How to Conduct Your Sales Force When Sales Training Is the Wrong Answer
How do you decide how many salespeople you need? What their quotas should be? How big their territories should be? For that matter, when you are launching a product or expanding into a new market, how do you know whether your new salespeople are doing the right things or even whether they are doing things right?
A European scientific instruments company called me recently. Verne (not his real name) was the general manager of their U.S. sales and service organization. He was hiring marketers and salespeople to sell his company’s products to both the university and corporate environments. While revenues were growing, they were not growing enough. He knew more salespeople were necessary for his company to grow, but he also knew they alone would not be sufficient for it to grow.
Verne explained to me that while his product was solid and had lots of potential uses, he had the classic “solution looking for a problem” dilemma. His corporate parent had great expectations. Applications engineers were always busy. His salespeople’s geographies were huge and the sales cycle ranged from six months to several years, so they were constantly on trains, planes, and automobiles. Everybody was working really hard. Things were probably improving, but Verne couldn’t really tell if it was enough to meet his parent company’s expectations.
How Is a General Manager to Know?
Figuring out how to increase sales revenue is harder than it looks. For example, if the market doesn’t already know about and seek out your product, adding salespeople won’t necessarily create the desired result (though it will increase costs!).
This often comes as a surprise to managers who didn’t grow up in sales. After all, isn’t it salespeople’s job to sell things?
The question isn’t as simple as it sounds. There is an old adage that goes “Salespeople sell what sells.” The underlying prerequisite for salespeople to succeed is people in the market (prospects) who want what you are selling. If you can’t find them or easily educate them to want what you sell, you have a serious problem.
Having more salespeople around in and of itself won’t create more demand.
Verne knew he needed salespeople to help make the market aware of his complex instruments, yet how much should salespeople be expected to promote, and how much should they be expected to produce? Does a large territory help, or does travel time reduce productivity? Should the new sales guy be assigned to the western half of North America, where there was nothing but future potential, or to the bottom third of the sales funnel, where there just didn’t seem to be enough conversions?
How could Verne know if his salespeople were doing enough of the right “salesy” things during their large amounts of unsupervised time or spending too much time on administrative and activity reports? Were they wasting their time with non-buyers and ignoring buying signals? Or, as they were inclined to believe, were they really doing such a good job that nothing more could be expected of them?
If your head is spinning, it should be.
Most people in Verne’s position end up relying on the tried and true management stand- by: They punt!
That’s what Verne was about to do too. He was about to call a sales training company he had heard of. He could just as easily have looked at CRM software, or a marketing campaign.
Training is easy to understand and easy to buy. Gross margins for off-the-shelf training are around 75% to 80%, so the training company would have been happy to hear from him!
But something didn’t feel right. He was sure his salespeople probably needed some training and some new software for that matter.
Which was the most important thing for him to fix right now?
That is the right question!
Something Seems to be Missing
How do you figure out what part of the process needs fixing first? Verne sensed that he was missing something, and he was right. He needed to know which levers to pull to achieve his goal. Being a scientist at heart, he was looking for facts, measurements, and sign-posts, anything that showed how this system worked.
Unfortunately, most companies lack the ability to make fact-based decisions in sales and marketing. Unwittingly, they run things in an uncoordinated fashion, as if conducting an orchestra by telling the clarinet, trumpet, and the trombone sections to independently make as much noise as possible!
Then, when customers don’t come running toward them fast enough, they stand behind the blaring clarinets, trumpets, and trombones, and urge them on: “Let’s do another clarinet campaign!” or “Let’s get training for the trumpets!,” and “Above all everyone, blow harder!”
Of course you can predict what the result will be. It is the result Verne sensed he wanted to avoid.
What Is the Organizing Principle for Sales and Marketing?
You too may have sensed that something was missing in the way you manage your sales and marketing. Why do we all work so hard yet everything seems to keep falling apart?
The answer is simple: We focus naively on trying to generate a transaction (so we can get some of the customer’s money) while our customer is focused only on their problem.
Without realizing it, we are fundamentally disengaged from our customers!
