Sales 3.0: Personalization at Scale

*Editors Note: Guest post by Daniel Barber, Director of Sales Development & Operations at ToutApp*

In Part One, we established how taking a marketing automation approach to sales is dated and destined to fail. We introduced how successful salespeople deliver relevant content to both empower the buyer and initiate a mutually beneficial relationship.

Predictable Revenue: End of an era.

Traditional sales theory taught us to use Aaron Ross’ Predictable Revenue as a model for our sales outreach. The message is clear and simple: go high and ask for the referral. I can speak to the use-case for this approach and have deployed it to generate revenue, however this method was used at Salesforce.com in 2004.

We’re at the tail end of 2014, today’s buyer expects a different experience. A relationship that begins with an education on how similar companies are addressing the same challenge.

This is challenging for Sales professionals to implement at scale, as the prior theory simply required templates and a delivery mechanism. The success of this method has lead to an undercurrent around sales intelligence. Sales professionals are starting to ask questions:

  • How many emails does it take to generate a reply?
  • How long should I engage with a buyer?
  • Who should I engage with within an organization?

These are important, but I’d like to focus our attention in a different direction.

The number of emails means nothing.

In a webinar in April, I introduced the concept that it’s not the number of emails, rather the content that drives engagement. Information overload leads buyers to want one email, not ten. It’s simple: send one email instead of ten – just make the one email 10x better.

Sales communication through email boils down to two types: (1) “Nurture” messages to educate the buyer and (2) “Activation” messages to incentivize buyer action. (1) is in your control, while the buyer’s existing business environment affects (2).

With the release of LinkedIn Sales Navigator, sales professionals now have access to a treasure trove of data, and possess the ability to push organizational and individual trigger events to their inbox.

LinkedIn Sales

Breaking through the buyer’s status quo is tough. I’ll defer to Jamie Shanks on how he defines the six trigger events that lead to action:

  1. Company gets acquired
  2. Competitor releases new product/solution
  3. Incumbent sales rep leaves
  4. Prospect changes decision maker
  5. Prospect wins large account – increased capital availability
  6. Capital raise

Using these events, sales professionals can determine the right messaging and engage the buyer at the right time to activate an action.

But, how do companies achieve personalization at scale?

There is a common thread throughout the the fastest growing companies. Individuals who are able to deliver personalized messages without sacrificing value – while somehow magically painting broad outreach strokes – are infinitely more successful.

The 10/80/10 Model.

The philosophy is widespread, but the concept has never been articulated. This method was implemented at Responsys and drove revenue from 80M to 200M over the course of 16 months. The concept draws on several themes: Hoffman & Barrows’ Why You Why Now; Elias’ Shift Selling; Grant’s Give & Take.

The Breakdown:

10: Spend the most energy on your message’s opener – the first 10% of your email (including your subject line) should enchant your buyer. The first sentence of an email has one purpose: engage the reader to read the second. How do you enchant your buyer? We’ve all heard the mantra: make it about them. This goes beyond mentioning one tidbit from their LinkedIn profile, rather employs leveraging technology to push trigger events to your inbox and intertwining the message with something hyper-relevant to the reader (e.g. a recent Twitter post declaring National Sandwich Day or perhaps a link to the Neil Diamond classic Sweet Caroline for those lucky enough to hold the name). Get creative.

LinkedIn Sales2

80: If your reader continues, it’s because (1) Your 10 sparked a level of curiosity or (2) your 10 indicated utility in solving their current challenges — but best communications combine both curiosity and utility and weave in your value proposition for product/service. It’s imperative that you tailor the message to the persona of the buyer.

For example, if you’re trying to reach a VP of Marketing, focus your message so that it describes how your product/service would solve strategic challenges. Conversely, if you’re contacting a Manager or Analyst, refine your message to illustrate how your product service would solve day-to-day challenges of a tactical position.

LinkedIn Sales3

10: If they’re still reading, they’ve crossed the chasm and now need confirmation that you’re credible (1) individual and (2) marketplace contender. You’ve piqued your reader’s interest, told him a bit about your company – now, tell him how you’re helping his peers — and make it easy for him to join them. At this moment, the reader would like to engage with you – make it easy for them. This doesn’t involve a call-to-action of “what time would work for you next week”. Make it easy for the reader to review your proposed times, and check their calendar to confirm if one of the times works with their schedule.

LinkedIn Sales4

We’re all human, and it’s time to treat your reader like one. Personalization requires personality, and as sales people it’s our job to form mutually beneficial relationships. Let’s leave automation to the Marketing team and strive for personalization at scale.

How to Get to Monthly Recurring Revenue in SaaS?

*Editors NoteThis modern approach to sales is a guest post by Jacco Van der Kooij, SaaS Sales Strategy Consultant from Silicon Valley, California. This article was previously posted on Startup Juncture and is being republished by the authors permission.*

Companies big and small realize that a one-time sale, no longer provides the growth, and profits needed. Every day more companies are moving to an As A Service model with the promise of monthly recurring revenues and exponential growth.

Salesforce has been the leading beneficiary of this model. It transformed the CRM industry – once dominated by SAP and Oracle selling 6-7 figure perpetual licenses – to selling its software based on a monthly bite size subscription fee, also known as Software as a Service or SaaS. This post is about the impact of the SaaS model on sales organizations, in particular Business to Business (B2B) sales organizations. Lessons learned from B2B SaaS have proven to translate to many as a Service businesses.

