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Don't Just Count, Measure

The United States faces a shortage of 140,000 to 190,000 people with deep analytical skills and 1.5 million managers and analysts to analyze data and make decisions based on their findings. — Big Data: The next frontier for innovation, competition, and productivity

Measurement can be defined as a quantitatively expressed reduction of uncertainty based on one or more observations, while counting is to determine the exact number or amount of something. Executives have become obsessed with counting; they track everything from inventory, hours worked vs. hours billed, number of Facebook fans, website visitors and much more. It is easy to like counting, because it is familiar and exact. However, it is time to move beyond counting, and start measuring. (more…)

August 3, 2011 Nate Watson News 4 comments

Contemporary Analysis: Focusing New Salespeople

New salespeople often struggle to focus on the right opportunities, and this often keeps them from meeting their quotas or closing unprofitable deals. However, new salespeople should not be faulted for their lack of focus, because generating an ever increasing number of opportunities is an essential responsibility of a salesperson. It is up to sales managers to focus their teams on the right deals. At CAN we use the following techniques to focus our inexperienced salespeople so they start closing the right deals as quickly as possible.

Focus on a Lead Product

Most companies have multiple products, and effective salespeople always lead with one product. They know that when meeting new people that they do not have time or the customer’s focus to explain each product. Without a lead product it is easy for inexperienced salespeople to come across as confused or under trained. We recommend having each new recruit select a lead product that they are most interested in or most experienced with. This will reduce training time, simplify introductions and increase confidence.

Client Profiles

Once salespeople have a lead product that they can use when meeting new prospects, the next step is to develop a profile that they can use to qualify prospective clients. For your profile to be effective it needs to reflect reality and then used to approve only deals that fit the profile. The simplest way to make sure that you client profile reflects reality is to describe your last 5 closed deals that were profitable, loyal and active.

Justify Opportunities

It is important to force salespeople to be realistic about the quality of the opportunities in their pipeline. Each sales person at CAN has to explain a prospects need, willingness and resources before an opportunity is added to the sales pipeline. Also, every 2 weeks the CAN sales team gets together to review current, lost and closed opportunities. Our discussion focuses primarily on what actions each person needs to take to make sure they meet their quota, what sources and tools people are using to find opportunities, and how opportunities are changing based on changes in season or economics. At the conclusion of each meeting, the goal is to make sure that each salesperson has a plan for the next 2 weeks that will help them make sure they meet their quota.

Align Incentives

Your incentive structure is essential to focusing your team because salespeople respond well to incentives. The best method I have found to design a sales incentive plan has been to describe my desired client experience from first encounter to close, and design my incentive structure accordingly. For example I would increase base salary if I wanted a more consultative sale instead of a commodity style sale.

Utilize Milestones

It is important to review relationships with your people, and one of the most interesting tools that I have used is to setup specific terms with milestones. Each term at CAN is 1 month, but that should vary depending on the natural metronome of your organization. The purpose of the terms is to have evaluate whether or not the relationship should continue. It is important that this be a two way process. You want to judge whether your salesperson is worth the continued investment, and also whether your salesperson could produce more value somewhere else in or outside the organization.

August 1, 2011 Nate Watson News No comments yet

Simple Science vs. Complex Science

Science is the systematic study of a phenomenon that includes observation and experimentation to explain and understand why things happen. We can use science to explain almost everything in our universe from the effects of gravity to the impact on sales of your latest marketing campaign. However, it is important to understand that there are two types of sciences, simple and complex, and that the answers they produce are different. (more…)

