Stop Guesstimating Your Sales Forecasts

Matthew Bellows  May 17, 2012 www.blogs.hbr.org

For anyone running a sales organization, the 48 hours before a pipeline presentation are the worst days of the month. The pipeline meeting is where you tell management your team's sales forecast for the next month, and no matter how good your numbers were last month, your work life is a mess.

In the days and weeks leading up to this point, you've had everyone send you their individual and team projections. You've told them, "Update me on the deals you've been working on, tell me about the new ones, estimate when they are going to close, and give me a percentage chance for each one."

You have been diligent in managing your people and in creating compensation plans that reward consistency and predictability. You have stayed on top of the major deals. You have put in place sales training and a market-leading, cloud-based CRM system. Everyone on your teams spends hours each week typing updates, but for those 48 hours, none of it seems to help much.

Basically, you're going into the pipeline meeting and giving your bosses your best guess, because you lack the tools to offer something more precise.

But how can forecasting sales data be such of a problem? The performance of the sales team has always been the most measurable in a company. At the end of every week, month, quarter and year, the result of sales activity is shown on the top line for all to see.

There are two reasons. First, the obvious: the higher you go in the organization, the less connected you are to the deals happening beneath you — and the more vulnerable you are to individual reps or teams, either purposely or subconsciously, altering their pipeline projections to suit their needs. This is no different from how people in non-sales functions push to create budgets and targets they know they can beat.

The second reason for the sales manager's pain is that when it comes to gathering data about upcoming sales possibilities, companies and CRM systems rarely measure anything real. For most kinds of business-to-business selling, your CRM database is an outdated collection of anecdotes and guesses. The fewer the deals, and the longer the sales cycle, the less your "data" matches reality. The stuff that does get accumulated in spreadsheets and CRM systems looks like data — there are dollar signs and probabilities next to prospect names — but it's not. It's really just the opinions, guesses, estimates and suppositions of your sales team.

Thus, the terrible two days. The number you present to your bosses will look definitive, and your reputation will be staked to it. You will have padded it, of course, and your boss will push back and demand that you raise it. You'll settle on a compromise, but you'll leave the room anxious, because you know that there's nothing firm and reliable to back it up.

Why is this the best we, as sales leaders, can do? Because for the most part we are collecting and summing opinions instead of data.

Some innovative sales organizations are starting to move away from the old ways. The growth of inside sales teams and the increasing emphasis on more-measurable sales channels like phone calls and emails is a start. And while CRM systems have their shortcomings, the central repository of information and leads at least gives the harried manager a single pile through which to dig.

But there will be no end to the stress, the chaos and the cognitive dissonance of the 48 hours before the pipeline meeting unless we change. We have to start caring more about sales activities, the specific actions that salespeople and sales teams perform to close more business. We need to know how many phone calls, emails, demos and visits it takes for our teams to close a deal. Then we need to measure the underlying data for each team member without requiring them to report on themselves.

(Full disclosure: Although my company does make an email product to support the sales function, it doesn't help with the problem of tracking sales activities.)

So this is a call to innovative sales leaders, sales operations people, technology and service providers, and the top companies of the CRM industry. Let's build the processes, the services and the tools we need to collect data instead of opinions. Let's learn to build forecasts based on what we do instead of what we say. And most importantly, let's help our salespeople succeed instead of weighing them down with processes that waste valuable time and money.

It's the only way to improve those awful 48 hours. And along the way, we'll find ways to make a whole lot more money.

Matthew Bellows is founder and CEO of Yesware.

People Want Jobs That Make A Difference, Even If It Means A Pay Cut

 Ariel Schwartz www.fastcoexist.com

A new survey comparing college students soon to enter the work force with current workers found that everyone wants an "impact job," and would do a lot to get one.
The job market may be bleak, but college graduates of all ages still have high hopes that they will eventually land "impact jobs" that make a difference socially or environmentally. So says Talent Report: What Workers Want in 2012 from Net Impact, which surveyed 1,726 college students about to enter the workforce as well as employed four-year college graduates (including Millennials, Generation X, and Baby Boomers) on their life goals, job satisfaction, and desire to have an "impact job."
Here’s what the survey found.

