Post on 07-Mar-2018
transcript
Direction Determines DestinationSales Strategy & Planning Best PracticesMarch 1, 2013
Shawn RossiPrincipal, North American Sales Performance Leader shawn.rossi@mercer.com678-427-8275
MERCER 1
Shawn RossiPrincipal, Sales Performance
Practice Leader
About The Speaker…
• Focused on sales force productivity optimization for 17+ years
• Widely published and frequent speaker – Works published in WorldatWork, SHRM and
other publications– Spoken for WorldatWork, SPM Solution
Provider User Conferences and the Sales Management Association
• Former sales operations strategy executive for a leading consulting company
• Former marketing executive for an eMarketing company specializing in the IT Solution space
• Began sales effectiveness career at Andersen Consulting – focused on CRM and customer care within the telecommunications industry
MERCER
CAPABILITIES & TRAITS OF TOP PERFORMING SALES ORGANIZATIONS
MERCER
Sales performance excellence is centered around the voice of customerSales strategy and planning defines the direction
3
MERCER 4
Ranking the impact of sales performance management levers
4
0%
5%8%
8%8%
11%14%
22%
24%24%
32%38%
41%41%
51%73%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Other
Customer SegmentationSales Coverage/Role/ Channel Modeling
Sales Person Status Changes
Account Definition & MaintenanceField Communication
Recruiting & On-boardingTerritory Definition & Alignment
Sales Compensation AdministrationSales Process & Playbook Definition
Sales Productivity Analysis & ReportingSales Training
Deal/Pipeline Management
Sales Compensation DesignQuota/Goal Setting
Sales Strategy & Planning
% of Companies
Impact of Levers on Sales Productivity(% of surveyed companies who ranked lever within top 4)
MERCER 5
Keeping it in the familyLion’s share of sales strategy & planning owned by sales or sales ops
5
0% 20% 40% 60% 80% 100%
Sales Strategy & Planning
Customer Segmentation
Sales Coverage/Role/Channel Modeling
Sales Process & PlaybookDefinition
Account Definition &Maintenance
Deal/Pipeline Management
Sales Sales Ops Marketing Other (Finance, HR, IT, etc.)
Lever Ownership by Organizational Function
MERCER 66
Top sales performance DNATraits of best in class sales organizations
Maximizing sales time for the right opportunities
Effective Execution
Coverage model and sales process reflects the voice of the customer (VOC)
Attune to the Voice of Customer
Sales role definitionSales role definitionRecruiting & on-boardingSales compensation designQuota/goal setting
Key Sales Organization Characteristics Sales Operations Core Competencies
Customer segmentationSales strategy & planningSales strategy & planningSales training
Hiring the right DNA for the sales role and supporting the right behaviors via aligned
rewards
Right People, Right Behaviors
1
2
3Coverage/deployment modelingCoverage/deployment modelingDeal/pipeline managementSales productivity analysis & reportingSales compensation administration
MERCER
Best practice is to “connect the dots” and align
Sales & Channel Strategy Sales Process Definition & Alignment
1 2 3
4Sales Organization & Role
Design
5Sales Compensation
Design
6
Customer Segmentation & Targeting
Quota Setting
Cust. Seg. Retention Expansion Acquisition
Tier 1 95% $100M $10M
Tier 2 85% $75M $100M
Tier 3 75% $25M $40M
Targets
EVP, Americas
VP, Channel Sales
VP, Direct Sales
Account Manager
Director, Midmarket
Director, Strategic Accounts
Director, Hardware Sales
Account Executive
Sales planning
Targeting strategy
Qualification (go/no-to decision), based on fit & plant capacity
Expansion opportunity
Deal strategy
Pricing / negotiation
Product Planning
Prototyping and Trialing
First order (PO signed)
Win/loss review
4. Commitment
Sales Process
1. Interest 2. Belief 3. Engagement 4. Commitment
Build – Reconcile – RefineBuild – Reconcile – Refine
SeniorManagement
SalesManagement
Salesperson
Senior Management reviews with Sales Manager
and makes adjustments based on trend line data
and corporate expectations
Senior Management reviews with Sales Manager
and makes adjustments based on trend line data
and corporate expectations
Sales Management determines how to
achieve adjusted goals on a Salesperson basis
Sales Management determines how to
achieve adjusted goals on a Salesperson basis
Sales Management strategizes with
Salesperson on how to achieve goal on an
Account basis
Sales Management strategizes with
Salesperson on how to achieve goal on an
Account basis
Salesperson combines data with customer insight to
developAccount-level Planning for
the year
Salesperson combines data with customer insight to
developAccount-level Planning for
the year
Salesperson and Sales Manager review and
agree on the Salesperson’s Account
Plans
Salesperson and Sales Manager review and
agree on the Salesperson’s Account
Plans
Sales Manager rolls up Salespersons’ Account Plans to Sales Manager
Level
Sales Manager rolls up Salespersons’ Account Plans to Sales Manager
Level
MERCER 11
Target pay mix 85/15Target pay mix 85/15
Measures & Weights
Mechanics & Links
NEW ACCOUNTSTOTAL REVENUE
New Accounts = 30% of TI
Individual Contributor: Directional Incentive Comp RecommendationsFor Sales Rep, Account Manager/Executive, National Account Manager
Mix & Upside
Total Target Incentive (TI)
Total Revenue = 70% of TI +
Payout Type Bonus
Thresho ld 85% of Prior Year Re venue
Bonus Payout
Attainment TI Payout 0% - 85% 0
86% - 90% 50%91% - 97% 75%98% - 100% 100%
101%+ +3% for each 1%Cap NoPayment Quarterly
• Total revenue = all revenue generated both for home plant and other plants
• New accounts = number above $40K
• Remove plant EBI/operating budget modifier
Payout Type BonusThreshold None
Bonus Payout
New Accounts TI Payout 1 - 2 $1,5003 - 4 $5,0005 – 8 $7,500
9+ $1,500 per acct.Cap NoPayment Annually
• Payouts and tiers are illustrative and need to be cost modeled
• Consider counting an account >$100K to count as more than 1 account
• Hold upside pay for total revenue until annual goal is achieved
• Goals should be calibrated and set based upon an individual’s market potential
7
DEFINING AN ACTIONABLE SALES STRATEGY
MERCER
Top performing sales organizations answers these key questions during the planning process
