The 63% on non-selling activities is largely due to the fact that the selling and buying process has become much more complex since the late 1990s, and the backend tasks that sales people have to manually perform are now reflecting that complexity.  Unfortunately (or fortunately depending on how you look at it) technology hasn’t been effectively utilized to automate those tasks.  Activities like sales reports, forecasting, proposal creation, order entry, CRM entry, billing, and sales team collaboration largely are done the same way they were five years ago.

• Sales people: take a piece of paper and chronicle all the non-selling activities you do this week; I bet it is huge, and would love to see the list you create in your comments below.
• Sales Leaders: Take your last month/quarter’s sales numbers, and multiply them by 1.63; that’s how much your team would have sold if all its time were spent directly on selling; did your eyes pop out of your head yet?!?

Hopefully the numbers above have painted a compelling picture for you to take action, and give your sales people more face time to sell. The more complicated question is what can you do to increase the amount of time your sales force spends selling?  Below I’ve outlined some steps you can go through to help you better understand the amount of revenue lost because of non-selling activities, and how to create a compelling business case to invest in outsourcing or automating the “non-selling” activities.  Like always, it would be very helpful to bring in an external consultant to help you with this process, because it is complicated and there are many unintended consequences that can significantly hurt your business if they aren’t performed properly.

Step 1: Determine your sales people’s non-selling activities and the average time dedicated to those activities.  This will quantify how much time your salespeople are spending on each non-selling activity.

Step 2: Determine the revenue that your sales force will create if their time were spent selling instead of performing their current non-selling activities.  These numbers can be hard to accurately predict for several reasons, but will provide you with a base for creating a case to automate/outsource the non-selling activities. In this table, each sales person generates $200,000 in revenue per year. The bottom line will indicate how much potential revenue sales people will drive if they stop spending time on non-selling activities, and spend time selling in front of customers.

Step 3: Estimate the cost of automating (ex. software) or outsourcing the non-selling activities.  This is probably best done by contacting potential vendors and getting initial quotes on the cost of their solution as well as the amount of non-selling time that the solutions will eliminate.  Bundle numbers if the automation/outsourcing addresses multiple  activities.  I assumed automating or outsourcing each activity would cost $200,000 per 100 sales people.  The actual numbers will vary greatly, so I just did this for illustrative purposes. Now all you have to do is subtract the revenue that your sales force will create if they were selling from the cost to automate the non-selling activities (see the two bottom numbers in the tables above)

As you can see, investing in automating outsourcing can instantly create millions in revenue for your top line, and propel you to a great 2010! If your sales force is only spending 39% of their time on actually selling, the list of “non-selling” activities should be very long.  Coming up with these numbers is not an easy task, but well worth it. I would love to hear your feedback on how much of your time you think you or your sales force spends on non-selling activities, and what you could do if you were in front of the customer for that time.

Let me first articulate what I mean by hunters (Ex. “New Business Development Executive”) and farmers (Ex. “Account Manager”). Hunters largely work at the beginning of the sales funnel, both prospecting and qualifying sales opportunities.  They generally will find a solution to a qualified prospect’s expressed need and work to take the opportunity to closure, but are not responsible for post-sales activities.  Farmers largely work at the back end of the funnel, and are responsible for servicing existing customers and identifying/closing new sales opportunities with their assigned accounts.

Differences Between Hunters and Farmers:

One of the shocking things that I learned when getting to understand what makes great hunters/farmers was that many of the major competencies that make someone successful at one type of sales role actually work against them in another! If you have been engaged in this debate or are wondering if you are a better hunter/ farmer, here are some key differences between the two types of sales roles.

