The Client

A SME company based in Northamptonshire

The Challenge

A couple of long standing, regular clients ceased trading which left the owner in need of finding new business. The MD felt his team were very reactive and no proactive activities were taking place. He was also not 100% clear in his mind in terms of the direction the business should be taking; as a result, the company had not seen growth in sales revenue, profit or customer retention.

The Solution

Increase sales revenue and profitability of the business with a view to clearly identifying the target market, and then focusing specifically on growth strategies, plan and process, where by the company is taking a proactive approach.

Task

1. Train, coach and facilitate the team in developing a detailed strategic market expansion plan
2. Train, coach and facilitate the team in developing a detailed marketing plan (including specific tactics to generate leads from the target market)
3. Sales training – Provided in depth training to the team, covering number of technique and tools, e.g.- call planning, needs analysis, linking needs to feature of the product that will benefits the clients, handling objections etc…

Client Benefits/Feedback

“Rakesh helped us in number of key areas of our business. This included developing a strategic plan that provided us with a clear sales and marketing plan and strategy. This then enabled us to develop a business plan based on key market segments. Rakesh also undertook training/coaching of the sales team and put in place tools to assist with future sales development and customer retention. Rakesh also helped us to develop the concept of “value selling and total cost of ownership model” this has now enabled the team to articulate the key benefits of using some of our solutions. We are now starting to see signs of improvements in our business performance and sales conversion rate and we have continuously used the Rakesh approach/methods in order to develop our business further. I would have no hesitation in recommending Rakesh and will look to use his service again in the future.”
T. Mariani – Managing Director

Chief level executives face unique challenges when it comes to handling a company. As a business scales, there is a significant burden to not only achieve sales targets, but also to exceed them. In this case, it becomes essential for these leaders to make use of tailored programs that blend tactical comprehension with state-of-the-art data analysis and personalized instruction.

Sales programs help transform how business is conducted, ensuring that every decision is smart and profitable.

Understanding the Sales Challenges at the C-Level  

Chef level officers typically manage larger, more strategic accounts where the effects of each decision extend beyond immediate revenue prospects. The complexities of negotiation, the need for precise market understanding, and coordination among various teams make these types of sales situations especially challenging.

Furthermore, maintaining relationships with clients at this level requires subtle handling and a keen understanding of customer needs alongside shifts in business. This underscores the need for an elevated approach to sales management.

Key Components of Effective Sales Programs for C-Level Executives  

For executives, an effective sales program must take into account their personal and company goals. This can be achieved by incorporating individual coaching sessions aligned with these objectives. Advanced training sections on strategic thinking, negotiation skills, and leadership can greatly enhance decision-making abilities.

Moreover, employing immediate analytics and feedback techniques helps in making strategies flexible and results-oriented. These types of programs often provide opportunities for executive peer networking, assisting managers in discovering and adopting the best methods for their businesses.

Integration of Technology in Sales Strategy  

Utilizing appropriate technological tools can provide critical data insights and predictive models that aid in making strategic decisions. Technologies such as AI-powered analysis platforms can predict customer behavior, adjust pricing plans for maximum profit, and uncover new business opportunities.

If you are a C-Level executive that is hoping to employ these technologies, then you will be pleased to know that these programs not only streamline your sales process, but also equip you with the ability to understand and predict market trends.

Measuring Success and ROI of Sales Programs  

In order to generate constant revenue, it is vital to have robust methods to track success and ROI. This involves establishing clear goals at the start of the program and regularly assessing your progress towards these objectives. Key performance indicators such as customer acquisition costs, customer lifetime value, and sales cycle lengths are essential in assessing efficiency.

It is crucial for chief officers to frequently review these KPIs to decide where adjustments need to be made. This process ensures that the sales program remains aligned with changing business goals and environments.

Creating a Culture that Embraces Ongoing Development  

Facilitating the development and education of employees is essential for sustaining business prosperity over time. Encouraging regular training sessions, workshops, or seminars to enhance awareness regarding new tools and developments can be heavily advantageous.

As a head or manager, you should also work towards creating an environment where feedback is not only received but acted upon—allowing strategies and methods to evolve with new knowledge or market conditions. A positive work culture where opinions are acknowledged also guarantees improved employee satisfaction and loyalty.

Strategic Client Engagement and Relationship Management  

Successful customer interactions are those that result in lasting relationships and brand loyalty. This type of engagement calls for customized messages, considering each client’s specific needs and preferences. Here, executives must use their expertise and insights in ways that provide value beyond ordinary sales pitches.

They should focus on consultative selling techniques to position themselves as essential partners in their clients’ successes. Regular review meetings, personalized updates, and strategic advisory sessions can enhance client relationships, marking the organization as the top choice for stakeholders.

