Tag Archives: sales process

The Holy Grail of the Repeatable Sales Process: Is Repeatability Enough?

Most of us are familiar with Mark Leslie’s classic Sales Learning Curve and its implications for building the early salesforce at an enterprise startup.  In short, it argues that too many startups put “the pedal to the metal” on sales hiring too early – before they have enough knowledge, process, and infrastructure in place – and end up with a pattern that looks like:

  1. Hire 1 salesrep, which seems to be working so we …
  2. Hire 2 more salesreps, which seems to be mostly working so we think “Eureka!” and we …
  3. Hire 10 more salesreps overnight

With the result that 8 of the 10 salesreps hired in phase three flame out within a year.  You end up missing numbers and hiring a new VP of Sales who inherits a smoldering rubble of a salesforce which they must rebuild, nearly from scratch.  The cost:  $3-5M of wasted capital [1] and, more importantly, 12-18 months of lost time.

But let’s say you heed Leslie’s lessons and get through this phase.  Once you’re up to 20-30 reps, you don’t just need sales to be working, you need to prove that you have attained the Holy Grail of startup sales:  a repeatable sales process.

Everyone has their own definition of what “repeatable sales process” means and how to measure if you’ve attained it.  Here are mine.

A repeatable sales process means:

  1. You hire salesreps with a standard hiring profile
  2. You give them a standard onboarding program
  3. You have standard support ratios (e.g., each rep gets 1/2 of a sales consultant, 1/3 of a sales development rep (SDR), and 1/6 of a sales manager)
  4. You have a standard patch (and a method for creating one) where the rep can be successful
  5. You have standard kit including tools such as collateral, presentations, demos, templates
  6. You have a standard sales methodology that includes how you define and execute the sales process

And, of course, it’s demonstrating some repeatable result.  While many folks instinctively drift to “80% of salesreps at 100% (or more) of their quota” they forget a few things:

  • The percentage should vary as function of business model: with a velocity model, monthly quotas, and a $25K ARR average sales price (ASP), it’s a lot more applicable than with an enterprise model, annual quotas, and a $300K ASP
  • 80% at 100% means you beat plan even if no one overperforms [2] – and that hopefully rarely happens
  • There is a difference between annual and quarterly performance, so while 80% at 100% might be reasonable in some cases on an annual basis, on a quarterly basis it might be more like 50%
  • The reality of enterprise software is that performance is way more volatile than you might like it to be when you’re sitting in the board room
  • When we’re looking at overall productivity we might look at the entire salesforce, but when we’re looking at repeatability we should look at recently hired cohorts. Does 80% of your third-year reps at quota tell you as much about repeatability – and the presumed performance of new hires – as 80% of your first-year reps cohort?

Long story short, in enterprise software, I’d say 80% of salesreps at 80% of quota is healthy, providing the company is making plan.  I’d look at the most recent one-year and two-year cohorts more than the overall salesforce.  Most importantly, to limit survivor bias, I’d look at the attrition rate on each cohort and hope for nothing more than 20%/year.  What good is 80% at 80% of quota if 50% of the salesreps flamed out in the first year?  Tools like my salesrep ramp chart help with this analysis.

But all that was just the warm-up for the big idea in this post:  is repeatability enough?  Turns out, the other day I was re-reading my favorite book on data governance, Non-Invasive Data Governance by Bob Seiner, and it reminded me of the Capability Maturity Model, from Carnegie Mellon’s Software Engineering Institute.

Here’s the picture that triggered my thinking:

Did you see it?  Repeatable is level two in a five-level model.  Here we are in sales and marketing striving to achieve what our engineering counterparts would call 40% of the way there.  Doesn’t that explain a lot?

To think about what we should strive for, I’m going to switch models, to CMMI, which later replaced CMM.   While it lacks a level called “repeatable” – which is what got me thinking about the whole topic – I think it’s a better model for thinking about sales [3].

Here’s a picture of CMMI:

I’d say that most of what I defined above as a repeatable sales process fits into the CMMI model as level 3, defined.  What’s above that?

  • Level 4, quantitively managed. While most salesforces are great about quantitative measurement of the result – tracking and potentially segmenting metrics like quota performance, average sales price, expansion rates, win rates – fewer actually track and measure the sales process [2].  For example, time spent at each stage, activity monitoring by stage, conversion by stage, and leakage reason by stage.  Better yet, why just track these variables when you can act on them?  For example, put rules in place to take squatted opportunities from reps and give them to someone else [3], or create excess stage-aging reports that will be reviewed in management meetings.
  • Level 5, optimizing. The idea here is that once the process is defined and managed (not just tracked) quantitatively, then we should be in a mode where we are constantly improving the process.  To me, this means both analytics on the existing process as well as qualitative feedback and debate about how to make it better.  That is, we are not only in continual improvement mode when it comes to sales execution, but also when it comes to sale process.  We want to constantly strive to execute the process as best we can and also strive to improve the process.  This, in my estimation, is both a matter of culture and focus.  You need a culture that process- and process-improvement-oriented.  You need to take the time – as it’s often very hard to do in sales – to focus not just on results, but on the process and how to constantly improve it.