• Emotional Resilience vs. Emotional Intelligence: Hunters must be emotionally resilient to deal with the high levels of daily rejection that come with prospecting (ex cold calling); they have to bounce back in a matter of seconds from rejection and reach out to another potential prospect.  Because hunters spend a lot of time prospecting, this is a key aspect to their success.  On the other hand, farmers must be emotionally in-tune with their account team and the customer team.  After all, customer satisfaction is an emotional feeling and farmers must be adept at sensing that.
• Hunt vs. Fulfillment: Hunters are driven by the rush of the hunt (go figure!), and the thrill of the “kill”.  Given how exciting that rush is, everyday details can seem pretty boring.  Because the primary duty of a hunter is to hunt, this works out well.  In contrast, good farmers like to get their hands dirty with the details, and consider themselves solid and dependable. This caters well to fulfillment duties, which are vital to managing an account.
• Independence vs. Team: Hunters are self-motivators and work very well independently.  They sometimes even have a disdain for marketing or sales operations folks that try to work with them, and often don’t like team work.  This is a vital characteristic because hunters work primarily by themselves during the prospecting and qualifying phases and have to be highly self-motivated.  They rarely get help in their jobs unless an opportunity has passed the qualification phase.  By contract, farmers are team players and collaborators.  They work closely with their account management team and the client, often framing business challenges and creating solutions alongside their client.
• Qualifying vs. Nurturing: The best business development people out there are superior qualifiers.  Hunters can be given 100 accounts and very quickly tell which five are worth pursuing.  In business development, it is essential that hunters spend their time on prospects that might close or else they are wasting their time.  This is the biggest barrier to a hunter’s productivity, so the ability to qualify quickly and accurately is crucial.  In contract, farmers are great nurturers.  They look at relationships from a long term perspective and are interested in getting to know their clients on a multitude of dimensions.  In account management, it is essential that salespeople develop thick long term bonds with their customers to promote trust and loyalty.  If a farmer was given 100 prospects, they would naturally try to develop long term relationships with most of them.

Organizing Your Sales Force into Hunting and Farming

Growing revenue is always a priority in business, so hunters are always needed when the business is small and growing.  As the business starts to grow and you see potential for profitable long term relationships with current customers, you will need to add farmers to your mix.  The most common mistake I see business make is to under invest in their farmers.  This is primarily because by the time you need farmers your sales force is filled with hunters that don’t value farming.  Take great care to check your hunters and invest in a farming unit.  The type of farming unit you need will depend on several factors: size of client (gross revenue), complexity of client’s business, importance of your products/services to client’s business, complexity of your product/service portfolio, and of course revenue potential.  As those criteria grow, there is the opportunity for more investment in an elite farming group. Farming units vary from cheap inside sales reps, to expensive Strategic Account Managers.

The investment in splitting your sales force into hunters (New Business Development) and farmers (Account Management) is large.  You will need additional management layers, dedicated sales operations and enablement personnel, and other support roles.  You should always run the numbers to make sure that each NBD and AM unit is profitable and can support itself.  Sales should always be a revenue center.

Weaknesses of Implementing the Hunter/Farmer Model

One of the things that I have come to believe in my time studying and working with businesses is that every management model has its weaknesses.  Splitting up your sales department into hunter and farmer departments is no exception.  Here are two problems that I have seen businesses encounter and how to overcome them:

• First, companies think Account Management (farming) is the same as customer service….IT IS NOT.  Certainly customer service is a large component of account management, but the primary focus of Account Management is to grow long term revenue……which should be reflected in their incentive plans.  I find too often that Account Managers do not work on any form of commission, and therefore don’t seek out new sales opportunities.  If you don’t incentivize your farmers to grow the business, you will get a reactive group of folks who don’t grow your most fertile customers.  Keep in mind that it costs 8-10 times as much to sell to a new customer than to an existing one, so your farming unit should have a great expense to revenue ratio.

