Sales, Sales Engineers and Discovery

One of the biggest disconnects I see between sales and pre-sales teams lies in the area of Discovery. In many sales organization there is a chasm between the sales implementation of Discovery and what pre-sales think they actually need. One of my clients said “my rep thinks that Discovery is telling me who is on the phone before a webex demo starts”. Thankfully it’s not always that bad.

Here is the basic problem, and I am generalizing a little here:- Sales views Discovery as something that gets in the way of the deal and slows it down. “Why do you need to ask all those questions – all they want is a demo.” Sales is also concerned that they may discover something that will prevent the deal from happening or may totally unqualify the deal out of the pipeline. (I have never figured out why they regard that as a bad thing – doesn’t it make sense to stop wasting time on something you are never going to win?)

Pre-sales engineers believe that there is no such thing as too much Discovery. The more you learn about a customer the better you can target the demo/presentation/proof-of-concept. That’s true – up to a certain point. Repeating the questions that someone else may have asked, or simply asking them a different way, can really annoy the customer and make it look like there is no co-ordination. SEs also start to stray into deal qualification (do they have a budget?) which is the #1 way to annoy a rep as they hear that from their manager all the time.

The trouble is – there is no perfect line to be drawn between sales and presales responsibilities in this area. Given the usual sales:presales ratio it is virtually impossible for the SE to be included in every single first call or discovery call that sales conducts. There are not enough hours in the day. Plus the relationship between every account rep and every SE is different. Some reps are more technical than others and some SE’s are more business/sales oriented that others – you need to adjust.

My usual advice is this:

1.       Discovery is a mandatory and necessary phase of the sales cycle. It is not to be rushed through. It’s also a constant process as you should always be learning more about the customer in every interaction.

2.       Sales and Presales need to agree on what needs to be ‘Discovered’ before a demo / presentation / pitch takes place.

3.       It doesn’t matter who does it, or if it is a combination of rep/SE – as long as it is done well.

4.       If you don’t understand why the customer might want to buy from you, and what the business drivers are behind the technology decision – then you shouldn’t move into the next phase of the sales cycle. Known collectively as The Dash To Demo, The Push to Present or the Sprint to Solution.

5.       Put a simple process in place to capture the info agreed upon in (2)

The outcome will be much better sales calls (and probably fewer of them) , less unqualified deals, a better pipeline and fewer back-to-back-to-back-to-back demos by SEs. Everyone wins.

You Are Only A Trusted Advisor When ...

You Are Only A Trusted Advisor When ... The Customer Says You Are!

I had the opportunity to participate in the Amazon Web Services for Public Sector Conference in Washington DC earlier this week. An very impressive event with over 2,500 people registered and a host of 3rd party vendors and partners in attendance.

It's very obvious that Amazon are serious about this market, and that judging by the number of customers (as opposed to prospects) present, the market is serious about them. Between the massive scale, competitive pricing, and the adoption of major US Federal and International standards they are here to stay.

The presentations were varied and informative, BUT ... as I am in a Trusted

Advisor mindset right now (writing the book) there was one slide that bothered me. It's the one where Amazon call themselves a "Trusted Advisor".

It doesn't really matter what you call yourself in a Trust relationship, it's what the customer calls you and how they view you that's important. Now, the Amazon Trusted Advisor is actually an automated system that checks your configuration and usage and makes recommendations on ways you can save money or optimize the system. Aside from the psychological human-machine implications of trusting an automated machine, you still have to deal with the issue that

a. A human programmed it with the algorithms
b. No matter what it says, you'll double-check it anyway. (Minimal Trust)

So .. You Are Only A Trusted Advisor When ... The Customer Says You Are!
(Even if you are a machine)

Should SE's Participate in SPIFF Programs?

Before I answer – a quick piece of trivia about the origin of SPIFFs. Although there have been numerous explanations about the SPIFF acronym (like the humorous Sales Performance Incentive FFund) it is not an acronym. The use of “spiff” or “spif” derives from the 1850’s. It was a term used by tailors to describe a payment in kind of fine cloth they gave to their best salespeople. The salespeople would then use the cloth to have suits or shirts made to “spif” themselves up.

As far as data, the one number I can share is that about 45% of software companies allow presales to participate, to some degree, in SPIFF programs. I continue to collect data within other industries as I don’t have a large enough sample size yet – but I feel that hardware, services and devices are all about the same.

That said, I am a firm believer in presales participation, when appropriate. Here is the reasoning I have always used with VPs of Sales and Finance.

1.       If we are truly engaged in team-based solution selling, then you need to encourage team-based rewards to reinforce the behavior.

