Why use Sales Processes?

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“Because of the predominant perception that selling is more art than science, few companies have sales processes that traditional sellers can execute. We believe that this deficiency is the single most important factor contributing to the disappointing results achieved with sales force automation (SFA) and customer relationship management (CRM) systems.”

- Michael Bosworth and John Holland, CustomerCentric Selling

Why use Sales Processes?

I believe that the most effective sales manager really is a sales coach. The sales manager should not be making sales calls any more than the football coach gets in the huddle and hands off the ball. The sales coach works behind the scenes to help sales reps improve their fundamental skills and to help lay out a game plan.

Just as a game plan is critical for the football team to win, so too is the sales plan essential for consistent success. While a sales plan may be very unique for large opportunities, every good sales plan follows a similar sales process.

A well-defined and automated sales process has several benefits, including:

 Improve the effectiveness of each sales rep: In his book CustomerCentric Selling Mike Bosworth points out: “We believe with equal or even slightly inferior offerings, companies can make the way their salespeople sell a differentiator. These organizations can win on sales process.” A good sales process can make good sales reps into better sales reps, turn your better sales reps into your best sales reps, and make your best sales reps into superstars. If done correctly, a sales process encourages the use of “best practices”, replicating across the sales force those actions that have yielded the best success. Automated steps also can be performed faster, easier, and more professionally.

Proprietary Information of SalesPath Corporation Page 2 of 9  Increase your close rate: By encouraging a solid sales process, reps should spend less time

on poorly qualified opportunities. They also can more easily maintain consistent

communications with customers, providing the right information at the right time. A study by CSO Insights revealed that companies that had an automated sales process that was taught and monitored closed as much as 5% more deals than those that did not. How much is 5% of your pipeline?

 Ramp up new sales reps faster: With the total costs of account executives exceeding $250,000 per year according to one study, every month that a new hire is not ready to take on their own sales represents lost opportunities and revenue. With a well defined sales process, new reps can get up to speed on how to sell your products much faster.  Better utilize marketing collateral and sales tools: As Mike Bosworth also reports in his

book, “Feedback from the American Marketing Association’s Customer Message

Management Forums indicates that between 50 and 90 percent of the collateral prepared by Marketing is not used by salespeople in the field.” The sales process can team Marketing and Sales together to make sure that the right information can easily get to the right people at the right time. Again, as Bosworth notes: “Marketing must view itself as the front end of the sales process, rather than the back end of product development.” A sales process can send case studies, customer testimonials, references, product sheets, and other marketing collateral as PDF attachments with an email message “word-Smithed” by Marketing and not a sales rep with little time to type a message. Product messaging can become consistent and complete.

 Reduce needless sales expenses: A well defined sales process includes milestones and checkpoints to ensure that an opportunity does not advance to the next step until the deal is in the right situation. Avoid applying expensive consultant, engineering, and sales support resources on poorly qualified deals just because the sales rep asked for them. In addition, you can reduce the inventory of marketing collateral in the field while ensuring that the rep is sending out the right version of a product data sheet and similar information.

 More accurate pipeline: Without a solid sales process that monitors what has been done and what yet is to be done with checkpoints, a sales pipeline is no more than each sales rep’s opinion. A sales team often includes both sandbaggers and eternal optimists. Sandbaggers forecast a deal only after they get a verbal commitment or letter of intent. Eternal optimists think that they will win every large deal they hear about. The sales manager needs consistent measures to determine where to apply resources, given such variety and opinions.

As Bosworth states: “What if we could codify the “artful” behaviors of the customer-centric sellers? What if we could build those behaviors into our sales processes and messaging? The truth is that all salespeople,

Proprietary Information of SalesPath Corporation Page 3 of 9 and in particular traditional salespeople, can become more customer-centric, and can produce at higher, more predictable levels. In fact, we have found over the years that a traditional seller following a good process is likely to outperform a naturally talented seller who is winging it.”

Most companies do not have a defined sales process. Even those that do have one defined find that their sales team does not follow the process.

Sales reps will use only those tools that they believe will make them more successful with the least amount of effort. They are students of the School of What’s in it for Me? Just because their sales VP says to do something does not mean that it will get done. In order for your company to successfully use the sales processes, you need to make certain that everyone in the sales team recognizes how it can help them. Why use a sales process? The answer, quite simply: those reps that use a solid sales process sell more. As Stephen Miller, the co-author of Strategic Selling and sales process guru, notes in his new book “The New Strategic Selling” what his company looks for when hiring a new sales rep:

“Not one in a hundred of our [account executive position] candidates was able to identify the real reason for his or her success. Usually, in trying to pin down the essential ingredients, they talked about luck, connections, or hard work. Only a tiny fraction understood that it was the way they went about their work-what we call their methodology or process-that was the real clue to why they did so well.”

