sales development
Process and metrics are the lifeblood of inside sales organizations. Leaders of phone/Web sales organizations — or their sales operations managers — typically measure conversions at every step of the sales cycle, in addition to average sales cycle length, average deal size and other more common metrics. Sales 2.0 companies are following their lead and putting increased focus on tracking and measuring their key performance indicators (KPIs) in all sales channels in order to predict and improve results at both team and individual levels.
But not every sales manager knows which metrics to track or how their productivity measurements compare against those of other companies. If you want to see what leading B2B companies in the San Francisco Bay Area are measuring, check out the latest inside sales (quota-carrying phone/Web sales) and lead generation (sales development/pipeline-building) metrics reports produced by Phone Works, based on surveys sponsored by the Bay Area Telebusiness Alliance (TBA).
Here are some highlights:
Inside Sales Survey
- The average annual quota for inside sales reps has increased dramatically in the past three years
- During the same time period, the percent of reps achieving quota has declined
- Inside sales reps achieving 75% or more of quota carry an annual average quota of more than $1 million
- Inside sales reps achieving 75% of quota or better close an average of 2 more deals per quarter, compared to all respondents
Sales Development Survey
- Companies that are achieving 100% of quota have a 6–8 attempt contact strategy to reach the prospect
- Average talk time has increased 18% in the past 3 years
- The number of qualified leads generated per week increased an average of 38% in the past 3 years
- Average daily volume of e-mails increased 31% in the past 3 years
Metrics will, of course, vary, depending on factors such as your market, your position in the market, your target audience, and your implementation of technology and process.
How do your sales metrics compare? What sales KPIs do you measure? Which metrics would you like us to add to future surveys?
Tags: inside sales, lead generation, Metrics, Sales 2.0, sales development
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 the third and last in a series featuring David Satterwhite and Mark Hamilton, whom I highlighted last year in a post titled, “Avoiding the Blame Game Between Sales and Marketing” (Feb. 9, 2009). At the time, they were a terrific twosome at newScale, a company that offers IT service catalog and service portfolio management software solutions. David ran Sales; Mark ran Marketing.
They’ve since left newScale (David went on to run sales at Genius and is now executive vice president of sales at Yammer, and Mark is starting up a new company to bridge B2B marketing with social media), but I had the opportunity to talk to them both again about their collaboration and their views on collaboration in general.
Anneke: Where does Marketing’s responsibility for prospects leave off and Sales’ ownership begin?
Mark: Traditionally, Marketing has thought about its job as getting a prospect up to a certain point in the cycle and then Sales taking them from there. To me, it only matters when the deal closes at the other end. Marketing can run the best campaign in the world, but if it doesn’t result in business, who cares? Marketing leaders need to understand that in order to be relevant to Sales.
David: Every function in the company is trying to get more streamlined; it’s our constant goal — trying to focus on doing more with less — so spending a lot of money on marketing you can’t attach to revenue is something that doesn’t make a lot of sense. You need a lot of collaboration at the top around your strategy to make sure you can tie revenue to marketing activity. Mark might come to me and say, “I’m thinking of an awareness campaign; how do you think it will help a sales person when talking to a prospect?” You have to have these conversations so you can throw the strategy up against the reality of the sales cycle.
Mark: Marketing is a portfolio of programs you run: You have awareness campaigns, direct lead-gen campaigns and others. If you don’t have alignment between Sales and Marketing, the balance of those different pieces of the portfolio can get all messed up. So the conversation with Sales might be: “I want to do an awareness campaign, but it’s hard to tie that to leads; let me show you how it all fits together, and how we’re trying to balance the portfolio of investments.”
Anneke: Is there a specific time or place Marketing should hand off a lead to Sales?
David: It can happen in multiple places. It’s really about what the buyer is telling us. At Genius, we found viewing certain web pages and spending 15–30 minutes on the site correlated to buying, so we handed those leads off to Sales at those points. On the other hand, we found downloading certain white papers didn’t correlate to buying, so we didn’t hand off at those points; we kept them in marketing for nurturing.
