Open for Business or Hoping for Business?

The leading indicators are encouraging – FedEx Corp recently reported higher shipping volumes and raised its earnings forecast. Oracle announced both higher top and bottom line results for its most recent quarter. Corporate IT buyers are once again starting to talk about strategic initiatives rather than cost cutting. Marketing organizations are spending left-over year-end dollars and sales organizations are once again hiring new sales people.

2010 is promising to be a challenging year even as the economy slowly improves. Few analysts are expecting a return to robust growth anytime soon; those organizations that wait for calm waters and steady winds in this market will find themselves left on the beach.

The winners in 2010 will continue to hone their market definition, development and selling processes. Market leaders are:

• Defining markets more narrowly
• Prioritizing opportunities more systematically
• Building deeper intelligence about individual organizations
• Targeting marketing and sales assets more precisely
• Analyzing the interim and final results more carefully

Measure What You Manage
The net effect of this work is two-fold. First, these organizations are finding higher ROI on their marketing and sales investments. While not all investments provide equal and high returns, the increased inspection of the process and results provides better and faster opportunities to modify and improve. Secondly, the organizations conducting this level of analysis and management are outdistancing their peers. Simply put, the right sales resource delivering the right sales conversation to the right prospect at the right time is vastly more compelling than a rep reading from a script or dragging a prospect through the corporate presentation.

As a buyer, which would you prefer – a sales person who talks about your purchase in the context of your use case or one who assumes that his or her product is right for you just because of your physical proximity?

We’ve all been there – we’ve been in both buying and selling situations in which everybody clicks and the process goes smoothly and quickly to the benefit of both parties. We’ve also suffered through situations in which it’s clear to almost everybody that the conversation is going nowhere.

Some marketing and sales executives have told me that they have chosen not to undertake this work because the underlying data is not available or that the process development and management appears difficult. They’re partially correct – the data is not easily available and the work is hard. This is what separates the leaders from everyone else. The leaders have chosen to take on this work and they are already enjoying the results.

Approximately a dozen technology companies have deeply invested in this work. Another couple of dozen are in some stage of investigation and implementation. These companies will be rewarded with higher top line revenue growth, profitability and customer satisfaction.

What Will be Different?
I’ll leave you with a challenge – what will you do to improve the efficacy of your marketing and sales activities in 2010? Do you still believe that what you did in 2008 and 2009 will work in 2010? What are you willing to do differently in 2010 to improve your results?

Thanks,

Lee

The Shiny Object

So I’m in the Admiral's Club on Friday evening at SFO after a long week at Dreamforce, salesforce.com’s annual user conference. In his opening address, Marc Benioff, CEO of salesforce.com, mentioned that some 19,000 people were attending Dreamforce this year…and the lines for coffee and restrooms fully supported that claim.

Dreamforce is an interesting dichotomy of people, process and technology. The people range from senior sales executives to junior IT managers, marketing people, finance and operations – anyone with an interest in running salesforce.com applications in their organization. The processes covered during the event span sales, marketing, customer support, development and many others. The technology coverage is similarly broad.

From my perspective, Dreamforce does the sales profession a disservice with its laserlike focus on technology to the near-exclusion of consideration of business needs and process improvement. In his opening remarks, Marc rolled out a new set of features soon to be available (maybe) in the salesforce.com environment, features that add “Facebook and Twitter-like” utilities to the SFA environment.

Why? Because they can. Because the company has been in love with consumer-type apps and Facebook in particular over the past few years. Because it’s cool. Because Marc wants to be notified anytime an opportunity is updated.

Salesforce Blather

This new set of features may be launched in the spring (or maybe not, depending on some unidentified factors), called Salesforce Bla ^h^h^hChatter. Just what I want – my people spending more time typing and networking with one another rather than engaging with prospects and customers.

I’m not taking a potshot at the company…I’m a firm believer in the salesforce apps and the value that they provide to sales organizations. I’m also a firm believer in process before technology, and I’m at a near total loss to understand the value to salesforce.com’s primary users (sales people and their managers) of this new functionality.

They’re Not Alone

In the Expo Hall at Dreamforce, I was heartened to see many new exciting applications that advance the science of selling. Many of these applications quantify and present the results of selling and marketing activities, allowing for substantially better understanding of the performance of the organization. Yet in the Expo Hall, these offerings were arranged in a bazaar-type format, with little rhyme or reason to their placement. Attendees wandered the aisles browsing from one booth to the next, listening to the pitches of each, without building any context of how they might work together, or the relative importance of the problems to be solved.

Without context of the overall organization, these offerings seem like so many more shiny objects to be collected in one’s basket and taken home. In too many sales organizations, technology is selected in the absence of underlying process. Many select the apps without having laid the groundwork of good process and as a result, the technology merely automates chaos.

