Miller Heiman Blog

In Search of Funnel Excellence

Tom Peters: “Life is pretty simple: You do some stuff. Most fails. Some works. You do more of what works. If it works big, others quickly copy it.”

Tom Peters is an American writer on business management practices, best known for “In Search of Excellence.” Let me connect his statements with findings from our MHI Research Institute’s latest study and my thoughts about funnel excellence.

We consistently find that organizations with higher levels of funnel confidence are also more likely to achieve their quota. In contrast, confidence in the available CRM data, which is a representation of their Sales Funnel, regularly gets one of the lowest scores in our survey. Funnel confidence and forecast accuracy represent the sales organization’s ability to execute proficiently and precisely.

At Miller Heiman, our typical Sales Funnel has four stages: (1) Universe: Starting with initial contact, ideas for future opportunities or simply any form of client enquiry. This is where prospecting occurs and where we have the highest volume (number of enquires, revenue impact) with the lowest probability. (2) Above the Funnel: After connecting with our client’s decision makers and jointly agreeing about interest in our offering. (3) In the Funnel: Closely working with our customer by generating the maximum value in the minds of all decision makers involved. (4) Best Few: Final steps with our customer’s decision makers are defined, we confirmed a high probability of getting the sale, and the order is expected. This is the narrowest part of our funnel but has the highest probability.

There are of course instances that require special handling outside our funnel, such as call-off orders from an annual purchasing agreement, large deals that significantly impact the overall revenue of our funnel, or “out of the blue” projects and changes.

Tom Peters: “The thing that keeps a business ahead of the competition is excellence in execution.”

The prime purpose of any meaningful Sales Funnel is to focus on excellence in execution with a set of well-crafted sales actions, in line with buyer commitments. We fully understand what it takes to move our client’s enquiry throughout the different stages toward the final order. Assigning probabilities helps us to statistically calculate values in the different stages and quickly determine corrective actions based on our funnel shape. Therefore, the second purpose of our Sales Funnel is to coach our sales team for results. Most managers focus only on measurable, statistical data about opportunities, forgetting about the values, attitudes, and concepts held by the people involved with our customers. Finally, by automating our Sales Funnel, we ensure structure and consistency in gathering client information. And, by making it available to our organization, we introduce best practices and encourage collaboration and proper resource management.

Tom Peters: “We got it right when we said that we were in search of excellence. Not competitive advantage. Not economic growth. Not market dominance or strategic differentiation. Not maximized shareholder value. Excellence!”

Once the definitions and the purpose of our Sales Funnel are fully understood, we seek regular usage from all parts of our company—only then will we start seeing the multiple benefits of our “living” Sales Funnel.

The least focus of funnel management is about forecasting, but rather on the selling behaviors that will result in proper prioritization and the highly accurate assessments of the opportunity status from a customer perspective. It is about a manager providing performance coaching to move opportunities through the funnel. The end result of these activities will be more accurate forecasts. The funnel helps to address uncertainties and consistently improves the chances of winning as we progress to the different stages. We—this is the whole company—are on our way toward excellence in funnel management, which will result in excellence in customer-facing execution.

Posted by: Klaus Leutbecher | Sales Vice President

Posted: 11/1/2014 6:00:00 AM by Bret Poinier | with 0 comments


Let’s (Not) Make a Deal: Coaching the Underperformer, Part 3

When you’re looking for quick wins at the end of the year, it can be tempting to play “let’s make a deal.” I’ve even had salespeople tell me they love this time of year because their prospects are ready for the offer and opportunities are easy to close.
 
If that strikes you as a little self-defeating, I’d say you’re on to something. These salespeople are training their prospects to wait for a discount. Some have even admitted sales are pretty dead in the first part of the quarter because customers know if they wait they’ll get a better offer.
 
To be honest, I know there were times in my career when I encouraged last-minute discounts. I’ll bet some of you reading this right now are doing the same thing. As sales leaders, we’re not only human, we’re extremely busy humans under immense pressure. Helping an underperformer make his or her numbers is hard and time-consuming. Who could blame us if we take the easy way out at the end of the period?
 
Think Twice
I’ve already stated one of the most obvious problems with discounting—you train prospects to wait for the offer. And as if that wasn’t enough, there are a number of other issues with end-of-year/quarter discounts:
 
You’re selling, not coaching. My colleague Curt Samson talked about this in our last post, “Focusing on the Funnel: Coaching the Underperformer, Part 2Coaching the Underperformer: Focusing on the Funnel.” When you step in and decide how to close a deal at the last minute, you’re selling. You need to be coaching. It’s the only way to achieve sustainable performance improvements.
 
You’re focused on the sales process, not the buying process. Your underperformer needs to learn now to assess the customer’s buying process and help guide the customer to a natural close. Discounting at the last minute undermines that learning, and your underperformer starts the next quarter no wiser than they were the last. The other lesson the underperformer will never learn is how to provide value above the expected price the prospect will pay.
 
You’re going to lose opportunities. What do you do when the customer doesn’t agree to your deal? You’ve told them how low you’re willing to go. How often do you close a deal at a higher price after your offer expires? More often than not, that hot opportunity falls out of your funnel or you have to offer the same deal to get them to close.
 
There are times when a discount may be warranted, but in the long run, the less discounting, the better. I know it’s hard, especially when your numbers are on the line. But as I would always remind my sales team, “If it were easy, anyone could do it.”

Posted by: Tim Call | Executive Vice President of Sales
Posted: 10/29/2014 6:00:00 AM by | with 0 comments


Focusing on the Funnel: Coaching the Underperformer, Part 2

It’s the end of the year. (Or the quarter) If you’re like most sales managers, you have a few underperformers on your team. Now your boss is asking what you’re going to do about it. Given the heat you’re getting, you probably want to turn things around as quickly as possible, right?
 
Looking for the Quick Wins
The funnel is, of course, the first place most frontline sales managers (FSMs) think to look, and a review of existing opportunities is a logical place to start. But in the case of the funnel, it’s not so much where you look but how you look that makes all the difference. You have to ask the right questions.
 
Most FSMs start with two questions:
  • What opportunities do you have in your funnel that can be closed before the end of the year?
  • What will it take to close them?
That approach only gets you so far. After all, if your salesperson knew how to close the business, he or she probably would have done it already. More than likely, they’ll list a handful of opportunities and start talking about what kind of deal they might accept. Calculating in your head how much closer these opportunities will get you to goal, you offer to step in and handle the negotiations.
 
In this scenario, what has the underperforming sales professional learned? Not much, other than how to get their sales manager to sell on their behalf. That’s not coaching. That’s selling.
 
Ask the Right Questions
Time for a rewind. Let’s go back to the conversation with the underperformer and take a look at the kinds of questions you should ask. Perhaps the biggest mistake a salesperson can make is to confuse their sales process with the customer’s buying process. Same goes for the FSM.
 
The conversation with the underperforming salesperson starts out the same way:
  • What opportunities do you have in your funnel that can be closed before the end of the year?
But that’s where the similarities end. Asking what can be done to close the business puts the emphasis on the salesperson’s activities. To help close the business, we need to focus on the customer by asking questions like:
  • What is their decision process? Where are they at in that process?
  • When do they expect to make a decision? Is there anything such as a budget issue that would encourage them to make this decision before the end of the year? Anything that might stand in their way and prevent them from making a decision?
  • Who are the buyers involved and what are their personal wins? What messages are we using with these buyers?
 
There are several fundamental advantages to this approach. First, by focusing on what the customer needs to move forward, you’re moving away from selling on price as an automatic fallback. More importantly, though, asking questions like these gives you the opportunity to diagnose why the salesperson isn’t performing. No coach, whether they are coaching an athlete or a sales professional, can be effective if they don’t know what skills they need to focus on.

Posted by Curt Samson | Vice President of International Operations
Posted: 10/27/2014 6:00:00 AM by | with 0 comments


Coaching the Underperformer, Part I

It’s late October as I write this and, for many sales organizations, that means there are only two short months left to make quota. Hopefully, your team is on target to make their numbers, but if you’re like most sales managers, you probably have a few that have fallen behind.
 
Let me make a bold statement. How you coach your underperformers is as important to the long-term success of your organization as how you coach your top professionals. Probably even more so.
 
That’s why my colleagues and I here at MHI Global are collaborating on a series of posts focused exclusively on helping frontline sales managers (FSMs) coach their underperformers. In this first post, I want to look at year-end coaching from a high-level perspective. In subsequent posts, we’ll delve deeper into some of the tactics that can help your underperformers turn things around.
 
I should note that this advice works whether you’re approaching the end of your fiscal year or just the end of the quarter—or at any point in between. Sound coaching is always in style.
 
Are You Coaching Opportunities or People?
At this time of year, it’s tempting for the FSM to turn from coaching salespeople to coaching opportunities. That is, instead of seeing their salespeople as individuals who are somewhere along the continuum toward making their numbers, the FSMs turn inward toward their own quota attainment. They think, “I’m at 80 percent. What do my people have in the funnel that we can close before the end of the year?” They identify enough big deals to get them the rest of the way and that becomes their focus for the remainder of the year.
 
Big mistake. First of all, you can’t coach an opportunity; you can only coach people. If you only focus your efforts on those likely closes, you’re probably just ushering the sale through the rest of the process. You might be helping the opportunity over a hurdle or adding a little management-level gravitas to the negotiations. But is that coaching? Not really.
 
When You’re Selling, You’re Not Coaching
Look over the activities you’re doing to help close these deals, and you’ll see them for what they are: selling. When you’re selling, you’re not coaching. It’s like the coach of the high-school basketball team jumping off the bench and substituting himself for a player who just can’t hit his free throws. Maybe the player will learn something by watching, but wouldn’t it be better to help the player develop the skills he needs to make his own free throws?
 
Will coaching always get the underperformer to goal? No. In fact, I would suggest that most of the time it won’t. But it will get them closer. (And maybe help you make your numbers.) More importantly, it will turn them into a better sales professional and, in all likelihood, set them up to have a much better first quarter than all of your top performers who are busy clearing out their funnel in December.

Posted by: Scott Hartman | Sales Vice President
Posted: 10/22/2014 6:00:00 AM by | with 0 comments


In Sales, Perception Is Reality. Or Is It?

Everyone in sales is familiar with the phrase “perception is reality.” If a customer thinks your price is too high, it is too high. If they think a competitor’s product is better, it is better. If they don’t think your company has what they need, you don’t.
 
Salespeople complain all the time about customers and their (mis)perceptions. For the sales rep, a common way to attempt to overcome a customer’s negative perception is to discount the product or to dig up dirt on the competitor. If that fails, they’ll keep the prospect in the funnel, sending them a new brochure every now and then, hoping they’ll eventually wear them down.
 
Sales professionals handle customer perceptions a bit differently. They understand that new information is the only way to overcome a customer’s perception, but that doesn’t mean a barrage of irrelevant sales brochures. Not just any information can incite a change in customer perceptions. If it could, then the sales rep’s method of sending out a new brochure every month would work, and we wouldn’t be having this discussion.
 
To change a customer’s perception, sales professionals focus on adding perspective.
 
The Foundation of Perspective
The ability to provide perspective is one of the key differences between a sales professional and a sales rep. Perspective requires the sales professional to understand two primary customer data points:
  • The customer’s context defines the environment in which the customer exists. Context is essential because it helps the sales professional define the problem and see the world from the customer’s point of view – both of which are essential to influencing the customer’s decision.
     
  • The customer’s concept defines how the customer sees the possible solution. Just as it’s important to understand the individual buyer’s role in the sale, it’s critical to understand their concept of a solution to their problem. If you don’t understand how they see the solution, you can never know how far off your proposal is, nor present it in terms that will bridge the gap.
 
The sales professional takes the time to thoroughly understand the customer’s concept and context, as well as their decision dynamics. By doing so, they are able to provide perspective, or a new way of looking at the problem, that can then alter the customer’s perceptions and influence their buying decisions.

