Sales Benchmarking: What to Measure in a Tough Economy?

To turn the tide on sputtering revenue numbers, sales organizations ratchet up pressure on sellers to hit targets.

Many will seek a fool-proof formulaic antidote. The more scientific it feels, the more control it gives over success–or so they presume.

Some swear by sales benchmarking.  Landslide Technologies’ SFA (sales force automation) application ensures you can “govern the sales process in an effort to drive large deals through the sales pipeline in a consistent manner."  Just use the SFA application to track your big deals and they’ll pump out new accounts like a canning machine on an assembly line.

Do benchmarks work?  Or are they a desperate attempt to CYA at each level of the food chain in the event of a day of reckoning?

One recent article from a worldwide sales training company described benchmarking as “a sales rep’s GPS, helping to map out routes that were either successful or time-consuming in the past in order to devise a more efficient course”.

Here’s their GPS system:

To simplify this already-simple model: all things being equal, if you make more calls per day (CPD) or increase your close rate (CR) or increase the average size deal (ADS) or if you have more salespeople (SP), you will increase your AS (Annual Sales).

The author of the article lauds this wildly lagging indicator of performance stating, “their (sellers) improved time management efficiency as the result of this benchmarking model will free themselves up from dependence on marketing departments for leads, support and differentiators.”

I couldn’t make this stuff up.

Feeling liberated yet? What a relief! Without burdensome leads, support and differentiators from marketing, sellers can work the levers on the benchmarking formula and land on their AS (don’t pardon the pun).

Some of the largest sales organizations tell their team to abide by their model – or else.

Now, let’s stipulate that tracking and measuring sales activity is critical to success. Still–too many sales organization have a knee-jerk response to sluggish short-term performance, namely engaging in short-term solutions.

There lies the slippery slope of micromanagement.  Knee-jerk short-term solutions to short term indicators.  It’s a recipe for low trust and high turnover.

Eventually, quality selling activity gives way to “prettying up” the spreadsheet. “My, that’s a good looking chart,” says the visiting exec from HQ.  Meanwhile, the team is thinking, “those numbers are bogus; plugged into Excel the night before to impress the brass.”

GIGO.  Garbage in, garbage out.

When I managed a regional sales organization, corporate decided to split the sales force into hunters and farmers–to improve the “cost of sales” ratio of gross comp to revenue.

We lost a $10.5 million deal. Why? We severed the relationship between their rep and the procurement director.   They, in turn, severed us.

We broke their trust, plain and simple.

What benchmark tracks lost accounts and missed opportunities due to relationship issues? None I know of–yet their impact is an order of magnitude bigger than what benchmarks mark.

Harvey McKay (author of Swim with the Sharks without Being Eaten Alive) offers a better predictor of selling success than all the formulae, algorithms and sales funnels combined. It’s a list of questions he calls the McKay 66.  He suggests that relationship-oriented information is king (mostly centered around the client relationship – not their stated needs).

For example:

* #39. On what subjects (outside of business) does the customer have strong feelings?
* #55. What is he/she most proud of having achieved?
* #58. What moral or ethical considerations are involved when you work with this customer?

Doesn’t it make intuitive sense that knowledge of answers to these kinds of intimate questions reveal more about our progress with a prospect or account than the number of dials, appointments or calls?

Selling always was and always will be, first and foremost, a referendum, not on process and statistics, but on the loyalty developed between sellers who can build relationships with buyers.

The Trouble with Buying Processes

Big companies have a process for buying things. They define the specs, they shop the vendors, they use specialized purchasing departments to define procedures and processes.

They have similar processes for recruiting human capital (aka human beings). Define the specs, shop the vendors, use special processes.

And ditto for selling. Define targets, channels, measure hit rates, etc.

What these processes all have in common is a focus on the efficiency of the process—and not so much on the effectiveness of the result.

Purchasing managers, HR recruiters and sales managers alike would benefit from Malcolm Gladwell’s recent New Yorker piece title Most Likely to Succeed: How Do We Hire When We Can’t Tell Who’s Right for the Job?