As we approach 2010, the sales organizations that invest in better processes – focusing on sales force specialization and performance, better interaction between marketing and sales, and increasing investments in customer intelligence – will be rewarded with higher growth rates than their peers.

The market has been ruthless over the past year, culling the weak from the market. It will be no different over the next few quarters and beyond, and those most adaptable to change (ref Charles Darwin) will be rewarded with not only survival but increasing success.

It's People-Process-Strategy

In many conversations with fellow sales executives, marketing executives and others involved in the selling and marketing processes, I found a general awareness of and focus on the triumvirate of people-process-strategy (Execution: The Discipline of Getting Things Done, Bossidy). Buy Execution on Amazon

If we work together to solve the problems of sales productivity, we have the opportunity to truly solve our customers' business problems, as opposed to baffling them with irrelevant talk of features, specifications and plumbing.

Thanks,

Lee

Selling is Dead

A good friend of mine, a senior sales executive at an enterprise software company, questions the need for field sales people. And he’s right, the outdated activities carried on by many field reps no longer have a place in this new economic environment.

The selling function has gone bipolar, but not in the sense first conjured by that word. What we’ve seen over the past few years is that the interactions that assist a prospect in completing a transaction have polarized in one of two camps – value or convenience. High touch or high efficiency. Human or automated. Face to face or the web. In person or in pajamas.

When was the last time you went to a bookstore? If you know what book you want, it takes fewer than 50 keystrokes and perhaps 2 minutes of your time to summon the book to your doorstep or inbox. On the other hand, if you want assistance in selecting a new bicycle, you’ll invest a couple of hours at your local bike shop talking with an expert about the relative merits of carbon fiber versus titanium, Campy versus Shimano, DuraAce versus Ultegra or Record versus Chorus.

You’ll still do your homework on the web prior to venturing out to your LBS. You need to show up prepared, to look smart, to avoid being bamboozled by a fast talking sales rep pushing a spiffed product on Saturday afternoon. But once you get there, you will find a rep that you like, someone you’ve decided that you trust (using the elaborate methodology outlined by Malcolm Gladwell in Blink) and you’ll count on her to guide you through the decision making and implementation (fitting) process.

Even smart, well-informed buyers can benefit from experienced, value-adding salespeople. As a cyclist with 35 years and countless thousands of miles under my belt, I once took a vintage cyclocross frame to a local shop (Hot Tubes) to be repainted. When I asked Toby, the shop owner and builder, about painting alternatives, he pointed out that the frame was two sizes too large for me. I had mistakenly assumed that cyclocross frames fit just like road bike frames. The frame went back up on ebay and Toby built me a beautiful custom cyclocross frame, fitting me perfectly and finished in my favorite shade of blue.

As a consumer, I knew what I wanted and I thought I knew what I needed. Toby, as an expert sales person, didn’t go the easy route and accept the frame for painting. Instead, he educated me about proper fit and helped me to conduct a cost benefit analysis of refinishing my (poorly fitting) current frame versus engaging him to build a (properly fitted) new frame.

Buyers selecting sophisticated technology products or services fare no better. Many technology initiatives fail not because of the inadequacies of the product, but of the lack of preparedness of the organization. Buyers think they know what they’re getting into, but simply put, they don’t.

And many sales reps will book the order without helping the organization to understand the processes required to ensure success of the implementation. Most sales people manage to get away with this once with a particular organization; a few manage to do it twice. However, it’s the reputation of the vendor rather than the sales person that is tarnished in the process. And today few vendors can afford to book individual sales at the expense of their reputation and standing in the user community.

So What’s a Savvy Vendor to Do?
You must act now. With the economic pressures easing a bit and budgets starting to loosen somewhat, the imperative to change is lessening. In my research on organizational dynamics, I’ve found that it takes a “big bang event” to ensure the success of a strategic cultural change initiative. (It also takes role and behavior clarity, but that’s a separate conversation.)

The Sales Productivity Framework I developed at IDC incorporates five key productivity levers – people, management, methodology, sales enablement and customer intelligence. How would you assess the capabilities of your sales organization for each of those levers? Are you sending your sales people out unprepared or ill-informed? Are you forcing high value sales engagements on customers looking for simple acquisition efficiency?

Andy Grove, former CEO of Intel, said that only the paranoid survive. In my experience it’s the world class sales organizations who focus most on improvement. In contrast, most of those stuck in the middle of the pack continue to hope that things will get better. We all know that hope is not a strategy, and we further know that if you’re in the middle of the pack, and not moving up, sooner or later (and probably sooner) you’ll find yourself spit out the back.

Don’t Let this Perfectly Good Crisis Go to Waste

When we come out the other end of this recession, we are not going back to what we wistfully have been referring to as “normal.” Sketchy is the new normal. Uncertain is the new normal. Tight budgets is the new normal. Discerning prospects is the new normal. CFO or CEOs signing off on small projects is the new normal.

