Miller Heiman Blog
The System that Works
One of the things that Miller Heiman does differently is we start with the understanding of the sales leader’s world. The Miller Heiman Sales System®
is a way for our customers to organize their strategy to have more productive interactions with their customers.
The key to everything we do at Miller Heiman is based on the premise that all strategies have to emanate from
customers’ requirements. Everything starts with the customer, that’s why the customer is at the center of the Sales System.
If you’re a sales leader, you can organize your challenges by thinking about your customer management strategies that you already have in place. For most sales leaders, their customer management strategies are focused around how their organizations:
When you build a customer management strategy around your customer, you can better service their needs.
With a plan in place, now you can better enable the system by making sure you support, organize and execute your customer management strategies by:
Having the right people in place
Giving managers a clearly defined and specific role
Enabling IT systems to support all other areas – CRM, Marketing, Compensation
- how to make the right decisions to move the organization forward in a strategic manner. You need research to measure and analyze the best practices and you need access to relevant innovations and emerging trends that will help customers make decisions and execute upon their sales strategy.
The Sales System is really a tool for sales leaders to use to organize challenges. We have found through our 35-plus years of working with sales leaders that this ends up being a really good tool for sales leaders to build a consistent framework for strategies that move their organizations forward.
Posted: 12/6/2013 10:40:21 AM
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Learn from the Best to Create a World-Class Sales Organization
Sales leaders often have a good idea of how their teams need to grow, need to improve and need to change. This knowledge can be based on an analysis of performance metrics. Or it can be more subjective, based on observations, experience and instinct. Regardless of the source of this knowledge, sales leaders should also look externally to the best practices of other sales organizations that have been successful in a similar sales environment to validate strategies and build the business case for change.
For the experienced sales leader and newly promoted alike, benchmark studies provide independent data and insights that help identify areas for improvement. The 2013 Miller Heiman Sales Best Practices Study
provides several instructive data points on how World-Class Sales Organization monitor and leverage the best practices of their top performers.
One of the interesting discoveries from our 2013 study was how well World-Class Sales Organizations track the behaviors that lead to results. Of the respondents to our study, 93 percent of those achieving World-Class performance said they knew why their top performers were successful
while only 34 percent of all respondents felt the same way. Which group would your sales organization fall into?
Most organizations try to define the behaviors of top performers, but without the right tools, this can be challenging. Frontline sales managers go on sales calls with their people and hold frequent account reviews. These are good activities, of course, but the data revealed is largely anecdotal.
So how do World-Class Sales Organizations track the behaviors that lead to success? They monitor them through sales technologies such as sales force automation and customer relationship management systems, knowledge management systems and even social media platforms. These systems provide sales leaders with actionable data that shows which resources top performers use, how they use them and at what stage during the cycle. But World-Class Sales Organizations don’t stop there. In the 2013 study, 89 percent said they leverage the best practices of top performers to improve everyone else
Joe Galvin, Miller Heiman’s Chief Research Officer often says, “You can’t manage metrics – you can only measure them
.” However, you can manage the behaviors that impact those metrics. Tracking behavioral data in CRM as well as documenting and replicating the best practices of your most successful sales people are effective ways to influence metrics. Behavioral assessments are also a very effective way to benchmark organizational behaviors and identify areas for improvement. If are interested in more information on benchmarking and our World-Class Sales Performance Studies, read our Research Note Benchmarking: Measuring Improvement.
From all of us at Miler Heiman, have a happy and successful 2014!
Posted: 12/4/2013 6:00:00 AM
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4 Catastrophic Mistakes B2B Companies Make with Inside Sales
Organizations are recognizing the strategic importance of small and midsized businesses on revenue growth and customer retention. Field salespeople are assigned to the largest customers and prospects and have no capacity to call on these smaller accounts. Inside sales representatives have greater bandwidth to manage more accounts, cross/up sell and increase customer loyalty in this critical market segment.