• The strongest objection to the separation of a sales force into hunters (new business development) and farmers (Account Management) is that it makes for an awkward transition for the customer after they have signed on the dotted line.  This is a VERY valid point.  After all, the customer has purchased from you because they have had a great experience with your hunter and might perceive a transition as a bait and switch.  It is important to get your Account Managers involved with sales opportunities as early as the proposal writing process and as late as the final presentations. You should also develop a value proposition for your customer’s transition to the Account Manager during the proposal/presentation process.  You need to ask for your new client’s approval to transition to the new Account Manager, and you should only fully transition them when the clients feel comfortable.  This part does require a lot of “managing”, but is well worth the price to put your employees in roles that align with their competencies and put your customers in good long term hands.

As always, I would love to hear what you think of the hunter/farmer model, and what your sales force looks like!

Because new business development is so important to so many, I thought I would post an article on what I consider to be one of the “golden nuggets” that sales executives should think of to help boost his/her sales organization’s new business productivity.

The golden nugget is your sales force’s ability to QUALIFY NEW PROSPECTS. To better understand the implications of good/bad qualification on new business development, I find it’s insightful to take a look at the sales funnel. There are two characteristics of the sales funnel that I find to be telling about new business development. The first is that as opportunities move down the sales funnel, they require an increasing investment of your company’s resources (time and money).  The implication is that if you let an unqualified opportunity move down the funnel it will become very expensive (in time and money) very fast, and you will lose out on the opportunity to invest those resources in other opportunities.  The second characteristic is that the greatest number of prospects sit within the first stage of your sales funnel (often called prospecting or initial contact).  The average amount of time that your salespeople spend qualifying a prospect in the first stage has a HUGE impact on your sales force’s time.  If your sales force reaches out to 100 prospects a week, an average qualification time of 30 minutes versus an hour can free your sales force of 3,000 hours per week; that’s equivalent to adding 75 full time employees per week.

So where does qualification fit into the sales funnel?  Qualification is the process by which your salespeople identify the quality of the prospect, and determine if the prospect is worth pursuing. In the sales funnel this is reflected by the movement of a prospect either from the first stage (often called “initial contact”) to the second stage (often called “needs analysis”), or the elimination of the prospect from the sales funnel altogether.  Qualification has a profound impact on both the number of expensive bad opportunities that leak into the advanced stages of your sales funnel, as well as the time your salespeople will spend trying to qualify prospects.  If you could use 75 new salespeople, or would love to have invested more resources in a big opportunity that got away, here are a couple tips to help your sales force qualify opportunities efficiently and effectively:

• Define Qualification: Generally speaking, a qualified opportunity is one in which the salesperson has spoken with someone involved in the decision making process, has found that the target company has a need, and is certain that the target company has an interest/commitment to take action to meet that need.  As I am sure you know, there are different degrees of quality and you will want to invest your resources accordingly.  I generally find that there are roughly three characterizations that businesses gravitate to once a prospect is deemed to be over the quality threshold: 1) Good enough to let a salesperson invest their time. 2) Good enough to assign local resources (engineers, regional marketers, local sales  managers) to the opportunity. 3) Good enough to assign corporate resources (regional sales VPs, directors of product management, C-level suite) to the opportunity.

• Create Qualification Questions: After you have defined what a qualified opportunity looks like, you will need to determine the key questions that your sales force must answer to determine the quality of the prospect.  I’m a big believer in looking at my best employees for insight, and almost always find that the best new business development salespeople will have a good understanding of the questions they ask to determine if the prospect is worth putting more effort into.  For example, a good qualification question I see elite salespeople answer is “Does your prospect have an assigned budget for the project/product/service?”  That might give you insight as to whether the prospect has made a commitment to meet their need.

• Answer Qualification Questions: Once you’ve determined the right questions to ask, it’s time to ingrain these questions in your sales management, sales process, coaching priorities, and CRM software.  The key here is to emphasize the importance of answering these questions in as many places as possible; this will help to create an environment (as opposed to a “flavor of the week” initiative) that exudes the importance of answering qualification questions.  You can always just require that they answer them, but unless they see those questions as important they are likely to game the system.

