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I wrote, The Number Are, Well, Just Numbers.  It stirred up a lot of discussion and one observation from Gordon Hogg, was both amusing and illuminating:

“It’s the Cobra Effect!  India’s colonial governor put a bounty on cobras to stop snake bites. Dead cobras came in but snake bites persisted.  People started breeding cobras to kill for the bounty.”

I don’t know it it’s a true story, but it points out the unintended consequences of some of the metrics we put in place.  We have to think about, “What behaviors are we driving–are those the behaviors we really want to drive?”

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Too often, we blindly put in place numbers, without understanding how our people will achieve the numbers.  Any sales person will try to figure these out–often gaming the system.

For example, a client thought:  “If we do more proposals, we’ll close more deals.”  He put in place a metric for the number of proposals the sales people needed to do.  In could make sense, the logic being, the more opportunities we compete in, the more deals we have the opportunity to win, even if we win the same share (It’s the more times at bat argument.)

The problem was, sales people couldn’t find enough qualified deals to make their proposal goal.  But under pressure to make the goal, they started sending out unsolicited proposals to prospects.   Pretty soon, all the sales people were making the weekly proposal goal, but the business results weren’t improving.

The answer was, the manager thought, “More proposals…..”  You know what happened.

Or the weekly/daily telephone calls goal.  Another client had a goal in place.  Over time, the people started achieving the daily call goal, but the results (booking more meetings) weren’t being achieved.  Again, management, wasn’t looking at the underlying issues—what behaviors were they driving, were those the behaviors they wanted to drive, would they produce the outcomes necessary, if not, why not, was there another metric that would be more effective to drive the outcomes needed…..

Or the pipeline coverage model—We know if the win rate is 33%, our pipelines have to have 3 times the number of opportunities necessary to make the number.  When people are struggling to make their numbers, often, managers react—“You need more in the pipeline, you need 4X, 5X, 6X…. coverage!”  But the results don’t improve.  What happens is sales people driven to get the coverage, cast wider nets, they get more into their pipelines, but the quality is poorer, as a result the win rates decline, pipeline coverage demands increase, ….. and the organization is in a death spiral because managers are fixated on a metric but not understanding the behaviors the metric drives, or whether it’s even the right metric in the first place.

Number and metrics are important.  But we can’t implement them blindly.  We have to assess the behaviors they will drive, the outcomes they create, whether we are measuring the right things, or the “what’s, why’s, how’s” of what we are measuring.

 In reality, if we really understand the things that drive results, how to consistently achieve the results we want, the critical metrics/numbers needed to track attainment, and the behaviors those metrics drive, we end up not having to measure very many things at all.
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Jul 5 18
The Numbers Are, Well, Just Numbers….
by David Brock

Business people, particularly sales, are obsessed with numbers.  We measure everything, we scorecard everything.

Revenue, orders, growth, margin, share, performance against plan, performance against prior periods, pipeline metrics, calls made, meetings held, demos conducted, proposals submitted, wins/losses, expenses/budget, CPOD, people hired, turnover (voluntary/involuntary), performance in customers (e.g. major accounts), performance in market sectors, performance by product line, performance in geographic region/territory, customer satisfaction/NPS, customer acquisition cost, new customer acquisition, retention, churn, renewal, open rates, click throughs, forwards, bounce rates……

Differing segments have specialized terminology for many of these metrics.  For example XaaS oriented businesses have a propensity to endless acronyms measuring the same things as above.  It should be no surprise from a segment that defines itself by an acronym, that metrics are acronyms, including ARR, LTV, CLV, CAC, Arpu, and on an on–you get the point.

Marketing creates a language of their own, usually accompanied by the appropriate acronyms, as wel–MQL, SAL, ABCD (OK, I made that up).

Numbers are important, they provide an indicator of progress, or lack of progress, toward a goal.

But numbers are just numbers.

And we run into problems when managers just manage to the numbers—which is what too many managers do.

“You are behind on quota performance, you have to sell more…”

“You have to make more calls, demos, meetings, proposals…”

“You have to have more pipeline coverage….”

“You must increase your activity levels….”

The problem with numbers is, they are just numbers.

They are indicators, they may draw our attention to something that’s going right, something that’s going wrong, or the progress we are making toward a goal.

