Miller Heiman Blog
Mastering the Challenges of Appraisals
Year after year, the same story: review time.
For sales controllers, HR managers, and sales leaders, this means hectic times ahead: Getting the appraisal forms and related documentation out again, and reviewing sales performance from last year as well as operationalising the sales strategy for 2015.
Reviews are about:
Breaking down sales targets and assessing past sales achievement, resulting in financial metrics.
Planning sales and personal-development initiatives for the frontline sales managers.
Facilitating two-way feedback loop between sales leader and frontline sales manager, providing coaching to the sales manager. By ensuring prioritization of sales activities, the groundwork for the best possible way to execute the sales strategy 2015 is being laid.
In order to gain competitive advantage, how do sales leaders master the balancing act of moving away from one-off reviews to anchoring the measurement of performance as a means of systematically doing better? With the support of a continuous sales- and team-improvement process.
Setting up the process as a discipline
Sales leaders in B2B sales are able to take advantage of approved tools such as the Deming Cycle or PDCA, which stands for plan-do-check-act. It has demonstrated its value in the manufacturing and project- management environment:
Plan: What goals do you want to accomplish? What specific objectives, customer segments, markets, and also softer targets have been identified?
Do: Where do you stand in terms of achieving your results? Sales managers should track movement through the buying process. For sales management, it would require paying attention to strategies that are aligned to changing market requirements.
Check: What do you want to fix or avoid? What needs to change and why? What plan do you have to improve?
Act: What corrective measures are necessary to take? What is working well within your team? Are there sales best practices that could be leveraged?
Implement: Execute the plan and enable the team. This phase requires specific sales activities—and then going back to the planning phase. How disciplined is your team in implementing the plan?
Ensuring suitable measurements and alignment
What quantitative and qualitative goals within your organization are to be met? Ensuring that the agreed parameters are specific, measurable, accepted, realistic, and able to be executed in a timely manner is crucial to the success of such a process. Are sales and marketing functions aligned to make execution of the 2015 strategy possible? Be aware that the objectives are linked to the overall corporate strategy and relate to the goals of the organization. Measure the success of your strategy by the impact it has in bringing about the expected results within the organization as a whole.
Taking into account time frames, ownerships, and activities
Similar to the sales cycles and differing sales activities in complex sales situations, the process timings, ownerships, and actions need to be adjusted accordingly. For example, instead of only acting by default toward the end of the fiscal year to achieve the targets within the last few weeks, schedule regular sessions over the year with the individual frontline sales managers so that the progress can be checked and corrective measures can be taken. Dedicated coaching meetings ensure that consistent improvements are made.
Making a continuous sales- and team-improvement process work
The sales-management adoption needs to be supported by a working system. This requires close collaboration, with sales driving the initiative and HR functioning as a business partner that allows sales leaders to reach their goals. The process is merely as good as its execution: Only with top management involvement are sales organizations able to make this disciplined, institutionalised process come to life. Organizations are then fully able to learn from within. Such initiatives may be kick-started through a program such as Advanced ConceptsSM, for example, which promotes better practices among sales professionals.
Would you like to share your challenges that you are facing in implementing a continuous sales- and team- improvement process? You can reach me at firstname.lastname@example.org.
Posted by Alexandra | Sales Consultant
Posted: 2/18/2015 6:00:00 AM
with 0 comments
Sales Call Basics Save the Day
One of the best things about the Miller Heiman Sales Performance Summit
is the opportunity to hear real stories from the field. I especially liked one that I heard this year about how a newbie salesperson used the sales call basics he learned in a Miller Heiman workshop
to save the day.
The salesperson and his team had an appointment to speak to one of the company's largest customers. They were scheduled to meet with the lead buyer, a 30-year veteran of the industry who was known for being somewhat difficult to work with. The young salesperson was 20-something and fresh out of sales training.
I'm sure you can already see the next part coming. Due to unavoidable circumstances, the rest of the sales team didn't make it to the appointment, and the salesperson had to meet with the buyer alone. I think this must happen to everyone in sales at least once in their career. I know it's happened to me, and I feel for the poor guy.
Well, he did his best. Having just gone through training, he had done a thorough job of call planning. He knew how the meeting should go, but he got a little nervous when he came face to face with this buyer. While fumbling around with his notes, the young salesperson confessed that he was a little new to selling and asked the buyer to bear with him. Then he told the buyer he'd spent some time thinking about what his company needed but that he wanted to make sure he understood the buyer's concept of a solution.
When the buyer saw the sincere interest the salesperson had for his company, he opened up and shared his thoughts. At the end of the interview, he even asked, "What else do you have in your bag?" The salesperson pulled out his Blue Sheet and the buyer took it from him and filled it in—without even being asked.
That last part earned him a little bit of ribbing when he got back to the office. The other salespeople couldn't believe he actually pulled out the papers and put them on the table. The salesperson was surprised to learn he wasn't supposed to do that. I think the other salespeople were just jealous that the young man was able to get more information out of the buyer in one afternoon than they had in years.
For me, the lesson learned in this story is that experienced sales professionals shouldn't get so wrapped up in their own egos that they lose sight of proven best practices. They may have developed their own way of doing things and been extremely successful over the years, but as this story shows us, sometimes we just need to go back to the basics.
Posted by: Bob Fuhr | Sales Consultant
Posted: 2/16/2015 6:00:00 AM
with 0 comments
In reference selling, timing is everything
Many successful sales executives have built their career on referrals. It seems they know just when and how to ask for a reference. But for most of them, it wasn't always that easy. Consider a young salesperson who gets this advice from his manager: "Remember to always ask the customer if they know anyone else who might be a good fit for our products."
On his next sales call, the young man sits across the desk from a customer and dutifully asks the question, "Who else do you know? …"
The customer scratches his chin and says, "I'm not sure. I'll have to think about it."
Discouraged, our salesperson packs up his briefcase and goes to his next appointment, during the course of which he repeats the same question and gets an almost identical response. Being the diligent young man that he is, he goes through the same routine, appointment after appointment, year after year, until he finally discovers a fundamental truth: In reference selling, timing is everything.
Earning the right to ask for a reference
It's too bad our newly minted salesperson's manager didn't coach him better. She could have helped him avoid years of frustration. Only after the customer agrees that the project goals have been reached has our salesperson earned the right to ask, "Who else do you know? …"
This means asking for a reference starts with having a well-defined sales methodology in which your sales professionals are trained to identify what problems the customer is trying to solve or goals they want to achieve. After all, if the salesperson doesn't know the objectives, he or she will never know when the customer should be satisfied enough to provide a reference.
Reference selling has never been easier
Thanks to platforms like LinkedIn, reference selling has never been easier. Once we know a customer's objectives have been satisfied, we don't have to ask them who else they know. If we're connected to our customers, we know who else they know. We can even do a little digging to see which of their connections are in the right roles and at the right types of companies for our solution.
Now when we ask for a reference, we can say things like, "I see you know Bob Smith over at Acme Widgets. …" This opens up a dialogue where you can learn more about Bob, about his company, and maybe even get an offer of an introduction without having to ask.
Sometimes the conversation will lead to a potential opportunity. Sometimes it won't. But I can say one thing for sure. Prospecting for opportunities through reference selling sure beats cold calling.
Posted by: Harry Hollines | Sr. Vice President, Business Development
Posted: 2/11/2015 6:00:00 AM
with 0 comments
Walking Away From Bad Deals
Losing is not a bad thing. Every selling situation is unique, and the expertise of the salesperson creates a level of adaptive intelligence that allows him to adjust to each customer’s situation in real time. Therefore, each opportunity, whether won or lost, expands the salesperson’s expertise, improving the outcome of future opportunities. Sales professionals develop a level of fluency how their solutions help customers achieve objectives and solve crucial problems. They understand how buyers determine the right solution and that lost deals play a crucial role because they emphasize learning about crucial activities along the customer’s journey more than the wins do.
What makes bad deals bad?
