A sample compensation model for an Inside Sales Rep. Note the Quota-to-total compensation ratio.
Another question: what compensation are you paying Reps that attend the D accounts vs. the A accounts?
This analysis shows that too much time is being spent on the D segment – a poor return on investment.
Buyer Personas is where it all starts. If you don’t know who you are targeting, you cannot generate quality leads.
Note the left-hand column that lists the types of demand generation activities.
An example of a client who redid their Lead Generation with our help. They were able to clearly identify the different stages of lead management and what they should expect within each stage. This way, they were able to determine how many resources they needed at each stage.
Perform a Sales Productivity Benchmark.
Contact us if you would like to understand how your 2012Sales Strategy can be set to create winning performance conditions.Email - firstname.lastname@example.orgPhone - 1-888-556-7338Web: http://www.salesbenchmarkindex.com
Website Email Phonewww.salesbenchmarkindex.com/ email@example.com 1-888-556-7338 Sales Strategy: Creating Performance Conditions to Win Are you ready to be world class?
Sales Strategy Research Results:Creating Performance Conditions to Win 1 Compensation Programs 2 Organizational Models 3 Lead Generation Programs 4 Selling Methodologies 5 Modeling Segment Potential
Compensation Programs:Best Practice Exercise 1. 1 Total target cash compensation is set at the 60th percentile of labor market competitors of a pre-identified list of companies. 2. Pay mix is no less than 85/15 and no greater than 50/50. 3. There are no more than 3 performance measures, one of which will be a sales production measure. 4. No measure is worth less than 15% of the pay program. 5. At least 60% and no more than 75% of reps exceed quota. Back
Current Current Current Total Benchmark Benchmark Benchmark Base (Ave) Bonus (Ave) Comp Base OTE Pay Mix $199K $270KVP Sales $150,000 $150,000 $300,000 76/24 $154K - $244K $191K - $349KNew-National Sales $85K $110K $79,781 $27,643 $107,424 77/23Executive $75K - $90K $108K - $166KExisting-National $85K $135K $79,781 $27,643 $107,424 63/37Sales Executive $75K - $90K $108K - $166K $125K $220KVP Media Sales $125,000 $25,998 $150,998 57/43 $87K - $134K $119K - $221K $99K $131KSales Manager NA NA NA 75/25 $81K - 116K $100K - $162KClient Development $81K $108K 71,147 $19,941 $91,088 75/25Consultant $72K - $90K $82K - $134K $81K $91KSales Engineer NA NA NA 90/10 $73K - $91K $75K - $107KClient Services $105K $115.5K $103,000 NA $103,000 90/10Executive Director $92K - $118K $99K - $131KClient Services $68K $75K $69,105 NA $69,105 90/10Director $62K - $74K $69K - $81K
Role: Inside Sales RepAssumptionsAverage yearly revenue per customer (within 24 month window), if any assigned $50,000Average deal size of the net new customer $250,000#SQOs per ISR per year (includes named pipeline prospects) 30Close rate for new logo opportunities 10%Deals closed per ISR per year 3TerritoryNamed customers (for 24 month post-deal period), if any assigned 0Named pipeline prospects 2Sales-qualified opportunities generated by the Lead Gen Specialist 30 Total # of accounts = 32Projected Revenue 0 Existing customers X $50,000 per customer = $0 3 Now logo customers X $250,000 per customer = $750,000 Total = $750,000QuotaQuota $600,000Quota-to-total compensation ratio 10.00Compensation Total compensation $60,000 Base % 50% Variable % 50% Base salary $30,000 Variable component $30,000
Organizational Models:Best Practice Exercise 1. We have matched selling capacity (total selling hours) to market demand (total market potential). 2 2. The type of rep needed is determined by the role the customer wants the rep to play when conducting a transaction. 3. Territory potential determines quota assignment. 4. Our best reps are in the territories with the most potential. Back
Customer Segmentation Analysis • 63% of volume and 52% of gross margin from 6% of customers • Bottom 70% of customer make up 10% of volume and 16% of margin % Total Volume % Total Customers 10% 6% 9% 18% 18% 15% 63% 70% A (>20M gal) B (5-20M gal) A (>20M gal) B (5-20M gal) C (2-5M gal) D (<2M gal) C (2-5M gal) D (<2M gal) How much sales force time is spent on that 70% of customers that should be invested in the top 6%?
