep its feet on the ground. Good idea for a company that has floated away several times on products light on marketing and heavy on engineering.

Product innovators should closely follow the above guidelines regardless of the present size of a business. Uniformly progressing in each of the areas just noted in the marketing plan and, further, as sales strategies are defined, ensures an optimum opportunity for success. Further, this approach affords a legitimate and convincing rationale for never, ever, agreeing to exclusivity with any particular participant in any one of these market verticals (meaning direct national sales, channel resellers or strategic partners). Rather each and every alliance and partnership should be a non exclusive activity. Closer association and, potentially, exclusivity may arise at some future time, but better to have such exclusivity arise through achieving or, better yet, exceeding revenue objectives than to enforce it prematurely.

You can be sure that there is a reason why very large successful businesses like Cisco opt for a multi lane highway when they put the bus on the road. Understanding that rationale and adopting it for one’s own approach can represent a big step towards success.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved

8
Nov

Funnel Management is an Essential Component of Successful Enterprise Sales Strategy

Too few sales opportunities leads to failure for most enterprise sales strategies. Where telemarketing is a key tool in sales strategy, two metrics must be kept at eye level and thoroughly managed to deliver success: Keep your eye on the daily number of:

  1. Conversations by telemarketer and
  2. Meetings scheduled by telemarketer

A good telemarketer with an up to date lead list should be able to engage in 10 to 15 conversations per 8 hour day. Conversations count, not the number of telephone numbers dialed. Therefore, adequate time must be spent assembling the lead list to ensure that contacts are valid and accessible. Be wary of using excellent telemarketers as no more than human demon dialers. In variably the telemarketers will either move on, or your hourly costs will go up to pay for all the extra dialing required to find someone on the other end of the telephone call with whom your telemarketers can engage. It may make sense to have more junior telemarketing staff do the dialing to simply schedule a preliminary conversation with more senior agents. The biggest return will lie in a process that nets more conversations. More conversations will inevitably lead to more meetings and, ultimately, more sales.

With regard to the meetings metric, a day’s activity for a senior telemarketer/teleprospector should result in at least one opportunity moving forward to a more substantive conversation, meaning a meeting, that may require the participation of a subject matter expert from your end as well as a more senior contact on the prospect side who plays some role in deciding what to buy.

Be wary of lateral meetings, in other words, follow-on telephone conversations that move horizontally with contacts who are unknown and projects that are unclear. Management must enforce a policy whereby information is collected about key aspects of the prospect business from the initial call and forward. Certainly it may be acceptable to schedule a second telephone conversation with a contact to ensure that all the important information is collected prior to progressing the conversation to a point where a subject matter expert joins the conversation. But more than one of these follow up call should be taken as indicator that telemarketing is not doing the job that needs to be done to collect important information in an efficient and progressive fashion.

The results of conversations should be noted within prospect reports by company. These reports should be thoroughly reviewed before higher level meetings are scheduled to ensure that next steps are truly warranted for a given opportunity.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved

6
Nov

Score Leads based upon Maturity to Deliver the Most Sales

Different leads require different types of activities to push sales opportunities forward. In my opinion leads can’t be managed unless some type of scoring system is used to determine where in a sales cycle a lead happens to fall. Without a scoring system equal time would be spent on all leads. Obviously hotter leads should receive more attention. But what constitutes “hot”?

To my mind, “hot” leads are opportunities where:

  • I’ve determined that I’m dealing directly with a decision maker who has the budget and authority to proceed on a purchase for my product
  • Further, this decision maker has a pressing need to obtain a product of service to reduce a significant cost that presently weighs on his business
  • He or she has a clear picture of what needs to be accomplished to reduce costs and understands that a product like mine will be required for the solution to work; in other words, the solution will absolutely not work and the losses will continue unless an additional product or service is acquired.
  • I’ve determined that my product or service will deliver the results the prospect is after
  • I can quantify the costs that the prospect will save as the result of buying from me.
  • Finally, I fully understand each and every competitor that the prospect may consider and am totally confident of my ability to show the prospect why my way is the right way for success and reduction of cost.

My scoring system differs radically from a typical scoring system that quantifies lead strength based upon numerical values derived from an analysis of the characteristics of paying customers for a product or service. Rather, my scoring system rates leads based on the proximity of a lead to a sale. I want to spend more of my time closing sales and less of my time wandering through a series of contacts to find the true buyer, the real need, etc. I am skeptical of the typical scoring system and make little to no use of it in sales management. My skepticism arose from my conclusion that lead scoring systems did a generally poor job of empowering sales teams with a useful tool to push forward sales.

On the other hand, a system like mine, which rates leads against a model of maturity is much more reliable. In fact there may be few leads at the level of maturity worthy of the title “hot”, but at least these few can be relied upon to deliver precious revenue dollars. Close these mature deals to buy the time and the effort required to push the far more plentiful, less mature leads forward.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved

1
Nov

Selling Products & Services for Enterprise Business Through Partners

A method can be used to mitigate some of the difficulties related to the complex sale for enterprise business. Specifically, enlist the assistance of an intermediary who is already entrenched within the prospect business. Opting for a channel sales strategy should be a natural decision where some facts have been determined through prospecting calls or visit with the prospect:

  • Products and services are purchased by a central procurement organization
  • Central procurement maintains an approved vendor list and
  • There is either no opportunity for your business to be added to the approved vendor list (they are no longer “taking applications”) or
  • Your contact lacks the authority to purchase in a manner but through the central procurement organization

If the above factors are in place then you have no choice but to work through one of the approved vendors. This necessity is not necessarily a negative. Choose a partner who is not an “order taker,” but a business with complementary offerings who can introduce your product or service to other prospects. This type of partner typically is not after a discount on your product; rather, the partner has a relationship with the prospect that will be benefited through provisioning products like yours. Of most importance, your partner, an approved vendor, is already a trusted resource for the prospect. Leverage that familiarity to cut through gobs of time that you would otherwise have to spend building trust with your contact, his/her management, etc as you schedule meeting after meeting in an effort to push the sale forward.

