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The Cost of a Failed Sales Manager? $4 Million…

A member recently shared with me that they’ve estimated the average cost of a single failed sales manager to hover around $4 million, calculating all the direct and indirect costs of lost productivity, attrition or poor team engagement and lackluster customer experience, not to mention recruitment, salary and training costs. Simply put, bad sales managers are toxic.

So, how can we build better managers?

Well, what if we all started with better raw material in the first place — surely prevention is better than cure, right? Some of the best companies follow the principles of Train, Certify and (only then) Promote. Putting manager candidates through their paces BEFORE promotion is much less risky than trying to do so after the fact.

A few years ago, Kohler, the manufacturer of specialized plumbing fixtures, had to let managers go at a rate of 10-12%.  It turns out that succeeding as a manager in a more complex sales environment proved too high a “double jump” for its newly promoted reps.

In order to build the right bench of future manager talent — ultimately achieving some truly remarkable results — Kohler developed a “Top Gun” training program that rigorously identifies individual development needs of manager candidates and provides a customized training regimen that includes live training in the field, embedded in the candidate’s typical workflow, and peer support from other Top Gun candidates.

To reduce sales manager failure, Kohler instituted a rigorous three-stage process:  Read More »

The ‘Just Add Water’ Approach to Social Media

Posted on  16 July 12  by 

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(This is the third post in our series on sales organizations’ emerging use of social media as a channel for shaping demand.) 

Although many people agree that social media can be an incredibly helpful tool for sales prospecting and due diligence, the question we hear over and over is “But is it scalable? We know that high performers can do it, but we are worried about the rest.”

The challenge facing many organizations is the best way to roll out social media use and ensure that it doesn’t negatively impact other initiatives, or backfire entirely.

How can you make sure this doesn’t cut into reps’ ability to do their real job? How can you be sure they don’t say things that are off-brand, or that do not reflect well on the company? How can you support them to be successful once they start to get involved?

Read More »

Is Your Comp Plan Incentivizing the Right Behaviors?

With the first half of the year now complete, many organizations are evaluating their performance against annual goals. Inevitably, performance in many areas won’t perfectly match predictions, and now serves as an ideal time to reprioritize and adjust strategies for the latter part of the year. It’s a good idea to take a look at your sales compensation plan as well to ensure that your sales team’s priorities are aligned with your organization’s.

We recently polled our members about the design and management of their sales compensation plans and the different metrics they use when measuring rep performance. Different metrics encourage reps to focus on different things, so it’s important to choose the correct metric or combination of metrics to make sure you are driving the right behaviors.

Following are some of the most commonly used metrics and the behaviors they drive, as well as the unintended consequences of each that you should be aware of.  Read More »

Don’t Let Biases Impact Your Key Account Selection

Posted on  10 July 12  by 

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(This is the second post in our multi-part series on Key Account Strategy and Management).

You’d think that investing in our best customers would lead to easy growth.  They buy a ton from us already, so if we just partnered a little more strategically then we could grow even more, right?  Wrong – and often, we’re the reason why.

Before we can even think about selecting key accounts that we want to target to grow, we need to make sure we have a compelling value proposition to get the customer to want to partner with us.  As my first post in this series addressed, if you can’t articulate the objective, scope, and advantage of being deemed a key account of your organization, neither can your customer.

But let’s assume we’ve got a solid value proposition in place.  Now it’s time to figure out which of our accounts to put into the key accounts program.  Many companies struggle with this because they put too much focus on revenue/volume metrics.  That’s not to say that current and/or potential revenue isn’t important, but there are things that revenue can’t measure.  Too much focus on revenue leads to us ignoring bigger issues like cost to serve or strategic alignment, and often emphasizes short term gains at the expense of strategic initiatives.

So how have companies overcome this?  Read More »

6 Lessons to Make the Most of Your Executive Sponsorship Program

Posted on  10 July 12  by 

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Companies are forever looking to get closer to customers; particularly the c-suite executives that are hard for reps to engage and serve in the customer organization. Most sales organizations often resort to establishing an executive sponsorship program—pairing senior executives with a few key accounts as a means to establish long-term relationships at the c-suite level in the customer organization.

At their best, executive sponsors help drive greater account penetration and customer loyalty, while also acting as internal account advocates—marshalling internal resources to customer opportunities and actively participating in account management and development. Executive sponsorship programs also serve as a platform for reps to learn and practice next-level skills from seasoned senior executives.

That said, despite the many benefits of executive sponsorship programs, very few sales organizations have seen tangible results from them. Programs often fail to gather momentum as executive sponsors lack defined objectives and motivational incentives to participate regularly. In addition, poor alignment between customer accounts and executive sponsors fails to yield the desired results.

Over the course of our conversations with members, SEC has uncovered six lessons for improving the quality of executive involvement and commitment in executive sponsorship programs: Read More »

6 Coaching Pitfalls to Avoid

Rapidly changing customer behaviors and expectations, coupled with increasing competition, is making it difficult for reps to close deals, often driving sales organizations to re-examine ways to boost sales. And while most sales organizations identify coaching as a key driver of improved performance and invest heavily in it, they often still find themselves facing poor performance results.

