Managing Sales in a Down Market

Presented by - Peter GilbertCEO of HR Chally SA

Chally’s Position in the Marketplace

“Chally provides the only quantitative sales benchmarks, assessment tools, and metrics for managing the “people” part of the 3 key pillars of

business: Strategy, People, and Process”Leonard W. Frey III, IBM, Global Business Services, Principal, Service-Line Leader, Sales Strategy

and Transformation

“Chally is like the GPS to Sales Success” Gerhard Gschwandtner, Publisher of Selling Power

“Chally is the proven comprehensive source of sales position assessment and sales research”

"AJ" Gandhi, Managing Director, Sales Executive Council

WORLD CLASS SALES BENCHMARKING STUDY

• Over 7300 sales forces surveyed over15 years.• 80-100 000 executives interviewed.• Executives asked how and why they buy.• All ratings based on customer feedback.• Careers of 230 000 salespeople tracked and monitored.

THE RESULTS:-In 15 years only 21 sales forces rated as world class by their customers!!!

Only 1 salesperson in 1000 meets world class criteria

Most CEOs should be really embarrassed about their sales forces!

The reality is that the economic pie is much smaller…

Some people are going to be badly hurt.

Some will not survive.

Only a small number will have the will, discipline and strategic vision to thrive.

Stock Market Crash

There is plenty of bad news!

Wall Street Crash - 1929

But there is also good news…

Paula Creamer Natalie Gulbis

Some people are making truck loads of money!!

What are the possible outcomes of

the recession?

Absolutely Fly!!

Crash & Burn!!

Simply Survive…

But this may not be the good news it seems!!!

In South Africa most sales managers have less than five years experience.Many of them may have never faced a tough market.And about 70% have never received any sales management training!

To really thrive in a recessionary market is going to require a radically different approach.

The story of the 1988 America’s Cup illustrates the point.

NEW ZEALANDThe holders

United StatesThe Challengers

The Challenge

Catamaran – America’s Cup 1988

• Fear, uncertainty and doubt is prevalent.

• How purchases will get made has changed.

• What contributed to sales success in the past – won’t guarantee success in the future.

What is different?

Market Contrast

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Growth Market Down MarketCriteria to determine projects and funding is relaxed

Only critical or strategic initiatives will be funded

Value is assumed and often not proven

Value must be developed and confirmed

Decisions can be made at lower levels in a companies hierarchy.

Decisions are made and approved at the highest levels in the company and those executives are not “rubber stamps”!

The Implication for Sales

• Risk Aversion• Cost Cutting – Cash

Conservation – Spending Cuts

• All projects reevaluated• Slow down of decision

process• Corporate approval process

has changed/risen

Thriving in the CurrentEconomic

Crisis

Surviving

We’re Getting Much Better at This

The Great Depression 1929–1939• Stock markets crashed worldwide, sparking a

global downturn, including a second recession in 1937

• It took 10 years to fully recover • In modern times the average is 24 months!

But !!!

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Those companies who suffered most or actually failed made 2 successive mistakes:

1. They reacted “inappropriately” 2. Were too slow to prepare for the

turnaroundThe Result:- More companies that failed,

failed after the recession, not during it!!!

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Nobody ever got fired for buying IBM

Stereotypical Success Story

The Difference Between Business Winners & Losers

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Losers WinnersFocused on Tactical

RemediesFocused on Strategic Plans

Created “Fire Sale” Offers Refined Strategic Processes

Increased Lead Generation Pruned the Leads Funnel

New Business Campaigns Improved Service to Best Customers

Cut Prices Increased Prices

Cut Costs Maintained and Reallocated

Failed to Prepare for Growth

Out Paced the Competition

StrategyFocus Focus FocusUpgrade systems and

processes to “C” suite standardsAudit & Re-evaluate associates,

partners, prospects, customers and sales force. Direct and commit resources accordingly

Focus on major improvements to the customers experience and results : Deliver value

Bring in the big guns – display confidence

A Roadmap For Success

Strategy

“Managing during the growth stage of the networking business meant you had to run and gun. Hiring as fast as you could, ramping the new people to just basic competence, and then pushing their activity to maximize your coverage. Making the sales numbers required stamina, not necessarily brilliant strategy”

Bruce ParelskinCisco Systems

Refining and Enhancing YourGo-To-Market Sales Strategy

“A Go-To-Market strategy is a purposeful and defined strategy to serve customers, win market share at acceptable margins and outperform the competition.”

