Sales Decisions have never been easier

Finally, we’re here. I’m very proud to announce Sales Scenario – your Sales Tactics App. It will profoundly change the way you make sales decisions. Instead of reading prepared reports or analyzing fancy charts, you and your team will actually run scenarios of the future to find the best way forward, by asking yourselves “What if …” The result will be better and more well-grounded decisions, which in long term will mean significantly higher profitability for your company. In my last post I told you:

“There are modern solutions, that in one single tool let you run and elaborate among future sales specific scenarios as many times a week you need to, invite and chat with your management team, friends or experts – when they got the time to – and get inspiration from top sales gurus, to make better and more well-grounded decisions that are already implemented from start, so you can stay as the leader in your specific market.”

Let me introduce the core principle of Sales Scenario App. The Tactical Perspective. In The App you fill in sales figures of where you are today (for example revenue achieved so far), where you need to go (for example your end year revenue target) and the chart in the app will tell you what to do. The App will calculate backwards in your sales process based on your input. The amount of required numbers in the stages in the process are decreased according to the actual efficiency – the hitrate. An example. Opportunities. The chart will show both how many (in average per sales rep) opportunities that are achieved the current date and how many every sales rep has to create from current date to target date (typically year end) to reach the target. In this case every sales rep has created 7 new opportunities every week (the green column in the chart), but from now on until target date they have to create 9 new (the orange column), otherwise the target would not be met. But is that amount really possible? If not, start play with the scenario by adjusting one or several constraints. Or run several scenarios, until you find the best. That’s more dynamic than a report or fancy chart, isn’t it? It’s like running a chart. Summary. The core principle of Sales Scenario is that good decisions are not made in isolation in response to an individual’s idea or individual piece of data. They require shared knowledge and analysis of a combination of different pieces of information. It adds future dimension as well by running several scenarios and asking the “what if question”. The Sales Scenario is available on AppStore today. Please let me know what you think! Best Regards, Stefan

Big Data anyone? It’s time for Less Data.

Sometimes you need time to think. I’ve just read an interesting post by Maree Conway Slow Strategy that pinpoints “there are no quick fixes, no silver bullets to developing strategy that is futures ready”. People are so anxious finding the right answer, they may not have time to think to ask the right question.

If you are sure having the right question, the specific answer will be ready to serve you. If you don’t, you still will have an answer. As Maree Conway tells, there are multitudes of options to explore and it’s not one single answer. You can’t be sure having the right question until you invest enough time to explore those options. Exploring your options one after the other you will discover that every option are connected to several questions as well. If you got five options – or scenarios – you easily can ask at least three questions.

Examples in a sales environment.
Scenario A: You discover the half year sales revenues are not keeping the pace for the end year. Questions may be (1) what if we book more sales meetings? or (2) what if we put more money in TM lead generation? or (3) what if we try to raise the average order size?
Scenario B: A continued slow down in China (an important market to us) escalate next year. Questions may be (1) what if we layoff five sales reps? or (2) what if we decrease our prices to keep up the number of orders? or (3) what if we increase the hitrate winning the deals?

You see, it’s not that simple just asking one question. Which of the above six is the “right”? That’s the problem with hype of Big Data as well as with Google. For sure, the answers will be there. The databases are full of them, but the tricky part is still to figure out what question to ask. The Big Data database or Google can surely give you patterns for help providing guidelines in which areas to look. However, it’s only historical data – it would still not give you facts about tomorrow. It’s up to you to think about. You need to discuss within your team, and you need time, since there are several scenarios to explore.

Exploring your options to find your right question, of course you may need some historical data. But you don’t need exact facts provided by wrongly asked questions. Big Data consultants will tempt you to ask questions because their only delivery is answers. They are paid after the number of answers, not the quality of the question. I think you should consider not starting any Big Data projects until you are very clear about what you need to know.

In that process, you need Less Data. It’s typically figures about revenues, process efficiency, people etc. This type of information is often easily available from your internal systems. More important, you would also need information such as competitors and their products, macro economics, customer challenges and so on. Do not be tempted to read the consultants’ answers first; they belong to other enterprises’ questions, not yours. Begin with much less data, but much more experience – which is not in any Big Data machine.

