Category Archives: Sales

Here’s lesson #2 around how you can use financial acumen to up your sales game…

Today I’ll be reviewing Total Cost of Ownership (TCO).  Often times when a company is evaluating a purchase decision, they will solely focus on the initial cost of an investment and choose the one that requires the lowest upfront cost.  However, a more sophisticated buyer realizes that this is not the full picture.  In properly evaluating the costs surrounding a project, it is more diligent to consider the initial investment plus any ongoing costs.

In layman’s terms, Total Cost of Ownership (TCO) is the initial purchase price ‘plus’ the additional costs of operation.

One of the most simplistic examples of TCO is when you purchase a new car.  For example purposes only, let’s consider someone looking to purchase a luxury car that’s evaluating a comparable Mercedes and Lexus model.  In comparing the two, they would naturally look at the cost of both- let’s say the Lexus costs $50,000 and the Mercedes costs $45,000.  A less informed buyer would view this at face value and consider the Mercedes cheaper and therefore a better value.  However, the more informed buyer familiar with the total cost of ownership concept would look at the purchase price + average cost of repairs, insurance and fuel.  When evaluating the 2 cars based on TCO- they may actually find that the Lexus is cheaper over time based on the overall cost comparison.

Here are a couple examples based industries you might relate to:

• Marketing Tech:  What is the initial software cost + support, maintenance and IT / Marketing labor hours to integrate and manage?
• Tech Infrastructure:  What is the initial cost for the hardware + installation, training, maintenance, upgrades and internal IT to manage and support?

As you can probably tell, TCO is extremely simple to calculate and only requires addition.  Here’s the calculation:

TCO = Purchase Price + Ongoing Costs

The output of the calculation is not only focused on the initial investment requirement, but the total cost over an extended period of time.  Here is an example of a technology purchase, comparing the initial purchase price model to TCO:

• XYZ Software
  • Initial Purchase Price = $100,000
  • TCO
    • Initial Purchase Price = $100,000
    • Installation Cost = $50,000
    • Annual Maintenance Cost (3 years) = $150,000
    • TCO = $300,000

If you’re not already using TCO as you pitch projects to your customers, I strongly encourage you to start using it.  I’ve found that it can be much more effective when comparing your solution to a competitor, to get to the true overall cost and proving value.  It will ultimately enable your CIO, CMO or CFO sponsor to present a more accurate picture of the costs associated with your project, and help produce a win-win for both you and your customer.

If you have any feedback or success stories using TCO, please share…

To follow up on my previous post around how financial acumen can be the missing ingredient from a salesperson’s game…

Depending on your situation- business school may have been a long time ago and concepts have since been forgotten, or perhaps you haven’t yet had the opportunity to learn the basics of Finance.

For those of you that fit in either category, let’s start with the quintessential metric in trying to get a project approved, “Return on Investment” (ROI).

In layman’s terms, ROI measures the amount you can expect to profit in return from spending money on a new investment. 

Here are a few examples based on industry that you might relate to:

• Marketing Tech:  How much will your investment increase conversion rate, and ultimately boost sales?
• Sales Tech:  How much additional pipeline / closed won opps will result from your project?
• Tech Infrastructure:  What costs can be cut from consolidating technologies?

The good news is that calculating ROI is simple elementary school math, only requiring subtraction, multiplication and division.  Here’s the calc:

ROI % = (Net return from investment – Cost of investment) / Cost of Investment X 100

The output of the calculation is an ROI percentage.  In other words- if you investment $1M and you can expect a return of $5M..  this would equate to a 4X or 400% ROI.  You would get 4 times the amount of your investment return, which is pretty good.  Here’s the example showing my work:

400% ROI = ($4M / $1M) X 100

Hopefully I didn’t confuse you, and I would strongly encourage you to think about bringing the ROI concept into your sales cycle.  I’ve found that by focusing on what client’s will get in return from signing the contract and making the investment, my deal flow moves quicker and customers are ultimately happier.  At the end of the day, this allows your CMO, CIO or CFO to deliver value back to the business, which is the whole point.