Gladwell’s opening metaphor is about predicting the success of a college football quarterback in the pro game. Despite extraordinary efforts at analytical and statistical rigor—you just never quite seem to know.

His target subject is teaching—how difficult it is to predict the success of a teacher by focusing on any available statistical predictor.

Yet the value of getting it right is huge. Gladwell points to research that says a good teacher dwarfs the effect of any other factor on a child’s education. The US could overcome its middle-of-the-road global relative performance simply by substituting the bottom 6% of teachers for average teachers.

The problem is, you can’t predict success in teachers, anymore than you can in quarterbacks.

The solution, he says, is to stop focusing on accreditation and criteria. Instead, have the equivalent of apprenticeships, open admissions, tryouts open to all. The good ones prove themselves quickly, as do the bad ones. Find out who they are not by controlling input metrics, but by letting people jump into the water and seeing who can swim.

I suggest that the same problem exists in evaluating suppliers, recruits, and sales funnels. These are all deeply complex, human, messy relationship issues. Good customer, employee and supplier relationships make a huge difference.

But the prevailing business wisdom is that we can analyze and measure our way into defining the right relationships. Think of RFPs (requests for proposal) or recruiting specs.

The motivation behind select-by-spec and hire-by-numbers is complex. It’s part blind faith in “science.” It’s part fear-driven cover-your-butt desire to appear blameless. It’s part fear of interaction with other people.

But whatever, it’s hurting us. In the name of efficiency, many business processes have been employed to bring human relationships to a least common denominator level. The result has been low effectiveness.

Let people mix it up. Inefficiencies can be dwarfed by effectiveness. It’s as true in work as it is in the NFL and the classroom.

Free Medium Coffee and Warm Fuzzies

What did the new Dunkin Donuts store owner do right? The sign says it all…”Free Medium Coffee”.

Do you think he drove traffic to his new store? Lots. I had to look twice at the second line; “No Purchase Necessary."

That’s different.

Free just feels different.

New businesses offer discounts, coupons and rebates all the time. They imply, “We’ll give you a good deal if you come check us out.” Free, on the other hand, says, “We’re willing to invest in a relationship with you and know we’ll need to earn your business.”

Now flip it. How obliged do you feel after hunting for the coupon, clipping it out, sorting it by category and then remembering to use it before it expires? You feel like they owe you the coffee, don’t you? At best coupons and other promotions offer a balanced exchange; at worst, buyers feel distrust about the process. How much pain have you felt due to coupon or rebate issues? One study suggested that 50% of all rebates never get turned in.

Now let’s look since the savvy store manager erected the sign:

Day #1 – On your first visit, you look around as you approach the counter with caution. Suspicious of a catch, you place your order, “I saw your sign and I’d like a free medium coffee.” When the person on the other side of the counter smiles and promptly pours your Dunkin Decaf, you wonder if the other shoe will drop. When you realize there’s no string attached, they just went from stranger to friend.

Day #2 – You know you’re getting a donut with the coffee. Why? Because you feel a strange sense of gratitude for a second cup of free coffee. I bet you never felt a sense of appreciation after using coupons? (By the way, after day #1, you told at least three friends about the free medium coffee because you like to give away free stuff too, even if it’s someone else’s).

Day #3 – “Dunkin Decaf, cream, no sugar Mr. Slatin?” says the lady in a pink and orange uniform. “Thanks for remembering Janice, let me also get a half dozen glazed and a half dozen with sprinkles, an egg, bacon and cheese croissant and a box of munchkins.”

What just happened?

The seller created value by giving you something without expecting anything in return. Did he have a previous relationship with you? No. But now he does. He changed the feeling you had about his product or service from neutral to positive. Warm fuzzies. Why are warm fuzzies important? Well despite popular belief – all decisions are based on emotion and justified by logic. Dunkin Donuts went through your mouth to get to your heart.

What’s your “free medium coffee”?

The Curious Case of Curiosity in Selling

What’s the top, number one, single greatest factor affecting success in sales?

