This curated column is authored by Jacco vanderKooij, Author of Blueprints for a SaaS Sales Organization
TL;DR: There is systemic failure across B2B sales organizations to hit their growth targets. Many blame either “the Millennials” for being unable to sell or “the market taking a turn”. However such systemic failure is the result of a transformation in sales in which; more customer centric skills are needed, sales is operating at a much higher velocity, and sales is becoming a team sport.
This is especially true in rapid growth companies. This transformation is creating an opportunity for companies to differentiate over competitors. To seize the opportunity forward thinking companies need to establish a substantial program to help their teams gain knowledge on customers, product knowledge, and sales skills.
Is This Post For You?
The insights shared in this post are intended for sales professionals in the B2B market, with a recurring revenue model and a sales velocity between 30 to 90 days.
The Problem Explained
A large number of sales organizations are falling below 80% of goal. So much so that the superstars on the team are no longer able to cover the spread of the sheer amount of contributors that are missing their targets.
Quite a few companies believe this to be a structural issue and they are moving upstream to avoid it all together. You can read more about this in a previous post Going Upstream.
This is Not a Millennial Problem!
It is becoming commonplace to blame the millennials for this. A recent article titled Why Millennial Sellers Aren’t Closing identifies the issues to be “pronounced with millennials that have grown up using screens to communicate.” the author wrongly recommends to “Focus on basic closing skills with millennials and you’re helping them develop vital muscles that get sales results.”
Such rhetoric is outright dangerous. Why? It is blaming the freshman for the non-performance of the team and sends them of with a recommendation to focus on the one skills that our customers hate the most.
So if not the Millennials what is the real problem?
The Swiss Cheese Model
The Swiss Cheese Model for accident causation was developed in 1990 by James Reason and is used today to understand systemic failures in healthcare, aviation, and engineering along two approaches:
- The Person Approach focuses on the errors of individuals, blaming them for forgetfulness, inattention, and/or moral weakness
- The System Approach concentrates on the conditions under which individuals work and build defenses to avert errors or mitigate the effects
James Reason states (and I am paraphrasing):
Humans are fallible and errors are to be expected, even in the best organizations. Errors have to be seen as consequences rather than causes, having their origins not so much in the perversity of human nature as in upstream systemic factors.
Systemic Factors in B2B Sales
The picture below identifies three upstream systemic factors experienced in many B2B sales organizations:
- It starts with the lack of any formal sales training on academic or professional level
- Most companies are ill equipped to train people in-house
- Companies put people in positions where their failure has immediate impact
Over recent years B2B revenues toppled due to the switch from an Upfront/Perpetual License model to a SaaS subscription model. The Client Acquisition Cost suddenly became a big issue. That resulted in hiring lots of lower cost first/second jobbers.
This explains why hiring more experienced and experienced B2B enterprise sales reps will challenge the business model. This also explains why some companies move upstream, where deal sizes are 10x.
The difference between the skills of the more experience EnterPrise Sales Rep vs. the first/second time Account Executive is referred to as the Sales Skills Gap.
The Sales Skills Gap
The Sales Skills Gap is the gap between what customers expect/need from a sales professional vs. what they get.
The customer expectation has changed in many ways as the result of gathering information online. But what has not changed is the three specific areas a customer expects sales professionals to know down pat:
- The market — problems different customers are having
- The product — how to solve a customer’s problem
- How to sell — match the solution to the problem along a proven process
This sales skill gap is not unique to Millennials as customers themselves continue to change in the way they become aware of a problem, the way they educate themselves on a solution, and how they select the right partner to help them solve the problem.
Expecting this gap to be closed with a one-time two week on-boarding program or a two-day sales kick-off is just not realistic.
Four Issues All Sales Generations Experience
There are several key issues that are amplifying the impact:
1. Compressed B2B Buying Cycle — Today’s B2B customers need a solution to problems they are having right now. This speeds up the B2B buying cycle (not a “sales cycle”) and minimizes the ability for new sales people to learn on the job without immediate repercussions.
2. Dependency on the entire sales team to perform — A recurring subscription model has a lower price point that has made it immune to RainMakers. Success in organizations based on a lower Annual Contract Value depend on a volume generated by all performers hitting at least 80% of quota.
3. Transformation of Sales Skills — Today educated buyers no longer wish to be sold. Instead they want to deal with an expert. The proverbial poop-ski hits the fan when B-performers who lack training on a more modern buyer centric approach start missing targets. Due to the lack of training they fall back on outdated sales techniques causing frustration with customers—and the downward spiral starts.
4. Rapid Growth demands — All of the above are amplified in rapid growth companies tasked with growing sales by multiples due to the immense potential of a connected world.
Failure to hit these growth targets put companies under excessive strain. Untrained management unfamiliar with the root-cause of the problem deploy the People Approach and start to fire and re-hire. Again this causes the gap to only increase.
The solution to this problem is not revolutionary. Countless organizations in other disciplines deal with untrained talent that has to excel in a demanding environment. Think of healthcare, armed forces, athletic, and academic institutions.
Following are some of the key steps with tools to help you get started.
I. Establish a Proven Process
As said, the sales process has changed into an “assist the buyer process” so listen to your customers and follow their lead.
Tool: Link to the Winning By Design sales process to get you started
II. Create Specialized Functions
Divide the process with specialized functions and micro promotions.
Tool: The Winning By Design Mastership program
III. Pursue Excellence in Each Specialization
Train on Your Market (Customers), Your Product, and Sales Skills through distributed learning.
IV. Enable Your Experts
Establish a Communication Channel that provides your sales team the right information
Tool: Blog on Sales Enablement by Tamara Schenk
V. Measure What Works
Key in today’s world is to measure what works. This so you can stop doing what does not work. This sounds easy enough but many managers find this hard as they will just keep piling on more things. Data will create clarity as to where you need to focus.
VI. Compensation Through Education
You need to motivate the right behavior. Some of you may be thinking “Here we go again … this is where the compensation consultant says we need to pay sales more money”. No. Following nearly 20 year in sales I have to say that if sales people were truly responsive to commission plans most companies would never have a problem with hitting targets.
Where do Millennials Stand?
Having worked with thousands of Millennials over the past two years, I believe Major Lazer and Justin Bieber summarize the sentiment among Millennials in his video Cold Water perfectly. As well as what Millennials are expecting of a CEO.
The challenges companies run into during rapid growth are not the result of one particular group (Millennials) lacking one particular skill (Closing) but rather the result of a trade that is undergoing a rapid transformation.
Most organizations are ill-equipped for this transformation forcing sales professionals are forced to figure it out by themselves.
New category leaders will recognize and capitalize on this opportunity by establishing a Mastership program that makes their sales force the ultimate unique differentiator.
Each of us can only do so much, but as a group we can truly make all the difference to a brand new generation of sales professionals. So let’s do this together, please add to the story to benefit the readers via the comments section.
Disclaimer: This is a curated post. The statements, opinions and data contained in this column are solely those of the individual authors and not that of iamwire or its editor(s). The article was originally published by the author here.