It was a torrid 15 months at Bromium. From a standing start, we delivered remarkable sales results in terms of bookings, customers (both numbers and quality) and unit sales. I want to thank the great teams in sales management, sales, sales engineering, sales operations, marketing, support and services, engineering and of course the ladies in G&A. Bonne chance to all of you.
The total commitment required by a job like that limited my ability to add content to this blog but I kept a list of topics that should be discussed and I now have some time to write. So here goes…
You know I’m a student of the go-to-market game and passionate about building and developing field organizations. Despite what they say, sales people love structure. At first blush they seem like the most unstructured people in an organization but the best ones want clear direction. They want to know what their territory is, they want to know what their comp plan is, they want to know what the sales process is and they want to know what is expected of them as they build a pipeline and drive toward meeting their numbers. So this is really more of a sales management discussion about setting and managing to expectations. The most obvious expectation for sales people is that they make quota. Simple right? But in most reasonably complex sales environments, those with sales cycles that measure in the months, equally important are expectations around activities and small successes that presage quota attainment. Sales people need to know what these activity metrics are and how they will be managed and inspected; this is not micromanagement, this is management.
If metrics are not being met it is: an opportunity to have an honest conversation about why, a time for the manager and company to add value to help the sales person succeed, a time for the sales person to clearly understand the consequences of continued non-attainment and a valuable data point for the business about its expectations. Setting expectations is not difficult, it’s often just math. Measuring, inspecting and responding to the results takes courage and thoughtfulness at all levels of a business.
An example: let’s say a company has a sales process for generating new customers that starts with a product presentation, of which half should progress to a product evaluation, of which two out of four should be successful, and then one of four successful evaluations should result in a sale within 90 days (others may buy in the future). So, three gates to an order: Presentation, Eval Start, Eval Success leads to an Order. Based on the average sales price, it’s easy to calculate how many orders a rep needs to hit quota, for this example let’s say the number is four per quarter. Working backward, for a sales person to succeed, quarter in and quarter out, they need 16 successful evaluations in the prior 90 days; meaning they need to start 32 evaluations; meaning they need to execute presentations to 64 potential buyers in 90 days, roughly 21 per month, 5 per week. If their conversion ratios can be better they can either exceed goal with less activity or better, crush their number! Of course upselling to existing customers adds to the opportunity once the product is deployed and the territory is building. But let’s focus on new customer generation for now.
If a new sales rep is averaging only 12 presentations per month after a reasonable ramp and training period then both the manager and the rep should be eager to have an open and honest discussion that can result in a number of actions:
- The manager can suggest some tactics that the sales person can use to increase their activity levels. Like working with local partners to generate a force multiplier and get an additional one to two presentations per week above and beyond their own prospecting.
- The manager can work with the sales person to analyze how they are using their time to find additional prospecting hours each week.
- The manager can “call in an air strike” like getting marketing to target the rep’s territory with an event or additional lead generation activity
If the rep is meeting the presentation metric but is generating only one evaluation start per five presentations, the manager should focus in on two things: the quality of the prospective customers sitting for the presentations and the quality of the presentations themselves. Assuming the rep is getting to the right people/companies, then something about the presentation is not resonating. The manager can now drill into that by:
- Role playing presentations with the rep
- Traveling with the rep and alternating who gives the presentation to making revisions to the rep’s version to improve its quality
- Arranging for the rep to shadow another more successful rep.
If fewer than two of four evaluations are successful (assuming the deployment team are on their game which we’ll take as a given here) either the customers and use cases are not consistent with the capabilities of the product, so there is a qualification/expectation problem at the beginning of the evaluation process, or the product is missing features that customers need to declare success. Often these are new requirements discovered once underway or added by new players at the evaluation stage. The technology may be attractive to one constituent but another must approve to move forward. This is fantastic information for the company to understand because even if a customer is willing to work around some shortcomings during the eval, these needs are likely to surface again after the order, at deployment time. If there is a problem at this stage, understanding why is perhaps more important than any of the above. Again, time for management to dig in and diagnose which of the above two issues are at hand and remediate. Qualification can be handled at the sales management level but missing features must be handled at the company level.
If most of the reps in a company are meeting their metrics but this particular person isn’t, the message is clear, let’s build a plan to improve or part ways. But what if the majority of the reps are not meeting the metrics? Now it’s time for the sales manager to “manage up”. Since each metric has a multiplicative impact on the final result, if there is a metric that most people are not hitting, understanding it is critical to success. What is the root cause? Are we hiring the wrong people? Or is there something structural about the product or the market or the go-to-market plan that isn’t working? Especially at young companies, management has to take signals very seriously and be ready to listen and pivot. Steve Ballmer is quoted as saying “The field is right until proven wrong”. Management, as a team, needs to have the courage to listen to the facts at the field level and respond to them, all the way to the board level.
Oh, and setting, communicating, measuring and resetting expectations is not just sales management. This is critical in all parts of the business. Customers have expectations that, if consistently not met, will result in them quietly looking elsewhere. Product delays might seem insignificant but time kills deals. Customers are willing to trust in the road-map unless it is consistently wrong/late, then they will take a wait and see approach. This gives competitors a chance to undermine your message and usurp the budget. To quote Dick Egan, the late founder of EMC, “It’s the product stupid”. Don’t forget that the customers want value from what they buy and they are more educated and demanding everyday. So understand the expectations they have of you (you were probably the one that set them) then hold the entire business accountable to those metrics while measuring and adjusting honestly, based on reality.
Good luck and good selling!
Please comment. It would be great to have a conversation about selling and to hear a story or two. If I don’t reply instantly, feel free to talk amongst yourselves until I get back ;-).
Image by Vince Vassallo via http://vincevassallo.blogspot.ca/
