Moe Revenue

2011…The Year of Forecast Training

As 2011 starts, we are seeing signs of economic improvement and companies moving to “restart” their revenue growth process. Our observation is sales managers are calling about sales training and Chief Revenue Officers (CRO’s) are calling about Forecast Training. Here’s why – CRO’s know that when they have prospects objectively positioned in their forecast process (4 Aces), they also know where they are in the sales qualifying process. This becomes a “2-fer” for the CRO in terms of improving both forecast accuracy and shortening sales cycles. The forecast audit trail reviews they conduct with their sales people are where the real sales training occurs…and CRO’s know that already.

Our Best Wishes for a Great Revenue Year!

Hiring Sales Talent in 2011

Now that companies are seeing enough economic recovery to start upgrading/expanding their sales staffs, the question of “how do we identify real sales talent” is back on the agenda. So, here is the game plan summary for getting the right talent for your sale.

The first step is to define both the sales cycle and the specific role talents and behaviors needed. This profile will be different for both hunters and farmers in your business so don’t try to mix the two. There is no “one size fits all” profile.

Second, select a web assessment tool for determining applicant DNA fit with your requirements. There are a number of web products available that essentially just confirm a pulse is present. Typically they report the person is 80% qualified for your position, etc. What does that say? Can you accept 80% sales performance? If you are using one of these, you are risking a bad selection decision. Contact us for better options – there are other options.

Third, make sure your initial interview simulates a typical sales call with a fairly cold, disinterested prospect. That is where all orders start today so you need to see how candidates perform in the real world and not in a soft interview setting.

I won’t be repeating this until Dec 2011 – good luck with your hiring programs!

Quick Recipe for Success

One of our local clients manages a CEO Roundtable for both executive and business development. As part of his program, he includes brief updates on development strategies and wisdom. One he recently distributed caught my attention as companies are finalizing their 2011 business plans and I wanted to pass it along.

Here is Gary Brattland’s Recipe for Success:

1. Hire great people and place them in jobs that fit their strengths, skills and passions.

2. Get out of their way. Provide people with the freedom to do kick-ass work.

3. Provide regular, actionable feedback.

4. Inspire people with goals that are more meaningful than making the company more money.

What is a Revenue System?

I have enjoyed the opportunity to address several executive groups recently about a very specific topic – “What is a Revenue ‘System?’”

First, ANY business system (production, inventory, quality, Lean, ISO, etc.) is:

— Process-Based

— Built on Competence and Expertise

— Includes Process Accountability and Diagnostics

Ideally, the system operates as a process-based, closed-loop activity so performance is predictable and consistently within acceptable standards. Obviously, most systems operate entirely within the 4 walls of the business but Revenue is based on outside variables called suspects, prospects and customers that comprise target market segments.

Even though suspects, prospects and customers exist outside the 4 walls of the business (aka independent variables), the system definition still applies. In our model (Sales Revenue System 2.0) Revenue is very much a “system”…and not and event.  Our clients already know that.

Interviewing Sales Candidates

Here is the Rule:

It is easier to train sales talent about your business that is it to train someone how to become a sales talent for your business. You already know all of the in’s and out’s of your business and industry but the euphoria of finding someone else that has some of that knowledge too can become compelling.

That is the trap we see all too often Applicants are eager for interviewers to go there and simply assume they can and will sell your product or service. All the applicant wants to do is get paid a lot of money to just ‘manage’ the existing account base. Before you discuss industry background, drill down on their selling skills and see how they handle some rejection.

If they won’t engage your tactics in an interview, how will they perform in your marketplace?

New Book Cover

The second printing is now completed and we are going with a new cover based on reader feedback.  Reviewers felt the original cover did not align well with the contents and they specifically wanted the CRO (Chief Revenue Officer) role called out with the ‘closed loop’ revenue systems graphic on the front cover.  The ‘closed loop’ revenue system concept has established traction in our marketplace and will be the theme for this edition.

As part of our second printing promotion, we are offering – for a limited time – free shipping on all C.R.O. Store products that include a book in the order.

What is a “Closed Loop” Revenue System?

If revenue is the lifeblood of a business, the revenue system is the heart that keeps everything working. Hearts operate only as “closed loop” systems and the same applies in business. In order to have a closed loop business system, you need a structured model with built-in process accountability and diagnostic controls. This is how companies install and operate Lean production systems, ISO-based manufacturing systems, 6 Sigma quality systems, global financial reporting systems, etc.

My experience suggests all companies do have some form of revenue system (heart) in place today. The reality is most are the “open loop” intermittent variety meaning the core revenue tasks of selling, forecasting, rewarding performance and staffing operate as standalone events with minimal process accountability. They may be done by one individual but that person addresses these as independent – sometimes even burdensome – tasks.

All companies have revenue stimulators (cold call Fridays, end of quarter discount promotions, etc.) that are used to keep the vision alive – and the doors open – but these are best described as tactical adrenalin, not a revenue system.  When these no longer produce the results needed, the quick-fix option is lowering the revenue bar to align with current ‘system’ capabilities assuming the financial structure can accommodate the reductions. This is the drug of choice for sustaining most ‘open loop’ based revenue models…and the number one reason why companies prefer a ‘closed loop’ revenue system (heart).

Eliminating Sales UFO’s

Our 5M’s sales process does not specify a sequence for qualifying prospects through the Motivation, Money, Methodology and Market qualifying questions. To qualify a prospect, you need to cover all of the M’s.

However, some sales teams are seeing higher numbers of UFO’s (Un- Funded Opportunities) such that starting with the Money discussion to confirm a budget does exist or funds can be allocated for the transaction is just a good strategy in today’s economy. There is a lot of stress in parts of our economy and it is not the first time we have seen prospects trying to identify new projects that could become their job savers.

The old rule – no money, no prospect – still applies.

Another Fish Story

Summer is vacation time in the US and many folks do plan on spending some time fishing. That may be why several recent video Skype sessions have included a comment about the fish on my office wall in the background. That fish is a 42 pound King Salmon caught in the Nushagak River, Alaska, just a couple miles from the ocean. We were flying out of Lake Clarke in float planes and decided to try the river to see if the salmon run had begun. It took over an hour and half to land the monster (caught with only 17 lb. test line) and was the largest fish brought in that week.  So when contacts ask, “Are you a hunter or a farmer?” I just point to the fish and say “yes.”

Why can’t the best sales rep become a good CRO?

This remains a frequently asked question so let’s resolve the issue. First, the best sales reps in most companies typically have a ‘hunter’ profile. This profile can have many variations but the common ‘threads’ are they take total accountability for their performance (no excuses) and they follow an intuitive, qualifying-to-close process that best fits their profile.

As such, under our SRS 2.0 model, they have uniquely developed one of the 4 core processes of a complete Revenue System, albeit one that is totally optimized to their profile and may not be readily transferable to others.

The complete revenue system requires competence in 4 processes – not just one. That makes the CRO role requirements much different than those of an individual contributor. The CRO has to deliver coaching (5M’s Sales Process), accountability (Bankable Forecast Process), motivation (Incentive Process) and talent selection (Staffing Process).

The step up from individual contributor to CRO is a quantum leap in leadership and responsibility. Most of the time, these leadership responsibilities are not tasks that fit the true hunter profile.