sales management association webcast five signs you need to graduate from sales ... · 2019. 7....

Presented by

© Copyright 2017 The Sales Management Association. All rights reserved.

SalesManagementAssociationWebcast

28 September 2016

Five Signs You Need to Graduate from Sales Effectiveness

BobKellyChairmanSalesManagementAssociationrjkelly@salesmanagement.org

[email protected]

DanPerryPrincipalSalesBenchmarkIndexdan.perry@salesbenchmarkindex.com


About The Sales Management Association

Aglobal,cross-industryprofessionalassociationforsalesoperationsandsalesmanagement.

Focusedinprovidingresearch,casestudies,training,peernetworking,andprofessionaldevelopmenttoourmembership.

Fosteringacommunityofthought-leaders,serviceproviders,academics,andpractitioners.

www.salesmanagement.org

www.salesmanagementconference.com

2

16 – 18 OCTOBER 2017 ATLANTA


Today’s Speakers

3

KevinGray

WWPortfolioManagement

IBM

[email protected]

BobKelly

[email protected]

DanPerry

Principal

SalesBenchmarkIndex

[email protected]

Presented by


SalesManagementAssociationWebcast

28 September 2016

Five Signs You Need to Graduate from Sales Effectiveness

BobKellyChairmanSalesManagementAssociationrjkelly@salesmanagement.org

[email protected]

DanPerryPrincipalSalesBenchmarkIndexdan.perry@salesbenchmarkindex.com

51/24/17 SBI Proprietary & Confidential. All rights reserved. 51/24/17 SBI Proprietary & Confidential. All rights reserved.

FIVE SIGNS YOU NEED TO GRADUATE FROM SALES EFFECTIVENESS Using a Revenue Growth Methodology


FIVE SIGNS YOU NEED TO GRADUATE FROM SALES EFFECTIVENESS

What is an expectations treadmill?• Executives are hired to create value through revenue growth for

their shareholders and have known for a long time that the key to a higher valuation is revenue growth.

• Gone are the days of slow and steady growth. • Executives brought in to improve a company’s performance have

low expectations and substantial room for improvement, to start. • However, once signs of success are visible, investors push

expectations higher and higher. • Executives have to pull off herculean feats to exceed these

revenue growth expectations.

#1: You are on the expectations treadmill and cannot fall off.



• Sustaining growth is very hard, particularly for large companies. The math illustrates this:

#1: You are on the expectations treadmill and cannot fall off.

Year 1 Year 10 Expected Growth Rate Revenue Difference

Current Revenues: $1 Billion

Revenues at 5% Growth Rate: $1.63 Billion

+$530 Million

Industry Growth Rate: 5% Revenues at 8% Expected Growth Rate: $2.16 Billion

Investors Expected Growth Rate: 8%

Can you reinvent

yourself to find the

$530 Million needed?

Salesforce Effectiveness alone cannot produce this amount of Revenue Needed. Executives need a Revenue Growth

Methodology



Temporary Spikes in Revenue are misleading. Sales Executives can go from Hero to Goat quickly. For Example--Why?

• New Products beat the Competition• New Sales Leader is hired which boosts Sales Productivity• Customer base goes through a Product Refresh• Only Standard Operating Procedures or Best Practices are put into

place which give short Revenue lifts

#2: You make your number sporadically, but not consistently, and not always.


REVENUE GROWTH METHODOLOGY METHODS

• Emerging Best Practice: A process or methodology used by top growth executives. Emerging best practices cause accelerated revenue growth.

• Best Practice: A process or methodology used by many within the industry. These are not as impactful as Emerging Best Practices.

• Standard Operating Procedure: An industry standard. If not in place, their absence may cause revenues to decline.

Salesforce Effectiveness alone cannot produce this amount of Revenue Needed. Executives need a Revenue Growth

Methodology deployed through Emerging Best Practices



Revenue Goals can simply be unrealistic• One Company in our Research had a Goal of 20% Revenue Goal for

20 years • Current Revenues are $5 Billion in Sales• Industry Growth is 5% Projected

• Market Maturation will occur which slows growth

#3: Your revenue goal is very hard to make, and may be unrealistic.

Little Chance of

Success

Sales effectiveness programs often do not take into account where an industry, company or product are in their life cycle. This is the

reason these programs often fail to deliver above average revenue growth.



A company’s revenue growth rate is constrained by the growth rate of the industry in which it participates

• For example, if the size of your industry is $10 billion with a growth rate of 10%, it is growing $1 billion per year.

• This is the growth available to the industry participants. If your annual revenue growth rate is less than 10%, then you are underperforming.

• If your annual revenue growth rate is more than 10%, then you are outperforming, capturing expansion opportunities, and taking market share from your competition.

#4: Your industry is growing revenues more than you are.

Sales effectiveness programs are only focused on sales. And because of this, they often fail to deliver revenue growth that

exceeds that of the industry



Which Market do you compete in?• Market Share:

• Gains in market share are an important component of growing revenues, especiallyif you are operating in a mature market.