The Five Stages of SaaS Sales

Today clients are able to try and buy a service online, and pay for it monthly. Thus sales organizations must re-define their role, goal, and with it the sales stages. Most of today’s SaaS services take 9 to 18 months of payments to turn profitable. Such success can only be accomplished if you have a great service, that enjoys ongoing investments in innovation, based on customer’s feedback, and best practices. This requires to take a new look at the sales stages:

1)   The O’sh!t stage (awareness)

In this stage the client identifies they have an issue. This may be due to an intelligent online awareness campaign, or a client may simply stumble upon your service during a “problem” search.

2)   The Aha stage (education)

Following online research, and by asking around, the client gains insight on its problems, and identifies a variety of solutions, of which one or two stand out. They will start to follow these vendors, download a paper, and sit in on a webinar to learn more.

3)   The WOW! stage (selection)

The client has determined that soving the problem is a priorirty. They contact two maybe three vendors and request help. They will commit their business to the company that provides the deepest insight into their problems. Most sales teams stop at this stage; Deal Won, Logo secured. However a successful SaaS sales organization still has 2 more stages to tackle:

4)   The Yihaa stage (onboarding to first use)

The service is launched on-time, within budget, and provides the value as advertised. Realize that there is no need to exceed expectations here, just deliver as promised. Not doing this will mean the client will exit the contract also known as churn.

5)   The OMG stage (recurring use)

In this stage you amaze a client by sharing best practices from others like them, introduce them to industry peers so they can build a community, and respond rapidly when they encounter issues. You expand their service by selling more seats, selling premium features, or increasing their usage such as bandwidth of storage. The outcome of this is a satisfied client, growing its Monthly Recurring Revenue stream.

The Customer Centric Approach to Sales

To move clients at high velocity through these five stage and achieve client satisfaction, requires a modern customer centric sales approach, a few best practices;

a)   Make how you sell as important as what you sell. Stop the mentality of “sell sell sell” aimed at hitting quota as the primary goal. Instead make solving the customer problem the primary goal. After all, if your monthly service does not deliver as advertised the client will unsubscribe long before you made money on them.

b)   Strategize the way you play Angry Birds; e.g. aim at a vertical market, deploy your sales, and measure results.. As you fail in your first attempt – and you will– adjust your aim and retry. This may include adjusting price, target market etc. Repeat this in 30-day intervals until you succeed. Stop overanalyzing and anticipating every move as if you are playing chess.

c)   Help your client understand the problem they are experiencing, and help share your insights how to solve their problem, better yet help them prevent it. This makes a proper diagnose of the customer situation early on in the sales process (the Aha stage) critical. This requires you to train your sales team on this!

d)   Invest as much in education as in awareness. Focus on providing valuable insights on your web-site, such as high level pricing information, competitive differentiators, and a white board video session where you explain in simple to understand terms why you started the company.

e)   First impressions matter online, even more so than in person. Your sales professionals must maintain a professional customer centric LinkedIn profile and manage their professional network. This is incredibly important for new hires, who must to repurpose their resume’s from “customer trophy cases”. Contact me if you like a step-by-step guide how to do this.

f)   Build a data driven sales organization, invest in what works, stop what doesn’t. If your data shows that the lead to opportunity conversion rates from a particular sales person are horrible fix that – NOW – don’t wait for 2-3 more months to see if the revenue converts. Trust the data.

g)   Develop a self learning sales culture, where sales professionals share best practices with each other. Start with daily (virtual) 15 minute stand-up session, where each team members shares a customer learning experience. Recording these experiences in a Google doc will lead to a training guide for new hires.

h)   Develop a compensation plan to that is structured to  keep your best customers, not just to keep your best sales people.   Great sales people work for great companies, with a great  service, so they build a reputation. Reputation is what pays your sales people, today, tomorrow and for decades to come.

If you are eager to gain ready for more insights follow my blog; www.futureofsalesisnow.com or mention this post as you contact me via LinkedIn.

22 Sales Tips From a First Time SaaS CEO

*Editors Note: Danielle Morrill is the Co-Founder and CEO of Mattermark. Mattermark provides deal intelligence and powerful analytics for investing, partnering, selling & marketing as well as viewing company info, team members, fundraising and more. These tips were originally tweeted and are being republished with permission.*

The job of a first time SaaS CEO is not easy, but it has been aided recently by the generous sharing of some of the most knowledgable and vocal champions that have went through, or are currently going through the journey. Resources like SaaStr, For Entrepreneurs, Both Sides of the Table, and Tomasz Tunguz‘s blog are some of our favorites. That’s why today, and in case you missed it, we wanted to bring you Danielle Morrill’s insightful chain of tweets about what she’s learned about sales as a SaaS CEO.

From Danielle,

Americans Aren’t The World’s Best Closers And What This Means For You

*Editors Note: Timo Rein is the Co-Founder and CEO of Pipedrive. Pipedrive is a CRM System to drive sales and track progress for Sales Teams. This article was previously posted on the Pipedrive Blog and is being republished with their permission.*

With customers in more than 150 countries, you really start wondering:

“How different is sales work around the world?”

With some data and time on our hands, we started looking into it and went on a quest to find the best sales nation in the world.