Without the right training, compensation, hire and technology, inside sales representatives will fail to meet their objectives and the organization will continue to experience high turnover. Here are four catastrophic mistakes made by B2B organizations that can spell the difference between market domination and being an also-ran.
#1 Training Them Like Customer Service
It’s all about perception. Many sales organizations view their field teams as highly strategic and the inside teams as purely transactional or as customer service reps. These companies will send their field sales teams through Miller Heiman training yet offer only customer service and sales support training. In today’s complex B2B sale, your inside sales rep can spend as much or even more time with a prospect than field sales. They need to know how to sell.
#2 Don’t Pay Them What They Deserve
Inside reps identify and close revenue-generating sales opportunities. Inside reps are field reps on the inside and need to be treated as their field counterparts. Their compensation strategy, plan, structure and governance will generally mirror that of field sales. In many cases, this may mean redefining their compensation plans from a flat salary or hourly basis to a direct and variable compensation but also include metrics for inside-specific tasks such as dials per week and number of customers contacted.
#3 Hiring the Wrong Person
Building a high-performing inside sales force requires hiring people with sales experience or an aptitude for sales. The hiring profile of an inside salesperson must align with the competencies, job duties, and compensation of the field person. Inside sales typically experience a higher turnover rate than field sales. Using a strong hiring, training, and coaching process, more progressive organizations are able to keep their involuntary turnover rates in the 10-15 percent range.
#4 Don’t Have the Tools
The inside rep must have both strong selling skills and customer support skills. They need to master the internal customer data, phone and CRM systems to manage their business. Just like their field counterparts, they need consistent coaching to be successful. Inside managers spend one-on-one time with their inside reps reviewing their funnel, discussing account strategies and listening/observing calls.
It’s not called the inside sales department for nothing. If you’re treating your inside sales role as little more than a glorified customer service rep, you might want to rethink your sales model – fast. While I still see these four mistakes all too often, organizations that focus on excellence in inside sales consistently outperform their peers.
Posted: 12/2/2013 6:00:32 AM
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A Culture of Chaos
Herding cats, running a goat rodeo or watching a 6-year-old’s birthday party all carry the same chaotic visual. Highly independent, strong willed individuals each pursuing a different objective or goal differently – all at once. The ensuing chaos is both impressive and fun to observe. Cats, goats and kids generating crazy energy, lots of disconnected activity and false starts resulting in random and predictably unpredictable results – except for the eventual mess the adults will need to clean up.
A sales organization that culturally relies on the judgment of each sales rep to individually create customer strategies, tactics and messages will have the same predictable unpredictability. Given wide latitude to define what is or is not a qualified opportunity and how to bring that opportunity to close promotes inefficiency and wasted energy as sales reps try to figure it out. More importantly, forecasting becomes impossible and funnel values worthless when everyone evaluates opportunities differently.
50 years ago, sales leaders had little choice but to rely on a salesperson’s judgment. They would try and hire the best people, give them a pitch and turn them loose. The unstructured world of selling in those days demanded a highly leveraged compensation because managers had no idea what sales reps were doing. A sales rep would be gone for two weeks with limited to no communication. Information about clients was hoarded by sales reps as protection against poor performance. Collaboration was limited as everyone sold their own way. As communication technologies improved, managers were able to connect more frequently with their reps and they began to recognize the activities, behaviors and messages that worked.
Fast forward to today and we see World-Class Sales Organizations relying on their customer management strategies to power sales professionals with a proven framework, strategy and terminology to drive performance and productivity. Their strategies provide the foundation sales professionals use to focus on the customer and their strategic issues. Opportunities are assessed based on common attributes by everyone.
For the sales leader, forecast accuracy and funnel confidence provides them the visibility they need to lead the business. They make better decisions to optimize and prioritize support functions for training and enablement. More importantly, the power of technology can be leveraged. Instead of wasting thousands of dollars per rep on a SFA system that produces meaningless data, they are able to generate analytics and begin to capitalize on the emerging insights made possible with big data.