If you have any feedback or success stories using ROI, please share…

I’ve been in Tech Sales for over 2 decades, and as most salespeople do- I’m constantly trying to figure out the winning formula. 

When I typically think of the winning formula- I’d say the most simple, but reliable approach is BANT.  This is qualifying the opportunity by confirming there is an allocated Budget, the person you’re engaging with has the Authority to buy, there is a real Need for the product and a designated Timeline to make the purchase.

I’ve utilized this approach for years, and while it’s brought success- sometimes it feels like something’s missing.  There are inevitably times when your deal has all these elements, but you lose the deal anyway.  There are times when you have all these elements, yet somehow the deal disappears with a ‘no decision’.  Or you’re trying to cultivate a deal, but can’t effectively convert it from a latent to active opportunity.

I’ve personally observed several, common misconceptions from salespeople on why customers buy their products.  Some focus on their relationship, strong position against a competitor, or their product’s features and capabilities.  While all of these can be factors in a decision, they do not address the customer’s #1 concern.

While I don’t have a magic wand that will guarantee a solution for any scenario, I do believe there is a critical missing ingredient from the average Sales Rep’s game:

Financial Acumen.

According to a survey of more than 300 senior executives conducted by The Economist Intelligence Unit, 65% of the leaders felt that a lack of their employees’ business acumen limits their companies’ strategy execution. 

Reacting to the capability gap, Jeff McCreary, former Chief Sales and Marketing Officer at Texas Instruments, commented, “Solid business skills are the foundational strength of virtually any enterprise. To build a high-performing culture and a team committed to rapid execution, you have to develop business acumen. Otherwise, you won’t be as successful as you can and should be.”¹

First off, what is financial acumen exactly? 

Financial acumen is defined as an understanding of the drivers of growth, profitability and cash flow as well as a firm’s financial statements and key performance measures.

So why does financial acumen matter to salespeople?  How will this help close deals and make money?

In thinking about why a prospect would invest in your product or technology, it comes down to one simple concept.  The goal of any company is to drive value back to its owners (shareholders).  In considering investing in your proposed project, the stakeholders will need to determine if it will ultimately deliver a positive impact to the company’s financial results by way of increased revenues or reduced costs. 

To put it in extremely simple terms- if they invest $1 in your technology, will it produce more than that $1 in return?  Would the investment be worth the effort if it produces $1.10 for your client?  What if the project could return $5 from the $1 investment?

I declare that it is the salesperson’s job to not only pitch why their product is the best, but it is essential in today’s business world to link their deal to the underlying projected “Return on Investment” to ultimately win over the key stakeholders, especially the CFO.

How would you rate your financial acumen?

Stay tuned, as I share more insight on the basic components of financial acumen in future posts…

1. https://www.bts.com/news-insights/articles/the-business-acumen-imperative

For all my sales colleagues out there, the dreaded moment has arrived.  We have gone from hero to zero.  Last year’s sales results are in.  Hopefully we have exceeded our quotas and paved our way to the much-coveted President’s Club Trip.  But no matter what the outcome- last year is history, your Sales VP has forgotten about your big wins from last year, and you are starting at 0% Quota Attainment for the year.

So what are you going to do about it?  How are you going to find success?  How are you going to put the chess pieces in place to ensure a checkmate before year’s end?

While this is as much a challenge for me as the next guy, with over 2 decades in a quota-bearing role, I’ve come up with some ideas that have worked over time. The key is your Annual Sales Plan, and here are a few of the critical elements:

• Full-Day Team Planning Session
• Account Plans
• Forecast Quarterly Deals
• Marketing Event Plans
• Learning Curriculum

Full-Day Team Planning Session

I covered this in one of my previous blogs, and here’s a recap:

https://jasonbaer.blog/2019/02/18/5-ways-to-crush-it-in-19-with-your-sdr-account-exec-partnership/

