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Master’s Program in Sales ManagementTURNING CORPORATE STRATEGY INTOSALES STRATEGY AND IMPLEMENTING IT!
AgendaYesterday – Strategy!
ContextLearn a framework for leading strategy and differentiation discussions How a strong Purpose can inspire action and differentiation The role that Sales Leaders have in building healthy workplace
culturesHow to set up the strategic planning cycle for more successful sales
outcomes
The 5 Worst Errors of Sales Strategy!1. Why we shouldn’t treat all customers the same2. Why we need to adjust the sales people and management
processes when the sales cycle gets longer3. Why a good sales forecast review is a strategic investment4. How sales incentives and compensation are not everything5. Why managing leading indicators is more strategic
Integrated
Strategy
Purpose
Culture
Leadership
Performance Systems
Execution
The 5 Worst Errors of Sales Strategy
1. We treat all customers the same We don’t build value propositions specific to customer segments
2. When the business changes we use the same sales people and management processes
We don’t recognize their inherent ability to manage complexity and line that up with the complexity of the sales cycle
3. We work IN the business not ON the business We don’t coach and mentor enough every day because we are lost in the weeds
4. We believe that compensation and incentives are 90% of high performance
We don’t focus enough on the growth needs of people
5. We don’t spend enough time managing leading indicators of success We get enamoured with looking in the rear-view mirror
Error #1:We treat all customers the sameCustomer segmentation
Segmentation specific value propositions
The Marketplace
Are all Customers the Same? Is your Market Diverse?
1. Understand Customer
Needs
2. Group Customers
3. What are the Most Attractive
Groups?
4. Develop Value
Propositions for Target
Groups
5. Develop Go To Market Strategies
Segmentation Principles
Businesses Need to beProfitable
Different customers
have different value drivers
Who do you
choose to serve?
What are you looking for?
How have you grouped your customers today?
How do you know that what they are asking for is a “market”?◦ What is an attractive group?
Geography
Demographics (age, gender, etc)
Buying Patterns
Size of Customer
Value of Customer
Industry
Benefits
Customer Needs
Interests
Values
Attitudes
Behaviour
Segmentation Matrix – Example
Premium Performance Value
ProfessionalHobbyistCasual User
Mar
ket S
egm
ents
Customer Segments
Price: Features: Services: Options
Segmentation Matrix (Example)
Premium Performance Value
Professional • Willing to pay top dollar for top quality and features
• Risk averse
• May consider price premium if features are relevant
• Is price conscious but will not accept low quality
• Accepts fewer features
Hobbyist • Willing to pay top dollar
• Willing to pay more if there is a reason
• Wants competitive pricing
Casual User • Will pay for the cool factor
• Product quality and reliability are drivers
• Price is a big factor in what to buy
Mar
ket S
egm
ents
Customer Segments
Group Work - Segmentation
Groups of 4
Pick one of your companies
Build a simple (3x3) segmentation matrix
30 minutes
The beginning of segment specific Value Propositions(Example)
Premium Performance Value
Professional • Top of the line Pro Full Frame SLR Cameras with top of the line lenses
• Service Plan
• Not top of the line but next level down
• Product One generation old
• Refurbished lenses?• Service: pay as you go
Hobbyist • Top of the line Compact System w/ interchangeable lenses
• Instructional classes
• Top of the line with one good general purpose lens
• The best combination of features and a great price – a bundle
Casual User • Compact Pocket Camera with all the Bells and Whistles (Wifi)
• Good Product – good warranty – good price
• Basic Camera for occasional use
Mar
ket S
egm
ents
Customer Segments
Where can you win? Where do you have advantages over the competition?
Workshop Same Groups:
Identify elements of the value proposition for two segments◦ How are they different?
15 minutes
The Marketplace
Are all Customers the Same? Is your Market Diverse?
Segment Specific Value Props
Which slice of the marketdo you wish to serve?