What we discovered was that we can’t trust stereotypes. For example, Americans simply aren’t the world’s best closers. But that’s not the whole story – we realized that some numbers in isolation can be misleading.

We pulled anonymized meta-data generated by Pipedrive users all across the world about # of deals that were added and closed; # of activities that were initiated and marked complete, and so on – and put it in a really large database. We sliced up the data by country and removed all outliers. What we got was a clean view about the differences in conversion, length of the sales cycle, and levels of activity around the world.

Now come and see how people sell all around the world.

The world’s best closers are South Africans (but it’s not the whole story)

Conversion rate is one of the best indicators of sales skills. And if you only look at conversion rates, a clear winner emerges – South Africa. Runners up include Brazil, Chile, Denmark and Sweden – a surprising combo of fast growing emerging economies and the conservative Nordics.

Sales Conversion in different countries

Worst closers, based on conversion rate? Sales people in Switzerland, Poland, Canada, Russia and… the United States. That’s right, Americans who invented selling as we know it are at the bottom of the conversion list.

Could it be possible? The numbers don’t lie, but we realized that the conversion numbers don’t tell the whole story. To understand what was going on we decided to look whether similar trends would emerge under other metrics as well.

Brazilians Get to “YES” Quickest

Time is money, which is why we included the average time of closing as one of the proxies for identifying the best sales nation.

Sales Velocity in different countries

Brazilians get to hear “yes” quickest – i.e. they take the least time to close a deal. Runner up positions are taken up by South-Africa and Chile, who were in top 3 positions also in the conversion table. It’s mostly the developing world who follow the top 3, including Mexico, Russia, Colombia and India.

On the other end of the spectrum – countries that are slowest to close – we find mostly European countries with Australia and Canada thrown in the mix. And the Dutch – the great traders throughout history – are the slowest of the slow.

So far, all of our preconceived ideas about who’s great and who’s not seem to be wrong.

Salespeople in Spain Have the Magic Touch

Finally, some sales managers argue that the best indicator of sales skills is efficiency. The more time you spend with one prospect, the less you have for others. So we looked at the average number of activities (calls, emails, meetings, etc.) per each won deal.

Number of sales activities per sale

A salesperson in Spain needs 3.8 activities per closing – whether they be calls, meetings or emails, with salespeople in Denmark, Netherlands, Estonia, Sweden and South Africa not too far away. On the other end of the scale, we found that a Russian salesman needs 6.11 activities per every closed deal, with Great Britain, Germany, Colombia and United States also all in need of relatively many touches to get to a YES.

Again, we find the hardcore salespeople of Great Britain and the US at the very end of the scale with little context to explain it. However, it’s possible that there is more competition for attention in developed nations so those sales cycles are expected to be more protracted; buyers have more options and have more sales teams competing for their attention.

What Does All of This Mean?

What we found was that… any sales success indicator in isolation is probably misleading.

It would be a mistake to declare South Africans, Brazilians or Spaniards the best at sales and call it a day. As you probably saw, interesting correlations emerged in the different rankings. Countries that were among the best in one dimension tended to fare well across other dimensions as well.

The countries that were quickest also converted highest (with the exception of Russia).

Overall we found a correlation:

Countries with high conversion rates close deals faster.

Low conversion tends to correlate with lots of activities per deal, and vice versa. Combining three variables, it becomes clear that countries with the highest conversion rates also enjoy the fastest sales cycles and fewest activities needed to complete each deal.

Sales Conversion vs Speed

Is this a signal of cultural differences, or is the mix of businesses using Pipedrive just very different from country to country (expensive vs. cheap items, enterprise vs B2C sales, and so on)?

Truth be told, it’s probably a bit of both. The correlations are not so clear that you could explain them simply with big differences in the business mix.

The Big Reveal – How Tough is The Life of Salespeople Around The World?

Salespeople in South Africa, Brazil and Chile seem to have it easiest – well.. at least for Pipedrive users there. USA, Canada, and to an extent the UK, Australia and France, have the toughest conditions – slow, low conversion, and lots of activities per deal.

How tough sales work is around the world

What This Means – Generally, For You, and For Your Team

And this reveals us what we’ve been looking for the entire postthere is no best sales nation. And there’s two sides to this.

The first is to do with the cultural and historical background and differences that have created this situation.

The second is perhaps more important. Admittedly for many of you this will be repeating the ABC, but for others it is something that will make a big-big difference in their day-to-day sales work.

  • For the 10% (and growing) of salespeople who sell globally – be aware of the sales culture of the country you’re selling to. When you’re selling to the people in US, it’s likely that you’re going to get more NOs and you’re going to have to do a lot of sales activities for the deals you are able to close than in some other countries. If you are one of the people who can adjust really well to different circumstances, try changing your rhythm a bit, and maybe you’ll be more successful.

  • Don’t judge your own work, nor the work of other salespeople by looking solely at the conversion rate. It differs, surprise-surprise, from industry to industry and from product line to product line. Though it’s general advice and been repeated over and over again, it keeps on staying relevant – look at sales with a more holistic view and you’ll have better chances to improve.

