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We Are a Prospecting Machine!
"Of course my salespeople prospect. That's what they are paid to do. At least that's what I tell everyone."
Reality is a hard state to deal with. Rationalization is so much easier. Even people who aren't in sales know it is the salespeople's job to go find customers. Who else? Marketing generates leads, customer service keeps the customers happy, shipping makes sure the customers get what they ordered, finance collects the money, and so on throughout the organization. It's up to the sales department to go find and close new business.
Sales management agrees. Sales management creates compensation plans, contests, and rewards for salespeople who go out and find new business. They have 33 motivational speeches on why their organizations have to go broader and deeper in current accounts, as well as take business away from the competition. They spend gobs of money on training their sales teams to get new business. Their companies are counting on sales to get new revenue streams from new customers. Someone needs to tell this to the salespeople, because:
Salespeople hate to prospect.
Take a look at the salesperson in Figure 1.1. She's friendly, has a great smile, and seems stress-free. She's having fun, right? Prospecting's cool—and everyone always calls back. Yeah, right. Let's get real. The fact is, salespeople would rather do anything than cold call—and they usually do.
Sales management doesn't want to alienate the sales team. It wants to empathize with them. After all, the managers were once in the same place; they too issued the same proclamations:
"Marketing needs to get us better leads."
"The market is very competitive right now."
"Getting new business is getting tougher and tougher."
Making these proclamations is a huge mistake. Huge. However, sales management has been known to listen to these voices and:
Develop a prospecting-only sales department, also known as a lead-generation team. (This is different from a qualifying team, which works quite well for passive prospecting—leads that come into your organization.) Compensate salespeople more for generating new business. Actually believe that retaining business is harder than getting new business and designing rewards accordingly. Measure and reward for overall revenue and not break out new sales to new customers as an important company goal. Designate two groups of salespeople in the organization: Hunters and Farmers. Hunters hunt for new business, and Farmers maintain current business. (Great idea, until your competitor sets its Hunters against your Farmers. Then, of course, you have to deal with Trappers and Skinners—way too much classification.)
Sales management beware: Some of this organizational thinking may lead you to make decisions that will come back and haunt you.
Progressive sales management in successful companies knows that customers churn.
"How did my pipeline dry up?"
"I thought my hunters were hunting."
"When I looked at it, my salespeople were using less than 5 percent of their time proactively prospecting."
"I asked my sales team, 'Who has asked for a reference in the past 60 days?' No one raised a hand, and the prospecting funnel is empty at the top for what reason?"
In addition, sales managers know that most customers do not buy all they can from one vendor, because they are not aware of the scope of the problems that exist in other departments within their own organizations. Opportunity abounds.
Calling high—that is, calling on people who are in upper management—with questions that let prospects think broad and wide within their organizations, and then creating a culture around this solid prospecting effort, takes sales management years to figure out. Let there be no mistake: The sales team that stops prospecting within its own customer base loses.
LEAD GENERATION VERSUS PROSPECTING
It is important to know the difference between lead generation and prospecting.
Lead generation is the act of targeting resources. It means figuring out where to hunt, what gun to hunt with, what to hunt, and when to hunt. Prospecting is the act of hunting. It means going through many fields and bushes to flush out the game, finding the game, taking aim, and pulling the trigger.
Prospecting = Hunting
A good lead-generation machine is no excuse for a lack of prospecting. Last time I checked, game doesn't just fall from the sky or knock on the door of the hunting lodge and say, "Here I am. Shoot me." The Internet has done a good job getting some game to knock on the door, but the really big game is still out there.
Prospecting Machine: A company in which the sales department is doing well. Nonprospecting Machine: A company characterized by a weak sales forecast, a bad sales forecast, a weak pipeline, longer sales cycles, is closing bad business, or is closing deals based on price because the customer does not see value.
