Without A Clear And Adaptive Sales Strategy, Customer Acquisition Efforts Fail
We have heard paraphrased versions of this again and again. Despite this, sales leaders frequently find themselves managing in situations of strategic ambiguity. As the pace of change continues to accelerate, sales leaders are quickly learning management agility and strategic adaptability are the new prerequisites for successful sales management. Yet, indecisiveness remains – Why?
Customers today are faced with an abundance of choice. Market conditions are changing rapidly. Budgets are tightening or restricted. The reasons for why indecision remains could go on. Approaching strategic uncertainty can feel a lot like driving with a blindfold, under a heavy fog, in the middle of the night. Often, this pushes leaders to avoid sound investments, defer decision making, and reduce or freeze resource allocation. As a result, anxiety, doubt, and uncertainty creeps into the thought process thus leading to poor decision making. Everyone feels this way from time to time.
Even so, whether a sales organization succeeds or fails, is largely based on their leader’s ability to move the team forward at the critical moment when the direction ahead is unclear. The best sales leaders are able bring a balance of realistic expectations, lead by example, and communicate with empathy.
A Sales Leader’s Core Function Is To Exercise Judgement
That is, to form views and interpret ambiguous evidence in a way that will lead to a good decision. When the path forward is unclear, the best sales leaders acknowledge what’s unknown – but also look ahead to what’s known.
This can be demonstrated by adopting the following 3 disciplines into daily practice:
Take Action (a decision must be made, indecision is costly).
Maintain Emotional Control (act “as-if” to inspire confidence in others).
Leverage Data and Domain Expertise (learn more, see more – knowledge is power).
Effective sales leaders are proponents of practicality when dealing with uncertainty. The adage “you can’t improve what you can’t measure” holds absolutely true here. At CIEN.AI, we put to practice a data-informed culture by measuring every data point and outcome within our own CRM (Salesforce). This helps our sales and marketing team mitigate forecast unpredictability and improve future outcomes. Predicting the future with absolute certainty is impossible, but utilizing predictive analytics will expedite your ability to determine what’s likely and place intelligent bets.
The modern sales leader today must balance their acknowledgement of what’s unknown, with decision making based on informed likelihoods. They can accomplish this by determining which dynamics are impacting their company (that they’re aware of). They must continuously solicit feedback and ask other stakeholders their opinions of what will happen. As leaders they must act upon what can be done that day, to better prepare their teams and customers for change. In doing so, they position themselves advantageously to take decisive action, demonstrate confidence, and achieve sales success well above the norm – even when the market landscape remains out of focus.
Don’t allow lack of clarity to cast a shadow over your sales team’s confidence or performance. Cien can help you drive your sales organization forward faster.
According to research by McKinsey & Company, there are three scenarios of COVID-19 affecting the world economy.
Unpleasant as it is, let’s look at scenario #3 since they label it as ‘the most likely’.
Scenario Three & Most Likely:
The middle of Q2 sees some progress of the containment of the local outbreak, but COVID-19 manages to spread to other countries
Demand and customer confidence remain low due to uncertainty
The travel bans remain in place until the end of 2020, leaving aviation and tourism completely frozen
The economy is largely affected by the setback and lack of customer confidence
We can see all of the above unfolding already; A growing pandemic, long-term ban on tourism, new strict travel limitations, a drop in customer confidence — everything indicates that returning to any kind of normalcy won’t happen any time soon.
That means there’s little to no use in focusing on enduring the new conditions. Instead, your ability to adapt to them and help your business sail on is where your focus should be.
Defensive moves are entirely understandable but they can easily become counterproductive.
So, what can you do?
1. Act quickly and proactively to adjust your route to success and chart a new one while capitalizing on dislocations in the market.
Cien does the heavy lifting for you with real-time tracking of all applicable data points adjusted to compensate for various CRM quality issues for a high-res image of the state of your current selling environment.
It makes “acting quickly and proactively to adjust your route to success and chart a new one while capitalizing on dislocations in the market” easy, effective and immediately impacting.
2. Build upon your capacity to be agile — align, identify, and prioritize critical improvement areas to respond to changing circumstances.
“Align” – Cien gives leaders a common language for aligning sales and marketing on the expected dollar value of every lead, account, and opportunity created:
“Identify“ – Cien allows you to dig into the intangible factors that impact sales performance and measure individual strengths and weaknesses.
Result: Your ability to rapidly “prioritize critical improvement areas to respond to changing circumstances.”
3. Evolve to become more resilient and bear up against unrelenting external forces, recover from hitches, and benefit from new opportunities.