Miller hires reps that have a process. As he notes: “If you want to predict the next sales representative of the year, the next star regional manager, the next national account executive, find out which salespeople are analyzing their own methodology, which ones are constantly reassessing sales strategy and tactics, which ones are looking for reliable, repeatable methods to improve their competitive edge.”

Adds CRM guru Barry Trailer: “Process is the roadmap by which we get things done. In sales, everyone has one, whether they're conscious of it or not. Usually their processes are not clearly articulated, almost never documented, and almost always individual.” We agree with Barry. Most successful sales reps have a sales process that they follow deal after deal, and which they are constantly refining. Most, however, do not call it a “process”, which is not cool in the sales world. They may just say that they are “experienced” or “sales savvy”. But nearly every top sales rep does indeed have a process they step through consistently. The opposite often is true about the least successful sales reps: they have no process. Each deal is unique. They react to whatever the customer asks for, even when driven by a competitor. They have no game plan to present to the customer. They are reactionary. And, they often lose deals at later stages after committing large amounts of resources and time.

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What is a Sales Process?

“Sales process: A defined set of repeatable, interrelated activities from market awareness through servicing customers that allows communication of progress to date to others within the company. Each activity has an owner and a standard, measureable outcome that provides inputs to another activity. Each result can be assessed, so that improvements can be made to (1) the skills of people performing the activities and / or (2) the sales process.”

- Michael Bosworth and John Holland, CustomerCentric Selling

When I took on my first sales management position I started by interviewing the members of my new sales team. Some were “seasoned” account managers with over 10 years of experience selling mainframe computers (at that time you only found “servers” in restaurants). Others were “rookies” with less than a year of experience. None were exceeding quota.

One of the rookies was pleased with his success on a large account, havinggone after an “elephant”. An elephant in sales-speak is a large opportunity with a large company. Elephants often takes 70% or more of a sales rep’s efforts for several months. While this rep did not win the business, he was very elated when the prospect told him that he had come in second! Compared to the lack of any success with such large accounts, second place seemed to him to be a win.

Another rep had been spending nearly all of his time in the office preparing proposals and configurations. He always had a lot of big deals in his pipeline, but his close rate was horrendous.

None of the reps had any plan for pursuing new customers. None had a plan on how they would approach a new deal. All were being considered for termination. None were close to meeting their quota.

The “seasoned” sales reps were not open minded towards a new sales approach. After all, they were “experienced”. They made quota every third year or so. Some of the rookies, however, were open to suggestions. They knew that, unless they improved quickly, they would be on the streets.

When I was a rookie sales rep, my sales manager gave me an article that described the IBM sales process. This sales process was similar to practices prescribed later by sales methodologies such as Strategic Selling and Solution Selling. The process required presenting a qualified prospect with a written “game plan” for how they should go about evaluating the IBM products. This plan was divided into stages. Within the stages were steps. Not all of the steps were required, but some milestones were mandatory. There were steps to be done by the sales rep, and some steps to be done by the prospect. The evaluation never would proceed to the next stage until both the sales rep and the prospect agreed that there was value in

Proprietary Information of SalesPath Corporation Page 5 of 9 I took this sales process to heart and decided to try it. When I explained this process to my peers, they laughed. They felt that no prospect would agree to such as plan. But I discovered that the first prospect I presented the plan to loved it.

Soon I was using the plan on every deal. Within a few years I discovered that when I got beyond Stage 1 in the plan, I closed nearly all of my deals.

I soon realized that I could create “sales tools” for most of the steps. For example, in one stage there was a “requirements analysis”. I prepared a set of questions to ask the department managers I interviewed so that I could focus more on the answers and less on coming up with the next questions. My “toolkit” included a “First Call” kit, with hand-outs passed to the customer as I explained a particular benefit or case study. The hand-outs were often passed around the company I was selling to, including to some decision makers or influencers I had not yet met. I then created a “Second Call” kit and a “Third Call” kit. My sales toolkit soon included a page of references, case studies, a proposal template, a sample project plan, and a ROI calculator. I would refine and update many of the components of the toolkit. I found that with the toolkit already to go I could spend more time in the field talking with customers.

When I took on this first sales management position, I suggested to the rookies that they develop a similar plan and toolkit for their territory. I helped them build these toolkits. I then coached them as they made their customer visits.

These rookies were amazed at the reception their “plan” and toolkit made. Not one prospect declined to use the suggested “evaluation plan”. In fact, the prospects were impressed at the organization the rep revealed, since most of the steps covered concerns that the buyer had. In one instance, the prospect mentioned that he was concerned that the new system could not be implemented in the short timeframe his company had. The sales rep then presented the sample project plan. He noted each of the key steps and the risk areas. This prospect signed the order that week!