Our research, data and sales experience highlights the fact that only through the regular and natural use of customer management strategies by the sales organization can sales leaders deliver repeatable and sustainable performance.
To learn about the activities, behaviors and performance of World-Class Sales Organizations, participate in the 11th annual Miller Heiman Sales Best Practices Study
. In exchange for your collaboration, we’ll share the results and also invite you to participate in our research community where we will share our insights with you through the year.
Posted: 11/26/2013 1:05:00 PM
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3 Steps to Predictive Funnel Management
Forecasting! As a sales leader, who hasn’t felt the stress and worry about their forecast. Your credibility is on the line. Do you sandbag? Should you tell management what they want to hear and hope for the best at the end of the period?
For as long as the profession has existed, salespeople, sales managers and business leaders have struggled to predict which opportunities will close this month, next month and the month after. The further out they go, the more unpredictable the numbers are as opportunities that were scarcely on the radar suddenly close and “hot deals” grow cold.
Unfortunately, poor funnel management leads to a host of problems. Business leaders make the wrong decisions based on erroneous predictions. Sales managers approve discounts where none are warranted. The profession of salesperson becomes more stressful than it already is. Clearly, there are benefits to be gained from improving funnel management.
A sales leader who is consistently accurate is a rare thing in the world of selling. But those who crack the code have credibility in their organization, and the leader’s strategic importance is enhanced.
In my work with sales organizations, I see three major obstacles to predictive funnel management:
Inconsistency in how the sales team defines an opportunity’s position in the funnel. It’s not just inconsistency between salespeople. Without a common framework, even an individual salesperson cannot be consistent.
Too much focus on the salesperson’s actions and not enough on the customer’s buying process. Movement between sales stages must be based on actions buyers take, not on the salesperson’s completion of a task.
Inconsistent reporting of opportunities. To avoid scrutiny, many salespeople wait to report a deal until it’s about ready to close.
With all three strikes against an organization, it’s no wonder forecasts are wildly inaccurate, but even one of these obstacles can cause problems. For example, let’s say your team agrees on sales stage definitions and the buying actions needed to progress an opportunity down the funnel. If they aren’t reporting opportunities until they’re ready to close, any forecasts further out than a few weeks are going to be inaccurate.
The key to addressing all three issues is transparency
. Essentially, transparency removes the “gut feel” from sales and replaces it with a far more reliable method of managing the funnel.
Driving transparency and, therefore, predictive funnel management is a three-step process:
Step 1: All parties involved in funnel management: frontline sales, management, sales operations, marketing etc., must define and agree upon a common definition of the stages in the sales funnel.
Step 2: As part of the common framework, there must be agreement on what buying actions must occur for an opportunity to progress down the funnel.
Step 3: Opportunity identification and progress through the funnel must be made transparent throughout the organization.
Transparency is the hardest part. In the past, it called for spreadsheets and lots of funnel reviews. From information gathered during the reviews, the sales leader could roll up a number and apply other factors, including gut feel and political expediency, to come up with a prediction. Too many organizations still do forecasting that way.
Transparency requires the organization to rely less on the subjective and more on the objective. In steps one and two, the common framework lays the foundation by enabling the consistent application of the sales methodology. To achieve transparency in step 3, salespeople need to be consistent in the way they report opportunity progress and funnel status to their managers. Sales managers, in turn, need to be consistent in the way they report progress further up the sales hierarchy. Using a common tool for funnel reviews and reporting helps remove the subjective nature of the forecast.
Stay tuned, as we’ll be releasing some new tools in quarter one of next year that will make predictive funnel management even easier. In the meantime, if you have questions or comments, you can reach out to me at email@example.com
Posted: 11/26/2013 6:04:08 AM
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Sales is Competitive
Professional selling is competitive. Make no mistake. Salespeople compete to identify opportunities, compete to gain customer credibility and compete to win. They compete with each other for resources, recognition, rewards and the next, more lucrative sales role. They compete as individuals, together in teams and as organizations in their markets. They must rise every day prepared to compete or be left behind. Competitors love to keep score. They love to win. That’s why they thrive in professional selling.