Cien gives you the data, tools, and methodology to “bear up against unrelenting external forces, recover from hitches, and benefit from new opportunities.”
Take Care Of Your Team And Be Ready
Cien helps you build the agility and resilience that you, your employees, and your company needs now more than ever.
Rather than uncertainty being an excuse to detach or check out, uncertainty should be a spur to engage and build sustainable advantage.
Nothing lasts forever, and we will emerge from this with more experience, more knowledge, and more ammo for whatever comes next. So, our recommendation is to stay collected and focused on maintaining flexibility and discipline with a wise use of digital opportunity. It’s a sure-fire way to keep your sales intact and ready for a boost.
Several years ago, in my last position as a major account executive, my brand new first-line sales manager asked me to sit down with him so he could give me my new quota for the year. I told him that I did not care what quota number he assigned to me and that the quota assignment would not impact my performance. I thought his head would explode.
What I told that new manager was 100% true. The only thing that quota meant to me was it gated when my commission rate would go from 4% to 6% to 8 % to 10%. Other than that, the quota assignment was just an arbitrary number that came from HQ. He was incredulous. “We are sales guys”, he exclaimed, “We live and die by quota performance!”
We live by commission check.
So I walked with him to his office and drew a turtle chart on the wall. The company, I explained, is counting on the top 20% of the reps to produce the most revenue and make or exceed their quota assignments. That 20% will also make the most money. The thought was that some reps would attain the quota numbers, about half would be somewhere between 60% and 90% attainment, and the rest would be below 60%.
I admit that I was cheating here. I had seen the chart on the VP of Sales Operations whiteboard a few weeks before. The quota assignment exercise then became a simple algebraic model to distribute revenue assignment plus over assignment such that a bell-curved performance result would have the company making its revenue goals with about 25% of the sales reps achieving quota and hitting their performance bonuses. This controls for both the cost of bonus commission exposure and the attainment of revenue plan exposure.
So, I concluded, it does not matter to me what assignment number you give me. All that matters is that I know I will be in the top 20% and the question becomes how will I optimize my earnings. “OK, Get out of here.” was his reply.
I took two lessons from that exchange which has stuck with me. The first is that it is a waste of time for the manager to worry about the guys in the top 20%. The second is that quota is a useful tool for understanding relative performance.
David Brock wrote a very thoughtful blog post about Does Quota Matter last year for Partners in Excellence. I agree with his conclusion that the point of Quota is to maximize performance and Quota is one way to measure if we are meeting our performance goals. David also references an amazing piece of research undertaken by CSO Insights. Their annual Sales Enablement Study for 2019 stated that among the firms they surveyed, the average revenue attainment was over 100% of plan while the average quota attainment of the sales teams was around 61%. I find that shocking.
Part of what shocks me is that we accept that pattern as acceptable. Sales leaders I speak with, and most of my customers and prospects are sales leaders, tell me that one of their three most pressing issues is how to get the 70% of the reps in the middle to improve their performance. The sales leader who can grow the performance of those reps in the middle of the bell curve breaks the bank. The company posts more bookings and the reps make more money. Everyone is happy. If you go back to the bell-curve chart, it is clear that the top 20% are carrying the freight. How do we extend that performance?
The answer I read frequently is that the correct course of action is to identify the best rep and have everyone else emulate that rep. I disagree. I believe that no two reps, like no two opportunities, are created equal. Different reps have different skills. The key is to understand what are the skills and needs of each rep and how do we optimize each rep’s performance.
That is not easy. It is a challenge for which few sales leaders are trained and for which there are few tools in the market. Most AI for Sales tools are focused on activities rather than behaviors. One of the great beauties of the Challenger Sales system is that it teaches best practices and processes while allowing room for individual skills. Understand and coach each individual and the performance of the team will rise.
This article was written by Joe Lupton, Cien’s Head of Sales and Customer Success.
Firms can earn big returns by effectively measuring each step in the sales and marketing process
Do you hear your Sales leaders complain to Marketing that their teams are not getting enough high-quality leads? Are the Marketing folks pointing to the high volume of leads that fit the Ideal Customer Profile criteria and have shown sufficient intent to trigger a qualification as a Marketing Qualified Lead?
There is a rich bounty of published work telling us that Sales and Marketing must run in lockstep. In an account-based world, a common language is clearly required to understand and account for the contribution of the sales and marketing teams to the revenue generation process.
