Sales Strategy: Creating Performance Conditions to Win

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Sales Strategy Research Results:Creating Performance Conditions to Win

Compensation Programs

Organizational Models2

Modeling Segment Potential

Lead Generation Programs

Selling Methodologies

1

3

4

5

1. Total target cash compensation is set at the 60th percentile of labor market competitors of a pre-identified list of companies.

2. Pay mix is no less than 85/15 and no greater than 50/50.

3. There are no more than 3 performance measures, one of which will be a sales production measure.

4. No measure is worth less than 15% of the pay program.

5. At least 60% and no more than 75% of reps exceed quota.

Back

Compensation Programs: Best Practice Exercise 1

Current Base (Ave)

Current Bonus (Ave)

Current Total Comp

Benchmark Base

Benchmark OTE

Benchmark Pay Mix

VP Sales $150,000 $150,000 $300,000 $199K$154K - $244K

$270K$191K - $349K 76/24

New-National Sales Executive $79,781 $27,643 $107,424 $85K

$75K - $90K$110K

$108K - $166K 77/23

Existing-National Sales Executive $79,781 $27,643 $107,424 $85K

$75K - $90K$135K

$108K - $166K 63/37

VP Media Sales $125,000 $25,998 $150,998 $125K$87K - $134K

$220K$119K - $221K 57/43

Sales Manager NA NA NA $99K$81K - 116K

$131K$100K - $162K 75/25

Client Development Consultant 71,147 $19,941 $91,088 $81K

$72K - $90K$108K

$82K - $134K 75/25

Sales Engineer NA NA NA $81K$73K - $91K

$91K$75K - $107K 90/10

Client Services Executive Director $103,000 NA $103,000 $105K

$92K - $118K$115.5K

$99K - $131K 90/10

Client Services Director $69,105 NA $69,105 $68K

$62K - $74K$75K

$69K - $81K 90/10

Assumptions

Average yearly revenue per customer (within 24 month window), if any assigned $50,000

Average deal size of the net new customer $250,000

#SQOs per ISR per year (includes named pipeline prospects) 30

Close rate for new logo opportunities 10%

Deals closed per ISR per year 3

Territory

Named customers (for 24 month post-deal period), if any assigned 0

Named pipeline prospects 2

Sales-qualified opportunities generated by the Lead Gen Specialist 30

Total # of accounts = 32

Projected Revenue

0 Existing customers X $50,000 per customer = $0

3 Now logo customers X $250,000 per customer = $750,000

Total = $750,000

Quota

Quota $600,000

Quota-to-total compensation ratio 10.00

Compensation

Total compensation $60,000

Base % 50%

Variable % 50%

Base salary $30,000

Variable component $30,000

Role: Inside Sales Rep

1. We have matched selling capacity (total selling hours) to market demand (total market potential).

2. The type of rep needed is determined by the role the customer wants the rep to play when conducting a transaction.

3. Territory potential determines quota assignment.

4. Our best reps are in the territories with the most potential.

Back

Organizational Models: Best Practice Exercise 2

63%18%

9%

10%

A (>20M gal) B (5-20M gal)C (2-5M gal) D (<2M gal)

• 63% of volume and 52% of gross margin from 6% of customers

• Bottom 70% of customer make up 10% of volume and 16% of margin

Customer Segmentation Analysis

How much sales force time is spent on that 70% of customers that should be invested in the top 6%?

% Total Volume

6%

18%

15%70%

A (>20M gal) B (5-20M gal)C (2-5M gal) D (<2M gal)

% Total Customers

Segment # Custs Vol (M) GM ($M) % Cust % Vol % GM Hrs/Cust Hrs/Touch Touch/Cust Total Hrs % Hours

A (>20M

gal)139 8,473 $335 6% 63% 52% 192 4 48 26,688 43%

B (5-20M

gal)233 2,381 $129 9% 18% 20% 48 2 24 11,184 18%

C (2-5M gal) 369 1,117 $75 15% 8% 12% 24 2 12 8,856 14%

D (<2M gal) 1,734 1,374 $101 70% 10% 16% 9 0.75 12 15,606 25%

Customer Segmentation Analysis

Align Selling Hours w/ Customer Value (Volume & Profit)

REALIGNED COUNTRY SALES STRUCTURE

Geo Manager

Pro Services Manager

Trainers (3)

Implementaion Consultants (32)

Managers (4)

Admins (5)

Support Staff (16)

Pre-Sales Manager

Pre-Sales Consultant

Pre-Sales Consultant

Pre-Sales Consultant

Pre-Sales Consultant

Sales Manager

Direct Sales Direct Sales

Direct Sales Direct Sales

Direct Sales Major Account Rep

Channel Rep Sales Admin

Sales Manager

Inside Sales Inside Sales

Lead Gen Lead Gen

Field Marketing Customer Acct Manager

Sales Admin

• Changes

– Add a Major Account Rep to the sales team

– Further reduction in the number of Direct Sales Reps (number is TBD) to reflect higher comp, bigger territory, and focus on hunter role

– Reduce Pre-Sales headcount number (number is TBD)

– Reduce Direct Sales Rep

Lead Generation Programs:Best Practice Exercise

The definition of a lead is determined by Buyer Personas.