Posted by: Jason Buma | Sales Vice President
Posted: 10/20/2014 6:00:00 AM by | with 0 comments


A Frontline Sales Manager’’ Triangle

In school, I questioned the value of learning geometry. But today, it makes perfect sense to me. Regarding the daily challenges of a frontline sales manager (FSM), an equilateral triangle seems to be a perfect visualization.

The frontline sales manager triangle – customer, business, and people

An equilateral triangle has three equal sides and three equal angles. These three equal sides can easily be mapped to the FSM’s core areas – the often-competing areas of customer, business and people.

Customer: This area is all about customer-management strategies, their implementation and execution across the sales team. It covers customer definition and segmentation, territory and account management. Understanding the customers’ typical challenges, their context, the relevant buyer roles and how they want to buy are key criteria for designing tailored engagement and growth strategies. This knowledge has to be mapped to the individuals on the sales team—their specific expertise, skills, competencies and talents (see below)—to make the right resource-allocation decision.

Business: The business area is all about executing the concepts and frameworks sales operations has implemented—for example, in the areas of sales-funnel management and reporting, performance management, and compensation plans. FSMs have to implement and execute these concepts with their sales teams. The FSM’s special focuses in the business area are funnel management and forecasting. Based on their regular coaching sessions with their team members, FSMs get the necessary clarity on current leads and opportunities to generate accurate forecast data. The availability of leading indicators that measure the performance of the sales activities that are directly managed, influenced and measured by the FSMs is the foundation for coaching.

People: This area describes the FSM’s most important role, the role as a frontline sales leader and coach. Whatever team the FSM is leading, sales performance begins with knowing each individual and understanding his current level of skills, competencies, knowledge and expertise to determine the best strategies for resource allocation, professional development and coaching. Whatever has to be executed in the customer and business area, the seeds for success are planted in the people area based on a thoughtful coaching approach. Apart from individual coaching, the FSM has to build a collaborative, sharing and learning culture across the team. Inspiring A-players to share their best practices allows everyone to learn from everyone else. Performance management is another key area based on sales operations’ criteria. Performance management cannot shirk the tough calls on resource allocation, hiring and employee dismissals.

The triangle’s foundation

The FSM triangle works as a framework to balance the three often-competing areas of customer, people and business to increase sales productivity and to drive transformation. The FSM triangle’s foundation is based on core values and individual behaviors that work across the triangle. That’s conscious collaboration and performance accountability.

Posted by: Tamara Schenk | Research Director
Posted: 10/15/2014 6:00:00 AM by | with 0 comments


Should Female Sales Professionals Try to “Sell Like a Man”?

A female associate recently told me she gets a little irritated when other executives tell her that female salespeople should “act like a woman, but think like a man.” In her words, “Do they somehow believe that female thinking, if there is such a thing, is somehow substandard?”
 
I try never to get bent out of shape about the silly things people say without really meaning them, but her comments got me thinking more about it. Sales professionals have different styles. Some are more empathetic than others. Some are better at building the business case. Maybe it’s based on gender or maybe it’s just based on the way their brain is wired. I don’t really know, but in my experience, the “why” doesn’t matter.
 
Sales professionals, both men and women, need to understand the strengths of their inherent personality styles. If they lack empathy, they can learn to spot the signals from successful colleagues who are better at it. If they are challenged when it comes to building out a business case, sales enablement can provide the tools and education to help them overcome their natural deficiencies.
 
At the end of the day, the most important style element in a successful sales cycle isn’t how sales professionals sell, but how the buyers buy. Let me repeat that even more succinctly. The focus is on the customer, not the salesperson.
 
One of the key tenets of the MHI Global sales philosophy is that every buyer makes every decision differently, every time. Even if this is the third time they have bought a solution like yours – or even your solution – there will be nuances to this buying decision. Maybe their time frame is shorter. Maybe they’ve expanded their buying community. Maybe they have a new CFO. The list of things that may have changed in their world is never-ending.
 
