HBR: What Makes Great Salespeople

Below is a blog post from Harvard Business Review. Do you have the right customer engagement?

What Makes Great Salespeople

What behaviors drive successful salespeople? Last year, research by my people analytics company VoloMetrix identified three things that were highly correlated with top performing reps: More time spent with customers; larger internal networks; and more time spent with managers and senior leadership. These three behaviors persisted regardless of region, territory, or sales role, suggesting that they are foundational ingredients for success.

We came to these conclusions after studying the sales force of a large B2B software company using six quarters of quota attainment data for several thousand employees. We then correlated it against 18 months of VoloMetrix-created people analytics KPIs. Since then, we have had the opportunity to work with several more companies to perform similar and much deeper analyses.

Building off of the earlier findings, we have developed a broader framework for each of the behaviors we idenftified (two of which we combined), plus an additional one:

  1. Customer engagement.This not not only includes overall time spent with customers, but also factors in the number of accounts touched; time spent with each; frequency of interactions; and breadth and depth of relationships built within them.
  2. Internal networks.We’ve found that it’s useful to break internal network characteristics into three sub-categories:
    • General: This includes overall number of relationships within the company; time spent interacting with other colleagues; and influence within the network.
    • Support resources: A set of metrics focused on the relationships reps built with sales support staff, including pre-sales specialists, inside sales reps, and others.
    • Management: A set of metrics concentrated on relationships between reps and their direct managers, as well as broader rep engagement with company leadership.
  3. Energy:This new angle, which is very much related to the previous two, includes a collection of metrics that measure overall time and effort exerted by salespeople.

In total, our new analysis suggests that sales success requires the right engagement model with customers, the right relationships within your own company, and putting in the needed time and energy. These insights may seem intuitive — and in many ways they are — but, according to the data, the details matter. Here’s how our findings play out:

Customer engagement doesn’t just mean spending time with more customers. We’ve stated before that top performers spend up to 33% more time with customers per week which, depending on the company, is typically 2-4 additional hours of time.  It’s clear that time with customers matters. However, through further analysis we’ve found that degree of focus can matter as much or more than total time. For example, in one large B2B technology company, top performers spent 18% more time with customers per week. Yet they interacted with 40% fewer accounts over the course of a quarter allowing them to spend more time with each of those accounts relative to lower performers.

In other words, depth trumps breadth when it comes to accounts — top sellers focused on building deeper relationships with fewer customers rather than casting a wider net of shallower engagement.

Of course, these metrics are not one size-fits-all and the right balance varies by company based on what they are selling (e.g., highly consultative sales processes benefit most from depth whereas more transactional models can benefit from breadth). Regardless, these key metrics relating to time spent with customers and account relationships have emerged both as strong predictors of sales outcomes as well as highly actionable metrics for sales leaders to track, incorporate into territory design and use to help their teams improve performance.

A bigger internal network is generally better, with some nuances in sales support. No matter how we cut the data, top performers have significantly larger networks within their company (30-40% larger, which typically equates to 10-20 more people they interact with regularly), higher centrality (a measure of influence within the network), and spend more time with leadership. When you think about the level of complexity in a large organization, it makes sense that people who find ways to build more relationships get exposed to more ideas from across the business, are able to access expertise quickly when needed, and have more context about what’s happening. All of these things help them to be successful.

But building relationships doesn’t mean attending lots of meetings, especially those with 20 or so attendees. When we measure relationships, it involves both a frequency and an intimacy component. To qualify as a “relationship,” you have to not only interact with someone frequently (at least 2x per month), but that it also has to be in a relatively intimate group (five or fewer people involved in the meeting or email). So to establish a large network, you have to interact with many people, on separate threads, frequently.

This takes a lot of time. The top performers we study typically spend anywhere from 10-15 hours per week interacting with small groups inside their companies. Often sales executives balk at the idea of their reps spending so much time internally instead of out selling, but the data suggests that it is time well spent.