ExerciseSame Groups as before and Same Company
Pick two of the segments of your matrix
Create value proposition statements for each of those twoReview Strategy Canvas if it helps
Identify one area where you could create Value by altering the 4 factors
30 minutes
Value Propositions At our company we value/believe ______________________________
This means we ______________________________
We seek to help Customers who ______________________________
Unlike our Competitors we ______________________________
Answering these questions:
Why should someone purchase your offering?
Why should someone purchase your offering instead of your competitors?
What is most worthwhile for someone to keep in mind about your offering?
Value Propositions At 1-degree we believe that enlightened workplaces have the greatest potential to shift global consciousness.
This means we only work with CEO’s who want to make culture a source of differentiation and a platform for employee growth.
We seek to help mid-size organizations who need to borrow our help in making this transformation.
Unlike others in this field we co-create the programs needed – we build on those elements of Strategy, Culture, Purpose and Leadership that already exist rather than force a complete system reset.
Error #1:We treat all customers the sameCustomer segmentation
Segmentation specific value propositions
Error #2:When the Sales Cycle gets longer we don’t adjust the sales peopleThe internet is making basic facts/information
availableCustomers are smarter – competition is increasing
Higher margins are in task-sourcing or risk-sharingThe Sales Cycle is getting longer and more complicated
Not all reps can naturally manage more complex sales cycles!
Levels of Complexity & Work AbilityA body of knowledge known as Requisite Theory or Stratified Systems Theory
Researched and introduced by Dr. Elliott Jaques in the 1950’s
Implemented in Fortune 500 companies
A Whole System of beliefs that demonstrates a natural hierarchy that functions optimally given the natural levels of human capability
Requisite for SalesWork Level Problem Solving
ApproachSales Method
Contribution Time Frame
V Concepts A or B or C Conceptual
Presents new business model > 5 Years
IV A > B > C vs E > D > F^
Yes/AndTrade-offs
Positions two possible solutions to address client issue(s) and can help with impact tradeoffs
2-5 years
III A then B then C Follows one or more threads
Articulates a narrative on how a solution impacts client’s business
1-2 yrs
II A and B and C Look for Patterns
Bird Dog – Provided an example they find a pattern and bring in an expert if needed
3-12 mos.
I A or B or C Feature-Benefit
Highly transactional – ‘dial for dollars’
< 3 months
Example:Rep Capability - Distribution
Level of Work Rep Performance Rep Level of Capability
Level V
Level IV High ManagerRep 6
Level III HighHigh
Rep 4 Rep 5
Level II Not Making ItNot Making It
Rep 2 Rep 3
Level I Not Making It Rep 1
Sales Cycle Complexity Tech example
Example Do you want fries with that?
Buys in volumeAndWants consistent budget costsAndWants to be legalRecomend: SW Licensing
Have a customer rip and replace their storage systemImplications:Cost/ impact on other systems / manageability
The implications of moving a datacentre to the cloud balanced against the implications of control and security
Sales Cycle Length
1 day - 3 months 3 months - 1 Yr 1-2 Years 2-5 Years
Sales Cycle ComplexityMeasured in Length
Ideal StateWork Aligned with Ability
Level V
Level IV Rep 6
Level III Rep 4, 5
Level II Rep 2, 3
Level I Rep 1
Complexity 1 day - 3 months 3 months - 1 Year
1-2 Years 2-5 Years
RepCapability
Sales Cycle ComplexityMeasured in Length
Overwhelmed or Reliance on Manager
Boring – limit exposure
Ideal Focus
Manage the balance
Manager RequiredOne Level up is required from Rep Capability so that the manager add value, context
Level IV Seems to be Required for the range of sales cycles – if every manager manages the complete range
What did we learn?Do you have different products or offerings that have different complexity?
Error #2:When the Sales Cycle gets longer we don’t adjust the sales peopleThe internet is making basic facts/information
availableCustomers are smarter – competition is increasing
Higher margins are in task-sourcing or risk-sharingThe Sales Cycle is getting longer and more complicated
Not all reps can naturally manage more complex sales cycles!