Professional salespeople take the time to discover these nuances. By combining this insight with an understanding of the customer’s concepts and context, they are able to add value to the customer’s world by providing their perspective. In the end, it’s the sales professional who adds value that wins the business, regardless of gender.

Posted by: Jennifer Young | Director of Sales
Posted: 10/13/2014 6:00:00 AM by | with 0 comments


Put Your Heart into Your Work

People spend a substantial part of their lives working, whether in a high-tech startup in Singapore, at a financial institution in New York, or as a machine builder in Stuttgart. As a result, the quality of their workplace experience is inevitably reflected in the quality of their lives. The major quoted factors for work-related stress include weak organization culture, poor management practices, unclear job assignments with continuously growing demands, inadequate work environment, difficult work relationships within teams, poorly communicated change initiatives, and unclear assignments. All of these factors can be attributed directly to poor management.

Based on Gallup’s most recent study, we learn that only 14 percent of all Western Europe employees in sales functions are actively engaged in creating value for their employer. Not surprisingly, managers and executives are only 1 percentage point higher at 15 percent. For me, there is a direct correlation—most Western Europe companies have been struggling for years to achieve consistent growth. What’s missing? Start putting your heart back into work using my simple formula: There are things in life you can directly influence that are relevant and where you put your heart. And there are significantly many more things you cannot influence and this is where you stop worrying.

Start with understanding your company’s mission, vision, purpose. All companies have them. You’ll find them on your company’s Web page (and sometimes they come with different tag lines). My colleague Tamara Schenk just published a step-by-step blog about that. This allows you to focus on your core values and to be clear about assignments, as well as fostering broader collaboration. Start using a common sales process with leading and lagging indicators. Document your customer interactions, your opportunities, and your account strategies. Use available automaton tools (SFA, CRM), keeping them updated while improving your productivity. Keep sharing successes and progress within your sales team and wider organization. Take every opportunity to connect with clients in person—not through multiple emails but by meeting real people in their work environment. Invest in your own education, continuously. Start researching your industry, technology, markets, products, competitors. Reflect on your documented client interactions and actively seek coaching advice (not just from your boss) and ask for regular training based on a transparent, agreed-upon future career path. Enjoy sharing your acquired learning and be vocal voicing your perspective within your team, your management and, of course, your customers. Lastly, start managing your boss by actively giving feedback and engaging your executive management in valuable client interactions. Take full accountability for your actions and put your heart into work.

Posted by: Klaus Leutbecher |
Sales Vice President
Sales Vice President
Posted: 10/8/2014 6:00:00 AM by | with 0 comments


Quick Momentum: Why Speed to Results is So Important

Typically if something is going to help drive results then you should start to see some sort of progress rather quickly.

I bring this up because I see far too many situations where sales leaders construct long, drawn out strategic plans backed by impressive thinking and insights. But, the leader never gets a chance to complete the plan because he failed on one key aspect--> his team didn’t hit the numbers.

It may seem unfair but the reality is that sales leaders need to be constantly showing progress and improvement with key sales metrics. Even the best-laid plans fall apart when performance wanes and the organization begins to lose confidence in the sales leader. 

When you think about it, this dynamic is not short sighted; it’s actually healthy. Salesforces that win do not typically execute on plans that build off a downward trend of performance. Instead, they implement ideas that get quick traction and build momentum. This momentum creates the fuel to keep executing on the change initiative and brings even more commitment to it because everyone can see the progress that is starting to take shape.

Winning sales organizations know that quick momentum almost always connects directly to customer conversations. Improving one’s understanding of the account; getting a better handle on the client's objectives; gaining insight on the decision process and better understanding the strengths and weaknesses of key competitors are all initiatives that can drive quick results. Fortunately, they can take place today in direct conversations with customers. The challenge is to get to discussions related to these issues rather than just move aside after you hear that “budgets are tight.”

Don't get me wrong. Strategic plans are requirements for any effective sales effectiveness or sales transformation plan. Market-leading companies are executing systems and processes to put these smart-sounding ideas into result-producing action. One thing is clear though: they all start with a focus on talking to prospects and customers and finding out how you can be a partner in helping grow their respective businesses.

