Sales 2.0 Thinking: Get an Outside Perspective

We are all insanely busy these days. In our day-to-day jobs, we are so focused on execution that it’s difficult to think about how to improve performance and productivity.    Here’s an idea:  talk to people outside your company, compare experiences and share ideas.   I’ve been interviewing Sales 2.0 leaders for my new book project and they all have one thing in common: they find time to call their peers doing similar work in other organizations, attend conferences and networking events and read about how others are improving results in sales. These Sales 2.0 practitioners seek out and are open to outside perspectives.

Last week I traveled to Atlanta to deliver several Sales 2.0 workshops, thanks to the invitation of Mark Barry of OpenView Partners, Marge Beiler of RareAgent, the AA-ISP (American Association of Inside Sales Professionals) and others who sponsored the events. I call these events workshops rather than presentations for a reason. I am not the only person contributing information: participants share their successes and challenges and everyone learns from each other.   In order to be a credible and current Sales 2.0 “expert”,  I feel I need to be continually learning from my clients and those that come to hear me speak.

In my Sales 2.0 workshops, I start by presenting the key concepts of Sales 2.0, what is driving it, and how companies are producing better results by practicing it. Then I get to my favorite part: facilitating a conversation with the audience.  In two days in Atlanta, I got to hear from Venture Capitalists and investment partners, business executives running venture-funded start-ups, sales professionals,  inside sales managers, inside sales reps, recruiters, trainers, and several other service providers, all of whom were eager to learn – from me as well as from other participants – what is working in the new world of selling and buying. Here are some of the things I learned:

1. In order to engage prospects, stand out from the crowd.

• At one company, e-mails that include a humorous video are getting a 20% better response than those without
• Prospects appreciate a personal touch: hand-written note cards and physical mailings are being well-received

2. Companies are experimenting with allowing inside sales reps to work from home.

• Most managers agree that this works well as special recognition for senior reps who are performing (but not recommended for new hires)
• Bringing the sales group together (face to face) is still important for team-building
• One company found a loss in productivity with remote reps

3. Large, established companies are learning from smaller companies.

• Much of what start-ups (and we in the Sales 2.0 community) take for granted is new learning for the Fortune 500
• There is huge potential to expand the role of inside sales within large companies (and improve their margin and customer satisfaction)

4. Sales teams are using social media  but don’t yet know how to evaluate the results.

• Most managers buy in to using LinkedIn in the sales process; many are skeptical about Facebook and Twitter
• Connecting to customers and prospects is a good idea

Read also Mark Barry’s excellent blog post about these events, Sales 2.0: Succeeding in the New World of High Productivity.

What have you learned by looking outside your company for new ideas? And where do you find them?

Tags: inside sales, Sales 2.0, social media, telework, video

Why Pilot Your Sales 2.0 Programs?

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 is the first excerpt from my interview with Jim Pitkow, CEO of Attributor, which produces Web-monitoring software that protects publishers’ revenue by preventing unauthorized use of content.

An inside-sales veteran, Pitkow worked with my company, Phone Works, to research his market and customers as well as test the feasibility of using an inside-sales model, before he ramped up his sales efforts. Like most Sales 2.0 leaders, Pitkow isn’t afraid to try new things, but he is smart enough to test his hypotheses on small scales with pilot programs in all aspects of his business.

Anneke: Why did you decide to run an inside-sales pilot program?

Jim: The pilot allowed us to address the multiple objectives of customer validation and customer development. Also, when you take a company that has existing product and some customers, but is struggling toward a fully scalable, repeatable sales model, we had to answer the question, “Do we have the right customer/product fit?”

I became Attributor’s CEO in January 2009 and was left with a set of key business strategy questions and options: How do I get that customer/product fit nailed and find out what repeatable sales processes I have? What’s the right sales model? Is it field sales or is it inside sales? What are the average sale prices? I knew I could find the answers through piloting an inside-sales program.

Anneke: What challenges did the pilot help you mitigate, given you were a small startup with limited resources?

Jim: One of the biggest challenges startups face is sales execution risk. When a company has a few sales, they think those sales are repeatable, and they think a field sales model is the best approach. Then they go out and hire a VP of sales based on these hunches, not metrics. Some time later, the CEO realizes the person they hired to run sales is not the best fit and/or that their field sales model is probably a telesales model. They’ve wasted anywhere from six months to, sometimes, 2 years before they get that clarity.

I wanted to be able to show demonstrable results quickly. The last thing I could stand to do is go six months, hire a telesales person, find out they’re not performing and have to start over from scratch. I didn’t have the time or the investor support to do that.

Anneke: You needed to fast track.

Jim: Exactly, so I hired Phone Works to help us to mitigate the sales execution risk, so we could test the market quickly and efficiently, and leave the market forces — not our ability to recruit, execute and perform — as the only unknown variable. That’s what we did, and it turned out to be very productive.

