Sales 2.0 Leaders Interview: Characteristics of Sales 2.0 Professionals

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 third and final 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: How are your customers changing?

Jim: They don’t require face-to-face. They’re happy with online and phone communication. We close six-figure deals without ever seeing a customer.

Anneke: There are people who believe it can’t be done — “Not in my market, not my customers” — and sometimes that’s true.

Jim: Yes, I hear that a lot, especially in markets outside the U.S. There is still this rolling wave, an evolution of acceptable business practice. We are constantly looking for as much efficiency as far down the stack as we can to reduce our costs and increase our margin.

Anneke: There are certain types of people — Sales 2.0 professionals — who aren’t afraid to ask for help, aren’t afraid to take risks, do things a little differently, experiment, do pilots, test — and not think traditionally about selling. But there are a whole lot of people who aren’t comfortable with that. Why do you think that’s the case?

Jim: The valley is filled with entrepreneurs and business leaders who feel they have to know everything and do everything. There is a lack of confidence from the business community, as well as their investors, as well as their employees. They feel if they’re not Superman, they won’t be successful.

Anneke: And they feel they’re not earning their compensation plan.

Jim: Right, and the exact opposite is true, at least from my experience: Good management knows where it begins, knows where it ends, knows where its strengths are and where they aren’t. Good management doesn’t have ego around itself such that it can’t ask for help; it can try and fail. There is a mantra these days of, “If you’re going to fail, fail quickly and cheaply.” It’s easy to say. It’s a great sound bite. It’s very hard to do — to sit there and say, “I want 50-grand, 100-grand, and at the end of that I’m going to tell you whether we have a scalable sales business.” To me, it almost seems too cheap. If the answer is actually that simple to find, it demystifies everything. A lot of people have a hard time realizing the answer is that simple and that efficient to get to.

Read the other excerpts of this interview series, “Why Pilot Your Sales 2.0 Programs?” and “When NOT to Build Inside Sales,” or find the full interview in the Resources section of this website.

Tags: inside sales, Sales 2.0, telemarketing, telesales

Sales 2.0 Leaders Interview: When NOT to Build Inside Sales

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 second 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 to 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: I’m curious about your perspective on testing sales messages and approaches, markets and sales processes before building a sales organization. Many companies want to do this themselves with their own employees — often after they’ve hired an entire sales team. Why didn’t you do that?

Jim: I’ve run inside sales. I ran a $10 million-plus run rate telesales company, multinational, multiple sales offices and stuff like that. The first issue is, if you haven’t done it, you’re going to pay the cost of learning on the job and go through all the inefficiencies of that. Even in my situation where I’ve done this — I’ve seen the movie, and I know how it ends — there are certain risks I’m not willing to entertain at certain critical points in the company’s growth cycle.

There is a certain amount of data I need before I’ll commit toward constructing a full telesales department. I’m a believer in efficiency being more a function of time than cost. I’d much rather bring on a temporary team for six months — where there is zero startup cost outside of working with them — to get to know them and nail the messaging.

I would hire outside consultants if I were building my own sales team. The startup costs are near zero, and in our project we were getting data back within four to five weeks from when we signed a contract, so we could execute upon our thesis. That began to shift our messaging, shift our notion of the product and shift our thesis in the entire marketplace.

Had we seen different results, we would have moved toward building an inside sales team. I wouldn’t build an inside sales team until I had the data that showed it was proved and repeatable. I wouldn’t want to spend six months building the team and then six months dismantling it.

Anneke: Exactly, and paying for all those severance packages.

Jim: There are multiple costs: the physical cost, the morale cost, the resourcing cost. It’s just an expensive proposition. In this day of low-cost, high-efficiency, quick time-to-market requirements, it doesn’t make sense not to test first. We don’t have time to lose getting it wrong. We’ll pay a little extra to get it right, and everybody benefits. The VCs are happier. The employees are happier. Our customers are happier.

Read the other excerpt of this interview series, “Why Pilot Your Sales 2.0 Programs?,” or find the full interview in the Resources section of this website.

Tags: inside sales, pilot programs, Sales 2.0, telesales

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

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