Your customers will have less patience for game playing, for unprepared sales resources, for timewasters, for uncertain ROI, for projects that don’t deliver on their explicit promises. If your message is not crisp, if your sales teams are not professional and polished and consultative, “below quota” will be the new normal. And nobody wants to live there.

Thanks,

Lee

The Chief Sales Officer

Peter Drucker said that "the purpose of marketing is to create a customer."

But just as the title of Chief Marketing Officer grew from the ascendency of the marketing role in the 1990s, sales is now in its own ascendancy. As marketing becomes more complicated with customers informing themselves via the Internet and social media, selling as a function (finally) has risen to a high level of importance in most B2B organizations.

Today, the strategic purpose of selling is to create clarity for a customer, helping them to answer the question "what should we do?"

As a result, the selling function has risen to the other "C-level" functions. The title is only now catching up.

It's still an unusual title, almost non-existent a few years ago. Do a search on Google or any of the career sites and "VP Sales" dramatically outnumbers "CSO." I've run across this title only a few times:

• AMD and Intel have CSOs
• Don Grantham, recent addition to HP, uses the title
• Mary Delaney was CSO at CareerBuilder before she became president of Personify, a CareerBuilder subsidiary
• Paula Shannon has been CSO at Lionbridge for some time
• Scott Rudy, former VP of Sales at salesforce.com, is now CSO at Savo Group

I expect the title to become more common (and embarrassingly, I should have posted this particular blog entry before I assumed the title!). Sales is now a critical function of any B2B organization and the sales organization needs a seat at the executive table, with operations and finance and marketing and people (what had been called HR).
With sales at the executive table, customers have a direct pipeline into strategic decision making. Sure, marketing organizations are chartered with collecting and delivering the "voice of the customer" but there's nothing like the voice of someone who has voted with his or her budget and has substantive input.
As a newly minted Chief Sales Officer, I'm learning the responsibilities inherent in delivering this input from the field. As a simple cost center, sales was less accountable for the results of their demands. With this greater visibility comes the responsibility of making the best decisions for the company and the customers.
I expect that my fellow CSOs are finding similar responsibilities. At the table with the rest of the executive team we represent the view from the outside. At the same time we have visibility into other company activities in a way sales never had before.
Personally, I welcome that responsibility. Together we are stronger!
Thanks
 Lee

This Fourth Quarter

This fourth quarter is the most important of the decade.

Two weeks ago Ben Bernanke stated that the recession is probably over. Housing starts are up. The leaves are turning (at least in New England) and business people are starting to believe that the light at the end of the tunnel may be something other than an oncoming train.

We are all breathing a collective sigh of relief. It has been a difficult year...and for many, with the official unemployment rate scraping 10%, challenges remain.

Yet a sense of optimism is evident. And just as I predicted early in the year, budgets are now starting to open up. Mostly marketing and sales budgets, by the way. There hasn't been a general unleashing of capital investments or discretionary spending. That will come later, in mid-2010 and beyond. For now, the increased spending is coming from organizations that want to position themselves for success in 2010.

And that's why this quarter is the most important of the decade. The results of this quarter will drive discretionary investment decisions in 2010. If you want to have a good 2010, you must deliver the goods this quarter. Success in this quarter will help to ensure access to funding for the next quarter and the quarters beyond that. Mediocre or poor results this quarter will cause a significant rethink of sales and marketing strategy.

Many C-level executives and corporate boards are thinking: "Okay, you've had a year to figure out the current environment and to make the necessary mid-course corrections to ensure a reasonable result by the end of the year." Prove them wrong and your successor will be working on a very different action plan, one that involves wholesale shedding of divisions or organizations, cuts that go far deeper than the 5-20% layoffs we've seen already.

There hasn't been a single more important three month stretch this decade than perhaps the fourth quarter of 2001 for the travel industry. At the time I managed a business that built and sold technology services to road warriers. Road warriers were grounded on September 11th and my business went poof. The entire travel business was reshaped in that quarter and the airline industry is very different today as a result.

Your opportunity is to prove, in the next three months, that your business is both viable and thriving. With a focus on "co-creating" value with customers, you may have a chance. Customers today don't want to be sold to...they demand consultative sales people who work with them to boost profitability, reduce costs, increase shareholder value, make a difference in their world.

The critical success factors are simple and straightforward:

• Focus exclusively on the prospects and customers who value and need your specific value proposition, your differentiator.
• Narrow this focus to those who are committed to short term improvements in their business.
• Ensure that your sales people fully understand the business processes and challenges of the individual prospect, not the group in general.
• Commit to value-adding rather than transactional behaviors. You may think that hard selling will work in this market. It hasn't for years and it certainly won't now. You might "win" a few deals but you're destroying the relationships that bring long term profitability.

Focus on making a difference in your customer's world.

Thanks,

Lee