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They don’t give us much more insight into why the numbers are what they are.  They don’t tell us why we may or may not be making our revenue/quota/margin goals, why we aren’t having enough customer meetings, why our activity levels are not where they should be, or whether the activities are producing what we expect them to be producing.

I worry about managers who proudly focus on “Managing to the numbers.”  They will always fail—or at least underperform those who seek to understand what the numbers mean.

Yet, that’s just what most managers do–they manage to the numbers.

Recently, I spoke to a senior manager who had set a “proposal goal” for all his sales people—“You have to present X proposals per week.”  I started asking, “Why did you choose X, should it be Y or Z?  Are X proposals a week producing the outcomes you want?  Are the quality of the proposals at the level you expect?  Are proposals even the most important thing do achieving your other goals? and on and on….”

He was confused by my questions, he frankly didn’t have much patience for my questions.  He tried to dismiss them, “I know proposals are necessary to produce orders.”   When I produced data showing the average trend in revenue per proposal was declining precipitously, his reaction was, “I have to up the proposal goal by 50%….”

Instead he should have asked questions like, “What’s happening, why is it happening, what are the causes of this, what might we do differently…..?”

We don’t understand performance problems by managing to the numbers.  Yet that’s just what too many managers do, they live in a volume and velocity world, where the answer to bad numbers is “Do more, faster.”

This is, primarily, a management problem–starting at the top of the management food chain.

We have to stop managing to the numbers, but using the numbers to help us understand what is causing them, why, and what we might do to achieve the numbers we want.  At all levels, we have to constantly drill down to understand not just the symptoms (the numbers), but what the root causes are.  We have to ask the 5 Why’s.  We have to assess what we might change and why.  We have to understand cause/effect.  We have to ask ourselves whether we should be doing things differently.

We have to ask ourselves if we are even looking at the right numbers in the right way.

It starts with management, but is not just a management issue.  Each of us has to look at our own performance.   Are we achieving what we should, if we aren’t why aren’t we, what might we do differently.  If our calls aren’t producing the results we expect, we need to examine who we are calling, how we are engaging, what we should be doing differently–our managers can help us, but it’s our own job to figure this out and to fix this.  At least if you want to be a sales professional-a high performer, you must always be assessing your own performance and improving.

Numbers are important and will always be.  But they are just indicators, they are signs we see on our journey, they help us understand our progress.

The most important thing about numbers is they should cause us to ask questions and probe.

 

Afterword:  Imagine applying the same analytic approach to your customer and their numbers.  Like us, too often they fail to probe and understand what underlies the numbers, whether they are looking at the right things, or whether they can improve their numbers.

 

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Jul 3 18
The Servant Sales Person
by David Brock

Yeah, I know what the immediate reaction to the title of this post will be…..

“But Dave, we’re slaves to our managers and our companies………!”

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I get it, I’m talking about something different, but if your managers are treating you like slaves, gently remind them the Emancipation Proclamation was put into effect on January 1, 1863 (for non US readers, I’ll have to do some research).

What I’m focusing on is the application of the principles of Servant Leadership to our how we work with our customers.

Underlying the concept of servant or transformational leadership are roughly 10 principles:

  1. Listening
  2. Empathy
  3. Healing (In a business sense we may think of this more as coaching, mentoring, even problem solving).
  4. Awareness (Both of ourselves and others.)
  5. Persuasion
  6. Conceptualization
  7. Foresight
  8. Stewardship
  9. Commitment to the growth of people
  10. Building community

But what if we examined the principles of servant leadership as applied to selling?