Neither does including partners within the complex sale strategy remove the opportunity of maintaining a national sales effort of your own. I have substantial experience working with businesses where it made sense to simultaneously operate channel sales and national sales efforts. Invariably these two teams of ambitious sales people would collide within prospects, but our solution was to provide a clear incentive to our national sales teams to defer to partners where possible. In fact, we utilized a lead generation system of delivering these national opportunities to motivate partners to allocate substantial attention to us. We also experienced strong cash flow as these “approved vendors” fast tracked our sale through the procurement organization.

Where products or services are built for the enterprise computing market–meaning personal computers, local networks and shared access to larger computing systems (mainframes, etc), it is a pure natural to leverage a channel sales strategy, which has always been a familiar characteristic of such markets. Use the channel to your advantage.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved

28
Oct

Top sales people fill large funnels with prospects and constantly manage volume to the upside

Top sales people feed off of pools of prospects. These sales achievers successfully maintain these pools of prospects at a constant, optimized level. This feeding process is referred to, in common parlance, as a funnel. The premise is that the right feeding interval (the phenomenon of gravity pulling material through the tube of a funnel) in conjunction with the right volume of prospects in one of these pools (meaning the amount of material added to the cup portion of a funnel) will result in a successful engagement whereby the sales person is paid an attractive compensation (commission) while the business realizes or exceeds the amount of revenue included in the sales plan.

Maintaining the funnel should constitute the majority of sales activity for sales staff. Sales management should take the steps required to ensure that funnels are in good shape across the entire sales organization. Monitoring funnel conditions can be as easy as keeping an eye out for high pressure sales activity and, conversely, inertia together with a lack of a sense of urgency.

The former condition is indicative of a lack of volume in the funnel and a need to force every “precious” opportunity through to a close. I’ve learned over time that a sales person who calls on the same prospect too frequently is a sales person who lacks the right number of prospects.

The latter condition, inertia together with a lack of a sense of urgency, is indicative of a sales person who has overestimated the prospect volume in the funnel; in other words, a sales person who has either over estimated the probability of sales, or a sales person who is marching to a different drummer, perhaps assuming that the firm will pick up the tab on compensation just to keep his or her at the job.

Generally it is much easier to manage high pressure sales people than the laggards. After all, high pressure sales people are, at least, adequately committed to the sales activity to deliver, under effective management satisfactory results. Better to jettison the laggards to keep the business afloat.

Above all, management activity must be largely directed to establish and maintain profitable funnel activity for each and every sales person. For a telemarketing operation this generally means monitoring outbound sales call volume together with the number of substantial conversations (generally conversations of 5 minutes or more on the telephone) on a daily/weekly/monthly basis. As a rule of thumb, for every set of 100 outbound calls, look for somewhere between 10 and 15 meaningful conversations. Any proportion less than a 10 – 15% prospect engagement rate should be analyzed. Keep an eye out for a poor call list or an ineffective sales person. Take remedial action promptly to avoid problems.

For an outbound sales staff the measure should be a top account list with an adequate flow of prospects into the list together with a reasonable close rate as predetermined by the sales plan.

For either type of sales staff, the method is to take remedial action promptly or else risk failure.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved

20
Aug

Maintain A Flexible Approach to Sales Forecasts & Go-to-Market Plans

As of late I have heard many allusions to “driving the car & changing the wheels at the same time” from clients and their prospects. This automotive metaphor depicts today’s business realities. Startup businesses & other hyper growth operations that feed off of some incoming revenue to fund operations while product branding coalesces and a market niche is attained must be managed with a high level of flexibility to avoid failure. As well, a high level of entrepeneurial expertise is required to successfully exercise that flexibility “in mid air” while the cash register is ringing.

Flexibility means changing the business plan and any of its components (including the sales plan), as required, to tune performance as the business chugs along. The key benefit of committing to this approach amounts to sequestering authority and business ownership with the CEO and any early stage investors. After all, the funding required to fuel hyper growth, at least in part, will be provided by the revenue resulting from sales. This self reliance obviates the need to look for substantial funds from outside sources who may have plans and intentions that run contrary to the plans of the CEO and founders.

However, this approach comes complete with substantial risks. For example, a change in the product plan can result in “orphaned” products that will remain removed from the broad product offering. These orphans, forever relegated to the periphery of the renovated product offering will, nevertheless, require complete support to ensure that early adopters (in the form of paying customers) are not disappointed by their purchase. Therefore, the burden on support staff will be increased should a substantial change in the product plan be required.

With regard to changes in the sales plan, realigning territories, changing commission structures, etc.can wreak havoc with the sales force and, therefore, threaten the reliability of forecasts and plans. These plans and forecasts typically provide the cornerstones of revenue assumptions; therefore great dexterity must be exercised by the CEO to ensure that required changes are successfully effected with minimal disruption.

In sum, a CEO should think long and hard about an early entry into targeted markets. A successful execution of radical renovation to product, sales & business plans while doors are kept open for customers to enter and place orders requires the careful dexterity of an open heart surgeon. One wrong move with the scalpel can result in the death of the business. CEOs do well to proceed with caution.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved