Inside Sales and Field Sales Harmony

I’m publishing a series of Q&A excerpts from my interviews with Sales 2.0 leaders, which will appear in my next book. This excerpt is from my interview with Bill Donellan, vice president of the Americas sales teams for i2, a company that provides intelligence and investigation software for law-enforcement, intelligence, military and commercial organizations.

Anneke: No new Sales 2.0 project is flawless. What were some of your mistakes, challenges or failures?

Bill: We’ve had a lot of challenges as we transformed our marketing. That’s been a big challenge for our inside sales team, because there has been a gap in lead-generation activity.

Also, while the inside sales team has kept the outside reps focused on large opportunities by handling our smaller transaction sales, opportunities in that size range decreased in the past year. With greater focus on larger deals, our outside reps are building bigger deals based on solution selling. Examples include how we position all our products around high growth areas such as fraud and cyber.

Anneke: Did your field sales organization readily accept inside sales?

Bill: (laughs) Field sales reps can’t appreciate inside sales until they’ve had a chance to work with good inside sales reps. Not everyone has had that opportunity, because not every company has a top-notch inside sales team. Besides that, many field sales reps don’t always want to delegate tasks, which makes it challenging for them to work in a team-selling environment. Phil (i2′s VP of the State and Local sales team) and I had to manage through the process and reassure the reluctant members of field sales that it was OK for inside reps to touch the customer first. We got everyone on the phone together to talk about what each sales rep, inside and outside, was doing on every account. Outside reps had to learn that the burden was on them to help their inside teammate come up to speed and let them take ownership — and that it would benefit them in the long run.

Anneke: How did management support the success of inside sales?

Bill: We had to monitor the program closely, listen in on phone calls and coach everyone through the value-selling process. And we had to ensure we had the right comp plans.

Anneke: What are the key things to get right with compensation plans?

Bill: Comp plans shouldn’t create competition in a team environment. They need to reinforce the goals of the program and the company.

Anneke: How long did it take for field sales and inside sales to work comfortably together?

Bill: It took two or three months. After that, field sales realized the value and was reassured the inside reps knew what they were talking about. With new field reps at Documentum (Bill’s former employer), it was the same: It took six months for the field to get comfortable with the inside group. Our goal in both companies was to find a way to work it out with no turnover.

Read the full interview with Bill Donellan in the Resources section of this website.

Tags: compensation, field sales, inside sales, lead generation, Sales 2.0

Transforming a Sales Organization: A True Sales 2.0 Story

Phone Works is helping the Media Division of a $14 billion communications company completely change the way they sell.  Our client is not unlike many companies, whose growth and margins have slowed or even gone negative in recent years.  What makes our client unique is their willingness to make bold, innovative changes to a traditional model that has worked for them for decades – until recently.   We have every confidence that with their dedication to re-invention,  they will become the clear market leaders in their industry. Why?

We have seen this borne out in other forward-thinking companies we’ve worked with – former employers and clients – who have been willing to take risks and fundamentally change the way they do business. As profiled in the Sales 2.0 book,  Oracle captured “low-end” and international customers early its history – and ahead of the company’s competition.  Syneron established a first-mover advantage by daring to sell to doctors and their office staffs differently -using the phone rather than expensive vacation junkets to fill the pipeline with qualified sales opportunities as well as serve customers with dedicated telesales reps.  Other businesses that have transformed their sales organizations and cultures to establish market leadership include Xerox, which created Team Xerox and IBM, which launched both phone and online sales organizations (IBM Direct and ibm.com).  All these companies decreased their cost of sale while increasing revenue by changing their sales coverage models.

Essentially, our work with this media giant includes building an additional sales channel to serve buyers through a centralized sales organization.  The first phase of implementation – serving the company’s smallest customers (in terms of annual revenue potential) -includes:

• creating sales goals and objectives that fit the new channel and sales culture
• addressing supporting compensation plans and incentives for both inside sales and field sales
• establishing distinct roles and responsibilities for inside and field sales that best serve customers
• building infrastructure, as well as all new sales processes,  in a new location
• evaluating sales talent, writing hiring profiles, and recruiting and training reps and managers
• redefining marketing programs to address customer needs and provide value while supporting sales goals
• implementing systems to increase sales productivity and effectiveness as well as capture market and customer data

In addition,  the field sales organization is being evaluated.  Not only has it become unprofitable to serve every customer with face-to-face visits from a sales team but it has become clear that not every sales rep is selling to their customers in the way they want to buy – with a consultative approach, focused on helping the customer improve their business results.  We will create an inside sales organization that follows customer-focused, Sales 2.0 principles: marketing programs will support sales goals, the sales process will be measurable and built according to the steps in the customers’ buying process, reps hired will provide value to customers rather than pitching products, and the organization will be technology-enabled.  The new inside sales channel will be the future footprint, leading by example and paving the way for field sales to embrace and model Sales 2.0 approaches to customers.

