The Power Of Sales Engineering Metrics - A True Story

Here is a wonderful story about the power of Sales Engineering Metrics and how they can truly make a difference to your business.

My client (who wishes to remain anonymous for both competitive and embarrassment reasons) has been collecting numerous metrics for 7-8 months. In preparation for their first ever Worldwide Sales Engineering Quarterly Business Review (QBR) a standard set of Metrics and PowerPoint slides were constructed for each of the major geographies and/or countries. Summary versions of the decks were sent out ahead of time – so that more time could be spent analyzing and discussing, rather than presenting and listening.

However – one item really stood out from the initial decks. They had recently released a brand new product, and the primary sales methodology for selling it was “try it and buy it” through a Proof of Concept (POC) / Trial-Evaluation system. The POC conversion rate from Trial to Buy was a rather low 45%, which they attributed to a 1.0 release, some nasty bugs and a learning curve for the SE’s. Except .. one region .. ANZ (Australia/New Zealand) had a 15/16 success rate.

Rather than wait for the meeting, the somewhat surprised VP of Global SE’s called the ANZ team to discover the reason for their success, and received a typically blunt, but honest answer.

“Oh, we thought the marketing approach and the customer prerequisites were a crock of $%&^! So we changed those documents and also created a step-by-step guide for new customers to explore the product which would work around those bugs.”

“Don’t you think it would have been a good idea to share that information?”

“It was so obvious we figured everyone would do it!”

The guide and updated docs were quickly distributed worldwide – including back to product marketing.

The outcome was that 9 POCs in process were saved from disaster in the next 10 days and the following quarter the POC conversion rate increased to over 70%. The revenue impact was amazing.

If you can't measure it - it tough to improve it! For more details about SE Metrics, and why they can turn a reactive team into a proactive one - check out the MTS Leadership Page.

So You Think You Are Fairly Paid??

Some interesting data from Payscale, the compensation software firm, about people's perceptions over whether they are paid a fair wage or not . It isn't Sales Engineering specific, but I've a few thoughts about that at the end.

This is the data from a survey of 71,000 . it shows that even if you are paid at or above the market rate, there is still a good chance that you feel you're underpaid relative to your peers. A massive 60% of employees who are underpaid say they intend to leave - compared to 39% of employees who are overpaid. (The report notes that presumably they are unhappy for many other reasons!).

The lesson for SE Leadership here is that if someone is being paid under the market rate - there is a 5 in 6 chance that they know it and a 60% chance they will take action. Even being paid at market (so at the 50th percentile) 2 in 3 SE's will still think they are underpaid. So .. if your pay package (it's more than just base salary + commission/bonus) is truly competitive - make sure the SE team knows it!! Reinforce it, with realism, at every opportunity.

And a word to the wise, don't rely on those comparison reports HR/Finance obtain from independent salary/consulting companies unless the companies surveyed are a true comparison to yours (and they rarely are). Remember that there is always some other company out there who is willing to "buy" your SE's and pay more for them. Money is one of the major reasons that SE's leave a company, Management is another, and Lack of Belief in the product is a close third.

Perception is reality!! Get real.

 

Age And The Sales Engineer

General statistics about the SE population have always fascinated me - particularly when they relate to age, gender, income and all those other "Human Resource" type metrics.

I've long maintained that gender diversity in the worldwide SE gene pool is atrocious and that we all need to do whatever we can to encourage more women into the profession. But that's a topic for another blog entry. This one is about age.

Age is neither a positive or a negative when it relates to being a superstar SE. With age comes experience and (hopefully) wisdom and a lot of knowledge gained from watching your own and other people's mistakes - and successes. With age also comes a lot of bad habits, some reluctance to change and a touch of cynicism. With youth comes the willingness to challenge the way things are now, potential incorporation of new thoughts and technologies into "the way we get things done around here" and unbridled enthusiasm.

The optimum SE team (whether its 6 or 6,000 members) has a mixture of youth and experience - and I know I am equating age and experience and that's not always the case. It's also the case that the average age of the SE team frequently matches the average age of the entire company (to within a year) - so it's interesting to note this data from Payscale showing age related to technology company.

I'll leave it as an exercise for the reader to draw your own conclusions about the data.

 

Elevators, Scampering & Saying No to Sales ..

Despite a crazy April with no blog posts (there goes a 2015 resolution!) the May content was actually posted a few days ago.

We lead of with The Elevator Pitch and The Sales Engineer. I've never been a big fan of those artificial "you have 45 seconds to.." exercises, yet they help bring a little thought and discipline to the process. What process would that be? The process of concisely explain what you do, and why that might be important to your elevator companion - and then more importantly - handing the control of the conversation back to him/her. Give it a read as I suggest 3 or 4 different versions of the elevator pitch, although I still think we should give it "the shaft".

