Moe Revenue

Jesse James, CRO

This month’s edition of Sales and Service Excellence magazine features a Chief Revenue Officer article I wrote based on the SRS 2.0 Revenue System. The article is an overview of the SRS system with some anecdotes sprinkled into it.

Local legend has it that Jesse was interviewed in his early outlaw days and asked “Why do you rob banks?” His response, “Because that is where the money is.”

Here is the link if you want to read the article via our website.

I read through the online magazine and was most impressed with the breadth of sales topics. I strongly recommend it.  If you would like more information regarding this contemporary monthly sales resource just email custserv@eep.com.

The 80/20 CRO Role

The Sales Revenue System 2.0 book defines 80% of the CRO role – coaching, accountability, motivation and staffing. Some folks have asked what’s typically included in the remaining 20%. Recognizing no two companies are identical, the 20% list can cover a wide bandwidth of topics. Below is a partial list of duties, tasks and responsibilities that I have seen included in CRO role descriptions:

- Customer support, service, satisfaction and retention programs

- Marketing Communications including new product pricing structures, sales strategy and product launch programs.

- Marketing Strategy to identify and prioritize target segments, primary competition and the windows of opportunity to make the revenue ramp.

- Strategic partnering with outside organizations for ramping/expanding target market segments.

The larger the organization, the larger the CRO role so you will need all the quality support you can get. One technique I have used with good success is to have manufacturing drive the forecast process. They need to translate forecast data into production schedules so being skilled with the 4 Aces data and understanding the closing strategies/schedules for key opportunities brings clarity to the whole process.

The CRO Role

One of the new charts in our DIY Revenue Workbook graphically defines how the CRO leadership roles of coaching, accountability, motivation and selection are aligned with each of the 4 core processes of the Sale Revenue System 2.0 model. The 80/20 rule applies to all leadership positions – here is that breakdown for the CRO role:

Coaching – 80% focus on the communication techniques for delivering the Critical Qualifying Questions. Sales reps are not born knowing how to do this.

Accountability – 80% focus on the 4 Aces audit trail and drill-down questions to maintain the “up or out” prospect flow. Nothing stays welded to the forecast.

Motivation – 80% focus on performance incentive creativity to recognize the major thresholds of contribution to the business and enable reps to skillfully navigate their own success.

Selection – 80% focus on defining the job first and keeping multiple qualified candidates in the pipeline at all times.

Revenue is only hard if you don’t have a systems-level approach for making it happen.

DIY Workbook Now Available

The Sales Revenue System 2.0 book defines the complete revenue system and how the four core processes are connected.  Many of our Do-It-Yourself clients have requested a program workbook to help facilitate their internal revenue system implementation project.  We felt that was a good idea and now have a ‘DIY Revenue Workbook’ available.  The workbook provides instructions, forms and examples for installing the 4 core processes.  It’s 36 pages and is available through our web store for $39.95.  As always, we welcome your questions and feedback.

10 Signs Your Revenue System Needs Upgrading

Over the years I have routinely asked CRO’s what are the indications their Revenue System needed to be upgraded. Here are their Top 10 responses:

1. Discounting is our primary closing strategy
2. All sales and marketing related promotional materials are feature / benefit focused.
3. Every sales presentation starts and ends with the company plaque in the lobby promoting the company’s on-going commitment to quality, service and support.
4. Forecast updates only require moving out the projected close dates.
5. New account business is on everyone’s goal sheet but we are not closing any new accounts.
6. Sales expense is the only number above plan.
7. Everyone in sales works a 40 hr. week as an account manager.
8. Reps say the sales cycle is getting longer due to all the new technology they have to explain first.
9. The names change on the forecast but the bottom line numbers don’t.
10. The only turnover in sales is with existing accounts.

If any of these look familiar, contact us immediately.

Bridging the Value Gap

My latest article is up on the Salesopedia.com website and deals with maybe the most important sales topic in this economy – Differentiating Value.  This recession is driving most decisions to price with the expectation of neutralizing value.  For sales people and CRO’s, this is a dangerous combination.  Here’s the rule from the article:

If you are not clear about what makes you worth more, you will always compete on price.

The article provides a cursory explanation of how to define your Differentiating Value.  For a more in-depth study, please consider Sales Revenue System 2.0 and the new, accompanying workbook in the CRO store.

Simply to Sell

I still see clients working hard on their Differentiating Value positioning but ending up with statements that make their product or service appear complex. This is a repetitive behavior so at some level, the temptation to make something look complex must be viewed as one way to justify a higher price. Confusion is a fast track to the low price alternative in the prospect’s world because prospects are too busy today and won’t spend the time sorting out your product or service complexities.