Risk Management in Sales Strategies  

Chief level executives must also identify potential risks associated with various sales strategies and markets. These could be influenced by economic fluctuations, competitive actions, or even changes in customer preferences. Using risk assessment frameworks and continuous monitoring tools helps officers foresee challenges and mitigate them before they negatively impact the business.

Integrating risk management into the sales strategy not only protects the organization from harm, but also helps maintain steady growth even when there is rapid turmoil.

Conclusion  

Customized sales programs are not just tools for meeting quotas; they provide a necessary framework for C-level executives to navigate the complexities of business operations with precision and foresight. When business leaders embrace a structured approach, it ensures continuous improvement and success in meeting future challenges.

Author: Mr. Mark San Juan

A careful balance of “volume” and “value” marketing strategies will help vendors avoid the three classic reasons for unsuccessful sales efforts.

Written by: Gad Tobaly, COO, Nastel Technologies, published on Sandhill.com, Business Strategy for Software, Cloud and Mobile

Traditional enterprise software sales efforts fail for three reasons: your solution does not meet its market’s needs, your sales force fixates on “big deals,” or your business model is flawed.

The recent economic downturn means software vendors can no longer afford to make classic mistakes. A closer look at these reasons for failure shows that software vendors can leverage diversified go-to-market strategies to find new levels of sales success.

Problem No. 1 – poor business model

Not surprisingly, nine out of ten product launches fail because of a flawed business model. Business models from conception often suffer basic flaws, including the following:

• Weak value proposition
• Poorly defined target market
• Disorganized distribution scheme
• Ill-conceived sales strategy
• Fragile customer relationships
• High cost structure

Enterprise software sales strategies often are based on the mistaken premise that a richly featured product will sell itself. This assumption drives enterprise software developers to devote inordinate resources to adding features without carefully considering whether they solve customer problems. At the very least, this produces “nice-to-have” products rather than “must-have” products. At its worst, failing to focus entirely on solving your customers’ problems complicates a solution without fixing your users’ biggest problems. Your solution is marginalized.

The lesson? Stay simple and address your customers’ pain points.

Problem No. 2 – product does not meet market needs

When companies launch a new product, they notoriously rush to strengthen sales efforts before testing the solution with multiple clients. Products thus often lack key features customers want or they don’t work the way customers expect.

Selling untested solutions obviously causes long-term problems. Cash is burned while generating disappointing revenues.

Mark Leslie and Charles Holloway, authors of The Sales Learning Curve , say your entire organization must learn how customers will acquire and use your solution, a process the authors call the “sales learning curve.” Leslie and Holloway show how a “learn before burn” strategy pays off. The authors, who grew Veritas Software into a $1 billion business, provide examples of numerous once-promising offerings aborted due to premature inauguration.

The lesson? While the sales learning curve is often ignored during product launches, incorporating it is one of the elements that are essential to marketing success.

Problem No. 3 – “big deal” dependency and the “hockey stick” effect

Another factor undermining successful enterprise software sales efforts is the allure of “big deals.” After landing one or two big deals, it’s not uncommon for a company’s most talented sales reps to be consumed with pursuing more such deals. Even the most experienced sales professionals and managers, often convince themselves they have a breakthrough solution. Anticipation runs through the company as sales executives fixate on landing more big deals while ignoring smaller opportunities that they could later use as a beachhead to expand within their accounts.

Dependency on big deals triggers a “hockey stick” effect. A big deal requires a long sales cycle. That extended time increases the possibility of “surprises.” Your customer sponsor could be reassigned, customer requirements could change, or a new vendor could enter the competition. Make no mistake, on a big deal, your client knows that your fortunes hinge on their purchase decision. Procurement professionals – who are rewarded for driving down what your client pays you – use this knowledge against you in negotiations, lengthening your sales cycle.

Dependence on big deals also creates a distinct type of financial pressure on your company because each client relationship carries high stakes and revenues are not predictable.

The lesson? Develop volume and value strategies employing a range of licensing models to diversify away from a dependency on big deals.

The solution to enterprise software sales challenges

While the introduction above explains the key reasons for failure in simple terms, implementing real-world solutions in the current business environment is not so simple. There are many dynamics affecting the enterprise sales process in today’s business landscape. Consider the following examples.

The customer development process

The high failure rate of traditional enterprise software sales makes it wise to bring customer needs to the forefront before the product is launched.

Software development, even before your product launch, should be centered on addressing the needs of customers—not adding features that software developers want. Concurrent with the software development process, vendors must create a way to collect customer feedback on the new product. This is crucial to gaining finding your target market and long-term client satisfaction.