When we work with companies, we help them find ways to minimize large standing meetings and instead create ways to enable broader networks consisting of smaller groups of people. The unfortunate truth is that top performers in most companies are finding ways to build these bigger networks in spite of the processes they work within rather than because of them.

Management relationships are another important aspect of internal networking. Generally speaking, more exposure to senior leadership correlates with successful sales outcomes. That said, we have found a lot of variation in the specific interaction patterns between sellers and front-line managers across regions, product lines, and companies. For example, in some companies we have seen an inverse correlation between front-line manager involvement and seller success, meaning that top sellers spend less time with their direct manager than lower performers do. However, even in these situations, the top sellers spend relatively more time with other members of senior leadership.

Lastly, in complex sales organizations, the relationships between sellers and sales support staff is an area where more relationships is not necessarily better. In fact, in some cases sellers who have more relationships with sales support workers perform worse. This is sometimes the result of inconsistent pairings in which, for example, sellers aren’t able to work with the same pre-sales specialist consistently and instead have to work with a different one each time. This can lead to more relationships, but a weaker team. We’ve also seen that there is a stronger relationship between the time spent with support relationships and the complexity and number of products being sold than there is to actual outcomes. In other words, sellers who are trying to sell a broader portfolio or simply have more complex offerings are more heavily dependent on support resources, regardless of their effectiveness.

Sales is hard work (but you probably knew that already). Consistently, we’ve found that top performers simply put in more time. Their weeks are approximately four hours longer, with up to 40% more time spent outside of normal working hours compared to their lower-performing counterparts. But the answer isn’t saying that everyone should just work harder; even low performers work an average of 50 hours per week.

The implication, instead, is that every hour is precious. So echoing some of the findings above, here are some changes that could be made at the company level:

  • If salespeople have 15 hours available to spend with customers in a week, focusing that time on five accounts at three hours each rather than 15 accounts at one hour each is likely to lead to better outcomes
  • To facilitate the growth of internal networks, start with onboarding programs. New hires should meet and interact with a large and diverse set of colleagues, and can be supported through collaboration tools, trainings, coaching, and other mechanisms.
  • Create a model where sellers have access to consistent support resources and staff. Having to start over with a different specialist in each account adds lots of overhead and reduces outcomes.
  • Know that every additional product line in a seller’s bag comes at the cost of requiring them to build more expertise and more internal relationships to have a shot at being successful. While offering a broad portfolio can provide a powerful value prop to customers in some situations, the implication on sellers needs to be carefully thought through.
  • The right approach varies by company, and these things can and do change over time; companies that gather objective data on a regular basis to inform decision making have a massive competitive advantage over those that rely only on anecdotes and gut feel. Organizations we work with, for example, receive automated weekly updates on all of these metrics aggregated by team without any manual data gathering.

Lastly, a note on causality. All of the above metrics are highly correlated with sales success, but we haven’t yet accumulated enough data to have confidence on which of these metrics are truly causal. So while it is true that top sellers spend more time with customers, it is not necessarily true that an underperformer would suddenly become more successful simply by spending more time with customers.

That said, rigorously proven causality is not a prerequisite for learning from these insights. Quite a few companies are enjoying immense value in the predictive power of these metrics, which typically account for up to 70% of the variance in sales outcomes quarter by quarter And having access to objective, up-to-date data on what behaviors works and don’t work within a specific sales organization is a powerful compliment to existing management tools and allows leaders to set their teams up for success.

HBR – What Makes Great Salespeople

Below is a blog post from Harvard Business Review. Are you focusing on building deeper relationships with fewer customers or casting a wider net of shallower engagements?

What Makes Great Salespeople

What behaviors drive successful salespeople? Last year, research by my people analytics company VoloMetrix identified three things that were highly correlated with top performing reps: More time spent with customers; larger internal networks; and more time spent with managers and senior leadership. These three behaviors persisted regardless of region, territory, or sales role, suggesting that they are foundational ingredients for success.