Sales teams, and especially individual salespeople, have the right to expect the company to do its part in lead generation. This could range from efforts to generate potential target markets and prospects, to qualifying teams (Q-teams) that qualify hundreds of leads, working them down to the most likely—the golden nuggets for salespeople to pursue. Great sales organizations have committed resources, up to 20 percent of their sales budgets, to lead generation, be it marketing dollars or sales dollars.
Taking the hunting analogy a bit further, you'll need to do some preparation before you grab your gun and head for the woods. Without putting together a strategy and culture around prospecting, you are looking at Mistake #1: Assuming that salespeople prospect, when they don't. Salespeople and sales teams need to generate leads. In fact, the sales team's focus on prospecting is the most measurable item of success or failure that I have seen inside of companies.
You get the point, right? The biggest mistake you can make is not to have a prospecting and lead-generation culture. The second biggest mistake is to have one but not measure it. You have to measure prospecting even more than you measure revenue.
Sales management must do one or more of the five "its" to ensure an aggressive and effective prospecting culture exists.
1. Measure It
If you can't measure it, why do it? Your sales team is not above being measured on:
The number of sales calls or qualified leads per week The number of executive prospecting calls or leads/month The number of prospecting attempts/connects/meetings per week/month The number of new deals per week/month/quarter The number of new deals in a current, installed, base account per month/quarter The number of new deals above $X per quarter Sales managers who do not have a dashboard metric for prospecting are 20 to 30 percent less effective than the ones who are. This is a big number and should grab your attention.
Prospecting metrics need to be tailored to your individual situations. But the point is, measure it.
2. Reward It
The saying is true:
"It's rarely the size of the reward that is most important; it's the accolades and the praise that come with the reward that end up being of most value."
How are you rewarding your sales team today? On what goals? Revenue and percent of quota to be sure, but what other rewards can you offer so the members of your sales team will feel good when they do something you want them to do?
Do you have a gong or a bell people can ring when they close a new piece of business? (The Internet has gong e-mails.) Do you have your president personally acknowledge every new-customer deal? Do you have your president call the new customer's president or owner to thank that person for his or her business? Can you start your weekly sales meetings off with a "New Business Report" or something that recognizes the people who have contributed? Do you have a "New Business Thermometer"? That's where the salespeople who have brought in new business during a month get their photos on the New Business board. The salesperson's picture gets placed at a higher level for every new customer the salesperson obtains. This is great for the salespeople who achieve and also for those whose pictures never leave the "Holding Area" (or whatever you want to call the bottom of the thermometer). It's better than a $50 check. Oh, and place the thermometer in the company cafeteria so everyone can see which people are doing their jobs, and which people are not.
3. Assign It
Suggestions do not work, and neither does hope.
Assign measurable objectives to each salesperson by week or month. You may be called a micromanager, but too bad. Salespeople will gravitate to the things they like to do or are the easiest to do, and they will avoid the "hard" things such as prospecting. Your goal is to help them be successful, and sticking their head in the mud (i.e., prospecting) needs to be an assigned measurable objective.
Your salespeople should provide some version of the following:
Five new-name accounts per week Three sales presentations to new-name accounts, or three sales presentations to new departments in current accounts per week Ten proposals to new-name accounts per month Five meetings with VPs and above to new prospects per week
Assignments like these will create a culture where prospecting is a normal behavior, not the exception. Less than 10 percent of sales organizations assign prospecting goals; and as you know, you reap what you sow. Less than 10 percent of companies have prospecting goals, but they all have revenue goals (a reactive measure). If you want to win the game, you have to measure it one play at a time.
A great way to track these objectives is called the Skill-Improvement New Skills (SINS) chart (see Figure 1.2). SINS tracks assigned tasks for six weeks, until the salesperson feels that the assigned tasks are routine or a part of expected behavior. Then something else can be tracked with SINS. It's not like a negative productivity plan for a poor performer (most people on personnel-improvement programs, or PIPs, will be gone in a month); SINS is a cool thing. It could involve reading a book, taking a class, trying to develop a strong prospecting e-mail, learning how to leave an effective phone message, or actually trying to get to a certain C-level contact.
