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5 Popular Sales Metrics That Destroy Sales Performance

Posted by Doug Davidoff

Feb 8, 2019 4:00:00 PM

Sales MetricsEditor's Note: This post originally appeared on the HubSpot Sales Blog

In 1997, Billy Beane became the General Manager of the Oakland A’s. The A’s had the lowest payroll in Major League Baseball and in the four full seasons before Beane became GM, the A’s averaged less than 70 wins a season. Beane knew if he was going to build a contending team, he would not be able to do it the traditional way.Beane’s strategy -- as depicted in the 2011 film, “Moneyball” -- has traversed beyond the world of baseball to nearly all sectors of business and has become synonymous with making data-driven decisions.The tenet Beane and the A’s followed enabling them to average more than 93 wins per year for the following eight years had two components:

  • Discard highly valued “vanity” metrics that did not have a significant impact on winning baseball games.

  • Identify different metrics -- preferably those no one else was paying attention to but which had a significant impact on winning baseball games.

If Billy Beane were to take over a sales organization today, he would feel like he’d traveled back by about 20 years.Sales organizations today are dominated by metrics, but they’re rarely data-driven and even take actions counterproductive to the outcomes they desire. This results in higher costs, burnt out reps, high turnover, and frustrated customers.When noted economist Steven Levitt published the book “Freakonomics: A Rogue Economist Explores the Hidden Side of Everything,” he shared the disproportionate impact structural incentives have on the behavior of individuals and their output.Structural incentives are those created by the structure of what’s being done. They are often referred to as the law of unexpected consequences and are generally more powerful than explicitly stated incentives.Structural incentives are also one of the primary causes of difficulty in change management. In sales, the most common structural incentives are the metrics used to assess performance -- whether tied to compensation or not.

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Topics: Sales Development, Performance, Sales Cycle, Sales

5 Necessary Elements for a Successful Account-Based Marketing Approach

Posted by Doug Davidoff

Jan 18, 2019 4:01:00 PM

5 Elements of Account Based MarketingOne of my favorite things from 2018 was the opportunity to join Ryan McInerney’s podcast to discuss the pros, cons, and myths surrounding Account-Based Marketing (ABM). Ryan also hosted Sangram Vajre, the founder and CEO of one of the very first ABM applications, Terminus. The conversation was so engaging that one episode quickly turned into two. (You can listen to episode one here and episode two here.)

There’s no question ABM is still hot. The good news is that, as account-based approaches have matured and technology has evolved, the opportunity to implement effective account-based programs is better than it has ever been.

But, realize that merely saying that you’re adopting such an approach does not change anything. If you’re changing your strategy, you must change your behaviors.

In our work with companies implementing or embarking with ABM, we’ve identified five overlooked or weak elements that are often the cause of failure. If you’re considering implementing such an approach, be sure you address these items.

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Topics: Sales Development, Marketing, Sales

The Missing Persona That’s Damaging Your Sales & Crushing Your Margins

Posted by Doug Davidoff

Jan 11, 2019 3:00:00 PM

BuyerPersonaA client of ours, who provides a uniquely designed sales performance improvement program design for a unique niche, was involved in a large, complex sale with a major company in their market. Traditional sales theory would lead to a focus on one of two roles/personas at the company:

  • The executive in charge of sales revenue, or

  • The executive in charge of training.

My client won the sale, and in the debrief we confirmed something very few people would have expected. While the client did a yeoman’s job selling to the typical roles, it was the head of technology (CTO) who was the key player that led the company to not only buy from my company, but to do so without decreasing the scope or paying less than my client proposed. It was also the CTO that prevented the head of training from “checking with outside vendors” to see if they could do the “same thing for less.”

The CTO had no formal role regarding the sales approach or training programs that were implemented by this company. Yet, because of the insights and knowledge that my client developed regarding this company, the CTO was engaged from the beginning. Looking back, it’s likely the smartest decision that was made during the several months of the sales process.

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Topics: Lead Nurturing, Sales Cycle, Sales

The Real Buyer's Journey, Part 2: Manufacturing Revenue

Posted by Doug Davidoff

Nov 19, 2018 9:00:00 AM

Manufacturing Revenue Blog-2Welcome to part two of our series on understanding the real buyer’s journey. In the first session, I shared the findings of our in-depth analysis of how buyers progress through their journey and take actions that lead to buying. In this session I'm focused on the other side of the equation, how sellers can align with buyers to increase the likelihood of generating engagement, entering conversations, and yes, successfully making sales.