We came to these conclusions after studying the sales force of a large B2B software company using six quarters of quota attainment data for several thousand employees. We then correlated it against 18 months of VoloMetrix-created people analytics KPIs. Since then, we have had the opportunity to work with several more companies to perform similar and much deeper analyses.

Building off of the earlier findings, we have developed a broader framework for each of the behaviors we idenftified (two of which we combined), plus an additional one:

  1. Customer engagement.This not not only includes overall time spent with customers, but also factors in the number of accounts touched; time spent with each; frequency of interactions; and breadth and depth of relationships built within them.
  2. Internal networks.We’ve found that it’s useful to break internal network characteristics into three sub-categories:
    • General: This includes overall number of relationships within the company; time spent interacting with other colleagues; and influence within the network.
    • Support resources: A set of metrics focused on the relationships reps built with sales support staff, including pre-sales specialists, inside sales reps, and others.
    • Management: A set of metrics concentrated on relationships between reps and their direct managers, as well as broader rep engagement with company leadership.
  3. Energy:This new angle, which is very much related to the previous two, includes a collection of metrics that measure overall time and effort exerted by salespeople.

In total, our new analysis suggests that sales success requires the right engagement model with customers, the right relationships within your own company, and putting in the needed time and energy. These insights may seem intuitive — and in many ways they are — but, according to the data, the details matter. Here’s how our findings play out:

Customer engagement doesn’t just mean spending time with more customers. We’ve stated before that top performers spend up to 33% more time with customers per week which, depending on the company, is typically 2-4 additional hours of time.  It’s clear that time with customers matters. However, through further analysis we’ve found that degree of focus can matter as much or more than total time. For example, in one large B2B technology company, top performers spent 18% more time with customers per week. Yet they interacted with 40% fewer accounts over the course of a quarter allowing them to spend more time with each of those accounts relative to lower performers.

In other words, depth trumps breadth when it comes to accounts — top sellers focused on building deeper relationships with fewer customers rather than casting a wider net of shallower engagement.

Of course, these metrics are not one size-fits-all and the right balance varies by company based on what they are selling (e.g., highly consultative sales processes benefit most from depth whereas more transactional models can benefit from breadth). Regardless, these key metrics relating to time spent with customers and account relationships have emerged both as strong predictors of sales outcomes as well as highly actionable metrics for sales leaders to track, incorporate into territory design and use to help their teams improve performance.

A bigger internal network is generally better, with some nuances in sales support. No matter how we cut the data, top performers have significantly larger networks within their company (30-40% larger, which typically equates to 10-20 more people they interact with regularly), higher centrality (a measure of influence within the network), and spend more time with leadership. When you think about the level of complexity in a large organization, it makes sense that people who find ways to build more relationships get exposed to more ideas from across the business, are able to access expertise quickly when needed, and have more context about what’s happening. All of these things help them to be successful.

But building relationships doesn’t mean attending lots of meetings, especially those with 20 or so attendees. When we measure relationships, it involves both a frequency and an intimacy component. To qualify as a “relationship,” you have to not only interact with someone frequently (at least 2x per month), but that it also has to be in a relatively intimate group (five or fewer people involved in the meeting or email). So to establish a large network, you have to interact with many people, on separate threads, frequently.

This takes a lot of time. The top performers we study typically spend anywhere from 10-15 hours per week interacting with small groups inside their companies. Often sales executives balk at the idea of their reps spending so much time internally instead of out selling, but the data suggests that it is time well spent.

When we work with companies, we help them find ways to minimize large standing meetings and instead create ways to enable broader networks consisting of smaller groups of people. The unfortunate truth is that top performers in most companies are finding ways to build these bigger networks in spite of the processes they work within rather than because of them.