The rookies soon were out-performing the seasoned sales reps. In fact, within six months two of the rookies were at the top of 75 sales reps in the region in quota performance. They continued to be at the top for years to come. Today one is founder and CEO of a successful company and some of the others are senior sales managers.

I tell this story to illustrate the possible success of an effective sales process. As Bosworth points out, a sales process has Stages and Steps within the stages. The steps, however, must be more than checkpoints - more than a Big Brother checkbox for “did you do what I told you to do” step. The steps must do

something. They must be part of the evaluation plan, and they must be part of the sales “toolkit”. They must be repeatable actions that most reps, given enough time and energy, would like to use.

A step often includes a piece of marketing collateral such as a case study, a white paper, a reference, a product data sheet, or an article that can be given to or sent to a customer. Salesforce email templates

Proprietary Information of SalesPath Corporation Page 6 of 9 serve this purpose well. Perhaps 70% of your steps will be email templates. A step may include documents, such as a proposal template or a survey questionnaire. A step also might help qualify a prospect. Keep in mind that in a consultative selling process the rep is not “selling” anything. The rep is focused on problem-solving; finding out what problems or opportunities the customer has and determining, with the agreement of the customer, if his solution can resolve the problem. The customer is an active part of the “buying process”. As Barry Trailer mentions, “The ability to track not only the selling cycle but also the buying cycle is integral to real forward motion. In a seven-step process (lead through close), a seller can perform all his actions and be at step 7, while the buyer is still way back on step 2.”

Many steps in the sales process may be “educational” and not directly related to the product being sold. Some article reprints may be of this nature. As Trailer notes: “When meeting buyers for the first time, the salesperson’s primary focus should be to build rapport and trust. Without rapport and trust, it is unlikely that buyers will share their goals and virtually certain that they will not admit problems to a salesperson.” Educating and learning about a customer is often more important than presenting a product.

Best Practices

A sales process can be just as likely to fail as using no process if not done right. Remember – most reps by nature will resist change and fight managers telling them what to do. So take the time to approach your sales process in an enlightened manner. Make sure that you do it right the first time. There will be no second chance.

SalesPath recommends the following “best practices” when defining and implementing a new sales process using a CRM tool such as Salesforce:

1. Get buy-in: A sales process created by the sales VP and dictated to the sales team almost always fails. Only when reps are involved in defining the sales process and take ownership in it can a sales plan really succeed and be adopted. We recommend creating a Sales Process Team that consists of 2 to 3 successful sales reps who are respected by their peers. Also select one or two from product marketing, someone from sales engineering, a sales operations person, a regional sales manager, and the Sales VP. Once the sales process is defined, sell it to the sales team. Make sure that the sales reps on the Sales Process Team spread the word. Evangelize the process by reporting early successes.

2. Start with your most complex sales process: As Mike Bosworth recommends, you should start with your most complex sales process. You then can add other processes by removing some steps from this initial process. For example, your most complex sales process might be for a new customer sale to a Fortune 1000 company. The subsequent “standard new customer” sales process might be a copy of this initial sales process with steps such as Headquarters Visit or Meeting with Your CEO not included.

Proprietary Information of SalesPath Corporation Page 7 of 9 3. Do not require all steps: Early approaches to automated “sales processes” usually forced each rep to

do each step in the pre-ordained order. This was hard to sell, since no two sales are ever alike. Sales reps reject the inability to control the sales process. We suggest that you use the sales process as an “outline” for the sale, but allow the rep to do steps in a different order or not at all. Many of the steps are there just in case the rep may need it. As you get more experience with the sales process, refine it. Add new steps based on feedback from the reps and drop those that are not being used.

4. Assign tasks to be done: For each step in the process, assign someone with the specific task to be done. For example, if there is a need to have a ready list of references to send to a prospect, assign someone in marketing or sales operations to create the list, and then to keep it current. If a case study is needed to validate a feature, then have Marketing create one. This is where Marketing and Sales meet for a common cause, creating tools that actually might get used consistently. Track each assignment.

5. Define multiple sales processes: You most likely should have more than one sales process. Selling to a large, Fortune 1000 corporation, for example, is different than selling to the typical customer. The Fortune 1000 prospect may need to visit your headquarters, or meet at a customer’s site to determine how they are using your products. The large sale may include a response to a RFP. A meeting between your executives and their executives may be helpful. Many of these steps are not used much for other types of sales. So, you may have one complex sales process called “Fortune 1000” and another called “Standard Sale”, which usually is a subset of the more complex sale, with fewer steps. Yet another sales process might be defined for the add-on sale to an existing customer. Start with the more complex sales process first. Once this is refined, then define other sales processes, making a copy of the more complex copy and removing unnecessary steps.