This experience is certainly encapsulated in your team and organization already.

Use that experience, take your time, read the blog post by Maree Conway for inspiration and develop your right question tenderhearted.

Sales Tactics for Dummies – Part Four

Long time – no see. I do need to aplogize. I haven’t come back to you in months. Really sorry for that. It’s no excuse, but I hope you may understand – it has been too much work and nobody has come to help, poor me.

Let’s recap previous posts. We were discussing a sort of correction system in sales to help when things happen on a tactical level. Remember? You set strategic goals and break down these to an operational level; what have to be done in your sales organization  – every day or week. Easy.

But things never go exactly as you plan. Lots of events occur; new competition, news, macro economy, etc, that force you to act. If you get insights often – for example every week – you are probably able to handle most events on the fly. This is the tactical level.

But is “on the fly” the right way to go? Are your decisions all the time well founded? If you’re experienced, maybe yes. But still I believe you can make better decisions. Think about the case Peter had in my previous posts. Let’s go on with Peter’s way to a well founded decision and the key features a tactical correction system has to be equipped with.

By setting up a few sales scenarios, Peter pointed out his Objective – meaning what problem or challenge has to be solved. In the example, the sales figures for BA Automotive in EMEA were dropping unexpected . Hence, Peter’s objective was: “Meeting the new competition and win the battle”. Help by hand, he presented scenarios he can think of as reasonable. The scenarios were elaborated in his management team to secure the quality.

What is the next step for Peter? In my mind, he’s got two alternatives:

1. Decide supported by his own thoughts and experience (“my solution has worked before”)
2. Ask a friend or expert

By definition, an expert knows a lot about one single topic, but may lack the overall picture. But since Peter himself has the overall Picture, why take the risk not to ask an expert to be really informed about his or her knowledge and experience in the topic? An expert may be a very educated person with University Grade and titles, but also an individual sales person facing just that challenge of the new competitor.

Useful information is typically how the competitor is acting in a lost deal, what arguments and sales pitches they are using, what discounts they are willing to give at what pressure, where they in detail are located, which customers they are attacking and so on. Detail knowledge that is too valuable to ignore.

This type of information provide the ability to set certain constraints of what can or can’t be done. For example, if the competitor is highly discounting the price – we may not be able to set our prices too rigid. When Peter decides, he have to be aware of these constraints and the only way to be that is to get people involved in an iterative Discussion. The individual sales person may say “if only the price is low, we will sell”, but the constraint may also be “the margin has to be on a high level” stated from the board or financal manager.

Do you understand what I’m looking for? People are experts in different areas and with different knowledge and experience. A software platform for Collaborative Decsion Making has to support a collaborative way of setting constraints and to let people honestly express their thoughts. Otherwise it’s not a collaborative way of making decisions.

In many organizations I have met, the middle levels of management are a bit afraid of what the levels below are saying. I mean, a sales rep may express thoughts that are a bit rough and may not be suited to be expressed in board meetings. My experience is that the middle management tend sometimes to hide uncomfortable truths for the management team or board. My opinion is that what you know, you are able to correct. If you not love what you hear from the grassroots, act upon it. Don’t try to think the problem don’t exist – it does. And as quickly you act, the better.

A software platform for collaborative decision making has to have the capability to be open enough not to filter out uncomfortable truths since in the long run it will even impact your brand and what values you stand for. A real collaborative decision making software platform also supports feedback from outside your company. Of course, sales figures may be sensitive in some extent to communicate outside your Company, but think of the upside value of having an outside view of your problem. For example, your customers. Having their view how you can reach your goals, isn’t that valuable information? Or what types of sales efforts they like or dislike?

It’s time to collaborate. Start within your own organization, but don’t be afraid to honestly ask for advice from the outside. Otherwise it’s still old truths.

/BR, Stefan

The final destination isn’t Integration, its Collaboration!!

I read articles every week about smarter ways of collecting information, how a company achieved success through attaining control of the Social Media flow of information, how new information has shaped the product development process in FMCG companies, and so on. Focus is mainly around integration of systems and oodles and oodles of data.

At the heart of it, the integration in itself was not the key to success, it was the interaction it caused between the people on different ends of the integration that caused the change. The collaboration!

