Category Archives: Sales leadership

Woulda, Coulda, Shoulda! How to Prevent Your Sales Strategy from Becomming a Disaster

Originally published 6/21/10

Oil slicks, mine explosions, lost sales opportunities . . .

Risks? What risks? Woulda, coulda, shoulda! By now we know that engineering shortcuts and bad assumptions come home, biting executives in the backside. Serves them right! Apologies fly. If only the sickening results were confined to the perpetrators. But they never are. Ask a BP shareholder, coal miner spouse, or anyone whose business depends on the unperturbed ecology of the ocean. And images of oil-soaked waterfowl further remind us that risks aren’t only manifest in financial statements.

Thanks lately to BP, risky business practices have bubbled to the top of discussions. That’s healthy for sales executives, because selling strategy is all about risk—and how to manage it. But like BP executives, many sales executives aren’t ready to face it. Who wants to be branded a naysayer? “We want to know how we are going to make our revenue target—not how we’re going to miss it!” An optimistic demand that ignores one of the few certainties in sales: not every prospect becomes a customer.

In February, 2010, Outside Technologies, Inc. conducted the 2010 Sales Risk Survey in partnership with CustomerThink. Over 100 salespeople and executives responded. How they’re coping with risk might reflect how a broader group of vendors see the road ahead:

• Greater uncertainty has a direct financial cost. Compared to last year, sales pipelines and sales cycle times are increasing. Fifty-two percent said that sales pipelines increased relative to last year, ballooning to an average of three times revenue target. Only 23% said their sales cycle times were trending shorter.

• The poor economy is perceived as the greatest risk, with approximately 25% of respondents identifying it as #1, and almost half placing it among the top three risks. “Challenges from competitive forces and new offerings,” “inability to establish relationships with decision makers” and “major changes in buyer preferences and needs” also made the top three, with the latter two tied for third.

• The risk of “no decision” remains formidable. Forty-four percent named “prospect delayed purchase indefinitely or did not make a decision” as the top reason for lost sales opportunities, followed by “price was high relative to competitors” (38%), and “competitor did a better job in marketing and sales” (35%).

• Erosion of “sales control” brings new risks. While the majority of respondents (70%) agreed with the statement “when we lose sales opportunities, we know the reasons why,” a surprising 53% indicated that their companies have less influence over purchasing decisions than ever before.

• Even though risks are known, many aren’t managed. Over 63% of respondents agreed “we know the greatest selling risks we face today,” but 43% felt that unexpected situations played a role in lost sales opportunities.

• Most are not preoccupied with having cutting-edge products or services in the sales bag. Less than 20% agreed with the statement “our customers only buy products with the latest features or technology.”

• We might not like what’s happening in Washington, but it won’t impact sales strategies. Less than one third agreed that pending legislation could substantially change their marketing and sales tactics.

• Companies cannot afford to lose their top sales producers. Retention of top sales talent was identified as a vulnerability by over 45%, while almost 25% felt their salespeople “lack the basic skills to compete in our markets.”

• Social media plays a role in communications risk. While nearly 60% felt their salespeople were skilled at communicating key value propositions, a whopping 57% percent disagreed that their companies were “effective at using social media for communicating with our prospects and customers.”

• Supporting technologies are not as vital as sales automation vendors would like us to believe. Nearly 72% were neutral or agreed with “if we were suddenly unable to use our sales/CRM applications, it would not adversely impact our sales operations.”

By nature, salespeople are optimists. But the collective observations of the sales executives who took this survey reflect a nuanced view of how people view the economic road ahead. We can infer emerging strategies and tactics based on the opportunities people see and the risks they want to avoid. In upcoming posts, I’ll share the external forces that contribute to selling risks, the greatest risks that executives see over the next 12 months, and how sales organizations are coping with them.

Further reading: Sales Risk Survey Executive Summary (free to CustomerThink registered members)

You’ll NEVER Guess What This Person Did in a Job Interview

On days when you’re convinced that we live in a civil society, in a kind and empathetic world populated with intelligent and caring individuals brimming with common sense, search online for worst job interview mistakes—or similar.

You’ll read true stories guaranteed to make you chuckle, and ask incredulously, “people do that?”

No question that the nadir of interviewee stupidity has yet to be discovered. But I began to wonder whether interview gaffes are only committed by idiotic, socially-lame job seekers in the presence of polished and experienced hiring managers, or whether ineptitude and rudeness enters the mix from both sides.