• Somewhat surprisingly, current workers said that having an impact job was more important than having children, a prestigious career, wealth, and community leadership. The top two most important things to have for happiness: financial security and marriage. Financial security still matters more than making a difference, but wealth isn’t important for people if they can do some good.
• That’s especially true for students: 58% of student respondents say they would take a 15% pay cut to “work for an organization whose values are like my own."
• Almost 60% of students also expect to have multiple job offers to choose from (that may be a little overly idealistic); 37% believe they can make a positive social or environmental impact within five years.

 Half of current workers care if their job helps make a better world, but 65% of students care.

Among current workers, work/life balance is the most important aspect of an ideal job. A positive environment is the second most important piece (it’s most important overall for students), and interesting work is third. Having a prestigious employer is the least important piece.

There are a few big differences between students and workers: 50% of students say it’s important to have an employer that prioritizes CSR, while only 38% of current workers care. Half of current workers care if their job helps make a better world, but 65% of students care.

Overall, women care more about impact jobs than men: 30% of women say they would take a pay cut for an impact job, while 19% of men say the same thing. And 60% of employed women believe that working for a socially and environmentally conscious employer is important, compared to 38% of men.

In spite of the student population’s idealism, Boomers are most likely to vote (73% compared to 43% of students in the last year), boycott a product or company, or volunteer outside of work.

What does it all mean? Employers had better start taking action now to accommodate the burgeoning socially conscious generation of college grads (which paradoxically does not seem to be civically minded at all). And those new grads, in turn, might want to check out some of the new impact job resources that have started popping up.

Ariel Schwartz is a Senior Editor at Co.Exist.

How to Engage Your Customers and Employees

R "Ray" Wang www.blogs.hbr.org May 9, 2012

Most customers now ignore targeted marketing campaigns, avoid responding to offers, and provide minimal feedback when asked. Instead, potential customers interact with each other, bypassing sanitized corporate messages devoid of meaning or value.
Meanwhile, employees increasingly look beyond compensation to non-monetary factors such as advancement, recognition, and corporate social responsibility in choosing where to work. And with the retirement of the Baby Boomers looming, attracting, retaining, and growing the next generation of leaders is an essential task for any organization.
As a result, organizations around the world are rushing to engage with their customers and employees. It's easy to see why. Without engagement, the influence of brands will continue to decline and big organizations will lose out on the best workers. Our studies at Constellation Research have found that engaged workers — those who participated in a forum, helped out a colleague in a chat, or provided feedback on an enterprise initiative — are 37% more likely to stay with their employers. Meanwhile, engaged customers are three times more likely to recommend or advocate a product or service to a friend. Improved engagement creates business value and strategic differentiation, and technology is enabling a shift from transactions to engagement.
Haphazard approaches to engagement negate good intentions
Unfortunately in the rush to engage, many organizations have taken a haphazard and siloed approach. Based on hundreds of conversations, a common theme emerges of failing to learn from the last Web and ecommerce boom. For example, many organizations have created separate social divisions in the same manner that ecommerce divisions were established a decade back. The result — haphazardly designed customer engagement paradigms doomed to fail. Why? These design points optimize for the company and not for a frictionless and seamless customer experience.
Meanwhile other organizations have built their social strategy using Facebook as the keystone in the same way AOL and Yahoo! central to many companies' plans last century. The result is overdependence on (and enrichment of) Facebook at the expense of driving traffic and activity onto one's own platforms. When customers wake up and decide they are the product, they will stop trading privacy for convenience. The result — brands built on Facebook will face a backlash.
On an internal basis, the rush to deploy social business tools matches the hype of the past decade in installing collaboration tools and assuming one's employees would easily adapt if only the right tool was deployed. The recurring problem — culture always trumps technology in adoption of new tools.
Successful engagement requires nine key components
How do we ensure engagement and avoid the fatal fatigue engendered by every wave of new media adoption? How can an organization and their leaders make the shift? The first step is to think systematically about it, and understand that engagement requires a set of building blocks. I divide them into three categories: people-centric values, delivery and communication styles, and the right time drivers.
People-centric values are the starting point. An organization needs to genuinely understand and relate to its customers and its employees before it can engage them. The key elements here are culture, community and credibility. Culture is about societal norms, communication preferences, and global outlook. At the organizational level, this includes which leadership styles are most effective, and how workers interact with each other. In dealing with customers, it's about understanding customer segmentation, digital readiness, and inclination to participate. Community focuses on internal and external stakeholders. Each stakeholder may have different needs. For example how you share information with a supplier may be different than what you can tell an internal employee. The last component, credibility, involves earning trust through actions. Credibility is built through influence, reputation, track records, and accumulated expertise.
Values alone are not enough. To engage successfully, organizations also need an understanding of delivery and communication styles. These styles incorporate channel, content, and cadence. Channel refers to the means of engagement: face-to-face, retail, mobile, social, web, kiosk, virtual, and video. Content can be internal, user-generated, re-purposed, paid, news-driven, or analytic. Finally, cadence describes the frequency of engagement — whether it's ad hoc, scheduled, or continuous.