Marketing Contribution Measures the Value Added by Marketing
They say Marketing is from Venus and Sales is from Mars. Whether you recognize it or not, the performance of a sales team depends in large part to the amount and quality of the leads sent to it by the marketing team. While measuring lead volume might be easy, assessing quality is not.
Typically, the value of leads generated by marketing is calculated based on average values such as average customer lifetime value, average lead conversion rate and the average cost per lead. As with total sales volume by sales professional, this simplistic measurement is done because more precise assessment is not easy.
This traditional way of measuring the value of a lead doesn’t provide any color on the quality of the lead, however. It fails to account for a lead’s propensity to close, the prospecting effort required to convert it, and the expected deal size for the lead. This simplistic accounting excludes important operational intelligence for optimizing sales performance.
The Cien Value Chain employs a complex set of AI models that derive a true value for each lead and opportunity. Using hundreds of machine learning and natural language processing models, the Value Chain calculates what the real value of any given opportunity is TODAY. Think of it as calculating the expected value of a lead that may not close for weeks or months. What the Cien Value Chain gives you is a starting point value that all parties; Marketing, Business Development, and Sales can agree on as representing the real dollar value of leads attributed to Marketing.
Sales Contribution Measures the Value Added by Sales
If you can’t measure it, you can’t improve it.
Why did Bob sell more than Sue last year? Was it due to the quality of the leads he received from marketing, the territory he was assigned, his work ethic, or simply a winning smile?
Historically, sales representatives were measured by the total revenue of sales signed. This is still a commonly used indicator of sales performance in many organizations.
Using total sales revenue as a measurement for sales performance can be misleading at best and counterproductive at worst.
This is because the total sales revenue per sales rep is a simplistic measurement that doesn’t reveal the underlying dynamics of where marketing and sales are strong or weak. Marketing may be handing weak leads to a strong sales professional, for instance, making the seller look worse than his skills allow. Or a rep might be closing sales and generating a high total sales volume, but half the cross-sell opportunities for his prospects go unrealized while another sales rep could better uncover these hidden opportunities.
Total sales revenue simply does not capture enough operational intelligence for sales performance optimization.
Many sales managers know this. The problem is that measurement beyond sales quota achievement is hard; firms must account for lead, pipeline, human and market factors that come into play. The data for this operational intelligence is there in CRM systems, but it often is incomplete, inaccurate or insufficiently structured. So sales teams tend to measure on a few key performance indicators, and CRM data is used primarily for forecasting purposes.
Getting beyond these simplistic metrics is important for the operational intelligence that businesses need for improved sales performance. This requires looking at both marketing output and sales performance.
Let’s take an example.
Imagine two sales reps Bob and Sue who work in the same team. At the end of the quarter, Bob has signed $1,000,000 worth of bookings, and Sue $800,000. Without a clear picture of the team’s effectiveness, Bob appears to be the highest performing seller.
When a firm is able to take into account the true dollar value generated by lead generation and sales development efforts, it is able to compare the lead value received by a sales professional with the added value the seller has contributed to it.
In Bob and Sue’s case, it’s possible to calculate the value of leads they received and compare them with the actual value they signed. And it turns out that Bob actually received $500,000 of leads and pipeline value from marketing, while Sue only received $200,000. Bob actually contributed less to the business than Sue, even though at a superficial level his numbers were higher.
As this example shows, the best seller on the team isn’t necessarily the one who has signed the most contracts, it is the ones who have added the most value to the leads and opportunities received by the marketing and sales development teams.
It may be that other sales professionals appear to sell more because they’ve received more valuable leads from marketing, or because they work a territory that has greater demand than another rep. External market factors such as a local competitor leaving the market might also distort the picture of the seller’s performance.
Artificial Intelligence Makes it All Possible
Improving sales performance requires better operational intelligence. The problem, as stated above, is that most firms cannot effectively analyze their business data comprehensively enough for this insight.
The good news is that advances in statistical science, machine learning, natural language processing, and AI allow businesses to exploit sales data and CRM records for new levels of understanding previously not possible.
With AI, companies are now able to measure and account for the exact value created by marketing campaigns, the value generated by a sales development team’s prospecting, and the qualification efforts, distinguishing them from the value created by the sales professional who converted those qualified opportunities into signed contracts.
By looking at the multiple factors that make up a sale, artificial intelligence allows firms to break out the individual performance of every seller in the organization. From this, companies can immediately generate more revenue by allocating higher value leads to the most effective sales reps and train those reps who are underperforming.
Cien delivers the intelligence needed for this more sophisticated analysis. The first step to measuring sales and marketing’s contribution is to request a Hidden Revenue Assessment.