There are no hard and fast rules, though. In the world of Sales 2.0 and marketing automation, we monitor the process all along, and we learn from the monitoring process. Sales development or lead qualification plays a critical role, engaging buyers who are qualified enough to go to Sales but not yet qualified for a quota-carrying salesperson.
Mark: There’s no magic answer. To me, it depends on various factors such as sales reps’ personalities, skills levels, and the time of the quarter or month. Some reps can handle high volume without getting overwhelmed, and focus on building territory. Others don’t want to talk to a prospect until they are ready to buy. There’s no way Marketing can make a unilateral decision regardless of personality. We can give a rep the ability to dial it up or dial it down. This can change during the last 30 days in the quarter. Some reps can close sales in 30 days, so they need leads even in the final month. For new people or people who are building pipeline, we’d have a different process.
Also, as the marketing guy, you have to be really cognizant, check in with Sales, ask how you’re doing and if the program is tied to revenue. You have to be careful in that discussion, because it can come off as pointing fingers or blaming. I work really hard never to have it perceived that way.
Read the other excerpts of this interview series, “New Age Buyers: Are Your Customers Changing?” and “Sales & Marketing Collaboration: Driven by Culture or Technology?” or find the full interview in the Resources section of this website.
Tags: marketing automation, Sales 2.0, sales and marketing alignment, sales development
Nothing is more dreaded by most sales reps than having to generate new sales leads by cold calling. I am preparing for a webinar, hosted by InsideView and part of their educational web event series on Sales 2.0, that explores a more effective way to find qualified sales opportunities and engage with those prospects. Called “Prospecting 2.0″, this new approach is a godsend to sales reps. Customers are pretty happy about it, too. It respects both the customer and the sales rep’s time by focusing the sales organization on contacts who are most likely to be interested in receiving a phone call or e-mail from them. How is this possible? Sales reps that practice Prospecting 2.0:
- Put themselves in the customer’s shoes and only reach out to those contacts at the right time with the right message
- Are well-informed about their prospect’s business objectives, initiatives, and challenges
- Use a lead rating system to prioritize their contacts and organize their outreach and follow up accordingly
- Embrace technologies that make them more effective and productive by delivering information in an easy-to-use context
In many Sales 2.0 organizations, there is a dedicated person or group whose job it is to reach out to customers early in their buying cycle, discover if there is a “fit”, and keep them engaged – with the help of nurturing marketing programs – until they are closer to a buying decision. This Sales Development or Lead Qualification group allows sales reps with quotas to focus on closing qualified buyers without sacrificing the filling of the sales funnel for future quarters. While sales reps are compensated on revenue-generation, sales development reps are paid on delivering qualified opportunities to the sales force.
E-mails can benefit from a Prospecting 2.0 approach as well. At the end of last month, I remember getting a message that went something like this:
“Since it’s the end of our quarter, I thought you might be interested in (product name), which is now available at a 15% discount until (end of quarter date).”
This is a commonly-used approach that has everything to do with the sales rep’s quota attainment and nothing to do with the customer. Consider instead this customer-centric, personalized approach:
“Steve at Steve and Company suggested I contact you. I read recently in Profitability Today that your company is facing cost reduction in sales. We just reduced head count 20% while increasing revenue 25% by implementing Sales Wonder Tool at Steve and Company. Would you like hear more about how we could help you decrease cost while increasing productivity at your company?”
In next week’s webinar at 10AM on April 21 PST, I look forward to interviewing Jason Braun of Jellyvision and Mike Pilcher of MarketBright and hearing about how they use a Prospecting 2.0 approach every day in their sales organizations. We’ll address three key topic areas:
- The Importance of Data
- Know Thy Customer, and
- Provocation-Based Selling, as described in the article by Philip Lay, Todd Hewlin and Geoffrey Moore in the Harvard Business Review.
What questions do you have about how to prospect more effectively? What approaches are working for you?
Tags: Geoffrey Moore, Harvard Business Review, InsideView, Jellyvision, lead qualification, MarketBright, Philip Lay, Prospecting 2.0, Provocation-Based Selling, sales development, Todd Hewlin, webinar
One of the strategic prerequisites of Sales 2.0 — the use of innovative sales practices enabled by technology — is the alignment of sales and marketing. Organizations often have different executives with separate goals, perspectives, and compensation-plan objectives running sales and marketing. This can lead not only to internal unrest but also to negative customer experiences or perceptions of your company, not to mention poor sales results. Those companies that engineer their organizations to guarantee sales and marketing cooperation, however, achieve both competitive advantage and improved revenue.
