The Sales Insider

About three years ago we were analyzing the leads that come from our website trying to find out if some were better than others.

Everything we do at InsideSales.com is based on metrics. Instead of just hiring marketers, we hire math majors and economics majors in our marketing department because it is all about studying and testing and analyzing.

So we charted out our leads and we found that there were two obvious “clusters” of leads based on the types of offers we had made to generate them. I call them “Buying Signals” and “Tire Kickers” and we found there was an 8 to 1 difference in the results they generated based on overall revenue.

Buying Signals are just that, respondents to offers that clearly say I’m anxious to talk to somebody at InsideSales.com about making a purchase decision. I have “need,” not just “interest.” Anything product-centric, pricing-related, commitment-based, etc. We learned that even a toll free number is an “offer” somebody can choose to accept on a website (and is often the very best one.)

Tire Kickers want to learn something. They aren’t ready to buy, they have “interest” but not need. They may not know that have need yet. The way to turn a Tire Kicker into a Buying Signal is with compelling information and education. Our research shows that a Tire Kicker is 8 times less likely to buy than a Buying Signal.

I was reminded that interest is the counterfeit of need. Interest belongs to the marketing department, whose job it is to educate. And need belongs to the sales department, whose job it is to build value and close to fulfill need.

Kinds of Buying Signal leads:
Free trials, demos, product overviews, contact us, product slicks, pricing requests, proposal requests, toll free phone numbers.

Kinds of Tire Kicker Leads:
Company overviews, white papers, research papers, webinars, on-demand webinars, how-to’s, forums, blogs.

So what did we do?

We cut out most of our Tire Kickers and focussed on Buying Signals. We even scaled back our well-known research papers like the paper that Inc. Magazine recently quoted.

What happened?

Things went great for about two months. Our sales went up, then they went down. And our leads started drying up. We couldn’t figure out what happened until one day we looked at previous leads and found that people typically downloaded 2-3 Tire Kicker offers before moving to the Buying Signal leads. It was a “lead funnel” and we had stopped the new leads from entering the funnel.

So immediately we put back all of our Tire Kicker information leads and expanded them.

It was almost a disaster, but it turned out to be one of the most important things we have ever learned.

Hope it helps!

Ken

One of the most powerful things I have ever learned in managing salespeople is the power of posting results visibly. When I do that results go up 20% almost overnight. I don’t care what it is; dials, appointments set, demonstrations, closes. Now of course, depending on length of sales cycles, it takes time for more results-based numbers to show.

Why?

I think sales reps are extremely competitive. They are the competitive athletes, the warrior class of the business world. The most correlated measure when I hired top performers was a competitive resume in athletics in college or high school. They can’t stand to be beat, or to be second. (see my blog on “Hiring Athletes… A Great Bet for Inside Sales Jobs“.)

My friend and mentor Jeff Call taught me this principle when I was back at FranklinCovey managing the fastest growing department in what was then one of the fastest growing companies in America. He would have me post the individual and team stats every day. And our numbers kept rising.

Where did he get the principle of performance visibility? “Putting the One Minute Manager to Work” by Ken Blanchard. Ken was a guest lecturer and a bit of a mentor to us at Franklin during those days. His other book “Raving Fans” had also been a recent hit.

Thanks Jeff. This is one of those gifts that keeps on giving!

Everyone goes through sales slumps. If you haven’t yet, you’re either too new to the profession . . . . or you just haven’t been doing it long enough.

We’ve got some sharp sales reps here at InsideSales.com, so I thought I’d talk to them about what they do to get out of their personal pipeline woes.