The client communication process that must run in parallel with software development has been defined in The Four Steps to the Epiphany by Steven Gary Blank. Blank maintains that an enterprise software vendor’s understanding of customer problems and needs – a process he calls “Customer Development” – is driven by four factors:

• Customer discovery – drives understanding of customer problems and needs
• Customer validation – develops a sales model that can be replicated
• Customer creation – creates and drives end-user demand
• Company building – transforms an organization from mere earning to one designed for execution

Learning before burning

Companies ignore the sales learning curve at their own peril. They often rush to ramp up the sales force and burn cash, sometimes at the cost of survival. Here’s an example of what can go wrong.

Typically, a CEO and CFO would calculate net revenue the company must generate to break even. In this instance, let’s assume that’s $12 million. They ask the VP of sales how many sales people are needed to generate $12 million in revenue. Based upon a quota of $2 million annually for each sales representative, the Sales VP advises hiring 20 new sales reps as soon as possible.

Here is the basis of his calculations, wherein “X” is the amount of sales required to break even and “R” is expected net revenue, “Total Costs per Rep”are estimated at $400K (on target earnings of $300K plus $100K for expenses and other fees), “Gross Margins” are estimated at 90% and a “Ramp Up” period of 6 months…

X = R x 1/ (Quota – Total Costs) x Gross Margin x Ramp Up / 12 x 80%

With your new 20 sales people hired too early, your organization will be swamped and you will quickly burn into your cash. Instead, you want to ramp up the sales force progressively in order to learn before burning – and not burn before learning.

Software as a Service (SaaS)

We believe that elongated sales cycles associated with big ticket deals are essentially motivated by the ultimate necessity for the customer to mitigate the financial risk associated with the decision to buy your solution. Therefore if you lower or eliminate that financial risk then the sales cycle will be shorter.

With the subscription model, software vendors forfeit a large one-time license fee but gain steady, predictable revenue year after year. In many instances, the break-even point of the traditional versus SaaS model occurs after three to four years. During that period, the SaaS vendor may appear to lose money but actually makes it back by being able to take on new customers and providing add-ons to the customer over the life of the relationship.

The SaaS model also helps to penetrate new market segments, such as the SMBs that could never before afford a similar solution because of the upfront payments and maintenance burden associated with maintaining a locally installed system. While the SaaS subscription model is a radical departure over the traditional perpetual license pricing regime, the SaaS model nonetheless requires recognition of the following:

SaaS is merely a delivery model. You still must ultimately deliver a relevant application!

• Telesales and online marketing may be the optimal ways to reach your market. However, direct sales— not channel sales— are paramount with SaaS.
• Choosing a subscription versus perpetual licenses pricing model is challenging, but you must make a choice. Select which works best for the five-year period ahead.
• Whatever is your direct sales model, when it reaches critical mass it is wise to separate hunters from farmers. Deploy hunters with new business opportunities and farmers with maintaining existing relationships.

Value and volume go-to-market

With the hunt of the big deal, you don’t have the certainty or predictable revenue, and you are held hostage to one or two deals a quarter because your buyer knows you are heavily dependent on his order. However, the hockey stick effect need not be avoided. It just needs to be managed.

A way to manage the hockey stick effect is by employing “volume” and “value” strategies. A “value” strategy is best suited for vendors targeting large companies, while a “volume” strategy is best suited for vendors targeting small- or medium-size clients (see figure). To sustain growth, software companies must devise a selling strategy that balances value and volume.

For example, Microsoft is a volume business and its Office line of products is famously adopted by large enterprises. From the beginning, Microsoft devised licensing options that attracted big corporate clients. In contrast, SAP is a value business. To sustain growth, it has had to create new offerings to generate business from small- and medium-size clients. Depending on whether you are a volume or value vendor, consider the following strategies:

• Product segmentation – You can balance value and volume strategies by assigning one product line with a volume strategy while employing a value strategy with another product line. For example, a security single-sign-on product might be priced to serve large enterprises, while a solution for monitoring network infrastructure could employ a volume pricing strategy targeted to small- and mid-sized clients.
• Open source model – Open source refers to opening your source code to users. A basic version of your product can be provided for free and distributed via a volume strategy, while add-ons and customization are paid for and support a value strategy.
• OEMs, channel partners, and other integrations – There is a need for software firms to embed their products in larger solutions provided by Value Added Resellers (VARs), System Integrators (SIs) and others. There are also channel partners who help profitably expand your reach – but please do not expect these partners to figure out how to sell your product if you have not figured it out on your own! Consider the “Partner-Assist” approach where the partner makes the introduction, you handle the sales cycle and the partner takes the lead back during implementation.

