There are three main aspects to sales: Planning, Selling, and Tools. This talk from Stephen Allott takes you through the journey of planning for success and which rules and tools can help and hinder your organization. From generating good leads, to spotting good sales people and how to motivate them to be better.
Over 30 years Stephen has seen the evolution of software and tech companies with a fascinating career spanning computers, strategy, software , universities, chairing 8 companies, Government, and most recently in AI gaining a wealth of experience and some great insights to share at BoS Europe 2018.
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Stephen Allott: Sales. That’s all you need to know. Just the one word, ‘sales’. Thanks Mark, we’re done!
So who in the room is happy with their sales performance? Put your hand up. Well I can’t see any. That’s presumably why you’re all still here. Well at least in this session. Maybe I’ll start to worry about whether you’ll still be here in the years to come.
Let’s get to know you a bit more just to understand, who’s a founder or in commercial management of a software company? And who’s something else like a V.C. or a consultant or thinking about doing a startup? So, the vast vast majority of you are running or helping run your software company.
Mark gave me the last slot of the day saying “make it entertaining” and “give them all a good send-off”. But software sales is actually deadly serious because it’s the lifeblood of the business. It’s so serious that I was concerned about getting here on time and I love the Barbican so much – it’s got everything; it’s got concert halls, it’s got cinemas, it’s got lakes, it’s got restaurants, and it’s even got plants growing in glass things. But it’s quite hard to find your way around so I got here yesterday morning… I tried to find the Businesses of Software conference, and I finally found it about lunchtime today! So I managed to arrive on time.
So a few things about me and then just to introduce myself. I’ve done a number of things through my career. Been in the computer industry about 30 years. Stopped off at McKinsey along the way doing Tech strategy. Then I was lucky enough to end up in a scale up called Micromuse for six years that we IPO-ed on NASDAQ. Spent three years in the Cambridge University computer laboratory – not as a techie but so doing business advice and strategy for the head of departments.
It’s been a long eight years, I think, one way and or other helping make Red Gate grow. And it’s a fantastic success. It’s good to see lots of friends here today. I then got lured into the cabinet office in five years doing a job called Crown Rep SME which was introducing innovative smaller suppliers to the £44 billion that central government spends every year. Most recently I’ve done quite a lot of chairmen and NED roles. Right now, I’m working on official intelligence doing a study for the Mayor of London about how to turn London into an I.T. cluster. So that’s sort of my headline. What I really like though was cycling. Up things like Mont Ventoux which was done that about 25 times which is very challenging I think was a bit thinner then!
In terms of sales I’ve got sort of two experiences which sort of shape my career. This was this sales in Micromuse; we grew a lot. That was in the last century now, so I can’t really live off that one. More recently in the government we started something called the G-Cloud Digital Marketplace and I didn’t found this I wasn’t in charge of it but I was involved in promoting it around the country, recruiting a bunch of suppliers working full time and doing the growth strategy so can feel I contributed a little bit to this growth chart. Which is more recent 2012 to 2018. It’s an online website which is really a catalogue for cloud services and products and consultants and developers to build Government digital and cloud implementations and I think it’s transacted over £3 billion since it started.
So that was a hell of a lot of fun.
Serious business of Sales
So onto sales – the serious business of the rest of the afternoon. How to succeed in sales. There are three buckets really to this; one is planning it correctly; second is actually doing the selling; and thirdly using various tools to help you get along.
Those are my three headings as you can see within each in planning you’ve got to get the right number of heads of the right profile. Secondly you’ve got to pick the markets to target. Third you’ve got to design sales territories. The reason I keep looking down there is my glasses aren’t good enough to be able to see the screen down here. So I might turn around and look up here. Then once you plan your organization the next thing is you get around to is actually selling. And you’ve got to decide your lead gen tactics. How to design your sales process and how to compete with your competitors successfully.
Along the way there’s various tooling you use. I’ve put targets and comp plans as a tool because it’s part of the way you run the business. Forecasting is another important tool. And finally – and this has been evolving a lot over the last few years – the technology systems and support tools like Salesforce.com or HubSpot becoming more and more important. So those are the nine areas I was thinking of talking about and of course they go across digital sales, inside sales, and field sales. That turns out to be 27 different areas to cover in about 45 minutes. Mark and I were talking about this and we did a little survey of what you were most interested in, so here are the answers: the number one topic by type of sales is inside sales – you’re most interested in that. You’re next most interested in digital and then field – which is people in BMWs arriving at customers in suits trying to sell them stuff – is less interesting which I guess kind of fits with the way the software business is evolving. Then on the other axis. The number one topic is sales process design which I think translates into you really want to understand how to sell stuff, is that right? Are you thinking of that’s actually how when you’re talking to a customer are you moving along the steps.?