2.       Salespeople bear far more risk (both financially and job stability) than presales, so they should clearly receive the largest portion of a SPIFF.

3.       Most presales people care more about inclusion in a program than the actual payout amount. (The best thing a VP of Sales can do to gain the respect of a presales team is to show that he/she considers the impact of every program and initiative on both sales and presales.)

4.       I define “where appropriate” in this manner:

a.       A SPIFF to encourage linearity of bookings in all three months of a quarter, or to include faster payment terms to reduce DSO (Days Sales Outstanding) is a SALES SPIFF only.

b.      A SPIFF to encourage the uptake of a new product, or cross-selling across multiple product sets is a joint SALES/PRESALES SPIFF.

c.       A SPIFF To encourage customers to upgrade from an old version of a product to a newer version is a PRESALES SPIFF.

5.       I define ‘sharing” using this great example. A hardware company was originally planning to rollout a 10,000 Euro SPIFF to salespeople who sold a certain amount of new product to new accounts in a quarter. Their goal was E40M. After looking at who would truly be doing most of the work (demonstrating, configuring, benchmarking etc.) they elected to modify the SPIFF. The revised version gave E7,500 to sales and E2,500 to presales. The result was maximum engagement, team selling and E62M of new product sales into the new accounts market.

6.       I once helped the finance department of a software company analyze the historical results of multiple SPIFF programs over a three-year period. Those that included presales had an average incremental effectiveness of 26% over those that did not.

So the summary is that presales should participate in SPIFFs when a case can be made that they drive a significant part of the end goal – although to a lesser extent than sales.

FINALLY – A WARNING. One of my customers decided to implement a 20% additional sales quota credit for all deals that were implemented through a new partner program. In one quarter, partner deals increased from 17% to 85% - resulting in 5/6 deals going through partners, even when they shouldn’t have – to the detriment of the customer. Presales, who received no credit – had to clean up the mess alongside services and support. Compensation drives behavior.

Why Businesses Buy Technology

I talk about “The Three Wise Men” a lot in my workshops. They are the guiding principle why businesses make technology decisions – being:

1.       Increase Revenue

2.       Reduce Costs

3.       Mitigate (Decrease) Risk

So it was heartening to read the “connect” article in the September issue of CIO Magazine, which showcased the advice of CIO’s to their peers. In particular, the advice of Rick Roy – the SVP and CIO of CUNA Mutual Group. I quote his advice in full.

“We use three macro-level business metrics to prioritize IT investment decisions and set strategy: revenue growth, cost reduction and risk management and compliance. For line of business spending, it’s rare for someone to introduce a major initiative without a strong connection to one of those. But at the enterprise level it’s more challenging. How does that Windows 7 upgrade really help the business? Whoever presents that case has to make the connection.

Risk mitigation and compliance are the hardest to quantify. We must distinguish between the need-to-have and the nice-to-have. We can’t just say we need to invest in something because the risk is high. What does that mean? Will we lose money? How much? Will we lose customers? How many? We take advantage of our in-house actuarial and risk-modeling expertise to quantify risk.

We look at IT spending in business terms, reporting our costs as an expense ratio. It changes the conversation from “IT costs too much” to a conversation about priorities. It requires more rigor, but it benefits IT to have a clear focus on our top priorities”

Beautiful – well said Rick!! A lesson in there for every single Sales Engineer and every single sales representative.

Take A Break!

At least here in the US, the week before the Labor Day holiday (Monday September 2nd) is usually a quiet week for me. It's the last week of summer, the last week of freedom for children before they go back to school (so many customers take the week off) and it's also my Wedding Anniversary - all good reasons not to travel.

So I use the time to catch up on paperwork, make some calls, and most importantly of all - do some writing. As I am now working on both the Third Edition of Mastering Technical Sales and an add-on book with a working title of "The Trusted Advisor Sales Engineer" I have about 60,000 words to write or revise before the end of the year.

That means I need to focus and concentrate on a single task. That means I turn off email for 3-4 hour periods. And that means I get almost no distractions and get a lot done without the annoying "ding" or the temptation to check my inbox. I know if someone really wants to reach me they'll call me.

Try it. Take baby steps. Next time you really need to focus on a task ..

1. Turn off all the visual and sound notifications that you have new email. Don't forget to silence the phone and tablet too.
2. Then - go into your email settings, and set the synchronization time for email to 60 minutes.
3. Finally - shut down your email for a couple of hours.

If you are working on your #1 most important, critical task - there is no reason why you shouldn't treat it the same way as being in front of a customer. No interruptions!

Give it a try ..