Sales leaders must deliver results, now. This month, this quarter, or they will be gone. They must compete to win, just as the sales professional. That’s why sales organizations must have performance-driven cultures. Quotas and compensation plans are put in place to clarify strategy, focus behaviors and reward results. Leaders make sure the selling environment is one that truly focuses on the client and their results, not just putting numbers on the board. They recognize that being competitive is about sustaining winning. From transactional sales at the SMB level to the largest, most strategic accounts, salespeople must compete in order to perform.
Some suggest that sales doesn’t need to be so competitive. That salespeople should be given maximum latitude as to how and when to connect to the customer, what activities to do and when the business might close. In effect suggesting that the performance-driven sales culture is wrong and should be replaced with a culture where everyone feels good about what they do, irrespective of results, like the school field day that has replaced traditional competition games with activities that award ribbons to all participants. In sales there will always be winners and losers.
What differentiates the sales role from other knowledge workers in the enterprise is the precision with which sales performance is measured. In other knowledge worker roles, individual contribution is difficult to quantify and impossible to reward. While the project and initiatives they work on are important, they can rarely be quantified or connected to revenue. They don’t have to directly compete against equally smart, insightful and highly motivated people trying to prevent their success. That’s why most employees have base salaries and fractional bonus plans tied to corporate or business unit results and their managers perception of how they perform. Sales is about results.
Each business has its own unique set of challenges. Effective listening and authentic curiosity with a focus toward improving one's understanding of the customer is the foundation that fuels compelling solution design. It's hard work; it takes intelligence, creativity, ingenuity and, above all, the desire to compete. Business-to-business selling has been, is and will always be a highly competitive profession. It’s a high stakes, competitive game with very precise standards for performance and absolute clarity about results – it’s not an activity.
At Miler Heiman, we study the behaviors, attributes and performance of World-Class Sales Organizations. Join us in the 2014 Miller Heiman Sales Best Practices Study
to gain access to the insights from this study throughout the year in research notes, webinars and our executive summary report.
Posted: 11/22/2013 6:01:38 AM
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What does it take to get closer to customers? In a word: collaboration.
Getting close to customers matters, and this requires a healthy amount of collaboration. For our customers who are able to drive better results for their organization and better outcomes for their customers, collaboration is the cornerstone to driving these results.
Thinking about one of our clients who spoke at our recent Sales Performance Summit in San Diego, GE (General Electric), as an example. The focus of this presentation was the significant impact that GE has made on their business by getting together and rallying around their most important customers, pulling in disparate teams that support them, and coming up with a customer-centric strategy. This approach takes into consideration the way that GE wants to approach each account, but, most importantly, the way the account wants to buy from and work with GE.
This collaborative approach required leadership, sponsorship, clear and open communication, and tools and resources to be able to facilitate the conversations that drive the correct and best outcome for the customer. What GE found from the work they have done, from the very first test to the well-defined process they have branded internally, was an extremely positive outcome for their business and for their customers. They call this effort a “war college.” Teams get together and work on their most important accounts by region and by line of business.
As a result of the war college effort, GE is seeing better outcomes, including additional opportunities within these accounts. The financial results of the war colleges has been significant, and customer satisfaction and perception with GE has been undeniable improved.
When looking for examples of world-class organizations, there is no doubt that GE comes to mind at the top of the list. Throughout our long-term relationship with GE, it is clear that they believe relationships matter. They continue to invest to get closer to customers. The best of best are always looking to do more, do better, and this is true of GE.
