Strategy, Sales, & Sales Management

Strategy, Sales, Sales Management B2B Sales Management 101 B2B Sales Strategy 101 B2B Sales Case Study: Groove Sales & Strategy Reading List

B2B Sales Management 101

B2B Sales Strategy 101

B2B Sales Case Study: Groove

Sales & Strategy Reading List

B2B Sales Management 101 -- Harsh Reality

B2B Sales Management 101 – The Number “Quarteritis…” “ The sun rises & sets on the quarter”

“ The sun rises & sets on the quarter”

B2B Sales Management 101 – Sales Representatives Sales Rep Profile Personable, builds trust High energy Aggressive/”edge” Street Smart (v. book-smart) Listeners/nonverbal Motivated by money 80-20 rule Compensation Base $90k - $100k Commission $125k (plus draw) 0%-50% quota = x%; 50% -100% quota = 2x%; > quota = 3x% Stock options – less important President’s Club Top reps’ pay > CEO’s Measurable & Accountable – high turnover tolerated

Sales Rep Profile

Personable, builds trust

High energy

Aggressive/”edge”

Street Smart (v. book-smart)

Listeners/nonverbal

Motivated by money

80-20 rule

Compensation

Base $90k - $100k

Commission $125k (plus draw)

0%-50% quota = x%; 50% -100% quota = 2x%; > quota = 3x%

Stock options – less important

President’s Club

Top reps’ pay > CEO’s

Measurable & Accountable – high turnover tolerated

B2B Sales Management 101 – Strategic Selling Nuclear unit SR, SE, Cnslt, Mgmt Power Selling Champions Coaches Economic Buyer IT, LOB IT, LOB, Prchsg Legal, Finance, BOD Find Pain, Find $ Ask questions/listen/non-verbal

Nuclear unit

SR, SE, Cnslt, Mgmt

Power Selling

Champions

Coaches

Economic Buyer

IT, LOB IT, LOB, Prchsg

Legal, Finance, BOD

Find Pain, Find $

Ask questions/listen/non-verbal

B2B Sales Management 101 – Predicting The Future PROSPECTS (Email, URL, Source, HI-IQ Email Nurture) LEADS (Phone #, Lead Conversion Event) NEW CUSTOMERS (CC# and Authorization) Satisfied CHI > 70 Unsatisfied CHI < 70 Marketing Sales Customer Service HubSpot HI-IQ SalesForce.com OPPORTUNITIES (Demo/Trial, 3 per day per rep) SalesForce.com SUSPECTS (HubSpot, WSG; PPC MVT)

B2B Sales Management – Predicting the Future The Funnel Visitors Prospects Leads Opts

B2B Sales Management 101 -- Predicting the Future The Forecast

B2B Sales Management 101 -- Other Accounts Reviews Recruiting (profile) Territory Distribution Compensation Plans Sales Rep Development Sales Process & methodology

Accounts Reviews

Recruiting (profile)

Territory Distribution

Compensation Plans

Sales Rep Development

Sales Process & methodology

B2B Sales Strategy 101 Segmentation = Profits 1 Total churn rate (not shown) is calculated as cancelled customers (all time) divided by total customers (all time). Monthly churn rate is total churn rate divided by average customer lifetime of 4.16 months All Customers Avg. Trans. < $3k Avg. Trans > $3k SMBs 28 108 VSBs 21 28 Total 185 Cancelled Customers Avg. Trans. < $3k Avg. Trans > $3k SMBs 3 7 VSBs 11 7 Total 28 Monthly Churn Rate 1 Avg. Trans. < $3k Avg. Trans > $3k SMBs 2.6 % 1.6 % VSBs 12.6 % 6.0 % Total 3.6 %

B2B Sales Strategy 101 Crossing the Chasm…

B2B Sales Strategy 101 Model Comparison Source: Rethinking the Sales Force ENTERPRISE CONSULTATIVE TRANSACTIONAL Agenda setting Boundaries blur- unclear who is selling and who is buying Problem solving Doing the deal Nature of sale Access to strategy Access to influencers Access to decision maker Prerequisites for success Trust – based Business equals Insider Both parties change fundamentally Benefits – based Client-advisor Cooperative Cost - based Buyer-seller Confrontational Nature of relationship Strategic plan Purchasing stream Event Time horizon Platform fit Values fit Sustainability Importance of problem Solution fit Price-performance tradeoffs Price Availability risk Ease of acquisition Key buyer concerns and decision criteria High Strategic and/or cost importance Limited substitutability Differentiated Customizable Hidden Capabilities Well Understood Readily substitutable Standard items Product or service characteristics