One of the absolute gems that I figured out a couple years ago, was scheduling an all-day Workshop with your Team- which could include your SDR/BDR, Inside Sales Rep, CSM, Sales Engineer and whoever else contributes to your results.  We’re talking about loading up on a Venti coffee that morning, bringing in lunch, snacks, and having laptops and a whiteboard ready to go.  The best place to start is by identifying the top customers / prospects to target for the quarter.  This is a great opportunity to enable the team to help mold the strategy, and get their buy-in.  You can jointly research the accounts, to make sure which ones best fit your ICP (ideal customer profile).   From there- you will fill out all the fields in a Google Sheet such as contacts, contact info, and key LinkedIn connections to help get you in the door.  I know it’s tough to carve out an entire day to do this, but trust me- it pays off big time.  My SDR’s have consistently been top performers in generating SQL’s (sales qualified leads), and we agree that the Prospecting Workshop is one of the main reasons.

Develop Account Plans

Do your homework.  There is no longer a shortage of data on your accounts, it’s now a matter of scouring your research sources to find the signal from the noise. Identify the top decision makers that make up your buying committee at your top deals.  Social map them to your network on LinkedIn and find out what makes them tick.  Research the businesses of your top accounts like you’re conducting an MBA-level study on them.  Figure out what’s working for them and the gaps that are preventing them from meeting their corporate goals.  This will help link your solutions to the problems they’re trying to solve for.  And if you’re already engaged in a deal with the account, build out your close plan.  Detail the sequence of events between now and the day their executive will sign your deal.

Forecast Quarterly Deals

I know it’s early in the year to forecast all your deals for Q1, Q2, Q3 and Q4, but hopefully you were prospecting and cultivating deals in Q4 of last year.  With the view you have into your business, take a best guess as to what your target deals look like for every quarter.  I know this is a leap of faith and a shot in the dark at best, but how can you make a target if you don’t have one?  I chose 2 big deals to focus on in Q1 of last year for Q3 and Q4 that I had never spoken with, and guess what?  Both closed for a total of almost $1M by year-end.

And don’t forget to update your CRM / Salesforce to reflect your quarterly forecasts, which will keep your bosses very happy 😊.

Marketing Event Plans

You should have fun with this one.  Come up with some brilliant, groundbreaking new ideas for customer/prospect events, and share them with your marketing team.  They’ll love your input.  The more you’re invested in the event, the more attendance you’ll drive, and the more pipeline attribution will result to make your marketing team look good.  And I’m not talking about planning those boring ‘ol lunch-n-learns at a local steakhouse, or tickets to a sporting event.  Those have been way overdone, and don’t motivate the right execs to attend.  I’m talking about breaking the mold- go race luxury sports cars, do something innovative and new.  And while you’re at it, drop off something personalized to an executive you’re trying to reach- specifically centered around one of their unique interests.  Works wonders.

Learning Curriculum

How is it for the first 22 or so years of our lives, we were constantly learning, studying, doing homework, taking tests and challenging our minds for the majority of our days?  Why is it that beyond our early 20’s that constant learning just stops?  Most of our training during our career years consists of corporate mandated HR training and new hire training when we start a new job.  This doesn’t have to be the case…

So with the new year upon us, it’s the perfect time to stop being complacent and come up with your own personal learning curriculum based on what will sharpen your skills for the year ahead. This could consist of corporate-provided training, product training, online classes on Lynda.com or a free MOOC (Massive Open Online Course) like Udemy or Coursera.  Or you could do something more in-depth by taking a class at a local university or extension program, or even get a certificate, degree or MBA.  I earned 2 certificates from Cornell’s online program over the last couple years and found it to be highly beneficial.

In Summary…  Raise a glass to your successes in 2019, and get ready to chart a new pathway to crushing your quota in 2020.

When Monday comes, go get your Venti latte at Starbucks, put on your AirPods with your favorite Spotify playlist queued up, and get ready to build your plan and successfully execute in the year to come. Good luck!

Does anyone have any other suggestions for a successful 2020 Plan worth sharing?