The last piece is choosing the right time drivers to provide a why, when, and where in engagement. The goal is to inspire action through context, catalysts, and currencies. Context means location, business process, role, relationships, and sentiment, all of which need to be considered to deliver the right offer to the right person at the right time. Catalysts are what inspire action and response: campaigns, offers, advertisements, direct rewards, indirect rewards, and loyalty programs. Finally, currencies influence behavior through an exchange of value. Monetary models include traditional cash, bonuses, rewards, and rebates, but non-monetary currencies such as virtual goods, recognition, access, and influence can often be more powerful.
The nine critical components of stakeholder engagement




















New models of engagement herald the death of B2B and B2C
The emergence of extremely viral people-to-people (P2P) networks has changed the notion of the customer and employee forever. Social media, social networks, and mobility also herald the death of B2B and B2C as we know them. A bad experience at work with a particular brand of laptop bleeds over into consumer choices. Great experiences with consumer products have driven the rise of bring-your-own-device-to-work — a key to Apple's new success in the enterprise.
As organizations master engagement, early adopters will shift to building experiences by filtering massive streams of information through context. Context — in the form of roles, relationships, location, business process, time, and other factors — will transform engagement to experience. Early adopters of augmented reality and gamification already apply these nine Cs of engagement to craft intuitive and natural customer experiences. The drive towards engagement will impact both the future of work and next generation customer experiences. The move to engagement lays out the first step to a P2P world.

R "Ray" Wang is Principal Analyst and CEO at Constellation Research.

10 big mistakes successful leaders make

Steve Tobak May 9, 2012 www.cbsnew.com

Executives and business leaders don't just peak and lose their potency over time, like wine. They change. Oftentimes, success is the culprit. Success affects everyone differently and not necessarily in a good way.
I've seen it happen to loads of successful CEOs, entrepreneurs and business owners I've worked with over the years. It's not a result of the Peter Principle, since their responsibilities didn't change. It's not necessarily a question of the business outgrowing their capabilities, either.
And they don't just "lose it." Rather, they change. Success changes them.

If you know a little about human psychology, that shouldn't surprise you. You've got to really know yourself, possess unusual self-confidence, and be pretty well grounded in reality to withstand the ego-inflating onslaught of winning big in business.

Since we're all human, we're all susceptible to the unusual pressures and pitfalls that come from achieving what we've always dreamed of. In my experience, these are the ten most common traps successful leaders fall into.

Becoming the status quo. Startups often break into the market by challenging the status quo. The problem is when success makes them the status quo, yet they don't realize it. That was evident when Apple and Google challenged the BlackBerry with the iPhone and Android platform. It's ironic that RIM's co-founders forgot that they were once the challengers. Their failure to be proactive or even to react in time was RIM's downfall.

Tunnel vision. They lose perspective and become rigid, sticking to their myopic vision like glue. Since competitors are unpredictable and markets are always evolving, it can be deadly to a business. If their vision fails to gain traction, they often double down and become even more grandiose. We saw that with former Sony CEO Howard Stringer's concept of product synergy. The only problem is it didn't exist.

Losing their fear. Fear is a key emotion that warns you when to be alert and when you need to act. When you start to think that success is inevitable and believe you can't fail, you act irrationally, become reckless and take risks you shouldn't or without due consideration. Reminds me of lots of megamergers and LBOs, that's for sure.