After reading David’s blog on “Who Cares About Big Data, Where Are The Big Questions?” I realized that this clear cut wisdom often gets put aside in the heat of the moment when you are fighting the challenges of getting the budget you need to get the information you need, fighting the technical challenges, fighting the analysis challenge and finally fighting your entire organization in order to land the change. The big question is really “How do we achieve better collaboration?” Better collaboration with our customers (call it social networking or whatever), better collaboration in planning (sales and operation planning or integrated business planning) and better collaboration between co-workers and top management.

The problem is that there is a fear of collaboration. People in companies don’t want to share information and discuss this with others. First of all you risk getting criticized; second of all there are plenty of functions that don’t create value and people in these positions don’t want the fraud to be revealed. It also puts a lot of demand on the organization to have a dialogue that is on the right level and a common goal to achieve something greater than whatever is the scope of the individuals work. This is Managements task to put into place. This I have written about in earlier blogs.

It leads me to think about the success stories I read about Apple and Google, they achieved collaboration through an open culture with little hierarchy and very strong culture. Everyone in these companies know what they are trying to achieve as a whole, at all times, they know what they are working on and who is involved and their own role. Sharing is crucial for the projects and collaborating around each other’s parts of the project is natural.

Read Stefan’s blog “Sales Tactics for Dummies – Part Two” to find out more about Collaborative Decision Making (CDM). This is the goal, the other stuff is help along the way. But don’t get stuck on the way… lift your vision to achieve something beyond the traditional structure and heirarkies!

I will be back with more on this topic…

Sales Tactics for Dummies – Part Two

I’m still where I left you; on the tactical sales level, trying to take the right decisions when unplanned events happen.

Let’s look into that “correction system” I mentioned in my post Sales Tactics for Dummies – Part One that responds to deviations and provide help at hand for what to do when various events occur.

First: Definition. What do I mean by the term “Correction System”? I would say mainly two components;

1. Tactical decision model for sales (discussed in this post)
2. Software platform (will be discussed in a coming post)

Tactical decision model for sales

The essence of the question is to make better decisions when you face a sales tactics problem occurring from an unplanned event. In most countries today, decisions are made based on position – hierarchic – not consensus based, see illustration:

The MD – Peter – has to be informed about the certain topic of the decision to make. If he’s not sure, he will ask the individual responsible in the management team.

In a sales perspective, let’s look at an example. During the monthly management team’s reporting session it appeared to Peter that a dramatic decrease in sales orders for the business area Automotive in EMEA has happened. Typically this issue is addressed to Kenny (Director Sales), who forward it to Brian (VP Sales EMEA), who in turn let George (Sales Manager Automotive EMEA) answer why the figures are dropping for the first quarter. George’s answer related to new competition that is raised in the area, proposing products with more features, lower price and sold by very nice commercials on TV. Brian documents George’s answer in an e-mail and sends it to Kenny. Kenny prepares a presentation where the answer is a part and in the next management meeting he briefs Peter and the rest of the team.

Peter then turns the question to Bruce (Director Product Development) if we are able to launch our new product earlier to match the competition we are facing. Peter also asks Emmy (Director Finance) what aspects she see lowering the price, Patty if we may downsize the supply chain and how flexible we can upgrade again if our actions have the wished impact and also, Peter asks the Director of marketing, Eve, what the cost is for a TV commercial and what result we could expect from it in lead generation. Several weeks later Peter make his decision based on these “silo answers”.

Did we miss any knowledge to make a better decision, such as:

• Kenny stated a wished price level to get sales figures boosted
• Eve states she could manage a nice TV commercials campaign and asks for the no of leads to be generated
• Emmy says lowering the price will erode the margins
• Peter supports not to lower the price – he has promised a high margin to the board
• Bruce may say a new designed component will outperform the competition to a lower price
• Emmy calculates the margin for new version and is satisfied
• Peter approves the new price
• Patty comments that component would have a longer delivery time
• Eve wants to coordinate the sales boosting campaign with the product launch campaign
• Emmy supports the coordinated campaigns; it will lower the costs
• Patty comes back with delivery times and gets comments
  on them
• Kenny states the no of leads he needs to be generated in the campaign to target the sales budgets
• Danny sees synergies in using the same type of campaigns in his BA
• ….etc

By this, Peter had full control over many views at the same time and came to this decision:

“We stress to launch our new product ASAP, but we need to wait for the new component that gives us the possibility to lower our price. That means we launch a sales boosting campaign coordinated with our product launch. Our BA Energy gets full details to run similar campaigns for lowering our total marketing costs for the entire company and higher output results. Decision Made”.