Error #3:We work IN the business not ON the businessBusy-ness rules – we mistake busy for effective
Rhythm of review – what is your practice?
Forecasting is strategy being executed
Sales ManagementFORECAST REVIEWS – MONTHLY EXECUTION OF STRATEGY
Forecast Reviews1. If the planning process made sense than a commitment to the Goal
is mutual
2. The Territory Plan or Account Plan makes the Objectives for the year very clear
3. The Forecast review is as much about the actions and steps as it is about the $ Forecast. If the rep is not taking the steps can you reasonably expect the results to follow?
◦ Sales Management is about keeping reps on track with the right activities or adjusting based on new information
◦ Every Sales Call therefore has an objective relative to the monthly forecast discussion and the annual Sales Plan
October ForecastCustomer Opportunity Probability 30 Days 60 Days 90 DaysABC Co. HR Project 30% $12,000 $19,500 -Jones Bros. Dist. Refresh 90% - - $100,000B-Town Inc. Brampton
Expansion50% $ 9,000 - -
GrowTown International Services
70% - $19,000 -
Tower Vendor of Record 75% - - $15,000Run Rate $11,000 $11,000 $11,000Forecast $32,000 $49,500 $126,000
Probability is mapped to Sales Stage that is relevant to your company
November ForecastCustomer Opportunity Probability 30 Days 60 Days 90 DaysABC Co. HR Project 40% $12,000 $19,500 -Jones Bros. Dist. Refresh 90% - - $100,000GrowTown Vendor of Record 75% - $10,000 $10,000Google Creative Building 20% $55,000 - -City of Dallas Property Project 90% $17,000 - -
Run Rate $11,000 $11,000 $11,000Forecast $95,000 $40,500 $121,000
CompareO
ctob
erN
ovem
ber
November Action LogAction Who Owner/Help By When Purpose
Meet ABC Co. Project Lead Me – take SME
Nov 10 Figure out why this project is stuck
Send Invites All Customers
Me Nov 3 New Product Launch
Post thought leadership Buyer’s Guide - LinkedIn
Me Nov 7 Support Awareness
December ForecastStarts with Review of NovemberCustomer Opportunity Probability 30 Days 60 Days 90 DaysABC Co. HR Project 40% $12,000 $19,500 -Jones Bros. Dist. Refresh 90% - - $100,000GrowTown Vendor of Record 75% - $10,000 $10,000Google Creative Building 20% $55,000 - -City of Dallas Property Project 90% $17,000 - -
Run Rate $11,000 $11,000 $11,000Forecast $95,000 $40,500 $121,000
Nov
embe
r
Sales Management See your job as:
“Getting People Done Through Work” Not
“Getting Work Done Through People”
Error #3:We work IN the business not ON the businessBusy-ness rules – we mistake busy for effective
Rhythm of review – what is your practice?
Forecasting is strategy being executed
Error #4:We believe that compensation and incentives are how we motivate performance
What Are Our Basic Needs and Growth Needs
Evol
ution
of P
erso
nal C
onsc
ious
ness
Satisfying your physiological needs for security;staying alive and keeping your body healthy.
Satisfying your emotional need for belonging, protection and connection.
Satisfying your emotional need to be recognized for your skills, talents or qualities.
Satisfying your need for autonomy, freedom, independence and adventure.
Satisfying your need for authenticity and finding meaning and purpose in your life.
Satisfying your need to actualize your purpose by influencing or impacting the world around you.
Satisfying your need to leave a legacy—to have led a life of significance that will be remembered.
Growth Needs
Basic Needs
At any given moment in time, our values are a reflection of our unmet basic needs, and the growth needs associated with the stage of psychological development we have reached.
What a Sales Rep Sounds Like:
Evol
ution
of P
erso
nal C
onsc
ious
ness
Survival: I need to close this deal because I havebills to pay or I am afraid of losing my job.