• Training!: As a manager and a leader, whenever you set a strong direction for your people it is important to surround them with the resources they need to do accomplish their goals.  Seek out an internal or external sales training group that specializes in helping salespeople qualify, and follow up with support: here are a few tips that will help you with sales training.

• Set Goals and Measure Results:  As with anything, measuring progress towards your goals is crucial.  If you aren’t sure about what goals you need, set-up your qualification infrastructure (steps above) and then start to gather data to help you set a baseline.  Set up your goals so that they are consistent with the other goals for your sales force.

One important note: The reason why I see most companies struggle with qualification is that they over rely on one of the two different types of questions they make their sales force answer: objective and subjective.  An objective question requires a black and white answer, such as “Is there an assigned budget for the project/product/service, and what is the amount?”  Customers have never fit neatly into objective boxes because they are all unique, and a salesperson’s value often lies in their intuition.  Holding back your investment in all prospects unless the answer to this question is “Yes” might be a mistake.  A subjective question relies solely on the perspective of the salesperson, which often varies from salesperson to salesperson. Of a ten prospect account list, one salesperson might see five qualified prospects while another might see two.  This makes it very hard to truly see the ripe opportunities that you should invest resources in winning.  In order to be as accurate as possible, it is vital that you use a mix of both subjective and objective questions.

Part 1 of this article received 25 comments on this site, and another 20-30 on LinkedIn; all of you shared many great insights, and I’d like to cover some of the main themes.

1. Attitude: Both sales management and the sales force must need/want to get better through training.  Often times sales training is sought because management sees the need, yet salespeople fail to adopt the training because they don’t. People will never adopt a significant change unless they truly want to (think dieting, smoking, and Jamarcus Russel).
2. The Right People Must Be On The Bus: Sales training will amplify the skills of your employees who are already producing at average to high levels of performance, not compensate for those who aren’t meant to be salespeople.   Train the people you know you want “on the bus”, and move the people who aren’t meant to be in sales to a job they like.
3. Behavior Modification: In the end, sales training is meant to change behaviors.  This was a “wow” moment for me, because there is a ton of work by brilliant psychologists on behavior modification, that can be applied to your sales training implementation plan.
4. Training is a strategic transformation: Sales leadership needs to think of comprehensive sales training as a strategic initiative, because it requires a large commitment from a broad array of resources, both human and monetary.

All these points have enough depth to them to be written about extensively, but the scope of this article is “practice”, so I am going to stick to that piece. As a participant in multiple sales trainings myself, I have realized that there are two steps to training.  The first is to understand the concepts……that can be done in the classroom and refreshers.  The second step is applying the training in front of customers that can be unpredictable, and that must be done through practice.  Here are some tips on effective methods of practicing to get the maximum return out of your sales training investment.