As you can see, it’s an iterative process and the social discussion moves the decision forward. Since Peter received knowledge from all his team members and by incorporating the discussion between the members he permits a well founded decision to evolve. It’s a Collaborative Decision Making model.

The history of Collaborative Decision Making goes down decades ago and today Gartner points out Collaborative Decision Making (CDM) will change the way we interact with information (see Hype Cycle for Business Intelligence, 2011), even if it will take a while: “…but require a significant cultural change for this technology to be widely adopted…” (Gartner 2011).

The Collaborative Decision Making model fits perfectly into a sales organization, since it improves the quality, transparency and auditability of tactical sales and marketing decisions by bringing together the right decision makers and their knowledge, brainstorm among specific scenarios and appoint the best of the scenarios to go for, and finally, see the impact the scenario has and form the action plan based upon it.

Like Gartner mentioned, it’s a cultural change in ways decisions are made. There are drawbacks of Collaborative Decision Making, but I think the globalization and harder competition will drive the process in this direction. You need to act more agile on events that happens “outside” your plan and there are no room for mistakes or bad founded decisions – often you only get one chance when events happen.

If you go for a Collaborative style in tactical sales decisions, you may be interested in my next blog post where I would like to discuss what support software platform you need to manage it.

Tip! Click the “Follow” button to automatically get the next post in a mailbox close to you.

Until then, take care.

/Stefan

When does the simple become the complicated?

I recently read an article about Swedish entrepreneurs, how they struggled with getting funding to start their business and how they ran into unwanted issues as they achieved success. This blog is dedicated to all the entrepreneurs out there…

So, you started out your company with a great business idea, some money from your own pocket and the belief that you would succeed. Some years later you are standing there in an organization with 30 employees doing the exact same thing as before, but you are more lost than ever and your results are spinning out of control. “How did I get here?”, you might ask yourself.

It is really quite simple. As your business grew, you added people in your organization to meet the increasing demand. In times of fast growth this process is usually quite chaotic it can leave you with the feeling that you might have recruited some poor achievers. As you added people you also added a need for communication you didn’t  need before, you always knew what you were planning and acted accordingly, nowadays it seems like people in your organization constantly are working on the wrong thing or that time and resources are being spent in areas that are not according to your own priories. You have also found that people never tell you anything, all information turns up too late and you feel like you’re chasing to make ends meet.

Organizations require work and you have been in it for the business, the smell of the deal, the thrill of helping the customer, and so on. So you haven’t been doing what you should have been doing, and yet you have. There was plenty you could have done, but there is no point in bringing this up for your sake, you are already there and I seriously doubt that anyone starting up is reading (they are busy making the mistakes you made), so I’ll spare you the lecture.

Most importantly, don’t beat yourself up about it. You are where you are and it isn’t all bad.

Key words that describe an entrepreneur. http://www.wordle.net.

What can you do at this point? First of all you need to seriously ask yourself the uncomfortable question, “Am I the right person for the job?” Communication and structure is not natural to all people, so don’t force yourself to work with something that does not make you happy and the end of the day. Look within your organization and see if there is someone with this ability or hire someone. Start by taking yourself out of the equation. This solves the management issue.

Now, you need to take what you have in your head and put it on paper, write down the vision you have for the company. Why do we exist and if I close down tomorrow will my customers loose a value they cannot find any place else? Already got one? Great! Start communicating this to all employees.

You also need to set the route how to achieve the vision. Of course you will never reach it, because it’s a vision, but you need a way to aim in that direction, your strategy. A strategy doesn’t have to be grand or complicated. IKEA had a strategy called 10 jobs in 10 years and it was communicatively genius. By the way, I believe we did it in 7 years. State what you want to achieve in a given time frame. Keep the language simple and leave out room for interpretation. You should create sub strategies to support the overall strategy: HR strategy (what competence do we want, how to we get there), Sales strategy (hunting vs. farming, product mix, market potential, resources, etc.), production strategy (make or buy, type of capacity, capacity volume, sourcing countries, etc.), and so on. Start communicating this to all employees.

