The New Reality

Things ain’t what they used to be. And this oft-used phrase has never seemed more apt than it is for sales leaders today. Following the downward financial spiral of 2008 through 2009, the sales profession has been coming to grips with a new reality. No longer viewed as a crisis to simply get through, the tougher sales environment is being accepted now as the way forward for sellers in every industry, in every corner of the globe.

From smaller budgets (for both buyers and sellers) and smaller sales teams to busier prospects and longer buying cycles, sales teams are having to do more with less – and do it better than ever before. So how have managers adjusted their sales strategies to succeed in this environment? We talked to several sales managers to find out what is working for them and how things are different today. In short, “better” is the prescription of the day. With no room for error, everything from the initial call to the final close is being tightened up and improved.

Better Processes

There certainly has been room for improvement. From 2005 to mid-2007, closing sales was a bit like shooting fish in a barrel, said the managers with whom we spoke. “If you could establish a need, you knew the prospect could find a budget,” says John Rogers, healthcare area manager for Gartner. As a result, he says, “you could get away with mistakes.” You could skip a step in the sales process, he recalls. Or you could ask about the buying process but not have to dig too deeply into it; there was always money available if the prospect really wanted your product or service.r

As those funds dried up, the little errors and missed steps got expensive. For instance, reps who failed to gain a deep understanding of the buying process often discovered – too late – that there was no budget or that they’d been building a relationship with the wrong person. As closing metrics started moving in the wrong direction, Rogers realized he needed to make a change.

His aha moment came while reading The Checklist Manifesto: How to Get Things Right (Metropolitan Books, 2009), a book by Dr. Atul Gawande that makes a compelling argument for the use of checklists to help people in all industries do things better and avoid mistakes in today’s era of abundant information and complexity. Leveraging Dr. Gawande’s research and insight, Rogers created a very strict process for selling and forecasting. The process goes into deep detail, ensuring that salespeople are taking the right steps, asking the right questions, and talking to the right people from beginning to end. Deals get rolled into the forecast only if there are check marks in all the right boxes.

Sure, it sounds basic. But like many of the doctors in Dr. Gawande’s book, salespeople realized they were missing steps in the sales process once they began following Rogers’s process. “It also really helped us realize we needed to do a better job at the beginning of the sale, and we needed a larger pipeline,” says Rogers. As reps began tightening their processes and adhering to the checklist, results improved: Rogers drove more than $1 million in growth and was $595,000 net positive in the second quarter of 2011, up from $450,000 in growth and $125,000 net in the second quarter of 2010.

Better Listening and Connecting

So much of managers’ success today is the result of getting back to basics. When prospects’ coffers are flush, those basics can slip without much impact on results. “In the good times, everyone had an interest and a budget,” says Keith Brodhead Jr., managing director of enterprise sales at Xignite Inc., a provider of on-demand financial market data. “Today, we have to make more calls to better qualify and better understand what clients want. We really have to listen to build the case for how we can help.”

Improved listening and questioning skills have been a centerpiece of Xignite’s sales strategy coming out of the economic downturn. Brodhead remembers that, as the market was scraping bottom, “the CEO stepped up and said, ‘We’re not winning deals, and we’re not in budgets. Let’s take a step back and better understand what customers want, how they want it, and why they want it.’” He simultaneously pushed for salespeople to have more strategic, higher-level business conversations that would position Xignite as a trusted advisor, rather than as simply another vendor.

In response, Xignite salespeople began doing extensive research about the organizations and the people they were calling on. They asked better, more strategic questions and sought to thoroughly understand their prospects’ needs and planned usage of Xignite data. The result: Xignite posted a couple of big wins in 2010 that positioned it for further growth in 2011.

“Budgets are still constrained, and it’s still hard to sell,” observes Brodhead. But by asking better questions, listening fully to the answers, and patiently working to establish itself in a trusted-advisor role, the Xignite team is finding that doors are opening and prospects are willing to talk.

This ability to listen and become trusted advisors is helping many sales teams set themselves apart at a time when prospects are on information overload. “Clients have a lot of choices today. They are bombarded with messages. They open their laptops and there are fifty to one hundred emails, e-books, Webinar invitations, white papers, and more,” observes David Ruiz, sales manager at Nagnoi, business performance improvement specialists based in Puerto Rico. “To cut through the clutter, you have to really know your customers – know everything about them and their needs.”

Coming into the downturn, Ruiz was a sales manager for a large technology firm and one of many people cut during the recession. He says today at Nagnoi, he applies the same principles that he applied at his previous employer. Above all, his aim is to be a consultant, not a seller. He wants clients to pick up the phone and call him, not just when they are struggling with a business problem, but also when they are looking for tickets to a show or to share a personal victory. Getting there requires getting back to basics. “You have to call clients, not just email them. Take them to breakfast or lunch,” he says. “It’s old school, but it works.”