Management relationships are another important aspect of internal networking. Generally speaking, more exposure to senior leadership correlates with successful sales outcomes. That said, we have found a lot of variation in the specific interaction patterns between sellers and front-line managers across regions, product lines, and companies. For example, in some companies we have seen an inverse correlation between front-line manager involvement and seller success, meaning that top sellers spend less time with their direct manager than lower performers do. However, even in these situations, the top sellers spend relatively more time with other members of senior leadership.

Lastly, in complex sales organizations, the relationships between sellers and sales support staff is an area where more relationships is not necessarily better. In fact, in some cases sellers who have more relationships with sales support workers perform worse. This is sometimes the result of inconsistent pairings in which, for example, sellers aren’t able to work with the same pre-sales specialist consistently and instead have to work with a different one each time. This can lead to more relationships, but a weaker team. We’ve also seen that there is a stronger relationship between the time spent with support relationships and the complexity and number of products being sold than there is to actual outcomes. In other words, sellers who are trying to sell a broader portfolio or simply have more complex offerings are more heavily dependent on support resources, regardless of their effectiveness.

Sales is hard work (but you probably knew that already). Consistently, we’ve found that top performers simply put in more time. Their weeks are approximately four hours longer, with up to 40% more time spent outside of normal working hours compared to their lower-performing counterparts. But the answer isn’t saying that everyone should just work harder; even low performers work an average of 50 hours per week.

The implication, instead, is that every hour is precious. So echoing some of the findings above, here are some changes that could be made at the company level:

  • If salespeople have 15 hours available to spend with customers in a week, focusing that time on five accounts at three hours each rather than 15 accounts at one hour each is likely to lead to better outcomes
  • To facilitate the growth of internal networks, start with onboarding programs. New hires should meet and interact with a large and diverse set of colleagues, and can be supported through collaboration tools, trainings, coaching, and other mechanisms.
  • Create a model where sellers have access to consistent support resources and staff. Having to start over with a different specialist in each account adds lots of overhead and reduces outcomes.
  • Know that every additional product line in a seller’s bag comes at the cost of requiring them to build more expertise and more internal relationships to have a shot at being successful. While offering a broad portfolio can provide a powerful value prop to customers in some situations, the implication on sellers needs to be carefully thought through.
  • The right approach varies by company, and these things can and do change over time; companies that gather objective data on a regular basis to inform decision making have a massive competitive advantage over those that rely only on anecdotes and gut feel. Organizations we work with, for example, receive automated weekly updates on all of these metrics aggregated by team without any manual data gathering.

Lastly, a note on causality. All of the above metrics are highly correlated with sales success, but we haven’t yet accumulated enough data to have confidence on which of these metrics are truly causal. So while it is true that top sellers spend more time with customers, it is not necessarily true that an underperformer would suddenly become more successful simply by spending more time with customers.

That said, rigorously proven causality is not a prerequisite for learning from these insights. Quite a few companies are enjoying immense value in the predictive power of these metrics, which typically account for up to 70% of the variance in sales outcomes quarter by quarter And having access to objective, up-to-date data on what behaviors works and don’t work within a specific sales organization is a powerful compliment to existing management tools and allows leaders to set their teams up for success.

IOP: Understanding your customers, or failing to

Below is a blog post from Innovate On Purpose. You’re most important strategic decision and you “failed” at helping customers understand the change or understanding if and when the decision was necessary?
Understanding your customers, or failing to      

What constantly surprises me is how little large companies invest in understanding their customers, and how often large companies are shocked to discover that their customers are unhappy or angry about new products or new shifts in strategy.  I write today about JC Penney, once an icon and anchor for many shopping malls, and now a retailer adrift in the “in betweens”.

JC Penney is struggling.  Like Sears, another broad range retailer, Penney has seen its market share erode, due to a wide range of factors.  Some of those factors include shopping patterns (fewer people going to malls), shifts in fashion and foot traffic, the length and depth of the recession, online versus retail shopping, and many more.  Sears and Penney’s, along with some other venerated retailers who in many ways founded the way Americans shop, seem increasingly out of touch and irrelevant.