Bad deals are opportunities that have not been thoroughly vetted until it becomes apparent later on that there’s not a good fit between what we offer and what the customer needs. When we stubbornly pursue such deals, the outcome is anything but a Win-Win. Deals become bad when we get off track in the beginning of our engagement and we fail to fully understand what the customer needs to fix, accomplish, or avoid. Thus, we fail to communicate the right value proposition. Moving further along in our engagements without getting support from our customer prevents us from aligning our sales actions with the customer’s buying process. Deals turn bad when we ignore critical signs where our offering is constantly questioned and price becomes the main issue. Or, we fail to engage in a value-based dialogue or, the buyer repeatedly ignores jointly agreed-upon actions.
Why is it so difficult to walk away from bad deals?
Let’s have a look at Dan Ariely’s book Predictably Irrational
and the notion of ownership. He describes two quirks: falling in love with what we have and focusing on what we may lose rather than what we may gain. To this he adds, “The more work we put into something, the more ownership we begin to feel.” Finally, we even feel ownership prior to owning something.
Now, with Ariely’s insight, we can easily find numerous bad deal examples within the funnel. We continue to invest more of our own selling time and our company’s resources in opportunities that keep hanging in our funnel for far too long. Of course, we are confident that with added engagement and more resources we will recover from any delay and be successful in the end. An example would be where our loyalty to strong historic relationships with a customer (even though the company is no longer investing) makes us ignore a new emerging account. Another example is when we read about an exciting technology firm and, imagining what we could do for them, promptly put material together without having spoken with anybody. We hesitate to remove bad opportunities from our funnel because it will make us look like we’re not going to make forecast and we risk getting asked difficult questions from our manager.
When to walk away?
For a start, focusing on the facts helps us to stay on track. Using the criteria for ‘Ideal Customer’ or ‘Ideal Opportunity,’ as well as using the most recent customer data for scoring against such standards, helps us to avoid falling in the biased-ownership trap. Focusing on objectivity is best supported, with 85 percent of world-class sales organizations using specific criteria established to define a strategic account, compared to 34 percent of all other participants in the MHI Global Sales Best Practices Study.
We know all about ‘lose fast.’ When you see the first signs, as described here, it is time to question whether to keep investing in an opportunity. Talk to a person you trust within your client’s company, and ask about the validity of your joint project. Involve your sales manager, someone from marketing, or a trusted person from your leadership team to get another perspective. In the MHI Global Sales Best Practices Study,
94 percent of world-class sales organizations are confident in their management’s team effectiveness in helping their sales team to advance sales opportunities, versus 34 percent of all others.
Focusing on your ideal customer and adding clearly defined opportunity criteria help us avoid falling into the trap of bad deals. Consistent managerial coaching and tracking opportunities in CRM bring further objectivity into our daily work and help us to lose fast, based on transparent and fact-based decisions.
Posted by: Klaus Leutbecher | Sales Vice President
Posted: 2/9/2015 6:00:00 AM
with 0 comments
Stay the Course
We’re more than a month into the new year and sadly, statistics say that those of us who made resolutions have already broken them. A Forbes
article notes that over 40 percent of Americans make New Year’s resolutions, but just 8 percent of those who’ve made resolutions will actually achieve their New Year’s goals. The most recognized antidote to best intentions gone astray is planning. And there’s no shortage of thinking about the importance of making a plan in a quest for success. From Benjamin Franklin’s “If you fail to plan, you are planning to fail!” to Robert Burns’s “The best laid schemes of Mice and Men oft go awry/And leave us nothing but grief and pain/For promised joy!”
In sales, having a good game plan is key, but then what? By this time of year, our quotas may have been reset but the question remains: In reality, how will you actualize your plans? How will your team accomplish its mission and actually reach your 2015 sales numbers?
What we often forget is the importance of staying the course
: making sure that we reconnect from time to time with the original plan so as to make adjustments and refocus energy and resources. It reminds me of the optimistic lot who, at the beginning of the year, proclaimed their New Year’s resolutions of exercising more, reading more books, or volunteering more in their community but by February has forgotten all the good intentions and excitement. It happens to the best of us but can be avoided if we set out to actualize those resolutions with specific and tangible strategies that can even be plotted along a timeline. “I’ll increase my stamina over the course of this year by adding another half-mile to my morning run each month.”