Agenda setting

Boundaries blur- unclear who is selling and who is buying

Problem solving

Doing the deal

Access to strategy

Access to influencers

Access to decision maker

Trust – based

Business equals

Insider

Both parties change fundamentally

Benefits – based

Client-advisor

Cooperative

Cost - based

Buyer-seller

Confrontational

Strategic plan

Purchasing stream

Event

Platform fit

Values fit

Sustainability

Importance of problem

Solution fit

Price-performance tradeoffs

Price

Availability risk

Ease of acquisition

High Strategic and/or cost importance

Limited substitutability

Differentiated

Customizable

Hidden Capabilities

Well Understood

Readily substitutable

Standard items

B2B Sales Strategy 101 Reason for shift to consultative model Sales 5 Resource commitment needed for consultative selling Sales 4 Sales 3 Sales 2 Sales 1 $ Cost Source: Rethinking the Sales Force Sales 5 Sales 4 Sales 3 Sales 2 Sales 1 % Return 0%

B2B Sales Strategy 101 Consultative Model “ Listening and gaining business understanding are more important selling skills than persuasion; creativity is more important than product knowledge.” “ The only single ‘truth’ that seems to be holding true for all sales forces is that they have to create value for customers if they are to be successful. Just communicating the value inherent in their products isn’t enough.” “ It’s a risky strategy in a consultative sales to go to a senior-level decision maker before thoroughly understanding the issues and problems where you can create value. Most good consultative salespeople will first do their homework by working with those influencers in the buying organization who have the best knowledge of the problems and opportunities where the selling organization hopes to create value.” … Quotes from “Rethinking the Sales Force.” Neil Rackham & John DeVincentis

“ Listening and gaining business understanding are more important selling skills than persuasion; creativity is more important than product knowledge.”

“ The only single ‘truth’ that seems to be holding true for all sales forces is that they have to create value for customers if they are to be successful. Just communicating the value inherent in their products isn’t enough.”

“ It’s a risky strategy in a consultative sales to go to a senior-level decision maker before thoroughly understanding the issues and problems where you can create value. Most good consultative salespeople will first do their homework by working with those influencers in the buying organization who have the best knowledge of the problems and opportunities where the selling organization hopes to create value.”

… Quotes from “Rethinking the Sales Force.” Neil Rackham & John DeVincentis

B2B Sales Case Study: Groove Networks P0: Evaluation P1: Validation P2: Initial Rollout P3: Enterprise Rollout REVENUE COST OF SALE

B2B Sales Case Study: Groove Networks 2 months 2-3 months 6 months ongoing P0: Educate P1: Validate P2: Initial Rollout P3: Enterprise Rollout SALES ACTIVITIES IT call(s) Orientation LOB/LOB IT calls Validation 2 Track Pilot Trial: - IT validation - LOB pain project Implement seats & gather metrics Penetrate new LOBs Engage enterprise apps Horizontal bus processes Groove as standard desktop DNA Integrate w/ Ent Apps Groove broadly deployed and used throughout value chain LOB Pain ID’d IT Champ Validation Process Pain Validated IT Validated $100k+ Multiple Pain/Lob IT Service Offer’g $500K+ MSLSA $1m/yr Every desktop

IT call(s)

Orientation

LOB/LOB IT calls

Validation

Implement seats & gather metrics

Penetrate new LOBs

Engage enterprise apps

Horizontal bus processes

Groove as standard desktop DNA

Integrate w/ Ent Apps

Groove broadly deployed and used throughout value chain

B2B Sales Case Study: Groove Networks Q1 (P)hase Movement P1’s Lowe $46K ESP $50K AMEX $40K Mattel $35K Intermec $22K P2’s HP Mktg $770K OCPA $691K Siemens $111K SAIC $142K Praxair $100K Novartis $86k VLH $522K Army $154K HP C&I $106K KPMG $100K P0’s SPAWAR $18K Hitachi $10K CARE $7K DuPont $7k Verizon $6K ServiceCo $16k

P1’s

Lowe $46K

ESP $50K

AMEX $40K

Mattel $35K

Intermec $22K

P2’s

HP Mktg $770K

OCPA $691K

Siemens $111K

SAIC $142K

Praxair $100K

Novartis $86k

VLH $522K

Army $154K

HP C&I $106K

KPMG $100K

P0’s

SPAWAR $18K

Hitachi $10K

CARE $7K

DuPont $7k

Verizon $6K

ServiceCo $16k

Further Reading

Questions?