Three tips on how this can benefit you:

  1. Try improving your conversion rate as much as you can. Usually, it starts from improving a critical stage-to-stage conversion a little. If you hit the ceiling, look elsewhere to other metrics.
  2. Measure the length of your sales cycle. Compare it with others, compare it with the data presented here about your region. Try shortening this cycle, chat with people in your business who close faster. Find out how long they take to move from one step familiar to you to another. If there are people around you who are more successful and have longer cycles, study their work habits, slow down a bit, and see how this works for you.
  3. Calculate your number of activities per an average deal that you win. Compare it with the best producers in your company. Are they doing more things with prospects? Are they doing less? Again, try adjusting your work flow, and monitor the results.

 

Objections… Symptoms of a Broken Process

*Editors Note: Recap post of the Deck presented at Sales Hacker Series in New York City on November 20th, 2014 by Jake Dunlap, CEO at Skaled. Check out the other recaps from the Series in New York City by Dan Thompson and Dave Govan.

Why Do People Buy?

People buy because they have a need. It’s our job as salespeople to find that need and that’s what most of us are trained to do. Find the need. But there’s more to it than that.

What most people don’t address when it comes to their actual sales process are the other factors involved:

  1. Does the Prospect even want a solution?
  2. Are they willing to take next steps for implementation?

Without these other two pieces the sale won’t happen. We all have wants, needs, desires, etc. but do we actually want them solved? Not always. It must be a problem that the customer wants solved. As salespeople we need to raise the importance of not solving certain issues. As far as next steps go, are they comfortable with what needs to happen next to move along in the process?

Our job is to:

  1. Create needs
  2. Raise the importance of these issues
  3. Eliminate barriers to move along in the process and implement what we do

Why Do Sales Objections Happen?

First, your pitch is too tailored or overwhelming. In other words, we talk about what we do, our solution and the amazing things that it does. On the prospect side, they’re thinking “Yea, that’s great but I have these other 4-5 things that I care about more…” Second, is that we don’t spend enough time talking about implementation. Third, is you have a lack of knowledge of the buying process. You think that you’re dealing with the individual, but in today’s modern buying climate how people buy is equally – if not more important – than the actual decision maker. People generally make consensus decision making.

What Causes These Objections

  • Lack of knowledge of the Buying Process
  • No Need or Not a priority
  • No Budget or Authority
  • Switching cost is or is Perceived to be too High
  • Too Similar to what they are Currently Doing
  • Cost / Time to act is more than the Investment is Worth

Budget Concerns

Guess what? They do have budget….they just don’t want to give it to you or can’t commit to what you asked.

Try these tactics when you run into budget objections:

  1. Run a trial to prove value – “Let’s do something small over the next 3-6 months to prove out value so when we are looking at a bigger spend when budget opens up…we have the use case” If they are really interested then this should make sense.
  2. Sign the agreement with a start date of when the budget frees up.
  3. If the price was different, would you be able to pull the trigger or could XYZ pull the trigger?
  4. Give to get? If we lower the price to X and show the value of Y, then will you agree to a press release / logo/ Referral?

They Aren’t Ready To Move Forward…

Try and reiterate the issues and ask if they are no longer a priority.

Or They Just Don’t Tell You… They Go Silent

Likely causes:

  • Barriers were too high to implement
  • Switching costs were too high
  • ROI was not present
  • Someone you never met…said No!

How To Fix The Future

  • How to Fix a Decision Makers Non-Involvement
    • Address it early in the discovery process or call
    • Act as if it is the typical part of the process to include decision makers on the next call when ending meeting two.
    • Make it a requirement to walk through the final details

Salesforce

The final way to solve this problem is to train your people to not come to you if they haven’t gotten these details figured out:

  • Sales Qualified Lead – SQL’s
    • Pain expressed
    • Decision Maker
    • Champions & Coaches
    • Pain can be solved with solution

10 Tips for Getting What You’re Worth – Negotiation & Objection Handling

*Editors Note: Recap post of the Deck presented at Sales Hacker Series in New York City on November 20th, 2014 by Dan Thompson, East Sales Director, Smarsh.

Objection Handling vs. Negotiation

Objection Handling:

  • Addressing your prospect’s concerns about your product or service in order to create technical, organizational, and personal buy-in
  • You are still selling at this stage in the process

Negotiation:

  • Attempting to reach mutual agreement about the value of your product or service
  • You have already been selected as the vendor of choice

Remember: Don’t negotiate before the prospect is sold, and don’t revert to “selling” once you’re in negotiations.

Overcoming Objections

Objection Handling: Tip #1

Learn From Your Losses

  • Review your lost opportunities over the past year and look for themes
    • Which objections came up most often? Which ones were the deal breakers?
    • What areas will require product development? What can you work or talk around?
  • Review your near-losses and close calls; opportunities you won but almost didn’t
    • What were the biggest hurdles to closing the sale? How did you overcome them?
  • Use these insights to create a “cheat sheet” of common objections and craft 2-3 potential responses for each. Test them out and revisit them often.

Objection Handling: Tip #2

Understand Your Prospect’s Real Concerns

  • Why is the objection an issue for them, and why are they bringing it up now?
  • No assumptions. Guessing at the prospect’s intention can put the deal at risk.
  • In order to truly understand, you must:
    • Validate and acknowledge the prospect’s concern (nurture)
    • Understand the problem they’re facing and the reasons behind it (ask why?)
    • Respond only once you’re sure you understand the real concern
  • Never answer a question without understanding the context behind it!
  • When in doubt, place the ball back in the prospect’s court. It’s their job to clarify.