Collaboration, when it is done well, provides a superior outcome. Many people believe collaboration can slow things down or view it as a check-the-box approach so that everyone has some level of visibility. So they don’t collaborate. Real collaboration is about getting people to buy in and build better results for their customers and their organizations. Congratulations to GE for cracking this code as they continue to better their organization and get closer to customers.
Find the latest thinking about what it takes to be a world-class organization by joining the 2014 Miller Heiman Sales Best Practices Study
, open through November 29.
Posted: 11/21/2013 6:01:04 AM
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Foundation of a Performance Culture
The foundation of a performance culture in sales does not begin with profiles and assessments. It doesn't begin with a comp plan or a new CRM system with management reports. A sales performance culture requires the regular and natural use of core customer management strategies that are proven and scale across the organization. From that foundation, predictable funnel management is established based on how customers buy. Sales professionals can focus on the customer, frontline sales managers can coach to success, and sales leaders can confidently make decisions to lead the organization.
Customer management strategies provide the necessary frameworks that replicate success. They enable sales management the ability to coach for performance versus status. They are the baseline for predictive funnel management. They give sales professionals the essential tools to focus on the customer. They provide the structures and terminology that allow anyone customer facing or engaged in the selling cycle to collaborate internally. Trying to improve performance across an organization without them is virtually impossible.
Predictable funnel management is the outcome. Frontline sales managers that coach opportunities based on where the customer is in their decision-making process are better able to verify opportunity status. From there, based on knowledge about the customer’s concept, strategic and tactical decisions and priorities can be made. Predictable funnels will yield forecasting accuracy that is world class and the proper direction for selling activities that are tied to customer actions.
When we talk about World-Class Sales Organizations a few things emerge that define why customer management strategies are the foundation of a performance culture. Sales professionals use their customer management strategies to get close to customers and to prepare for those interactions. Frontline sales managers are fluent in those strategies and use them as the basis of their coaching. Sales leaders have confidence in the funnel data being reported because they reflect the customer management strategies that were built on customers successfully buy. Sales leaders make sure that the sales manager role is strategically supported and invested in properly so that performance is established, replicated and sustained.
To learn more about the behaviors, attributes and performance of World-Class Sales Organizations, participate in the 2014 Miller Heiman Sales Best Practices Study
, the longest, continuous sales behavioral study in the world. Join our community of customer-oriented sales leaders and professionals. In exchange, we will share with you the research and insights from this study throughout the year in research notes, webinars and our executive summary report.
Posted: 11/20/2013 6:06:57 AM
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The Noise Before Defeat
"Strategy without tactics is the slow road to victory. But tactics without strategy is the noise before defeat."
— Chinese military general, strategist and philosopher, Sun Tzu
Today's sales leaders do not have the luxury of a slow victory or a major defeat in any context. Sales professionals can’t afford to individually recreate account or opportunity tactics for every customer situation. Both need a strategy to guide and prioritize their activities.
Strategy can be something that gets in the way of activities. Sales leaders avoid developing a real strategy because it slows down the initiatives they want to execute. Many times leaders feel that if they just start doing things then the strategy will most likely begin to unfold. While there is certainly value in an action orientation, action needs to have purpose. Almost inevitably this mistake ends up derailing initiatives and forcing leaders to go back to the drawing board. But it doesn't have to be that way.
A clear strategy is the connecting point for all parties. Whether it is a new compensation plan, a different approach to building a coverage model, or a new way of managing customers, a clear strategy allows the organization to gain agreement on direction as a starting point. The sales force will reject or ignore any tactical initiative unless they understand the strategy. A tactical leader may think he or she is making progress because everyone appears to be complying. But when execution falters, a new tactic will be launched repeating the noise before defeat.
When there is a clear understanding of the strategy and why it matters, then almost everyone can quickly gain agreement and evaluate the best tactics to make it happen. With a strategic frame of reference, people can contribute ideas and insights. But without a clear understanding of strategy, it is impossible to get everyone moving in the same direction.