Fear of losing. The opposite of becoming fearless to the extreme is becoming too risk averse because you're afraid of losing what you've won. Unfortunately, that simply doesn't work in an ever-changing business world. Once that fear of taking chances sets in, you're business is doomed.

All knowing. They stop asking questions and don't really listen when key stakeholders -- customers, executives, directors, investors -- tell them something they need to hear. They think they have all the answers, that they're the smartest guys in the room. They miss critical warning signs.

Isolated. I've seen far too many successful people develop an elitist or ivory tower mentality. They become insular in their thinking and cut themselves off from others with layers of bureaucracy and hierarchy. There are also usually physical manifestations like executive offices, suites, buildings, and assistants to keep the masses out.

Controlling. In the name of maintaining a culture of entrepreneurship, they become obsessed with keeping things the way they are. That often translates to micromanaging and controlling every little thing. They fail to let go by adding processes and infrastructure that growing businesses need to effectively scale. I see this over and over, especially in the high-tech industry.

Surrounded by yes-men. There will always be weak-minded lackeys that tell leaders what they want to hear and sugarcoat negative news to gain favor. But their power only comes from weak leaders with low self-esteem that need their egos to be constantly pumped up.

Lost the magic. Business success is nearly always the result of a number of factors. Sure, there's a product or service that customers are excited about, but there's also pricing, timing, partners, even luck. Whatever the combination, it's tempting for successful entrepreneurs to think it's all about them, not the "magic formula" that got them there.

If I build it, they will come. Entrepreneurship works in America because anyone with an idea can get funding and, if the stars are aligned, develop a hit product or service. To get out of the "one hit wonder" phase and develop a second and third successful product, however, requires a willingness to embrace marketing, sales, operations, customer service and other business functions.

Key Account Selling: The Unwritten Rules

Tom Searcy May 16, 2012 www.cbsnews.com

Selling key accounts is like baseball: Both have their codes of unwritten rules.
Baseball fans and players know the game has an informal code of conduct worthy of a samurai. One former player said it is a game played by human beings and governed by unwritten laws of survival and self-preservation.
These rules are largely unofficial and aren't written down on clubhouse walls. But they are well-known. For instance:

• Don't slide into second with your spikes high and try to injure the infielder (that went out with Ty Cobb)
• With runners in scoring position and first base open, walk the number eight hitter to get to the pitcher (don't get me started on the designated hitter rule)
• Don't bunt with a home run hitter at the plate
• If there is a fight, everyone must leave the bench, and the bullpen has to join in (but no bats -- just fists)
• In cities that have two baseball teams, any given fan can only root for one of them (President Obama roots for the Chicago White Sox, for instance, not the Cubs)

Selling key accounts is similar to baseball. There are unwritten rules you are expected to learn if you want to pursue these major pieces of business, which have the highest profit potential. The competition to land these large corporate accounts is fierce. These unwritten sales laws are also a matter of survival and self-preservation.
One such rule is that when you're trying to land a key account, your prospects are listening for certain things. They want to know if you respect their money, if you respect their time, and if you understand the risks they face. For them, it doesn't matter what you are selling; they will judge your selling tools to see if you respect and understand the unwritten rules about money, time, and risk.

Salespeople have a bad habit of ignoring these unwritten rules and selling what they think prospects want to hear: quality, service, capacity, innovation, on-time delivery, guarantees, and all the other usual buzzwords. But the fact is, these are not the reasons why big companies buy. When you speak an entirely different language it shows, at best, ignorance of the rules, and at worst a lack of respect.

When you use those typical words, you are asking the big company to translate what you believe is valuable to what they believe is valuable. For example, to a big company the meaning is different.

Quality means time -- production lines not going down because of faulty parts, customer service calls not received because products work, and so on.

Quality Also Means Money -- repeat purchases, reduced waste in production, etc.
Quality Means Less Risk -- fewer product returns, investment confidence, etc.
The more complex your offering, the more difficult it is for a big organization to hear the three things it needs to hear make a decision to buy. To play the game right, we need to talk to a big company in its own language. We have to translate value based on the result of what we deliver.

