I read a great article in Harvard Business Review yesterday by Steve W. Martin regarding the twelve most important sales metrics to track. Broadly, they fall into the following categories:
- Quota attainment across the organization as a whole and by individual sales contributor. I would extend this to include reviewing quota attainment (or revenue, if quota is not specified) by product family and business unit. Mr. Martin suggests that, on average, quota attainment varies in the tech industry from 52% (software) to 66% (telecommunications).
- Quota size by sales role (Account Executive, Inside Sales, Market Development Representative, Account Manager, etc.).
- On target earning by role for the sales team.
- Average deal size.
- Sales adoption by vertical market or target business size (enterprise, SMB, etc).
The article was originally published in 2013, but the stats and concepts are timeless. You can read the article here.
I’m a big fan of the Evangelist Marketing Minute published by Alex Goldfayn. He recently published an article on sales calls that I’d like to underscore.
Over the years, I have had to coach more salespeople to pick up the phone and call prospects. It’s easier and more comfortable to send an email – but much less effective. Especially now as fewer salespeople call, it’s easy to distinguish yourself by simply picking up the phone and having a business conversation. Challenge yourself to make X-number of sales calls a day and watch your pipeline increase overnight.
See Alex’s article here.
Fabulous article in Forbes from Andrew Vest on networking. As I see it, networking is like bank loans – you will get the best results if you do it when you don’t need it. My take on networking:
- Networking is not about you. It’s about helping and supporting others. If you take this perspective, your needs will be taken care of.
- Everyone has something of value to offer – find that thing and provide yours openly and willingly.
- Be generous in sharing your network – this will reap benefits for you and those that need your support.
- If you promise to do something, do it.
What, you may ask, does a post on building your personal brand have to do on a sales and leadership blog? It’s simple really… The average tenure of a VP of Sales is 19 months. Less in a startup. The stark reality is that if you are a sales leader, you will likely look for work several times during your career. I would argue that’s a good thing. I have experienced my greatest personal and professional growth during these times of transition.
My friend and recruiter-phenom, Jim Krouskop, recently posted a great article on LinkedIn regarding building your personal brand. I highly recommend it (and him) . You can find the article here.
The best (some would say “only”) way for your organization to accurately predict the future is through your pipeline. In order to be remotely accurate, it is imperative to include four things: Total Deal Value (typically 12-month deal value for SaaS or services companies); Sales Stage; Probability; and Close Date. In order to refine accuracy, sales stages should be set, tied to probability, and marked by specific gates and rigorously enforced. Ethan Zoubek recently wrote a really good article on the topic. I strongly recommend it.
You can take a deeper look at my selling methodology here. Of course, this is customized for each company I support.
Also, check out this article on qualifying Opportunities.
Check out this great post from Tom Zbaren on Inbound Marketing and Social Selling.
That is such a great question on so many levels… In this case, I’m, thinking about how long is too long for an Opportunity to sit in the pipeline before raising red flags. The truth is the answer varies depending on the solution and market you are selling into. Most of my experience has been leading teams that sell complex technical solutions into major enterprise accounts. I’ll give you my too simple rule of thumb: Ninety days.
If I don’t see momentum in an Opportunity after ninety days in the pipeline, I begin to become concerned that the Opportunity is not real. Perhaps the Prospect is not ready; the solution isn’t the right fit; the Account Executive is padding their pipeline; or any number of other reasons. That’s not to say that this is a hard and fast rule. I recently had a deal with ABC resurface after two years of inactivity. Out of the blue. But that is by far the exception. All I’m suggesting is that you, as a sales leader, take a look at stagnant deals and ask tough questions about their progress:
- When was the Prospect last contacted?
- Have we identified and engaged all of the stakeholders (not just an executive sponsor)?
- What are the competing priorities?
- Has budget been allocated for the project?
- Has the Prospect settled on a solution to their challenge – is it your solution?