Next we look at a great process called SCAMPER. It's not mine, I just use it to look at an existing process that a customer may have, when I want to help determine what (if anything) needs changing and how we might do that.

"Ask John" covers some interesting ways to say "no" to sales, often without having to say "no". The word can be a very emotive and even confrontational one, which makes many SE's back away from using it. Then they get into a different kind of stress and trouble because they have over-committed their time. I'm a big believer of saying 'no" (easier as I run my own business) and it helps keep me, and Mastering Technical sales, on-point and less distracted. 

Looping back to an earlier post from the year, "Is 2015 The Year of SE Leadership?" we ran 3 separate SE Leadership workshops in April. I learnt a lot from each of them (as I should), but what is interesting is that no matter where you are in the world, and no matter what you are selling ..

1. SE Leadership is woefully underserved in skills training.

2. The problems are more-or-less the same.

3. Everyone needs metrics to proactively run presales as a business instead of just reacting to the loudest salespeople. 

Best view of the month from a workshop goes to this one in Singapore taken from the Millenia Tower. That's the Singapore Flyer in foreground and you can make out part of the Marine Gardens behind it.

Good Selling!
 

Is 2015 The Year Of Sales Engineering Leadership?

 

I have long maintained that first line leadership, whether as a sales or as a presales manager, is one of the hardest jobs in the company. You are responsible and accountable for so much, yet have little decision making authority. Add to that the fact that the management selection and promotion process is often “who is our best SE – let’s make him/her a manager so they can teach everyone else to be just like them” instead of “who would make the best leader, make smart decisions and motivate their team to obtain maximum efficiency?”

This means that first line managers often flounder and struggle in their new positions and don’t receive much guidance and training except perhaps for some generic HR stuff. This is where the sales and presales path tends to divide. Sales managers can attend coaching classes about negotiation, about mentoring, and about guiding reps in account review processes. The metrics that sales managers have to measure and are judged by are relatively simplistic and predominately monetary. Presales managers get … reheated sales training or sent back to that generic HR material …  and no clue as to how to run presales as a business.

For years I have had a passion about SE leadership as it is one of the few things I miss about the corporate world. I sure don’t miss waking up in the morning wondering which of my SE’s want to quit, who had a fight with a rep, who skipped training, who apparently “screwed up” a deal etc… And every year I run maybe one or two SE leadership oriented sessions with an “enlightened” client.

That is now changing in 2015.

Already, here at MTS, we have four SE leadership sessions booked, and three more that I would be willing to forecast to my boss (if I had one). I’d also place another five or six early in the pipeline.

What is happening?

I don’t believe that I, or my business partners in Singapore, have suddenly gotten smarter about how to pitch and sell the requirement for this kind of training.. No .. you, the collective SE/High Tech community have suddenly realized that you have been significantly under-investing in a key component of your sales force. One of my more famous analogy quotes is “Sales Engineering is the oil that keeps the sales engine running smoothly”. If you believe that the #1 job of a SE Manager is to develop and serve their people then maybe the manager is both the filter that keeps the oil clean and the mechanic that ensures it is regularly topped up and doing its job.

It seems that 2015 is shaping up to be the year of improvement for the SE Leader – and maybe we can rid ourselves of that horrible “Player/Coach” position whilst we are at it!”

The Technical Win : A Worthless Metric?

I have always disliked the concept that Sales Engineers are responsible for winning the technical sale

and gaining the Technical Win. During my pre-MTS career as a presales leader anyone in my organization who spent a lot of time talking about The Technical Win (TW) was generally met with a withering glare and a statement like “Where in your compensation plan does it say that you get paid on the Technical Win?”. It’s an intermediate point in the sales process – at best.

Has the Technical Win become redundant in the modern world of Solution Selling? Ask any group of Sales Engineers to define their job, and the phrase “we’re responsible for winning the technical sale” is mentioned. Many SE organizations measure and publish their Technical Win Rate for RFPs, Proof of Concepts and Trial/Evaluations. This month I will examine the Technical Win (TW) and determine if it is real, if you should care, and what the metric tells you.

 A VP of Sales Engineering at a large software company told me his POC Technical Win rate was 82%, yet the Business Win rate (generating revenue) was only 59%. I asked if his team was directly compensated for a Technical Win. They are not. My point exactly. But you can learn something from the statistics.

The Technical Win

The strict definition of a TW is when you are informed, in writing, that your solution has been accepted and judged superior to that of your competition. For example, you may have scored a 13/14 on a POC evaluation compared to an 11/14 by your competitor.

