Posted by Geoff Alexander on Mon, Jul 26, 2010 @ 10:02 AM
One of my inside sales training course clients had a real dilemma a couple of weeks ago. Since her Lead Qualification reps were being compensated on appointments being sent to the field, she was finding that there were a significant number of unqualified appointments being made, and the Field salespeople were beginning to complain.
One of the problems was that there wasn’t a lead grading system in place, so a lead was characterized as either being an appointment or a non-appointment. This is not an isolated incident, and I see this quite frequently. Naturally, if no lead grading system is in place, Business Development reps will create as many appointments as they can, because that’s how they’re measured and compensated.
To fix this, a lead grading system should be put in place, and compensation should be adjusted accordingly. My feeling is that unqualified leads should never be part of a compensation package, and the best place to start is by defining what constitutes an “A,” or fully qualified and compensated lead.
One of the concepts I teach is that there are six basic qualification question types, and each question should be asked on every qualification call. Here they are, along with my ideas on the responses that might constitute an “A” lead:
Requirements: The prospect has defined at least one technical or product/service requirement that links to an element of the proposed solution.
Timeframe: The prospect intends to buy within 90 days.
Decision Tree: The decision process is defined, leading up to the appropriate VP or CXO.
Scope: The potential size of the opportunity is defined, encompassing all individuals, departments, and divisions within the enterprise that will be eventually using the solution.
Business/Consequence: A business problem is identified that links to the proposed solution, as well as the consequences of not solving the problem.
Budget: Has a budget been allocated for the solution in question? This question must always be asked, but a “no” answer is not necessarily a deal-breaker, as budgets can be allocated if the Business/Consequence, Requirements, and Timeframe answers constitute a qualified lead.
This is a model, and it’s going to vary somewhat depending on your product. For transactional sales, maybe the “A” lead timeframe is 30 days. For large enterprise deals, maybe it’s 3-12 months. You can craft your own “B” and “C” categories after you’ve determined what an “A” lead is, and perhaps tweak your comp plan to reflect that as well.
Although the issue on the table is sales leads going to Field reps, the case for ranking lead qualification categories is critical for all Business Development teams. Asking the Field for input regarding what they think constitutes an “A” lead is important too. After all, the Field is the customer.
If you’re a Business Development manager who hasn’t yet implemented a lead ranking system, now’s a good time to start. And if you already have, it’s worth a check at least once a year to ensure that youre ranking system is giving the Field what it needs, and you’re compensating your team members on the activities that best reflect on the profitability of the company. And be sure to add Lead Ranking development and maintenance to your Best Management Playbook.
Posted by Geoff Alexander on Mon, Jul 12, 2010 @ 10:02 AM
Today's post wasn't written by me. It was written by an individual that has just landed herself an outstanding six-figure inside sales job. I know her, because she took one of my inside sales training courses. More than one company was bidding for her, so she was able to choose from among several. How was she able to accomplish this? She gave outstanding employment interviews, and I know, because I got feedback from more than one company. She "wowed" everyone, so I asked her what the heck she did to gain all this traction. She told me, and I asked her to put it in writing for the blog. She wants to remain anonymous, but we'll call her Allison for the record. What she says below should be adopted by everyone looking for an inside sales or qualification job, and most of it actually applies to just about any job. It's 4 pages long, but trust me, it's worth it.
Here's what Allison says:
How to Prepare for a Sales Job Interview – Not exactly like a date, but close!
When you get asked out for a date, wouldn’t you want to know who you’re dating, what the person is like and how much fun you think you’ll have? With the internet as your tool, you can easily find the answers to these questions on Facebook, LinkedIn, Twitter, Podcasts and Google searches. It is no different for a job interview. You can use these sites to mine company and personnel information. Knowing the answers to these questions about a company and the people you will be interviewing with will have you prepared and possibly close the interview as well. Do your homework!
When I receive that wonderful call about scheduling an interview, there are several steps I take to prepare. Most importantly, I treat my interview from my first point of contact to the last as a sales call which has a beginning, middle and end structure to it. I also set my intention of getting the close (the job) by being prepared with the knowledge of “who, what and how” (homework).
In the Beginning - Before the Interview
Before I find the office on MapQuest and park my car to get to the interview on time, I need to know “who am I talking to?” The company’s website has loads of information to answer this question. Most company websites have an “about us” tab. This information will tell you what the company does and usually has a marketing tag line in the likes of answering “…we create an efficient way to save money and time with our software product…” It’s a compelling, succinct and simple message that the company wants its potential customers to understand and is known as “branding.” Knowing a company’s branding message is very important in understanding the product and what problems it can solve for their client. If you get the job, you will need to know this to meet your quota.
In addition to knowing a company’s branding message, it’s important to know about the company in its competitive market. Who are their competitors? What is the differentiation of their product in comparison? It’s good to know whether the company has recently been acquired, are currently active in acquiring other companies, its financial strength and whether it is a national or global company. I use Hoovers.com to get a brief overview of the company. You don’t need to pay for their in-depth service. If the company is a publicly traded company, information about the company is readily available. You can also search for a company in LinkedIn.com for the same purpose.