So what are those specific strategies and steps you can take to give your sales goals the best shot at becoming sales realities?
Taken from a range of our intelligence, here’s a list of important insights we teach at Miller Heiman:
Make sure company objectives are clear to salespeople and that they understand their role in helping to achieve those objectives.
Formalize sales processes and establish a balance between compliance with sales processes and recognizing individual perspectives of salespeople who understand their customers.
Remember to focus on the customer. Sam Reese, former CEO of MHI Global, wrote an article about planning in which he noted that “the winningest organizations have unlocked the secret: to put the customer at the core.”
Use data analytics as tools, but remember the importance of building individual relationships and helping your sales team develop perspective and intuitiveness.
Support salespeople through coaching and mentoring.
Having a sales plan is crucial and requires understanding of your company’s resources, market realities, and what’s possible within a given time frame. Staying on track is critical to the success of that plan and requires tenacity, stamina, and ongoing recommitment to the plan.
Posted by: Jason Buma | Sales Vice President
Posted: 2/4/2015 6:00:00 AM
with 0 comments
Old Accounts, New Opportunities
It is not uncommon for sales professionals and organizations to operate too narrowly in the relationships they have with customers. They can easily get stuck in one swim lane with the contacts they have developed and the products or services they sell. Spending time assessing what is going on across their entire customer’s business and connecting with a broader contact base (think “high, wide and deep” relationships) can spawn many new and previously unidentified potential opportunities.
When you look at your existing customer relationships, look for opportunities where you can provide more value. Analyze what they're currently buying from you and then find the gaps. Are there complementary services or products that you might be able to provide for them that can boost their growth and performance?
Make sure too that you leverage the relationships you have by asking for referrals. This has been a very traditional practice in sales. I've been in sales 30 years, and getting referrals was always one of the top ways to build your practice and your business. In the B2B world, a lot of people have lost sight of that. It doesn't seem to be as fashionable as perhaps it once was, and yet there's still a lot of opportunity to find new clients by asking your customers for other people who could benefit from your services.
One thing that's never really changed and still is a big factor in sales is building trust. Integrity, respect, and credibility have always been integral in forging long-term relationships. In the complex selling world, it's even more complicated because there is more than just me and you in the relationship. As a seller you have a team; there are multiple people dealing with the client. And that makes it a bit trickier to engender that type of long-term relationship. You have to make sure that you're connected in all the places you need to be, with all of the key players, but also that your team members understand their roles and and how they can help support and drive that, too.
The foundation for creating new opportunities with existing clients lies in making sure you're providing value. Set up checkpoints and regularly get feedback from the customer as to how you're performing. You can make that as formal or informal as you see fit. To do it formally, set some criteria that can be evaluated and measured, and establish a cadence of quarterly business reviews. Informally, you can simply keep your finger on the pulse of what the customer is thinking about and how that customer feels about the relationship. The important thing is to focus on results for them and help drive results in their business. That’s how you create a solid platform for an enduring, long-term relationship.
Posted by: Damon Jones | Sales Vice President
Posted: 2/2/2015 6:00:00 AM
with 0 comments
Make 2015 the Year You Segment Your Channel
At this time of year, I often get asked, "What's the one thing we can do to improve our channel sales this year?"
The list of actions organizations can take is long and varied: market mapping, better territory planning, improving hiring profiles, more comprehensive onboarding of channel managers and partners, targeted compensation plans. … However, when pressed for the ONE thing, I don't have to think very long to come up with an answer. Most of the time, I don't even need to know much about your situation. The answer is the same for almost every channel leader I talk to.
Make 2015 the year you segment your channel.
No, I'm not talking about vertical segmentation—although that could be important for you. I'm not even talking about volume vs. niche partners, despite the focus we've placed on this topic in recent posts. I'm going back to the basics: Achievers, Believers and Deceivers.