  1. Listening—kind of obvious in engaging customers and understanding their goals, dreams, challenges, problems.  Yet too often, we spend the time talking.  Or we listen selectively, waiting for cues to go into pitch mode.  This is active listening–engaging the customer in deep understanding and conversations in which there is shared learning.
  2. Empathy—if we can’t put ourselves in the customer’s shoes, if we can’t see things from their point of view, we will never be able to connect with them and engage them in meaningful ways.
  3. Healing—in a very real sense, selling is about healing, helping the customer solve problems, helping them learn how to improve.  But this occurs at both an organizational and individual level.  Too often, we miss the connection at the individual level–we focus on the business goals and return.  But we forget how the individual–what do they want to achieve, how are we helping them, how do they see themselves in the situation?
  4. Awareness—there are a couple of perspectives here.  The first focuses on our awareness of the customer, their problems, challenges, and opportunities.  The second is broadening the customers’ awareness of their own situations, of new methods, ways to improve, and so forth.
  5. Persuasion—we talk a lot about this in selling, usually from the point of view of pitching.  I prefer to think of this as a way of helping the customer create and own a compelling need to change.
  6. Conceptualization—this is critical, it’s really about helping the customer create a vision of a new future and how they might get there.  It’s important that the customer is involved in creating the vision–it becomes part of them, rather than someone else’s vision.
  7. Foresight—encompasses the wisdom of past experiences, applying them to helping the customer achieve their goals.  We leverage not only the customer’s own experience, but the experiences of working with other customers in their attempts to solve similar problems.  We leverage these principles in our own process of engaging customers effectively.
  8. Stewardship—this term has fallen out of fashion, but really speaks to personal ownership, accountability, and responsibility.  We see from that stewardship helps center us in our role within our own companies, as well as in trying to be genuinely helpful to our customers.
  9. Commitment to the growth of people—this should be self explanatory.  It’s a drive for our own personal learning and growth, as well as working with our customers, teaching them, helping them learn, helping them address their problems/opportunities and to grow personally/organizationally.  How do we help our customer grow–organizationally and individually.  All this is really a core part of the value we create with our customers.
  10. Building community—as sales people working in complex B2B sales, we know we need support from within our own company, our partners, and others.  We know our ability to grow our relationships within our enterprise accounts and territories is continually building trust and our relationships.

The Servant Sales Person creates superior value with their customers.  The Servant Sales Person creates superior value with their colleagues and within their organization.

The principles of Servant Leadership are also fundamentals to becoming a high performance sales person.

Oh, and by the way, you may want to drop a copy of this on your manager’s desk.  Perhaps, they’ll think of their role in being servant leaders to their teams  😉

 

 

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Jun 28 18
Can You Make A Sales Call Without Talking About Your Product?
by David Brock

Imagine you have an appointment with your ideal customer.  The only constraint is that you can’t talk about your product.

Could you make the call?  What would it look like?

I suppose you could talk about the weather, exchange chit chat about the World Cup, perhaps the latest baseball games or cricket matches.

But that wouldn’t be very satisfying to you  or the customer.  It probably would be a very short meeting, because your ideal customer probably doesn’t like to have her time wasted.

What could you possible talk about that would be a good use of the customer’s time?

A good start would be to talk about what the customer is most interested in talking about.

But you’d be wasting your time, and possibly be unqualified if you just spoke about any topic your customer is interested in.

You’d have to harness the discussion to talk about challenges they have about the problems you are the best in the world about solving.

But you’d be forced to talk about it from their perspective–not pitching your product features, functions, feeds, and speeds.

You’d be forced to get the customer to talk about the issues and how it impacts them and their organization.  You’d have to drill down asking them to define the issues specifically.  You’d probably then ask them how it impacts them.  You’d immediately get into how important the issue is in the scheme of things.

You might then guide the discussion to what they’d like to change, when, and why.  You’d probably follow that up by asking their goals or “what would it look like if that problem/challenge were eliminated?”

You might help them realize there might be different ways to look at or think about the issues.  Or you might help them understand they may be overlooking important aspects about the problem or things to consider as they look to eliminating the problem.  These, of course, wouldn’t be product/solution capabilities, these would be change and risk management issues.

Through the conversation, you would help the customer shape their thinking about their urgency in addressing the issues, the impact they of the change, you’d help them create a vision of a future state where they be moving past the problem, addressing new opportunities.

Properly executed, by the end of the meeting, the customer will be left with one question.

“How can you help me do this?”

It’s only then that your solution is relevant–in fact critical to them.  At that point they will be hungry to learn how you can help them.

Think about your next critical meeting with a customer.  Imagine what that meeting would look like without ever mentioning your products.  Even if the customer asks you, don’t give into the temptation, shift the conversation away from the product, focusing on the customer.  Develop your call plan, then execute it.

Magic happens when you do this.

 

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