Remember rule No 1: What matters most to a larger organization is time, money, and risk. For salespeople, that means following the unwritten rules of doing the translation in real-time, when you are presenting the benefits of what you sell. Every benefit needs to be accompanied with an impact statement that translates to time/money/risk in the big organization's business. To be successful, those are the (unwritten) rules.

The Hidden Wealth Beyond Net Promoter

Bill Lee May 10, 2012 www.blogs.hbr.org 

Net Promoter Score (NPS) is perhaps the best known customer loyalty tool around today, based on the entirely sound principle that the more customer promoters you have (i.e., customers who say on surveys that they're highly likely to refer you to a colleague or friend), the more likely you'll be to grow your business and outpace the competition. That makes powerful sense, and the continued growth and success of Net Promoter is a testament to the idea's relevance and value.
But I have found in my years of experience working across industries and sectors, that firms who embrace NPS are often leaving tremendous sources of wealth creation on the table. That's because the focus of NPS is on creating promoters, but stops short of engaging them to actually promote the business through activities like referrals, references, blogging or tweeting, speaking at industry events, or any of the myriad ways that passionate customers can help build businesses these days. The implicit assumption seems to be that NPS is only about getting customers to buy, to keep buying and to buy more. But there are many other — often far more lucrative — ways that customer promoters can create value for your firm and help grow your business.

Here are some ways to tap this unrealized source of growth:

Be intentional about customer promotion. Many firms assume that because a customer says on a survey that he'd be highly likely to refer you, that he will in fact do so. That may not be the case at all: they need to be asked. Two studies of firms in the telecommunications and financial services industries showed that only about 10% of declared promoters actually do refer profitable new customers. That's not bad, of course, but what about the other 90%? Why not intentionally provide opportunities to such promoters and invite them to, you know, promote you?

By the way, not all referral customers are the same. Businesses that take the time to understand which customers are more likely to respond to a marketing campaign by buying, and which are more likely to respond by referring a colleague or friend — doubled the return on their campaigns, as opposed to those that treated everyone as a potential buyer.

Look for customer value beyond promoting. Loyal customers who are disposed to refer business to you probably like you a lot. Why limit the ways in which they can help you grow your business to referrals? They might enjoy helping with your sales and marketing efforts by providing references or testimonials. Or they might speak on your behalf at industry events. Or participate in your user groups or other customer communities. Or ... you get the idea.

Remarkably, even highly sophisticated firms miss these opportunities. When Coleen Kaiser took over SAP's global customer reference program, she thought it would be a good idea to have the firm's promoters — in addition to providing referrals — to provide sales and marketing references as well. (A referral occurs where a customer suggests your solution to her friend or colleague. A reference is where a customer affirms the value of your product to your prospect). As it turned out, only 20% of promoters were customer references. Indeed, very few references were identifying themselves as promoters on NPS surveys!

Kaiser took the obvious step of reconciling that anomaly — making sure that her team invited promoters into its reference program, which more than tripled their participation to 70%. It wasn't a hard sell. After all, these are customers who've said they'd be highly likely to recommend SAP. As a result, in post-sale surveys, sales people went from identifying customer references as a "neutral influence" on sales to identifying them as one of their highest rated competitive advantages.

Move beyond promoters to defenders. With the rise of social media and the ability of buyers to check out a business long before they engage with its marketing communications or sales people, the very idea of a "promoter" is looking dated. It's too passive. The concept that emerged at the 2012 Summit on Customer Engagement was "defender." That's a customer advocate who doesn't passively wait for you to invite her to promote your firm, but who is already active on the social media sites that are talking about your firm and vigilant about addressing and correcting negative comments as well as amplifying positive ones.

Salesforce.com (SFDC) and a growing number of other firms are cultivating such customers, who are often called "MVPs" (most valuable professionals). At the 2012 Summit, a panel of three such MVPs talked about their activities and wowed the audience of marketing professionals with their dedication to keeping the Salesforce.com brand strong. They blog, they attend live events, they present and sit on panels. In return, they're given front row seating and other benefits and platforms at SFDC events. And they do all this for free — any other arrangement would destroy their hard-won reputation for objectivity.

Defenders go way beyond simply being loyal customers. They identify their success with SFDC's success and both promote — and defend — the firm vigorously. In today's world, such passionate 3d party defenders can be among a firm's most powerful sources of wealth and sustained growth.

