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Sales, Sales Management, Sales Strategy

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Presentation I have done in a Sloan software class on sales, sales management, and sales strategy. Particularly applicable to companies doing b2b selling.

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Sales, Sales Management, Sales Strategy

  1. 1. Strategy, Sales, & Sales Management
  2. 2. Strategy, Sales, Sales Management <ul><li>B2B Sales Management 101 </li></ul><ul><li>B2B Sales Strategy 101 </li></ul><ul><li>B2B Sales Case Study: Groove </li></ul><ul><li>Sales & Strategy Reading List </li></ul>
  3. 3. B2B Sales Management 101 -- Harsh Reality
  4. 4. B2B Sales Management 101 – The Number “Quarteritis…” <ul><li>“ The sun rises & sets on the quarter” </li></ul>
  5. 5. B2B Sales Management 101 – Sales Representatives <ul><li>Sales Rep Profile </li></ul><ul><ul><li>Personable, builds trust </li></ul></ul><ul><ul><li>High energy </li></ul></ul><ul><ul><li>Aggressive/”edge” </li></ul></ul><ul><ul><li>Street Smart (v. book-smart) </li></ul></ul><ul><ul><li>Listeners/nonverbal </li></ul></ul><ul><ul><li>Motivated by money </li></ul></ul><ul><li>80-20 rule </li></ul><ul><li>Compensation </li></ul><ul><ul><li>Base $90k - $100k </li></ul></ul><ul><ul><li>Commission $125k (plus draw) </li></ul></ul><ul><ul><ul><li>0%-50% quota = x%; 50% -100% quota = 2x%; > quota = 3x% </li></ul></ul></ul><ul><ul><li>Stock options – less important </li></ul></ul><ul><ul><li>President’s Club </li></ul></ul><ul><ul><li>Top reps’ pay > CEO’s </li></ul></ul><ul><ul><li>Measurable & Accountable – high turnover tolerated </li></ul></ul>
  6. 6. B2B Sales Management 101 – Strategic Selling <ul><li>Nuclear unit </li></ul><ul><ul><li>SR, SE, Cnslt, Mgmt </li></ul></ul><ul><li>Power Selling </li></ul><ul><ul><li>Champions </li></ul></ul><ul><ul><li>Coaches </li></ul></ul><ul><ul><li>Economic Buyer </li></ul></ul><ul><li>IT, LOB IT, LOB, Prchsg </li></ul><ul><li>Legal, Finance, BOD </li></ul><ul><li>Find Pain, Find $ </li></ul><ul><li>Ask questions/listen/non-verbal </li></ul>
  7. 7. B2B Sales Management 101 – Predicting The Future PROSPECTS (Email, URL, Source, HI-IQ Email Nurture) LEADS (Phone #, Lead Conversion Event) NEW CUSTOMERS (CC# and Authorization) Satisfied CHI > 70 Unsatisfied CHI < 70 Marketing Sales Customer Service HubSpot HI-IQ SalesForce.com OPPORTUNITIES (Demo/Trial, 3 per day per rep) SalesForce.com SUSPECTS (HubSpot, WSG; PPC MVT)
  8. 8. B2B Sales Management – Predicting the Future The Funnel Visitors Prospects Leads Opts
  9. 9. B2B Sales Management 101 -- Predicting the Future The Forecast
  10. 10. B2B Sales Management 101 -- Other <ul><li>Accounts Reviews </li></ul><ul><li>Recruiting (profile) </li></ul><ul><li>Territory Distribution </li></ul><ul><li>Compensation Plans </li></ul><ul><li>Sales Rep Development </li></ul><ul><li>Sales Process & methodology </li></ul>
  11. 11. B2B Sales Strategy 101 Segmentation = Profits 1 Total churn rate (not shown) is calculated as cancelled customers (all time) divided by total customers (all time). Monthly churn rate is total churn rate divided by average customer lifetime of 4.16 months All Customers Avg. Trans. < $3k Avg. Trans > $3k SMBs 28 108 VSBs 21 28 Total 185 Cancelled Customers Avg. Trans. < $3k Avg. Trans > $3k SMBs 3 7 VSBs 11 7 Total 28 Monthly Churn Rate 1 Avg. Trans. < $3k Avg. Trans > $3k SMBs 2.6 % 1.6 % VSBs 12.6 % 6.0 % Total 3.6 %
  12. 12. B2B Sales Strategy 101 Crossing the Chasm…
  13. 13. B2B Sales Strategy 101 Model Comparison Source: Rethinking the Sales Force ENTERPRISE CONSULTATIVE TRANSACTIONAL <ul><li>Agenda setting </li></ul><ul><li>Boundaries blur- unclear who is selling and who is buying </li></ul><ul><li>Problem solving </li></ul><ul><li>Doing the deal </li></ul>Nature of sale <ul><li>Access to strategy </li></ul><ul><li>Access to influencers </li></ul><ul><li>Access to decision maker </li></ul>Prerequisites for success <ul><li>Trust – based </li></ul><ul><li>Business equals </li></ul><ul><li>Insider </li></ul><ul><li>Both parties change fundamentally </li></ul><ul><li>Benefits – based </li></ul><ul><li>Client-advisor </li></ul><ul><li>Cooperative </li></ul><ul><li>Cost - based </li></ul><ul><li>Buyer-seller </li></ul><ul><li>Confrontational </li></ul>Nature of relationship <ul><li>Strategic plan </li></ul><ul><li>Purchasing stream </li></ul><ul><li>Event </li></ul>Time horizon <ul><li>Platform fit </li></ul><ul><li>Values fit </li></ul><ul><li>Sustainability </li></ul><ul><li>Importance of problem </li></ul><ul><li>Solution fit </li></ul><ul><li>Price-performance tradeoffs </li></ul><ul><li>Price </li></ul><ul><li>Availability risk </li></ul><ul><li>Ease of acquisition </li></ul>Key buyer concerns and decision criteria <ul><li>High Strategic and/or cost importance </li></ul><ul><li>Limited substitutability </li></ul><ul><li>Differentiated </li></ul><ul><li>Customizable </li></ul><ul><li>Hidden Capabilities </li></ul><ul><li>Well Understood </li></ul><ul><li>Readily substitutable </li></ul><ul><li>Standard items </li></ul>Product or service characteristics
  14. 14. B2B Sales Strategy 101 Reason for shift to consultative model Sales 5 Resource commitment needed for consultative selling Sales 4 Sales 3 Sales 2 Sales 1 $ Cost Source: Rethinking the Sales Force Sales 5 Sales 4 Sales 3 Sales 2 Sales 1 % Return 0%
  15. 15. B2B Sales Strategy 101 Consultative Model <ul><li>“ Listening and gaining business understanding are more important selling skills than persuasion; creativity is more important than product knowledge.” </li></ul><ul><li>“ The only single ‘truth’ that seems to be holding true for all sales forces is that they have to create value for customers if they are to be successful. Just communicating the value inherent in their products isn’t enough.” </li></ul><ul><li>“ It’s a risky strategy in a consultative sales to go to a senior-level decision maker before thoroughly understanding the issues and problems where you can create value. Most good consultative salespeople will first do their homework by working with those influencers in the buying organization who have the best knowledge of the problems and opportunities where the selling organization hopes to create value.” </li></ul><ul><li>… Quotes from “Rethinking the Sales Force.” Neil Rackham & John DeVincentis </li></ul>
  16. 16. B2B Sales Case Study: Groove Networks P0: Evaluation P1: Validation P2: Initial Rollout P3: Enterprise Rollout REVENUE COST OF SALE
  17. 17. B2B Sales Case Study: Groove Networks 2 months 2-3 months 6 months ongoing P0: Educate P1: Validate P2: Initial Rollout P3: Enterprise Rollout SALES ACTIVITIES <ul><li>IT call(s) </li></ul><ul><li>Orientation </li></ul><ul><li>LOB/LOB IT calls </li></ul><ul><li>Validation </li></ul>2 Track Pilot Trial: - IT validation - LOB pain project <ul><li>Implement seats & gather metrics </li></ul><ul><li>Penetrate new LOBs </li></ul><ul><li>Engage enterprise apps </li></ul><ul><li>Horizontal bus processes </li></ul><ul><li>Groove as standard desktop DNA </li></ul><ul><li>Integrate w/ Ent Apps </li></ul><ul><li>Groove broadly deployed and used throughout value chain </li></ul>LOB Pain ID’d IT Champ Validation Process Pain Validated IT Validated $100k+ Multiple Pain/Lob IT Service Offer’g $500K+ MSLSA $1m/yr Every desktop
  18. 18. B2B Sales Case Study: Groove Networks Q1 (P)hase Movement <ul><li>P1’s </li></ul><ul><ul><li>Lowe $46K </li></ul></ul><ul><ul><li>ESP $50K </li></ul></ul><ul><ul><li>AMEX $40K </li></ul></ul><ul><ul><li>Mattel $35K </li></ul></ul><ul><ul><li>Intermec $22K </li></ul></ul><ul><li>P2’s </li></ul><ul><ul><li>HP Mktg $770K </li></ul></ul><ul><ul><li>OCPA $691K </li></ul></ul><ul><ul><li>Siemens $111K </li></ul></ul><ul><ul><li>SAIC $142K </li></ul></ul><ul><ul><li>Praxair $100K </li></ul></ul><ul><ul><li>Novartis $86k </li></ul></ul><ul><ul><li>VLH $522K </li></ul></ul><ul><ul><li>Army $154K </li></ul></ul><ul><ul><li>HP C&I $106K </li></ul></ul><ul><ul><li>KPMG $100K </li></ul></ul><ul><li>P0’s </li></ul><ul><ul><li>SPAWAR $18K </li></ul></ul><ul><ul><li>Hitachi $10K </li></ul></ul><ul><ul><li>CARE $7K </li></ul></ul><ul><ul><li>DuPont $7k </li></ul></ul><ul><ul><li>Verizon $6K </li></ul></ul><ul><ul><li>ServiceCo $16k </li></ul></ul>
  19. 19. Further Reading
  20. 20. Questions?