My shot at Implementing Sales 2.0

I have been asked to attend a Six Sigma Event around the new Oracle On Demand CRM we are implementing at my company. We aren’t going live until the fall (if then) but my company seems to be doing the right thing by actually inviting sales to the table for the scoping process. As many who follow this blog know – I am advocate of the Sales 2.0 concept; perhaps even a zealot.

Oracle On-Demand as a few cool tools that I am excited to learn more about, such as the Social CRM applications around sharing and scoring content. Most of my experience, however, with CRM implementation comes from Salesforce.com. When I worked at the Complex Sale, Inc., we had an application for opportunity management located on the App Exchange. That made the implementation process quite literally seamless. White Springs, the company that makes The Complex Sale’s App, also has pre-built integration with Oracle as well.

Oracle lists their feature partners on their website.

Inside View: I am very excited about offering my opinions on integrating the Inside View applications to our CRM instance. As stated on previous blogs, we employ a third party to set appointments from the West Group. They do a great job and allow us to focus on selling rather than prospecting. However, when we do get the appointment set – we need to be as prepared as possible. I tell my team they need to research five aspects of their prospect to be best prepared for a first call.

1. Industry
2. Company
3. Individual
4. Title
5. Geography

Inside View gives this data, pre-packaged on a company by company basis, embedded inside of the account tab inside of the CRM. It sours the blogs for triggering events, LinkedIn for the prospects themselves, and provides in-depth data on the company. It is a one stop shop for first call preparation – inside of the CRM.

Kadient: One of the first things I did as a new sales manager was to institute a Best Practices Sales Cycle for my team. This is the process of collaborating and documenting the client-facing milestones and tasks needed to successfully move a prospect to signature. I put the deliverable of this process on an excel spreadsheet. All my reps are expected to have a specific BPSC spreadsheet for every opportunity they have to show progress. The byproduct of this process is a common sales process, expectation, and vernacular.
The cells that comprise the BPSC spreadsheet are linked to other tabs inside of the excel document. These additional tabs share greater detail, links to other information, and templates.

Kadient takes this idea and integrates it inside of the CRM where quite frankly it should be. Kadient will attach the BPSC or playbook to the opportunity record where the rep can go for direction specific to the type of opportunity. The functionality gives a rep sales messaging that’s battle tested, competitive information, or PPT templates that have won business. Better yet, from a sales manager’s perspective, I can get a better line of sight into the deals I am forecasting and trends for training purposes.
I will keep you posted on my success in getting these tools integrated in the Oracle On-Demand.

Caution: Whales in the Swimming Pool

no swimmingIt is right around this time of year when I start to get very anxious. The summer is winding down, my alma mater begins their football season, and our buyers are awakening from the summer doldrums. As sellers, our sense of urgency increases because the end of the year is within sight – and the same is true of our buyers.

Or is it?  Follow this link to read my thoughts on forecast accuracy.

Try this little exercise. Pull up the pipeline you have been working diligently to build over the first 9 months of the year. Sort it by revenue from highest to lowest. If you are like most sales professionals, you will find there is a correlation between the size of the deal and the proximity of the close date to December 31st. In other words – the largest deals are generally the ones the furthest pushed out. This is natural and stands to reason. After all, these deals aren’t fully scoped therefore we don’t want them gaining the attention of the powers that be. However, we still want the recognition that there is a whale or two swimming in our pool. Since we don’t know when this deal is going to close – we assume that the buyers will have the same source of urgency that we have and that it will eventually close by the end of the year.

We as salespeople need to realize that this, in fact, is not the case. Many of us have the high hopes that 2009 will be very different from 2008 and buyers will finally come off of their wallets. But just as Rick Page has taught us – Hope is Not a Strategy.

Three items we need to consider when we are thinking about these whales at the end of our pipeline for 2009 . Start doing these things now so you can be assured you are well positioned to close out the year strong:

1)    The global recession has made buyers much more cautious and conservative with their earnings. Therefore cost justification models are not enough to close a complex sale. CFO’s have been piling up proposals with ROI’s attached for two years.

To Combat this, Find the Powerful People: Align with the individual who can and will walk your proposal into the CFO’s office and say, “I need this signed because it is critical to the success of our business.”

2)   Our sense of urgency to close by the end of year is motivated by our internal pressures to make quota. Our buyers do not share this motivation.

Uncover their Source of Urgency: Find out what does motivate the decision-makers to buy and by what date they need this solution. If Jan 1 comes and goes without our solution in place – what are the negative ramifications to the organization?

3)   Many buyers have little knowledge about evaluating our solution and our implementation timeframes. Therefore by the time they get around to evaluating your solution it could be too late to have it up and running by the start of the year.

Closing Strategy: Through a position of empathy and experience, share with your buyer your normal evaluation, approval, and implementation process in the form of a timeline. Back it out from the source of urgency date for go-live and let them know the steps needed to start by that date.

Try this process to help feed the whales swimming at the end of your pipeline.

How to guarantee a missed forecast

missed_targetThe sales managers I speak with tell me there is only ONE thing worse than not making your revenue target and that’s to forecast that you were going to make your number and then miss it. I am sure most that are reading this will agree. The problem with forecasting however is that most companies look at sales forecast in the macro and use the law of large numbers. The law of large numbers as defined by Wikipedia is a theorem in probability that describes the long-term stability of the mean of a random variable.  Therefore, when we look at a sales pipeline through the law of large numbers we can see why percentages are applied to forecasting.