That’s because the progressively complex sales environment is pushing sellers to develop new skills. The critical question in this scenario—are managers suitably modifying their coaching approach to cater to the emerging needs of its sales force? The answer – maybe not.

To make their coaching efforts more effective in this evolving environment, managers should ensure that they steer clear of some common coaching pitfalls.

Here are the top six coaching pitfalls most managers face, and how to avoid them: Read More »

Three Ways to Change Customers’ Minds

Posted on  26 June 12  by 

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In today’s era of selling, customers are engaging suppliers only after they have done significant due diligence to determine their needs, identify a solution, and settle on a price they are willing to pay for that solution. In this world of established demand, reps are being relegated to a role of fulfillment with price being the only thing they are able to compete on by the time a customer reaches out to them.

It goes without saying that this is not an environment that any sales organization wants to operate in, but given today’s better informed customer, this shift in buying behavior is a reality that is here to stay and sellers must face.

As such, SEC set out in its 2012 research to determine how sales organizations can overcome this challenge by identifying how the best sales reps are getting ahead of the price-driven sale. Our research found that to do so, high performing reps teach customers where they learn, delivering disruptive commercial insight that effectively reframes the way they think about their business and the problems facing it.

In the process of analyzing how the best performing reps teach their customers into (or back into) the beginning of the sales funnel, SEC identified the ways reps use commercial teaching to reframe customer thinking. These approaches are based on how familiar customers are with the problem at hand, and whether or not they have already developed an understanding of the solution.

Read More »

Hey Motivated Buyer, You’ve Changed…

Posted on  25 June 12  by 

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What happened to our motivated buyers and decision makers?  They used to be so easy to identify, evaluate and work with.  We were able to create opportunity scorecards based on known and defined criteria to identify the high-value opportunities and accounts.  These are the same people and companies we’ve sold to for years, but doesn’t it feel like we need to sit them down and say “you’ve changed.  I don’t even know you anymore”?

Well, it’s because they HAVE changed.  A motivated buyer in today’s environment is different than the motivated buyer of just a few short years ago.  As many of you are aware SEC research has found that, on average, customers are already 57% of the way through their buying process before FIRST contact with ANY supplier.  They’ve been out there learning on their own, defining their own needs, researching solutions and considering all their options, without suppliers.

In today’s marketplace, we’d call those opportunities established demand.  It’s the world of the commoditized, price-driven sale; the one in which we’re one of three suppliers to submit the bid.  It’s the place none of us want to be, yet often times, the criteria we tell our sales professionals to look for in opportunities drive them right INTO this established demand.  They are looking for motivated buyers, with established needs who know what their problems are and need solutions.

However, what we’ve found at the SEC is that the absolute best sellers out there are using a very different approach to identify and select opportunities.   Read More »

12 Principles of World-Class CRM

Posted on  20 June 12  by 

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Let’s assume for a second you have 100% adoption of your CRM system.  What does that look like?  How would you define 100% adoption?

Most companies I speak with would be happy with:

a)     Every opportunity currently being pursued has a forecasted value

b)     Recent and frequent updates at various stages of the sales process

c)     Vast intelligence extracted from every customer about every organization

If this is how you define adoption, congratulations, you’ve just built a system to reinforce Relationship Builder behavior.  Perhaps we should change the name of CRM to CRB – Customer Relationship Builders?

Now back to reality.  How many of us have 100% adoption?  Hardly any – and that’s likely because your best reps recognize that your system lacks relevance with how to sell in today’s sales environment. Read More »

How Strong is Your Leadership Bench?

Posted on  19 June 12  by 

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Sales leaders agree that consistent growth in an ever-evolving sales environment hinges on strong leadership. SEC’s sister program, the Corporate Leadership Council, found that leaders with the right leadership skills are 50% more likely to substantially outperform revenue expectations. However, in an uncertain economy and a changing labor market, good leadership can be hard to find – and even harder to keep.

So, how can we better prepare for expected leadership turnover when sales organizations are under the mandate to deliver higher growth than ever?

The answer is to develop a succession management plan that is built to prepare and support new leaders to execute current and future strategies without missing a beat in a fast-paced sales environment.

A critical component for any succession strategy is to incorporate an effective leadership development plan to close future leaders’ skill gaps in the areas that are most critical to enterprise-wide success. Yet when the SEC asked hundreds of sales executives what was most important for driving effective sales leadership, developing a leadership development plan was identified as a problem area for most sales organizations.

The best leadership development strategies provide diverse on-the-job experiences that align the organization’s leadership strategy to an individual’s development needs. Succession management efforts are not discrete events, but rather part of a cohesive system for managing talent in an organization. Further, expanding succession management to the front line enables development for high-potential employees earlier in their tenure, which can increase retention rates and improve the quality of leadership and management throughout the organization. Read More »