• Growth that comes from taking share from competitors is the hardest type of growth to obtain, and typically the most expensive.

• Market Expansion: • In comparison, growth that comes from general market expansion is

much less expensive because competitive retaliation is low since all competitors are doing well.

#5: Your competitors are growing revenues faster than you are.

Sales effectiveness programs do not deliver revenue growth by taking share from competitors solely. Product teams need to establish better pricing and packaging to gain share which is

something Sales Effectiveness doesn’t do.


WHAT IS A REVENUE GROWTH METHODOLOGY?

A management method used to accelerate the rate of revenue growth.

Why is it needed?To grow revenues faster than their competitors and industry.

How does it work?Gets the functional strategies of sales, marketing, and products into alignment.


REVENUE GROWTH METHODOLOGY

CORPORATE STRATEGY PRODUCT STRATEGY MARKETING STRATEGY SALES STRATEGY• Step 1: Objectives• Step 2: Markets

• Markets• Accounts• Buyers

• Step 3: Products• Coverage & Channels• Packaging• Pricing

• Step 4: Competitors• Step 5: Go-To-Market• Step 6: Talent

• Product Planning• Markets• Accounts• Buyers

• Step 2: Product Principles• Buyer Behavior • Customer Experience Design

• Step 3: Go-To-Market• Product Road Map• Product Launch & Messaging• Pricing• Packaging

• Step 1: Marketing Research• Markets• Accounts• Buyers

• Step 2: Strategy and Planning• Brand Strategy & Planning• Brand Positioning & Messaging• Campaign Strategy & Planning• Content Strategy & Planning• Budgeting Strategy & Planning

• Step 3: Resources• Marketing Organizational

Design• Agency Management• People Plan

• Step 4: Execution• Account Based Marketing• Lead Generation• Customer Marketing• Partner Marketing

• Step 5: Marketing Support• Product Marketing• Field Marketing• Marketing Operations• Systems

• Step 1: Sales Planning• Markets• Accounts• Buyers

• Step 2: Engagement• Prospecting• Sales Process• Organizational Design• People Plan• Channel Optimization• Territory Alignment• Quota Setting• Compensation Planning

• Step 3: Sales Support• Sales Operations• Sales Enablement• Systems• Back Office Support

REVENUE GROWTH METHODOLOGY

A Revenue Growth Methodology allows you to make your revenue growth target every quarter, and every year, because it is not solely dependent on execution. It perfectly blends strategy (multiyear) with execution (in-year).


HOW TO USE A REVENUE GROWTH METHODOLOGY

• Identify hidden revenue growth opportunities.

• Develop innovative channels to route products to market.

• Develop an organizational model with sales, marketing and product working in harmony.

• Increase revenue per sales person by optimizing territories, quotas and compensation plans.

• Launch new products successfully.


WHAT IS THE BENEFIT OF STRATEGIC ALIGNMENT?

Why?• RGM Perfectly blends strategy with execution • Implements emerging best practices as opposed

to standard operating procedure • Facilitates and achieves strategic alignment

among the external market, the corporate strategy and the functional areas.

There are four primary benefits of implementing the RGM: • Probability of obtaining the

revenue growth objective will be increased

• Customer Lifetime Value (CLTV) will increase

• Productivity per sales head count will increase

• Customer Acquisition Cost (CAC) will decrease

These benefits are realized when the RGM is implemented by great business leaders.


CUSTOMER ACQUISITION COST DECREASES


CUSTOMER LIFETIME VALUE INCREASES


PRODUCTIVITY PER SALES REP INCREASES


WHO IS USING WHAT?


COMPANIES THAT MAKE THE NUMBER


CALL TO ACTION

• Is Your Strategy a Problem?• Are Your Tactics a Problem?• Build a Sequenced, Prioritized Roadmap of a mixture of

Strategy and Tactics (Execution)• Fundamental Execution


SALES BENCHMARK INDEX

SBI Daily Blog: http://www.salesbenchmarkindex.com/blog

SBI Weekly Podcasthttp://www.salesbenchmarkindex.com/sbi-podcast

SBI Quarterly Magazine:http://www.salesbenchmarkindex.com/the-sbi-magazine

SBI Monthly TVhttp://www.salesbenchmarkindex.com/tv

Revenue Growth Methodology:https://salesbenchmarkindex.com/how-to-make-your-number-in-2017/report/

© 2014 IBM Corporation

FIVE SIGNS YOU NEED TO GRADUATE FROM SALES EFFECTIVENESS Using a Revenue Growth Methodology

© 2014 IBM Corporation25

HOW TO USE A REVENUE GROWTH METHODOLOGY

• Identify hidden revenue growth opportunities.

• Develop innovative channels to route products to market.

• Develop an organizational model with sales, marketing and product working in harmony.

• Increase revenue per sales person by optimizing territories, quotas and compensation plans.