Audience member: Understanding the key checkpoints and key metrics
Stephen Allott: Okay so the steps in the sales process and some of the key metrics. So that’s your number one area of interest. The next, interestingly, is Targets and Comp Plan Design so we can spend quite a bit of time on that. And the third biggest area of interest is designing a great team through the heads, the hiring, the organization structure at the top. And the fourth is how to do lead gen. So as we go along I’ll bring out a bit more on those. We’re going to start with your most popular topic which is inside sales. And the very important topic of how do you design your organization to do it? Inside sales means people who stay in the office using email/telephone/video to interact with customers, but don’t get in a BMW and go visit them. So that’s what typical people mean by inside sales. There are other terms for it but that’s a pretty good one.
Organization
Now how do you organize those? So you’ve got to decide firstly what geography you’re going to cover: are you just going to cover the U.K. or you’re going to go into English speaking markets around the world like the US and other Commonwealth countries or you’re going to go to Europe or South America. I’ve worked with one very successful tech company who from London ran a big call center inside sales operation covering all European time zones and most European languages. From Italian, Portuguese, Spanish, Polish, German, French, some of the Scandinavians, covered South America, Brazil, and in the early days North America.
It’s quite a revelation about what geographic coverage you can get from one inside sales or telesales operation. And I know Redgate done a similar sort of thing that’s more in the past and more recently unbelievably successfully. But you’ve got to decide what geographies you’re going to work in. Then within that you’ve got to decide whether you going to organize by vertical industry within the geography, or within the geography just divide up the country into geographic areas. Whether you’re going to pick customers by size. You can have a group dealing with big accounts a group dealing with medium sized ones a group dealing with small ones so you can organize by size. Another popular organization principle is new customers and the customer base and maybe a separate team doing renewals.
So when you do the hiring you’re going to have to have some view about that because if you’re having someone to serve Germany they better damn well speak German. You’ve got to have an idea of your market focus and territories – which are the second and third topics on this – when you do your design at the beginning. So far I’ve just been talking about the salespeople themselves but it turns out that the first line supervisor role is absolutely critical. Sometimes they’re called Team Leaders, District Managers they can be called.
But that first line supervisor role, research shows, is probably the biggest lever on success. When I’ve tried to recruit them or promote them, that’s actually been one of the hardest things to do – I don’t have any simple answers to that – as long as you know that maybe they’re in really short supply in the industry, I think they probably are. But if you know that, that’s a pivotal success lever; it’s something you can focus on. So that’s something about the organization structure, I guess, at the top. If you’ve got multiple sales teams you might have a sales director on top and a popular question I’ve been asked over the years is “do you hire bottom up or top down in line” with two high reps and then put a manager onto that would you have the manager and let them hire their own people. I see some faces nodding in the audience. I don’t think there’s absolutely a right answer to that but I’ve slightly preferred the bottom up rather than the top down. Just for speed and for reducing risk because it can take quite a long time to hire a sales director once you’ve hired them then how their salespeople so that can take quite a long time. And if you get the sales director hire wrong then everything underneath would probably be wrong. But if you’re hiring bottom up. Three or four people there’s a chance some of them will work out and some won’t.
Productivity
So we’ve thought about organization. Then the next question is how many should you be getting and over what time. So the numbers – this is part of planning – and the usual way of doing that, whether it’s inside sales or field, is having some idea of the productivity; what’s the yield going to be of each sales rep? It turns out there’s some pretty hard metrics on that. Some pretty predictable ones that you can go off. So you should be able to find out what the sort of expected yield per rep is and secondly the ramp rate so you hire them and it can take often six months to get them to come up the productivity curve. So you can actually do some reasonably accurate calculations on how many of these people you need.
The final thing and probably the most important thing on setting up your organization is hiring good people, because they have a lot more effective than people who aren’t quite so good. And one of the things I’ve found with technically led companies, often headquartered in Cambridge who think they have an absolute fantastic product and the world will beetle past their door to buy it, is they often haven’t hired reps before. So if you haven’t hired reps before, how do you know you can get good ones or how do you know who a good one is? I think the simple answer to that is get help. Try and find someone through your network who’s done this sort of thing before and get them to help you in the process. And there’s quite a few steps into hiring good salespeople. You’ve got it explained to in either the job ad or the recruitment agency or on your website what sort of person you’re looking for. And there’s many different shapes and sizes of them but one of the important things to remember is you’re selling not buying.
You’re trying to persuade really great people to join you probably when you’re in your fairly early days that they might want to go and work for Google or Amazon or something big and might not want to work for a smallish startup that has uncertain prospects. So it’s really important remember you’re selling not buying. Another characteristic of the really top salespeople is: they’re pretty careful about investing their career in a company and it’s prospects. They want to know it’s really good, that they’re a bit like investors they’re investing their career and probably several years. So the really good people would due diligence you quite a bit, that’s a very good sign. But then if you asked. What would be the number one characteristic of a great salesperson? My answer would be motivation, rather than any other characteristics, because it’s a pretty tough job and you get a lot of rejection. You’ve got to be highly motivated to keep going, you’ve got to be highly motivated to learn, and highly motivated to keep trying even when they’re facing adversity. So those are some of the sort of things I’ve learnt about building a good organization.