We understand the # of leads generated, and their quality score, for each demand generation $ spent.

We have a defined process to move from an inquiry-lead-opportunity-customer.

We understand the volume required at each funnel stage to make the number.

We have made the switch from outbound to inbound marketing.

Back

3

HR SVP/EVP (Most senior person)

Focus: HR compliance, employee engagement/culture, productivity, accountability

Responsibilities: Benefits, Payroll, recruiting, compensation, performance management

Role in purchase: Always a key influencer and may be drive the evaluation. Evaluates employee engagement, staffing levels, and compliance.

Finance CFO (delegates to Controller)

Focus: Financial performance and productivity. Always looking for ways to increase profitability.

Responsibilities: Delivers bottom line numbers for the organization. Financial performance reporting, forecasting revenue, budgeting and cost control

Role in purchase: Approver/Economic Buyer

Operations COO

Focus: Optimal productivity and efficiency. Seeking Quality, Cost savings and Speed. Process driven to achieve customer satisfaction.

Responsibilities: Delivers on the promise of the organization (product/service)

Role in purchase: User Buyer, must work with the CFO to fund a WFM solution.

• Receive advanced notification and visibility to compliance issues

• Get visibility or access to historical data to manage compliance issues

• Identify root cause of performance and productivity issues.

• Maximize the productivity of my workforce

• ALL: Balance staffing requirements and employee schedule preference

• Ease of use solution for employees, limited training required

• An early warning alert and historical view of compliance challenges and issues

• ALL: Access to data that helps me maximize return on employee investment (Productive/Efficient)

• ALL: third party validation and proof of financial justification

• Increase employee engagement resulting in higher satisfaction

• Ensure compliance with automated HR and pay policy enforcement that supports workers and workplace

• High user adoption, reduced training and fewer errors with BIC user experience

• Get the reports I need to compare profitability of plants/stores.

• Identify root cause of performance and productivity issues.

• Maximize workforce productivity • Receive advanced notification and

visibility to labor expense leakage• Model workforce changes and see

how they impact KPI’s

• Ease of use solution for employees, limited training required

• To reduce costs of managing my workforce

• Deliver highest quality at the lowest cost in shortest time

• An early warning alert and historical view of compliance challenges and issues

• Schedule the right people, right place, right time

• Integrated solution resulting in improved accuracy (no re-key) and speed (no latency)

• Decreases administrative time Improve customer service and product quality while reducing costs by changing the way labor is deployed and scheduled

• Cloud solution is scalable and configurable, with an upgrade path that is automated and no cost

• Get the reports I need to compare profitability of plants/stores.

• Receive advanced notification and visibility to labor expense leakage and compliance issues

• To reduce costs of managing my workforce

• To drive out costs and enable incremental revenue generation

• Self-funding investment, clear ROI • Flexibility of solution to meet the

current and future needs of my evolving company

• Better align corporate performance indicators with employee activities

• Cloud solution is scalable and configurable, with an upgrade path that is automated and no cost

I Cant… I Want… Key Messages

Buyer• Do I have a problem? • How does this problem relate to

achieving my goals? • How painful is the problem? • Who does the problem impact –

departments, users, employees, decision makers?

• What are my peers doing?

AWARENESS PREFERENCEPersona: Company Profile and FitFocus Verticals and Employee Count: Manufacturing, Retail, Transportation, Professional & Financial Services (300 – 5000 employees)Indicators of high likelihood of pain, strong fit• Old legacy in-house ERP and T&A systems• In-house manual systems and processes• Hourly workforce that is decentralized, unionized,• Growing/shrinking, leadership change, merger/acq• Facing heavily regulation with govt customersBuying criteria: • Increased productivity, Compliance, User experience,

business case, systems integration, employee satisfaction

Buyer• Can I ignore this? • Is there a quick fix? • Can I fix it myself? • Do I need help? • What are my choices if I need help? • How should I evaluate alternatives? • How will others on my purchasing

committee evaluate alternatives?

CONSIDERATION

Buyer• How long will it take to get this

fixed? • How much of our time do I need to

put towards it? • How do I know the fix will work? • How disruptive will it be? • How much will it cost? • What impact will it have? • What happens if it doesn’t work?

PREFERENCE

Exit Criteria

Lead Management Stages

Lead Generation = Demand Generation + Lead Management

Awareness Consideration Engagement Intent Opportunity

MCL MQL SAL SQL

Sources

Webinars

EmailCampaigns

Direct Mail

Web

Outbound Calling

Events

Lead Generation

Waterfall Exercise – Future State US HR/Payroll

128,051 MCLs

3,842 MQLs

960 SALs

471 SQLs

Lead Sourcing6,400,000

3%

25%

49%

25%

Conv

ersi

on R

ates

IMPLICATION – Opportunities are nurtured across a broader qty of MCLs with more qualified leads coming through to the sales reps.