There are often multiple answers to questions like that, because all the prime candidates overlap similar territory. You might argue for a can-do attitude, or customer focus, or a committed team.

Let me make the case for curiosity.

Imagine being in a constant state of heightened curiosity when you are with, doing work for, and thinking about your customers. What would that look like?

The answers fall into two broad categories, I think:

1. If you were curious on your customer’s behalf, you would:

• Notice an awful lot of things about their people, products and customers
• Formulate many hypotheses
• Ask a lot of questions to pursue those hypotheses
• Want to know lots of things on general principle: preferences, history, culture, practices
• Be other-focused

2. And while you were being curious, you would spend less time on:

• Worrying about how to get the sale
• Worrying about how to speed a decision, or close, or qualify a lead
• Trying to portray yourself in ways you assume will influence the customer

Now here’s the punch line. Most approaches to selling tell you to ask a lot of questions—basically like the first category.

But they also tell you to worry about that second category. In fact, they say the sole purpose of all questions is to get the sale. Most sales approaches say you absolutely should worry about getting the sale, speeding a decision, qualifying, etc. Which kills curiosity.

Curiosity says, to hell with that. Curiosity says, the purpose of questions is to find out what could be: what could be better, what the right thing is, what the customer should do.

The paradox, of course, is that curiosity-driven selling just plain works better. It works better because the questions are grounded in the customer’s world, not the sales person’s needs.

The linear, process-driven, metrics-based approach to selling that has become so prevalent has many virtues, but one gigantic, glaring defect: By trying to maximize the sale, it has devalued the customer—thereby reducing sales effectiveness (insert ironic music here).

Curiosity may have killed some cat once upon a time; but it serves salespeople well. Curiosity isn’t a sales tactic. Done right, sales are a natural byproduct of being curious.  There’s something very simple and right about that.

The Silver Lining in the Recession Cloud: a Shift Toward the Customer

Can you feel it? It’s all around us.

No, I’m not talking about the doom and gloom of the stock market or the latest bank collapse. I’m talking about a the subtle changes where you shop, eat, bank, style your hair and service your car. Despite the dark sky of economic woes, there’s a silver lining – a shift toward the customer.

* Chain restaurant staff are more welcoming.
* Safeway has a sale sign on every item (recognizing that people need to perceive a deal before they’ll buy)
* The local Toyota dealership is offering free Cappuccino’s on Monday, Wednesday and Friday and now leaves you with a bounce-back coupon.
* Staples offered 50% off any copy paper (although tied to their rewards program – not very customer focused)

Last night, while I was at the local Target, the floor manager announced (loud enough for customers to hear) that any employee that helped a customer find a “high ticket” item resulting in the largest sale would get a $5.00 Target gift card.

Think back to not too long ago. Didn’t you feel complacency just prior to the storm clouds moving in? I’m guessing Lehman Brothers, Fannie and Freddie all were perched on their porches in rocking chairs before the tornado came. The energy was about to drift to the buyer.

New found energy?

Genuine customer focus?


Here’s the question that pulls at me – what if this customer focus du jour carries beyond the current storm clouds? What if this recent shift back toward customer satisfaction propagates valuable lessons that translate into better service once the sunny days are here again?

Perhaps this is a divine shake up — requiring us to “love your brother as yourself” in order to get back on track.

Those who are truly customer-focused will soak up what works and what doesn’t through these trials. Those that are thinking about these activities as a tactic to wait out the storm will probably revert back to their old ways.

In the short term, buyers benefit. In the long-term both buyers and seller can.


Selling Problem Solving by Solving Problems

One thing about accountants I really like. They learn awfully fast.

I had breakfast the other day with an old friend, a forensic accountant—call him Joe the Accountant. He’s a bit of a loner, motivated by achieving results, and impatient with what he sees as bureaucratic and procedural focus. And he is very sharp.

He’s a bit like a bloodhound; don’t point him toward the scent and expect him to back off. Perhaps that’s why he tends to rotate employers every 6 – 8 years.