Briefly now on inside sales I’m going to talk about focus: which bits of the market do you focus on? Now again when you’re small this is really crucial because you can’t attack or try to sell to the whole world when you’re small – you just don’t have the resources. And if you don’t concentrate in some areas you probably don’t understand a market to enough depth. To really make traction in it. A related factor is in many areas of software you only really make money once you start to dominate. If you’re a small company, it’s fairly obvious that you can only dominate a small market within the foreseeable future. So how do you pick your markets to focus on? In the market these days, one of the things that led to that great explosion in sales is I pretty much got lucky in terms of market focus because when I joined them, I was really obsessed with the growth of the Internet. One of the markets I really wanted to penetrate was Internet service providers. Which luckily had a number of characteristics which I think is still applicable today. It was a small market began to grow explosively. We had a product that had a massively superior technical fit and value proposition to any of the competitors. The main one of those was HP so the third characteristic is you could get a list of them. And pretty much find them all up or email or invite them to seminars to try and sell to them. The fourth was the competition had completely neglected them because they were so small. HP were much more interested in selling to Vodafone or AT&T than they were selling to rinky dink little Internet service providers and another thing that was really handy is they didn’t have long procurement processes because they were small companies they could buy very quickly based on your technical features that you didn’t have to go through single sourcing procurement type processes. And the final thing, that was really handy, is when they picked the standard which happened to be us in our particular area. That was very influential in other bigger markets. So you take all those characteristics that’s like a filter for how you choose some of your early focus markets.
Now that ties back to your sales organization and the next topic ‘territories’ we already touched on some of the questions in relates to organization like what geographies do you target; which verticals but by now we probably pick those; what size of customers you try and sell to – small or large or medium. And bear in mind that as I mentioned earlier the small ones buy a lot quicker than the really big ones. And I know a lot of fintech that are sort of beached on the year long procurement cycles in big banks. When you organize your territories do you have people focusing on the base or new business or do you in territories have named accounts. So if you’ve decided that you’re going to sell to E-commerce type companies you could give a rep every e-commerce company in the UK or even Europe or on the planet. We could say here’s 20 that we think are particularly fertile go focus on them. What I’ve learnt is often the fewer accounts the sales rep has to focus on the more successful they are. Because they have to really drill indepth into the 10 that you give them to target something like that than if they have an opportunity list of 500. So that’s territory design. Now moving on to one of the topics that you’re really interested in.
Lead gen
Lead gen. Everyone wants to know about lead gen. What are some of the things I’ve learnt about that. Now the first thing about lead gen is you’re really going to try lead gen in the markets you focus on it sort of links to the focused question you can’t really skip the focused question before getting into lead gen. There’s probably a dozen different ways of working probably more.
But invariably, I found, that the number one source of leads is word of mouth. If you’ve got a good product word of mouth it’s going to be the biggest driver. And if you google on the internet how to do word of mouth marketing, you’ll find tons and tons and tons of stuff about how to drive it. I’m not going to try and summarize that today but that’s really worth looking into. Word of mouth. Then other tactics writing content like white papers or useful stuff that people will find when the search on the internet come to you. And you can capture their contact details when they download it. Another one is building up an email list and spamming everyone on the planet with your email newsletter and monitoring the open rates and hoping that yields something. Another is search marketing by Google AdWords. Link to SEO but just concentrating on AdWords; that’s a hugely popular thing to do. Display advertising. Some variation on internet advertising and ad retargeting people like Criteo. Well if you looked at something it follows if you look at that pair of boots in the shop it will follow you around the internet. You’ve probably all seen that. Paying influencers to blog about you or brief them on your products. Having YouTube videos and placing pre-roll ads in front of them by what you do. One of the newer things I’ve got educated on recently is using Linked In to email people. And if you’re targeting a particular market you can you can find people in particular like e-commerce find the companies that go on Linked In to track down key job titles. In fact let’s do a quick hands up here in the audience has been using Linked In for that kind of thing – put your hand up. It’s a pretty popular. We found it unbelievably effective actually. So I think Linked In is one of these tools that’s really really growing in popularity. And then, last but not least, inviting people to webinars. So there is a vast menu of what can work for lead gen.
What particularly works, things like Linked In, one thing I learned recently in terms of email contact is personalization has a hugely higher yield than non-personalized emails. It takes a bit of effort to personalize an email so it’s got to be human crafted. But if you find out about their profile that they like shark fishing, put something on the email about how’s your shark fishing going? But the key thing is just to find out what works. Be experimental do more of that and do less of what doesn’t work. A sort of related topic with all these different lead gen approaches is multi-channel attribution – what you’re trying to do is work out what the return on your marketing spend is in terms of lead gen and there are companies around now, I’ve been working with one call Phosphor, that has some clever stuff that ties up the web, the mobile, maybe the tablet, and even the physical sort of customer identities and then has some clever ways of calculating what the attribution of different marketing touches along the way. There’s quite a bit of guesswork involved, but it does help you start doing the calculation what the return on yield is. So that’s quite a bit on lead gen.