1. Separate the real opportunities from the fluff: “When I hit a slow period, sometimes I’ll throw some stuff overboard and just start over. When your pipeline sucks, it means you’re wasting time chasing stuff you can’t really close. Focus on generating better deals instead of chasing garbage.” — R.J. Tracy
2. Focus on “touch” quality, in addition to quantity: “Our software [the InsideSales.com Lead Response Management Suite] has built-in safeguards to make sure we do enough follow-up, but let’s be honest, not all follow-up activity is created equal. A call is a call, as far as your numbers are concerned, but being ready and engaged when you call is another story. The prospect knows when you don’t care.” —Dave Boardman
3. Get an easy win or two to rebuild momentum: “Sales is so psychological. When you’re at the bottom of the leaderboard for a month, it becomes this total mental drain. Now you’re not only NOT closing, you’re hurting your chances to do it even more. I’ve found if I can get a couple of quick, easy closes, even if they’re relatively small opportunities, it gets me back into the flow.” —Erik Chapman
4. Treat your leads like gold. Follow-up to new inquiries faster, with more relevance: “I can’t tell you how many times I’ve gotten a hold of someone who was surfing a competitors Web site just after they requested that we contact them. Because we follow-up immediately on all of our Web inquiries [see the InsideSales.com ResponsePop Inbound dialer], we have a lot of live conversations with people while they’re still in the search process, and I feel like it allows us to influence the conversations for our closers.” —David “Davie” Warren
5. Reevaluate how well your technique aligns with how the customer actually buys: “I remember one deal early in my time here where I sent the prospect literally every piece of collateral we had, yet he still kept asking for more information. Turns out the main decision maker was attached at the hip to his IT people. Here I was, this “newbie” sales rep trying to ‘Wow!’ them, and a five minute conversation with Thomas [Purdy, InsideSales.com's Director of Product Development] moved the deal forward more than I did in a week.” —Steven Foster
6. Track your losses as hard as your wins: “There’s almost always a reason a rep loses a string of deals, a pattern behind it. If I see a rep struggling, I’ll go back into their last 4-6 opportunities, and work with them to piece together the process.” —Danny Gardner, InsideSales.com Director of Sales
7. The most obvious answer, take a needed break: “Taking a week off to recharge is obviously ideal, but it’s not like you’re closing anything while you’re gone. Sometimes taking a random Thursday off to go do something you like is just as good. Sometimes it’s 20 minutes to make a doughnut run, or whatever, just something to get untracked.” —Ben Richardsr

What’s the real value of what you sell? Of your expertise?

The reality is, it doesn’t actually matter what the “real value” is. What matters is, what’s the absolute, bottom-line, no-questions-asked lowest possible price you will ever sell your products and services for?

Regardless of the actual number, that’s ultimately its value to you.

I bring this up because I bumped into a link on Twitter to a blog entitled the Redhead Writing, where author Erika Napoletano talks about how too many businesses give away the “meat” of what they sell for free, then wonder why the client isn’t willing to pay more.

Be warned: the article, and much of her Web site uses language that, well, let’s just say that your typical sailor wouldn’t feel too out of place (at the risk of mixing metaphors, I realize for some of you that’s a feature, not a bug).

But in the midst of the article was this fabulous gem of wisdom:

“If you’re looking for something for free, you’re going to get a lot of 36,000 foot view information mixed with some 5,000 foot view gems. If you want ground level insight, that [crap, cow dung, poop] costs money.”

And the principle couldn’t be more accurate for high-touch B2B sales.

Why are we so willing to undercut our products and services’ value? Why are we so willing to give away our time and resources chasing after those elusive deal closes?

I know why the prospect asks for it: bargaining on price is leverage. They know it puts pressure on you, and it’s the most immediate win for them—it’s the fastest, simplest, most easily measurable way for them to minimize their cost of risk. In some cases it’s less about the actual dollar amount as it is about their own mental state—”Well, it wasn’t what I hoped, but at least I bargained for it at a good price.”

Don’t ever forget that when a prospect buys, it’s because they inherently value what you’re selling more than they value the things required to get it. The fact is, a sales transaction by its very nature ultimately generates more value for the customer than for the seller. As sellers we accept this fact because most of the time even getting the “short end of the stick” is still enough to be profitable.

Why are so many “bad clients” the most demanding? Because they know that they’re far and away getting more value than what they’re putting in to it, and they’re going to maximize that to the absolute limit.

Giving away stuff “free,” or “cheaper” is easy to do, just be aware that what you’re doing is merely increasing the relative disparity in value between you and the prospect. If you’re fine with that, by all means no one will stop you–but before you do, do some realistic thinking about what your real hard price cap is, and whether or not it’s what you really believe it should be.

Saw that lead metrics guru Trish Bertuzzi posted an answer to question on Quora talking about the most appropriate way to do sales lead routing.

And I thought I’d quickly chime in.

In the actual Quora question, the person asks, “What’s the most effective way to route leads?”

One of the respondents immediately chimed in to say that simply doing it by region makes the most sense.

In our experience, this isn’t the case.

For outside sales teams (read: when the rep goes on site), regional divisions make sense to save travel costs.

However, if you’re not engaging in on-site sales practices (and let’s face it, even those who do spend 70+% of the time selling over the phone/remotely anyway), the net benefit of regional-based sales divisions is nil, and can actually be a detriment if you’re sending sales leads to reps who are unqualified to handle them, simply because the lead falls in the rep’s “region,” or because a manager wants to do it ad hoc just to make sure things are “fair.”

Skill-based and vertical-based routing has the highest net benefit in terms of lead qualifications and closes, because reps have a leg up in identifying true prospect needs and establishing a trust-based relationship. Regional routing can be appropriate, depending on other factors, but on a simple win/loss close ratio, it has no measurable impact on performance.

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A couple of years ago we hired what we thought was going to be a stellar sales rep. He appeared to be smart, well-spoken, and had the individual charisma that we thought was going to make him a star.