REALIGNED COUNTRY SALES STRUCTURE Geo Manager Pro Services Pre-Sales Sales Manager Sales Manager Manager Manager Pre-Sales Pre-Sales Trainers (3) Direct Sales Direct Sales Inside Sales Inside Sales Consultant ConsultantImplementaion Pre-Sales Pre-Sales Direct Sales Direct Sales Lead Gen Lead GenConsultants (32) Consultant Consultant Major Account Customer Acct Managers (4) Direct Sales Field Marketing Rep Manager Admins (5) Channel Rep Sales Admin Sales Admin • Changes Support Staff (16) – Add a Major Account Rep to the sales team – Further reduction in the number of Direct Sales Reps (number is TBD) to reflect higher comp, bigger territory, and focus on hunter role – Reduce Pre-Sales headcount number (number is TBD) – Reduce Direct Sales Rep
Lead Generation Programs:Best Practice Exercise The definition of a lead is determined by Buyer Personas. 3 We understand the # of leads generated, and their quality score, for each demand generation $ spent. We have a defined process to move from an inquiry-lead- opportunity-customer. We understand the volume required at each funnel stage to make the number. We have made the switch from outbound to inbound marketing. Back
Persona: Company Profile and Fit AWARENESS CONSIDERATION PREFERENCE PREFERENCEFocus Verticals and Employee Count:Manufacturing, Retail, Transportation, Professional & Buyer Buyer BuyerFinancial Services (300 – 5000 employees) • Do I have a problem? • Can I ignore this? • How long will it take to get this • How does this problem relate to • Is there a quick fix? fixed?Indicators of high likelihood of pain, strong fit achieving my goals? • Can I fix it myself? • How much of our time do I need to• Old legacy in-house ERP and T&A systems • How painful is the problem? • Do I need help? put towards it?• In-house manual systems and processes • Who does the problem impact – • What are my choices if I need help? • How do I know the fix will work?• Hourly workforce that is decentralized, unionized, departments, users, employees, • How should I evaluate alternatives? • How disruptive will it be?• Growing/shrinking, leadership change, merger/acq decision makers? • How will others on my purchasing • How much will it cost?• Facing heavily regulation with govt customers • What are my peers doing? committee evaluate alternatives? • What impact will it have?Buying criteria: • What happens if it doesn’t work?• Increased productivity, Compliance, User experience, business case, systems integration, employee satisfaction I Cant… I Want… Key MessagesHR SVP/EVP (Most senior person) • Receive advanced notification and • Ease of use solution for • Increase employee engagement visibility to compliance issues employees, limited training resulting in higher satisfactionResponsibilities: Benefits, • Get visibility or access to historical required • Ensure compliance withPayroll, recruiting, compensation, data to manage compliance issues • An early warning alert and automated HR and pay policyperformance management • Identify root cause of performance historical view of compliance enforcement that supportsFocus: HR compliance, employee and productivity issues. challenges and issues workers and workplaceengagement/culture, productivity, accountability • Maximize the productivity of my • ALL: Access to data that helps me • High user adoption, reduced workforce maximize return on employee training and fewer errors with BIC Role in purchase: Always a key influencer and may • ALL: Balance staffing requirements investment (Productive/Efficient) user experience be drive the evaluation. Evaluates employee and employee schedule preference • ALL: third party validation and engagement, staffing levels, and compliance. proof of financial justificationOperations COO • Get the reports I need to compare • Ease of use solution for employees, • Integrated solution resulting in profitability of plants/stores. limited training required improved accuracy (no re-key) andResponsibilities: Delivers on the • Identify root cause of performance • To reduce costs of managing my speed (no latency)promise of the organization and productivity issues. workforce • Decreases administrative time(product/service) • Maximize workforce productivity • Deliver highest quality at the lowest Improve customer service andFocus: Optimal productivity and efficiency. Seeking • Receive advanced notification and cost in shortest time product quality while reducingQuality, Cost savings and Speed. Process driven to visibility to labor expense leakage • An early warning alert and historical costs by changing the way labor isachieve customer satisfaction. • Model workforce changes and see view of compliance challenges and deployed and scheduled how they impact KPI’s issues • Cloud solution is scalable and Role in purchase: User Buyer, must work with the • Schedule the right people, right configurable, with an upgrade path CFO to fund a WFM solution. place, right time that is automated and no cost • Get the reports I need to compare • To reduce costs of managing my • Self-funding investment, clear ROIFinance CFO (delegates to Controller) profitability of plants/stores. workforce • Flexibility of solution to meet theResponsibilities: Delivers bottom • Receive advanced notification and • To drive out costs and enable current and future needs of myline numbers for the organization. visibility to labor expense leakage incremental revenue generation evolving companyFinancial performance reporting, and compliance issues • Better align corporate performanceforecasting revenue, budgeting and indicators with employee activitiescost control • Cloud solution is scalable andFocus: Financial performance and productivity. configurable, with an upgrade pathAlways looking for ways to increase profitability. that is automated and no cost Role in purchase: Approver/Economic Buyer
Lead Generation =Demand Generation + Lead Management Lead GenerationSources Lead Management StagesWebinars Awareness Consideration Engagement Intent Opportunity EmailCampaignsDirect Mail Web MCL MQL SAL SQLOutbound Calling Events Exit Criteria
Waterfall Exercise – Future State US HR/Payroll Lead Sourcing 6,400,000 2% 128,051 MCLs Assumptions 3% • Marketing contribution of 25% of total $40m rev goal Conversion Rates 3,842 MQLs – 118 deals x $85k = $10m 25% • Avg. sale SOV $85k 960 SALs • Conversion rates of average b2b lead gen teams with sound 49% process 471 SQLs IMPLICATION – Opportunities are 25% nurtured across a broader qty of MCLs 118 Deals with more qualified leads coming through to the sales reps.