One company that exemplifies a high level of collaboration between sales and marketing is newScale, a company that offers IT service catalog and service portfolio management software solutions. This is due to the close working relationship and shared compensation-plan targets of the company’s EVP and head of sales, David Satterwhite, and VP of marketing, Mark Hamilton. Their partnership commitment is so strong that they not only co-develop integrated programs and practices, but they also make presentations as a team. These executives’ dedication to collaboration, elusive in many companies, earned them a market-leading position in its field, with more than 1.5 million users worldwide, including 20 percent of the Fortune 50.
David and Mark are evangelists of sales and marketing communication and collaboration at the top level.
• They make it a priority.
Both believe alignment has a critically positive impact on both top- and bottom-line results and frees them to focus on making their numbers. They also stress that it is a prerequisite to a healthy and productive company culture.
David and Mark maintain their commitment to alignment by considering each other members of their management teams, attending the other’s management meetings, and holding weekly one-on-one meetings or phone calls. They treat the annual marketing plan as a customer proposal, with sales being the customer, and share staffing and head-count planning.
• They develop shared rules of the road.
This includes assuming a positive rather than adversarial intent on the part of the other department, which they model at the highest level, and recognizing that they have a shared ultimate metric of success — revenue growth — on which compensation in both sales and marketing is based.
David underlines the importance of upbeat psychology, as well as personal relationships, in business. By coaching his sales team to give marketing staff the benefit of the doubt when something goes wrong and by helping them resolve conflicts through trust, he avoids hours of management “therapy” and keeps his group focused on sales effectiveness and efficiency.
• They leverage each other’s strengths.
David contributes his sales instincts for what produces revenue, understands what motivates his customers to buy and his sales team to sell, and has highly developed skills negotiating and winning deals. Mark is expert at operations, systems, and processes, distilling and analyzing complex concepts, and seeding and growing markets.
• They collaborate on designing and implementing sales tools and technologies.
Price lists, closed-loop lead processes, weekly sales tips, win/loss programs, and continual surveys of marketing-program effectiveness are some of the tools the company developed that have passed the sales “sniff test.” Because they are designed by both sales and marketing, they actually get used.
Mark describes the difficulty he faced getting newScale’s sales people to report on lost deals. Sales people like to celebrate successes, not dwell on failures. By documenting the deals they haven’t won, sales people may feel they bring attention to their weaknesses in sales process or skills. When he asked his marketing group to call “lost” customers, though, Mark uncovered a solution to the problem of engaging the sales team. The calls revealed that many customers weren’t lost at all, as they weren’t happy with their chosen alternative solution to newScale’s product. Though newScale’s sales team didn’t win these sales initially, these customers became part of the pipeline a second time through Mark’s calling program. The sales group happily adopted the program when they understood it as a sales campaign that could unearth recycled, newly qualified leads.
Mark also recognized an opportunity to improve lead qualification and pipeline building using products from Genius.com, but he wouldn’t dream of signing up to try them without running the idea by the manager of David’s deal-development team. Genius’ products truly support a Sales 2.0 collaboration between marketing and sales by allowing reps in both departments to track and act on important data on potential customers (such as who is responding to e-mail messages, and what web pages they are looking at right now and for how long). By including the sales team in the evaluation and decision-making process, Mark succeeded in bringing a valuable sales tool into the company that is enthusiastically embraced by the lead qualifiers.
As customer requirements and economic conditions change, the old way of selling — independently of or in contradiction to marketing efforts — doesn’t work. Sales 2.0, the evolution of the sales function, includes rethinking sales strategy, people, process, and technology. With a business strategy that emphasizes sales and marketing alignment and collaborative planning and execution, companies will stay competitive and achieve sales success.
How well do sales and marketing align in your company? Tell us what works (or what doesn’t work) for you!
Tags: collaboration, Genius.com, inside sales, marketing, newScale, Sales, sales and marketing alignment, sales development
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