What order do you want to do this in? What is first up on the agenda? Are there dependencies (A before B. C has to follow A, but is independent of B). Build in some flexibility to be able to shift priority and/or direction due to circumstance (still the same strategy though). Set a budget to keep track of income and costs. Now you are ready for setting the first year tactical plan.

Write the plan for the coming year, what you want to achieve from a business perspective, what goals you have for different product areas (what will grow and what will reside), what market shares to reach, retention rate, and so on and so on. Start communicating this to all employees.

The point of communicating each step within your company is to make you check your own work. If it does not sound right when you write the communication, then maybe you need change something, or if it is too complicated to explain, it most likely is too complicated to execute.

So, when does the simple become the complicated? When you stop managing…

This is just a quick guide, remember, there are really good professionals out there who can help in all these areas. Have patience, this can take time…

Don’t let yourself get distracted by trends, bring out the best of you and your business

Lately I have been inspired from an unexpected direction, from a sales person. I have always been a skeptic to sales shady ways, never giving a straight answer, never doing what was promised, always stating what will happen and dodging all relevant questions of actually has been achieved. But working with Stefan and reading David Brock in the ”Partners in EXCELLENCE Blog” has given me insight that I have been generalizing too much. They inspire me. There are sales people who understand and can explain what sales really contribute in a company. Read what they are writing to come back to the core question of what selling is all about and how you can get more control of your people and processes.

Today development moves at an amazing speed and information is global at the push of a button. Keeping up with what is happening in your area of work is difficult and time consuming because of the sheer amount of information. The influence of Big Data, social media,solution selling, sales and operation planning, and whatever new thing that is happening out there is actually totally irrelevant if you are doing it for the wrong reason. They are merely the cherry on the cake. This is what I find inspiring in Stefan and David. They are talking at the core of the topic sales, what makes a delicious cake…

This weekend I watched an interview with Simon Sinek, “the #1 Business Principle that Changes Everything”. Thank you Scott at “Live your ledgend” for the interview! What strikes me is that people that constantly are changing to the latest fad on the market in order to “fix” their business or the ways they work have not asked themselves the important question “why” they do what they do. So if you are a searcher, reading this blog because you want a quick solution to your business problems, I have to disappoint. You need to do the celery test. There is no “fix”, you need to sit down and write why your business exists or why you work with what you do every day.

If you are a sales manager you need to task yourself why you are a manager. I cannot tell you the right answer (it’s not “because I’m a great sales person”), but if you love the challenge of sales and you are inspired to lead people you will be helped and inspired as I have been by reading the blogs I mentioned in the beginning.

My why? I love fixing problems and sharing what I learn. Maybe it is more that I like learning new things and finding ways of using what I know to solve problems. I get in there and I go in deep to find out what the real issue is and then there is the juicy delight of finding a way of getting others beside myself to understand the solution. This is the reason I have been writing about strategy. It all starts there and if you have a problem with strategy, your owners or management team really need to sit down with the “why” question. When you’re clear on the “why” the strategy will come naturally. If you still need help to solve a complicated issue, don’t worry about it, you are welcome to give me a call. I’m eagerly awaiting the next challenge.

A more dynamic approach to sales

In an LinkedIn discussion I started recently I aimed to get some answers upon the thought if sales reps care to sell your profitable products or just the ones they feel are the easiest to sell or are most comfortable selling.

The audience was really active and helpful, I got many valuable insights and perspectives.

However, the result was also somewhat shocking.

Most of the comments told me that if I just put a compensation plan in charge I will get any of the products sold – but it has to be compensated.

That makes me worried. By nature, a compensation plan is at operational level – how many phone calls to perform, sales meetings, quotes etc as well as order revenue metrics per week and year. These KPI’s may be – hopefully – be connected to the overall strategic goals (check out our sales scenario app at AppStore: http://itun.es/se/-x4oH.i), but the compensation plan is usually written on a yearly basis.

