Sales Methodology Experts Whitepaper

7/31/2019 Sales Methodology Experts Whitepaper

1/11

This Sales Methodology Experts white paper discusses how increasing sales effectiveness can

positively impact a companys growth strategy. After exploring the key components of a

companys growth strategy, this paper outlines how increasing the capabilities of the sales

organization can drive growth. It also provides a clear process for improving overall saleseffectiveness, as well as a simple method for determining the impact of these improvements

on a companys revenue.

SIEBEL eBUSINESS

December 2003

Sales Methodology Experts Guide to Sales

Effectiveness


2/11

The Growth Imperative 1Figure 1: Strategy Components 1

Growth Strategy Components 2Figure 2: Product/market expansion grid 2

Accelerating the Execution of the Growth Strategy 4Figure 3: Reducing Risk 4Process 4Tools and Technology 4People 4

Developing the Sales Organization 5M: Methodology 5S: Skills 5K: Knowledge 5

E2: Effort and Environment 6

Understanding the Impact on the Growth Strategy(The Power of .1) 7Figure 4: Sales Equation 7

Successfully Implementing Change 8Figure 5: Six Stage Implementation Process 8

Table of Contents

W H I T E P A P E R


3/11

S A L E S E F F E C T I V E N E S S

W H I T E P A P E R

As companies emerge from the difficulties of

the recent economic downturn, the challenge

is to transition successfully from a survivestrategy to a thrive strategy. Many

companies are developing aggressive growth

strategies designed to enable future

employment, investment, and organizational

opportunities.

Studies have shown that strategy execution is

the single most important non-financial

factor valued by investors. The challenge not

only lies in how to define the growth

strategy, but more in how to energize the

whole organization, particularly the salesorganization, to execute the growth strategy.

A useful way to consider the effectiveness of

a growth strategy is to consider it from three

perspectives:

Has the growth strategy been clearly

defined?

Has it been communicatedto the right

audiences within the company?

Is it being acted uponby the right people?

To be effective, a growth strategy must meet

these criteria and contain the following 3

components (See Figure 1):

Market Strategy

Product Strategy Channel Strategy

1

The Growth Imperative

Growth

Strategy

Market

Strategy

Product

Strategy

Channel

Strategy

Exists / DefinedCommunicatedActed Upon

Figure 1: Strategy Components


4/11

Growth Strategy Components


W H I T E P A P E R

2

1. Definition of market segments thewhere of the growth strategy.

Geoffrey Moore, a prominent strategy

consultant and author of best-selling

business books including Crossing the

Chasm, defines a market segment as a

group of customers or prospects who have a

common set of needs and who reference

each other when making a buying decision.

Companies are rapidly realizing that as

global market conditions continue to

improve, the time has come to clearlyconsider which market segments to pursue

for future growth, and with which products.

Professor Igor Ansoff, a prominent thinker

in the field of strategic management, posited

a growth matrix that outlines the fourfundamental market growth areas companies

can pursue (See Figure 2):

1. Selling an existing product in an existingmarket Market Penetration

2. Selling an existing product in a newmarket Market Development

3. Selling a new product in an existingmarket Product Development

4. Selling a new product in a new market Diversification

Each option has its own level of risk and

reward. Only after careful analysis andplanning can strategic thinkers identify the

appropriate target market segments and

begin to understand the implications on

messaging and offering development.

PRODUCTSCURRENT

NEW

NEW

MARKET

PENETRATION

M

ARKETS

1

MARKET

DEVELOPMENT2 DIVERSIFICATION4

PRODUCT

DEVELOPMENT3

Figure 2: Product/market expansion grid (Source: Igor Ansoff)


5/11

C A S E S T U D I E S 3

2. Definition of product/service thewhat of the growth strategy

Associated with the selection of growth

markets is the need to clearly define the

products and capabilities that are compelling

to target customers. By identifying segment

needs, product development and product

marketing professionals can determine what

new products or modifications to existing

products will fully address those needs. In

this way, the company can provide superior

products that establish a sustainable

competitive differentiation.