Another component to “who am I talking to?” Are the Executive Team (E.T.) and most importantly, whom you will be interviewing with. Again, the company website will have a tab to view the E.T. with their previous job experiences, which will tell you if you have any connections to their past companies. Most of the time, the people you will interview with, although important enough to hire you, will not be on the website under the E.T. and you will have to dig further. It is why it is critical to know the correct spelling of the names of the people and their job titles of whom you will be meeting so that you can review their profiles on LinkedIn.com. I use LinkedIn.com to get a sense of the person/people I will be talking to in an effort to create a connection in the interview. If you find an interesting tidbit about the person, he/she will recognize that you searched their profile in LinkedIn. This information alone, can give you a lead in building rapport during the interview (more on that later). In addition, you should have your own LinkedIn profile as it is now the business standard.
What does the company do? Read the “Press Releases.” Press Releases are a company’s pitch of putting their best foot forward. Select one or two that peak your interest. It will give you something you can talk about during the interview. Knowing whether the company has received recent venture capital support, current business partnerships, won industry awards, or launched a new product or version. This information will ignite your enthusiasm and ability to articulate that you did your homework about the company. This will also tell you if you like the company, where it’s going and answer if you want to work for them.
How does the product solve a client’s problem? Read a “Success Story.” You’ll need to know this to meet your sales quota. Does this solve a problem for one person, SMB (small/medium businesses), Fortune 500, Fortune 1000 or other? Does this solve a problem on a national or global scale? You’ll need to know this if you have a geographic territory and whether or not you have the experience to call a variety of markets. This will also tell you about the vertical markets the company is attempting to reach.
Review the job description. This will tell you how the company believes the client’s problems will be solved. The job description will tell you what you will be responsible for and what type of work experience they are looking for. You will need this information to build your compelling stories of WHY you are the right person for the job.
In the Middle - During the Interview
In real estate, the mantra is “location, location, location.” Location is all that matters. The best locations are usually where the best deals are to be had. In sales, whether it is doing your job or going on an interview for a job, my mantra is “connect, connect, connect.” In sales, if you cannot quickly connect with the prospect be it a warm or cold lead, you won’t have a close. People buy from people. In the case of job interviews, the interviewers are the “buyers.” You are the “seller,” selling the goods i.e. YOU.
You must have compelling stories to tell aside from your resume about how you are the perfect person to fill their needs in the job opportunity available. Understand that your resume gets you to the interview or in some cases; helps recruiters get you in the door. Your connection of stories between what you (the seller) can do for them (the buyer) is what is critical to a successful interview.
Actively listen. There is a saying in sales, that “the first person to speak loses the sale.” When you are actively listening, you are taking mental notes on how to respond to the interviewer’s interest in you and how you can help the company with your skill set. You will spend a good amount of time listening to the interviewers talk about the company, where it’s going and what they would like to accomplish with filling in this job. This is a good time to ask each interviewer’s job title and responsibilities so that you can understand the reporting relationship and what’s at stake for hiring you, a highly qualified sales person.
Build a rapport. Remember, this interview is a two-way street. Build a rapport with each person interviewing you. You need to create dialog to show interest and ability to articulate that you can do the job. Asking questions is the best way to create conversation. Sometimes you will meet on a one-to-one basis and other times the interview is a group interview. The sole purpose for you in an interview is to build a relationship (connect, connect, connect) to create a dialog (compelling stories) about how you can solve their need to increase sales. It’s up to you to create an on-going articulate conversation.
Some questions to ask:
What is the most challenging objection to purchasing this product? How do you overcome the objection? What do you like about the company? Where do you see yourself and the company in 5 years? Who are your competitors? How do you differentiate your product?
You’ll need to know this if you get the job. Why not know what’s in store for selling the product? Know the hurdles the company is against in improving sales growth.
Know your numbers. In sales, it’s a numbers game. All sales people know their numbers: quotas, KPI’s (e.g. 40-60 calls a day) and percent of outcomes of prospects to close. You should be able to quote from memory what you have accomplished in numbers.
Top Skills. Have a list of your Top 20 Skills (I got this great recommendation from a VP of Sales) and another list of five specific skills in detail related to the job to have for yourself in the interview to remember and discuss while in conversation. You can craft a generic list of your own or use the job description for listing necessary skills. At the end of the interview hand this copy to your interviewer. Handing this list to the interviewer shows that you have confidence in yourself and helps the interviewer position you in the company’s organizational chart. The fact that you crafted a list and gave it to the interviewer will leave a lasting impression.
Be positive. Nobody wants to work with a stick in the mud. How would you feel if your date was negative and complained about past relationships? What would you think if you had to listen to boring stories? Wouldn’t that tell you that this date isn’t going to work? All your worries about not having a job, needing money, the “what ifs” about not getting this job, etc, leave these at home before you drive in the car to the interview. Be positive about your compelling stories, your abilities, your past work experience, people that you have worked with and other hobbies you might have.