Very quickly, allow me to define these terms:
Achievers - These are typically your best partners no matter how you slice and dice your channel segments, but it’s more than just revenues that define them. True Achievers are well-funded, have a clear strategy, sell vigorously into the existing customer base and, on the whole, create their own leads, close their own deals, and deliver the complete solution.
Believers - Believers make up the bulk of most channels. If your channel follows the typical 80/20 rule, they may be in the top 20 percent, but it’s not usually the result of their own efforts. All too often, they have managed to curry favor with their CAM, who feeds them the best leads and helps them close the business. They could become self-sufficient Achievers except for a few gaps in their business strategy.
Deceivers - These are the “squeaky wheels that get the grease.” By complaining loudly, they convince the organization to dedicate resources, but at the end of the day, Deceivers aren’t willing to do what it takes to become Achievers.
I've worked with some organizations with fairly deep pockets, but not a one of them has ever had a budget that outpaced their ideas. Those of you with shallow (or empty) pockets are even more challenged. Focusing your resources on those partners who warrant them is one of the best—and one of the easiest—things you can do to get off to a great start in 2015. The clock has been reset. It's time to start fresh.
Posted By: Rich Blakeman | Managing Director, Channel Enablers
Posted: 1/28/2015 6:00:00 AM
with 0 comments
Unlocking Forecast Predictability
This time of year, I get a lot of calls from potential clients with one thing on their mind: improving forecast predictability. Yes, they want to generate more opportunities. They want to improve velocity at every stage of the sales cycle. They want to be better closers. But most of all, they want to improve forecast predictability. Perhaps it's because so many of them were so far off the mark in 2014.
An amazingly simple solution
Unlocking forecast predictability is simpler than it looks. Forecasting is like a locked door with a sophisticated-looking locking mechanism. You approach it, assuming that the key must be equally complicated. As you try different keys on your chain, you start with the fanciest ones first. You might even try different techniques with these keys, turning them first one way and then the other. Only after you've exhausted the "obvious" possibilities do you try the only one that remains.
When I talk with sales leaders, they often tell me they've "tried everything." They have a defined sales methodology that clearly delineates the stages of the sales cycle. They've invested in training and hired only the best. They've also invested in sales force automation and even have fairly decent adoption rates. They've cajoled and they've threatened—but they still have no confidence in their forecasts.
You keep using that word ...
When I hear sales leaders and sales professionals talk about opportunities that are qualified, committed, hot, or whatever—the actual term used doesn't matter—it reminds me of a line from the movie “The Princess Bride”: "You keep using that word. I do not think it means what you think it means."
The problem in many of these organizations is that their funnel terminology means something different to everyone on the team. The organization may have defined the sales stages, but they haven't gone so far as to define how an opportunity progresses from one stage to the next. The individual members of the team think they're speaking the same language, but they really aren't.
For example, does having an appointment with a prospect make them an opportunity, or do they need to have a timeline and budget? Is a qualified prospect one who is definitely going to buy something, although perhaps not our solution? Or is a qualified prospect one who is going to buy something, and we are favorably positioned to win the opportunity? What level of intent to buy signals a committed prospect?
Don't forget the customer
When defining the actions that move an opportunity from one stage to the next, it's important to remember that it's the customer who needs to take action, not the sales professional.
When I work with sales organizations, I tell them it's like dating and getting married: You don't go from seeing someone whom you might want to marry to getting married. At least most people don't. There are a series of stages along the way, and no matter how much you might want to get married, the object of your affections needs to take action for the relationship to progress from one stage to the next.
Posted by: Carol Reynes | Sales Consultant
Posted: 1/26/2015 6:00:00 AM
with 0 comments
How much is discounting costing you?
Discounting is a perennial problem in many organizations. Year after year, salespeople discount to meet their numbers. In some cases, all the customer has to do is ask.
The metric no one wants to know
In all the end-of-the-year analysis sales leaders do, there is one metric almost no one wants to look at—how much money was left on the table due to discounting. Since it's a bit scary to analyze this for your organization, let's take a look at a hypothetical example.
