Tuesday, February 27, 2007

Your Company's Sales Alignment

Early on the last day of the quarter, one of my top sales reps brought to me a large order from a Fortune 500 company. I congratulated the salesperson and asked them to book the order for the quarter. They told me that they could not book the order because our controller would not sign off. I visited the controller with the sales order in hand; at the time we had a policy that any orders over a certain dollar level required the controller’s signature. The order would have placed the sales rep into a bonus situation, and the order just by circumstance would push the quarterly results for the company into new territory. The controller looked me in the eye and said, “I am very busy and I am not going to drop what I am doing so some salesperson can make their bonus.” To settle the order booking issue we had to go to the top of the organization to establish the company’s priorities.

Not booking the order would have sent several poor messages to the sales team;
1) There is no sense of urgency for sales success in the organization,
2) Success of an individual that benefits the organization is not important, and
3) Sales is not a respected contributor to the organization.

Usually the sales team is the lifeblood of most organizations. The sales compensation plan is a key element to motivate or demotivate people on that team. 99% of salespeople are not looking for a “hand out”, they are looking for a pay package that makes sense, has a reasonable chance for attainment, and is linked to the overarching objectives of the organization. Treat your people like adults and you will get more of their attention at crunch time. Increased attention equates to increased sales.

I recommend you taking an inventory of your organization, and taking note if everyone is aligned behind the success of the sales team? If they are not, what is the reason for this condition to exist, and what impact is it having on your success? Selling is challenging enough without having people in the organization that are not supporting the sales objectives of the company.

Saturday, February 17, 2007

Setting Sales Goals

Setting sales goals is a core activity of sales departments. The establishment of the goal for annual, quarter, and month is probably the single most critical decision that shapes and drives a sales department. Every company needs and deserves a purpose built sales team that has the capability to deliver on the sales goals of the organization. When the sales goal is overlaid with the company’s offerings, the resources available, level of marketing support, route to market, market potential and competitors; a sales strategy can be formulated that dictates the sales tactics (sales plan). A sales plan simply outlines how the sales and marketing resources that are available are going to be allocated to achieve the goal.

Just setting a goal, without examining impact to the sales and marketing department is not a reasonable approach. A good everyday example of a goal without a reasonable plan would be someone who wants to loose 15 pounds in 90 days. That is a stretch goal and depending on the weight and health of the individual that may or may not be a good goal. Let’s assume that it is a good goal. A very bad plan to achieve this would be for the individual not eat until they had lost the 15 pounds. Not a very practical plan. The plan that sits behind a goal has to be reasonable to implement. The plan must have the resources available to permit proper execution.

If a developed sales plan calls for a 40% increase in marketing spend and 6 new hires to sales, but there is only budget for 20% increase in marketing spend and 2 new sales hires, then the success of the goal comes into question. The goal and the plan are tightly integrated because of their nature. The plan must be reasonable in scope, and look at potential contingencies.

As an example, consider a mythical company that the previous year achieved 50 million in sales; this represented an increase of 12% over the year before. Then let’s assume that management’s goal is to grow an additional 12% in the new year, this would put the new revenue target at 56 million. The question then becomes, what is the sales and marketing plan that has a high probability of achieving that goal, all other things in the market being equal (competition, disruptive technologies, major market shifts, degree of market penetration, maturity of market, significant new products, major changes in your go-to-market partners, etc). All things being equal, your sales force should become more efficient year over year. So the assumption becomes that to achieve a 12% increase in annual sales the sales budget would need to increase less than 12% (this is dependent of the relative size of the organization and market conditions).

When the goal is established, an assessment is made of the previous year’s success balanced against budget expenditures, a draft plan is built that accommodates the expected growth for the coming year, and the plan’s implementation cost is then forecasted. If goal, plan and budget are signed off on then the next step is implementation and measurement.

The goal and the plan must align. This seems so obvious, but I have often seen examples with little or no alignment between the two. Most often this happens when the sales plan is not adapted to fit the company’s product offering, the potential market and the internal resources available. Critical for success is a company’s alignment with the market, and the internal alignment of the sales and marketing team.

Points for consideration:

  • Goals need to be clearly defined
  • Company’s sales and marketing plans need to align to goal
  • Plan has to be resourced to the right level
  • At the very least middle management needs to buy into both the goal and the plan to achieve the goal. This is critical for success.
  • The entire sales and marketing team should believe that the goal is obtainable, and see a way forward to achieve the goal.
  • Everyone in sales and marketing must understand their role and their contribution to the company goal; if this is not clear then they become disassociated from the process of meeting the goal.
  • Senior management must be completely supportive of the goal, the plan and the allocation of resources to support that plan.