“Maybe I should just do free-lance work,” he mused to me. “I don’t mind selling. I just don’t know how to do it well. I could get appointments with several well-positioned past clients. I could just ask them if there’s some work I could do for them, I suppose.”

“No,” I said. “Talk to them about what problems need solving.”

Joe: Of course, silly me. Then I can pitch how I might be able to solve them.

Me: Congrats, you just went from weak salesman to average salesman in ten seconds.

Joe: So–how do I get to the next step? (Joe’s pretty impatient too).

Me: Pick one problem and solve it in that meeting.

Joe: Hmmm. I like that. But will the client do anything if I just give him the advice?

Me: You just went from pretty good to almost really good. So answer your own question.

Joe: I see, he’s got to be involved in getting the right answer in order to act on it it. So—you’re saying just do the work right there in the meeting?

Me: Pretty much.

Joe: So when do you make the sale?

Me: After you solve the problem together, you say, “This is great fun. We ought to do more of this. Though after one more session, you need to pay me. I can’t just be having fun for free. So how shall we set this thing up?”

Joe: Hmmm. Yes, that works, doesn’t it? Give ‘em a taste of your wares, so to speak. Just do it–then ask for the sale. Right?

Me: That’s about it.

Joe: Great, thanks. Gotta run; this breakfast is now interfering with scheduling my first sales call.

One thing about accountants I really like. They learn awfully fast.

A Contender for Worst Business Advice of 2008

If your customers trust you, that’s good, right? Like, really good?

So suppose you wanted to ruin trust with your customers. What would you do to destroy trust?

• You might try lying to the client.
• You might try saying one thing and doing another.
• You could try keeping secrets from the customer.
• You could refuse to answer direct questions.
• You could actively prevent your customers from learning about cost-saving solutions.

Incredibly, these are specific recommendations made by a business blog, Drooling for Dollars (the name tells you something), in a post titled “A Successful Businessman Keeps Secrets From His Clients.

In this post, the author offers nuggets like “never let a client know your hourly rate,” “tell your client that the work will be completed in 3 weeks although you get it done in 3 days,” and talks about “those irritating and annoying clients who ask too many questions before making a deal.”

It’s good to answer some questions, says the piece–it helps build trust. But don’t go overboard with it—trust could ruin you if those nasty competitors called “customers” find out too much.

The author summarizes: “There are pieces of information you should never reveal to your client, no matter how many times they ask or how much they insist you [sic].”

Uh huh? Really?

Anyone wanna help me shoot some fish in a barrel? The comment section is right below.

Top Ten Ways for Your Business to Deal With a Recession

Global equity markets set all-time upside records yesterday. But US credit market trading was closed. By the time you read this in the morning, you may or may not think you need to worry about a recession.
Hint: you still do.

So here are some ideas. I have readers in large companies and solo consultancies; lawyers and salespeople; private and public sectors. Tweak the ideas to suit your own situation.

And please generously share your own ideas by commenting!

1. Shift some of your marketing budget to sales. You’ve planted the fields; now pay the harvesters to go to work.

2. Hire some key people from competitors in your industry. Increase your strength and get good PR for doing it.

3. Buy capital equipment now (or soon), when it’s off-cycle, suppliers are desperate, lines are short, and customers like you are welcome. When the up-cycle returns, you’re set to cash in, while others pay high prices and wait in lines with the other unfaithful.

4. Set a new metric; be in the slower half to lay off people. Not as wishful thinking, but as a conscious strategy to invest in people, and to be seen as and known for doing so.  Did you believe that stuff about people you said?  Now’s the time to walk the talk.

5. Higher levels of management—take a pay cut. Not just bonuses, either. The higher the level, the deeper the cut. What part of “leadership” didn’t you understand?

6. Tell your shareholders to suck it up. Not all stakeholders benefit equally at all times. This is not their time. Their time will come again, and even better—if they have the foresight to help customers, suppliers and employees when it is they who need the help.

7. Ask your key customers what you can do for them. They know you’re short on cash; offer services, advice, free consulting, and non-cash expenditures.

