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.

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.

 

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.