Objection Handling: Tip #3

Stop Putting up Speed Bumps

  • All prospects have a vision of their ideal solution. This gets them ready to buy.
  • Your job is to help them realize that vision, not distort it.
  • Salespeople distort their prospects’ visions by:
    • Answering un-asked questions
    • “Pitching” unwanted features and benefits
    • Generally misaligning your solution to their pains or use case
    • Saying anything that creates unnecessary risk in the prospect’s mind

Objection Handling: Tip #4

Go for the “No”

  • “Is it over?” “is this going to be a deal breaker?” “should we just call it quits?”
  • “Walking away” tests an objection’s importance and identifies the prospect’s real concern
  • When there’s a particular objection that comes up repeatedly, don’t wait for your prospects to bring it up. Get it on the table early and seek resolution.
  • This builds genuine credibility and rapport
  • Don’t worry: Just because you’re walking towards the door doesn’t mean you have to go through it… unless, you want to.

Objection Handling: Tip #5

Understand That Pricing is NEVER the Real Issue

  • There is a direct correlation between pricing and conviction (value)
  • Less certainty your product will solve their problem means greater pricing pressure
  • Solution: Learn what your prospects would need to see to justify paying more, then show them you can deliver (ROI)
  • In other words: Let your prospects answer their own objections.

Better Negotiation

Negotiation: Tip #1

Have a Game Plan

  • Determine your pricing “envelope” – your best, worst, and most likely scenarios
  • Create a list of potential negotiables – setup fees, minimum commitments, etc. – and assign trading values. Remember that contract terms have value too.
  • Know your non-negotiables and stick to them
  • Remember your prospects will have their own envelope and negotiables too.

Best and Worst Case Scenarios in a Negotiation in Sales

Negotiation: Tip #2

Consider Your Prospect’s Environment & Business Drivers

  • What do you believe is of value to this particular prospect? Why?
  • Internal & external factors influencing their decisions may include:
    • Buying team, business challenges / goals, and individual motivators
    • Short- and long-term strategy – expansion, relocation, new technologies, etc.
    • Competitive pressures, market trends, and general business environment
  • Determine their most likely alternative – a competitor, develop in-house, or doing nothing
    • What unique advantages does your product or service provide?
    • This will determine how much leverage you have

Negotiation: Tip #3

Never Give Anything for Free

  • Always get something comparable or greater in return when you give concessions
  • Know what items could sweeten the deal for you:
    • Commitment to sign within an agreed-upon timeframe (EOM, EOQ, etc.)
    • Longer initial term (annual vs. monthly contracts, multi-year agreements)
    • Case study or reference account, use of logo in marketing materials
    • Introduction or referral to other potential clients
    • Better payment terms (upfront vs. monthly payments, shorter collection times)
  • “Freebies” lower your solution’s (and company’s) perceived value

Negotiation: Tip #4

Know When NOT to Negotiate

  • Providing certain concessions create undue risk to the business, regardless of how much you may want the deal, the new logo, or the revenue
  • Owners and Sales Managers: It’s your job to know when these times are.
  • Set guidelines, implement check-and-balances, and stick to them.
  • This is easy if you’ve done a good job creating your pricing envelope and valuations
  • Live to sell another day…

Negotiation: Tip #5

Quarterback the Process

  • Consider the various buying centers involved: project sponsors, technical buyers, legal, procurement, etc.
  • You must always be working these functions in parallel
  • As the seller, it is your responsibility to drive the procurement process

One Final Tip:

Keep Calm and Don't Take it Personally

In Summary

Successful objection handling and negotiation ultimately comes down to:

  • Knowing yourself, your customers, and your marketplace
  • Remembering that “pricing” is really about conviction
  • Having a game plan and never giving anything for free
  • Owning the process and maintaining control
  • Never taking things personally

How to Create Win/Wins in Contract Negotiations

*Editors Note: Recap post of the Deck presented at Sales Hacker Series in New York City on November 20th, 2014 by Dave Govan, CRO at Dynamic Yield.

When we get into negotiations there are different modes that we get into, but often we’re concerned with the relationship, the substance, the price, the terms, etc.

A lot of people think that they want to end up somewhere in the middle, or what is called Positional Negotiation. It takes very little effort, very little energy, and sometimes we may want to do that, but the best type of negotiation is the Collaborative Negotiation. Collaborative Negotiation is where you are creatively problem solving so both parties win.

How to Handle Negotiations

Plan Your Negotiation Strategy

BATNA (Best Alternative to a Negotiated Agreement)

The person with a better BATNA has the most leverage in a negotiation.

For example, if you’re a young company and you have no major brands and you’re calling on a major brand, who do you think has a better BATNA? Well, not the young company because their best BATNA with that major brand, is that you have no major brand. This is a case where the young company might make concessions that they normally wouldn’t.

Contract Negotiation Tips

  • Establish Trust Upfront & Gain Trust Throughout
  • Manage Gains & Losses
    • Plan to Provide more Concessions / Rewards than deliver losses.
    • Do Communicate Concessions in Stages
    • Communicate Losses in One Big Chunk.
  • Don’t Accept Counterpart’s offer quickly, delay.
  • Don’t Rejoice in your Gains and Alienate your Counterpart

Observe Verbal & Physical Cues

When you’re in a negotiation observe physical and verbal cues! Now, if you’re selling over the phone it eliminates the visual aspect but there is still a ton of things you can take away from strictly audio.