Go-To-Market Strategy: Why Does It Matter?

Sell more of your product/service fasterGet your ideal price more oftenIncrease customer satisfaction

• Higher customer loyalty• Increased revenue per

salesperson• Decreased time to market• Decreased time in employee

performance

• Increased number of sales people making quota

• Decreased unwanted sales turnover

• Increased revenue per member

• Increase renewal retention

Increase profitability and customer value

Make the List Make the Rules

Make the Sale Make the Standard

Infrastructure

Value

Relationship

Marketing & Messages

Customer Engagement

Efficiency

Effectiveness

Customer Co-Management

Decisive Force

Price/Performance New Source Of Wealth

Process Performance Business Improvement

Trust Based Political Based

Business Fit

Partner BasedTransaction Based

Solution Fit

Requirements Fit Vision Fit

Known Need/Solution Unknown Opportunities/New Solutions

Known Need/Unknown Solution Known Objectives/Unknown Strategies

Go-To-Market sale strategy Model (GTMss)

Customer

Technology

CRM

Marketing

ManagementManagement

FulfillmentFulfillment Human Human ResourcesResources

Customer

Technology

CRM

Marketing

ManagementManagement

FulfillmentFulfillment Human Human ResourcesResources

• Based on the chosen Go-To-Market Sales Strategy:

• Design a Sales Process which operationalises the Sales Strategy

• Align Marketing, Human Resources, Technology and Fulfillment to the strategy and process

• Hire and Train to the process based upon demonstrable competencies and attributes

• Select and install the correct management metrics and leading indicators

Business Process and AlignmentGo-To-Market Operating System

FOCUS, FOCUS, FOCUS

Old Chinese Proverb

“If you chase two monkeys both will escape.”

High Intensity Focus

• Top Management become deeply involved• The client base is intensely scrutinised for current and future

value• Huge attention is focused on most valued customers• Levels of engagement with key customers is intensified• Activity levels are increased by 35%• Carefully crafted messages are continuously communicated at

all levels• There is intense effort directed at preparing the sales force for

the upturn

Upgrade Systems and Processes To “C” Suite Standards

Audit and re-evaluate associates, partners, prospects, customers and your sales force. Act swiftly on the findings. Direct and commit resources accordingly.

Our Great Sales Challenges*

Increase Sales Productivity• Only 53% of pre-recession reps made quota• Pre-recession reps won only 49% of their

opportunities

Cost Reduction• Pre-recession turnover ranged from 27% - 41%

*CSO Insights

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Where Do We Start to Upgrade Our Sales Growth Processes?

Learn from the “C” Suite: CEO’s, COO’s, and Executives in Finance, Manufacturing, Supply Chain Management, etc.

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The “C” Suite (and most Business Functions) Rely on Predictive Analytics Using:

• TQM: To find sources of error and eliminate them– ISO, Lean and Six Sigma are modern refinements of TQM– The Six Sigma error rate standard is 3.4 times in every 1

million

• Actuarial Science: Rely on the “Law of Large Numbers”– Develop metrics to measure and predict complex outcomes– Actuarial Research is based on:

• Very large samples (100,000+) • Over long periods of time (10-50 years)

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The Traditional Approach to Sales “Benchmarking”

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Consultants Recommend:Study the techniques of the top 20% and train the middle 60%

ABC Company: 200 Salespeople and $200M in Sales*

$90 Million$750K/person

$104 Million$2.6M/person

*Performance averages based on over 900 sales forces measured by Chally over 35 years

The Result

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ABC Company: 200 sales people and $200M in Sales

$90 Million$750k/person

$104 Million$2.6M/person

Improving the performance of the middle by a generous 5% each... only produces 2.25% improvement in sales

$94.5 Million = $204.5 Million Total Sales

ABC Company: 200 Salespeople and $200M in Sales

$104 Million$2.6M/person

Applying to Selection & Alignment

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$90 Million $104 Million$4M/person

$90 Million $104 Million = $200 MillionTotal Sales

Reassigning or replacing the bottom 20% with just “above average”competency levels

= $218 Million Total Sales

$114 Million

will increase production by a minimum of 9%

ABC Company: 200 Salespeople and $200M in Sales

If we now train the rest of the sales force and get a 5% gain, we get an additional $5.7 Million

