sales strategy - creating winning performance conditions
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Sales Strategy: Creating Performance Conditions to Win
Are you ready to be world class?
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www.salesbenchmarkindex.com/ info@salesbenchmarkindex.com 1-888-556-7338
Sales Strategy Research Results:Creating Performance Conditions to Win
Compensation Programs
Organizational Models2
Modeling Segment Potential
Lead Generation Programs
Selling Methodologies
1
3
4
5
1. Total target cash compensation is set at the 60th percentile of labor market competitors of a pre-identified list of companies.
2. Pay mix is no less than 85/15 and no greater than 50/50.
3. There are no more than 3 performance measures, one of which will be a sales production measure.
4. No measure is worth less than 15% of the pay program.
5. At least 60% and no more than 75% of reps exceed quota.
Back
Compensation Programs: Best Practice Exercise 1
Current Base (Ave)
Current Bonus (Ave)
Current Total Comp
Benchmark Base
Benchmark OTE
Benchmark Pay Mix
VP Sales $150,000 $150,000 $300,000 $199K$154K - $244K
$270K$191K - $349K 76/24
New-National Sales Executive $79,781 $27,643 $107,424 $85K
$75K - $90K$110K
$108K - $166K 77/23
Existing-National Sales Executive $79,781 $27,643 $107,424 $85K
$75K - $90K$135K
$108K - $166K 63/37
VP Media Sales $125,000 $25,998 $150,998 $125K$87K - $134K
$220K$119K - $221K 57/43
Sales Manager NA NA NA $99K$81K - 116K
$131K$100K - $162K 75/25
Client Development Consultant 71,147 $19,941 $91,088 $81K
$72K - $90K$108K
$82K - $134K 75/25
Sales Engineer NA NA NA $81K$73K - $91K
$91K$75K - $107K 90/10
Client Services Executive Director $103,000 NA $103,000 $105K
$92K - $118K$115.5K
$99K - $131K 90/10
Client Services Director $69,105 NA $69,105 $68K
$62K - $74K$75K
$69K - $81K 90/10
Assumptions
Average yearly revenue per customer (within 24 month window), if any assigned $50,000
Average deal size of the net new customer $250,000
#SQOs per ISR per year (includes named pipeline prospects) 30
Close rate for new logo opportunities 10%
Deals closed per ISR per year 3
Territory
Named customers (for 24 month post-deal period), if any assigned 0
Named pipeline prospects 2
Sales-qualified opportunities generated by the Lead Gen Specialist 30
Total # of accounts = 32
Projected Revenue
0 Existing customers X $50,000 per customer = $0
3 Now logo customers X $250,000 per customer = $750,000
Total = $750,000
Quota
Quota $600,000
Quota-to-total compensation ratio 10.00
Compensation
Total compensation $60,000
Base % 50%
Variable % 50%
Base salary $30,000
Variable component $30,000
Role: Inside Sales Rep
1. We have matched selling capacity (total selling hours) to market demand (total market potential).
2. The type of rep needed is determined by the role the customer wants the rep to play when conducting a transaction.
3. Territory potential determines quota assignment.
4. Our best reps are in the territories with the most potential.
Back
Organizational Models: Best Practice Exercise 2
63%18%
9%
10%
A (>20M gal) B (5-20M gal)C (2-5M gal) D (<2M gal)
• 63% of volume and 52% of gross margin from 6% of customers
• Bottom 70% of customer make up 10% of volume and 16% of margin
Customer Segmentation Analysis
How much sales force time is spent on that 70% of customers that should be invested in the top 6%?