One last comment on this subject is that many times in an organization there is imperfect plan alignment and even internal plan conflict can exist. It is hard enough to develop customers and grow sales, but when there are core conflicts inside an organization it becomes doubly hard. There is never an environment of 100% peace, love and harmony; the complexity of an organization is too great to achieve that, and a small level of dissonance is not a bad thing. However, there should never exist a condition that takes the focus off of the plan and execution of the plan.

Tuesday, February 6, 2007

Customers Visiting Headquarters, Part 2

Corporate visits were a critical component of sales at a larger enterprise company I worked at. There were 200 to 300 customer visits per year at this company; sometimes there were three a day. We had a very nice corporate visitor facility; with dedicated staff, and with dedicated resources. Sales people, who wanted to have a customer visit staged, would call the visitor center and all of the particulars of the visit would be coordinated for that sales person and customer by the assigned visitor center staff.

I had an opportunity to see how the enterprise visit worked from the point of view of a “subject matter expert”. In a year-and-a-half I gave approximately 30 presentations on the company’s integration story. Each time after the visit the presenters were evaluated by the customer on their presentation quality, we received a grade, and the presenter with the highest grade at the end of the month received recognition for being recognized by the customers. In the 29 out of the 30 times I presented I was not briefed on the history the customer had with our company, what was the visitor’s objective, what was the sales objective, who the individuals were, their role in their organization and what was the customer’s objective.

The one time that was different was when a sales representative from Scotland came to my office the day before his customer was scheduled to visit. He had contacted me the week before and said he wanted to bring me up to speed on what he was trying to accomplish. He told me what the customer was evaluating for purchase, he told me why integration was important to his customer (my pitch was on integration), what he hoped they would learn from my presentation, how much they had bought from our company the last 5 years (year by year), who would be attending (and their roles), and he wanted to make sure I brought handouts of my presentation.

On most visits I knew only the name of the company that was in our visitor center, what room to show up at, and the time. At the end of my presentation the sales representative left the room with me and thanked me for presenting to his client, and gave me a rough appraisal of how it went from his point of view. Most of the selling that are supposed to happen on a customer visit he had prepared for.


From this and other positive and negative experiences I had at the visitor center I have developed a list of things that you might want to consider on staging a customer visit;

  1. Before the customers are on site have a crystal clear idea of what their objectives are,
  2. At the start of the visit list the visitor’s objectives and how you are going to accomplish those,
  3. Make sure the visit is designed to address the customer sales and product issues,
  4. Get executive sponsorship for each visit, at least have a letter from the CEO welcoming the visitors,
  5. Make sure the people involved are briefed, at least with a background document,
  6. Make sure the presentations are meaningful to the customers situation,
  7. If you are the sales representative, request a copy for yourself of every presentation (I have seen presenters with 80 slides that were slotted for 45 minutes, and would not leave the lectern till finished),
  8. At the end get feedback, not just on the presenters, but on how well the visit met the objectives your visitors had prior to the meeting,
  9. Have handouts that are related to the visitor issues that are uniform in appearance for visitors,
  10. Do not hold the visitors captive all day, provide breaks after most presentations, have the subject matter experts available for side discussion,
  11. Stay on time,
  12. Set-up a question “parking lot” for follow-up at the end of each session,
  13. Ask customers to sign a visitor wall or hang their picture (something personal) that leaves their mark on the company that day,
  14. Have sales person rate support staff, facilities, and subject matter experts (this goes to top sales management),
  15. Stay flexible, and enjoy the time with your customer.


The customer visit is an important sales event that requires careful coordination between the field and headquarters. When headquarters is in the planning mode they should not forget that the focus should be on helping the field close and support important and critical customers.

Sunday, February 4, 2007

Customers Visiting Headquarters, Part 1

The corporate visit is a part of sales that is typically only seen in larger enterprise sales. Customers or potential customers drop in on your company to receive an update on company’s direction and for assurance that you are the right technology partner for their needs, now and in the future. Customers that take the time to visit you are very serious about the relationship they have with you as a vendor.

At an enterprise software company I worked at, an outside consultant was brought in to look at our sales process and why customers bought from us. The consultant found out that over 70% of the corporate visitors who visited us bought a substantial amount of product and service over the 18 months following their visit. Typically a large enough purchase was made that the customer visit program was deemed a very successful part of the sales process. Customer visits are not always appropriate, and have to be a well thought out part of the sales and marketing process. However, the expense and effort that it takes to put together a successful program can be well worth it in building close relationships with key customers.