8. Tell your key customers that you’re extending your receivables terms by 15 days—because you understand how things are.  Do not stiff your suppliers.  And don’t hide these two particular lights under a bushel; tell customers and suppliers personally what you’re doing, and let them thank you.  Personally.

9. Identify a local charity in severe trouble. Make a contribution to them. It will have outsized impact, you’ll make an impression, and others—like board members and the community—will notice it. This one you do hide under the bushel.  Don’t worry, it’ll be noticed. 

10. Talk to your bank about why you’re doing steps 1 – 9. Say you want them to know you’re not just cost-cutting to make it through each month, but intelligently investing in the future through a longer timeframe than your competitors. In other words—you’re the kind of responsible customer they should want to lend to.

There are a few common themes here:

• Don’t fall prey to short-termism
• Do well by doing good
• Meet transactional opportunism with relationship strategies
• Be there for others now, and they will be there for you later
• We remember those who helped us when times were tough
• Now’s the time to prove you’re trustworthy—worthy of trust.

Why Testimonials Are Over – Rated in Sales

How would you like to have Stephen R. Covey write a glowing book-jacket quote about you and your business?

What a great testimonial, right? Covey’s book The 7 Habits of Highly Successful People has sold 5 million copies since it’s copyright date of 1989. It is still—still—ranked number #85 on Amazon’s total rankings (including Harry Potter, etc.), and #1 in several sub-categories.

So a referral from Covey ought to be worth a ton. And by extension, references in general ought to be valuable, right?

Well, yes and no. And as usual, the no is more instructive than the yes.

Take the case of a new sales book: Sales Blazers, by Mark Cook. Right there on the cover, it says, “Sales Blazers is one of the most important books you will ever read.” –from the foreword by Stephen R. Covey.

"One of the most important books you’ll ever read. " That’s what Covey says, to you and to me, right there on the cover.

Now I don’t know about you—your reactions could be different than mine, to be sure—but for me, when someone tells me, flat-out, in a mass media outlet, that he knows what I will believe to be the “most important” anything in the world—watch out. That’s a red flag. I am already suspicious.

Now I’m thinking, ‘how dare you claim to know what’s important to me—much less “most important?”’ This is like TV ads that address me in the second-person singular as “America.” (“America, we know you love sports. That’s why we created pocket couch potato…”)

Lesson one about testimonials: all the testifier’s fame is put at risk if the testifier claims knowledge he doesn’t have—in this case, knowledge about me.

So now I’m predisposed to be suspicious when I check out the book. I note in the foreword that the author used to work for Covey’s son, at Covey’s company in Salt Lake City. Self-interest rears its ugly head like Putin flying over Alaska. Is this going to be an objective review? Cui bono?

I check out the (three) online reviews on Amazon. The first two are by people living in Salt Lake City. What a coincidence. (And, surprise, they’re positive).

Now I’m ticked off before I open the cover.

When I finally look at the book, it’s all about how leadership can improve revenue for a sales team.

OK, fair enough. I believe that. And I see the link between leadership and team performance. I also believe Covey knows something about that, so now he’s regaining a little credibility with me.

But as I read on, I notice the book is all about selling and revenue and achieving sales goals. Nothing about customers.

I mean nothing! I go to the index. There are 2 entries on “competitor,” and about 13 on "rewards". But “customer?” Not a one.

Now, there’s nothing wrong with leadership, revenue goals, or sales success. They’re all very relevant to sales, obviously. A book about it is perfectly valid.

But in my case—me, personally—I happen to believe very strongly that sales should be ultimately all about the customer. I mean by that—the end goal, purpose, meaning and intent of sales—is to improve life for the customer; and that if you do that, you too will succeed wildly in selling.

You don’t have to agree with my view on that, nor do Covey and Cook (and evidently they don’t).

But—if you’re going to tell me, in a mass medium, what I, me, personally, am going to consider one of the most important books I’ll ever read—then you’d better be right.

And in my case, he was wrong.