Overcoming Objections

Price

Whether is costs a $1 or $1M it doesn’t matter. What matters is the value that it delivers to your business. Identify use cases and ROI and collaborate with your prospects. Don’t be afraid to use the word Draft with people. It helps collaboration and makes the prospect feel involved and valued in the process.

Legal Terms

  • Use Principle Based Negotiation
  • Leverage Industry Standard Terms

Seek Win / Wins & Always Think Positive!

“Your beliefs become your thoughts, Your thoughts become your words, Your words become your actions, Your actions become your habits, Your habits become your values, Your values become your destiny.” – Mahatma Gandhi

Questions? Comments? Tweet them at @SalesHackerConf or leave them in the comments below!

How to Build a Validated Sales Process

*Editors Note: Recap post of the Deck presented at Sales Hacker Series in Boston on November 18th, 2014 by Tim Bertrand, SVP of Worldwide Sales at Acquia.

Acquia is the fastest growing private company in the United States from 2009 to 2013, and I had the pleasure of joining when we were 20 people back in 2009. We’ve grown from about $2M in bookings in 2009 to about $120M at the end of this year.

This is a really nice segue from what Steve McKenzie presented on. I’m going to give you some real world tactics that we use to move deals through the funnel faster, on how to manage the funnel, and how to build a validated sales process.

At Acquia we have SDRs, and our ISR & SDR team globally is about 45 people. SDRs are responsible for outbound pipeline generation and ISR are responsible for all of our inbound leads, which is somewhere between 18-25K inbound leads per quarter. Too, our business is seasonal so we find that in the Web Dev business that Q1 & Q3 are our slower quarters while Q2 & Q4 tend to be the quarters where customers spend money.

Our AE team, from a prospecting perspective are focused on target accounts. We had the same situation with marketing that InsightSquared had where they were saying – “The leads are green, the leads are green, the leads are green” but we’re coming back and saying “The pipeline is red, the pipeline is red, the pipeline is red”

Again, similar to InsightSquared, our marketing team is measured on MQLs, raw pipeline, sales qualified pipeline, and bottom-line bookings. So we are absolutely joined at the hip and that our ISR and BDR teams are goaled on the same things. Our teams have a shared responsibility to make sure that we get to our pipeline goals.

We know based upon pipeline metrics that we track where we need to be stepping into a quarter in order to meet our number.

Sales Accountability: Set SLAs

Once we sat down with marketing and decided that we all would be measured on the same metrics, everyone “put their money where there mouth is.” We have SLAs that we’ve agreed to between Sales and Marketing, so when we get an MQL we know to call them back within an hour and as you move through our funnel we agreed to SLAs between Sales and Marketing.

Sales Execution

We know that over the last 12 quarters, based upon the pipeline that we’ve generated, the results have been within 5% of our pipeline metric. So when we walk into a quarter, unless a miracle happens, that is we were 20% off on our pipeline goal we know that we have a risk for that particular quarter.

So the first that we do before the opportunity even goes into Salesforce, we have to do what is called a discovery letter. We do deep discovery over the phone and then we send the prospect a discovery letter, and that letter then has to actually be validated by the prospect.  It’s not a situation where we had a conversation and I sent you something and then I put the opportunity in Salesforce. Instead, the prospect has to respond back and say – “Yup. You’ve heard me correctly” or “Oops. You have this part wrong” – this way you have an interaction with the prospect.

The first thing we did to prevent reps from jamming up the pipeline is put the discovery letter process in place. Prospects have to be validated.

The second thing we do is before you can move an opportunity from the prospect stage into one of our forecast categories is that they have to pass The Qualifying Test.

Next step is that before you move an opportunity from best case (deals that are qualified) you have to do a Pursuit Drill which has to be validated with a Sales Manager. These are “The 15 Things You Have To Know About a Deal” in order to discover where the holes are in the deal. Once the deal moves into a “Likely” forecast category, and with someone in sales management you have to do “A Vision to Close” and that is what you think every step that needs to happen from today until the day they will close. Again, that process is validated with the customer. It covers everything from –  “Here’s the legal stuff that needs to happen, Here’s who has to be involved with the decision making process, etc.”

The Discovery Letter

A “Discovery Letter” should be sent within 24 hours of a possible opportunity interaction. It typically contains the essence of the conversation that occurred during the sales call along with a proposed set of next steps. A common structure is:

  • A detailed description of the sales person’s understanding of the need and what is driving the need
  • A description of the timetable, budget, and approval process
  • Re-cap of any recommendation you made
  • A list of open questions that were not answered (and may have been tabled for off line discussion during the meeting)
  • A list of agreed upon next steps and owners. This list is one of the best ways to push things forward, especially if there are due dates attached to each next step.
  • A discovery letter MUST BE VALIDATED / ACKNOWLEDGED by prospect

Example of a Discovery Letter

James,

Thank you for your time today. I now have a much better understanding of your data needs.
I have summarized my notes from our conversation. Please let me know if you have any comments / clarifications.