• Launch new products successfully.© 2016 IBM Corporation


PEOPLE, PROCESS AND TECHNOLOGY

Sales Management

Sales Analytics

Sales Planning• What is the market opportunity & potential?• Which accounts are the most profitable?• Do my sales quota targets align with the revenue plan?• How should we carve up our sales territory coverage?• What should each of the sales people carry in quota?• Do we have the right number of sales reps and talent?

• Are there any territory coverage gaps?• Is there any unassigned quota?• Are the incentive compensation plans motivating the sales reps?• Do we have the right dashboards, and reports • Can we make changes when disruption occurs?

• Are we in jeopardy of achieving quota targets?• Which sales team/individual is gaming the incentive compensation

plan?• What products are performing poorly in the market?• Are there any sales territories under-served?• Are the incentive comp plans motivating the right sales behaviors?Aligning CEO, Finance, Sales, Marketing, Product



HOW INNOVATIVE TECHNOLOGY CAN HELP


Sales PlanningAccount and Scoring

Product ProfitabilityTerritory Coverage

Revenue Planning/Quota SettingSales Capacity Planning

Sales ManagementTerritory ManagementQuota Management

Incentive Compensation ManagementSales Recruitment, Hiring and On-boarding

Sales AnalyticsSales Forecasting & Predictability

Cost of sales vs cost of compensationRevenue & profitability

Market trends, patterns & opportunities

Sales Performance Management (SPM)A comprehensive solution


SPREADSHEETS SIMPLY DON’T WORK


Many firms still rely on a patchwork of spreadsheets, email, manual processes, and outdated legacy systems to manage and administer variable comp plans


SPM JOURNEY


Uniq

ue v

alue

del

iver

ed

Relative scope and complexity of change

1 2 3 4

Client is operating in a chaotic environment where they are using spreadsheets and manual processes, errors in commission payments, lack of visibility, etc.

Client has taken control of the sales performance and incentive compensation processes and is no longer working in spreadsheets, manual processes, lengthy payment cycles, and has gain trust and confidence with the sales team.

CHAOSpre-ICM

STABILIZEtheoperation

OPTIMIZEdecisions&processes

Client is able to provide visibility into sales performance and metrics to make better decision with some level of reporting and analytics.

Client is leveraging a comprehensive sales planning, management, and analytics solution to guide data discovery and predictive analytics with visualizations of sales performance and incentive compensation data.

Reducedisputes

Calculateaccurateandtimelycommissions

Meetauditandcompliancerequirements

Manageworkflowandroutingprocesses

GainsalesteamtrustandconfidenceSales

performancevisibilitywithdashboards&

reportsSpreadsheetsorHome-grownsolutions

Improveddecisionmaking

Gainsomeusefulanalyticsand

insight

Moresatisfiedsalesteam/reps

Stabilityandroutine

Deepanalyticdiscoveryand

predictiveinsight

Decisionsthatresultinhighlyimpactfulbusinessresults

Abilitytobeagileandflexible(i.e.economic,competitive,marketconditions,etc.))

Plan,manageandanalyzesalesperformance

Valuerealized

COGNITIONdata&analytics

Isolatedprocesses

Nocollaboration(i.e.Sales,Finance,

Marketing)Novisibilityofsalesperformance

ErrorsinOverpayments

Mis-alignment

Makestrategicandtacticaldecisions

faster’

EvaluatingSPMSolutions

ImplementSPMSolution

FullyadoptSPMSolution

ExpandSPMtoPlanning,Management&Analytics

First step


MOVE FROM CHAOS TO STABILITY


► Added 5-6 hours of selling time per rep per month

► Cross-sell ratio (products owned per customer) increased from 2 to 5.66

► Over $1 million in reduced commission overpayments lead to system payback in 1st year

► Improved plan managementincreased profit margins by25%

ENABLE & MOTIVATE SALES TEAMS

FLEXIBILITY TO ADAPT

BOTTOM LINE IMPROVEMENTS

DRIVE OPERATIONAL EFFICIENCIES

► Payout process reduced from 2 weeks to 2 days.

► Went from hundreds of spreadsheets with manually entered data to one simple system

► Reduce times to set up new plans by 250 hours annually

► Modeling allows simulation of plan changes or adding new components prior to rolling out

Many organizations simply begin by moving away from spreadsheets to Incentive Compensation Management as the first step in their SPM journey.


To Learn More…


ibm.com/spmhttps://www.linkedin.com/groups/8334140

Best Practices in Sales Performance Management – Incentive Compensation, Territories and Quotas

@IBMSPM


How Does Training Become More Nimble?

32

Sales effectiveness initiatives are insufficient? Doesn’t this just describe poor sales effectiveness initiatives? Are they being ignored?



33

Do you think spreadsheets should be eliminated altogether or used less?



34

How do you get good data on this if you are not in an industry where the information can be found easily?



35

Can you give us an example of a company or industry where predictive analytics resulted in a change in how sales organizations make decisions?



36

What is the profile of the companies you used to determine the statistics? (Size, Product vs. Service, Market Type, etc.)


Thank You

ThankYou

sales management association webcast five signs you need to graduate from sales ... · 2019. 7....

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