Be passionate. Have a passion that has nothing to do with work. I’m a baseball fan and I am passionate about the game, the score and the players. For others, cooking, art, sailing, collecting and traveling are other passions. Wouldn’t you rather work with someone who has a passion than not?
The end - The Close of the Interview
When you sense that the interview is coming to a close, you can ask:
What is your time frame for hiring? In your opinion, how do I (you) rate against the other candidates at this time? What are the next steps?
Be thankful. Make sure you get a business card of those you meet. It will give you their email addresses. Thank all the interviewers with a strong handshake and nice smile. Write an email within 24 hours to thank them for their time. Understand that you both spent time out of your day to meet while other things were boiling on the stove. As long as you can show respect for them it shows that you have respect for yourself as well. Look at this as a possible beginning rather than a means to an end. Your paths might cross again.
Reply and Stay Active. Once you have sent your thank you email, return any emails and calls from them as promptly as you would any sales call. Your response shows how you are an active sales person by treating the interviewer as a prospect.
In summary
Preparing for a Sales Job Interview is not exactly like a date, but close in knowing the “who, what and how” elements it takes to understand why you are there in the first place. It has been my experience that no interviewer wants to see a candidate fail. For some interviewers, it’s just as uncomfortable for them to interview you as it is for you to be interviewed. As long as you know that you have done your best in doing your homework and creating a connection, it is the most you can ask of yourself.
- Warm regards, and Play Ball!
Geoff here again: I can't add anything, except take Allison's great advice whenever you're applying for an inside sales or qualification job, and add it to your Best Practices Playbook.
Posted by Geoff Alexander on Mon, Jun 21, 2010 @ 10:02 AM
Salesforce.com is a CRM database tool that's become the standard for many companies' inside sales teams, and I've seen it used many times when I coach team members during my inside sales training courses. It's powerful, but like most robust tools, it needs to be tweaked for the characteristics of the team using it, based on use cases. Generally, I encourage my clients to either have a dedicated Saleforce.com expert on staff, or utilize a consultant to assist in making the best use of the CRM.
One of my blog correspondents is going nuts over how her company has implemented Salesforce, and she's made a very cogent, if impassioned, statement about how it's not working as well as it should at her company. What triggered her correspondence to me was the ongoing discussion on the blog based on my KPI (Key Performance Indicators) post. She's got a litany of concerns, including some that relate to intra-company politics, but basically what she's dealing with is a sales process that's not working as well as it could. She wants to remain anonymous, which is why I'm telling the story here, and it's not listed as a blog response.
I'm posting it here, because she addresses issues that I've been hearing a lot over the past few months. I'll let her tell it in her own words. If you can relate to her issues, you'll know you're not alone. And if you don't have similar problems, congratulate your CRM expert for doing a great job.
Here's what she has to say:
"Data Quality 101. I've been burned by the company buying a bunch (7000+) of "leads" from somewhere & loading them into Salesforce.
"The alleged quality was questionable. For a 10% sample of my patch I kept statistics on: address, phone, URL, description & contact. Boiled down to taking an AVERAGE of 7 minutes to bring a single Account record up to callable quality. So I'm doing DATA ENTRY, while I'm paid on sales. Would you have any idea if there's a mechanism or accessory for Salesforce that quarantines incoming 'leads' into a pending status before accepting them a valid?
"One of my big, first clues to Salesforce was their introductory training video... where at one point they go out of their way to emphasize the importance of using "good naming standards/conventions" when choosing a opportunity name. So if one time it's called BCBS MA & another time Blue Cross/Blue Shield Massachusetts & another time BlueCross/BlueShield Mass... duh you'll get results all over the place. Guess what? Busy salespeople are NOT typists. They'll make up whatever name makes sense to them at the moment.
"Surfing the Salesforce site last night was not enlightening. ‘Data Quality' seems to be no more complex than de-duplicating. Basic challenge... when the CEO puffs up his chest ‘We're using Salesforce...' which means we're way cool, this essentially slams the door on the question, ‘...yes, but HOW well are we using it?' Another non-unique challenge... the freshly appointed Salesforce administrator took it as personal insult to imply that just perhaps everything in Salesforce wasn't 100% up to snuff. How dare you challenge my manhood! I just do not understand why people get so tied up in their shorts over common stuff like this... admit it, knuckle down & fix it & get on to selling."
Geoff here again. So there you have it, some pretty frustrating words from an inside sales rep trying to motor through a challenging situation. Lots of my readers are management people at startups, just beginning to put together an inside sales team. If you're in this category, put some serious thought into pre-tweaking your CRM to get in inline with your KPIs, and try making a few calls yourself as a use case to ensure that your system is set up to optimize the successful work of your reps. Add this to your Best Management Playbook.