1. Set KPIs: Clearly in any sales training initiative, there must be an evaluation mechanism to determine the progress towards adopting the new sales training.  These KPIs should be constantly measured and serve as a dashboard for the sales training’s executive sponsor, giving them insight into strengths, weaknesses, and bottlenecks in the sales force’s adoption; adjustments can then be made to address the current state, and get the program to the desired future state.  The KPIs should be worked into each salesperson and sales manager’s compensation scheme in a way that doesn’t allow for gaming of the system.
2. Carve Out Time for Practice: Soon after training, salespeople will enter back into a sales world that is filled with distractions.  For the first three to four weeks, management needs to carve out significant amounts of time to devote to practice: role play (preferably videotaped) with testy customers, video presentations of actual salespeople or trainers using the new methodologies on customers, and tests.  Remember that you are taking time away from each salesperson’s effort to hit quota….it is a good idea to suspend quotas for this first month in place of some adoption goals. At the end of this period, salespeople should be able to complete the new sales methodology with minimal resistance (common objections).
3. Take it To the Field!:  Let’s face it, role plays aren’t a very good simulation…..there’s no substitute for a live customer.  For the next three to four weeks, managers (or trainers if managers are uncomfortable) need to day-ride with each salesperson to 3-6 calls.  For the first 1-2, the manager will lead the sales call using the new sales training. For the next 1-2 calls, the salesperson will lead the calls with assistance from the manager who can step in to get a call back on track.  For the next 1-2 calls, the salesperson is on their own, and the manager will be an observer.  Managers need to give feedback after each call, have the salesperson practice any major hiccups in the calls (use techniques in #2),  evaluate how much of the training the salesperson has adopted, and surmise whether each salesperson can run a sales call on their own using the new sales training.  For each salesperson, stay on #3 until they can independently run a sales call.
4. Get Together to Talk: Based on the major categories of the sales training methodology, form social networking groups to discuss challenges, successes, role play, and share tips to mastering each category of the training.  These groups should be actively moderated by your sales training company and salespeople who have become “stars” at each category.  Social networking is a powerful technology, and utilizing it within your company (or partnering with other companies who have used the same training) can be transformative.
5. Keep Practicing: Tiger Woods, Joe Montana, Derik Jeter, Kobe Bryant…..all these people are great masters of their profession, and all of these people still practice.  Keep your salespeople practicing by repeating #3 once a month to touch base, evaluate, and find areas to improve upon.  Your quota is going up next year, and the skill sets of your sales force must also.

**A big thanks to everyone that was willing to share their opinion on par 1, as all of you have substantially added to the part 2 content.**

Professional athletes practice up to 100 hours to prepare for each game, the armed forces (ideally) drill for years before they send units to a live battle field, and a musician practices their song or piece of music for months before they perform it in front of a live audience.  It is almost absurd to even imagine some professionals performing without practicing.

So why is practice so important? Practice is an important follow-up any time there is an introduction of new concepts or a re-introduction of old concepts.  It provides a comfortable learning environment in which people can test and repeat what they have been taught, allowing them to make mistakes and try uncomfortable maneuvers free of “real world” implications.  After a person or team has practiced enough, they can take their new concept to the “real world” with the confidence that they will be able to execute. The more practice one has, generally the more confident and likely they are to try their newly learned skill in the “real world”.

In the sales world, practice is especially important after sales training.  That’s why it blows my mind that I have NEVER seen a sales organization that commits itself to continuous practice after sales training! In fact, the only commitment that I have seen from companies is to hold salespeople accountable for implementing the new training in the field after NO PRACTICE, or holding refresher webinars to try to keep all the book learning inside their salespeople’s heads.  Never have I seen a company create a practice environment in which sales people can test, experiment, and master their sales training to the point of comfort and confidence.   What do you think would happen to a professional sports coach who gave his players the playbook on Monday, and expected them to execute the plays perfectly on Tuesday?  How do you think the players would perform?

There are several reasons why businesses don’t practice, and I think it is important to address why they are bad reasons:

“We can’t practice because we’re always playing:  our business is open 24×7, and if we shut down the business it costs us money.“ This is partly true in the short term, but business is about growth, not maintenance.  You can’t grow the business if the skill set of your salespeople stays the same.  There are many other things that are ’shutting down’ your business that are highly unproductive….inefficient internal process, CRM data input, salespeople having to navigate silos, etc.  Imparting a better skill set in your employees is not a cost, it is an investment with a return.  The size of the return only depends on the quality/quantity of the sales training and the quality/quantity of the practice (thus the quality/quantity of the implementation).

“We have to hit quota for this month/quarter, nothing else matters.” This is also partly true in the short term.  If you plan on being a sales leader within your company longer than a year, things other than this month’s quota do matter significantly.  While you can make short term tactical decisions to hit your quota for this month/quarter like pulling in business that would normally be booked next month/quarter, those decisions largely are unsustainable and sacrifice the long-term.  Long Term decisions (hitting quota for 2010) need to be thought of as more strategic investments.  Your team’s quota for 2010 is likely going to be significantly higher than 2009, and you need to figure out a way [now] to hit that quota too.  There are really only two options within your control.  You can fire all your underperforming reps in 2009 and hire superstars for 2010; if you figure out the formula for that let me know because you’ll be the first and will go down in the history books next to the guy who discovered cold-fusion.  The second option is to upgrade the skills of your current sales force through training and practice.