 
If a VP of Sales commits $10,000,000 of revenue but historically only realizes 50% of that commit, then he weights his forecast accordingly to $5,000,000. Some companies get even more granular in that they apply a percentage to a deal when it is in a certain stage in the sales cycle. 

 
Discovery Stage                       15%     x          $1,000,000      =          $150,000
Qualification Stage                 35%     x          $1,000,000      =          $350,000
Demonstration Stage             45%     x          $1,000,000      =          $450,000
Proof of Concept Stage         70%     x          $1,000,000      =          $700,000
Negotiation Stage                    85%     x          $1,000,000      =          $850,000
Close Stage                            100%   x          $1,000,000      =          $1,000,000
Total Pipeline Value                                                                          $3,500,000

 
If you are using either one of these methods to forecast, then I have some very bad news. When you live by percentages you will die by percentages because no one wins a piece of a deal.

 
To forecast by the law of large numbers means that you are surrendering any insight into why you are going to win or lose a deal. After all, a forecast is merely the sum of every deal predicted to close. Every one of those deals has its own story and should be committed to close based upon the manager’s understanding of that story – not a coin flip. To take that concept even further, forecasting by stage in the sales cycle takes no account of the competitive nature of an opportunity. If you are in the negotiation stage of a deal and have 85% probability of close, wouldn’t your competitor also be in the same stage? You both are not going to get the deal, much less 85% of it.

 
At The Complex Sale, Inc., we recommend having qualitative deal review based upon objective criteria to forecast an opportunity. To view a recorded webinar on these 11 questions – please follow this link: https://www1.gotomeeting.com/register/794796552

Will it close on time?
 Do we know when they can no longer go without a solution?
 Do we know the decision-making process?
 Do we know the approval process?

Will we win?
 Have we linked our solution to solving enterprise-level pain?
 Do the decision-makers acknowledge our differentiation?
 Do we have enough votes of the decision-makers to win?

Will it close for the amount forecasted?
 Have we quantified the value based upon their criteria – not our ROI?
 Do we understand the political risk associated with this decision?

Have we prepared for the political nature of the decision making process?
 Are we anticipating counter-attacks of the competition?
 Are we aligned with powerful people to break a deadlock?
 Have we outlined the steps needed to get the deal signed?

Your confidence in winning should be based upon objective questions like these. The more you can answer “yes,” the more confident you feel that you can win and vice versa.

Will we win? Will it close on time?

*** The Complex Sale, Inc. has recorded a webinar on this topic: https://www1.gotomeeting.com/register/794796552

crystalballexecutive

Outside of your own personal expertise, the most valuable piece of information you can offer buyers is your pricing. In the Complex Sale 2.0 world, buyers are gaining more and more control because information is becoming more and more available. Therefore, you should only share pricing when / if you feel you have positioned yourself as best as you can to win the business. If there is information you still need, you will not get it AFTER you send a detailed proposal.

Before you hand over pricing, make sure you can answer yes to these 11 questions.

Will it close on time?
 Do we know when they can no longer go without a solution?
 Do we know the decision-making process?
 Do we know the approval process?

Will we win?
 Have we linked our solution to solving enterprise-level pain?
 Do the decision-makers acknowledge our differentiation?
 Do we have enough votes of the decision-makers to win?

Will it close for the amount forecasted?
 Have we quantified the value based upon their criteria – not our ROI?
 Do we understand the political risk associated with this decision?

Have we prepared for the political nature of the decision making process?
 Are we anticipating counter-attacks of the competition?
 Are we aligned with powerful people to break a deadlock?
 Have we outlined the steps needed to get the deal signed?

The biggest mistake we see sales managers make is to base a forecast on stages in the sales cycle. Just because you are 85% into a sales process doesn’t mean you are going to win 85% of the business – or any of it for that matter. If you are in a competitive deal, your competition should be in the same phase and somebody has to lose. You need to compliment this quantitative step of forecasting based upon where you are in the sales cycle with the qualitative step of the 11 question deal review.Our research shows that 25% of forecasted deals are lost to competition by not taking this factor into account.

 

Our research also shows that 25% of forecasted deals are lost to no decision. That is why it is imperative to have the business case established before you present pricing. If you don’t understand the quantifiable metric upon which your decision-makers are going to base their decision, then you have a good chance of losing to no-decision.

A Dirty Little Secret about Forecasting

A recent survey by The Complex Sale found that 50% of forecasted deals results in a loss or no decision! I am not talking about winning percentages per se – but deals on the forecast ready to close. Why would this happen?

The answer is that most sellers create a close date around their own source of urgency – the month, quarter, or year end and not around the buyer’s source of urgency. I got my sea legs in campaign fund-raising and one axiom we had was never trust a number that ended in 0. For example – I would ask the question, “how much did we raise today?” If the answer ended in 0 – then my suspicion was raised. I can safely say the same thing for forecasting – never trust a number that has the end of the month as a close date.

We need to ask ourselves – what bad thing happens if this date passes without an agreement? If you don’t know then I would say you should find out. That is the leverage you will need in negotiation. If you do know and the answer is nothing – then you are likely to be one of the 50% of forecasted deals that doesn’t close.

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