M2O/t in the chart means Mutually Agreed Measurable Objective over Time. The objective you want the salesperson to fulfill. Go read ProActive Sales Management if you want a detailed explanation of measurable objectives.
You use the SINS chart to make a salesperson a better prospecting machine as part of your culture, rather than being treated as an exception.
4. Speak It
Every day! The more you talk about cold-calling, the success of getting new-name accounts, and/or additional new business at current accounts, the more attention the sales team will give it. Walk the talk. Get your butt out of the chair and go on some prospecting calls. Not customer visits, but cold calls. Go by yourself, don't just tag along with your reps. Go to a trade show and really work the booth. Keep prospecting front of mind. Make time for it. Use your contacts.
5. Enlist It
Get other departments and people to help.
Getting leads—especially good warm leads—is not easy. It takes a whole bunch of effort to find a prospect who is willing to talk to you, has a problem, has money to fund this new effort, and is willing to make a change. The more other co-workers or friends can help, the better, and rewarding leads is not a bad idea—but remember, the recognition is better than the reward itself.
Here are some things you can do.
Go to other departments' staff meetings and enlist their help for leads. Have an Internet guru live in the sales organization to help capture home page hits, as well as what your competition is doing on its home page to generate leads. Go to lead-generation social breakfasts; have your salespeople go to them in the cities where they live. Go to trade shows at which your prospects exhibit, and get leads—and please do not say it won't work; way too many companies are successful at it. Find out how the customer service department passes leads, how it's rewarded for it, and how it's measured on it.
Sales managers have tough-enough jobs without taking on the added responsibility of empathizing with a salesperson over the lack of leads, how hard the market is today, and how they do not have the right product to break into the C suite. By far, the biggest sales-management mistake is lack of an effective, organized, and well-executed prospecting effort.
For the organization to succeed, a sales manager may have to do things that are unpopular but necessary. Getting the sales team to prospect—as a team and as individuals—and to do it well truly ends up making or breaking a sales organization. That's why it's the first thing in this book.
It's All About Luck
"I'm lucky to have Mary on the team. She is such a top producer." "Fred is lucky I'm his boss. With anyone else, he would have been long gone." "I'm a lucky manager to have such a great team."
It seems sales management relies on luck rather than increasing the skill sets of its players or recruiting new talent. For example:
General Electric is legendary for turning the bottom 10 percent of its employees so the rest of the employees get better. Read any of Jack Welch's books for details. In sports, general managers and coaches are always tying to get one more top-notch player or are investing huge amounts in training facilities. They want their people to be better. Hotels are always divesting themselves of properties they do not need so they can acquire other things they really want—and make more money doing what they do best. Luck? What is luck? If you want a great sales team, you have to plan for it, just the way everyone else does.
YOU MAKE YOUR OWN LUCK BY RETOOLING
"We don't rebuild at Ohio State. We retool." —Jim Tressel, Head Football Coach, The Ohio State University
No, you do not have to divest yourself of salespeople or trade them to your competition for future draft picks, although the thought of that sometimes does seem pretty enticing.
The point is: Sales management makes a big mistake by reactively assigning territories and accounts to the teams it currently has rather than the teams it needs to have.
You as a sales manager have an obligation to figure out what skills your sales team will need to become competitive over the next six to twelve months. Train and educate your people so they have these skills. Test them. If they pass, they can sell. If they do not pass, they can leave, or they can go somewhere else in the company. They just can't be salespeople.
That may seem a little drastic, but consider these examples:
A shipping department where the shipping people do not want to learn how to use FedEx online, costing the company hundreds of thousands of dollars An office administrator who does not want to learn Word or PowerPoint A salesperson not wanting to learn or use a customer relationship management (CRM) or sales-force analysis (SFA) system (Continues...)
Excerpted from More ProActive Sales Management by WILLIAM "SKIP" MILLER Copyright © 2009 by William Miller. Excerpted by permission of AMACOM. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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