- What is the next step, and what is the timeline for that?
- What is the purchasing process and whois involved?
- Where are you in that process?
Your Account Executives may feel defensive when you ask these questions. This isn’t about you trusting them to properly manage a sales cycle, it’s more about you normalizing the overall pipeline (some AEs are more optimistic than others) and providing the valuable service of an outsider’s view of progress. It has been my experience that after a few rounds of these types of questions, the pipeline begins to self-correct and become more accurate.
[Check out this sample pipeline report to get a sense of the metrics I track and review]
My buddy Nick Ris turned me onto this great post on LinkedIn from Jim Herbold, CRO at Infer. Jim gained great experience at Box and other startups that experienced the hyper growth we all hope for. These are great lessons for anyone at a startup or wanting to launch something of your own.
I have had the privilege of working for a number of young companies selling complex technical solutions into major enterprise accounts. I love the pace of startups and the challenge of delivering these types of solutions to big companies. It seems the first concern (voiced or not) I run into when approaching a large prospect is viability. Will the company be around in a year to service the solution? Are there resources to properly implement and launch the solution? If the company folds, what happens to the code and implementation? These are all fear-based responses from your prospect that, with a little effort, can be overcome.
The first and best response to concerns regarding viability is to point to other prime logos that have already made the decision to buy from you. See this post on getting your first sale. Getting your first prime clients may not be enough to overcome the viability objection – here are a couple of other ideas:
- Many startups refuse to share financial information with prospects – whether or not an NDA is in place. Not only do you not want that information getting into the hands of your competitors, frankly they are often not very impressive and won’t inspire confidence. In lieu of financials, you can provide a letter from your prime investors (assuming you have Angel or VC backing) stating their commitment and support to your company.
- Consider partnering with a more established industry player that can bring credibility before you have established yours. Note that you may need to contract through the partner as opposed directly with the client to provide the sense of security the client is looking for.
- If you have a traditional software product, you can offer to put the code in escrow, reverting to the client if the company folds. Be careful with how this agreement is worded and what triggers the reversion.
- Ask your prospect to become an investor. Doing so allows them to more directly control the product roadmap, gives them insider knowledge (if they are on the board) and puts them in prime position pick up the pieces if the company begins to fail. Be careful about offering clients too much control over the company. Your company needs to remain independent – able to move with the market whether or not your client is moving in that same direction. Remember, you are (probably) not a custom dev shop and need to focus on creating a product that scales into the market.
Even if you ask all the right questions (“Now that it looks like we have a solution that addresses your challenge, what are your top three concerns about working with us?”) you may not hear the viability objection. If your Spidey senses are activated around this concern, I encourage you to ask directly (“Do you have any concerns working with a young company like ours?”). At least this allows you to uncover and address the objection if it exists.
I recently spent nine months helping a 30-person startup shift from selling complex SaaS solutions into SMBs to selling them to major enterprise accounts. I enjoy the pace of startups and the impact that I can have on leadership of the business. Over the course of the last fifteen years I have had the privilege of doing the same for a number of young companies. The target profile of prospects for my last company was senior leaders in the Marketing organization – typically C-level. I found unique challenges selling into marketing, many of which I experienced selling in to HR.
Every major enterprise account allocates budgets at the beginning of the year, including budgets for HR and marketing spending. One would like to think that once the budget is set, the leaders of those teams would have the roadmap necessary to prioritize projects and allocate spend. My experience has been that the leaders of these teams feel empowered to prioritize and make decisions, but often need to go back to the well to rationalize significant purchasing decisions against the overall list of priorities and budget. As part of that process, those budgets are balanced against other enterprise-wide priorities and progress against the revenue and profit target. HR and marketing budgets seem to be the first to be reduced when profit targets are at risk.
The best strategy I have identified to combat this is to gain cross-functional support for the proposed project early in the sales process – hopefully during the front-end of the needs analysis process. See this post on gaining cross-functional support.