The approach I share today is based on decades of direct experience combined with in-depth analysis, interviews, and studies. My promise is that if you take this approach, you'll gain the following five benefits:

  • You'll be able to design and execute strong customer acquisition programs much more easily.

  • You'll gain greater predictability and repeatability in your customer acquisition efforts, and therefore

  • You’ll gain greater scalability.

  • You'll dramatically increase the results from the marketing and sales efforts that you are taking.

  • You'll lower your overall costs for acquisition (CAC) and position yourself for an extraordinarily strong customer success program and your team will be happier and healthier.

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Topics: Lead Generation, Demand Generation, Marketing, Sales

Sales Lessons From Better Call Saul

Posted by Doug Davidoff

Sep 17, 2018 6:00:00 PM

better-call-saulLast week as I was recovering from an amazing Inbound 2018 conference, I sat back on my couch, turned on the digital recorder and started the episode of Better Call Saul that I missed while traveling to Boston.

Now, I don't know about you, but I'm about as big a fan of Breaking Bad as there is, so if I can't get me any new stories about Walter White, then the transformation of Jimmy McGill to Saul Goodman (it's all good, man) is the next best thing.

So I sat back, ready to escape into Jimmy's world, forgetting (for an hour) all of the crazy sales and marketing strategies running through my head. Little did I know, that the creators of Saul were about to share one of the most important, and difficult to accept, sales lessons out there.

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Topics: Sales Training/Coaching, Sales

5 Tips for Making a Strong First Connection with a Lead/Prospect

Posted by Doug Davidoff

Aug 10, 2018 3:00:00 PM

connect-calls-3More money than ever is spent on the technology, people and process to enable organizations to generate higher volumes of sales qualified leads at greater velocities. Research from Gartner CEB indicates that these investments aren’t working out too well. They found that, on average, companies are spending nearly $5,000 per rep more on technology alone, and they’re seeing their conversion rates drop almost 12 percent.

The growing tech stack, combined with maturing lead and demand generation tactics, have given sales reps an apparent playground. Gone are the days of not having enough people to talk with (or, at least, they should be). Despite all the investments being made to “reduce friction for buyers” and more activity, companies are still suffering from a dearth of qualified and engaged prospects willingly entering predictable sales processes.

Through our work over the last several years, I’ve identified two key causes for this problem.

  1. This first is likely not new to you, as it’s been highlighted, ad nauseam, over the last half-decade. Buyers have changed how they engage and sellers are not stepping up.
  2. The second doesn’t get anywhere near the attention, but may be just as big. The sales process has become, well, far too process stringent. This is not a slam on the relevancy and importance of defined and documented sales processes, but, rather, an indictment of how they’re being implemented and executed.

I’ve seen this from both sides of the table—advising and coaching sales reps and dealing with sales reps as a prospect and customer. The first call is painful. You would think that all of the attention and money that’s been spent on building sales development teams and designing prospecting processes, reps would have mastered the first call.

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Topics: Sales Training/Coaching, Sales, Playbooks

The Critical Role of Intent in Demand Generation, Sales and Marketing

Posted by Doug Davidoff

Jul 12, 2018 1:30:00 PM

intent-video-splash-screenWe've been doing a lot of research over the last year into a critical part of the buying process that seems to get very little attention in the design and execution of demand generation: sales and marketing efforts. Anyone who has ever been involved in attracting or acquiring new customers knows that buyer intent is an important ingredient in the customer acquisition recipe.

Intent varies by person, by market and/or by what you're selling. There are any number of factors that are going to impact when and where intent occurs, but somewhere along the buyer’s journey, buyer intent hits a critical point. Intent, initially, does not necessarily relate directly to buying from any particular vendor. Buyer intent refers to the decision that some level of action needs to take place. If you think about the last major purchase or even decision that you made, you can quickly and easily identify that point that separates pre-intent actions from post-intent ones.

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Topics: Lead Generation, Inbound Marketing, Performance, Demand Generation, Marketing, Sales, Sales Enablement

Conversations Don’t Happen by Accident: The 6 Strategies to Creating a Strong Chat Experience

Posted by Doug Davidoff

May 2, 2018 10:00:00 AM

CAPBot ChatYesterday, Drift announced the latest enhancement to their conversational marketing platform, called Leadbot 2.0. Leadbot 2.0 increases the power available to marketers and salespeople utilizing chat while also drastically improving the user interface and ease in building out strong chat experiences.