Most SE organizations have a far looser definition, which may only require you to complete a POC or trial by meeting the success criteria. Acceptance may also come in verbal fashion. Recording of the TW may be as simple as checking a box on a screen in salesforce with no proof. An exasperated Regional VP of Sales based in Hong Kong once told me that in his opinion the TW was the equivalent of not losing – which is very different from winning.

 By contrast, the Business Win is definitive and measurable – as it will result in the generation in revenue flowing from the customer to your company, and eventually, one hopes, into your personal bank account. You are paid to generate business that will cause a purchase order to be issued.

Should You Care About The Technical Win?

Another way of looking at the TW is that it says to everyone that the SE organization did its job and the sales force did not. This is hardly the best way to promote teaming between sales and pre-sales. I have always believed that pre-sales is also responsible for the Business Win, just as sales has some responsibility for the Technical Win.

Given the incredible focus that most organizations currently have on Selling Solutions instead of Selling Products it is hard to rationalize the justification of a Technical Win in that environment. Selling value means that you continually need to link your achievements in a proof, trial or evaluation to not only the technical criteria, but also to the business and financial criteria. Put simply, how does your solution increase revenue; decrease costs or mitigate business risk better than the other guy’s stuff? Technology and Business are inextricably linked.

It is an unpleasant fact (small startups aside) that the TW rate will always be higher than the BW rate. Companies can decide to do nothing, lose or move funding, make an acquisition, change market strategy, fire your internal champion or base their decision upon boardroom or golf course politics. The BW rate can underperform the TW rate by 20 or 30 percentage points.

The most important aspect of the TW versus the BW is why the difference occurs for each specific deal. Should an SE team successfully complete an onsite evaluation, but then generate no revenue because there was no executive sponsor, no budget or no agreement to consider a purchase – then that is a sales execution problem. However, that leaves the SE organization open to charges of execution errors every time they engage in a perfectly teed-up evaluation and lose. It is a two edged sword.

 How To Use The Technical Win Rate

1.      Measure a TW against a tight definition – with proof required from the participating SE team. Which means define your rules for a TW and then stick to them. No cheating or grey areas.

2.      Make TW an internal SE metric, which is never provided to sales unless accompanied by a fully prepared pre-sales executive. Given a statistically valid quantity, breakdown the numbers by geography, vertical, solution area and competitor and monitor the trends for a rolling period equivalent to your average sales cycle.

3.      When presented to sales, position the TW-BW difference as an opportunity to (a) close more deals; (b) highlight competitive or regional trends and (c) operate more efficiently.

4.      Investigate the reverse win. That’s when the SE team loses the TW but your company gains the BW. There are often patterns, especially around executive access or partner utilization, that can yield positive results the next time around.

Summary

When the SE organization is focused upon, and satisfied with, the Technical Win you are doing your company and your bank balance a disservice. It is a useful intermediate metric, and can promote a good discussion at the executive level, but should be selectively applied at a field level. If you are truly focused upon selling value, then look at a Solution Win – which is when both the business and the users accept your solution as being uniquely qualified to solve their problems.

 

Because no one is paid for a Technical Win.

The MTS Sydney Edition

Welcome to the Australian version of the blog, live from Sydney. This is an exciting couple of weeks as I'll be down under conducting a number of dinner speeches, meetings and training workshops. That also means that the May newsletter was delayed a day because of time zone issues - it should be out 8am on Wednesday 7th May East US Time.

This months lead article is The Challenger Sales Engineer - where I give six great reasons why the Sales Engineer is the perfect person in the sales team to execute on the Challenger premise. It's something that every good SE has known for a long time, but often a lack of courage, permission and corporate culture gets in the way.

Article #2 is an update to "The Stress Free Demo" and examines a dozen things the SE can do to reduce the possibility of things going wrong in 'the big demo". It's amazing how much relates to planning and preparation!

Book Of The Month is Gerry Weinberg's Becoming A Technical Leader. It's written more from an It-problem solving point of view, but has some great insights in dealing with and motivating the "techie". And there is a varying percentage of techie in every Sales Engineer.

Also - a reminder about The SE Manager Pocket Guide if you didn't download it during April, and also that I finally released my video series "The Consultative Sales Engineer".

Good Selling!

Technical Trials and Tribulations

So this has been an interesting 10 days in that a strange bug effectively killed our website. I learnt a couple of things:

1. It's an important part of the business.
2. It badly needs to be updated and modernized.
3. Yahoo (my hosting service) has terrible technical support as I spent hours on hold and they hung up on my several times.
4. The bug was ultimately the results of some poor code from Amazon which was mis-interpreted by Yahoo Site Builder.

But enough of my problems. We are back up, and the new content has finally been posted. You'll be able to read about The Sales Engineer Advantage - why we SE's should be rock stars when in front of the customer (but aren't). There is also an interesting article on The Five SE Manager Basics (which are actually good for everyone else as well!).