Amazingly, my online searches turned up very little about the social indiscretions of interviewers. Unfortunate, because if you’re planning to hire salespeople, but possess the warmth and interpersonal skills of Dick Cheney, you won’t find much help online. On the other hand, based on turning up 223,000 search results for job interview mistakes, job candidates have no excuses whatsoever for messing up an interview.

To overcome the paucity of information about interview-er Don’t Do’s, I will share some Hall-of-Shame moments from my own experience.

I have met with hiring managers who in an interview have:

• made disparaging remarks about a specific ethnic group
• worn jeans, t-shirt, and sandals
• handed me a trick pen that gave an electric shock to “see how I would respond”
• been 15 minutes late for a scheduled phone meeting, and interrupted the call three times to attend to other calls
• told me that they didn’t have time to read my resume in advance of the meeting
• not known my name when the interview started
• began by reciting the highlights from the company’s annual report
• when asked, could not name one leader she found inspiring

If you’ve read this far, I’m sure you have a few zany experiences of your own. Undoubtedly, some would make these appear minor.

I have heard a few hiring managers attempt to justify their lack of courtesy or failure to prepare by saying that these stressors simulate selling situations, and they want to learn how candidates handle them. This is garbage. There is never a positive purpose for inconsiderate behavior. It is as arrogant as it is ethically shaky.

For any social interaction, there are reciprocal expectations for courtesy and respect—or there should be! Interviewers have the added challenge of being ambassadors for their companies. An interviewer might feel entitled to ‘dis a candidate, but it’s risky, because his or her personal brand and corporate reputation are on the line. Social indiscretions—whether committed by interviewer or interviewee—carry the same powerful negative vibe as bad customer experience.

Never hand a sales candidate a trick pen. He or she might be a key influencer on your next make-or-break deal (or know someone who is!). Even with almost seven billion people living on the planet, the world is not that big.

Trust, Shmust! We Need a Sales Mensch

A shondah* that in 2011, people have to teach these skills to adults:

How to build relationships
How to be a trusted advisor
Three ways to build rapport
How to build trust in a sales relationship

But it’s no surprise. Being an adult simply reflects the passage of time, which has nothing to do with emotional maturity.

So who can create great sales outcomes without having to being told how? That, I can tell you in one word: a sales mensch! “Like who,” you ask! Like Dicky Fox! There’s a mensch! You should be as sincere and honest!

A sales mensch is more than an Experienced Professional. More than an Honest Salesperson. More than a Trusted Advisor, even. “You’re a mensch” is the highest accolade one person can give to another. To be a real Sales mensch requires nothing less than character, rectitude, dignity, and a sense of what is right and responsible.

When you are a sales mensch, you don’t need the oft-hyped rapport-trust-relationship stuff, because you’ve got that—and more. And you don’t pick up mensch-ness on Day 2 of a sales skills training program or from bullet-ized tips on a PowerPoint slide. Which explains why there aren’t more sales mensches.

Nevertheless, here’s what sets sales mensches apart from the Everyday Salesperson:

1. A sales mensch helps people who cannot ever return the favor.

2. A sales mensch always strives to do the right thing in the right way, and he or she never says, “Well, at least we’re not as bad as (fill in the blank)!”

3. A sales mensch helps people without regard for their station or status within a company or society.

4. A sales mensch recognizes that mensch isn’t a title that is awarded, rather a quality one always strives to maintain.

5. A sales mensch is humble, and recognizes the contributions and sacrifices that others have made toward his or her personal achievements.

6. A sales mensch‘s zeal is always tempered by recognition of context–that is, a sales mensch keenly understands that a prospect’s situation and world view right now has many competing priorities. A sales mensch shows empathy.

The best quote on menschness I’ve seen comes from Alan Gregerman on CustomerThink: “We win in business and in life when we respect the value of customers and prospects. And when we seek to be worthy of the trust they put in us.”

That’s a sales mensch! What’s not to like?

* Shondah: yiddish– shame

Top Sales Producer Meets Foreign Corrupt Practices Act

Which of the following transactions violates the 1977 US Foreign Corrupt Practices Act (FCPA)?