Posted by Geoff Alexander on Mon, Feb 01, 2010 @ 10:01 AM
We don't just create and deliver world-class telesales training courses here. We also help great telesales reps who've excelled in our classes and at work to find jobs. We know reps that have never been under quota that were laid off this year. The other day, veteran inside sales executive Alicia Assefa interviewed a candidate we sent her, and she gave the candidate some outstanding advice on how to make a presentation in the interview that would be compelling to any sales executive. It's all about describing how you use KPI (key performance indicators) to increase your numbers and overshoot quota. I asked Alicia to share her perspective with my blog, and she did. I'll let her put it in her own worlds. Here's what Alicia says:
Everyone knows how difficult it is to find work. It's tough out there. Although job opportunities are more prevalent than they were say, six months ago, it is still a very competitive market. A few months ago, you could expect hundreds of applicants for one open position. Now, the number may be in the tens of applicants. In any case, the odds are still against job seekers. In order to get noticed, your resume must stand out. To get to the next level of the interview process, you must stand out, during each interview.
If you are looking for a sales position, there is a sure fire way to stand out from the crowd and position yourself as the "right "person for the job. Know your numbers.
Your numbers are metrics that Sales Managers call Key Performance Indicators or KPIs. A manager's performance rating is, in most cases, tied to KPIs such as pipeline growth and quota achievement.
What are the KPIs for an Inside Sales Professional? KPIs will vary, based on whether you do Teleprospecting or have a sales quota.
KPIs for Teleprospecting Reps: If you are a Teleprospecting Representative and your primary focus is on generating leads for a Field or Inside Sales team, your KPIs might include the following:
- Average Daily Dials: You should know, on average, the number of dials you make, each day. If the product is a high ticket complex solution that requires that you speak to a Senior IT professional, you may make 40-50 dials per day, as you must get past gate keepers, etc., to reach the required high-level IT professional. If, however, your product is a lower-priced commoditized solution, you may be able to make 60-100 dials per day.
- Raw Lead (RL) to Qualified Lead (QL) Conversion: Raw leads are the leads that marketing provides you, each day. Depending on the type of solution and contact level you need to reach, your RL to QL conversion should be in the range of 15%-20%. If you have a position, currently, check out the RL-to-QL conversion statistics for your team, for a 2 week period. See what the average is and where you rank. If you are looking for work and don't know this particular KPI, try to remember the total number of leads you received and how many of those turned to a qualified lead.
- Cold Call Ratio: Cold calls are calls that you make to contacts that you uncover without the aid of marketing support. Sales Managers are, typically, very interested in Sales Representatives who are not afraid to make cold calls. In general 20% of your dials should be cold calls into your accounts or territory. Managers will want to know where you got the contact names and how you pitched your Company's value proposition.
- Contact Ratios: Dials and lead conversion are interesting to Sales Managers because Sales is a numbers game. The more dials you make and the more leads you qualify, the greater your chances are of successfully meeting sales targets. A very important KPI is the contact ratio number. For example, if your daily dial average is 50, you should expect to connect with a minimum of 5 important contacts, or 10% of your dials. Ten to fifteen percent of your dials should be with important contacts that can help you move your sales activity to the next levels.
- Pipeline Growth: Pipeline is not just for quota bearing reps. Teleprospecting Reps, who generate leads for a Sales team, will have a pipeline of Qualified Leads (QL). Know the Average Sales Price (ASP) of your solution. Know your team's quota. Once you have this information, you can start to build your qualified leads pipeline. Typically 33 percent of deals will roll off the sales forecast, 33 percent will close and 33 percent will stall. If you are supporting a Sales Team, in general, you will need a qualified leads pipeline of 3X your teams' quota targets.
- Emails: Emails are another touch point that connects you to prospects. Although the phone is the primary way to connect with prospects, it is often necessary to stay in touch through an email. Know how many emails you send out, daily. Emails, when added to your average daily dials, increases the total number of prospect touches you have, each day. On average you should send out 15-20 emails to key contacts, daily.
KPIs for TeleSales Reps: If you are a quota bearing Sales Professional, your KPIs will include most of the items above, including:
- Average Daily Dials
- Cold Call Ratio
- Contact Ratios
- Average Sales Price
- Emails
In addition, as a quota bearing representative, you have a quota (monthly, quarterly, semi-annual, etc.). In order to achieve your quota, it is important to build your pipeline to ensure that you will meet sales targets.
- Pipeline Growth: Depending on the type of solution you are selling (complex, high-priced or commoditized, low-priced) you will need to build a pipeline of 3X to 6X your revenue objective. If you are currently working in a sales position, ask your manager how large your pipeline should be to meet sales targets. Start building to that level, to ensure your success.
- Quota Achievement: Every Sales Manager is going ask you if you made your sales targets. If you did, you should know how (pipeline growth of X times of Sales Targets, X Cold Calls made per day, 50-60 Daily Dials, etc.). If you didn't, you should know why. If you didn't, make your numbers, were you within 85+ % (an acceptable range). If you didn't, how did you rank against your peers?
After you've derived your numbers: Now that you know your numbers, the next step is to ensure that your résumé lists your numbers (KPIs). List your achievements, by company. For example you might list:
- At ABC Company I achieved 92% of my quarterly objectives for 6 consecutive quarters. I was ranked number 2 amongst my peer group. I achieved my numbers based on:
- 1) Average Daily Dials: 65
- 2) Cold Call Ratio: 20% of all dials
- 3) Pipeline: 2.5X quarterly sales objective
- 4) Contact Ratio: 20% of my daily contacts were with senior level IT Executives
Once your resume is completed and lists your KPIs, your next and final step is to complete a one-page overview of your accomplishments. This overview should list your major accomplishments, with the most important accomplishment listed at the top.