To answer my own question:  is repeatability enough?  No, it’s not.  It’s a great first step in the industrialization of your sales process, but it quickly then becomes the platform on which you start quantitative management and optimization.

So the new question should be not “is your sales process repeatable?” but “is it optimizing?”  And never “optimized,” because you’re never done.

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Notes

[1] Back when that used to be a lot of money

[2] You typically model a 20% cushion between quota and expected productivity.

[3] The nuance is that in CMM you could have a process that was repeatable without being (formally) defined.  CMMI gets rid of this notion which, for whatever it’s worth, I think is pretty real in sales.  That is, without any formal definition, certain motions get repeated informally and through word of mouth.

[4] With the notable exception of average sales cycle length, which just about everyone tracks – but this just looks at the whole process, end to end.  (And some folks start it late, e.g., from-demo as opposed to from-acceptance.)

[5] Where squatting means accepting an opportunity but not working on it, either at all or sufficiently to keep it moving.

Using “Win Themes” to Improve Your Sales Management and Increase Win Rates

At most sales review meetings what do you hear sales management asking the reps?  Questions like these:

  • What stage is this opportunity in?
  • What value do you have it at in the pipeline?
  • Is there upside to that value?
  • What forecast category is it in?
  • In what quarter will it close?
  • What competitors are in the deal?
  • What products will they be buying?
  • Do they have budget for the purchase?
  • How do we meet their primary requirements for a solution?
  • How have we demonstrated that we can meet those requirements?
  • What are the impacts of not solving those problems?
  • How did they attempt to solve those problems before?
  • Who is impacted by the consequences of those impacts?
  • Who is the primary decision maker?
  • What is the decision-making process?
  • Who else is involved in the decision and in what roles?
  • Who have you developed relationships with in the account?
  • What risk is there of a goal-post move?

And on and on.

Some of these questions are about systems and process.  Some are about forecasting.  Ideally, most are about the problem the customer is trying to solve, the impacts of not solving it, how they tried to solve it before, the ideal solution to the problem, and the benefits of solving it.  But in our collective hurry to be process-oriented, methodology-driven, systems-compliant, and solutions-oriented, all too often something critical gets lost:

Why are we going to win?

What?  Oh shoot.  Yep, forgot to ask that one.  And, of course, that’s the most important one.  As I sometimes need to remind sales managers, while the process is great, let’s not forget the purpose of the process is to win.

(I’ve even met a few sales managers so wedded to process and discipline that I’ve wondered if they’d rather crash while flying in perfect formation than win flying out of it.)

Process is great.  I love process.  But let’s not forget the point.  How can we do that?  With win themes — two to three simple, short, plain-English reasons why you are going to win the deal.  Here’s an example.  We are going to win because:

  • Joe the CFO saw first-hand how Adaptive didn’t scale in his last job and is committed to purchasing a system he can grow with.
  • Our partner, CFO Experts, has worked with Joe in the past, has a great relationship with him, and firmly believes that Host is the best fit with the requirements.

Build win themes into your systems and process.  Don’t add win themes to the bottom of your Salesforce opportunity screen; put them right up top so the first conversation about any deal — before you dive into the rabbit hole — is “why are we going to win?”   Two to three win themes should provide a proposed answer and a healthy platform for strategic discussion.

(And, as my friend Kate pointed out, in case it didn’t come up in the win theme conversation, don’t forget to ask “why might we lose?”)

Using "Win Themes" to Improve Your Sales Management and Increase Win Rates

At most sales review meetings what do you hear sales management asking the reps?  Questions like these:

  • What stage is this opportunity in?
  • What value do you have it at in the pipeline?
  • Is there upside to that value?
  • What forecast category is it in?
  • In what quarter will it close?
  • What competitors are in the deal?
  • What products will they be buying?
  • Do they have budget for the purchase?
  • How do we meet their primary requirements for a solution?
  • How have we demonstrated that we can meet those requirements?
  • What are the impacts of not solving those problems?
  • How did they attempt to solve those problems before?
  • Who is impacted by the consequences of those impacts?
  • Who is the primary decision maker?
  • What is the decision-making process?
  • Who else is involved in the decision and in what roles?
  • Who have you developed relationships with in the account?
  • What risk is there of a goal-post move?