A. Paying a Bloomberg employee’s taxi fare to JFK Airport
B. Offering cash to a Czech Republic government official to expedite processing for a business permit
C. Buying lunch for a senior logistics manager at General Motors

The correct answer, all of these*, underscores an emerging problem: the FCPA has become the legislative equivalent of the Ford Pinto. Useful, but burdened with obvious flaws that get worse with age.

“C’mon! The Feds would never prosecute anyone for something as trivial as paying for a client’s cab fare!” you exclaim. Pause for my sarcastic expression. According to Mark Mendelsohn, who was responsible for recent growth in FCPA enforcement during his time working for the Fraud Section of the US Department of Justice, “If you look at who we’re prosecuting, we’re prosecuting mid-level to senior level corporate officers and employees, CEO’s, CFO’s, heads of international sales.”

And, I might add, earning more than chump change for Uncle Sam. The top ten FCPA settlements total $2.8 billion. In 2010, over half of the civil and criminal penalties the US Government collected were from the FCPA. That’s ahead of a lot of better-known, oft-reviled consumerist, environmentalist, protectionist legislation that collapse into three- and four-letter acronyms like OSHA, FDCA, CWA, and EPA.

Why should anyone reading this care? Because regardless whether your title is CEO, VP Sales or Marketing Rep, the government has unleashed its flying monkeys, and they’re looking for you! According to the US Chamber Institute for Legal Reform, “Five of the top ten FCPA settlements occurred in 2010 alone. The remaining five have all occurred since 2007. An added sign of increased enforcement is that there are currently more open FCPA investigations pending resolution than at any other time since its inception. “ Before you complete the PowerPoint deck for your upcoming sales meeting, I suggest including a slide with the jocular title, FCPA Regs. It will help settle everyone down after the morning coffee.

But before I jump into my Indiana-built Subaru and head out to a big-government-bashing tea party rally, let’s be fair. Without the FCPA, we’d have chaos. Corruption undermines everything we do as marketers, brand managers, and salespeople. Our foundational assumptions include that a major part of the value of our products and services are derived from quality and unique benefits. A payment-with-wink here, an expedite fee there, and that no longer applies. And although it’s hard to believe in today’s litigious and protectionist world, before 1977 there wasn’t a government on the planet that made it a crime to bribe officials of a foreign country. We’re not talking suitcases filled with cash left at arranged drop points. Just fees that were buried on financial statements as a cost of doing business.

But in the thirty-four years post-FCPA legislation, the sales and buying landscape has buckled, shifted, and changed dramatically. What worked in 1977, doesn’t today.

These forces have sharpened the need for FCPA reform:

Globalization. The importance of international trade has increased significantly since 1977. Today, nearly one third of our economy—over $3 trillion—comes from offshore. At the same time, the line between foreign government and foreign business has become hard to discern. Where to begin, where to begin? Did I hear anyone mention Airbus or OAO Gazprom? Require your sales executive to look up the ownership status of his prospect’s company on his iPad before he pays for business lunch.

Demands for economic growth. According to a recent Deloitte survey of companies in the financial services industry, 63% of respondents reported that FCPA issues caused their companies to renegotiate or abort planned business contracts, mergers, and acquisitions in the last three years.

Increasing legislative complexity. According to the US Chamber for Legislative Reform, “American companies seeking to sell their goods and services overseas need straightforward, reasonable guidelines so that they know what the standards are and can communicate them clearly to employees and foreign workers. The FCPA in its current form does not provide such guidelines.”

Not to throw another selling risk on the already-large pile that includes “no decision,” and “competitive pricing,” but FCPA compliance has earned a rightful place among the usual suspects. If you sell internationally, the macho adages “do whatever it takes to close the deal,” and “I don’t care how you make your number, as long as you make it,” should be replaced with the meeker “better run this past Steve in Legal . . .”

Yes, it’s less fun, less “shoot from the hip.” But whether you work for an offshore company that sells in the US, or a US company that sells worldwide, understanding your sales risks is just as important as knowing your opportunities.

* Bloomberg is a company owned by the mayor of New York City, Michael Bloomberg; the United States Government is the primary shareholder in General Motors

IBM at 100. Aggressor? Defender? You Tell Me!

There are two kinds of people in the world: those who over-simplify, and those who don’t.

Complexity, made clearer through categorization. But whether uber-broad categories are useful is another question.