Your overview should list the following:
Sales Highlights and Accomplishments
Company XYZ:
- 2009 Presidents Club
- Achieved 120% of Quota
- Pipeline 5X revenue objective
- ASP: $50,000
- Contact Ratio: 20%
- Cold Call Ratio: 15%
When you have an onsite interview, make sure that you give your Sales Highlights and Accomplishments document to the hiring manager. Keep a copy in front of you, for the entire interview. You have a lot of numbers to discuss and you don't want to forget your most important KPIs.
Knowing your numbers and communicating your numbers, during the interview process, will put you way ahead of the competition. When you know your numbers, Sales Managers will feel very comfortable that they won't be hiring a junior person. Rather, they will see you as a seasoned and serious Sales Professional who is goal oriented and highly motivated. Start building your list of KPIs. Know your numbers and communicate them in your resume, Sales Highlights and Accomplishments overview and during the interview process.
It's Geoff here again. So there's some important advice from an inside sales executive whose job entails determining who to hire and who to discard. One day while I was a juror, a judge told me after the case was finished that he was frustrated because he'd told the prosecutor exactly how he wanted the case presented, and the prosecutor went and did it his own way anyway. And lost the case. Here, we have an inside sales exec who's telling you how to get hired. Add Alicia Assefa's advice on presenting your KPIs to your Best Practices Playbook.
Posted by Geoff Alexander on Mon, Jan 04, 2010 @ 10:01 AM
Last week I provided 5 great tips for closing year-end business, from a list of my own favorite blog posts. But you voted on yours, too, and that's what today's post is about.
When I launched this blog in 2008, I did it with two objectives in mind. For one, I wanted to convey valuable elements of my telesales training curriculum to my subscribers, a good number of whom work for companies that would love to hire us to train their inside sales teams, but can't find the budget to do it in these tough times. My other objective was to help to elevate ethics and best practices within the high tech inside sales business, posts that are pertinent to sales management as well as sales reps. Particularly in the latter category, I've ruffled a few feathers, but that gets dialogue going and brings issues up that frankly need to be addressed in order for our industry to continue evolving. The blog's successful. It's been picked up on a bunch of other websites, and loads of people are using the material (even my competitors!)
Reflecting on 2009, I thought it would be of value to tell you what your colleagues were prioritizing when they read the posts that were written in 2009. Here are the top five, in order of page views. If you haven't read them in awhile, why not pick out the ones you feel might help you get a great start to the new year? Numbers 3 and 5 deal specifically with Management issues, while #s 1, 2, and 4 reflect techniques that can increase sales, starting this week:
- 20 Characteristics of a Superior Inside Salesperson
- 5 Most Common Price Negotiation Mistakes
- Increase sales through improved Daily Call Metrics
- 4 Common weak phrases that erode telesales success
- Increase sales by conducting an effective Telesales Employee Performance Appraisal
I'll keep blogging on techniques and issues I feel are critical as the new year unfolds. These are wonderful, exciting times to be in Inside Sales, and each new leap in the technologies we use presents new opportunities and challenges. Believe me, I'll write about them. I hope you'll add the techniques in the posts above to your Best Practices Playbook... and let's get started having a great year!
Posted by Geoff Alexander on Mon, Oct 12, 2009 @ 01:33 AM
Today's post comes from Bangkok, where I'm doing some sales consulting for Frank, who's just inherited a sales team that in the past has been effective, but now the numbers are dropping and the company is concerned. Frank was brought in to run Operations, and has a sales team where two reps are over-quota performers and the rest are functioning below par.
There are other important issues Frank needs to address, some of which are in the area of team communication. The team has never been formally trained, and there is no current training budget. The top performing rep refuses to share the reasons for his success with other members of the team. The result of these two issues is that there are no best practices to be shared because they have not been codified.
This post is potentially important to all of you. If you're a telesales rep, you may one day be promoted to managing a team of inside sales people, and I guarantee that you won't be moving into a "perfect" situation, because there are none. If you're currently in Management, you may be dropped into a situation where most of your inherited reps are functioning at a rudimentary level, and you'll either have to grow them or dismiss them. And in today's austere world, you may have no money to hire us to help solve your problem through one of our telesales training courses. So what are you going to do, and where do you start?
As I told Frank in our consulting session, two of the first things to look at are what makes his best reps successful, and how their behaviors can be factored into creating a meaningful set of key performance indicators for everyone else. Let's look into this further:
1) What behaviors constitute top performance? Frank's top rep constantly blows out his quota numbers, but won't share his best practices. So Frank's going to have to "go along" on sales calls to observe and log best sales practices. This means listening to calls or going out on joint sales calls (his reps are hybrids, and work both on the phone and face-to-face). From this, Frank should begin to cobble together a list of best practices. He may not have to completely reinvent the wheel, because he can start with my 20 Characteristics of a Superior Sales Rep article, and build from there.