So when the numbers came back after six months, I was surprised that he was nowhere near hitting quota.

“Hmm, that’s interesting,” I thought. “I figured he’d be a star, let’s give him a little more time.”

End of the next quarter, same results. Now I was panicked. How could he have possibly been failing? What had I done wrong? What was wrong with our sales process? If this “superstar” sales rep wasn’t hacking it, surely we had to fix something, right?

I talked to the front-line sales manager about ideas. We went over sales collateral. We reviewed pitches and product demos. We mentored.

And what we discovered was that in spite of his evident natural talents, they never really translated into the rigors of his daily work. There was an intellectual laziness, an assumed air of success–”This is going to work simply because I’m the one doing it.”

Now of course some long-time sales professionals might argue the point. “Of course you have to assume success,” they’d say. “You have to have confidence that you’re going to get the sale. If you can’t be confident, you can’t succeed.”

Which I completely agree with, but with this rep it was different. His confidence was purely internal, not external. His confidence in himself never translated to confidence in management’s goals and directives. It never translated into confidence in our sales processes and technologies.

There was no question he wanted to succeed, but he wanted it to be on his terms, on “his watch.”

Needless to say, his close rate never improved. His pipeline was always full, but at the end of the month/quarter revenue was scarce.

And worst of all, the rest of the reps had picked up on the fact that he wasn’t really being a team player. They resented when he would get “hot” leads, because, they grumbled, “He’s never going to get anything out of them anyway.” Letting him go ended up being a double-positive, because the rest of the team worked harder, and we weren’t throwing good leads into a dead pool.

Ultimately I learned a few things:

1. Trust the numbers, not appearances. Baseline numbers are set for a reason, so unless they’re a complete sham, use them. If you don’t trust your quotas, why have them?

2. If you don’t trust the numbers, you don’t trust your process. If you can’t believe what the numbers are saying, it means you believe there’s a break in the system.

3. Employee failure is expensive, but the situation allowed us to get a fresh look at what we were doing. Stagnation is today’s ultimate business-killer, and while a total overhaul of a team or process isn’t always necessary, a minor “reboot” isn’t a bad thing. Embrace opportunities for change.

4. Reps need to be aware of the line between confidence and intellectual laziness. It’s okay to occasionally do an “end around” past company process if it’s going to make a prospect happy. But constantly justifying breaking the rules because “It’s the way I get success” should be a red flag that something is amiss.

You and your company have done everything right up to this point.

The marketing team created a compelling, targeted set of material that caught the attention of a potential buyer. They found your Web site and grabbed some information—a couple of white papers and a pricing list.

You followed up on the new lead quickly and effectively, using good lead management and nurturing tactics to make contact.

You feel like you’ve done your homework. You feel you understand their position in their industry. You’ve done a deep needs analysis, and feel you have a common ground with the prospect on how to address their pain. You get your best collateral and presentation material, tailored to the information you already have.

You wind up and give them your best 95-mile-an-hour fastball, the pitch that’s worked for you so many times in the past.

Yet contrary to evidence, against every sign you’ve seen to this point, you’re met with looks of confusion, or even worse, apathy.

The prospect doesn’t get it, or worse, doesn’t seem to care.

Now what do you do?

In baseball, the difference between a run-of-the-mill pitcher and an All-Star is rarely their “first pitch.” In the Big Leagues (and we’re assuming that’s where you want to be), everybody has a 90+ mile-per-hour fastball—but the best pitchers have a 2nd, a 3rd, sometimes even a 4th pitch that they can command.

While there are occasional exceptions to the rule (see Mariano Rivera and his un-duplicate-able cut fastball), in most cases the best pitchers win because when their primary pitch isn’t working, Plan B isn’t crossing their fingers and hoping for the best.

Sales is no different.

When your initial, carefully-prepped pitch is a “miss,” the answer is almost never to keep “winding up” and tossing something out there.

Stop, and figure out what happened.

Typically it’s one of three things:

• You’re not actually a contender and you didn’t know it.
• You’re in the dark about something going on inside the prospect’s company.
• You’re talking to the wrong people for the value prop you’ve presented.

If you’re just a “sounding board” for a competitor’s RFP and they’ve already locked in to another vendor, stop wasting your time and move on. Maybe the prospect just realized that your solution will require an entire technology platform overhaul—one they had no intention of making. Maybe your solution forces them to change a licensing situation with another vendor, and they don’t want to upset their current arrangement.

If you really are in contention, then clearly something has changed. There’s a management “realignment” on the horizon and your product/service is in the line of fire. A relocation is about to happen. A key budget or cashflow problem has reared its head.

Regardless, the solution is the same: dig back in. Who’s really in charge now, and who’s really going to make the decision?

Gather data, re-set your presentation, toe the rubber, and fire again.