No matter. Steve Case, founder of America Online, hit the nail on the head last week during the keynote at the Digital Media Conference in Arlington, Virginia when he said “there are two types of companies in the world: aggressors and defenders.” What he means is there are entrepreneurs and Zappos, and virtually everyone else.

When a start-up company has nothing to defend, aggressor is an obvious choice. But along with success, entrepreneurs frequently lose their mojo faster than the swooning Florida Marlins. “Be all you used to be,” except when you’re becoming fat, dumb, and happy.

Just this month, two once-aggressive innovators, Google and Gore (maker/licenser of Gore-Tex), were dragged under the FTC’s anti-trust lens and now must defend their defensiveness. According to The Wall Street Journal, (Feds to Launch Probe of Google, June 24, 2011),“’Google engages in anti-competitive behavior…that harms consumers by restricting the ability of other companies to compete to put the best products and services in front of Internet users, who should be allowed to pick winners and losers online, not Google,’ said, a group representing several Google critics . . .”

And Gore? Legal, not Laboratory, ensures the company’s shareholder value. Columbia Sportswear, a plaintiff in the anti-trust probe of the company, said “consumers mistakenly believe that Gore-Tex is the only waterproof, breathable membrane available. And Gore has reinforced that impression by restricting its licensees from using rival brands or even claiming that other technologies are both waterproof and breathable.” In The Wall Street Journal (Gore-Tex Faces Anti-trust Probes, June 22, 2011), Peter Bragdon, Columbia Sportswear’s General Counsel and plaintiff, added, “We believe that Gore has long engaged in a systematic campaign of exclusionary conduct to insulate its dominant position against challenges from more innovative, better quality and lower cost rivals.”

Sheesh. When a company reaches the point that attorneys generate more excitement for shareholders than do chemists and software developers, you know time takes a toll on more than just physical good looks. Which brings up a question. How did IBM become a vibrant 100 years old this month when Google and Gore act crotchety at the youthful ages of 13 and 42, respectively?

Self image has much to do with IBM’s success. Not that IBM didn’t have its own anti-trust skeletons when it had a 70% market share and was derisively called an evil empire. But “from the beginning, IBM had a concept of itself as an institution, not just a technology company,” said Rosabeth Moss Kanter, a professor at Harvard Business School. Others agree. ”IBM is not a technology company, but a company solving business problems using technology, said George Colony, chief executive of Forrester Research.

This insight provides much more than good ol’ customer-centric Pablum with a sell-solutions-not-products! label slapped on top. After all, IBM survived three major IT platform changes. That’s like GM transforming its product line from all gas-powered, to all electric, to all public transportation vehicles. And IBM never required a government bailout. Remarkable.

Why does IBM thrive in an IT industry characterized by innovation and change? Pigeonholing the answer into “aggressor” or “defender” archetypes doesn’t tell the story. According to a recent article in The Economist, 1100100 and Counting (June 11, 2011), there are five key reasons:

1. IBM maintains connections to its customers. “Today the main conduit is the huge services organization, which employs more than half the total workforce . . . it often ‘co-creates’ products with customers.” The company has come a long way since MAPICS and DMAS.

2. IBM has become less hierarchical. “Its Smarter Planet initiative is said to have originated in one of IBM’s ‘jams’, online brainstorming sessions where all employees and sometimes even family members are welcome. “ Not your father’s IBM, when wearing a shirt other than white was a brazen sign of disrespect.

3. “IBM tries to ensure that the output of its 3,000-strong research division remains relevant to its business.” If executives at Chrysler thought similarly, the world would never have seen the now-discontinued Crossfire.

4. “IBM is no longer a collection of independent national subsidiaries, but a globally integrated company” with a common IT infrastructure.

5. IBM has an ethos of financial planning and risk management. “One rule is to ditch businesses that are about become commoditized and no longer yield a sufficient profit margin.” Goodbye PC’s and printers, hello PriceWaterhouseCoopers!

When you think about the resources that enable enterprise longevity, a valued sales force belongs on the list. IBM has more than a few best practices worth emulating. “From the beginning, as a maker of complex machines IBM had no choice but to explain its products to its customers and thus to develop a strong understanding of their business requirements. From that followed close relationships between customers and supplier.” There are thousands of books and blogs on these topics. But IBM achieves them.

Aggressor? Defender? Both? Neither? Maybe defying categorization is the best strategy of all.

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