Fortunately, solving the problem is relatively simple. Organize sales and marketing sections so that they do a better job paying attention to the conductor–the customer. We ask each section to play its part when the customer signals them to do so.
If the customer is not aware they have a problem, the clarinets should play a tune helping them realize that their life could be better than it is right now. Once the customer is ready to know more, the trumpet section should melodiously convey the aching of their problems and the relief your solutions will take them to. Once the conductor signals the time is right, the trombones deliver the depth and resonance of liberation they hoped for from the beginning.
The organizing principle for sales and marketing is the same as it is in any other production environment:
- Do more of what the customer values
- Do less of what they don’t value
That means defining something called the “Customer’s Journey,” the stages your customers go through on the road to solving their problems. University environments, where research grants are king, are different from corporate environments, which want to solve money-driven problems. Sometimes the Customer’s Journey is only a few steps, and sometimes there are many steps.
Yet if you are to have a meaningful relationship with your prospects and customers, everything you do to Find, Win, and Keep customers must be of some value to them. It must help them move through the stages of their journey. This is the sales and marketing equivalent of the production line.
You do something, they respond, and you can measure it every step of the way.
How to Define the Sales Production Process
We are talking about defining Verne’s sales production process. How can he know what will help prospects move through the stages and what will not?
- The marketing department wants to create a brochure, a branding campaign, and a video.
- The sales department wants to do more seminars on university campuses, conduct more trial demonstrations, and possibly offer ball game tickets (to build relationships).
Which of these will help customers take some measurable action in their problem-solving journey?
Answer: Test it. Track it. Measure it. Analyze it. Once the organizing principle is defined, you can figure almost anything out.
Far from just being about “what salespeople do,” the sales process is the totality of how your organization helps customers move through the stages of their journey. Once you have defined the customer’s stages, you are able to work on refining and improving each stage, starting at the top.
Verne originally assumed his salespeople should be responsible for everything involved in finding, winning, and keeping within assigned geographic territories. Salespeople were measured only on revenue. He hired a marketing manager, but was unsure how this marketing manager could best help the situation.
He needed a template for how to conduct his sales process.
The concept of the Customer’s Journey gives Verne and his team a powerful lens: They can correctly define the stages and measure the quantity and quality of deal flow. That means they can track the flow of money!
Until those stages are defined, Verne will be leading his team from behind, making guesses about what they should do. His guess is as good as anybody else’s. In fact, it is probably better than the guesses he’d get from sales training or CRM software companies, which are more than willing to fill his brain with their pet material.
Getting the Company on the Right Track
It is not that those companies might not have something valuable to offer. It is that Verne has little way of knowing what works until the stages of value-add have been defined and validated, so they can be measured like a production process.
In Verne’s case, this organizing principle opened up new possibilities.
One of Verne’s salespeople, I’ll call him Tom, told me it had taken him 18 months to build up a meager sales funnel. “The thing is,” he said, “I can call into any major university and out of ten science professors, two or three will be interested in attending my seminar to learn about our applications. The business is there if you can look for it.”
Yet, instead of doing those seminars, Tom was distracted helping customers figure out why they haven’t received their instrument yet, or supporting other customers who needed training or assistance in analyzing their data.
Compared to setting up a steady flow of qualified prospects, all those other problems were relatively easy to solve. What would happen if Verne could find a way for Tom to spend more of his time doing those prospecting calls and seminars? Would concentrating his focus improve the flow of business?
Once the process is defined in measurable terms (such as number of suspects and number of qualified prospects produced by week), questions like this are easy to answer.
Want to know the volume of deals a good salesperson is capable of handling? How big sales territories should be? Which kinds of prospects are most likely to buy? Once you have things set up properly, it is all in the data.
Defining the sales process correctly enables you to know that your team is being conducted by the customer from the very start.
My bet is that Tom’s seminars will 1) produce measurable proof that they have increased his funnel and 2) that other salespeople can learn from the way he does it. No sense adding salespeople unless they know how to grow the funnel and it can be measured.
A bigger funnel will make selling new deals easier. Higher deal-flow leads to higher revenue, which pays for expansion, which, of course, is the point of the whole thing.