Achieving improved results

Employing the solutions discussed above is likely to make enterprise software sales efforts more successful. It is worthwhile defining what success looks like. Results you can expect include:

Sustainable profitable growth – Implementing at least 2 out of the 4 solutions listed above will help you balance growth and profitability in a predictable way. Trying to accelerate growth by throwing salespeople at the problem without accomplishing key milestones in the Customer Development Process will only generate frustration. You will be happy at the first sales acceleration but it won’t be sustainable. Then you’ll hire a new Sales VP hoping things will be different. It’s like drinking salty water and expecting to calm your thirst.

Outstanding customer experience – Going through the Customer Development Process will keep you close to your early adopters. They will help you develop appropriate support processes for when you“cross the chasm” and target the mainstream customer base. If you implement a SaaS delivery model – and you do it right – it is expected that all management burden (integration, updates, maintenance, etc.) will be on your shoulders – not the customer’s shoulders. The usual finger pointing between software vendors will be limited and ultimately, you will sustain high customer satisfaction.

Market share growth, improved brand and “de facto” choice – It is expected that your controlled approach will help you target meaningful market segments. Repeat wins in a specific segment will help you develop a brand name and appear as the “de facto” choice in that segment. This in turn will help you better lead your organization and raise the bar even higher. In the software business – more than in other businesses – that dynamic of success is a necessary condition for inspiring people to excel. This is probably due to the intangible nature of what is being sold.

Attract and retain top talent – A winning company has a better chance of attracting better talent. People like success and the benefits that come with it.

Market value – Ultimately, your board and your market recognize your solid and sustainable performance. This recognition will give you a “currency” that you can monetize while acquiring other companies or positioning your own company for sale. You know your foundations are sound and that you can grow revenue and realize cost synergies in all confidence. Other organizations will be happy to join forces with yours.

About the author: Gad Tobaly is an International software executive with extensive experience growing sales and profits worldwide for U.S. and European technology companies. As Chief Operating Officer for Nastel Technologies, an application performance management (APM) software company, Gad repositioned the company on target markets with the highest revenue potential, reversing a three-year revenue decline to double digit profitable growth, leading the company to Gartner‘s Magic Quadrant and joining forces with one of the giant vendors in this space (CA Inc.) to create an alliance set to produce a paradigm change.

View Gad’s short bio

Before we go into the details of the brand turnaround project, I would like to give a short statement about being a women leader: YES, I AM A WOMEN BUT I have always behaved without thinking I am a women. Work place is competitive for all (men and women) and what will make difference is results, how to get them and how you develop your team& work with others. I have always tried to lead by example. When I took this turnaround challenge, I was the first women to do so and my sales force and customers were mostly men. I gained respect step by step from all. Then I tried to balance the team with more women as I believe the balance creates a good mix and is part of diversity.

Let’s look at the brand turnaround project:

• Industry: Apparel
• Positions held: Sales Director and then General Manager
• How hired: Internal promotion via internal interviews
• Brand turnaround context: First signs of decline when I applied for the role. At that time I held a sales director role on a smaller brand within the company and became with the new role the first women in that role for this brand in this market!

STEP 1: FACE REALITY

• Meet customers, spend time in the field with the sales team on different channels
• Assess in depth & evaluate impact of decline on your budget in terms of revenue and profitability
• Hold conversation with your top management and be transparent
• Hold meetings with your direct and indirect team and be transparent about the challenge to over come
• Start working on actions to minimize the current gap to prepare the brand turnaround

STEP 2: CHANGE – “INSANITY IS DOING THE SAME THING OVER AND OVER AGAIN AND EXPECTING DIFFERENT RESULTS” EINSTEIN QUOTE

Same behaviors will generate same results. Once you know that you need to identify what changes are required. You need to be radical and drive their implementation.

STEP 3: FASHION APPAREL REQUIRES ALSO PROCESS AND STRUCTURE FOR A SUCCESSFUL BRAND TURNAROUND

Apply the same principals in apparel than in FMCG but in a simple, smart way. This approach was new at that time for apparel industry.
Principles:

1. Prioritize your accounts (revenue/profit criteria)
2. Plan your visits/calls 4 weeks in advance
3. Share your final plan a week before with your manager of the whole organization
4. Prepare each call with clear quantified objectives and define agendas
5. Debrief on agreed actions regarding the next steps and the achieved results
6. Keep all information in the customer file.

Drive execution of this new way of working via your managers team and ensure by yourself it’s done. Be consistent on it if you want your team to believe in it and do it.