The MTS Book Of The Month for SE's is Marshall Goldsmith's "What Got You There Won't Get You Here".  It's been one of my favorite books for years, and I recently had the opportunity to re-read it as part of preparation for a workshop I ran. Well worth your time to pick up a copy and learn about the 20 bad habits that may be keeping you back.

I challenge anyone to read the book and NOT see themselves in there somewhere. You really do feel like you are putting the training wheels back on your career.

More to come. The 3rd Edition of Mastering Technical Sales is nearing completion and is slated for a early July publication, and The Trusted Advisor Sales Engineer in now underway as a planned eBook for later in the ear.

Plus I'm going to be in Australia or a week or two in May running some seminars and giving a couple of speeches.

Good Selling!

 

The Female PreSales Engineer

I've long been a big fan of getting more women into the profession of Pre Sales Engineering. Although I feel the industry has made some progress over the past 10 years, it is absolutely not enough. The overall percentage has wavered between 10-15% and I'm not seeing much of an upwards trend.

It's important because companies are missing out on a vast potential talent pool, and (accuse me of being sexist) women just listen better and generally do a better job of asking questions and conducting discovery. I'm not even going to touch the empathy situation or the attention a female SE may receive when presenting to an all-male customer/IT group. Yet I do feel I am entitled to say that as my daughter is a presales engineer (with an Engineering Degree) and I know what she has gone through.

A few recent experiences this year have brought this to bear.

1. Wow!

For the first time ever - I had a class where there were more women than men. First time. Amazing! Thanks Christine and Stephanie!!

2. Industry Variations

 

Let's say , for math simplification, that my typical workshop has 20 SE's in it.

 

The numbers I've tracked over the years show that the number of women varies from 0 to 8. Breaking that down further. IT infrastructure/"plumbing" companies have by far the lowest percentage. The more technical/geeky the product is, the lower the percentage and diversity drops and rapidly approaches zero. I've had three classes this year with zero women - and the class represented the entire national or worldwide SE team.

 

Hardware companies are little better.

 

General software companies seem to hover around that 10-15% level.

 

Application type companies (ERP, CRM and HR) trend higher and the ratio can reach 25% or more.

 

3. Hiring and Recruiting.

 

Many SE leaders tell me that they cannot even find experienced candidates to hire. So how about a grow-your-own associate program? Or look at your technical support / customer relations team?

 

4. Global Implications

 

Much as I bemoan the stats here in the US - it is even worse in most parts of the world. Asia-Pacific-Japan-China has a long way to go. Parts of Europe are better than others. Yet there is hope -  Early this year I ran 2 workshops in India and there were a significant number of young female SE's in the class. With just a little encouragement to speak up and try new things - they stole the show and put their male colleagues to shame.

 

When I look back at my career, some of the best SE's who ever worked for me (and I like to think that I did make a point of hiring women to diversify and improve my teams) were women. No question about it - and you know who you are. Two of my best ever SE managers were women.

 

Lets make a difference and take a positive step to improve the profession. Evangelize what we do - and lets recruit the next generation of SE's in a 50/50 mix - it will make us all better.

 

What do you think?

Making Mistakes

I just finished Alinia Tugend's Making Mistakes as the review book for June.


It was tough reading. The basic premise is that mistakes are good - as long as they are non-fatal, are found and corrected rapidly and are learning experiences. This is all dependent upon the prevailing social or corporate culture that we live in. So far , so good - although like many business books nowadays it has one central theme and just beats you over the head with it for several hundred pages.


My viewpoint on mistakes, as far as the Sales Engineering community is concerned, is that they are healthy. Einstein was once quoted as saying that if you didn't make mistakes you weren't really learning and trying. Yet as SE's - we demand perfection - perfection of ourselves, perfection of our software/hardware and perfection from the rest of the team. Not too realistic. Throw in a demanding sales manager and that's not an environment that is going to be adaptable to change.


As a manager I always tried to differentiate between a MISTAKE - such as failing to prepare adequately before a demo or missing a key business issue, with a mistake - such as a slide that didn't get quite get the point across, or pressing the wrong button on a screen. Why is this of interest to me? I'm in the business of making people change - change the way they perform Discovery, change the way they present, change the way they design PPT, change the way they structure and design demos. None of that is going to happen without a few mistakes in front of the customer - yet in the long run my customers tell me about increased win-rates, fewer demo do-overs, better POC conversion rates etc - all because someone was wiling to take a (measured) chance.


The morale of the post is try something different. Practice it, think it through, and then add it to your customer-facing repertoire. (And when it works - share it with your peers). It's what will make you a better SE.