What is most telling is that Penneys has, or should have, a wealth of data about their loyal customers, but they’ve managed to anger them by eliminating coupons and promotions.  The new CEO’s strategy is to shift to everyday low prices, but that has confused and angered the existing Penney’s shopper.  Here’s how Forbes puts it:  Johnson admitted he misjudged how customers would react to the change. “We failed at that,” he says.  What?  Your most important strategic decision and you “failed” at helping customers understand the change, or understanding if and when the decision was necessary?

Penney’s management either decided that existing customers weren’t valuable, or decided that they wanted new customers who weren’t shopping at Penneys.  The problem with their strategy is that they shut off the spigit of current cash flow from existing customers, who are confused by the lack of promotions and coupons, but haven’t ramped up a new segment of customers who want everyday low prices.  Or, do these second customers exist?  It’s not clear that Penney’s understand their existing customers needs and wants, or what their potential customers needs and wants are.

This scenario is what blocks innovation in many organizations.  Management is terrified that a new innovation will kill the golden goose of current earnings, without attracting enough new business to create new earning streams.  The worst possible outcome is to confuse or distract existing customers and simultaneously fail to win significant numbers of profitable new customers.

I wasn’t present at the conception of the one low price strategy at Penney’s, but I have to believe it was driven from the top down, and the inside out.  New products, services and business models are successful when they meet real needs, whether those needs are clearly identified or still unarticulated.  I think the Penney’s executive team believes people want one low price, but it’s clear that they failed to investigate what their existing customers want and need, and whether they believed that the promotions were more work than otherwise.  Also, its not clear that Penney’s has identified prospective customers and their wants and needs.  So existing customers are angry and confused, and potential customers are uncertain what Penney’s offer.  A Twofer!

There’s a lesson here for innovators.  You may love your idea.  You may think it offers better value, better benefits for your customers than what exists.  Your opinion does not matter.  You need to solve a need that customers have, a need that is relevant and valuable to them.  And, you need to understand how wedded they are to current solutions, benefits and characteristics.  Change is difficult and inertia is strong.  Yes, Jobs argued that customers didn’t know what they wanted, but he often gave them things that didn’t exist.  When comparable alternatives exist, and customers have longevity with usage, understanding their needs, the relevancy and urgency of their needs matters.  It’s inexcusable that Penney’s doesn’t understand that and “failed” to do so.  The same is true with any innovator who assumes his or her solution meets the needs or offers important value to customers.

Get out of your office.  Meet your potential customers.  Find out how valuable the existing solution is, what’s wrong with it and how valuable new solutions would be.  As Woody Allen once said, 80% of success is just showing up.  In innovation, much of success is in finding a valuable and important need and filling it.  Just show up where your customers are, listen with an open mind. Don’t impose a solution.

Forrester: B2B Customer Experience Is Grounded In Collaborative Relationships

TJ Keitt wrote a blog post on Forrester. Do you have a strong customer base to effectively collaborate with your customers?

B2B Customer Experience Is Grounded In Collaborative Relationships

Posted by TJ Keitt on April 10, 2015

On a recent podcast with my colleagues Deanna Laufer and Sam Stern, I was asked about the difference between business-to-consumer () and business-to-business () customer experience (). My answer is what I believe is the problem that vexes professionals trying to establish programs in firms: In a given account there isn’t one “customer”; there are many stakeholders whose interactions with the firm must help them be successful in their work. This puts stress on the organization — how do you coordinate these many experiences to ensure each of these stakeholders gets the value they seek from the firm?

In my report Customer Collaboration Powers Customer Experience, I propose the path to solving this problem starts with professionals embracing the concept of customer collaboration. We define this as the reciprocal exchange of valuable insights and information between a vendor and its client stakeholders. Done correctly, this is a continuous set of interactions that happens throughout the account’s life, as the picture below illustrates.