I’ve be working in Artificial Intelligence for the last year and a half, so one question is how does that apply to the sales and marketing stuff? One of the huge themes is personalization so there’s a company in the US called Persado that does personalized emails. Essentially it learns about each of the prospects, gathers data from their Facebook profiles, or their browsing behaviour, or their customer track record and increasingly personalized the message. It’s a bit like Cambridge Analytica swinging the election for Trump. Which people think is dastardly but you probably want to get some dastardly technology working for you. So personalization in marketing is really really a growing thing I think really developed mainly in the consumer area rather than the business area. So you can get personalization not just in the messaging but in the web experience. Which sort of leads us onto the onto the sales process.
Sales process
So a number of aspects to the inside sales process. One is, people mentioned, steps. I’ve seen up to 10 steps in the sales process but inside sales team to use a cruder set. Might be four things like have you made contact with a job title that might buy your product so contacts sometimes called DMC (decision maker contact) that can be by email or phone. Have you got through to someone who’s at least worth talking to. Secondly, once you’ve talked to them, have they got an interest or needing your product. So they’ve moved one step in the sales process. Thirdly, if they have, have you done them a proposal? Forthly, have you closed it?
In one company I’ve worked with that’s the four steps that they’ve been using. I guess the real question is optimizing that sales price to make it really work well. And I did some research, recently, in a big operator of an inside sales team selling technology to find out what’s working. I did quite a lot of interviews with their top performers and really three main messages came out when you talked to the top performers. One is target the right accounts. Secondly copy the habits of the top sales performers. And thirdly have the right level of activity to make you meet your targets. So investigating each of those a bit more.
Targeting the right accounts
One of my favorite questions when meeting software company management is say just “tell me what’s your ideal prospect profile?”. Do you know who you’re trying to sell to as opposed to just trying to sell it to anyone? And that can actually be quite a hard question to answer unless you’ve thought about it a lot but if you don’t know, as the founder or one of the leaders of your company, what the ideal prospect profile is for you it’s going to be pretty hard to explain that to someone who starts working for you in sales. They might manage to work it out for themselves and often the good ones do but you’ve got to have in mind what is your ideal prospect profile. Now, in this particular case the people I was helping were targeting (amongst other verticals) e-retailers. So they were looking for retailers that had a minimum sort of basket value of a sale, a certain level of traffic to their websites, so many unique visitors, a price level at a certain level not really cheap stuff. So they had the right profile outside in which you could discover from the web. Second they wanted to grow. So they had a growth plan. They had some kind of compelling event or target they were trying to meet. If they were using competitive tools that was a good sign.
So what you’re looking for, from the beginning, is knowing who your ideal prospect profile is and that they’re actually going after them intelligently rather than just trying to sell to anyone. So that’s targeting the right accounts.
The habits of top performers
Secondly what were the habits of top performers. So in this particular case they were targeting the CEO, keeping the pitch short, learning one call closes, selling value to the job title KPIs – what that means is whatever job title you’re talking to there’ll be some objectives or bonus plan that they’re on and you have to diagnose that when you’re selling the value of your tool. So you’re helping the person you’re talking to reach their personal goals.
They may say ‘How are you different from this competitor?’ so the salesperson has got to be responsive when competitive tactics. They’ve got to handle objections – turns out not being a good idea not to pre-empt the objections but to handle them. And, of course, to be persistent. So that was some of the characteristics of top inside salespeople working on the phone. Another feature of improving performance is doing call listening so you can record the conversations of your salespeople, analyze them as a team, pick out good performance good or good tactics and teach it to the rest of your team. Another habit of top performers was organizing their day well so they did things like allocated time to particular blocks of activity. They learned good times to call during the day sometimes just at the end of the day or early in the morning when people are sort of getting ready is a good time to get through. And they used as their CRM well to plan their phone calls. And the third habit of top performers if there’s any kind of technical onboarding by your customer, of your product which there often is, that can be a real blockage in getting customers implemented and getting paid. So part of the sales process the top performers were qualifying the infrastructure they could actually work with a tool they were selling, finding out who in the internal organization had the ability to prove the technical resource to do the implementation. And related to that is making the salespeople responsible for the end to end implementation rather just selling the stuff and walking away. So those were some of the habits of top performers.
Activity level
The final one, activity level to hit targets something about the metrics down the funnel. You can actually work out from the target and the average deal size how many deals they’re going to close every quarter. So, you can work back through the sales funnel. Numbers of deals closed. There’s a rate which they convert quotes to orders. There’s a rate which you convert proposals. Sorry, a rate which you convert orders to deployments the rate you convert proposals to conversions and a rate which you get contacts to proposals and back from that a rate which you get calls to contact. So, you can you can actually calculate the activity levels people need to hit when they’ll be successful them and monitor them all the way through the process. You can pretty much real time instrument whether your salespeople are going to be successful.