For other email tips go read "Are You Really Paid To Read 200 Emails/Day?"

You Might Be Wondering ...

Yesterday I sat in, as a “dummy guest”, on a remote demonstration and presentation that my newest client had set up. As part of my Discovery process I often like to listen in on a typical sales call. This call was going wonderfully, to the point where I was wondering what I could contribute as feedback other than a few minor cosmetic changes. The team had performed an admirable job of discovery, had identified two painful key business issues of their prospect, and had tailored their pitch to solving those problems and showing the economics of their solution.

There was budget, there was pain, and there was an agreed-upon approval process. I was seeing a deal leap forward in the sales cycle towards a successful close. The pre-sales engineer executed a masterful finish and handed back to the rep.

Who then said “you might be wondering..”

Everything fell apart because the salesperson decided to answer a question that had not been asked about deployment and support. The question was NEVER going to be asked because the customer was in “lets-go-mode”. The entire atmosphere of the call changed into suspicion and uncertainty over this late revelation, and ended with the dreaded “Thanks - we’ll think it over.” Disaster. Deal gets de-committed from the quarterly forecast.

Two lessons learnt from this call.

1.       It’s not always the Pre-Sales Engineer who opens his mouth at the wrong time and supplies too much information.

2.       There is a place for a rhetorical “you might be wondering” when it logically leads onto the next topic of conversation, and it is early in the sales cycle. But never at what was essentially the solution proposal phase.

Beware.

Channeling The Channel

 

Back in the mists of time I can still remember the very deal I ever helped to close as a Sales Engineer. I remember it for two reasons. Firstly, it was in Newark, New Jersey - not the nicest place in the world back then. Secondly it was closed with a major assist from an SE at one of our channel partners.

Perhaps it made a great first impression, but I have always had a soft spot for the channel organization in any technology company, as what could be better than getting paid to have other smart people do the heavy lifting work for your company?

Over the years, the Channel SE has moved in and out of favour with technology companies - large and small. Often it is a cyclical affair - channel partners are loved for a couple of years, then they start to take too much business (in someone's opinion) away from the sales or services organizations. Process and compensation barriers are put into place, the channel fades, internal sales rise for a short period, and then a sales dip happens as your competition uses their channel to beat you in territory coverage, RFP and POC support and general deal-making. As a channel SE you get used to being whip-sawed around the sales and SE org-chart every fiscal year, and sometimes at mid-term.

At least in 2013, and globally in the software business, the channel is seeing a resurgence - which means increasing demands are being placed upon Channel SE teams. As usual, demands and responsibilities increase faster than headcount and budget. The secret to a successful SE team is a combination of factors.

1.  As many companies are phasing out the Generalist SE ("Jack of all trades, Master of none") - the channel is a fantastic place for these folks to live and to make a living.

2.  Decide on the "Commander's Intent". That's a military phrase which reflects the reality that no plan survives contact with the enemy. No sales and go-to-market strategy survives contact with customers, competitors and channels. For example - is the overall intent of the Channel SE to (a) educate and enable the channel partner SE's or (b) fight side-by-side with channel partner SE's in the trenches or (c) work with your channel salesrep to sign up more channel partners?

3.  Teach your Channel SE's how to teach and train - quickly. They don't have time to do it twice. It needs to be short, sharp and effective.

4.  Aim for repeatability. There is no room for "heroic efforts" in a Channels team, the SE: Partner ration won't allow for it. That means have a sales process that everyone follows, a capture and onboarding process for new partners, and a comprehensive training and enablement program for existing partners. On that sales process note - many external companies have a great "sales" system for salespeople and are clueless on the channel SE side of things - so beware!! (You wonder why they ignore potentially 40% of their audience, but that is another story)

5.  If you are a large enough company - share globally! I just facilitated a meeting with one of my customers worldwide SE channels leaders and encouraged them to "share their toys". Three great ideas came out of New Zealand, Belgium and Thailand that saved the collective organization 3-4 hours per SE per week and increased their channel conversion rates by 12%.

6. Cast a large shadow. Don't rely on the sales or business development managers to publicize your efforts. When you contribute to the good of the greater SE team, or help land a big deal, or provide an assist to marketing or support - make sure they know about it. Don't be the best-kept secret in SE-land!

7. (Controversial). If a choice has to be made as to which outside partner should get attached to a deal - that selection CANNOT be made just by sales alone. I have seen too many deals get ruined because the partner was selected on the basis of expected commission, bonuses or golf course etiquette. Presales needs a say too - on the basis of who will make the deal easier (and faster) to win.

That's it. Go Channel!!