STEP 4: CELEBRATE SUCCESS WITHIN YOUR TEAM AND GROW YOUR TEAM CONFIDENCE

Failing at delivering budget creates tension and month after month, team starts lacking confidence. This is reason why it’s key to start celebrating even small success from one team member or one region with all. It gives a light and put everyone in a different mode. It’s like in sports. If you believe you can make it, you train yourself and there will be a day when you will be successful.

STEP 5: NEVER COMPROMISE SHORT TERM WITH MEDIUM TERM

Brand turnaround comes from several factors but there is a big one called “brand equity” on which sales have a great role to play. Sales have to drive revenue within the frame of brand equity! This is never to forget. Align with marketing and merchandising on brand objectives and ensure sales force understand them and have also qualitative objectives to reach and reason behind those targets. Ensure you deliver your short term with quick win that will not damage your medium term objectives

STEP 6: BRING RETAIL BEST PRACTICES INTO WHOLESALE

• Sell out focus is key any case.
• With a retail back ground, it’s obvious.
• For ones having work in wholesale, it has been a learning path.
• Focus most of your team on improving sell thru results of their customers.
• Act as a retailer for your customer! It’s has been a key mindset to develop and actions to put in place.

STEP 7: CELEBRATE SUCCESS WITH ALL

Important to take time to celebrate and pause to review progress and how success has been achieved. Celebrate with all within the company to ensure team spirit is kept in good time also!

STEP 8: BE DEMANDING, CONSISTENT AND RESILIENT AND FAIR TO YOUR TEAM!

If you want your growth to be sustainable, you need to keep driving implementation all initiatives and ensure processes are used at any time. This is restless effort!

STEP 9: KEEP DEVELOPING YOUR TEAM AND EMPOWER THEM

Spend time in coaching and developing your team. Identify within your team who could be your potential bench and prepare him as best as possible. It will allow you to be promoted and feel secured if you have a successor ready for the role.

WHAT I LEARNED:

• Work under business and financial pressure
• Be transparent
• Say what you do and do what you say
• Be consistent
• Be demanding
• Encourage your team especially when times are tough
• Invest time in coaching & developing your team

About the author: Nathalie Schneider, an experienced commercial executive director, with significant expertise of leading multi brand brand retail operations. She has a strong track record of aligning teams. As a senior business leader, she is adept at strategic planning, change management , driving execution of profitable sales results and delivering continuous improvement in sectors of retail, wholesale and fashion.

View Nathalie’s short bio

If you can’t explain why customers should do business with you, how can you expect THEM to know

Listen and look closely at advertisements that promote that they are the BEST – HIGHEST RANKED – MOST AWARDED – at something and it always come with the key qualifier. Best “in class,” and most awarded  “in their segment…”

THIS is the very key! Eliminate every opportunity to be measured on a level playing field with everyone else in your markets. Unless, of course, you are already the market leader with a substantial share…but I suspect, to achieve this, the market had to recognize uniqueness and a “bar” was raised with which to measure all others.

Create and play on a field that you know you dominate and force others to compete with you on your terms. One example from my past. Where IBM, NCR, Dell and HP were the recognized leaders in Point of Sale computers, a relatively unknown brand struggled to even be invited to bid. All of the others have nationwide and worldwide onsite repair capabilities with 8 hour response time offered. Too small to credibly compete, we redesigned a point of sale system that was the first and only blade based self service POS that was “purpose built” for POS with technical features (liquid cooled; flash boot; single module replacement from front of POS). The new challenge was a discussion around uptime, availability and purpose built design…something the bigger brand names struggled to adequately address for those who valued these aspects most. The company began winning contracts and industry awards and global recognition for innovation. You want to win more? Change the game!

It doesn’t always mean you have to revamp your entire product offer. Much can be accomplished by better targeting your offer to a segment that values most what you have to offer – where others don’t shine as bright due to their huge size; slow responsiveness; higher costs; or merely they don’t value this segment as highly. Example? EVERYONE wants to biggest utility companies in the Country – Duke Power and/or PG&E for example. To compete head to head against the largest industry vendors can be both expensive and time consuming. Select the target who needs most what you readily have and can do better than the bigger competitors – say CoOp and Municipalities … and strive to be the BEST… for this segment… and you may well enjoy more sales… shorter sales cycles… domino referral sales… greater brand awareness… more profitable deals…a broader customer base making you less vulnerable to fickle customers who change vendors every contract cycle.

So, how do we know which game to play? Everyone could use some help framing the following. You and your team are closer to your business than almost anyone. Your individual and collective perspective would be collected from all sources. Making an extraordinary effort to have these questions answered by a wide collection of sources is strongly advised. Feedback and input from customers; suppliers; sales partners; industry influencers and – ever more important – customers you are losing or have lost. Their perception is their reality – no matter what you say.