1. How will we drive the sales organization to deliver and meet the revenue goals?
2. Where is the revenue going to come from if we are to meet and exceed our goals?
3. Do we have the resources required to cover the market?
4. How can we effectively drive accountability to ensure we make our goals?
Overall Sales Strategy
Go-To-Market Approach
Channel Strategy & Coverage Model
Sales Process & Accountabilities
Account Planning
Strategize
Plan
ExecuteToday’s Focus
9
MERCER
Sound sales strategy answers three key questionsIllustrative outcome
Answering These 3 Simple Questions Provides Foundation for Action
Customer Segment Retention Expansion Acquisition
Tier 1 95% $100M $10M
Tier 2 85% $75M $100M
Tier 3 75% $25M $40M
How
Where
Target Retention: 85% ($850M)Target Expansion: 20% ($200M)Target Acquisition: 15% ($150M)
Prior Year Revenue: $1BGrowth Target: 20% or $1.2B
What
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MERCER 11
Key Input: Understanding & prioritizing growth componentsStart with knowing your revenue streams
Identifying key business drivers that need to be reinforced through either the sales incentive plan or the sales management process is
critical for strategic alignment.
Identifying key business drivers that need to be reinforced through either the sales incentive plan or the sales management process is
critical for strategic alignment.
Key drivers for success
Customer Scale-BackBeginning
of Year Revenue
End of Year
Revenue
- +
+
=+
-
Starting Year
Revenue
Ending Year
Revenue+
+X%
Metrics to encourage cross-selling LOBs
Align rewards to target specific customer segments
Support a more consultative sales approach to drive
additional client value
Customer Acquisition
Customer Churn
Up-selling &
ExpansionCross -Selling
Price Increases
CustomerScale-Back
Retention New Sales Core Business Net Growth
MERCER
Key Input: Customer segmentation & targetingSegmentation sets the foundation for alignment, targeting drives effectiveness
Universe of Companies
Target List
Targ
etin
g P
roce
ss G
over
nanc
e
Clients
Key Questions To Answer
• What are the sources of data for targeting purposes?
• What is the ideal client profile?
• What are the segmentation criteria?
• What customer segments are most attractive?
• What are the unique needs of the industry and the service lines?
• Who currently covers these accounts and are they effectively selling to them?
• How is the targeting process managed and incorporated into performance management?
• What is the action plan for each of the customer segments?
Ideal Client Profile
Priority Segments
Pursuit Targets
Action Plans
Segmentation
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MERCER
Profile-based SegmentationProfile-based Segmentation
Leading companies identify the best targets to achieve our growth goalsTargeting approaches
Revenue$
Revenue$$
Revenue$$$
Large Companies
Small Companies
Large Companies
Small Companies
Internal
External
Com
mer
cial
Indu
stria
l
Opportunity-based SegmentationOpportunity-based Segmentation
Illustrative
External Variables• Company size (revenues/# of ee’s)• Industry/Industry sector• Company dynamics (growth rates)• Private vs. public• Degree of organizational change
(M&A activity)
Internal Variables• Revenue• Profitability• Volume• Products purchased• Strength of relationship
Maintain selectively
Maintain minimal
resources/ investment
Withdraw
Evaluate growth
opportunity/ maintain
Maintain minimal
resources/ investment
Maintain selectively
Develop & grow
Develop & grow
Protect & grow
Opportunity HighLow
Low
High
Fit
• Dependency is quality data to segment accounts:• Internal: Finance, Ardexus• External: D&B, Hoovers, US Bureau of Labor
Statistics • Most commonly used approach
• Dependency is Opportunity/Fit Scorecard:• Clearly define what constitutes degree of fit and
scale of opportunity• Progressive companies are increasingly taking this
approach; easier to institute if data quality is an issue13
MERCER
COVERING THE MARKET TO DELIVER RESULTS
MERCER
Top performing, highly efficient sales organizations leverage a holistic channel strategy, especially in hyper competitive, diverse target markets
Target Market
Customer SegmentGeographyProduct/Solution Fit & PreferencesImplementation Requirements
15
MERCER
Consider target market dynamics as well as sales and marketing capabilities when formulating your channel strategy
Channel Selection
External Factors Internal Factors
16
MERCER 17
Customer buying preferences and dynamics provides insight into the optimal channel strategy, coverage model and sales process
LOW HIGHTECHNICAL REQUIREMENTS
PRICE ROIFINANCIAL FOCUS
LOW HIGHKNOWLEDGE OF LOCAL MARKET REQUIRED
ONE MULTIPLENUMBER OF BUYERS/DECISION MAKERS
LOW HIGHPROMINENCE OF PROCUREMENT
Key customer buying factors can vary by product and market…
Examining VOC/ buyer preferences answers the question:How do we best tap the potential of the target customer segment?