And on and on.
Some of these questions are about systems and process.  Some are about forecasting.  Ideally, most are about the problem the customer is trying to solve, the impacts of not solving it, how they tried to solve it before, the ideal solution to the problem, and the benefits of solving it.  But in our collective hurry to be process-oriented, methodology-driven, systems-compliant, and solutions-oriented, all too often something critical gets lost:

Why are we going to win?

What?  Oh shoot.  Yep, forgot to ask that one.  And, of course, that’s the most important one.  As I sometimes need to remind sales managers, while the process is great, let’s not forget the purpose of the process is to win.
(I’ve even met a few sales managers so wedded to process and discipline that I’ve wondered if they’d rather crash while flying in perfect formation than win flying out of it.)
Process is great.  I love process.  But let’s not forget the point.  How can we do that?  With win themes — two to three simple, short, plain-English reasons why you are going to win the deal.  Here’s an example.  We are going to win because:

  • Joe the CFO saw first-hand how Adaptive didn’t scale in his last job and is committed to purchasing a system he can grow with.
  • Our partner, CFO Experts, has worked with Joe in the past, has a great relationship with him, and firmly believes that Host is the best fit with the requirements.

Build win themes into your systems and process.  Don’t add win themes to the bottom of your Salesforce opportunity screen; put them right up top so the first conversation about any deal — before you dive into the rabbit hole — is “why are we going to win?”   Two to three win themes should provide a proposed answer and a healthy platform for strategic discussion.
(And, as my friend Kate pointed out, in case it didn’t come up in the win theme conversation, don’t forget to ask “why might we lose?”)

Just Effing Demo

I remember one time reading a win/loss report that went something like this.

“We were interested in buying Host and it made our short list.  When we invited you in for a demo with our team and the CFO, things went wrong.  After 20 minutes, your sales team was still talking about the product so the CFO left the meeting and didn’t want to evaluate your solution anymore.”

Huh?  What!  We spend a few hundred dollars to get a lead, maybe a few thousand to get it converted to a sales opportunity, we give it to our sales team and then they ‘show up and throw up’ on a prospect, talking for so long that the key decision maker leaves?

Yes, salespeople love to talk, but this can’t happen.  I remember another time a prospect called me.

“Look, I’ve been using EPM systems for 25 years.  I’ve used Hyperion, Essbase, TM1, and BPC.  I’ve been in FP&A my entire career.  I have an MBA from Columbia.  I am fully capable of determining my own needs and don’t want to play Twenty Questions with some 20-something SDR and then play it again with some sales consultant before I can get a live demo of your software.  Can we make that happen or not?”

Ouch.  In this case, our well defined and valued sales process (which required “qualification” and then “discovery”) was getting in the way of what the eminently qualified prospect wanted.

In today’s world, prospects both have and want more control over the sales process than ever before.  Yes, we might want to understand your requirements so we can put proper emphasis on different parts of the demonstration, but when a prospect — who clearly knows both what they’re doing and what they want — asks us for a demo, what should we do?  One thing:

Just effing demo  —  and then ask about requirements along the way

Look, I’m not trying to undo all the wisdom of learning how to do deep discovery and give customized demos, espoused by world-class sales trainers like Barry Rhein or in books like Just F*ing Demo (from whose title I derived the title of this post [1]).  These are all great ideas.  They should be your standard procedure.

But you need to remember to be flexible.  I always say don’t be a slave to metrics.  Don’t be a slave to process, either.

Here’s what I’ve learned from these situations:

Avoid triple-qualifying prospects with an SDR, then a rep, then an SC. Make SDR qualification quick and light.  Combine rep and SC qualification/discovery whenever possible. Don’t make the prospect jump through hoops just to get things started.

Intelligently adapt your process. If the prospect says they’re an expert, wants to judge for themselves, and just wants a quick look at your standard demo, don’t try to force a deep discovery call so you can customize – even if that’s your standard process.  Recognize that you’re in a non-standard situation, and just show up and do what they want.

Set expectations appropriately. There is a difference between a “Product Overview” and “Demonstration.”  If you think the right meeting is 30 minutes of slides to frame things and then a 30-minute demo, tell the prospect that, get their feedback, and if everyone agrees, then write “Product Overview” (not “Demonstration”) on the agenda.

Don’t make them wait. If you say the presentation is a one-hour demo, you should be demoing software within the first 5-7 minutes.  While brief personnel introductions are fine, anything else you do up-front should tee-up the demo.  This is not the time to talk about your corporate values, venture investors, or where the founder went to school.  Do that later, if indeed at all.

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[1] A great book, by the way.  My favorite quote:  “in short, I stopped trying to deliver the perfect demo for my product and starting trying to deliver the perfect demo for my audience.”