So that’s quite a long time on sales process. But that was the topic you were most interested in.
Selling against competition.
Simplistic. It’s just a win loss analysis. When you when you lose find out why, when you won find out what why you won and feed it back into your sales team. The next topic you were really interested in was targets and comp plan design. Which is a bit of a black art. But one of my favorite topics I’m going to talk about that a bit.
Targets and comp plan design
So there’s a whole number of facets to target and comp plan design. Recently I got into a bit of theoretical discussion with someone I was helping. So actually for the first time in my career I went on Amazon and looked up sales planning commission design and bought the American textbook on it which is 500 pages. Unbelievably. And they really spent 500 pages debating whether you have a bonus target ingredient in your comp plan design or just a straight commission that’s sort of what it boiled down to. And they sort of weighed up the pros and cons. Now I thought this was amusing because when I joined Micromuse the founders just said well the best comp plan design has both. So basically you have a target and a bonus that quota. A commission made up to target and then accelerated over quota. So, you just stick both in.
It seems like that bit of wisdom was useful all along. So that’s called a payout profile but one of those contentious topics is the measurement interval. So do you do monthly quarterly and annually. So, we are going to ask the audience. Who has annual targets for the sales team in the company? Put your hand up. Who’s on annual? So some of you. Who’s on quarterly put your hand up. I think that’s got a few more. Who’s on monthly. Not many. Who’s on nothing? So, it seems like quarterly is probably the biggest lump. If your sales reps are just on a straight commission with no target then you can never measure them. I think. Setting a target is really good and I think quarterly is generally the best. There are some exceptions but the reason I really prefer quarterly over annual is it tells you whether they’re failing or succeeding much more rapidly. You really want to know if they’re not succeeding early on rather than just say well we got all these big deals and they’re going to land at the end of the year. The other means to go Quarterly is the Americans do it and they tend to be really really successful. So, there must be something in it. I’m not persuaded by people who say that sales cycles are really long. Because if they are used you what you need as a company is you need deals to land at regular intervals so that salespeople need to manage their pipeline so that they get business coming in regularly rather than being in big lumps.
Measurement interval quarterly is really my favorite thing and I take a lot of persuading to deviate from that. The next thing is what number are you measuring them on. There is a quite a number; it could be the value of orders which means basically contracts signed, It could be invoices that you submit to customers, It could be accounting revenue recognized, could be cash received, and if not clear on the differences between those that can get you into quite a mess. Is there anyone in the room who doesn’t pay on orders? Not many. So that’s basically telling me you’re paying on the right thing – generally value of contracts signed.
The next question is it the target that the turnover is essentially the revenue or the gross margin of what you’re selling that depends on the structure of your business. And the next design feature. Do you have one number that the reps aiming to hit or do you have multiple components of the target that they’re trying to meet – like the amount they book and the value of their forecast pipeline. Or the amount they book of one product and the amount they book of another. Now I’m a big fan of one number because that’s telling you whether they’re succeeding or failing. Sometimes people put in splits which little bits of bonus for selling new products and stuff like that. But broadly speaking one numbers the right way to go. Then you get debates about whether you have individual targets or whether you have team targets or some component of each. And so the whole debates go on. It’s a bit of a black art. I’d say there’s no one perfect comp plan design. Any particular one can be gained but in general the more pressure you put on for people succeed. I think it will drive the business harder. So that’s targets in comp plan design.
Forecasting
Still on the inside sales thing. Moving down to forecasting. Now forecasting is really absolutely critical management lever for you.
The sort of week I started in Micromuse the owner said to me. The first thing I want you to do is tell me what the sales forecast of the quarter is going to be which is a really great question because to answer that you’ve got to go and find out about every single deal, you’ll talk to every rep about their deals, take a view yourself whether they’re going to close or not. That will involve you trying to work out what it’s going to take to close them and then you can easily be judged on whether you’re right. So that’s one question as the founder or senior management in your company you can ask that’s going to tell you a hell of a lot. The forecasting is a really useful lever but it’s seems people get really messed up in how they do it. And I think Salesforce is really heavily responsible for this because it can produce all sorts of graphs and charts it looks very comfortable with huge pipelines and factored numbers and figures. And I think that’s often just detached people from the critical element of forecasting which is talking to the salespeople about what they’re going to do. If you stop that process and make them work through a system, you’ll detach yourself from the front line. I’m a big fan of sales leaders and sales directors continuing to talk to their people about what they’re going to sell and not leaving it inside the system.