This is not to suggest that change isn’t difficult.  It is uncomfortable and scary for reps,  especially when organizations are transformed, job descriptions changed or positions eliminated, compensation is “adjusted”, and time frames to get up and running appear unreasonable.  Sales managers worry about keeping reps motivated and generating revenue during such times of potential upheaval. But doing nothing is no longer optional.  Our client company has shown leadership not only in its decision to undergo a sales transformation, but also in its implementation and roll-out of the changes.

Last week, I attended our client’s meeting to address “future state”, as they call their post-transformation world. In attendance were marketing and sales managers at all levels, from all over the country and from both the field and corporate organizations.  The participants were chosen for their openness, willingness to embrace change, and ability to help explain the necessity and opportunity ahead to their colleagues and staff members.   Regional sales vice presidents presented goals, desired outcomes, and a proposed new sales strategy and restructure and then quickly made the meeting interactive, breaking the group up into work groups to address possibilities as well as concerns. I noted that the concerns raised were very similar to other organizations undergoing Sales 2.0 transformations, especially when multi-channel team selling is implemented:

• How do we make sure customer relationships are taken care of  (i.e., who “owns” accounts?)
• What is our kick-off message internally and to customers to describe our bold, new, customer-driven sales organization?
• How do we support a team sellling approach through our new compensation plans?
• How do we staff our future sales team? Who on our current staff will fit into the new model with training and coaching and who won’t be able to make the shift?

This was not a meeting of whiners,  though.  After raising concerns, the groups then brainstormed about possible solutions. By getting participation and “buy-in” from key field sales members who are seen are leaders by their peers as well as their staffs, our client is taking key steps to a successful move to the Sales 2.0 world.

How is your organization rolling out Sales 2.0 initiatives? And why? What are your experiences, including obstacles and challenges? Share your do’s as well as your don’ts!

Tags: field sales, inside sales, Phone Works, Sales 2.0, transformation

The Emergence of the Hybrid (Telesales/Field) Sales Rep

In Sales 2.0, the lines are blurring between traditional telesales and field sales jobs.  Inflexible rules about what constitutes a telesales or field sales opportunity are no longer working for companies or their customers. Some companies are experimenting with their sales models, allowing sales reps that are primarily inside reps the flexibility to leave their phones and computers when customers require and warrant a face-to-face visit.
I talked to veteran sales executive, Bill Lohr, to learn about his recent successful implementation of a hybrid inside/field sales model in his last position heading sales for the global leader in on demand Web Content Management (WCM). Bill refers to the new model as the “tweener” model: in between an inside sales model and a field sales model.
AS: What do you call this new kind of inside sales rep?
BL: Given my background in professional services, I gave them the title “Client Executive”.  I think of Software-as-a-Service companies as services businesses, not software businesses. Software is the tool by which to deliver services to customers. Yes there is software involved, but the things that really matter are creating value and trusted relationships.
AS: What made you decide to employ an inside/field sales hybrid model and how do you implement it?
BL: The majority – if not all –of the sales cycle at my last company was conducted over the phone.  However, some customers needed a face-to-face visit if the first year revenue amount was very large, the customer was strategic, or the deal was complex. In general, inside sales reps could make field visits if an annual order size exceeded $500,000. One example is a major newspaper for which we went onsite twice in order to close the deal.  For our first visit, they had 25 people in the room. We were able to establish relationships with key decision makers, who championed our solution internally and allowed us to sell into other departments.
AS: What percentage of your customers required face-to-face visits?
BL: For Enterprise Accounts, probably 50%.  But other than the final closing steps, the rest of the sales cycle could still be done by phone and online.  The fact that the company has no field offices encouraged us to minimize travel.    We even closed accounts in Australia and Holland without ever meeting the client.  You can do a lot with the phone and online tools such as web collaboration products.
AS: How is your sales team structured and what are the responsibilities of each team member?
BL: Given the monthly recurring revenue model, the customer’s need for a consultative sales approach, and the company’s many different kinds of buyers, I needed flexibility. Inside sales reps in most companies don’t have the ability to leave their desks and that didn’t make sense to me. I think of the Client Executives as expert “set up” people while my role as SVP of sales was to help close sales and play a first line mentor and coach role.  I would go to all face-to-face customer meetings with my reps and provide support and education.
AS: Contrast your sales productivity before and after you implemented the new sales model.
BL: When I started, it took only 18 days to qualify an opportunity and 56 days to close. By designing a more sophisticated sales process and implementing the hybrid model, it now takes 26 days to qualify but only 42 days to close.  I lengthened the lead qualification process but ultimately shortened the sales cycle.  The monthly revenues increased exponentially as well because we were doing a better job qualifying prospects out of the funnel early in the sales cycle.
AS: What is the profile for your new hybrid sales rep?
BL: Someone who has experience in telesales (on quota sales) positions, is confident on the phone, and is able to engage customers in phone and web meetings and conduct web demos and presentations.  Our reps also need to be able to navigate an organization by phone, have meaningful conversations with all levels of buyers, and coordinate these buyers– often up to 15 or 20 –within a company.  Ideally, candidates have been in the top echelon of inside sales at a company like salesforce.com and their next step is a field sales position.
AS: What is their quota and target compensation?
BL: Quota is based on one month of the monthly recurring revenue (MRR) for a one-year deal and goes up for a two-year agreement, e.g. a deal that is $20,000/month for one year would get quota credit and the rep would be paid on $20,000.  The MRR can justify this model. Target comp is over $150,000/year at quota.