% Total Volume
6%
18%
15%70%
A (>20M gal) B (5-20M gal)C (2-5M gal) D (<2M gal)
% Total Customers
Segment # Custs Vol (M) GM ($M) % Cust % Vol % GM Hrs/Cust Hrs/Touch Touch/Cust Total Hrs % Hours
A (>20M
gal)139 8,473 $335 6% 63% 52% 192 4 48 26,688 43%
B (5-20M
gal)233 2,381 $129 9% 18% 20% 48 2 24 11,184 18%
C (2-5M gal) 369 1,117 $75 15% 8% 12% 24 2 12 8,856 14%
D (<2M gal) 1,734 1,374 $101 70% 10% 16% 9 0.75 12 15,606 25%
Customer Segmentation Analysis
Align Selling Hours w/ Customer Value (Volume & Profit)
REALIGNED COUNTRY SALES STRUCTURE
Geo Manager
Pro Services Manager
Trainers (3)
Implementaion Consultants (32)
Managers (4)
Admins (5)
Support Staff (16)
Pre-Sales Manager
Pre-Sales Consultant
Pre-Sales Consultant
Pre-Sales Consultant
Pre-Sales Consultant
Sales Manager
Direct Sales Direct Sales
Direct Sales Direct Sales
Direct Sales Major Account Rep
Channel Rep Sales Admin
Sales Manager
Inside Sales Inside Sales
Lead Gen Lead Gen
Field Marketing Customer Acct Manager
Sales Admin
• Changes
– Add a Major Account Rep to the sales team
– Further reduction in the number of Direct Sales Reps (number is TBD) to reflect higher comp, bigger territory, and focus on hunter role
– Reduce Pre-Sales headcount number (number is TBD)
– Reduce Direct Sales Rep
Lead Generation Programs:Best Practice Exercise
The definition of a lead is determined by Buyer Personas.
We understand the # of leads generated, and their quality score, for each demand generation $ spent.
We have a defined process to move from an inquiry-lead-opportunity-customer.
We understand the volume required at each funnel stage to make the number.
We have made the switch from outbound to inbound marketing.
Back
3
HR SVP/EVP (Most senior person)
Focus: HR compliance, employee engagement/culture, productivity, accountability
Responsibilities: Benefits, Payroll, recruiting, compensation, performance management
Role in purchase: Always a key influencer and may be drive the evaluation. Evaluates employee engagement, staffing levels, and compliance.
Finance CFO (delegates to Controller)
Focus: Financial performance and productivity. Always looking for ways to increase profitability.
Responsibilities: Delivers bottom line numbers for the organization. Financial performance reporting, forecasting revenue, budgeting and cost control
Role in purchase: Approver/Economic Buyer
Operations COO
Focus: Optimal productivity and efficiency. Seeking Quality, Cost savings and Speed. Process driven to achieve customer satisfaction.
Responsibilities: Delivers on the promise of the organization (product/service)
Role in purchase: User Buyer, must work with the CFO to fund a WFM solution.
• Receive advanced notification and visibility to compliance issues
• Get visibility or access to historical data to manage compliance issues
• Identify root cause of performance and productivity issues.
• Maximize the productivity of my workforce
• ALL: Balance staffing requirements and employee schedule preference
• Ease of use solution for employees, limited training required
• An early warning alert and historical view of compliance challenges and issues
• ALL: Access to data that helps me maximize return on employee investment (Productive/Efficient)
• ALL: third party validation and proof of financial justification
• Increase employee engagement resulting in higher satisfaction
• Ensure compliance with automated HR and pay policy enforcement that supports workers and workplace
• High user adoption, reduced training and fewer errors with BIC user experience
• Get the reports I need to compare profitability of plants/stores.
• Identify root cause of performance and productivity issues.
• Maximize workforce productivity • Receive advanced notification and
visibility to labor expense leakage• Model workforce changes and see
how they impact KPI’s
• Ease of use solution for employees, limited training required
• To reduce costs of managing my workforce
• Deliver highest quality at the lowest cost in shortest time
• An early warning alert and historical view of compliance challenges and issues
• Schedule the right people, right place, right time
• Integrated solution resulting in improved accuracy (no re-key) and speed (no latency)
• Decreases administrative time Improve customer service and product quality while reducing costs by changing the way labor is deployed and scheduled
• Cloud solution is scalable and configurable, with an upgrade path that is automated and no cost
• Get the reports I need to compare profitability of plants/stores.