Product strategy development is an iterative

process, and must be linked to the Market

Strategy in order to be effective. Time

considerations also come into play here; if a

solution can not be developed within the

time constraints (imposed by production

schedules, competitors maneuvers, or

political developments, for example), there

may be a need to reconsider the original

market segments.

3. Definition of channel (coverage)strategy the how of the growth

strategy

A critical component of the growth strategy

is determining the best way to cover the

selected market segments and product sets.

For example, does entry into a new segment

or offering area require developing a new go-

to-market channel (such as telesales), or the

deletion/modification of an existing one

(such as reducing dependence on a live sales

force)? Determining effective channel

strategy is one of the most difficult aspects of

strategy definition (and especially

execution), since it frequently involves

modifying the behaviors of a group that can

often be resistant to change the sales

organization.

Again, the iterative nature of strategy

development plays a role here it is often

necessary to reconsider the target market

and strategic product selection based on the

availability of sales talent (sales professionals;

sales managers; sales consultants; pre-sales

support resources; channel or business

partners; etc.).


6/11


W H I T E P A P E R

4

Recently, many companies havelooked to technology as a means to

accelerate the execution of their

growth strategy. While it is true that

technology has a pivotal role to play,

it is also true that technology alone

cannot guarantee strategy execution.

There is no single panacea that

guarantees success. Recent

experience with companies across a

broad spectrum of industries has

revealed that success in driving the

growth strategy results from theeffective convergence of three

distinct domains: process,

technology, and people.

Process

The first domain of convergence consists of

corporate-level processes designed to enable

the members of the sales organization to do

their jobs. In order to drive sales effectiveness,

companies should implement certain best

practice processes. The most critical of these

corporate-level processes is the sales process.

The sales process identifies the sales stages

your organization uses for evaluating the

status of each opportunity for pipeline

management and forecasting purposes. The

sales process also defines the critical roles in

the organization, identifies key buying

milestones, and should map onto the

customers buying process. Defining and

implementing the appropriate sales process

is the first step to driving sales effectiveness.

Tools and TechnologyThe second domain of convergence is the

implementation of the technology, tools, and

infrastructure necessary for supporting your

core processes. While the processes aredesigned to drive sales effectiveness,

technology-enabled selling tools make it easy

to leverage the processes.

By determining the appropriate tools,

infrastructure, and technology to implement,

companies ensure that they fully leverage

their processes without placing excessive

burden on users. The marriage of these two

elements, process and technology, is key to

enabling the sales organization to implement

the growth strategy.

People

The development of sales people is the final

domain of convergence. The goal is to

deploy the right people with the right

capabilities to execute the growth strategy.

The right people are those who are able

andwilling to implement core processes and

utilize tools and technology to maximize

their effectiveness.

Developing sales people can be a difficult

task, as these individuals are often resistant

to change. Sales people and sales managers

do not automatically migrate to new

processes and technologies because they

believe they limit the unique sales approach

that have spent significant time developing.

They are concerned that the new processes

and technology may, in fact, be inferior to

their current method of pursuing sales and

commissions. Adopting the new sales

strategy and methods may entail risking

valuable time, effort, and relationships

risks that sales people are ultimately

unwilling to take. This belief in their ownabilities and methodologies makes it difficult

to convince them of the need for change.

Figure 3: Driving the Growth Strategy

The convergenceof Process,

People, and

Tools/Technologydrives sales

effectiveness

Tools/Technology Process

People

Accelerating the Execution of the Growth Strategy


7/11

Developing the Sales Organization


W H I T E P A P E R

5

In order to identify and design developmentactivities for the sales organization that

directly support the growth strategy, an

understanding of cause and effect, as it

relates to the sales function, is beneficial.