On a related topic is mechanical use of percentages factoring pretty much every CRM system I’ve looked at just takes these steps in the sales process whether it’s four or 10 or whatever they are. Saying it is a 10 step sales process and you’re at step 1 it’s 10% likely to drop, in step 5 is 50% step 9 it’s 90% I’ve never understood this. It just doesn’t seem logical. You could be at Step 9 but the customer could have said well we’re not going to buy it for two quarters so it’s 0%. So it just didn’t seem to be any logic in this mechanical step based forecasting process and always been a big fan of management judgment but not judgment of the rep, judgment of the sales leader. Because they’re going to apply a consistent approach to all their deals. Whereas if you allow the reps to do it, they just going to have an idea what the right percentage is. So forecasting is really one of your critical levers. And something sales leaders will be judged on if they can if they can tell you what number they’re going to make and beat it they’re probably doing their job really well.
Systems and tools
I put Kaizen up there which is improvement. So tools are really really an interesting and growing area. I’ve got absolutely fascinated recently with doing lead gen with Google. And becoming a bit obsessed in the morning and seeing how many clicks I’ve had and how many many downloads that’s led to and how many leads that’s generated and where they’ve come from. It’s absolutely addictive kind of thing to do. So, using Google AdWords and Google Analytics to see what’s going on in your lead gen. And then seeing them piled into HubSpot so you can see the identity of who downloaded and look at where they’re from. I just absolutely love it. I imagine that’s pretty widespread but those kind of tools for digital lead gen really are incredibly useful.
We’ve already talked about Linked In as a tool. Another one is bulk e-mail which I’m sure you are all familiar with and open rates. On basically pipeline management for salespeople watching their deals mature through the pipeline. This is a really cool tool I saw a while ago called Pipedrive which basically visualizes where in the sales process people are and it’s incredibly easy to use because what salespeople are trying to do is move it through these steps in the sales cycle.
Sales Force you’ve all heard tons about and I think he’s got some people who like it. Personally, I’ve never got that into it but obviously like pretty much everyone else on the planet has. Microsoft Dynamics I’ve looked at for CRM and it seems pretty horrible. And finally, I’m getting obsessed now about the quality of telecoms.
Because every single customer interaction, you seem to spend the first 10 minutes talking about why the voice quality on Google Hangout’s so bad why you can’t hear them on WhatsApp. So I think one of the important tools to focus on now is just telecoms that absolutely works. Not wishing to be an old fogey but 20 years ago when we used AT&T or B.T. the phone line always worked perfectly. But nowadays…. it’s absolutely horrible. I don’t know what the answer is whether it zoom or Google Hangouts or WebEx or Skype or WhatsApp or whatever it is. I don’t know what you found. I mean I’d love to hear a question how do we solve this communications problem? Landlines.
But it’s really really significant. I have terrible trouble even here. You know sometimes you can’t hear what they’re saying and the video freezes. So that’s really a cool tool. I mean that’s probably one of the most important tools. Kaizen I put down the problem which is at the bottom which is Japanese for ‘good change’ and I think one of the critical success factors in sales is just continuous learning. We never really know what’s going to work and what doesn’t work. You can have a theory. Basically you’ve got to learn as you go along.
So, doing that systematically is really really critical.
So that’s a survey of those nine areas in digital. I’m going to blast through the rest pretty fast but that’s giving you the meat of nine different areas with a focus on three or four that make a big difference in how to succeed in sales. What’s different in field? Not very much. The two things you were interested in was territory design the sales process design so the territory design stuff pretty similar to the inside sales stuff.
You might have some channels OEMs or resellers and stuff to deal with. I’ve deliberately excluded that because it gets unbelievably complicated. In terms of sales process design for field reps you’re just going to have more steps than four you might have up to 10. Things like Qualifying the lead properly at the beginning, in fact sales qualification is one of the favorite topic of sales professions and I should add I’m not a sales professional. I’ve never worked in sales. And never had any sales training. Just so you know where I’m coming from I’m a general manager, but I’ve learned the hard way that business success does depend on being able to hire and organize the right people. But sales qualification is the thing they talk about a lot and what they mean is finding out whether they can buy from you very early on because the worst thing to do in sales is waste time or someone who’s not going to buy from you. So, one of the ways of thinking about sales is it’s not about persuading them to buy something they don’t want. It’s about finding whether they actually need what you’ve got quickly and efficiently. It’s a qualification at the first meeting is really your ideal. Then it goes into things like the technical trial, getting the technical win, getting commercial proposal, getting a verbal win. One valuable technique I’ve seen is getting the client all chart written out so you can see all the people in the customer who are going to influence the purchase and where they fit in the organization. Then you systematically go around and find out if they’re for or against you. Whether they decide influence sign off and make the decision. And then finally working out how the procurement process works and getting the order out. So that’s where you get down to this kind of field sells more granular stuff. Some of the things they talk about.
Those are really the differences in field sales. Just to wrap up let’s talk about digital which is pretty different. But it’s the second area you are most interested in.
Designing your digital marketing organization. Well, obviously, these can be huge if you’re a big digital sales operation, but I think it is barest minimum, there’s going to be somebody who’s getting the clicks in. Secondly, someone’s designing the page that they come to try and convert them and somebody who’s involved in adjusting the product pricing and maybe the package that you’re selling. They seem to be the three principal roles. Maybe I’ve missed any, do you think I missed any when you’re selling? Online lead nurturing and lead nurturing? Well that’s possibly part of getting the clicks in and nurturing it. So that’s the basic organization structure.