What is your experience with pilot programs? Have they revealed unexpected findings? Helped prove possible results?

Tags: inside sales, pilot programs, Sales 2.0

Social Media and Inside Sales: Time Waster or Money Maker?

Rini Das, CEO of PAKRAGames, is one example of a Sales 2.0 executive who, by all indications, is on the path to revenue-generation by incorporating LinkedIn, Google Alerts and Twitter into her online prospecting strategy. She and her CMO, Michelle Stewart, search for, research and send personal messages to their target audience (often based on the information their prospects provide themselves on their profiles and in their tweets): sales VPs and inside sales executives in selected industries who are either one-degree-removed connections or are those with whom they share a group. By incorporating these outreaches into their weekly prospecting process and religiously tracking metrics, they know how many prospects contacted via these sources will end up in their pipeline. Of the invitations they extend, 72% accept, 36% are are qualified and 21% make it to their pipeline.

But many inside sales leaders – and their managers – are still questioning the value of social media in the sales process.  This was one of the key topics discussed at last week’s Inside Sales Summit, now in its second year and produced by the young but growing AA-ISP (American Association of Inside Sales Professionals). The conference, held in Minneapolis, drew more than 200 executives and managers who manage phone and Web selling and lead qualification teams from companies including 3M, ADP, Apple, Carnival, FedEx, GE Medical, GeneSys, IBM and a host of smaller companies. The panel discussion I led, “Social Media in Inside Sales: Time Waster or Money Maker?” was one of several sessions aimed at inside sales professionals looking for new ways to engage increasingly hard-to-reach and harder-to-please buyers. The panel included senior-level sales executives Brett Wallace from ZoomInfo, Greg Volm from InsideView and Kevin Flynn from salesforce.com, who described how they’ve integrated social media into their sales, marketing and internal team collaboration.

I kicked off the panel by describing “The Inside Sales Social Media Panacea”: What sales managers need to know in order to answer the “time waster or money maker?” question:

-For each of your customers and prospects, you know which social tools they use and prefer (if any), so your team can easily reach them in new ways and stand out from everyone else.

-You have a proven process for using social media in the sales cycle and can track social media outreaches (LinkedIn, Twitter, Facebook, etc.), along with calls and e-mails and the associated contacts metrics: connections, qualified leads, forecasted leads and sales.

-You can measure the impact of pre-contact research using social media and networks such as blogs, LinkedIn, Google Alerts and Twitter, and decide if the extra time spent in planning mode, which reduces activity, yields better results.

-You know which leads and which sales came from which social media and networking activities and at what point in the sales cycle, draw conclusions accordingly and spread the best policies and practices across your sales organization.

What other questions are you asking about social media? How are you measuring the success of your social media and social networking programs? What results are you seeing?

Tags: inside sales, social media, telemarketing, telesales

Inside Sales Managers’ Community: The Telebusiness Alliance

Communities  — and not just the online varieties — seem to be in vogue.  As our world changes, buying and selling practices evolve, and our jobs become harder and more competitive, Sales 2.0 leaders realize they don’t have all the answers — there is a lot to learn by looking outside one’s own company and comparing experiences with others.

The Telebusiness Alliance, a community of inside sales managers, was founded because of my own desire to connect with other managers whose teams sold by phone and Web.   After I started Phone Works after a 10-year, nose-to-the-ground career at Oracle,  I knew that to build a a successful consulting practice providing  trusted advice,  I had a lot to learn about how companies other than Oracle viewed and implemented inside sales.  So 17 years ago, I called six inside sales managers at companies known for their inside sales prowess and invited them to join me for lunch at a local restaurant. I was eager to hear from my peers about their successes and challenges,  how their departments fit into their companies’ overall sales strategies and how they approached key issues such as integrating with marketing and other sales channels, mapping to buying processes, finding good people, motivating them, measuring their performance, and enabling their productivity.

Today the Telebusiness Alliance has grown to almost 200 members in the San Francisco Bay Area, is led by a board of dedicated volunteers and meets every quarter to share industry best practices and provide support and mentoring. The group consists of noncompeting inside sales managers, running both quota-carrying and sales development/lead generating teams, who see value in discussing mutual business issues, both at meetings and online via our LinkedIn group.  Perhaps because we manage inside functions, we especially welcome face-to-face gatherings, and the meetings are well-attended.  Attendees come from the newest start-ups, as well as the who’s who of the valley, and everyone learns from each other.

Inside sales managers aren’t the only ones looking to learn from their peers. Last year, my longtime colleague, Phone Works General Manager Sally Duby, helped form the Silicon Valley VP of Sales Executives Forum to serve the needs of local chief sales officers. Sales operations managers can join their own special interest community, the Sales Operations Forum.