1. What do we do? “One sentence”  a. “We make the best value priced metal soft drink can in the Americas.”

2. What do we do uniquely or better than anyone else? (“We are the only one who…”) – a para max and try not to make it a catch all…like, “ we are the easiest to work with, best priced…flexible…custom tailored… mass production…green (recycled)… lightest weight…most durable… stylish…”

3. What Specific Segments Do We Provide a Specialized Offer? Avoid “every customer with a pulse” mentality. Consider lifetime profitable customer profile. Rank and prioritize your segments.

4. What is our Value Proposition to 1) Financial Services (specifically subsegment Client Account Records); 2) HealthCare (specifically subsegment EMR); 3) Telecommunications/Utilities (specifically subsegment Subscriber Records)

5. Identify, Validate and Document (from the target’s perspective) THEIR Value Metrics (I need to manage costs down and I need an cost effective tool to help me); Buying Criteria ( I don’t want to have to change everything I do to use that vendor’s product – the product should suit me and not force me to conform to it); Easy to Position the Benefits to my Stakeholders; …

Position the Problem Statement – then – Position the Value Proposition –– For example, as a customer, I struggle to integrate and make seamless disparate point products that actually create exposures. Where do other approaches fall short – what makes us the better way to go… – one page.

Why YOU? 2-4 page – brief non technical business case positioning paper to highlight the challenges; demonstrate how well you know their pain points and exposures; why the current and/or typical approach is insufficient; position against the competition (highlight the current and typical shortfalls for example – classic security rarely precludes the extraction of digital files on a USB or download from a USB); demonstrate how your offer came to be…the considerations…what was rejected…the rationale that drove the development of your offer…in terms that keep the customer pain point front and center.

About the Author: Orlando Joseph

Global Technology Executive with strong business and financial acumen. Strong ability to link marketing strategy and results directly to overall business strategy and company financial goals. Keen abilities to develop strategy from in-depth analysis of buyer and/or customer insights. Documented program development skills, from advertising to digital presence accros all relevant marketing channels. Possesses excellent influencing skills and able to drive consensus. Able to recognize and articulate a future direction; provide strategic direction, and have the ability to direct global and localized products, brand, advertising and related specialties while managing budgets. A strong track record of new product development and demonstrated ability to forge strategic alliances with key partners. Accustomed to driving results and delivering return on Investment. View Orlando’s short bio

Tips for improving your sales performance: Customers are now smarter at buying than the salesmen are at selling

If you are an executive, you may have read one or more of the thousands of books currently available on how to improve sales performance. With so many books advising on how to be great at sales, you may be forgiven for wondering why there are so few talented salespeople out there.

You see, the thing is, in the last 40 years there have been no significant advances in sales techniques. Virtually all were built on a foundation E.K. Strong laid down in 1925. Any “new way” of selling can be mapped to one of 4 approaches that were first promulgated in the 1960’s. Procurement methods have changed – but selling methods have stood still.

If a company is not hitting its sales targets it may be due to one or more of the following problems:

Most salespeople have had little formal training

In a survey of our clients we found that most salespeople have had less than 4 days formal training in the profession of selling. Less than 2% of salespeople had been on a structured sales training program that the likes of IBM and Xerox once ran.

Most companies don’t have a formal sales process

Almost any sales process is better than none, but most salespeople are not required to follow any process at all. Only 12% of companies have a formal sales process.

Most executives don’t know how to sell

The vast majority of senior executives are not necessarily skilled in sales. Often thought leadership and mentoring on salesmanship doesn’t exist. We worked with a large organisation last year where the CEO was shown the Account Plan of his largest client. It was apparent to everyone in the room except him that he just didn’t understand the language of sales. For instance, he wanted to know where “the compelling event” was taking place.

Customers are smarter at buying now than the sales are at selling

It wasn’t so long ago when the buying department was a much underrated offshoot of the Accounts department. Today it is not unusual to have a Strategic Procurement Director helping the exec team shape the direction of the business. With e-auctions and supply chain strategies in operation, buyers are now better able to take control and the salesman often finds himself dancing to the buyers tune.

Sales are not empowered to sell

Many sales people are simply not empowered to sell their product. They are expected to raise the awareness of their product and get to a point where the customer may buy. But they do not have the authority to truly negotiate a creative win-win outcome for their own company or that of their customer. At best they can offer a bit of discount to try and sweeten the deal.

Sales hasn’t got anything to say worth listening to

When I was an IBM salesman in its heyday, I could walk into any MD’s office and he would be glad to see me. Why? Because I had something to say that was of interest to him and relevant to his business. If you waste a customer’s time with irrelevant solutions – don’t expect him to answer the phone when you next call.