Getting the clicks in
So getting the clicks in as a marketing person. Page Design conversions and journey UX digital sales kind of person and product pricing packages sort of product management but you’re blending them into a team. Focused markets when you’re selling online is a bit harder to pin down. But I think again it’s going to affect how you do your lead gen. So all the comments we made earlier about the different ways of doing lead gen also are relevant. You’re not going to do lead gen in Japan if you’re not selling in the Japanese market.
Sales Process we mentioned freemium services earlier. There’s quite a few different ways of selling online whether it’s the sign up, the freemium, and then trying to convert them up which Salesforce started with and lots of people have done. With tools there’s tried by model download it and have a go see if you like it. We tried making people download a white paper sign up for a subscription but putting their credit card details and say we will give you a month free trial and then charge you, but they really didn’t like that.
So it’s different than playing different tunes on how you do that. Related to that is personalizing the web experience again back to the impact of A.I. on sales as well as personalizing messaging customizing the web experience when it comes to your website based on who they are whether they’re a customer or not. Their web experience external data that’s a hugely growing area. Then there’s other things about how you dress up the website. Do you say on there we’ve already been adopted by a thousand customers and here’s their logo? Would you say we’ve got these fantastic technical features? We say here’s 10 business cases which show ROI. For all those things you’ve got to judge where you are in the adoption cycle as to which type of purchases in the market you’ve got at the moment.
So personalizing web sales is a critical thing. Competition on digital sales I never really mastered but you go beyond doing win loss analysis – if you can find people who’ve bought your competitor. Moving on to the bottom of this: targets and comp plan design. What’s the best way of managing and targeting people who’re doing this sort of thing? Well there’s this rather than revenue period there’s an important concept of customer lifetime value. You’re thinking about a lot. It’s been familiar for a long time in the mobile phone business but is increasingly relevant in software sales. So the basic concept is it’s worth spending enough on marketing to buy a long term customer. If someone’s going to be your customer for five years it’s worth spending a lot more on acquiring them than someone who isn’t. But how do you know when you’ve converted the customer or their lifetime value is going to be a comp a your team on that. It’s pretty difficult. You have to be using complicated data analytics to predict their lifetime value. You should be doing that to work out how much you want to buy the clicks for. But it’s quite hard to connect the lifetime value with your comp plan design. I think increasingly people are using A.I. for that type of thing. In terms of forecasting getting down to the bottom. Really run rates, Projection, Willing to spending on your Business drivers like marketing spend is probably the way to go and we talked about some of the tools.
So that’s a that’s a scamper and kind of finish now but that’s a scamper through the deadly serious topic of sales. I hope it turns out to be really really fun for all you folks and you get those massively rising successful sales growth. Just to wrap up if I think what’s really really important, In the sales area, obviously hiring really really great people makes life a hell of a lot better. That’s really the number one thing. Because they’re kind of self managing. Second I think planning sensibly is really important you get the right sort of people in the right sort of roles and the right sort of rate. And finally continuous improvement. You just keep learning as you go along because it changes all the time. You never know what the right answers are. So you just keep having to continue to adapt. So that’s it for me. I think it’s time to have fun and go home! I think, Mark, and we can have some questions
Q&As
Audience member: Hi. Thanks for that it’s all really really very helpful. I personally don’t have any sales team, I didn’t even know half the terms were that you were referring to and it’s something I’m aware that we really ought to look at as a company. And frankly, I don’t mind admitting this in the confessional atmosphere of business of software, is that because I personally don’t like being sold to and find the whole thing quite confusing. I’m also basically afraid of the fact that if I started to go down the journey of sales that I’ll make a mistake and it will just waste a lot of money and just I’m basically hiding away from the whole topic. So it was good to hear that.
But my question is more of a broader hesitancy which fuels that feeling which is you’re talking about how the telephone is now dying almost as a communication medium. I personally hate we were talking about this last night hoping for hate being cold called, you know? I just feel completely offended if somebody has got hold of my mobile phone number. I don’t want to do cold calling. I don’t want people on behalf of my company to do cold calling. And an equally the whole kind of structured enterprise sales we heard earlier is also dying because you know cheap to buy SaaS is taking over you know taking over the world. So I’m just wondering you is there is there a lifespan associated with some of the methods you’re talking about because culture is now changing where people are becoming more resistant to these techniques. They know they’re being sold to, they don’t like it, it’s not the way they make purchasing decisions, they’d rather go for Laura’s you know total self service onboarded system even when they’re paying out quite a lot of money. And we have that experience at You Can Book Me we have some companies who pay us thousands of dollars and they’ve never picked up the phone to us at all they didn’t need that sales process to buy.