“We’ve been through 5 sales trainers in the past 5 years, and we haven’t had a significant improvement.” I would be willing to bet you a steak dinner that’s because your salespeople don’t use the training.  At the end of training, salespeople (including myself) are excited to take it to the field.  But as they sit down in front of the first prospect/customer they see after the training, they realize that they haven’t even come close to mastering the stuff they learned in the training classroom, and they don’t want to risk using a live prospect or customer as a guinea pig.  Sacrificing a ‘live’ customer could literally take food off their dinner table! Salespeople are smart, they are going to use the most efficient way they know how to move the prospect to a buying customer.  Until they think the new way gives them a better chance than the old, they will use the old way 100% of the time.  The only method to impart enough confidence in the effectiveness of the new training is to allow your salespeople to practice it in a ‘non-live’ environment that promotes learning, personalization, innovation, and feedback.  Only then will they have the confidence to bring their new training to the field.

I have planned to cover the below topics in part two of this blog, and would love to hear from you if you have any stories from your company or thoughts on these:

• How often should I/we practice?
• How do you create a practice environment?
• How do you measure the progress of practice (from a sales force and salesperson perspective)?

I will post this entry on LinkedIn again, but if you want me to email you directly when the blog becomes available, just email me here.

The irony with trust is that most buyers don’t trust sellers. Look at mainstream media and its portrayal of salespeople; they’re dishonest, immoral,  manipulative, and will do whatever it takes to meet quota.  When I told my college roommate that I took a job in sales his first question was, “How do you know a salesman is lying?  Their lips are moving!”  Now I’m sure you’re saying “That’s not me”, but studies have overwhelmingly reported that people think others trust them at significantly higher levels than they actually do.

Given the fact that trust is important yet buyers don’t trust sellers, it blows my mind that I have never seen a sales training that focuses around trust!  It is a HUGE opportunity to win business. Although there are many ways to build trust (honesty, integrity, etc.), cultivating empathy for your customers and prospects will build trust in a way that will differentiate you from your competitors.  Empathy is a fundamental building block of strong relationships and will allow you to build the foundation for a trusting relationship, encourage your customers to surface information that they normally wouldn’t, give you insight into what makes your customers tick, and form a connection with your customer that cannot be broken.

Empathy is the ability to place ourselves in another’s situation, experiencing their emotions and perspective.  If you’re worried that you aren’t good at empathizing, don’t.  We actually have specific neurons in our brains, called mirror neurons, that help us with empathy.  So we all have the tools to empathize, we just need to start working them out.

So here are a couple tips to cultivating empathy within yourself; a fair warning that these things need to be practiced every day, as often as you can.  Yes, they are soft and touchy-feely.  But after all, you’re selling to people, and people buy with emotion.

1. Be cognizant of Your Own Emotion: It doesn’t matter how emotionally hardened you are, we all have emotions.  Emotions are a survival mechanism embedded deep into our psyche, we’ve just been trained to quickly repress them because it isn’t professional. As emotions pop up that you want to immediately repress, hold them there and observe.  You don’t have to act, just observe.  After all, the more familiar we are with our own emotions the greater the chance that we will be able to read others’.
2. Practice Curiosity: Ask open ended questions, and listen to the answer for the sake of the answer (most people listen to the answer only to formulate a response).  That should lead you to ask more questions, and the answers usually result in a pretty interesting story! Open ended questions start with “why”, “how” “tell me more about…”, “you mentioned…”.
3. Ask yourself “How would that make me feel?”: Put yourself in your customer’s shoes as they’re talking, and try to figure out how you would feel if you were in the same situation.  This will give you insight into their experience, perspective, and emotion.
4. Mirror: Repeat back what your customer said to you and try to guess their reaction: emotionally, physically, mentally, etc.  If you’re right, you’re on track.  If you’re wrong, the customer will correct you and know that you are truly curious about them.
5. Pull Out!: Experiencing someone else’s emotion can be intense.  Learn to pull out of your empathetic state after you have gotten a taste so you can think about the situation rationally.
6. Identify their Master Character: Every society has a number of character types that are consistently in movies, TV shows, novels, and stories.  Whether it’s the underdog that pulls through, or the powerful bad guy that gets what they deserve, these master characters are based on common personality types in society. Chances are your customer resembles a master character.  If you can identify your customer’s master character, you can infer and anticipate how they will behave.