2) Which key performance indicators need to be exceeded for a rep to be constantly over quota? Frank's business is advertising sales for a publishing company. His top reps already know how many calls and appointments it typically takes to make a sale. And Frank already knows what the average sales price is. From this, he can derive a list of KPIs that will indicate how many calls a rep has to make each day to meet his or her monthly quota. The dilemma or course is that superior reps take fewer calls to meet quota, but Frank is starting from scratch. So Frank will have to build a different KPI list for every rep. He wants everyone to meet quota, but clearly, his junior-level reps are going to have to work either harder or smarter to get the job done. After reading my blog article on How to build better KPIs, Frank will be on his way to deriving his own KPIs.
In a perfect world, Frank would have inherited a sales team with already meaningful KPIs established, and all his team members would be in agreement as to what behaviors make them successful salespeople within the context of what they're selling. Obviously, this is what superior sales training does, but he's walked into a situation in which "hire and fire" is the norm, and sales training is seen as an unnecessary expense. He's trying to change that. Eventually, we may be able to come in and train his team. Until we do, I've given him some valuable ideas on what he can do in the meantime to increase sales performance. I imagine many of you reading this post have a similar dilemma, and many of the rest of you will too, eventually. Many sales managers are brought in to solve a problem: there are no "cushy" sales management jobs. Sometimes the hardest part of solving any problem is knowing exactly where to start. If you're not facing this dilemma today, print out this post and add it to your Best Management playbook. You'll probably be faced with a similar problem sometime in your future. As your sales management career evolves, so will the size of the issues with which you'll be dealing. And that's why you're getting paid the big bucks, right?
Posted by Geoff Alexander on Mon, Jul 20, 2009 @ 01:15 AM
There's been an awful lot of buzz recently in the press and around corporate water coolers about how much productivity is being lost by workers surfing the web while at work. Inside sales people are always a good target for complaints like these, because they work on computers virtually from 8 to 5. Martha Irvine, who writes for the Associated Press, wrote an interesting article highlighting some of the corporate concerns that was picked up on Google (URL at the bottom of this post). But I have a different take on what's going on here, and it shouldn't present a problem for any telesales department that judges productivity based on sales numbers and key performance indicators (KPI).
When I was a sales rep, I used my break time to catch up on the newspaper, but never got corporate grumbles, because I always exceeded my sales numbers. I had cobbled together my own spread sheet, telling me how many calls I had to make each day to make my sales numbers, and frankly my main concern was beating my quota every month (if you're not sure how to develop your own KPIs, read my post on the subject and get crackin'!) As Irvine points out in her article, companies are installing blocking technology to screen out various social websites, so naturally reps are responding by doing it anyway on their mobile devices. I would make a strong guess that any company using this type of filtering technology with its telesales department isn't practicing "Management by Objectives" a concept popularized by Peter Drucker way back in the 1950s. If that's the case, these companies are guessing that by removing social media access, the numbers will improve. By filtering web access, companies run the risk of putting a serious dent in team communication as it relates to worker-management relations. And in doing so, they hurt themselves personnel-wise when the word gets out that the company's draconian web practices make it a not-so-fun place to work.
In my telesales training courses, I teach people to use social sites like LinkedIn as a way to increase sales, and those of you who do just that know how effective it is. That's one of several reasons I don't like the idea of web filtering at work. I want the reps I train to make lots of money, and the web helps them get there. Now we all know there are excesses. One company of which I'm aware had a web-shopping mania in its midst, but guess what? There were no KPIs enforced, and only a minority of the reps were meeting their quotas. That's just poor management.
So if you're an inside sales manager, enforce strong sales or lead qualification objectives, and don't worry too much about your overachievers looking at Facebook occasionally. You'll have a happier crew that will want to perform for you. And add valid KPIs to your Best Management playbook.
Read Martha Irvine's article.
Posted by Geoff Alexander on Mon, Jul 06, 2009 @ 01:26 AM
Last week, just as I was getting ready for the long weekend, I got a blog query from Dave, one of our subscribers. And it's a toughie. Read Dave's question:
"I'm in a new "sales" position, using [sigh] Salesforce.com . Bottom line... while I'm compensated on SALES, much of my work/time (particularly as I work through the "leads" in my region) is data entry. I've put a watch on it & takes upwards of 5-10 minutes to bring a skeletal lead (no address, phone, website or description) up to usability. From experience I know it's crucial to have these basic facts at hand... but it kills my prospecting/selling time. I'd just as soon not go to my boss with the typical lament: "these leads aren't any good." Suggestions?
P.S. With the popularity of Salesforce, I'd be willing to guess there are a lot of folks wrestling with this frustration. This also touches on the greater topic of ‘data quality'... this morning I happened to find: collection/mish/mash of Blue Cross Accounts. BlueCross, Blue Cross, Blue Cross of MA, Blue Cross of Massachusetts, Blue Cross/BlueShield & more."