Stephen Allott: Yeah absolutely. Moving with the times and I think millennials really like self-service and prefer talking to machines actually, that’s what’s emerging from the AI thing. I think field sales at the bottom is definitely dying. Lots of people don’t like being sold to. Some do, and most importantly, I think it’s important for them not to feel like they’re being sold too but rather being helpful. Something like that. Cold calling I think is pretty much dead. That may be one of the few areas where people still do it but there’s almost no companies that publish a switchboard number say calling the switchboard and asking to speak to the technical director just so last century. People volunteering their details and then contacting them by e-mail. So it’s not the place to go but as I say this evolves very fast and that’s where I think you can see that the what the audience wanted to hear about today was digital and inside and really there’s not much interest in the field stuff at all.
Audience member: Sorry, I feel compelled to interject to this point I backgrounds in telecoms and I actually see over very early stage telecoms cool analytics start up I can tell you that the voice call isn’t dead in fact it’s probably going to become even bigger and stronger than it ever has been. It’s about how you incorporate it into that sales process, so you may decide from a company culture that you don’t want to do that proactive, but in terms of making it part of the process where people will engage with you might only be selling to those people that are happy not to but you might be missing out on a whole chunk. Ofcom in the U.K. have done research recently that shows that for those small to medium businesses – the size of the organizations that are here – the phone’s never been less relevant but has place as big or a bigger part in that sales process. And when you go online and you have all the Chat messaging chat applications the next five years you’re going to see them turn into voice chat applications so I just wanted to open you guys back up because all the research shows that with all the devices like Amazon Echo and the Apple Watch devices that voice is going to a replace a lot of the messaging type activity. So I just want to add that.
Audience member: I just want to add to that.
Just as a PSA generally for sales. What’s worked really well for us is if someone emails in and has expressed interest, to immediately get one of our sales reps on the phone and to ring them and then it’s not intrusive because they’ve just inquired and it’s a much faster conversation because it’s being done synchronously rather than three or four rounds of email. And I think that I think the product that he was using is called ‘yes ware’ if anyone is looking for something like that
Mark Littlewood: The founder of YesWare spoke at BoS US which I’m going to sell to you in a minute…
Audience member: I want to add Yes Voice is becoming the new UI purely because it’s the least frictionless way of interacting with whoever it is. So yes voice is absolutely the new way to go. Coming back to you Stephen, this might be a bit of a philosophical debate: where do you set the continuum from do you pay a very low base salary and a very high or even open ended commission or why do you comp ideally your salespeople on that stretch between very low base high base?
Stephen Allott: So the mix of base and variable that are default to is 50/50 with the uncapped commission plans that’s a default. I think it’s going to be a pretty hard business if they’re on less base and more variable than that. That’s pretty aggressive but I think 50/50 is sort of been around for a very long time and as people probably expert accepts the idea of uncapped variable is pretty controversial but basically salespeople want to make money in the best way have advertising to the world at your place to make money. Have one of your salespeople and a huge amount of money on the deal where to get round and other people would be motivated by that even though it might feel a bit expensive. That’s a great way of motivating your sales team and attracting other great performers.
Audience Member: Thanks. Yeah. Very practical bit of advice I’m looking for at the moment is how to scale up. So we have a very successful salesperson in a territory but that territory is growing very quickly in terms of the demand. How do I put another two people in that territory without disrupting the existing very successful salesperson and how do I design that comp plan, the target, and genuinely split up that territory in a fair way. Have you got any practical advice on that?
Stephen Allott: So there’s a number of components to the answer. The first is say you’re dividing oneself territory into three you’ve got to have enough opportunity in the territory to support all three of them. So you’ve got to make sure there’s enough business to go around. For accounts that you’re transitioning from one rep to new people which you might do, suppose you had a sales territory and you decide divided into three industries like finance, insurance, and media for example. So the accounts with the rep was handling that he’s losing or she’s losing there’s quite a common established practice then over three months they get if it landed in the first month 75 percent of the commission in 25 would go to the new person then 50/50 then 25 75 so you can have a transition out would be quite a common way. There’s another question which is do you give productive accounts to the new people or just give them new business and allow the old person to keep the productive accounts. I quite like putting new people into giving them a reasonable number of productive accounts and already established because they can learn it’s not so hard just to complete new business so those are some of those are some of the tips I guess.
Mark Littlewood: Stephen, thank you very very much indeed.
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Stephen Allott.
Stephen Allott is a business and social entrepreneur, Venture Partner at Seedcamp, author of Sales Tales, chairman of Aspirant Analytics and Founder of the Cambridge University Computer Lab Ring, with 272 graduate founded companies in its Hall of Fame.
Stephen also set up a non-profit called Cambridge Ring to back companies started by Cambridge University Computer Science and Technology graduates. He spent three years setting this up pro bono as a passion project. Some of its greatest successes include DeepMind Technologies, which was bought by Google, Raspberry Pi, and ARM, which is the most common chip architecture in the world.
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