CURRENT SITUATION

  • ABC company is currently hosting their Drupal site at RackSpace
  • Significant user growth has crashed the site five times in the past two months
  • The site outages are tarnishing ABC’s brand and the CEO has mandated a fix ASAP
  • RackSpace nor ABC have the Drupal expertise to troubleshoot / manage this environment. There is a concern that the site has security flaws
  • ABC is looking for a company to provide hosting and application support 7/24
  • The annual budget for hosting and support is $75k. James and his boss will make the vendor decision.

NEXT STEPS

  • James will complete the hosting questionnaire by …..
  • James and his boss will participate in a 60 minute requirements gathering / validation call with Acquia on ______
  • After this call, Joe will turn a proposal around in 24 hours
  • Joe and James walk through the proposal on ______

James, I look forward to working with you on this project.

Regards,

Joe Salesperson

If you put an opportunity in and it doesn’t have a discovery letter, Sales Ops will go in and zero out the dollar value on that opportunity, they email you and CC your Sales Manager and say “You created this opportunity but don’t have a discovery letter. Once you’ve gone back and validated the opportunity you can go back and enter in a dollar amount.”

The Qualifying Test

This is something that someone on the Sales Management team sits down with each rep before they move an opportunity into one of forecast categories and they answer these particular questions:

  • Do they have a problem?
    • Be able to identify the pain
    • Be able to identify the business impact of the pain
  • Can we provide a solution that solves this problem?
    • Be able to identify the solution
  • Is the problem compelling and are they planning to take action?
    • Be able to determine timeframe for a decision
  • Do we have access to key decision makers?
    • Identify key decision makers
  • Do they have a realistic budget? (is it big enough for Acquia?)

The Pursuit Drill

When we first started out, we did these in an ad-hoc fashion but now they’re religion in the company. Every deal that gets into the “Best Case” forecast category and above has to have a pursuit drill done.

The template should be completed by a sales rep and VALIDATED by a sales manager / deal team for any deal that makes into QUALIFIED/BEST. It should also be used as a “gut check” before investing in a formal proposal.

The pursuit drill ensures we answer these kinds of questions:

  • Does the customer have a need?
  • Do we have the right solution?
  • 
Is this a closable opportunity?
  • 
Where do we have red flags?
  • What pro-active strategies should we deploy?

Vision to Close

A vision to close MUST be done AND Validated by a manager prior to moving a deal into Likely/ Commit. Answering theses 3 quick questions can create a roadmap on how to get a deal to closure

  • How do we get business buy-in?
Person / what they care about / how we will get them bought in
  • How do we get technical buy-in?
Person / what they care about / how we will get them bought in
  • What is the procurement / legal process and how do we navigate?

Other Key Tricks to Closing Deals Faster

The “Dear John”

  • You MUST act with edge to understand which deals to focus on
  • A “Dear John” will force the customer to confirm that can execute by your target date OR tell you no
  • Should be sent
  • Beginning of each Q
  • At the end of week 7
  • You all should have an example on google docs (Dear John example) “Yes is great, No is ok, maybe is unacceptable”

Internal Selling Documents

Many times, your contact will need to get approval for your proposal from the decision makers that you cannot get access to. In these situations, you need to help your champion sell your proposal internally. Never assume, however, that your customer can “sell” this initiative with any degree of competence.

Customers who have to go in front of the Executive Committee to get the decision will typically need to put a document together (one or two pages) for the committee. If necessary, volunteer to help your champion create an internal selling document for the decision makers that briefly outlines:

  • The need
  • Why this need should be addressed now
  • The options we evaluated
  • The solution we recommend, and why
  • The details of the initiative (cost, time frame, etc.)
  • How this initiative will support the company goals (save money, improve control and visibility, etc.)

If your customers are willing to sit down and create the document with you, they have really brought you in!

Questions? Comments? Tweet them at @SalesHackerConf or leave them in the comments below!

The 5 Metrics for Growing Your Team Effectively

*Editors Note: Recap post of the Deck presented at Sales Hacker Series in Boston on November 18th, 2014 by Steve McKenzie, VP of Sales at InsightSquared. All of the data presented here is illustrative. 

1. Lead Trajectory and MQL Growth

A lot of companies track leads, website visits or blog subscriptions, but the problem there is that it’s a lot easier to attract general traffic than it is to attract your target buyer.

  • You may see a sharp increase in traffic, but if you don’t segment general visitors versus marketing qualified visitors you’ll have a misleading indicator of growth.
  • Therefore, identify criteria to label something MQL and then track the growth of new MQLs month over month.

Are We Growing our MQL Number?

Get on track with lead generation

Here’s how we do it, the different colors in the charts represent different lead or campaign source for MQLs.

You want to watch for two things here:

  • One is that you actually have exponential growth up and to the right.
  • Two is that your mindful from where the lead growth comes from, this will help you double down on the right marketing spends later.

2. Lead to Opportunity Conversion Rate Over Time

Now that you’ve gotten marketing on track, you’ll need to pressure test whether or not your criteria for MQLs was correct. By tracking the percentage of MQLs that convert to sales opportunity month over month, you can early identify whether or not the leads you thought were marketing qualified are actually sales ready or not.

Where do Unqualified Leads Fall out of our Sales Funnel?

Conversion Rates

Take a look at this trending chart. Here we’re tracking the percentage of leads that get qualified as MQLs in blue, and MQLs that convert to qualified opportunities in yellow.