This news, combined with the leaps HubSpot has made with their soon-to-be-released update to their chat product, Messenger (I’ve had beta access to the product for the last month), means that the momentum behind Chat and Conversational Marketing isn’t going to slow down anytime soon.

And for good reason. I’ve always believed that the mantra of the modern demand generation executive is “Solve for the customer!” Done properly, chat is a powerful tool to empower both the seller and the buyer, enabling them to have meaningful conversations in the most effective and efficient way possible. I’ve made no secret that I don’t believe Chat means the end of other demand generation tactics, but the compelling use cases for Chat continues to increase every day.

However, Chat is by no means an easy or “quick fix” solution. It’s not as simple as throwing some code onto your site, assigning sales reps to manage it, and then waiting for the people to ask you if you will let them buy your product/service. Make no mistake, there are far more bad chat experiences than there are good ones.

Implementing chat requires a commitment of time, money, and a solid effort to develop the strategies, plumbing, and training to make it work. There’s no question it’s a great opportunity to create leverage and lower costs, if - IF - you do it right.

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Topics: Sales Development, B2B Sales Strategy, Sales, Technology Stack

Why I Don’t Give My Head of Sales A Revenue/Sales Quota

Posted by Doug Davidoff

Apr 27, 2018 1:00:00 PM

No-Sales-QuotaMake the number! It’s probably the three words that dominate the thinking of salespeople and executives everywhere. I’ll admit that over my career I’ve literally had dreams--and nightmares--where making the number was the central theme. (Of course, whenever this happened, I knew it was probably time to take a week off).

Sales quotas (or revenue quotas) are a foundational element of the sales. For most, the only question to ask about quotas is “Where should the target revenue or new customer acquisition quota be set?” Questioning the need, appropriateness, or effectiveness of even setting quotas is sacrilegious in business circles.

But the time has come for those leading businesses into the future to admit that quotas aren’t working. Recent research from CSO shows that barely 50% of salespeople are meeting quota, a trend that has been steadily deteriorating. Anecdotally, many senior sales executives responsible for setting quotas adjust to this reality by setting artificially high quotas and putting more pressure on salespeople.

Earlier this week, I presented a webinar where I revealed some research that we just completed, along with ways to implement strategies that can double your pipeline in 90 days. In this session, I shared that the nature of sales continues to undergo rapid change. If selling is going to remain a viable strategy, leaders must rethink their fundamental assumptions about sales, how they allocate talent and resources towards the sales process, and how they assess and compensate performance.

At the beginning of this year, I determined it was time to take a lead in designing the sales model of the future. As a part of our 2018 sales plan, I eliminated the sales quota as a key metric for our VP Sales. Here's why.

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Topics: Sales Development, B2B Sales Strategy, Sales Cycle, Sales, Sales Enablement

5 Keys to The Effective Use of Technology

Posted by Doug Davidoff

Mar 13, 2018 10:00:00 AM

hire-technologyLast week I was talking with Jess, our Director of Operations, about the inordinate impact that technology has had on the sales and marketing function. I told her about my first “CRM.” As a new hire with Alamo Rent-A-Car, I was assigned 624 travel agencies in my territory. A couple days after I started, I got a thick envelope with 104 pages of cards (there were 6 cards per page) printed on a dot matrix printer. I separated my cards, placed them into a file box and went to work.

Sales and marketing technology (or, the growth stack) has moved from being a complement to the work that needs to be done, to being at the core of virtually everything that happens.

The Role of Technology in Sales & Marketing

Consider the following:

  • The average company is spending almost $5,000/sales rep/year on sales technology. (source: Gartner CEB)
  • The Marketing Technology Ecosystem had just 120 names when it started in 2011. Today, there are more than 5,000 technology alternatives (and growing). (source: ChiefMarTec)
  • Investment in sales technology over the last two years tops $10 billion. (source: VentureBeat)

What’s clear is the mushrooming growth and impact of technology in demand generation and sales. Equally clear is that despite all of these investments, users are not seeing the returns they expected.

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Topics: Marketing, Sales, Technology Stack