• Receive advanced notification and visibility to labor expense leakage and compliance issues
• To reduce costs of managing my workforce
• To drive out costs and enable incremental revenue generation
• Self-funding investment, clear ROI • Flexibility of solution to meet the
current and future needs of my evolving company
• Better align corporate performance indicators with employee activities
• Cloud solution is scalable and configurable, with an upgrade path that is automated and no cost
I Cant… I Want… Key Messages
Buyer• Do I have a problem? • How does this problem relate to
achieving my goals? • How painful is the problem? • Who does the problem impact –
departments, users, employees, decision makers?
• What are my peers doing?
AWARENESS PREFERENCEPersona: Company Profile and FitFocus Verticals and Employee Count: Manufacturing, Retail, Transportation, Professional & Financial Services (300 – 5000 employees)Indicators of high likelihood of pain, strong fit• Old legacy in-house ERP and T&A systems• In-house manual systems and processes• Hourly workforce that is decentralized, unionized,• Growing/shrinking, leadership change, merger/acq• Facing heavily regulation with govt customersBuying criteria: • Increased productivity, Compliance, User experience,
business case, systems integration, employee satisfaction
Buyer• Can I ignore this? • Is there a quick fix? • Can I fix it myself? • Do I need help? • What are my choices if I need help? • How should I evaluate alternatives? • How will others on my purchasing
committee evaluate alternatives?
CONSIDERATION
Buyer• How long will it take to get this
fixed? • How much of our time do I need to
put towards it? • How do I know the fix will work? • How disruptive will it be? • How much will it cost? • What impact will it have? • What happens if it doesn’t work?
PREFERENCE
Exit Criteria
Lead Management Stages
Lead Generation = Demand Generation + Lead Management
Awareness Consideration Engagement Intent Opportunity
MCL MQL SAL SQL
Sources
Webinars
EmailCampaigns
Direct Mail
Web
Outbound Calling
Events
Lead Generation
Waterfall Exercise – Future State US HR/Payroll
128,051 MCLs
3,842 MQLs
960 SALs
471 SQLs
Lead Sourcing6,400,000
3%
25%
49%
25%
Conv
ersi
on R
ates
IMPLICATION – Opportunities are nurtured across a broader qty of MCLs with more qualified leads coming through to the sales reps.
2%
• Marketing contribution of 25% of total $40m rev goal
– 118 deals x $85k = $10m
• Avg. sale SOV $85k
• Conversion rates of average b2b lead gen teams with sound process
Assumptions
118 Deals
Selling Methodologies:Best Practice Exercise
1. We understand the Buyer’s Journey.
2. Our sales methodology has been redesigned and mapped to the new buyer’s journey.
3. The new sales methodology has defined stages, activities, job aides, and buyer driven exit criteria.
4. Our SFA system facilitates the adoption of the sales methodology.
5. Forecasting accuracy exceeds 80%.
Back
4
Buying Cycle
Sales Cycle
Catalyst Needs Recognition
Explore Options
Resolve Concerns Purchase
Prospecting Opportunity Identified
Determining Differentiated
Problems
Confirming Vision Match
Confirming Value and
Power
Finalizing Mutual Plan Negotiating Closed
First Meeting Pain, Timeline, Decision Criteria, SOE
Discovery, Schedule Demo
Demo, Summary of Findings
Reference Called,Activant Preferred, Proposal Review
Close Call Complete,Ask Order
Recognize Problem
Clear Vision of Solution Preferred Solution Identified
Risks Considered Issue Order
Sale
s Ex
it C
riter
iaB
uyer
Exi
t Crit
eria
Sales Process:Misaligned Exit Criteria
Worst Case Duration
Prospecting Opportunity Identified
Determining Differentiated
Problems
Confirming Vision Match
Confirming Value and
PowerFinalizing
Mutual Plan Negotiating Final State Total Duration
Closed - No Decision 75 126 86 87 51 61 30 40 556
Closed - Lost 116 187 106 75 57 35 15 15 606
Closed - Won 44 90 97 84 43 42 16 13 429
* Note: Duration for a Stage is the days from Previous Stage to current stage plus days from next stage back to current stage
--- Includes Stage Reversal ---
Prosp
ecting
Opportunity
Iden
tified
Determ
ining Differe
ntiated Pro
blems
Confirming V
ision M
atch
Confirming V
ision an
d Power
Finali
zing M
utual
Plan
Negotiati
ng
Final
State
0
20
40
60
80
100
120
140
160
180
200
Closed-No DecisionClosed-LostClosed-Won
Sales Cycle Length
2X Best Case duration until Negotiating Stage
Worst Case Stage Duration
Modeling Segment Potential:Best Practice Exercise1. We use a customer-driven segmentation approach.