(Note: For more information on best practices in inside sales quota assignment and compensation, have a look at the annual inside sales compensation survey report conducted by Phone Works.)
AS: Would you hire someone who came from field sales?
BL: I’m not sure I would.  I don’t think they’d fit the mold I need.
AS: How did you organize sales territories? Do the reps close new business as well as work with existing customers?
BL: Sales territories are structured by industry, not geography, since we target named accounts in specific vertical markets.  The client executives just close new business. I have a separate team – Customer Success – that is responsible for customer adoption, upselling, and renewals. The reps on this team are called client managers.  Their job is to do the right thing for the customer; they are not on quota (although thy get paid on the deals they find). Once a sale is made, the customer is immediately handed off from the client executive to the client manager.
AS: Did you have technical sales engineers supporting the reps?
BL: No, but we used technical resources on the client services team to assist the sales team.
AS: What metrics did you track?
BL: My sales organizations are very metrics-driven. I tracked call volumes, activities, sales stages, time in stages, pipeline flow, weekly changes and more.
AS: What sales tools and technologies did you use?
BL: Among others, we used salesforce.com, Jigsaw, Hoovers, GoToMeeting, LinkedIn, Eloqua, and EchoSign.
AS: How did you choose those particular products?
BL: I had two reps that came from salesforce.com, who were familiar with a number of products that integrate with salesforce’s product.  I also attended the Sales 2.0 Conference last fall, which showcased new technologies.
AS: How did the Sales 2.0 technologies help you sell?
BL: Lots of ways.  Jigsaw and Hoovers helped alert us to who the players are in a given account.  LinkedIn got us to the right people faster and increases their response rate because an individual reaching out to another individual makes the outreach more personal. EchoSign accelerated the contracts cycle.
AS: How much cold calling did your team do?
BL: I didn’t want my sales team spending any more than 20% of its time cold calling.  It is too costly to use these resources for that purpose.  Instead, Marketing generated leads for us by running email marketing and other campaigns.  Also, we had sales development reps chartered with cold calling.  Telesales reps are responsible for targeted account selling into vertical industries including high tech, financial services, and media. Their calls are warmer because they are based on research and knowledge.
AS: What have your sales results been?
BL: When I started, we were producing $20,000/MRR.  Two and a half years later, with the same sales team, the productivity increased to $700,000/MRR.

What are your experiences with hybrid sales reps? How do you detemine what telesales sells and what the field sells?

Tags: Bill Lohr, EchoSign, Eloqua, field sales, GoToMeeting, Hoovers, hybrid sales model, inside sales, Jigsaw, LinkedIn, SaaS, Sales 2.0, Sales 2.0 Conference, sales metrics, sales tools, telesales