Forrester B2B

Now some of you may be saying to yourselves that your business is purely transactional and your clients aren’t seeking this type of relationship. I would argue that those transactions won’t be satisfactory for your clients if you don’t develop relationships that help you tune them. For example, CDW revamped its customer feedback surveys, ensuring that more clients had the opportunity to give their perspective on their interactions with the value-added reseller. In so doing, they were able to gather leads for potential upsells or cross-sales. Others of you may argue that your customer bases are too large or too disintermediated by partners to do this consistently. Here I would argue that this is where a strong CX ecosystem can help you effectively collaborate with your customers.

In the report, we state that there are two ways to effect collaborative relationships:

  1. Facilitate collaboration between customers and partners.
  2. Participate in a collaborative network with partners and customers.

In the former condition, B2B CX organizations create environments that allow for customers to help each other or for partners to provide those valuable insights. For example, Rackspace Support Network — an online community the company operates — provides a venue for over 5,000 enterprise technologists to discuss amongst themselves issues with Rackspace’s technology, as well as helping each other find solutions. The result? A 50% reduction in over-the-phone support calls, as well as substantial reductions in trouble-ticket submissions and online chat sessions.

In the latter scenario, B2B CX organizations carefully select high-value customers and partners to work with directly. For example, file synchronization and sharing service provider Box’s customer success organization rolls out new features and functions to those accounts that have agreed to help the cloud services provider test, iterate on and verify the efficacy of these new capabilities.

In either case, a company will only be successful if they’ve built a network of partners and customers who trust the company enough and feel there is enough value for them to share insights with the company or each other. The question now, though, is how B2B CX pros help their organizations decide when to simply facilitate collaboration and when to participate in the collaborative network. And this leads to the next logical area of investigation in our B2B CX research: Who is the “customer” B2B CX organizations must focus on?

B2B CX organizations must understand which stakeholders in their accounts carry the most influence over the ultimate disposition of the account (i.e. whether the client renews at a higher, similar or lower level) and at which stage of the account’s lifecycle they play the biggest role. Our work here will help CX pros understand how to:

  1. Identify the consequential parts of the account lifecycle
  2. Find the key influencers (visible and hidden) at each point in that lifecycle
  3. Build a CX organization to address the needs of these key people
  4. Work with the CX ecosystem to care for the rest of the stakeholders

If you would like to participate in this next iteration of this research, feel free to reach out to me. And if you have thoughts you’d like to share about customer collaboration, please share them in the comments section below.

Sixth Anniversary

This year has been a wonderful year for my blogs. Below are my top ten views for the year.

  1. Using Customer Journey Maps to Improve Customer Experience
  2. Thank you for your business – we really appreciate it
  3. Very Funny Team Building Cartoon
  4. Cool GTD tip for tracking Waiting For items in Outlook
  5. The Great Depression Part 34. Tracking housing values from 1940 to 2011
  6. Using Evernote as a Customer Relationship Management(CRM) Tool
  7. Checklist Manifesto
  8. How to Deal with Rude People – 5 Lessons for Leaders and Others
  9. Do I Have an Opportunity to Do What I Do Best Every Day?
  10. TMN: 10 Wrong Ways Your Company Is Measuring Productivity

Thank you for your support over the past year.

Fifth Anniversary

This year has been challenging for my blogs. I had over 9,000 new visitors. Below are my top posts for the year.

  1. Thank you for your business – we really appreciate it
  2. North American lumber prices forecast to soar in 2013 and reach record highs in 2014
  3. The Great Depression Part 34. Tracking housing values from 1940 to 2011
  4. Using Evernote as a Customer Relationship Management(CRM) Tool
  5. Very Funny Team Building Cartoon
  6. Using Customer Journey Maps to Improve Customer Experience
  7. Checklist Manifesto
  8. Mind Manager
  9. The Power of Habit
  10. How to Deal with Rude People – 5 Lessons for Leaders and Others

Thank you for your support over the past year.