Given I’ve now been in a Sales and Sales Leadership position for over 2 decades now, I want to start by saying how lucky we are to be in a world where most Sales Reps are fortunate to have a Sales Development Rep (SDR) or Business Development Rep (BDR).  Not to sound like “…back when I sold, we had to walk 20 miles in snow to get to a customer meeting!”, but I have to say that life with an SDR is a heck of a lot better than it used to be.  In the “pre-SDR” days, Sales Reps had to do ALL of their own prospecting, lead generation, appointment setting, and handle the entire sales process all the way to the close.  In today’s world, the bulk of the responsibility for that initial lead generation is on the shoulders of the SDR.  Shout out to the SDR’s, you rock!

But in this new world, unfortunately- Sales Reps are not always effective in working with SDR’s.  More often than not, they’re quoting Glengarry Glen Ross saying, “the leads are weak”.  And to those Reps, I want to echo Alec Baldwin’s response from Glengarry with- “The leads are weak? *@#$( leads are weak. You’re weak!”

So how do we solve this problem, so that the SDR and Sales Rep can be successful this year?  The key in my opinion is.. partnership.  As a Sales Rep, I’ve had a successful relationship with my SDR year after year, and I attribute that to putting in the time and effort so that we’re both investing in a successful partnership. 

Here’s a summary of what I think it takes to build a successful SDR / Sales Rep partnership:

1. Schedule 1: 1 Calls 2X Per Week

The most effective teams meet twice per week.  The first meeting is typically on a Monday, to determine the plan for the week.  The second meeting is later in the week to review the results.  The Monday meeting should have a specific agenda, which outline your joint goals in all categories.  Agenda examples would include reviewing this week’s target accounts, number of calls, emails and social outreach, and how many appointments you plan to set.  In the spirit of the partnership- you will both walk away with action items- not just the SDR, the Sales Rep should have actions too, so that you’re tag teaming the work to penetrate new accounts.  The call typically lasts 30 minutes.  As the Sales Rep, I typically send out a summary of the week’s goals to my SDR, and review the results later in the week to ensure the proper accountability.

2. Keep a Prospecting Tracker

In order to help keep the prospecting efforts well organized, I find that keeping a ‘Prospecting Tracker’ spreadsheet is an effective way to keep everyone on the same page.  I highly recommend using a Google Sheet (vs. Excel), so that you can both make changes in real time, without having to email a spreadsheet back and forth.  While I wish there was a simple way to do this in Salesforce, I haven’t been able to build a clean report that’s as easy to edit as a Google Sheet.  I imagine that one day I’ll be able to do this in the CRM, but haven’t been able to pull it off just yet.  Here is a list of some of the key data I track in the Prospecting Tracker:

• Prospect company
• Key contacts
• Phone number
• Email address
• Track outreach activity (email, call, social)
• LinkedIn connections
• Teamlink connections (connections from your company, as identified in LinkedIn)

3. Run an All-Day Prospecting Workshop every Quarter

One of the absolute gems that I figured out a couple years ago, was scheduling an all-day Prospecting Workshop every quarter between the Sales Rep and SDR.  We’re talking about loading up on a Venti coffee that morning, bringing in lunch, snacks, and having laptops and a whiteboard ready to go.  The best place to start is by identifying the top prospects to target for the quarter.  This is a great opportunity to enable the SDR to help mold the strategy, and get their buy-in.  You can jointly research the accounts, to make sure which ones best fit your ICP (ideal customer profile).   From there- you will fill out all the fields in your Prospect Tracker, as mentioned above, such as contacts, contact info, and key LinkedIn connections to help get you in the door.  I know it’s tough to carve out an entire day to do this, but trust me- it pays off big time.  My SDR’s have consistently been top performers in generating SQL’s (sales qualified leads), and we typically both agree that the Prospecting Workshop is one of the main reasons.