MERCER
Direct Sales ChannelSales Objective Service/
Maintain Retain Expand New
Account Executive
Client Managers
Business Development Managers
Inside Sales(Lead Gen)
Inside Sales(Revenue)
Sales Operations
Product / Technical Specialists
Delivery / Implementation
Coverage links channel, roles and sales strategyExample coverage model for complex, B2B solution sale
Ove
rlay
&
Supp
ort
Rol
es
= Cover
Dire
ct S
ales
R
oles
18
MERCER
World class sales organizations define and align sales roles holistically as the role definition is critical in driving effectiveness and accountability
Sales Role
Customer SegmentGeography
Product/Solution Channel
Revenue Stream
Sales Process
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MERCER
ACHIEVING DESIRED OUTCOMES…GROWTH IS FIRST PRIORITY
MERCER
Sales Process Step Identify Opportunity Qualify Propose Close Implement Care/
Service Renew
Client Managers I I C C A A A
Business Development
ManagersA A A A C I I
Inside Sales(Lead Gen) A A
Inside Sales(Revenue) A A A A I I A
Sales Operations C C C I I I C
Product / Technical Specialists C C R C C
Delivery / Implementation R R C
Clearly aligning sales roles and the VOC driven sales process is a key lever for accountability and positive outcomes
Sale
s R
oles
Supp
ort R
oles
Illustrative Direct Channel RACI (R = Responsible, A = Accountable, C = Consulted, I = Informed) 21
MERCER
Benchmarking studies reveal significant opportunity within the existing customer base…and account planning is an enabler to realize growth
Revenue TrendsRevenue Trends OpportunityOpportunity
Existing Customers
New Customers
Source: Sales Executive Council Benchmarking data¹ A “solution” was defined as an effort that monetizes a service, an integration effort, or a contractual arrangement sole alongside core products
Existing CustomersLeverage account plan as your strategic roadmap to expand customer relationships – what strategies will you take to strengthen and grow the relationship?
New CustomersLeverage account plan as a tool to guide the sales process – what is your position relative to the competition and how will you communicate (or sell) your value proposition?
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MERCER
• A disciplined and systematic framework to manage the relationship lifecycle
• The vast majority of customers interviewed said that they would welcome a formalized, joint account planning process
93% of World-Class Sales Organizations jointly set long-term objectives with key/strategic accounts, in comparison to just 35% of other organizations
Effective execution requires account-level planningAn account plan should capture where you are today, where you want to go and an action plan to help you achieve your goals
• Encourages reps to take a forward-thinking view of the relationship
• Connects company’s goals and customer goals
• Enables the company to be more proactive in aligning ideas to the customers needs
• Serves as a roadmap toward long-term growth
• Elevates ability and improves consistency of strategic thinking
• Increase growth rates• Higher account satisfaction and
retention• Increase cross-product and cross-
plant integration
Account PlanAccount Plan OutcomesOutcomes
IllustrativeAccount Name: Industry Sector:
Name of Buyer Customer Needs Company Strengths: Company Weaknesses:
1. 1.
2. 2.
3. 3.
4. 4.
Connecting our Value to the Customer’s Needs Our StrategyValue Proposition Validated?
Investments We Will Make Target Revenue
Possible Actions Action Plan Who When
Account Name: Industry Sector:
Name of Buyer Customer Needs Company Strengths: Company Weaknesses:
1. 1.
2. 2.
3. 3.
4. 4.
Connecting our Value to the Customer’s Needs Our StrategyValue Proposition Validated?
Investments We Will Make Target Revenue
Possible Actions Action Plan Who When
Und
erst
and
the
Cus
tom
erD
eter
min
e th
e St
rate
gyD
evel
op
Act
ion
Plan
23
MERCER
Warning signs for potential sales strategy gaps
24
MERCER
Putting theory into effective action
Ideal Future State (What should we do?)
Feasibility (What can we do given current resources?)
25
Next Steps
1. Align with VOCTransform long term sales strategy and execution to better align with best practices
Clarify/improve GTM approach, segments, roles, accountabilities, processes, account planning, etc…
MERCER 26
THANK YOU!
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Shawn Rossi Principal, Sales Performance Practice Leader
MercerShawn.Rossi@mercer.com
678.427.8275