2%

• Marketing contribution of 25% of total $40m rev goal

– 118 deals x $85k = $10m

• Avg. sale SOV $85k

• Conversion rates of average b2b lead gen teams with sound process

Assumptions

118 Deals

Selling Methodologies:Best Practice Exercise

1. We understand the Buyer’s Journey.

2. Our sales methodology has been redesigned and mapped to the new buyer’s journey.

3. The new sales methodology has defined stages, activities, job aides, and buyer driven exit criteria.

4. Our SFA system facilitates the adoption of the sales methodology.

5. Forecasting accuracy exceeds 80%.

Back

4

Buying Cycle

Sales Cycle

Catalyst Needs Recognition

Explore Options

Resolve Concerns Purchase

Prospecting Opportunity Identified

Determining Differentiated

Problems

Confirming Vision Match

Confirming Value and

Power

Finalizing Mutual Plan Negotiating Closed

First Meeting Pain, Timeline, Decision Criteria, SOE

Discovery, Schedule Demo

Demo, Summary of Findings

Reference Called,Activant Preferred, Proposal Review

Close Call Complete,Ask Order

Recognize Problem

Clear Vision of Solution Preferred Solution Identified

Risks Considered Issue Order

Sale

s Ex

it C

riter

iaB

uyer

Exi

t Crit

eria

Sales Process:Misaligned Exit Criteria

Worst Case Duration

Prospecting Opportunity Identified

Determining Differentiated

Problems

Confirming Vision Match

Confirming Value and

PowerFinalizing

Mutual Plan Negotiating Final State Total Duration

Closed - No Decision 75 126 86 87 51 61 30 40 556

Closed - Lost 116 187 106 75 57 35 15 15 606

Closed - Won 44 90 97 84 43 42 16 13 429

* Note: Duration for a Stage is the days from Previous Stage to current stage plus days from next stage back to current stage

--- Includes Stage Reversal ---

Prosp

ecting

Opportunity

Iden

tified

Determ

ining Differe

ntiated Pro

blems

Confirming V

ision M

atch

Confirming V

ision an

d Power

Finali

zing M

utual

Plan

Negotiati

ng

Final

State

0

20

40

60

80

100

120

140

160

180

200

Closed-No DecisionClosed-LostClosed-Won

Sales Cycle Length

2X Best Case duration until Negotiating Stage

Worst Case Stage Duration

Modeling Segment Potential:Best Practice Exercise1. We use a customer-driven segmentation approach.

2. We use an activity-driven segmentation approach.

3. We use a cost-driven segmentation approach.

4. We have tested the validity of these methods:

– Named accounts- high value targets

– Industry- verticals with high propensity to buy

– Sales Frontier- peak performance replication

– Metro Compression- geographic density

– Territory re-balancing happens at least once per year

Back

5

Opportunities by Region (strategic & tactical)• Targeted NL Beachhead Region/Countries

• Complete view of potential: in SFDC and other

• 163 NPC Deals + 33 NPG, Main, and Direct

• Potential is built off a 3 year run rate

Europe:

Beachhead Potential = $42M

NPC Oppt = 5

NPG Oppt = 35

Africa:

Beachhead Potential = $26M

NPC Oppt = 8

NPG Oppt = 38

CALA:

Beachhead Potential = $42M

NPC Oppt = 6

NPG Oppt =22

Middle East:

Beachhead Potential = $16M

NPC Oppt = 6

NPG Oppt = 19

APAC:

Beachhead Potential = $23M

NPC Oppt = 8

NPG Oppt = 49

NPAC: $600M

Oppt coming up for

Renewals

Number Portability Opportunity Timing

• Consider Timing of when allocating Resources

• NPC Sales Cycle up to 2 years

• Strategic – Transactional (>25M subs)

• Tactical – RTU/License (<25M subs)

Timing of NP OpportunitiesCount of Country Fiscal Year

Territory 2012 2013 2014 2015 Total

Africa 1 2 3 2 8

Strategic 1 1

Tactical 2 3 2 7

Asia Pacific 1 3 2 2 8

Strategic 2 2 1 5

Tactical 1 1 1 3

CALA 3 1 2 6

Strategic 2 2

Tactical 1 1 2 4

Europe 2 3 5

Strategic 2 2 4

Tactical 1 1

Middle East 4 1 1 6

Tactical 4 1 1 6

Total 9 8 11 5 33

Phase 2 Phase 3Phase 1

How to Get Started?

Conduct Discovery Conduct Sales Benchmark Present Findings

Assess Sales Force

Assess Sales Performance

Drivers

Prioritize Possible Remediation

Actions

Determine Sales Force Maturity

Identify Key Drivers to improve

Means1. Exec Interviews2. Mystery Shopping3. Documentation4. Metric Data5. Customer Survey6. Sales Rep Survey7. Sales Rep DILO8. Expert Panel

Results1. Capture Current State2. Show End State

Possibilities3. Make Recommendations4. Quantify Impact

1. Channel Management2. Compensation Planning3. Key Account Management4. Lead Generation5. Quota Setting6. Sales Force Structure7. Sales Force Size8. Sale Management

9. Sales Performance Management

10. Sales Process11. Sales Strategy12. Talent Management13. Territory Design

Performance Drivers

21

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