6. Off-site meeting to define the sales process: SalesPath recommends that you have a full-day, off-site planning meeting for your sales process team. Go to a hotel conference room, order plenty of coffee, and turn off the smart phones and tablet devices. We suggest that you designate a “meeting

facilitator” from outside your company, or at least someone internal that has no stake in what gets defined. The facilitator makes certain that progress is being made, and that everyone gets chances to contribute. SalesPath sometimes acts as the facilitator. We start the meeting by first defining the customer buying process. This is a team effort, with some interesting discoveries made when everyone looks at the sales cycle from the customer’s eyes. Pay close attention to when the buying cycle begins. It usually starts long before the opportunity is defined. Identify the concerns that the buyer may have at points along the way. Cost, for example, may be less important compared to risk at the end of the buying cycle, with product features being even less important. Then give each team member several index cards. Have them write down the “actions” that they tend to do during a sale. Do not discuss these yet. Give them ample time to write each down on a separate card. The facilitator then collects

Proprietary Information of SalesPath Corporation Page 8 of 9 the cards and writes down each unique step on a white board or easel pad. Add checks next to those actions that are listed multiple times. After all have been listed, discuss the merits of each action. Have the team vote on the value (1 to 3) of each action. With the top 20 actions, decide the best order to do them. Note what “buying concern” is being addressed by the action. Are there any concerns of the buyer that has no action associated? Once the actions are defined, define your stages. How close are your sales stages to the buying stages? Define a milestone for each stage that must be completed before advancing the opportunity to the next stage. Milestones might be steps such as getting the customer to agree to a requirements survey (perhaps even signing an approval doc), reviewing (not just emailing) a proposal with the Executive Sponsor for the project, confirming the ROI with the customer, getting a letter of intent, or even determining who the Executive Sponsor is.

7. Customer actions: Make sure that the sales rep is not going down the sales path without the customer doing something. If you are not being seriously considered as the vendor of choice, then you may be doing a lot of work while the customer refuses to do any. As Bosworth writes in his book, “For vendors reacting, it will be a short sales cycle with little or no chance of winning. In many such cases, the buyers knew from the start which vendor they wanted to buy from, but they still had to get others to bid. In other words, these buyers are simply going through the motions to demonstrate to senior management that they did sufficient due diligence….The worst thing a salesperson can do for him- or herself and the company is to go the distance and lose…Two vendors win in every predetermined sales cycle: the company that is awarded the business and the company that has pulled out early, giving itself the chance to pursue other winnable opportunities. All the other vendors invited in go the distance, only to be awarded a silver medal.”

8. Describe the “evaluation process” to the customer: At an early stage of the sales process, add a step to describe the “evaluation” process to the customer. Do not be shy about pointing out early on that at the end is an order being placed if the customer is convinced that your product fits their needs best. If the customer is hesitant to agree to your process, red flags should appear.

9. Include a “deal review” meeting: For opportunities over $50,000 SalesPath suggests a “deal review” meeting between the sales rep and the rep’s sales manager. This meeting is even more important if additional resources are necessary as the deal progresses. It often is too easy for a sales rep to ask for a sales engineer to fly to New York Monday morning for a demo or analysis while the rep has not even met the key influencers in the deal. The “deal review” might be a Strategic Selling Blue Sheet or something less formal, such as a questionnaire that is then discussed between the rep and the manager. Much of the needed information should be included in the CRM. The manager needs to be a “coach” at this point, but also be wary of a deal where many red flags pop up. It is our experience, for example, that most sales reps will spend a lot of time with one contact at a company and have virtually no one-on-one meetings with key influencers. Only after the manager is convinced that the

Proprietary Information of SalesPath Corporation Page 9 of 9 deal is solid and that the bases have been covered, should the deal progress to the next stage. In many instances, the rep may be directed to go back and gather more information or make more calls. 10. Continue to refine the process: No sales process is ever “complete”. If some steps are not being used

frequently, consider dropping them. Always consult with the sales team to determine what additional steps might be added. In addition, refine your current steps and keep them current.

Commit the right resources

Most companies we find get excited about using the sales processes and the sales reps look forward to using them, but then the project falters as the marketing collateral, email templates, and other items in the sales process are never created. A sales process requires a resource commitment by your executive team, by sales management, and by marketing. Be sure that you have the staff and resources to undertake this effort as well as to maintain it over time.

We also find that most companies do not have a well-defined sales process that reflects the current sales environment and accepted by the sales team. SalesPath suggests that you get outside help to guide this definition and to help you structure it.

“If management can proactively assess the quality of what is in the pipeline and help salespeople disqualify low-probability opportunities earlier, pipelines won’t be filled with hopes and dreams. Without a process, conversely, management tends to be a series of autopsies performed on dead proposals or lost orders. With process, corrective surgery might have been possible, and the outcome could have been a win.”

- Michael Bosworth and John Holland, CustomerCentric