Wednesday, December 17, 2008

Planning for Success in 2009

I have to admit that I’m a glass-is-half-full optimist. In fact, I have been accused of looking at a half-full-glass situation and arguing that it was closer to a three-quarter-full glass situation. So, it is with that back drop as a dues paying member of Optimists Anonymous that I have been troubled so much with all of the economic trouble that has been in the news recently. It is not that I have my head in the ground and can’t see that there are major issues with the US economy and the global economy, but my view is to focus more on the opportunity than the problem. Unfortunately, it has been tough to focus on anything but the problems with the news coverage, but I also know that with problems come opportunity.

As businesses look at their 2009 planning process, the major question is where the opportunity will come from with respect to revenue growth, profits, sustainability, and survivability. This is not the time for anyone to put blinders on but rather the time to take an objective assessment of your market, the products and services you offer, and competitive alternatives available to your prospects. Then use all of this information to align your resources (people, products, processes, and investments) to make certain that you deliver value to your clients.

If you were losing market share during 2008 because your products and services were inferior or were overtaken by new innovations or product offerings, then 2009 will be a very miserable year for you. Businesses will need to operate, but they will scrutinize purchases with a different lens – do I need this product / service to operate, and if I buy this product / service will it help me make / save money? Taking out of the equation the quality and selection of your products and services, the real question becomes whether or not you have an effective marketing, sales and support model. Looking at all of the ways your business interacts with the customer, especially with respect to Sales Effectiveness will impact your success in 2009.

For this reason, you should take an objective assessment of your Sales Effectiveness using these stages and components.

Business Strategy: The first thing to review is the business plan and strategy for the company. Often when working with managers of component parts of a business, they fail to take into account the overall business strategy and how it might impact their individual department or area of the business. Perhaps you are in a position to impact, or change, the business strategy otherwise you should simply worry about understanding the strategy so you can set up your 2009 plan in the context of the overall business strategy. Some of the questions you should be asking include;

• What are the big picture objectives for the business?
• Are there new vertical markets, products, or initiatives that will be rolled out in the next 12-24 months?
• What types of operational or structural changes are being made, and do these impact my area?
• How might my department better support the overall business strategy for 2009?

Analyze 2008 Results & Project 2009/2010 Desired Results: After you have an understanding of the overall business strategy and how it will provide a framework for getting to the destination, the next step is to define the destination – where are you going? This really involves two pieces of a puzzle; first, where did you come from or the results from 2008, and next, where are you going or the desired results for 2009 and perhaps into 2010. Your results from 2008 are critical to understand how and why you achieved the results last year, and this understanding will guide you to craft a plan to achieve the desired results for 2009. Some of the analysis you should perform on your 2008 results include;

• What were the results on an annual, quarterly, monthly, weekly, or daily basis? For the time periods that are relevant to your business get an understanding of how the results varied over time. Pay particular attention to any seasonal factors in how people buy.
• What were the results on a regional or territorial basis? Understand how different geographic factors and competitors impact the results. Also, get a sense of which managers and individuals are your best performers.
• What were the results by vertical market or industry? Determine if certain types of companies purchased more of your products.
• What are the results by account? If there is an 80/20 rule at play in your business then determine the 20% clients that are your best (measured by volume of purchases) customers.
• What are the results by product / service line? Get an understanding of which products and services are purchased most often by your clients.
• What is the average purchase or deal size? Depending on how purchases are made, you might want to look at annual purchases versus initial purchase, and it might be more relevant to look at median size if you have some significant deals that throw off the average.
• What are the average close rates and length of your sales cycle? In addition to simply looking at the end results, you probably also want to review the results based on conversion percentages – marketing campaign pieces to leads, lead to qualified prospect, qualified prospect to proposal, etc.

All of these questions should also be evaluated against each other in matrix form. For example, if you can analyze the difference in results for products by region, or territorial performance based by time period, or conversion rates by manager, or any of the other combinations of different variables then you have a much better handle on the meaning of the results.