4. Understand your SDR’s Career Goals

It is common knowledge that being an SDR is just a starting point for one’s career.  One of the main drivers in being successful as an SDR, is to move up to the next level to Inside Sales or an Account Exec.  But keep in mind- this may not be their goal.  They may be more motivated by compensation, personal recognition- or moving into a different role- like a Solutions Consultant or Customer Success Manager.  The Sales Rep is typically a more seasoned veteran, and it’s important to take responsibility as a mentor for the SDR, and share all of your tips and tricks you’ve learned over the years.  Everyone is different, and it’s critical that you understand their goals, and let your actions within your daily partnership help drive them towards ultimately achieving their specific career goal.

5. Celebrate the Wins

And if you haven’t figured out yet, my approach with the SDR / Sales Rep partnership is definitely one of ‘work hard’.  But the partnership will burn out if you don’t also add the ‘play hard’ element as well.  So given the success you’ll have with this approach, don’t forget to celebrate the wins and have fun.  During your quarterly Prospecting Workshops- be sure to go out for a nice dinner after a hard day’s work.  Be sure to celebrate and shower praise for every new lead, appointment and opportunity created.  And I find that even though the SDR’s are responsible for just generating the opportunity- they truly care when their initial lead gets signed and booked as ‘closed won’, so don’t forget to share that as well.

So there you have it, some ideas to crush it in ’19 with your SDR and Sales Rep partnership.  We’re lucky to have such a great resource, so make the most of it and good luck generating more appointments, leads and Closed Won deals!

Are you having trouble getting motivated to prospect here in the new year (fun!)?  As I’m putting my plans together for 2019, I was curious to learn how things have changed as calls, emails, social and other tools have evolved, and how the buyers are responding.  Here’s a summary of my top findings…

1. The best time to prospect is between 4:00 and 5:00 PM.

Takeaway: Many sales reps make the mistake of calling during lunch hours. It turns out that most people are not receptive of a sales call when they are on their break, so call in the late afternoon.

2. Thursday is the best day to prospect. Wednesday is the second best day.

Takeaway: Don’t let this stat stop you from prospecting on Monday, Tuesday, Friday, and the weekend. Every day should be a prospecting day.

3. It takes an average of 8 cold call attempts to reach a prospect.  

Takeaway: Prospecting is hard and most of us hate it. But if you give up on a prospect after too few attempts, you are passing up a potential sale. Be persistent and determined.

4. 3 out of 4 managers will take action from a cold call or email alone (DiscoverOrg)

Takeaway: Give your prospects the information that they need to make an informed decision. Once you have successfully created value, your prospects will want to follow through by moving on to the next step of the process.

5. Five years ago, the average voicemail response rate was approximately 5%, and it’s falling. (InsideSales)

Takeaway: And you can bet that that percentage has gone down even more since then. No one likes listening to their voicemails. Save yourself (and your customers) valuable time by getting them on the phone. This ensures that you will be able to address their questions and concerns in real time.

6. Email is almost 40 times better at acquiring new customers than Facebook and Twitter (McKinsey)

Takeaway: Although this stat is really about email marketing vs. social media marketing, it’s a good reminder of the general importance and power of email. It is worthwhile to improve your ability to craft impactful emails with effective subject lines and calls to action.

7. 70% of salespeople stop at one email.

Takeaway: If you send more emails, you’ve got a 25% chance to hear back. (YesWare)

8. More than one-third of email recipients use the subject line alone to determine if they will open the email. (Convince and Convert)

Takeaway:  First impressions are everything and the subject line of your email is your introduction to your potential customer. Let them know right away that you have something that is valuable and worth their attention.

9. 78% of salespeople using social media outsell their peers.

Takeaway: If done right, social selling really works.

10. Salespeople who actively seek out and exploit referrals earn 4 to 5 times more than those who don’t.  

Takeaway: Referral-based selling is a surefire recipe for success. A referred customer is already pre-sold on the credibility of the sales person, product and company which makes these types of opportunities the warmest sales leads.

References:

https://blog.thebrevetgroup.com/21-mind-blowing-sales-stats, Brian Williams, PhD

https://zety.com/blog/sales-statistics

https://www.business2community.com/sales-management/30-shocking-sales-statistics-that-will-change-the-way-you-sell-02080155