I cannot recall the last time a ‘confused’ prospect bought the higher-priced option.

CEO Sales Calls Known As Train Wrecks

How risky is it when CEO’s without a sales background want to ‘join the sales team and go slay dragons’ (i.e. attack the market and close new business). CEO’s are obviously focused on revenue today and when they are put in front of a real opportunity, all kinds of things can go wrong. I have had the pleasure of being on such calls…many times.  Here are some of the spontaneous comments CEO’s have contributed in “support” of sales:

• You can have an additional 10% discount if I can leave with an order today.
• We can extend warranty coverage at no charge.
• Call me at home if you need anything special.
• So, what do we have to give you to get the order today?
• You really don’t understand how great our products are.
• No one would buy our old design.
• You need to understand we have a lot of engineering costs to recover.
• Maybe we should just buy your company.
• Our product is patented so you can’t get it anywhere else.
• This was a great call – I got to say everything I planned to say.

The post-call reviews were all about how to protect the remaining opportunity and recover the prospect based on this CEO-level disruption. Sales reps have called this the equivalent of performing a “do-it-yourself heart valve” meaning you never let the CEO operate on your revenue stream unless you are ready to hemorrhage out.

I realize some CEO’s can be a real asset on a sales call, especially those CEO’s with a sales background.  However, the majority of CEO’s come from financial or operational background which brings a level of danger to any prospect call.

The CRO needs to get in front of this potential train wreck and make sure the CEO knows the questions you want him or her to ask at the start of the meeting. The “glad to be here, how can we help you” dialog to get a discussion started is the best. After that, the CEO needs to wait to be called on by the members of the sales team and speak briefly to the topic requested.

I find compliance to be quite easy.  I have always notified CEO’s they will get to walk back to the airport if they misbehave. So far that approach has always worked.

Street-Level Success

I received an interesting review of my book Sales Revenue System 2.0 recently – ”This is very street-level.”

My response was “Thank You!”

Just like you never see a bad sales resume, you also never see a bad business plan. After decades of reviewing new company startup plans, it became obvious the plans all had the same motivational template in that everyone involved (founders and investors) would all be rich and famous very soon. Our landfills must have been overrun with these bogus documents because I can count on one hand the total number of companies that made it to 5 years. The plans were nothing short of elegant – color bar charts, pie charts, order processing flow charts, etc.  Excel delivered pro-forma financials that were so compelling that only paupers would say no to the deal. It seemed like the next logical step was to start planning the movie.

So what went wrong? Usually there was plenty of blame to spread around, but the one truth in every failure was a lack of revenue.  There wasn’t enough revenue generated to float the boat and investors finally pulled the plug. The market-modeling math may have been correct (5% market share will produce a $50M business opportunity, etc.) but the sales execution never got off the ground.

My observation was no one in the room (founders or investors) was hands-on about the revenue challenge associated with closing new business. Street level is where orders originate and where success is earned one order at a time.

Thank You for the “street-level” compliment. It is where companies are built by competent Chief Revenue Officers.

An Ounce of Preparation…

OK, I know I am twisting the wording on that title, but you will see why.  My last post regarding my worst sale was a bit dated but still burned into my memory. It seems like anything pre-internet is now considered from the dark ages of sales history so let me bring you my next major disaster after the dark ages.

I was coaching a regional sales, service and parts distribution company in the roll-out years of PC-based networks. Corporate America was investing aggressively in this new technology but state and local governments were tracking behind the curve – partly due to heavy investments in mainframes and partly due to having IT staffs that arrogantly viewed pc networks as trivial.

My customer recruited an impressive list of their technology vendors to participate in a ‘network seminar day’ hosted at a conference center directly across from the state capital building in Lincoln, Nebraska. The logistics were impressive – several keynote presentation rooms supported with break-out topic rooms for more detailed discussions, buffets of food and beverages everywhere, dozens of topic experts on the agenda, etc.

Invitations were sent to literally hundreds of government contacts with no RSVP required – just walk over and learn everything you want to know about PC networks. We all arrived the day before the event to make sure everything was ready to go. Our expectations (and preparations) were for over 250+ people to attend.

The next day came and we were a bit shocked that our 8:30 am sessions were not as popular as we hoped – NO ONE showed up!  So we started working on the coffee and bagels to get ready for the 10 am rush when one of our techs walked in and dropped a critical piece of information on us.

The state offices were closed that day. Yup, a special Nebraska state holiday was underway and no one was at work. It was clear by 9 am that the day was a total bust and no one would be attending.

I suppose there are many lessons here, but proper preparation sure seemed like an appropriate one that day.  We simply assumed the government offices were open that day.  Not one of us did any sort of research on the calendar.

Another timeless sales truth – when you assume, you lose.