Relationship: My customer will buy from me because of the strong relationship we have.
Self-Esteem: I want to be recognized as one of the top performers in our company!
Transformation: I constantly stretch myself and bring new ideas to my clients.
Cohesion: I want to understand my customers real drivers and then match my solution up with that.
Make a Difference: I collaborate with my clients sothat my solutions make a significant impact.
Service: I don’t sell anything. I help my customersto build their business by serving with all we have.
Growth Needs
Basic Needs
At any given moment in time, our values are a reflection of our unmet basic needs, and the growth needs associated with the stage of psychological development we have reached.
What do Incentives drive?:
Survival: I need to close this deal because I havebills to pay or I am afraid of losing my job.
Relationship: My customer will buy from me because of the strong relationship we have.
Self-Esteem: I want to be recognized as one of the top performers in our company!
Transformation: I constantly stretch myself and bring new ideas to my clients.
Cohesion: I want to understand my customers real drivers and then match my solution up with that.
Make a Difference: I collaborate with my clients sothat my solutions make a significant impact.
Service: I don’t sell anything. I help my customersto build their business by serving with all we have.
Growth Needs
Basic Needs
How do we line up Incentives and Compensation plans so that they support strategy?What mix of base to incentive makes sense?
Drives:
Drives:
Drives:
Drives:
Drives:
Drives:
Drives:
Error #4:We believe that compensation and incentives are 90% of high performance
Error #5:We don’t manage leading indicatorsWe LOVE facts
We don’t like approximations
Leading Indicators
Lagging Indicators
Examples of Lagging Indicators% of plan
Customer Satisfaction
On-time Delivery
Market Share
Win-Loss Ratios
Customer Retention
Customer Profitability
What do these things have in
common?
Leading Indicators
Examples of Leading IndicatorsNumber of Sales People Trained/Certified
Number of prospects identified
Number of customer appointments each month
Number of Demonstrations completed
Number of prospects touched in Seminars
Size of the Sales Pipeline
Sales Cycle
Does The Rep know how to sell
the product?
Do we have any
identified suspects?
Have we had
technical people on
site?
Have we done a
proof of concept?
Have we presented
an ROI Analysis?
How about you?“ When we get technical people onsite we win”
“ When we do a demo we win”
“ When we present ROI cases we win”
Group WorkBreak into groups of four
Share your leading indicators
Discuss how you could measure at least one new leading indicator effectively (Make sure it is Strategically Aligned!!)
20 minutes
Error #5:We don’t manage leading indicatorsWe LOVE facts
We don’t like approximations
Glancing BackYesterday – Strategy!
ContextCorporate Strategy Fundamentals – it is all about DifferentiationHow a strong Purpose inspires action and DifferentiationThe role that workplace Culture plays in DifferentiationAligning (Corporate, Marketing, Sales Management) Strategy with
Sales
Today – Sales Strategy & Execution!The 5 Worst Errors of Sales Strategy
1. Why we shouldn’t treat all customers the same2. Why we need to adjust the sales people and management
processes when the sales cycle gets longer3. Why a good sales forecast review is a strategic investment4. How sales incentives and compensation are not everything5. Why managing leading indicators is more strategic
© 2 0 1 3 B Y N I C K F O S T E R O N B E H A L F O F S C H U L I C H E X E C U T I V E E D U C A T I O N C E N T R E ( S E E C ) . A L L R I G H T S R E S E R V E D . N O P A R T O F T H I S P U B L I C A T I O N M A Y B E R E P R O D U C E D , S T O R E D I N A R E T R I E V A L S Y S T E M , O R T R A N S M I T T E D I N A N Y F O R M O R B Y A N Y M E A N S , E L E C T R O N I C , M E C H A N I C A L , R E C O R D I N G , P H O T O C O P Y I N G O R O T H E R W I S E , W I T H O U T W R I T T E N P E R M I S S I O N O F T H E C O P Y R I G H T H O L D E R .