Empathy isn’t the only aspect of trust, but it is the foundation to building it.  Practicing empathy will also allow you to know your customer better than your competition.  Would you be open to a trusting relationship with a person who treated you with the above empathy?

Take a step back when thinking about the sales funnel, and think about it in the context of the strategy/goals of the executives within the sales function.  After all, the sales funnel is only supposed to serve as a tool to help sales executives achieve their strategy/goals.  The strategy for most sales executives is simple: Invest in sales opportunities that drive profitable, long-term revenue. Broken down that means

• Differentiate opportunities by their quality (Invest).
• Sell more.
• Sell at a higher profitability.
• Create long-term relationships by selling to customers your company is strategically valuable to.

The traditional sales funnel was born in the mid 1900s from a process engineering perspective, defining all the sales activities that must take place [chronologically] in order for a sale to close. The funnel was used to coach salespeople on the activities they needed to complete in order to move a greater quantity of sales to close in less time (NOTE: this only achieves 1/3 of the above strategy).  The steps vary for each company, but at a high level they are: initial contact, qualification, presentation, and close.  The traditional sales-activity funnel made some sense in the mid 1900s, because the seller controlled the buying process.

More recently with the proliferation of things like retail chains, eCommerce, and social networking, buyers have taken full control of the purchasing process; selling is now about meeting the buyer on their terms and understanding the steps they take during their purchasing process.  As I am sure you can imagine, this change made the sales-activity funnel obsolete and laid the foundation for the onslaught of the “new sales funnel” prophets who are changing the sales funnel from a selling-activity orientation to a buying-process orientation. The process varies for each segment of buyer, but at a high level the process is need/pain recognition, commitment to resolving the need/pain, evaluation of alternatives, and decision.  There are several benefits to using the buying-process funnel that will boost the seller’s ability to move a greater quantity of sales to close in less time, and in some cases more profitably.  To better understand specific benefits, take a look at BNET’s interview of Mark Sellers, author of “The Funnel Principal”.

What blows my mind about both of these sales funnel models is that they completely ignore the other person/company in the purchasing equation; the sales-activity based funnel completely ignores the buyer, and the buying-process funnel completely ignores the seller.  Not to mention if either method is a rousing success, it only helps sales executives achieve part of their strategy!  So until the sales funnel incorporates both the buyer and seller perspective, AND the process allows executives to better invest in sales opportunities that drive profitable, long-term revenue, the sales funnel will never fulfill its potential for transformative value to a company.  As I am sure you can imagine (and maybe already thought of), I believe that there are three changes you can make to your sales funnel regardless of which orientation you use, that will help you invest in sales opportunities that drive profitable, long-term revenue…………

First, map the sales activities (traditional sales funnel) to the buying stages (new buying process) to create an integrated buyer/seller sales funnel.  This will give you a sense of what both parties have to do to progress through the purchasing process.  For example, while the buyer is discovering that they have a pain, the seller is prospecting and qualifying the opportunity to determine if they will be a profitable account.  Both parties have agendas in this stage, and both must satisfy their requirements to move forward. Once you are able to map the selling activities with the buying stages, you should have a good sense of what both parties need in order to  move sales through the funnel quickly.  This should satisfy one piece of your strategy:

• Sell more.