This looks like a decent book on leadership and sales force management. Is it "one of the most important books I’ll ever read?" No way, no how, not even in the ballpark with a ten-mile pole, not a chance, you-gotta-be-koidding me.

And that’s the trouble with testimonials.

If you’re asked to give a testimonial, restrict yourself to statements in the first person. If you solicit one, don’t over-estimate the impact.

But—the heck with you Charlie, you might say—’Is it working?’

See for yourself at Amazon’s ranking: At this writing, it was ranked #298,332.

For comparison, see the Top 100 sales books on Amazon, where the #100 sales book is currently ranked #27,000. Not even close.

Don’t over-estimate the power of testimonials.

And don’t squander your own precious credibility by claiming to know the customer when you don’t. A reputation is a terrible thing to waste.



Meeting Price Objections from Trust

When the customer says, “I don’t know, that sounds kind of high to me…” what do you do? How does Trust-based Selling™ handle customers’ concerns regarding price?

First, note the sales jargon for this situation—it gets called “objection handling.” The wording is revealing. It suggests we have a conflict with our customer, an oppositional situation—their side is objecting to our side. And our job is to “handle” it. Kind of like a counter-move in wrestling.

But what if you’re trying to create a trust-based relationship with a customer? In that case, this isn’t about “objections,” much less “handling” them. Instead, it’s about a mutual inquiry as to whether joint value can be created—or not. Price is—at bare minimum—a simple and necessary part of the discussion.

But much more importantly, when we hear price comments as “objections,” we immediately jump to a place of high self-orientation—the trust-destroying denominator in the trust equation. Omigosh, they’re pushing back against me—I’ve got to counter-attack.

Thought one in responding from trust—it’s not about you. In fact, it’s never about you. It’s always about the customer. What looks like a threatening price objection is actually a great opportunity to learn something important about a customer, and a chance to add value right in the sales process itself. Here’s why.

Most price “objections” are simply expressions of dismay or concern—feelings—on the part of the customer. Most fall into five categories. Helping the customer identify these feelings and these categories is a positive help in and of itself. The actual words spoken can be identical: “— that sounds kind of high to me.” But they mask very different meanings:

The categories are:

1. Naïve. Uh oh, that’s way bigger than I thought. Subtext: "I feel ashamed; I didn’t understand what was involved in buying this product/service before talking to this person."

2. Out of Date. That’s more than we can afford. Subtext: "I feel embarrassed—I invited this person in thinking we could do it in this year’s budget. Now I see that won’t work."

3. Engineer. Wait a minute, I don’t see why it should be that much. Subtext: "That doesn’t make sense—they must be quoting me the fully-loaded version, let’s reverse engineer it."

4. Comparison Shopper. Hey wait—how do I know you’re not screwing me? Subtext: "I want to get a good deal, maybe not the best, but in the top half, so I need to know the real prices."

5. Bazaar Lover. Aha, the game is on! Subtext: "I don’t care what you quote me, I’m going to get 20% off! I love this part of the buying process!"

Each of these subtexts requires a very different response. The good news is—the responses are obvious. All we have to do as the seller is to ask! Ask the buyer what’s behind their words; what kind of concern are they expressing when they say, “I don’t know, sounds a little high to me.” What are they feeling?

Our job is simply to explain that all reasons are valid, and that we simply need to know which is operative here. Simply by stating them for what they are, buyers one and two feel relieved of their shame and embarrassment. And while this transaction won’t happen, you just vastly increased the odds of them buying from you in the future.

Number three becomes a simple job of itemizing features and costs—as long as we are not attached to the margin on every little feature. An easy sale.

Number four is solved by the willingness to be transparent, within the bounds of what’s legal. Another easy sale—as long as your price is fair.

Number five just wants to have fun. So build in a little upside, and be prepared to give a little more up; and enjoy yourself along with the buyer.

This is not about “handling objections.” It is about using curiosity and customer focus to build relationships. The profits follow—as long as we remember we’re supposed to be on the same side of the table as our customer, and in a relationship that is the sum of multiple transactions.