Selling Methodologies:Best Practice Exercise 1. We understand the Buyer’s Journey. 4 2. Our sales methodology has been redesigned and mapped to the new buyer’s journey. 3. The new sales methodology has defined stages, activities, job aides, and buyer driven exit criteria. 4. Our SFA system facilitates the adoption of the sales methodology. 5. Forecasting accuracy exceeds 80%. Back
Sales Process: Misaligned Exit Criteria Sales Cycle Determining Confirming Opportunity Confirming Finalizing Prospecting Differentiated Value and Negotiating Closed Identified Vision Match Mutual Plan Problems PowerSales Exit Criteria First Meeting Pain, Timeline, Discovery, Demo, Reference Close Call Decision Schedule Summary of Called, Complete, Criteria, SOE Demo Findings Activant Ask Order Preferred, Proposal Review Needs Explore Resolve Catalyst Purchase Recognition Options Concerns Recognize Clear Vision of Solution Preferred Solution Risks Considered Issue Order Buyer Exit Criteria Problem Identified Buying Cycle
Sales Cycle Length --- Includes Stage Reversal --- Worst Case Stage Duration 200 180 160 2X Best Case duration until 140 Negotiating Stage 120 100 Closed-No Decision Closed-Lost 80 Closed-Won 60 40 20 0 Prospecting Opportunity Determining Confirming Vision Confirming Vision Finalizing Mutual Negotiating Final State Identified Differentiated Match and Power Plan Problems Worst Case Duration Determining Confirming Confirming Opportunity Finalizing Prospecting Differentiated Vision Value and Negotiating Final State Total Duration Identified Mutual Plan Problems Match PowerClosed - No Decision 75 126 86 87 51 61 30 40 556Closed - Lost 116 187 106 75 57 35 15 15 606Closed - Won 44 90 97 84 43 42 16 13 429* Note: Duration for a Stage is the days from Previous Stage to current stage plus days from next stage back to current stage
Modeling Segment Potential:Best Practice Exercise1.2. We use a customer-driven segmentation approach. We use an activity-driven segmentation approach. 53. We use a cost-driven segmentation approach.4. We have tested the validity of these methods: – Named accounts- high value targets – Industry- verticals with high propensity to buy – Sales Frontier- peak performance replication – Metro Compression- geographic density – Territory re-balancing happens at least once per year Back
Opportunities by Region (strategic & tactical) • Targeted NL Beachhead Region/Countries • Complete view of potential: in SFDC and other • 163 NPC Deals + 33 NPG, Main, and Direct • Potential is built off a 3 year run rate Europe: Beachhead Potential = $42M NPC Oppt = 5 NPG Oppt = 35 NPAC: $600M Middle East: Oppt coming up for Beachhead Potential = $16M Renewals NPC Oppt = 6 NPG Oppt = 19 APAC: Beachhead Potential = $23M CALA: Africa: NPC Oppt = 8 Beachhead Potential = $42M Beachhead Potential = $26M NPG Oppt = 49 NPC Oppt = 6 NPC Oppt = 8 NPG Oppt =22 NPG Oppt = 38
Number Portability Opportunity Timing • Consider Timing of when allocating Resources • Strategic – Transactional (>25M subs) • NPC Sales Cycle up to 2 years • Tactical – RTU/License (<25M subs) Timing of NP Opportunities Count of Country Fiscal Year Territory 2012 2013 2014 2015 Total Africa 1 2 3 2 8 Strategic 1 1 Tactical 2 3 2 7 Asia Pacific 1 3 2 2 8 Strategic 2 2 1 5 Tactical 1 1 1 3 CALA 3 1 2 6 Strategic 2 2 Tactical 1 1 2 4 Europe 2 3 5 Strategic 2 2 4 Tactical 1 1 Middle East 4 1 1 6 Tactical 4 1 1 6 Total 9 8 11 5 33
How to Get Started? Phase 1 Phase 2 Phase 3 Determine Sales Assess Sales Force Force Maturity Prioritize Possible Conduct Sales Conduct Discovery Remediation Present Findings Benchmark ActionsMeans Results1. Exec Interviews Assess Sales 1. Capture Current State Identify Key2. Mystery Shopping Performance 2. Show End State Drivers to improve3. Documentation Drivers Possibilities4. Metric Data 3. Make Recommendations5. Customer Survey 4. Quantify Impact Performance Drivers6. Sales Rep Survey 1. Channel Management 8. Sale Management7. Sales Rep DILO 2. Compensation Planning 9. Sales Performance8. Expert Panel Management 3. Key Account Management 4. Lead Generation 10. Sales Process 5. Quota Setting 11. Sales Strategy 6. Sales Force Structure 12. Talent Management 7. Sales Force Size 13. Territory Design
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