You’ll notice up until the end of Q4 in 2013, about 40% of our leads were classified as MQLs, by the end of Q2 that jumped to 80%. So either our marketing team got a lot better at attracting the right leads, or they loosened up their criteria on what qualified as an MQL.

The proof is in tracking the conversion from MQL to opportunity (that’s in yellow). What you’ll notice is that at the same time in Q4 last year and Q2 of this year, there was a drop from 80% to 20% lead-to-opp conversion rate. So this is how you keep your teams honest and don’t get a misleading indication of growth.

3. Call to Connect Ratio and Meeting to Deal Ratio

Now that you’ve got your marketing house in order and you’re able to maintain the integrity of their growth, it’s time to put in some metrics to ensure proper handling of those leads by your phone team. Too many companies rely strictly on dial counts or phone volume as the sole metrics for a phone prospecting team.

  • It’s actually more important to be able to identify the actual ratios between the different steps in your sales process:
  • Calls to connects
  • Connects to meetings, ect.

This will allow you to develop a model that truly reflects the activity levels required to realize your growth goals.

Is My Sales Team Working the Phones Effectively?

Cold Call Sales Conversion

You know it takes about 8 calls to get a connect:

  • For every 10 connects you get, you can book a meeting
  • And 70% of those meetings show up and turn into opportunities.
  • You can now do the math and know that you need 80 calls to get one meeting
  • So you’ll need about 115 dials to get an opportunity.
  • Now if you take into account the amount of pipeline your phone team is supposed to generate and multiply that number of opportunities by 115 dials, you can easily back out the number of calls your team needs to make in a day.

Questions that you’d normally slave over in Excel can become incredibly easy with this style of reporting:

  • How many dials a day does a rep have to make
  • How much head count do I need
  • What’s a realistic expectation for Demand Generation in my business

4. Pipeline Inflow/ Outflow

You should have a demand gen side that’s reliably performing and generating pipeline. Unfortunately, the concept of trending pipeline reports and all CRMs fall way short of expectations. They can give you a snapshot of your pipeline today, but they can’t realistically tell you if that’s better or worse than this point last month or last quarter. How can you measure growth if you can’t see historical trends?

Are We Winning More Than We Lose?

Why is my sales Pipeline Changing

Here’s a solution to the inability to see trends:

  • The blue bars represent pipeline being created in the given month
  • We track it by value and by count separately
  • It’s important for us to identify if we’re creating more opportunities than we used to while maintaining discipline that they’re not all turning into loses.

5. Analyze Your Bookings

That takes us to our final point:

  • If you can generate growth on your marketing side
  • Analyze the integrity of that growth by watching your conversion rates
  • Model your phone activities to maximize the return on that lead growth
  • Track to ensure positive pipeline growth, then you should see a growth in bookings. Otherwise there’s a sales execution problem.

Is Your Team Converting Opportunities into Deals?

How Sales Booking Trend Over Time

So here’s my favorite slide and you can probably tell why. You’ve invested in marketing and gotten a return, you’ve modeled and invested in your phone prospecting team and gotten a return, now you can see the final payout by looking at a bookings trend that goes up and to the right.

 

View the SlideDeck from Steve and his Presentation at Sales Hacker Series in Boston here:

Questions? Comments? Tweet them at @SalesHackerConf or leave them in the comments below!

Don’t Handle Objections, Steer Them

*Editors Note: Recap post of the Deck presented at Sales Hacker Series in San Francisco on October 23rd, 2014 by Zack Kass, Head of Sales and Customer Experience at Shyp.

Salespeople are often taught to handle objections. The notion of – how you handle this, that, or the other thing. That doesn’t really matter. What really matters is that you got the right objections.

If you’re selling the same thing over and over, you’re going to get the same objections and they’re probably 10-20, maybe 30 that are the best objections. So your only goal is to get them to bring up those objections.

Just like in fencing, in sales you want to draw your “opponent” closer to you.

Every question is in the following scenario.

Objection Framework

  • Critical or Irrelevant
  • Rational or Emotional
  • Genuine or Rhetorical

Don’t answer a rhetorical question. Make someone make a rhetorical objection.

Defining a great objection – relevant and rational objections are the best objections and there are probably around 10-30.

For example, using an objection for Dropbox could be “Dropbox is going to lose my stuff” and that’s actually a relevant objection, but it’s extremely emotional because Dropbox isn’t going to lose your stuff, so say “Let’s talk about that. What do you think is going to happen to your stuff? What preconceived notions do you have about cloud storage?”

You want to steer them to ask you the right question, which in this case the rational one would be “What does Dropbox do to protect my storage?”

If you can focus all of your time steering objections to the best questions, you will win. Guide people through the process knowing that most will start off emotional and irrelevant.

Objection Steering Guide

  • Don’t condescend irrelevant objections
  • Empathize with emotional objections
  • Field great questions with honest, specific answers
  • Ask equally tough questions about their business

Objection-Based Sales Methodology

  • Build a list of the top 20 “great” objections a prospect can make
  • Rank-order the objections on two dimensions
    • Relevance
    • Favorability
  • Check a box when each question is asked

A Simple Focus

“Spend your time with people with people in one of two ways, asking great questions or driving great questions.”

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