$119.7 Million = $223.7 MillionTotal Sales

Key Components of ---------- - Methodology Include:

• Conducting Customer Audits– To establish customer perceptions of current state and periodically re-auditing to

measure improvement

• Development of Statistical Analysis “Validation Study”– Identity the predictive competencies that differentiate success

• Aligning your current Sales Talent to their strengths– Hunter vs. Farmer—Consultative vs. Relationship

• Select new Sales Talent– Replace low performers with Sales talent that is matched to role and goals

• Develop/Train/Coach your current and new Sales Talent– Implement sales and management training and coaching/ feedback system

• Conducting Exit Interviews– Ongoing interviews of associates leaving to gain understanding of why

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ABC Company's Results in Millions

After 1st Year After 2nd Year After 3rd Year$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

$90.00

Improved Selection Sales Growth

Improved Training Sales Growth

Total Sales Growth

Turnover Cost Reduction

Total Improvement

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30%

30% of pre-recession sales that had

been conceded to the competition

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CHERYL SMITH AE 77 48 42 74 50 68 28 90 50 84 75 52GARY MOORE AE 67 59 74 55 55 89 86 87 80 40 69 62STEVE JOHNSON AE 61 63 61 48 54 54 42 52 99 43 65 70HOWARD WHITE AE 57 48 50 60 54 31 33 74 50 98 74 70DEE DOE AE 56 53 58 49 42 20 50 57 40 32 43 70ANTHONY ANDREWS AE 56 50 58 77 64 75 57 33 50 88 57 49MARK MILLER AE 53 59 62 74 61 48 33 24 30 88 47 55ROB WILLIAMS AE 52 65 57 65 58 21 42 74 99 32 68 70CINDY SCOTT AE 51 52 50 58 48 88 63 57 70 84 70 49SALLY GREEN AE 51 52 59 61 63 73 70 80 30 78 63 14DIANE CLARK AE 50 69 61 45 57 48 2 72 80 45 66 30LINDA PRICE AE 44 53 61 52 61 73 57 91 30 32 51 86SUE ROGERS AE 43 59 60 69 60 81 81 52 30 73 52 30JOHN BAKER AE 42 64 61 40 40 88 75 77 80 25 61 70JERRY EVANS AE 41 59 63 41 60 29 70 67 30 45 47 30BETH BLACK AE 28 58 63 52 49 64 36 52 30 16 33 86

SOUTHEAST DISTRICT

AVERAGE 52 57 59 58 55 59 52 65 55 56 59 56

Scores 0-39 WeaknessScores 40-49 CautionScores 50-100 Strength

Sample Sales Force Talent Audit

Focus on major improvement to the customers experience and results

– Improved Offering– Improved Service– Improved Reliability

The customer: Industry

Market Business Issues

Business conversations NOT technical

Purposeful, Ready to Execute

Anticipate Objections

Preparation

Business Objective What a customer needs to accomplish to maintain or grow their business.

Business Issue What customer need to address and to achieve business objectives.

Problem Difficulties that prevent them from being able to satisfactorily deal with or resolve business issues.

Solution Capabilities any supplier needs to supply to enable customer to properly address their business issues.

Value The only thing that matters is a customer’s perception of the value of being able to resolve their

business issues; always a combination of tangible and intangible components. Ensure your

salespeople all have these skills.

Real Value

• Financial Justification is key:• Increase Revenue• Decrease Cost• Improve Productivity• Capitalise on opportunities• Regulatory Compliance• Mitigate Implications

Value Accrues to the Business Issue

Uncovering Business Value

Bring in the Big Guns

• Deploy your top executives in a carefully planned way

• Focus on the stability, success and security of your company

• Intensify the levels of engagement at all levels

• Consistently send the message that you are a reliable and financially robust supplier.

• Exit your poor performers early and boost the confidence and sense of security of the rest.

• Tune out information that isn’t helpful

• Increase your activity by 35%

• Rigorous qualification and time management

• Keep value top of mind• Anticipate Objections and

prepare• Eliminate excuses with

specificity

Your Call to Action

Chally Predictive Assurance® (CPA) ROI Guarantee

Based on client implementing Chally’s proven methodology …

Chally will deliver and guarantee client achievement of specific revenue and cost targets over a 3-year period

Please email peter@challysa.co.za to arrange a discussion!

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