Geoff here: So what Dave is dealing with here are raw company leads, where there is no contact, and he has to go to the web, use Hoover's, OneSource, or another source to get company, contact, and website data, in order to turn it into something he can call. OK, Dave, there are several areas to tackle here, and they all touch upon the challenge with which you're dealing. And there are solutions. Here goes:
1) As a general FYI, every one of my clients deals with similar Contact Management Relationship (CRM) issues, regardless of what CRM they're using, from Oracle, to Siebel, to SAP. To date, I've never spoken with a rep that's totally in love with his or her CRM database. Take heart in the fact that you're not alone, Dave, you're in a very big (and vocal) club.
2) I believe you when you said it takes 5-10 minutes to do enough data mining to bring a skeletal lead up to snuff. For what I'm going to suggest in #3 (below), I'd like you to actually log ten skeletal situations, with the time it takes to do each, and the name of the ultimate contact you enter into the contact field. Put these on a sheet of paper, because I'm going to take a scientific approach under item #3, and you'll need ten instances of quantifiable data to make your point.
3) Determine how many calls you need to make every day for your territory to reach its sales quota. It's easy to do, because I've got a blog post that tells you how to put together meaningful call metrics, and you should read it and cobble together yours. It's not that difficult, and it may differ from the call metrics you've been given. You'll end up creating a weekly sales quota sheet as well as a daily call quota sheet.
4) With the facts you uncovered under # 2 and #3 above, determine how many skeletal leads you can process in one day, and still make your sales numbers. If it's untenable, go to your manager with the irrefutable data. This is taking a scientific approach, and it's hard to argue with numbers. I've often said that managers like solutions, not problems, and taking this approach puts you squarely in solution mode. If your data checks out, your manager will have to come up with his or her own solution as well that works for the entire inside sales team.
5) I've saved a very good part for last. Trish Bertuzzi at The Bridge Group told me about a product called InsideView that acts as a front-end for Salesforce.com, and aggregates data from a number of different sources and compiles it right into Salesforce in a few moments. I saw their online demo, and I'm a believer. This product appears to be ideal for Dave's data discovery dilemma (give me an ‘A' for alliteration in my next English class), as it could dramatically cut the time he's taking to do manual data mining.
To sum up, I always teach a bit about research tools and techniques in my telesales training courses, and invariably, CRM issues come up. Every great telesales rep I know has figured out the number of calls he or she has to make to make the monthly number, so if any of you haven't taken a few minutes to compile yours (item #3 above has a link to show you how), then add that capability to your Best Practices Playbook. And Dave, thanks for bringing up a topic that undoubtedly frustrates many of your colleagues as well.
Posted by Geoff Alexander on Mon, Feb 23, 2009 @ 01:00 AM
There has been quite a bit of discussion on this site on the subject of Call Metrics, or KPIs (Key Performance Indicators). Just how many calls per day should a rep make, anyway? Much of the talk has been about whether telesales reps' KPIs are fair, and how the numbers are derived in the first place. In my opinion, the only valid call metrics are the ones are quantitively tied to quota.
Here's a model that you can use to determine if yours are meaningful. If you're an inside sales rep, see if these synch with the ones you're using now. If you're not using metrics right now, create your own chart, and you can see how many calls you'll need to make each week to make quota. If you're a manager, building a model using the formula below can be a great way to help your inside sales reps meet quota. If your ultimate objective is qualified leads or appointments, just substitute those outcomes for "sales."
You'll want to devise both a Weekly Sales Quota sheet, and a Daily Call Quota sheet. I've added straw figures as examples, and they'll be different than yours. In my telesales training courses, we always cover how measuring success is an important way to increase sales numbers. Use this model to chart your sales success.
How to derive a Weekly Sales Quota sheet for Telesales Reps:
1) What's the rep's total monthly sales quota? (Let's say $100K)
2) What's your company's Average Sale Price? (Let's say $5K)
3) Divide sales quota by ASP to get Total Number Monthly Sales needed to make the rep's sales quota: (Result is 20 sales)
4) Divide Total Number Monthly Sales by 4 to get Total Weekly number of Sales to meet quota (Result is 5 sales per week)
How to derive a Daily Call Quota sheet for Telesales Reps:
To begin determining your own company's Daily Call Quota sheets, you'll need to know:
1) Your rep's monthly sales quota (see above)
2) Your ASP (see above)
3) What your company's suspects-to-prospects ratio is
4) What your company's prospects-to-proposals ratio is
5) What your company's proposals-to-close ratio is
Here's a model used by one company: Let's say that for every 100 suspects:
1) 20 become prospects
2) 5 of them typically reach the proposal stage
3) 3 of them close
Therefore, a rep would have to call 200 suspects per week (40 calls per day):
1) To get 40 prospects (8 per day)
2) To generate 10 proposals per week
3) To generate the 6 closes per week needed to slightly exceed quota
Ramp-up time: How long after a proposal is generated does it typically take for a sale to close?
If you use this model, there will be a ramp-up time equaling the time it takes a sale to move from proposal-to-close stage. If the time is typically one month, then your reps should be fully productive using this model by the second month of its implementation.