Better Role Optimization

Preparation is another way that managers are cutting through the clutter and capturing prospects’ attention – and their limited dollars. It’s another Sales 101 basic, but one many reps let slip during the economic heyday. “People used to take the quality of their cold calls for granted,” admits David Goldshore, president of RightClick Recruiting, an IT staffing firm that places technology specialists at organizations in the New York City metropolitan area. Beyond rehearsing what they’d say when someone answered their call, preparation was minimal.

That doesn’t work today. Goldshore says it is so important now to have a thorough understanding of your prospects and the company they work for that he divided the sales role into two functions: research and recruiting/sales. Now RightClick has employees dedicated to in-depth prospect research, which they pass along to salespeople. Yes, it’s an investment, but a necessary one. The time needed to identify the right people to call and then “learn everything there is know about those people” would leave very little time for selling, says Goldshore. To do both jobs right, he realized, required two different people. Now RightClick recruiters focus their full attention on selling, armed with rich information that helps them quickly capture prospects’ attention.

Another benefit: these two very different roles enable reps to leverage their strengths in the position that best fits their natural abilities. Sales leaders are realizing that no rep can do everything and do it all well. They also understand that patching up an individual’s weaknesses is far less effective than playing to his or her strengths, which yields better results and more motivated, higher-performing salespeople.

Kate McIntyre, director of Entrust Certificate Services sales for Entrust, a provider of identity-based security solutions, also split the sales role when faced with aggressive growth targets as the economy was hitting bottom. In the past, her team operated in traditional sales territories, where reps were responsible for both account management and business development within a specific geographic area. McIntyre recognized that, for her team to excel at both functions, she needed reps who were laser focused on one or the other.

“When you get people focused entirely on new business, they become hungrier,” says McIntyre. At the same time, reps who are focused solely on account management become adept at growing wallet share within existing accounts and keeping customers highly satisfied. Reps shifted into the role best fitting their natural talents, further accelerating their positive results. Now when McIntyre hires new salespeople, she profiles to the two roles.

The financial downturn was a massive wake-up call to the sales profession, but astute managers have adapted, demanding greater levels of precision, preparation, and focus from their reps than ever before. These improvements will reap long-term benefits as the economy slowly climbs out of the trenches. •

Adjusting to the New Sales Realities: 5 Steps

Tony Rutigliano, senior practice expert at Gallup and coauthor of Strengths Based Selling: Based on Decades of Gallup’s Research into High-Performing Salespeople (Gallup Press, 2011), has been helping sales leaders adjust to the realities of selling in the new economy. He offers these observations on what has changed and what sales managers should be doing to adapt.

New reality #1: Managers who once were responsible for 8 to 10 people often have 12 to 15 reporting to them now, putting pressure on schedules.
How to adjust: If you haven’t already, stop selling and devote 100 percent of your time to managing. Next, evaluate each rep by asking yourself, “When do I get the best from this person? How do I position him or her to do that all the time? When do I get the worst from him or her? How can I shift that responsibility off of this person’s plate?” Get people doing what they do best, and results will follow.

New reality #2: The cost-of-sale metric is getting more scrutiny than ever before, putting pressure on sales leaders to reduce it.
How to adjust: Consider shifting some field-sales responsibilities to inside sales, a less-expensive operation. Rutigliano worked with a business-services organization that altered its sales model during the downturn, partnering field reps with call-center reps. Not only did the average cost of sale plummet, but many field reps were able to off-load the aspects of their job that they most disliked – a win-win.

New reality #3: Travel budgets have been sliced, limiting face time with customers and dispersed reps.
How to adjust: Push back. Explain that if your team doesn’t travel, your organization will be leaving “X,” “Y,” and “Z” on the table. When all but essential travel is cut, establish the definition of “essential” so there is no confusion. “Anything that involves winning, growing, or keeping a customer should fall into the essential column,” says Rutigliano.

New reality #4: Managers have less time than ever before to grow and manage their people.
How to adjust: You can’t afford “C” players on your team today – they must all be A’s and B+’s. Once you’re there, assume the role of a coach more and less of the manager. “It’s more about asking questions and listening than [telling your team to] call in three times a day,” says Rutigliano. “You’ve got to get away from that because you don’t have time, and neither do they.”

New reality #5: Cutbacks have made many reps skittish about what’s coming and whether they’ll be affected, which can impact performance.
How to adjust: Share everything you can as soon as you can. Resist the urge to hide when there’s negative information. Instead, just as pilots explain how long turbulence will last, explain to your team members what’s going on. Then they’ll be able to focus better on the job at hand.