Bill Lee is president of the Lee Consulting Group, Executive Director of the Summit on Customer Engagement, and author of The Hidden Wealth of Customers: Realizing the Untapped Value of Your Most Important Asset (HBR Press, June 2012).

Jim Collins: Good to Great in 10 Steps

Kimberly Weisul May 7, 2012 www.inc.com

Management guru Jim Collins asks entrepreneurs to do 10 things that will dramatically improve their companies. What are you waiting for?
Researcher and management guru Jim Collins has authored or co-authored six books, including Good to Great and Built to Last. On his web site there are 48 articles written or co-written by him. But speaking at the Womens Presidents Organization’s annual conference last week in Atlanta, Collins boiled it all down. Do these 10 things, he said, to dramatically improve your company.

1. Download the diagnostic tool at jimcollins.com, and do the exercises with your team. Yes, I thought this was self-serving at first. Then I looked it, considered that it’s free and doesn't require you to sign up for anything, and immediately saw his point.

2. Get the right people in the key seats. This comes from Collins’ famous observation that building a company is like driving a bus. You need a driver, but you also need the right people in all the key seats. So, says Collins, figure out how many key seats you have, and make a plan that will make sure you get all the key seats filled by the end of the year.

3. Once a quarter, have a brutal facts meeting. Be careful about who you include in this meeting. You will be discussing just the brutal facts. This is not the time to express opinions or strategize. Repeat: Only discuss the brutal facts.

4. Set a 15 to 25-year big, hairy audacious goal (BHAG). This is a goal that is concrete enough, and ambitious enough, to guide your company’s progress for years. Collins writes that “With his very first dime store in 1945, Sam Walton set the BHAG to ‘make my little Newport store the best, most profitable in Arkansas within five years.’ He continued to set BHAGs, which continued to get larger and more audacious, as his company grew.

5. Commit to a “20-mile march” that you will bring you to your big hairy audacious goal. Collins makes the analogy to someone who is trying to walk across the county. The best approach, says Collins, is to attempt to travel the same distance every day. If you’re on a 2-mile march, says Collins, you don’t bolt 30 miles ahead when the weather is good. You go 20 miles. When the weather is bad, you can’t sit inside and complain – you still have make 20 miles.

What does this have to do with entrepreneurship? In his research, Collins found that companies that perform consistently do much better than those that do spectacularly one year and are feeble the next. That’s because if you overextend in good years, when opportunity appears to be everywhere, you may not have the resources to get through the lousy years. The 20-mile march is a metaphor for the milestone that you can reach day-in and day-out.

6. Place at least one really big bet in the next three years, based on having fired bullets first. No entrepreneur has unlimited resources, just as no small army has unlimited gunpowder (this metaphor may be dated, but you get the point). The best use of limited gunpowder, or resources, says Collins, is to fire bullets to ensure that your aim is calibrated properly and that you can indeed hit your target. Only when you’re sure of your ability to hit your target should you load lots of gunpowder into a cannonball and fire away. “Fire bullets to calibrate. Fire cannonballs to go big,” says Collins.

7. Practice productive paranoia. Collins says he fondly refers to his entrepreneurial subjects as PNFs, or paranoid neurotic freaks. “Successful companies have three to ten times the cash on their balance sheets as their peers even when they are very small,” says Collins. Or as one of the CEOs he studied said to him, “We’re very proud of the fact that we’ve predicted 11 of the past three recessions.”

How exactly can one practice productive paranoia? Collins recommends making a plan that will allow you to go for an entire year with no revenues, and still survive.

8. Get a high return on your next luck event. Collins says that both great and mediocre companies encounter the same amount of luck, good and bad. What matters, he says, is how well they’re able to capitalize on it. Collins refers to this as ‘return on luck.’ “How are you doing on luck?” he asks. “Have you turned your bad-luck events into a big part of what makes your company great? Are you squandering your good-luck events?”

9. Make a to-do list. “If you have more than three priorities, you don’t have any,” says Collins. For every major ‘to-do’ on your list, you should have a corresponding item that you will stop doing. The 'stop-doing' list.

10. Commit to a set of core values that you will want to build your enterprise on, without changing them, for 100 years.