To determine the positive effect of sales

development (or in its absence, the negative

effect of stagnation), consider the following

equation:

M: Methodology to improve the

effectiveness of a sales organization, one of

the first steps is to install best-in-class

methodology. A methodology is a learnable

and repeatable best practice used by

individuals and teams that identifies what to

do at different times.

Examples of different types of methodology

include: Opportunity Management; Account

Management; Territory Management;

Partner Management; etc. The application of

a methodology normally results in a plan

that can accelerate the creation of revenue

streams, the development of excellent

customer relationships, and the winning of

sales opportunities.

S: Skills all sales people have already

developed many of the required sales skills in

their pre-selling careers, and then are able

with coaching and training to hone those

skills to meet the competitive and

demanding situations in which they find

themselves.

However, today there is an apparent need fornew,differentiating skills that serve sales

people and teams as they compete in todays

market and prepare for future market

environments. Specifically, these skills

include the ability to establish credibility

with senior executives, and the ability to

determine and communicate compelling,

business-based value propositions to

prospects and customers. These two skill

areas separate merely adequate selling from

truly exceptional sales performance. These

skills provide the how of competing

successfully.

K: Knowledge knowledge is the area of

sales competence that provides the

salesperson with the necessary context to

perform. Simply understanding the sales

process and having the skills to implement a

meaningful sales call is insufficient without

the appropriate knowledge that establishes

credibility and creates potential value in the

mind of a prospect.

Many companies invest significant resources

(people, money, and time) in providing

their sales communities with knowledge that

can be less effective than desired. The

requirement of the effective sales

organization is to receive applied

knowledge information and insight which

feeds directly into the methodologies for

creating and winning opportunities.

Examples of applied knowledge include:

product information with recommendedwinning sales strategies; win/loss summaries;

solution maps; etc.

(M + S + K) *E2

= ResultsWhere results can be measured innumerous ways: revenues, profits,

number of users, level of margin, etc.


8/11

E2: Effort and Environment The threedevelopment components of Methodology,

Skills, and Knowledge are aspects of

improving the abilityof the sales

organization.

Equally important is driving thewillingness

of the sales teams to do what is necessary to

accelerate the execution of the growth

strategy.

Willingness is partly demonstrated by the

work rate of the individual sales people

their level of Effort. Effort is an attribute of

an individual it can not be trained, it can

only be recruited. Behavioral interviewing is

a technique that enables managers to ensure

that they are recruiting people who are

willing to expend the necessary effort. Based

on the concept that past actions are the best

predictor of future behavior, the line of

questioning with behavioral interviewing is

focused on actual demonstrated behaviors,

instead of hypothetical questions.

Interviewees are asked to provide detailed,

specific examples of when they

demonstrated the particular behaviors or

skills the employer is seeking.

The other element that determineswillingness is the Environment surrounding

the sales people.

Environmental factors include:

Management how is performance

managed? What is expected of

salespeople? How are they coached? What

reinforcement is provided?

Measurement are the measures

(incentives, pay, and recognition) aligned

with the behavioral requirements? David

Packard, co-founder of Hewlett-Packard,frequently stated, Tell me how a man is

measured and I will tell you what he

does.

Systems and Tools are the sales people

provided with tools that enhance (and

not inhibit) their performance? Are

systems designed to minimize duplicate

entry?

S A L E S E F F E C T I V E N E S S 6


9/11

The ultimate goal of investing in thedevelopment of the sales organization is to

successfully implement the companys

growth strategy. This investment is intended

to have a significant positive impact on the

companys revenue.

It is often extremely difficult to visualize the

potential returns from an investment in

these areas. Managers intuitively know there

is some benefit in training and development,

but lack a model to help them understand

the magnitude of that effect. However, SalesMethodology Experts has created a simple

formula, the Sales Equation, to help

managers and executives gain a basic

understanding of how a sales effectiveness

initiative can impact their organization.