As an exercise, plug in your own figures, and you'll have a good idea of the call numbers you'll need to make to succeed. Constantly exceeding quota is one of the 20 characteristics of a superior inside sales rep. Develop your own KPI figures, and add them to your Best Practices playbook.
So that's a formula I've found successful. What's yours?
Posted by Geoff Alexander on Wed, Sep 10, 2008 @ 02:01 PM
Special note: Since this post was written, I've developed a great model for deriving metrics that makes logical sense, and can be easily customized for any company. Read it by clicking here.
Many inside sales reps today are measured on Key Performance Indicators (KPI), among which are Dials Per Day. Ken, one of our blog subscribers, mentions that he's being tasked with 50 dials per day, and asks how he can manage to call high, ask great qualification questions, and still make 50 dials in a given day. Additionally, he's mandated to get back to every inbound voicemail or lead call within one hour. Sounds tough, so let's dig in. I'll analyse it, and tell you how you can succeed through it
In an eight hour work day, a rep can realistically be expected to be on the phone six hours of that time. The rest is spent on paperwork, proposals, and in-house communications. There is also a burn-out factor that every rep experiences by being on the phone for all eight hours. Even I couldn't do it.
So if we take Ken's 50 dials, that amounts to 8.33 dials every hour, based on that six hour call day. If Ken actually has a conversation on every call, each call could only last 7.2 minutes. Furthermore, each of those calls would require at least 2 minutes of post-call data entry, lowering call time to 5.2 minutes. Even on a cold call, a rep should take two preliminary minutes to review the account being called, from a quick visit to the prospect's website to see what his or her company sells, to reviewing notes of past conversations on a warm call. Now our time per call has been lowered to 3.2 minutes, not enough time to fully qualify much of anything. Now we know that 7 people aren't actually going to answer the phone each hour. But if half of them do, and we take 15 minutes to fully qualify the prospect and two minutes for data entry, 34 minutes have elapsed and we have only 26 minutes left for the 6 dials we have left in order to meet the metrics. We have to hope, for Ken's sake, that he doesn't reach anyone in those 6 dials, or his metrics are shot.
Now that we've debunked the real-world reality of a 50 dials per day KPI, let's ask ourselves why management is enforcing this metric, and see what we can do to change it. Typically, this metric is enforced when the revenue numbers are down and call reports show that the reps are making fewer than 20 or so dials per day. Management knows that even great reps won't meet the metric, but does it in order to get reps out of lazy habits. It does tend to get call volume up, but can have a disastrous counter-effect of increasing the length of the sales cycle because leads aren't qualified (or disqualified) as well and efficiently as they should be.
My old boss Perry Lynne had an effective way of measuring metrics. He asked each rep to log every dial per hour, and also list "lost sales," where the prospect had already bought from a competitor. He then compared the dials metric to the top rep's sales numbers (often that was me). That gave him an idea of how many dials it would take to make optimum sales numbers. Perry could have taken the top rep's dials, doubled it, set a metric, and assumed that sales would double. But he didn't because, in my case, he knew I was qualifying the heck out of every opportunity, and he didn't want to run the risk of monkeying with success. There is both an art and a science to selling. The science involves metrics, but the art involves qualifying. This nexus represents the challenge that inside sales management has to deal with every day.
So how can Ken perform as well as possible within the framework of tough metrics? Here are a few ideas. Not perfect, but as perfect as I can get it, within Ken's boundaries:
1) Spend no more than 2 minutes reviewing the prospect's website and/or previous notes before the call.
2) On inbound sales leads from lower-level prospects, call high instead. You may reach an administrative assistant, but he or she can get you through to someone high enough that it's a better call than starting low. Your sale will progress faster there, and let her transfer you, because the call will be coming from an exec's office, the other party can see that on the phone display, and chances are he or she will pick up your call instead of ignoring it than if you dial cold, which sometimes happens. If he or she doesn't refer you, go back to the original lead, and call that person. That's 2 dials right there.
3) You've got to qualify or disqualify the prospect really fast. Use these six qualification question types we teach in our telesales training courses to ensure that you've gotten everything, and don't forget to get your prospect's official title right up front, so you'll know how valuable your information really is:
a) Timeframe: When do you have to have a solution on board?
b) Requirements: What does your ideal solution look like?
c) Business/Consequences: Tell me a little about your business, how the solution will positively affect your bottom line, and describe the consequences of not moving forward with it.
d) Scope: How many people/departments/lines of business will need this solution?
e) Decision Tree: How does the decision process work for getting the solution on board?
f) Budget: Is the solution budgeted? If not, what is the process for establishing a budget?
In a perfect world, you'd want to get the prospect to elaborate on all of those questions, and a good rep like Ken will probably do it anyway. If he does, his metrics will go down, but he'll increase sales, and overshoot his quota. He and his company will make a lot of money. And I don't think his manager will give him too much grief for not hitting the metrics.
Being the top earner in your department always gives you leeway with management. In a future blog post, I'll elaborate on the questioning methodology in item #3 above, because it works every time, and it's fast. Add it to your Best Practices playbook. And good luck with the metrics.