2. We use an activity-driven segmentation approach.
3. We use a cost-driven segmentation approach.
4. We have tested the validity of these methods:
– Named accounts- high value targets
– Industry- verticals with high propensity to buy
– Sales Frontier- peak performance replication
– Metro Compression- geographic density
– Territory re-balancing happens at least once per year
Back
5
Opportunities by Region (strategic & tactical)• Targeted NL Beachhead Region/Countries
• Complete view of potential: in SFDC and other
• 163 NPC Deals + 33 NPG, Main, and Direct
• Potential is built off a 3 year run rate
Europe:
Beachhead Potential = $42M
NPC Oppt = 5
NPG Oppt = 35
Africa:
Beachhead Potential = $26M
NPC Oppt = 8
NPG Oppt = 38
CALA:
Beachhead Potential = $42M
NPC Oppt = 6
NPG Oppt =22
Middle East:
Beachhead Potential = $16M
NPC Oppt = 6
NPG Oppt = 19
APAC:
Beachhead Potential = $23M
NPC Oppt = 8
NPG Oppt = 49
NPAC: $600M
Oppt coming up for
Renewals
Number Portability Opportunity Timing
• Consider Timing of when allocating Resources
• NPC Sales Cycle up to 2 years
• Strategic – Transactional (>25M subs)
• Tactical – RTU/License (<25M subs)
Timing of NP OpportunitiesCount of Country Fiscal Year
Territory 2012 2013 2014 2015 Total
Africa 1 2 3 2 8
Strategic 1 1
Tactical 2 3 2 7
Asia Pacific 1 3 2 2 8
Strategic 2 2 1 5
Tactical 1 1 1 3
CALA 3 1 2 6
Strategic 2 2
Tactical 1 1 2 4
Europe 2 3 5
Strategic 2 2 4
Tactical 1 1
Middle East 4 1 1 6
Tactical 4 1 1 6
Total 9 8 11 5 33
Phase 2 Phase 3Phase 1
How to Get Started?
Conduct Discovery Conduct Sales Benchmark Present Findings
Assess Sales Force
Assess Sales Performance
Drivers
Prioritize Possible Remediation
Actions
Determine Sales Force Maturity
Identify Key Drivers to improve
Means1. Exec Interviews2. Mystery Shopping3. Documentation4. Metric Data5. Customer Survey6. Sales Rep Survey7. Sales Rep DILO8. Expert Panel
Results1. Capture Current State2. Show End State
Possibilities3. Make Recommendations4. Quantify Impact
1. Channel Management2. Compensation Planning3. Key Account Management4. Lead Generation5. Quota Setting6. Sales Force Structure7. Sales Force Size8. Sale Management
9. Sales Performance Management
10. Sales Process11. Sales Strategy12. Talent Management13. Territory Design
Performance Drivers
21
Learn More
Contact us to hear the rest of the story...
Email - info@salesbenchmarkindex.com
Phone - 1-888-556-7338
Web: http://www.salesbenchmarkindex.com/
Whitepaper: http://www.salesbenchmarkindex.com/sales-strategy-download/
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