If a company brings in $100 million in sales a quarter, and the average discount is 10 percent, the sales team "lost" more than $11 million in discounts. If that happens every quarter, that's over $44 million a year.
It makes you want to know how much they missed their numbers by, doesn't it?
The answer to the discounting problem
I'm sure a lot of you are thinking, that's all well and good for fictitious company, but we have to discount to win the business. I'm certain that's what you hear from your salespeople when you threaten to take away their authority to discount on a whim.
Well, let me tell you a real story about one of our Miller Heiman customers.
This manufacturer knew that its salespeople were discounting almost every sale by at least 5 percent. However, they understood their wins and losses enough to know that when they fully understood the customer's requirements, they could increase the invoice price by 5 percent and still win the business.
Obviously, the key was to teach every member of the sales team to uncover the customer's needs before proposing a solution. In a first wave of training, the company sent more than 300 sales professionals through our programs. Later, we conducted an additional wave of training for the salespeople in Europe. The result: Profits have increased by 30 percent.
And who said solution selling was dead?
Posted by: Jennifer Young | Director of Sales
Posted: 1/21/2015 6:00:00 AM
with 0 comments
Industry 4.0: A Future Success Story
In the end of November 2014, I visited an important automation exhibition and spoke with many sales and marketing leaders about their expectations for 2015. The good news is the German trade association ZVEI reported steady and healthy industrial automation growth globally, from €357billion in 2011 to €417billion in 2012. The bad news is most sales and marketing leaders are skeptical about such growth and are not supporting a positive outlook.
Let’s have a brief look into today’s global manufacturing technology and the factory of the future, Cyber-Physical-Systems ‘CPS,’ or Industry 4.0. Major German industry associations came up with the tag Industry 4.0 in early 2013, using IT nomenclature to describe the 4th-generation factories. This 4th generation boasts globally integrated, highly autonomous manufacturing, combining telecommunications, information technology, and intelligent machines. Industry 4.0 represents a unique growth opportunity for Germany and other highly industrialized countries. It also bodes equally well for both globally operating giant industrial manufacturers and small, highly specialized system vendors.
There is lots of uncertainty about the overall global economic climate because of the unstable political situation and looming financial problems. Let’s recognize that Industry 4.0 will introduce new players and disruptive technology into the market. With all automation manufacturers investing significant R&D money into Industry 4.0 and all leading market-research firms giving a collective thumbs up for such an initiative, how can we transfer this positive momentum into revenue growth? How can we overcome today’s uncertainty?
Let us start with our markets and our customers. Do we know the ones willing to pay for value? Committed to high quality? The answers will help us define the Ideal Customer. We can measure our existing and future customers against criteria such as total revenue potential, alignment of technology roadmaps, positive financial contribution, and openness to collaboration. With Industry 4.0, the demands for resources are increasing, as is the risk involved in more complex projects. Having an ideal customer allows us in sales to focus from the beginning on the good ones, define alternatives for handling the truly bad ones, and anticipate problems with those who fall in the middle while substantially reducing uncertainty.
Common Sales Process
With Industry 4.0—aside from R&D—we now spend more euros for technical training and competency development. Unfortunately, those budgets are seldom balanced with the same amount of sales-skills training. Establishing a company-wide sales process supported with a CRM system using a clearly defined sales language ensures consistent customer interaction. We will get high-quality technical, commercial and people-related information for transparent and fact-based decision making. As a result, projects in Germany or in Malaysia can be evaluated using available, transparent facts without going into lengthy fact-finding missions.
As long as we remember to work hard focusing on those issues on hand (ideal customer, sales process) and not getting overwhelmed with factors that are out of our control (economic growth), we will be successful! I am convinced Industry 4.0 will become the future success story coming out of Europe, Japan, and the United States, then finding its way into China and other countries around the globe.
Posted by: Klaus Leutbecher | Sales Vice President
Posted: 1/19/2015 6:00:00 AM
with 0 comments