My experience is that you by then has no chance to act agile in between. My colleuage, Håkan, wrote a blog post last year that said something like: “if things go wrong – and they do…”, in “With a map and a compass”, which is true. The essence is that it is a need to set a sales strategy. You really need all people you have on board to go in the right direction and act on a daily basis to fulfill that strategy. As stated above: connect the strategic goals to an operation level.

But then you cannot – in your intentions to secure your strategic goals – go on cementing your KPI’s in compensation plans  and CRM alarming systems if you’re not on track.

Why?

Because the truth may be false. Things may have been happened since you printed down your strategy, of course. It may be an Italian comedian as prime minister that drives your important PIGS market to freeze status or a better development in the US employment statistics.

The only thing that is for sure is that nothing is for sure. Things are happening and if they can go wrong they intends to do so.

How agile does your business has to be? The answer on that guide you in how dynamic you need to set compensation plans and operational KPI’s.

Of course, you need that “alarm system” to tell you if the ongoing outcome deviates from your original plan, but you also need to have a “correction system”. If you wait too long acting upon deviations, you may put more and more heavy artillery in place to be on track again.

I name this intermediate stage “tactical”. You have your strategy – fine – and your activity based targets for individual behaviour on a weekly or monthly basis. However, based on the outcome, implementing the “tactical control system” would provide an agile and competetive approach that in the long run decreases your business risk as well as increase profitability.

In many ways a sound communication model is solving many issues. This discussion is not an exception. I wrote a blog post “Demand strategy decision making in an agile world” about decision making in an agile world recently. In the post you may get inspiration and help while implementing a more dynamic approch in sales.

In the end; how and what you sell has an impact on the rest of your company. My tip is to sit down once a month; look at the alarm system, take decisions, create decision points and be open minded.

Start measuring your process today; you’ll need to know tomorrow

In my last blog I wrote about the natural way of working in process, now I will follow up and writ about how you can measure the process.

Time, money and units. That’s it. In theory this is simple. You want to measure the effectiveness, cost or contribution of a single event or a series of events and you choose one of the three. Or all of them.

At the same time it is really difficult to collect data and format it so that you can present something that makes sense. If the work in a process is scattered across multiple locations across the globe and the work is split on numerous items, you will need to find some shortcuts.

• Tip1 Don’t go bananas, find a couple of areas and add data gradually and find the data at the lowest possible level, like sales of item X in store 123.
• Tip2 Keep all the raw data in one place and find ways of trimming it, putting this information in a secondary place, to ease analysis (keep a summery log of what you are trimming to continuously check that you have made the right assumptions).
• Tip3 Top level numbers are not always the sum of the lower levels; make sure you know when they are not.
• Tip4 KPI’s are important from a management point of view, but OPI’s can be more helpful in the short run and help make the right operational decisions, find a way to balance both with the time you have on hand. In the best of worlds one will support the other.
• Tip5 Try some versions before settling for what will be your standard.

So, related to tip5, what measurements should the raw data support? We need to know how effectiveness, cost or contribution is spread across the process (steps A to G in the figures bellow). We need to be able to see the relationships between the processes and we need to see development over time

Visualising each steps cost or contribution and how it accumulates through the process

We also need to know the change between two points in time; or different periods can be summarized in an index change. The index number is easy to understand as anything under 100 is a lowered result and anything over is an improved result.

How is the change in cost or contribution over time.

The value you are looking at can be measured as an average, you can look at max and min values, the standard deviation or the accumulated value. The advantage of one number is of course simplicity in in communication. This number can also be powerful if shown over time to see development and trends.

Different ways of measuring data over time.

We used a lot of index numbers in IKEA and it made communication a lot easier. The most popular index was last year’s result vs. this year. In some cases it was irrelevant but in cases like accumulate year result vs. accumulated current year result it was crystal clear if you had a tough road ahead to reach you goals or not. What we started to improve was to communicate the index between planned and executed. This is a crucial index, but was not used much. For me it says a lot about the business.

It is also important to find a way of measuring the change that occurs in a process step (IN vs. OUT) in order to find the contribution of the step or to see if there is a buffer effect; i.e. that there is an over capacity to be able to catch up in this step or not. This can be seen as a good thing or you can see it as just having too many resources in this step. In the same way you can see if one step continuously is lagging, then you might need to add resources here. One thing that can be devastating is variance in a process step. This is the level of unpredictability and needs to be managed either by building in a buffer in the process or as safety stock, either way, it is what costs money.