The Sales Equation is based on the idea that

the outcomes (revenue) generated by any

sales organization are the direct result of

four main factors:

1. The number of opportunities in the pipeline2. The size of the opportunities in the pipeline

3. The percentage of opportunities won

4. The length of the sales cycle

These four factors are positively impacted

through investments in the Process,

Technology, and People areas discussed

earlier. This means that managers and

executives have the opportunity to directly

influence their success by making relatively

small changes in these four areas. (See

Figure 4)

For example, companies can invest in a

proven opportunity management

methodology in order to directly impact

opportunity size, win rate, and the length of

the sales cycle. A proven opportunity

management methodology can significantly

increase the average size of the different

opportunities being developed, the

percentage of opportunities in the pipeline

that are closed, and the speed with which

those opportunities are closed. Thesebenefits can be increased even further

through an investment in the differentiating

selling skills discussed earlier.

In addition to impacting the factors related

to managing opportunities, companies can

significantly impact the number of

opportunities or at bats for each

salesperson through an investment in

account or partner management

methodologies. Through the effective

management of a companys pool of currentand future customers and strategic business

partners, a significant number of new,

pipeline-filling opportunities can be

identified.

Understanding the Impact on the GrowthStrategy (The Power of .1)


W H I T E P A P E R

7

Figure 4: Sales Equation

Revenue =# deals X size X win rate

sales cycle

Assume a 10% improvement in all areas as

a result of an investment in Opportunity,

Account and Partner Management

Methodology to improve key

measurements

=

48%

REVENUE1.1 X 1.1 X 1.10.9


10/11

Successfully Implementing Change


W H I T E P A P E R

8

The benefits of developing the salesorganization to drive sales effectiveness are

evident. However, in order to minimize risk

and improve the chances of success, it is

critical to apply a successful change

management process.

Although it seems counterintuitive,

organizational change is a manageable

process that has a definite structure and

outcomes that can be reliably anticipated. If

major corporate change is attempted

without understanding this process, onemight be confused by reactions that are a

natural part of the process. Implementation

guidelines can help managers anticipate the

reactions to and manage the outcomes of

major corporate change.

Sales Methodology Experts has developed an

effective change management architecture

for implementing large-scale process changes

in sales and marketing organizations. This

Implementation Architecture incorporates

leading-edge change management

techniques. The ImplementationArchitecture covers six phases of a successful

sales and marketing process change

initiative:

Analyzing business needs and identify the

right solution for achieving change

Aligning management with the change

initiative

Integrating the solution into existing

processes and systems

Deploying the solution through effective

training

Transferring ownership of the new

process to managers

Reviewing the success of the initiative and

present results to management

For additional information on leveraging the

Implementation Architecture to successfully

plan and execute corporate change, please

look for Sales Methodology Experts white

paper: Establishing Lasting Change in Your

Sales and Marketing Organizations.

Figure 5: Six Stage Implementation Process


11/11

(05/04)

www.salesmethodologyexperts.com

World Headquarters

Siebel Systems, Inc.

2207 Bridgepointe Parkway

San Mateo, CA 94404

United States

Tel: 650-295-5000

Fax: 650-295-5 1 1 1

Sales Methodology Experts

Atlanta

One Glenlake Parkway

Atlanta, GA 30328

United States

Tel: 770-829-4500

Fax: 770-829-4511

Sales Methodology Experts

Geneva

Siebel Systems Schweiz GmbH

18, Avenue Louis Casa

1209 Geneva

Switzerland

Tel: +41 (0) 22 747 75 55

Fax: +41 (0) 22 747 76 51

Asia Pacific

Siebel Systems Australia

Level 1, 80 Pacific Highway

North Sydney, NSW 2060

Australia

Te l: +61 2 9012 3100

Fax: +61 2 9012 3444

2004 Siebel Systems, Inc. All rights reserved. Siebel and the Siebel Systems logo are trademarks of Siebel Systems, Inc. andmay be registered in certain jurisdictions.

Sales Methodology Experts Whitepaper

Documents

Transcript of Sales Methodology Experts Whitepaper