Second, the seller must make it the responsibility of the sales and marketing departments to put robust tools and processes in place to quickly and accurately qualify opportunities, instead of leaving it solely up to the salesperson.  If your strategy is to invest, you need to know what opportunities will provide you with a greater return so you can allocate your resources appropriately; there is no better way to do this than quick qualification of opportunities.  Sales should team up with marketing to quantitatively and qualitatively define the profile of an ideal prospect, an average prospect, and a terrible prospect.  The data for this can be gathered from your best new business development salespeople (the best NBD sales guys are excellent at qualifying), focus group research, reverse presentations, strategic accounts, etc.  Use those profiles to create a rating system that you can integrate with your CRM and sales funnel to better qualify your company’s prospects.  This should satisfy three pieces of your strategy:

• Differentiate opportunities by their quality (Invest).
• Sell at a higher profitability.
• Sell to customers your company is strategically valuable to (long-term).

Third, train your salespeople to understand that they must satisfy both the buyer and the seller, and reward them for taking the steps to do so.  I have a post called “Commission: Baby Steps” that talks about how paying someone only after they close a sale is absurd; what gets rewarded gets done and if you only reward your salespeople for selling, you’re going to get a lot of bad customers. Incentivize your people based on completing each step of your new buyer/seller sales process, while putting special emphasis on qualifying and closing opportunities.

Focusing on each of these three steps should help you to invest in sales opportunities that drive profitable, long-term revenue.

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From my experience, companies predominately adopt the financial perspective, as I rarely come across a commission plan that pays out on anything but the final sale.  This can be effective in a transactional business in which sales cycles are short, but proves very ineffective at motivating sales people in longer sales cycles.

I love analogies, especially ones that refer to professional sports because it is the most transparent industry out there.  Imagine you are the owner of a professional sports team and you only pay your players if they score; In football that means touchdowns and in soccer that means goals scored.  What do you think your players are going to do if you only reward them for scoring??

Put simply, they will ignore all the steps that lead to a score, like getting first downs in football or passing the ball in soccer, if they even understand the steps at all. Your wide receivers will always “go deep” while the defensive backs will always attempt an interception; your soccer players will be shooting from all over the field and will never play defense!  Now I’m not a professional coach, but my guess is my team wouldn’t win too many games acting this way.

That’s why it blows my mind that companies only pay salespeople after they have “scored”, especially in sales cycles that last nine to twelve months!  What you should be incentivizing are the activities and behaviors that lead to a sale, like getting a first down or passing.  Task the Sales Operations department (or bring in a consulting firm) to define the steps that the best salespeople in your company or peer companies/industries take to bring a sale to fruition. Sales managers should integrate those steps with their CRM tools and their salesperson’s goals (often times called activity based commission, or management by objectives) so that they can drive insight into what their salespeople do well and where their development opportunities are, as well as insights and development opportunities for the sales force as a whole.    Eventually, you will have goals that each salesperson can consciously perceive as possible in the short term, as opposed to a “closed-sale” commission that only becomes consciously plausable once a sale is in its final stages and whose fate is already sealed.  This allows salespeople to see a clear path to the sale rather than just the end zone/goal posts off in the distance.

For all you finance folks out there, I know what you’re thinking.  “What happens if we pay our salespeople on all the activities that lead up to the sale, but the sales don’t close?”  As a finance person who is charged with investing in scalable initiates with a high ROI, this kind of result would be catastrophic.  I can empathize with your fear, and my response is that success of this kind of incentive program is predicated on your company’s ability to accurately define the behaviors and activities that lead to a sale.  Once you are sure those activities have led your best employees (or employees at peer companies/insutries) to close sales, then you know incentivizing the rest of your salespeople to perform those activities will win business.  On an individual level there might be some salespeople who are paid to “sell nothing”, but at a portfolio level the numbers will work out.  As any good leader would say, “the best invest is in your people”.