Training for a better sales performance is often a waste of time and money

Much of today’s sales performance training is based on techniques that are 40 years out of date. A bigger need is training in the cognitive psychology of selling. Some salespeople are naturally skilled in this area, most are not.

People don’t buy from people they don’t like

Let’s be blunt. The cruel truth is that if you have salespeople in your organisation that you don’t particularly like, the chances are high that your customers won’t particularly like them either. You can train, pay or bully a salesperson as much as you wish, but unless they have that certain spark they are doomed to fail.

Now, the good news is that your competition almost certainly has one or more of the above issues. Sadly, the bad news is they may be doing something to address them.

There is a wind of change blowing through the way we look at sales and selling, what worked in the past won’t work now.

Phil Smith the CEO of Cisco UK and Ireland sits on the European board and knows all about the need for a different approach. His view is as follows; “Here at Cisco we recognise that sales models evolve and those traditional models do not always remain relevant and can become costly and ineffective. The “High Touch” model which has Cisco sales teams directly building relationships with customers, while partnering with a highly enabled and motivated channel, provides flexibility for our partners and we believe the best possible solution for our customers. In the mid-market and SMB space this model is not affordable and provides an opportunity for a different “partner led” approach. In today’s market sophisticated and customer centric sales will prevail – It’s not good enough simply to do it the way it was done in the past.”

Whilst many companies wrestle with the problem Siemens Financial Services have not stood still. Jonathan Andrew the Siemens Financial Services CEO for Europe and Asia Pacific says: “In today’s increasingly competitive environment it is essential that sales organizations recognize that customers’ expectations, business models, buying processes and sales channels have changed significantly in recent years. Successful sales organizations eagerly embrace and anticipate the evolution and accordingly re-engineer their sales processes and approaches in order to gain the essential competitive edge necessary to differentiate and win market share”

Sales performance: Old sales approaches no longer apply

The big guns in industry recognise that the old sales approaches no longer apply for today’s sales performance – and they are actively doing something about it.

They know that the old way often involved “selling hard”. But the fact is that customers simply do not respect or accept this anymore. The secret lies in helping a customer to achieve their goals and to ensure that the buyer considers the seller to be adding real value to the transaction.

Patrick Allainguillaume the Chairman and CEO of Muzicall puts it this way: “It is absolutely true that selling has changed significantly over the years. Our strategy is 180 degrees away from trying to “get” a deal from a customer. To us selling is about helping, advising and guiding the customer. In today’s market, customers will choose vendors who add the most value – not those who are simply trying to push product”

Recent research has shown that buyers are more responsive to sellers who go out of their way to help the buyer. The antiquated method of selling which was about persuasion is long dead. In today’s business world the “Law of Value” applies. Bestselling authors Bob Burg and John David Mann define it as: “Your true worth is determined by how much more you give in value than you take in payment”

About the author: Ray Coyte started his career in IBM and was part of the “Golden Circle” of the highest performing salesmen in the company. He was European Managing Director and General Manager for two of the largest software companies in the mobile phone industry. Ray heads an International consultancy practice that helps companies get more out of their sales teams by building bigger and better relationships with customers. Ray is currently studying for his Doctorate in Business Psychology. View Ray’s short bio

You’ve seen it too many times before – the free-spending startup company which burns through their funds like a cocaine addict on vacation in Columbia. It’s ultimately a sad tale, with great potential often wasted, many jobs lost and multiple lives hurt. But it is sometimes hard to feel sorry for the management teams that put these companies in precarious positions with poor judgment and lack of self-control – they should know better, and end up getting what they deserve.

1. Spend it almost as fast as it comes in, because the market is overheated. This was endemic during the Internet bubble years, when even formerly conservative VCs were imploring their portfolio companies to “spend money faster”, and “get the eyeballs now, we’ll figure out how to monetize them later”. A lot of that was going on back then. Crazy, as we all look back at it now.
   
2. A more common situation where money tends to get spent way too fast is when a startup management team is staffed primarily with “big hitters”, coming from big company backgrounds. I remember in particular a mesh networking company here in San Diego, which burned through over $60M in VC money, while creating almost no revenue along the way. They hired an almost endless list of VPs from name brand, blue chip companies, paying them well over the going rates at early stage companies. The CEO came from a big telecommunications company (with no startup experience). He was paid a SALARY of $750,000/year. Yes, you read that right–I’m not even counting his bonus and option grants. In a company that was barely past the pre-revenue stage, and nowhere near profitability. It still amazes me.
   