Strategy provides the framework and focus for execution. It targets resources, prioritizes activities and defines output. For the sales leader, customer management strategies, how the sales team connects with their customers, will dictate their business management strategies. For the sales professional, strategy provides a proven account, opportunity or interaction structure, common language, and clear objectives. Strategy makes collaboration possible and binds sales organizations to a common goal.
We analyze the strategies, tactics and behaviors of World-Class Sales Organizations at the Miller Heiman Research Institute. We capture and share these findings through the largest and longest-running global research initiative focused on professional selling. Share your perspectives by joining us in the 2014 Miller Heiman Sales Best Practices Study
. In exchange, we will share the results and insights from the study when available in the first quarter of 2014.
Posted: 11/19/2013 6:02:31 AM
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Trial and Error
Inventor Thomas Edison, dubbed the “Wizard of Menlo Park,” is credited with saying, “I have not failed, I’ve just found 10,000 ways not to do it,” summing up the inventor’s dilemma. With no proven approach or established best practices to follow, he had little choice but to “figure it out,” one failure at time. The result, maybe on attempt 10,001 was the light blub.
Left to figure it out, one customer and opportunity at a time creates a performance dilemma for the sales rep. They can’t afford 10,000 failures before they begin to recognize and apply the patterns, activities and messages that happen when customers buy. They can’t lose winnable opportunities because they missed a common variable or failed to execute on a specific selling activity. They don’t have time to individually craft uniquely brilliant, one-off strategies for each interaction only to see them fail. Sales professionals must deliver revenue and they have to perform, now. That’s the reality of professional selling.
To perform, sales professionals must efficiently manage multiple accounts and opportunities simultaneously. Every customer decision is made for different reasons, but the activities, behaviors and criteria that lead to a customer decision follow a recognizable pattern. These patterns form the basis of the customer management strategies that highly productive sales professionals use repeatedly to connect and interact with customers. The only way to successfully manage enough accounts and close enough opportunities to achieve quota is through the efficiency and productivity realized from naturally and regularly following proven customer management strategies.
Absent of a defined strategy to follow, individual tactics and activities will flourish as salespeople flail away trying anything to gain traction. New hire time-to-time productivity will become much longer as new salespeople will need more time to figure it out individually leaving a trail of blown opportunities. Frontline sales managers will be unable to coach as individualism will trump organizational execution and performance. When a salesperson leaves, account transitions will present more creative opportunities for the new sales rep to figure out a new account, most assuredly with a different approach from the exiting rep. The customer will need to start over as well with the new sales rep because there will be no corporate relationship, no sense of brand loyalty, only the broken individual connections with a now departed rep. The good news is transition meetings will be quick.
More complex selling environments, involving multiple customer-facing sales resources, will require even more time to collaborate as now the group must determine how they will interact with a customer on each opportunity. The team will need time to establish their special framework for managing that account, the factors they think that matter, the terminology they will use and activities that need to be done, and then consider the unique message to deliver. After each interaction, the group will need to reconvene to create the next customer interaction.
On the white board, empowering highly autonomous and creative people around a problem might appear viable. Hire smart people, give them a pitch and let them figure it out. Ask a salesperson and they would love a world where they don’t have to worry about quarterly numbers, commission dollars or managers asking about performance.
In the real world of sales, where performance drives income, time is money. Sales leaders won’t be sales leaders very long if they don’t deliver, every month, quarter and year. Salespeople won’t last long either if they can’t quickly and efficiently create opportunities, successfully manage opportunities and manage the customer relationships that lead to revenue. Every time you go for a ride, you don’t need to rebuild the bicycle.
At the Miller Heiman Research Institute, we analyze the behaviors, attributes and performance of sales organizations of all sizes, geographies and vertical markets to share our experienced-based perspectives about the always evolving world of sales performance and productivity. Join us in the 2014 Miller Heiman Sales Best Practices Study
, the largest, continuous sales behavioral study.
Posted: 11/18/2013 6:04:38 AM
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