Once you know where you have come from (2008 results), you can develop a road map to your destination (2009 desired results). Simply assigning a budget or quota number to a manager or individual will not help them understand how to get there. Most sales executives and sales reps drink their own cool-aid and they will not take a critical look how past results will impact future performance and then you are dealing with a mentality of wishful thinking or the belief that simply working harder will yield better results.

Alignment of Sales Structure with Strategy & Desired Results: It is critical to align the structure of your front line teams with the business strategy and desired results. If you don’t do this, it is somewhat like suggesting that you need a “military” to fight a war but not thinking through what type of war needs to be waged and understanding the differences that an air force, ground force, or naval force would bring to implementing the strategy. You will most likely need a combination of specialties when it comes to the marketing and sale of your product, but the percentage combination of these specialties is the real question.

• Use the metrics of the number of leads that are needed to yield a certain number of qualified prospects and closed deals to determine the structure and volume of your marketing efforts.
• Use the metrics on the number of leads that need to be managed to determine the number of inside sales resources.
• Use the metrics of the average size deal, length of sales cycle, and overall 2009 desired results to determine how many outside sales resources are needed to handle the volume of active opportunities.
• Determine if you can have inside sales resources carry certain opportunities all the way through closure and eliminate certain types of opportunities from the need of an outside sales resource or account manager.
• What role do partners, value added resellers (VARs), and your other distribution channels play in the sale of your product? Depending on this role, who needs to manage them?
• Do certain types of clients warrant different sales & buying processes, and if so, what type of resources do they need to manage the process?

Marketing, Sales & Support Processes: In almost every company, there are separate departments for these functions. However, almost every client is looking for some consistency in how they are treated during the evaluation, purchasing, and customer service phases of their experience. This consistency boils down into a couple of core issues;

• Expectation setting. Does the promise of features, functionality and benefits from marketing align with how the product / service are explained by the sales team? Does the selling process align with a prospect’s evaluation and buying process? Does the customer service from the company deliver the support that was promised during the sales process?
• Smooth hand offs. Is the left hand talking to the right hand, or does the client have to explain what they want to every representative of the company that contacts them? Do the sales people know what the prospect wants based on how they expressed interest (marketing activity) in the product? Does the customer service team know how the client plans to use the product and any specific idiosyncrasies with their needs?

During the planning for your 2009 results, you need to determine if you have the right processes in place to support the client. If there is not proper expectation setting and a smooth hand off process between departments then you run risk of generating interest that you can’t fulfill, selling products that you can’t support, and working really hard for mediocre results.

Details Lie In Execution: Strategy, analysis, alignment, and processes are nothing without proper execution. In fact, we have worked with companies that have all of these elements well defined but still have trouble meeting their desired results. As they say, the “devil is in the details” and in the case of getting results in business these details are most often how a plan is executed not the plan itself. Many more plans fail due to poor execution than the quality of the plan.

Plans, strategies, and processes are executed by PEOPLE.

• Do your people have the right proper aptitude and personality to do their jobs? If you can’t get all of the insight you need by direct interaction, then look into one of the many personality assessment tests available to you. As one of my colleagues insightfully told me, “they won’t guarantee an employee is successful, but the results will tell you which people are likely to fail due to a mismatch between the requirements of the position and their abilities and desires.”
• Do your people have the right skills and experience? There are some skills and experience that you need to hire to get a base line level of performance, but there are others that you can train. Make sure you know the difference, and create hiring criteria that insures getting new employees that can do the work. Next, create training programs to improve or enhance the skills that accelerate high level performance.
• Do your people know what to do? In every company, there are high level performers that will figure it out on their own and achieve great results. Unfortunately, there is a large group of people in the middle of the bell curve that need more direction even if they have the right aptitude, personality, skills, and experience. Create clear job descriptions, and document your processes and best practices so people know what to do when confronted with a situation. Effective training also plays a big role in differentiating between success and failure.

Robust economic times often mask inferior companies and products who benefit from a “rising tide lifts all ships” phenomenon in business. Rest assured that 2009 will not be one of those economic times. There will be big winners and big losers, and the winners will be the companies that plan for success and then execute their plans.

If you would like to learn more about how an external objective assessment might answer some of these questions, please contact us directly.

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