Simple measurements to compare what goes into a process step to what comes out if it.

The thing is, if you know what you want to measure you need to get started, NOW, don’t sitt around. Because, unless you start measuring it, you’ll never be able to analyze it. You might have to rethink how you measure, but sitting around thinking about it will get you nowhere. Waiting for perfection is just another way of failing.

So now, off you go! Get it done already! You’ll be happier a week, a month or possibly 6 months from now, depending on what you decide to do…

Side note:

You can of course also measure culture, but does not really relate to what I write here. There is an article by Mark Graham Brown in Business Finance  on the topic.

Who is doing the farming in new sales?

While New Business sales focus on signing the potential customer as quickly as possible, key account management’s target is to expand existing customer engagements. How can you combine these two opposite momentums for better profitability?

When first finding a potential customer, obviously they have got some type of need or problem. The qualification process evaluates type of need, when the business may take place, if there is a budget, our type of solution to their problem, if we may identify decision makers and so on. If all goes well sales management keep pace pressure on to close the deal in line with defined KPI’s so the sales rep can start focus on the next opportunity.

Hold on for a sec. Two questions;

1. Was it the right customer need the sales rep went for?
2. Didn’t the potential customer have more than the initially identified need?

The point is if there was any other need to fulfill that contained a higher business value for us.

Did the rep really take his time investigating the complete picture? Were notes taken about additional but more vague and indefinite needs or problems?

Unlikely.

Sure, I definitely agree the blood flow in Hunting is pace and focusing on closing. The process for hunting is really focused from the initial segmentations; through the dating to the opportunity stages, just like the picture:

My point is that we don’t leave enough space for reflection in the hunting process. The KPI’s binds us to go on even before we are able to think clearly about our possibilities we actually have on a new potential client. By qualifying the need that comes up first so easy, it fits perfectly into the established checkboxes in our sales funnels and our VP Sales Management nods encouragingly when the opportunity quickly passes through the funnel to closing stage, valuing the reps’ expensive sales time to be spent on the next opportunities.

Unfortunately, of all life blood you have poured into the funnel, only one droplet is signed as an order. Stressed by the KPI’s for the individual sales rep, we are too blinded seeing the right opportunity – the one that end up our potential customer being an A-customer, not a B or C.

And we won’t let anybody else in. It’s my opportunity and potential client. There is no room for anybody else exploring any eventual larger possibility.

In Farming, it’s the opposite. The only thing important in farming is to expand the customer engagement in order to increase business volume. And it’s vital, since there obviously are no other engagements established than the initial one. The result is that the farmer, named as Key Account Manager, starts from scratch since there was nobody doing the farming in new sales. After kick-off the process starts with hand-over, usually digitally (but still no notes about any other needs!)

I think this is one of the reasons we sometimes combine the new sales and key account management in one role. The thought is good, however, it’s a poor compromise. A good hunter doesn’t have the mindset or patience needed for “administer” farming and the farmer isn’t equipped with blood taste in his mouth or new client radar in prospecting.

Going back to the theme of this blog post; what happened with all other needs or opportunities you may have been able to see, but not had the time or interest to act upon, during your first sale to a new customer? How can we have the “farming job” in new sales done? If the hunter already has been doing some of the farming job in the hunting process it would be a kick start for the Key Account Manager building his customer development plan.

Tightening the gap between the hunting and farming processes will expand your business value on the acquired client, which is a prerequisite for better profitability.

What’s also obvious is that New Sales is not measured in opportunities they aren’t focusing on. If there is no effort than just taking some notes, I don’t really see the point of not doing the farming job in new sales?

Some steps that are easy to start with may be:

1. Make it easy to catch needs or opportunities, a simple form in a mobile device is a good advice – with very little effort needed
2. Take time evaluating which of the needs that will be the first (quick) sale; note all other needs
3. Hold the New Sales responsible for planning and performing the hand-over meeting. Don’t pay any sales bonus until the meeting is held
4. Base one part of the customer development plan on the simple list in (1)

As always, it’s all about communication.

Best Regards,

Stefan Johansson