Good luck and good selling.

Posted by:
Sam Reese | CEO - MHI Global
Sam Reese | CEO - MHI Global
Sam Reese | CEO - MHI Global
Posted: 10/6/2014 6:00:00 AM by | with 0 comments


Give and Receive

Collaboration is a key in successful business transactions, and at its heart is the concept of giving and receiving. In fact, sharing economies are based on the collaborative principle of “you have to give to get.”

At the MHI Research Institute, giving begins when we share the highlights from our 2014 MHI Global Sales Best Practices Study. Last year, our research narrowed down three attributes found in world-class sales organizations. The three qualities each corresponded to a cultural component that drives the attitudes and behaviors in an organization. The organizational qualities we identified from the 2013 study, Customer Core, Collaborative Culture, and Calibrated Success, tied into our analysis of the 2014 data, where we found three classifications of sales behaviors that define World-Class Sales Performance. These were: Provide Perspective, Conscious Collaboration, and Performance Accountability. When we connected these individual behaviors with the attributes that we identified in world-class sales Organizations, we arrived at a framework for a performance-oriented sales culture.

What is a performance-oriented sales culture, exactly? In our findings, we found it’s one that consistently knows how to connect and engage with customers, knows how to work together, and that has a framework for measuring, recognizing and rewarding.

Let’s examine the qualities in more detail.

Provide Perspective: Providing perspective is a level of connecting and engaging with prospects and customers that goes beyond just knowing the customer’s products. It means that you take into account the customer’s situational context and the different concepts of each impacted stakeholder. In this framework, you understand that in complex buying environments, every customer makes every decision differently. In an organization, the sales team needs to understand the specific decision dynamic before the team can map all of the findings to the portfolio of capabilities, products, and services. Once done, the sales team can then come up with a specific, customized solution that enables customers to achieve their desired results and wins.

Conscious Collaboration: Conscious collaboration begins with customers. When you collaborate, you achieve better results in a shorter amount of time. Individuals with various areas of expertise and roles come together using a common language and strategic frameworks. Collaboration occurs across teams, organizations and companies, and individual contributions are multiplied. It’s important to understand that collaboration objectives are different for a strategic-account environment when compared with the tactics used by an inside sales team. Therefore, collaboration should be defined specifically and spearheaded by the sales leadership team. In other words, sales leaders need to establish the guiding principles for different collaboration situations in order to create a foundation for conscious collaboration.

Performance Accountability:  The performance accountability metric is the one that separates world class from all others. Our research found that World-Class Sales Performers hold themselves accountable for their customers’ success and wins. Sales performers who score high on performance accountability know that the success of their customers is the foundation for their own success, and they hold themselves accountable along the customer’s journey. When a deal is closed, the sales professional doesn’t just walk away; instead, the sales professional identifies additional possibilities to create a value-add for customers. Additionally, we found that the sales professional also holds him- or herself accountable to the standards and expectations set by the frontline sales managers.

Giving and receiving: Where you come in

In the spirit of sharing knowledge to foster collaboration, we hope you can take some of the points we just shared from our research and apply it to your organization’s practices.

Ready to share your knowledge with us? Please lend your insights to our own research so that we can have true collaboration. The 2015 MHI Sales Best Practices Study is now open. Please take 20 – 30 minutes of your time to go through the survey questions. When you participate, we give back – true collaboration. Here’s what you’ll receive when you participate in the study:
  • Timely business intelligence—exclusive, first access to the full study results when they’re published in Q1 2015
  • Entry into a drawing for a World-Class Sales Performance Gap Analysis—an opportunity to take advantage of a service provided by the Institute’s research analysts that compares the participant’s organizational behaviors to those of World-Class Sales Performers as identified in this study
  • A complimentary report from the MHI Research Institute, Perspectives on Productivity: The Next Level of Transparency
 
Click here to participate in the study – it’s open through November 30, 2014.

Posted by: Tamara Schenk | Research Director
Posted: 10/1/2014 6:00:00 AM by | with 0 comments


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