3. Another scenario I have seen quite a lot, are pioneer companies that are developing a novel technology or product, attempting to create a truly new market. What happens often in this situation is what I’d call an “itchy trigger finger”. That’s when it’s still too early to create the critical mass needed in a market. Instead of being patient, marshalling their resources and continuing to develop their products while educate the market, these innovators get impatient. They blow through their investment capital with a premature, huge ramp-up in Sales and Marketing, well prior to their product or the market being ready for this expansionary phase. Their large expenditures in Marketing serve only to prime the market, to the great advantage of their fast-follower competitors.
   
4. The final situation that you often see leading to overspending is the company that has been bootstrapping successfully (but also painfully) for a very long time – then finally is able to attract a round of Institutional Capital. Every startup has a long list of “like-to-haves” that they would spend money on – if they only had it. So it’s ok to knock off the most important areas at the top of the list, when that initial funding finally comes through. But like a starving man let loose after hours at McDonalds, some of these formerly prudent managers gorge on the newfound capital – spending it like its ongoing cash flow – not the precious investment capital that it actually is. Not being miserly with investment capital is one of the cardinal sins indicative of bad startup management. In this particular situation, it is otherwise sound managers who undergo a bout of “temporary insanity”– a particularly sad story.

So that’s one side of the coin – overspending. We’ve all seen it, and when you’re not inside the eye of the hurricane that is a startup company, it’s pretty easy to recognize. There is no doubt that this free-spending behavior has killed many promising startups.

But what about the flip side of the coin – when managements are TOO miserly, and spend too little? This is an area that I have not seen discussed very much lately, in early stage tech circles.

Now please keep in mind, I’m not advocating spending funds that you simply don’t have. Borrowing is rarely a good idea for an early stage software or tech company. If you don’t have the money – please, don’t try to find a way to spend it anyway! Conservation of capital is one of the basic pillars of good startup management practice.

Yet, there are some places where an early stage company simply HAS to invest, or the outcome will be almost certain crib death. Below are a few important examples:

STAFFING THE STARTUP WITH GOOD PEOPLE

Good companies are built with good people. Great companies are built with great people. Even the company with great brand equity and outstanding IP, are doomed for a fall without the continued benefit of committed, smart staff. In a startup, it’s even more critical, because you don’t have any of the built-in advantages that a big company has, which might allow the enterprise to coast for a bit before heading south. Without good people, startup companies will not thrive for long. Even if a profitable business can be built, it will eventually hit a wall, as a result of lack of depth in the employee pool. The initial founders can only take it so far without a strong supporting cast-growth will eventually stall. I have a client, a young CEO, who has done a great job building a strongly profitable, multi-million dollar business in a large and competitive market. But his growth appears to be stalling, because he views much of his staff like desk chairs, or any other overhead line item – an expense item to be minimized. Don’t make this mistake. Your staff is your lifeblood, not a ball & chain to be jettisoned at every opportunity.

CREATING A GOOD PRODUCT

Almost important as good people to a software or high tech startup, is a killer product. Although there are many, many things that are important to a successful startup tech business, by their very nature, tech companies are almost always driven by a great product. There are exceptions, no doubt – but this is a pretty good rule. It makes little sense to cut expenses in product development (assuming that you’re spending the money wisely!), until you have created a product that can lead to winning in the marketplace. With a startup, that almost certainly means something that’s not “me too” – it needs to be faster, cheaper, more capable. A strong product is the muscle that allows you to break though the barrier of embedded competitors with strong positions and brands. Don’t kid yourself and save your money for other things, until you’ve hurdled this bar.

BUILDING A CRITICAL MASS OF UNIT SALES

Lastly, you’ve built a killer product and have a savvy staff pushing it out into the market. With whatever you’ve got left in your tank – use it. Stomp on the gas peddle, spend whatever you can muster on outbound sales and marketing programs. This is where the proverbial “crossing the chasm” really takes place. There are a certain number of successful customers you need to sell, before you get over the peak of that initially steep sales curve – and things start to get easier. Once that happens, people know your company name and product. Enough happy clients are out there so that word of mouth marketing kicks in. Instead of fighting for every new customer, they start coming to you in increasing numbers – without any effort at all. Your product is now showing up in the market share figures. The press and analyst community start to call you, instead of you leaving endless unanswered messages in their voicemail boxes. Yes, at some point, believe it or not, it really does get easier! But this happens only if you are able to close the number of initial sales necessary to reach critical mass in your specific market. Until you reach this point – SPEND WHATEVER MONEY IT TAKES – AS LONG AS YOU HAVE IT.

About the author: Phil Morettini is an experienced High Tech senior manager with functional expertise in product marketing, new product planning, business/corporate development and sales management in a BtoB and BtoC environment.

View Phil’s short bio