Real quick:

Found an interesting research analysis by CSO Insight’s Barry Trailer that showed that sales rep quota attainment actually goes up when the ratio of reps to managers goes up.

In other words, sometimes we need to avoid the temptation to “over manage” and “over analyze” our sales people and simply let them do what they’ve been trained to do.

As Barry says,

“Any time taken from selling is reducing sales capacity. Coaching meetings, research and other value-added activities are valuable and important contributors to overall success. But standing meetings (e.g., every Monday morning at 8:30 am) are often holdovers from an earlier way of doing things. CRM reporting tools and dashboards can provide a basis for both managers and reps to communicate routine matters and to gain performance improvement insights.”

Ostensibly without the need to verbally re-hash each reps’ pipeline.

Ran into a great blog by Bob Apollo (@bobapollo on Twitter) on the Inflexion-Point Blog this morning that really got my wheels turning, entitled “Is your CRM system a sales prevention system?”

Since one of my company’s biggest products is a lead management CRM, I was intrigued by Bob’s five “danger signs” that a company’s CRM “is actually behaving as a sales prevention system:”

1. Unhelpful Stage Definitions
2. Give – Get Imbalance
3. Poor Forecast Accuracy
4. Static Sales Process
5. Failure to Reflect Prospect Decision Making Process

Items 2 and 3 particularly resonated.

• Give–Get Imbalance

If data input to the CRM is not not being used to give reps feedback, it simply falls into a “black hole,” Bob states, “with no evidence it is ever subsequently used by management for any practical purpose. Sales people need to believe that the information they enter is used by management to help them improve their chances of winning.”

Bob is absolutely correct, and this is generally more of a process problem than a data problem. My experience is that companies that waste time entering a lot of data into their sales intelligence systems do so because they don’t have a specific process for defining wins and losses–so reps feel compelled to enter anything and everything they think is going to help them.

Fix the process–identify key sales staging points that align to the customer, not the seller, then configure the CRM software to make data input direct and as easy as possible. I regularly see clients go through crazy finaglings to create some “essential data view” that their CRM system would support natively—if they knew how to use the system’s report engine properly, and then aligned their processes to leverage it.

• Poor Forecast Accuracy

Here Bob points out that according to CSO Insights, sales forecast accuracy for most companies hovers right around 50%, and that “Even if the projected headline revenue number is achieved, the way in which the number is made up bears little relationship to the deal by deal forecasts, and relies on heroic selling rather than intelligent use of resources.”

Sales metrics gurus The Bridge Group have repeatedly stated that a forecast should be 90% accurate in terms of both time frame and dollar value–and in my opinion, forecasts that don’t reach that level of accuracy aren’t much better than licking your finger and sticking it into the wind.

Accurate forecasting requires a process based on how the customer buys, not on the rep’s sales process. Revenues and time frames aren’t about telling the sales manager “how close” the rep thinks the deal is to going final—it’s about what’s actually going on inside the prospect’s “box.”

When people ask us the best technologies to use to get more leverage for their sales teams, our first response (purely out of self-interest, obviously) is, “A lead management CRM and a dialer.”

After laughing a bit at our shameless self-promotion, a lot of them will follow-up by asking, “Anything else?”

It’s not a comprehensive list by any stretch, but here are a few things our own sales team uses to increase their productivity.

1. Docusign for e-document digital signatures http://www.docusign.com

We discovered a while ago that paperwork is a huge time-waster for most sales organizations (see Ken Krogue’s “15 Time-Wasters of Inside Sales and Marketing” for details).

A digital signature service cuts down the hassle of re-faxing every form each time a contract gets updated. Simply update the digital document, upload it, and have the client sign on the (digital) bottom line.

2. Third-party lead providers

Not every industry can get the same level of results, but opening an account with one or more companies that provide relevant sales leads can be a way to boost opportunities. Our own marketing efforts have cooled somewhat on this lead source lately, but over the years hundreds of our clients have had success with them. As long as you’re willing to consistently monitor how well each provider is converting and selling, this can be a great benefit to a sales team.

3. Flexible sales collateral

Technically it’s not a single “technology,” but creating manage documents that can be quickly re-applied and re-appropriated for multiple situations is a huge time-saver. A really sharp-looking product brochure is great–but if it’s only available as a PDF, you have to completely re-design it for the Web. Use Web-ready technologies and templates to create as much of your sales collateral as you can.

4. Digital faxing

Digital faxing is useful in two different ways–one, it’s a great change-up for sales collateral (if you can get permission to send faxes to prospects, it creates great synergy with calling and voice mail), and two, it’s much more efficient. Why go through the hassle of printing, faxing, and waiting? All of our reps have the ability to send faxes directly from within the InsideSales.com system, and it’s a huge cost and time saver.