Inside sales managers, you can join our community at the next meeting of the Telebusiness Alliance on February 9 from 8:30 to noon in Redwood City, CA.   We’ll be asking:

• What did you do to change behavior to increase productivity in 2009?
• What are you looking to implement to gain efficiencies in 2010?
• What are the top sales productivity tools you are using today or planning for tomorrow?

Do you have a local community for sharing ideas and best practices? What are the benefits of being part of a community?

Tags: Community, inside sales, Telebusiness Alliance

Looking for Incremental, Recurring Revenue? Optimize Renewal Sales

Many companies miss the huge incremental revenue opportunity of renewal sales: a dedicated phone-and-Web-based sales team that follows up with customers every month or year to insure they renew their contracts or service.  By relegating renewals to an administrative overhead function, you could leave millions of dollars on the table.  With a quota-and-commission-driven inside sales approach, you can not only increase revenue at a high profit, but also engage customers more fully and insure they are actively using the most current version of your products or services.  This leads to happier and more loyal customers – ones that are less likely to be lured by your competition – as well.

After presenting early findings and trends in inside sales compensation this week at the San Francisco Bay Area Telebusiness Alliance meeting, I sat in on a breakout session with managers of renewal sales to discuss issues pertinent to their sales groups.  The group consisted of managers representing companies selling big ticket items: hardware, software (perpetual license as well as SaaS) and medical devices.  While some groups are selling annual service or maintenance contracts, those in SaaS businesses have a subscription-based model and are trying to make their products “stick” by selling additional months of product access. What these groups have in common is the incremental, recurring revenue potential of their territories.

Many managers reported compelling productivity gains by dedicating a sales group to renewals, refining the renewal process, and hiring commission-based renewal sales reps, including:

• 17%-200% increase in renewal rates
• increasing multi-year contracts
• decreasing churn rate
• decreasing headcount while growing revenue
• increasing on-time renewals by 50%
• identifying additional revenue opportunities (e.g. new product or service sales)

In some companies such as those selling Software as a Service (Saas), renewals are often considered the territory of an “installed base” or “customer sales” (aka “farmer”) rep, or rep selling to customers that have previously been sold by a “new business” rep (aka “hunter”).  There have been numerous webinars, articles and blog posts recently questioning how current or accurate the “hunter/farmer” labels are in today’s Sales 2.0 world, so I am making these role distinctions using different (more politically correct?) words.

In the debate over whether or not to separate out renewals from other customer sales,  I fall on the side of creating distinct roles in companies that renew service on an annual basis when it can be justified by revenue potential, budget and resources, if only because the customer contacts are often different. Renewal purchasing is often handled directly and solely by an administrative or purchasing person, while a new product or service purchase is typically driven by a business or technical buyer.

As for when to pass a customer from new business to renewals or customer sales, companies are all over the map. In some SaaS companies, new business reps are given 60-90 days or more to sell additional months of service while others ask the new business team to turn over the customer the day after they purchase.  If your company objective is aggressive market share growth, I suppose you would want your new business reps to turn over new customers asap for nurturing while they pursue the next set of prospects to bring into the fold.  In any case, teamwork and collaboration (and compensation to support that) are essential to making your customers’ experiences good ones, as the hand-offs occur.

Whether or not field reps get commission credit for renewal sales varies from company to company.  Some companies pay a small bonus of a few hundred dollars to renewals-only reps who find new product or service opportunities and pass these to another sales group; the bonus is only paid if a sale happens.

Some other things I learned from the group of renewal sales gurus:

• In the Bay Area, comp ranges from 60-70% guaranteed pay with 30-40% incentive or commission pay with an OTE of $75-120K
• Companies have special incentives to motivate reps to close renewals in the quarter the renewal is due, but there are also incentives to bring in past-due renewals
• Clean and correct data are critical to the success of a renewals sales team
• Other administrative issues, such as co-terming renewal dates, can be a significant part of the job
• Churning in the smallest customers can be very high. Some companies forgive churning (and don’t “debook” them in commission calculations)  in opportunities less than $6K rather than penalize and demotivate reps
• Outsourcing renewal sales can be a viable solution, especially in certain markets (e.g. outside North America), given the pay-for-performance model offered by vendors focused entirely on renewal business such as Encover and ServiceSource
• “Reinstatement fees”, applied to months after a renewal date has passed, motivate customers to renew on time
• Pairing inside reps with partners can help close renewal sales in smaller accounts, if an onsite visit is required; company field sales resources are called upon if the order size is large enough
• Dedicated “win back teams” can help address the special challenges associated with lost or non-renewing customers while increasing the productivity of other  sales teams

Do you have a sales team dedicated to renewal sales? Do you have experiences to share?

Tags: Incremental revenue, inside sales, Recurring revenue, Renewal sales, Sales 2.0