July 27, 2011 Nate Watson News 7 comments

Make Employee Feedback Believable

This post is part of a series of interviews with experts in business intelligence, sales management, marketing, customer retention, management and strategic planning. Everyday, the CAN team interacts clients, mentors, and friends who are leaders in their fields, and we started this series to share their expertise.
Research shows that employees who focus on improving their strengths consistently out perform employees that focus on their weaknesses (Read a Related Post). According to Gallup, employees that focus on developing their strengths are more productive and are 6 times more likely to be engaged in their jobs and 3 times as likely to report having an excellent quality of life. However, it is difficult, demanding, and often counterintuitive to think through who you are and what you do best. Studies on the reliability of performance ratings have repeatedly shown that people struggle to rate their own performance. The most accurate performance ratings come from others. Given this, it shouldn’t be assumed that we truly know our strengths or weaknesses.
One of the simplest ways to encourage employees to identify and focus on developing their strengths is by creating a feedback loop that connects an employee’s behavior with the results of their actions. According to Industrial-Organizational Psychologist Josh Kuehler, when feedback is more detailed and frequent, it creates more self awareness; a primer for performance improvement.
However, employee feedback is most commonly offered as a response to events that are negative, rather than positive, in nature. In other words, it is easy to see the performance gaps and therefore easy to offer employee feedback when performance falls short of expectations. Negative employee feedback also has a tendency to be more frequent and detailed, when compared to positive feedback. When the performance problems occur, it is easy for others to see the specific actions to fix performance problems. It is more difficult to recognize the specific actions taken that led to a successful task or project. According to Josh, this can be attributed to the fact that while employees are expected to do positive things, typical management is focused on correcting poor performance rather than praising good performance.
This type of employee feedback as a response to negative events creates a negative loop of interaction between managers and employees where the employees act to avoid punishment, instead of focusing on developing expertise in their positions. Management by exception is a poor model, yet is too common. To help balance negative and positive feedback, Josh recommends that managers make providing frequent and detailed feedback part of their management routine, rather than solely in response to negative events. Josh is currently developing software that helps managers support the expertise of their team by making detailed and frequent feedback a part of their weekly routine.
Josh recommends that managers provide frequent and detailed feedback to their employees in a way that connects how an employee’s behavior produces specific results. Instead of using feedback only for correcting negative behavior, managers should focus on developing and amplifying the excellence of their employees. This requires that the managers act as a sensor and decision system, monitoring behavior and outcomes, and providing the employee with an understanding of how their actions contribute and create outcomes on a grand scale.

July 27, 2011 Nate Watson News No comments yet

Focus on the Business Question, not the Technology

This post is part of a series of interviews with experts in business intelligence, sales management, marketing, customer retention, management and strategic planning. Everyday, the CAN team interacts clients, mentors, and friends who are leaders in their fields, and we started this series to share their expertise.
Corporate business intelligence has hit a roadblock, according to Cameron Ludwig, the Director of Analytics at BlueCross BlueShield of Nebraska. “As a discipline, we have been more enamored about what we can do, and not what we should do”. Business intelligence of tomorrow needs to put less focus on technical capabilities, and instead, emphasize designing solutions that focus on answering essential business questions. This need for a shift in focus is due to the exponential increases in data availability and the increasing reliance of executives on data in their decision making. For example, in a recent study by McKinsey there is a projected 40% growth rate in the amount of new data generated per year, with many companies having hundreds of terabytes of data (link). As a discipline, business intelligence has matured to the point where we need to move beyond collecting and displaying of data. It is time to shift to the next level.
“Now the knowledge is taking the place of capital as the driving force in organizations worldwide, it is all too easy to confuse data with knowledge and information technology with information.”- Peter Drucker, 2005
In order for BI to make the transition from what is technically possible, what we can do, toward what is valued by business, what we should do, requires a shift in focus for the emerging field of data science. Although I am hesitant to say that data scientists should study business at the exclusion of technology, this shift requires that data scientists become students of business as opposed to technology. That is, their greatest value comes from studying technology to the point of knowing what is possible and how to apply technology to meet the needs of their end users. For example when a contractor builds a house, he doesn’t study the hammer, he studies architectural plans and creates a finished product from raw materials. The same goes for data scientists; they should focus on understanding the problems that need to be solved, then spend time studying how to use raw materials (data) to create a valuable finished product.
Keeping with the need for a shift in the field of business intelligence from technology to application, the valuable finished product is not a dashboard displaying metrics, but rather actionable intelligence focused on answering the business questions of the end user. This renewed focus of business intelligence requires that BI only provides decision makers with what is essential to answer their questions. All the slick user-interfaces, gauges and dials of flashy dashboards will never provide as much value as the algorithm behind an executive report that integrates ten different historical and environmental variables to advise which projects to bid on, including anticipated profit margins.
Tremendous value exists in the proper application of data science, but the maximum value comes from a deep understanding of the needs and objectives of the end user. Ensuring that the end product fits the end user requires the right feedback, and at least as much criticism as creation. When self- and peer-reviewing their work, Cameron recommends that data scientists should be required to justify the existence of each sentence, idea, graph, and model. This requires each BI report to be designed with simplicity in mind, but also maximizes value to the end user and builds trust in BI by focusing only on that which contributes to solving the problem at hand. If an artifact, tool or feature cannot be defended, it is most likely of little value and should be eliminated. In order for business intelligence to contribute maximum value to the organization, every element of business intelligence must justify its existence.
“Capital importance of criticism in the work of creation itself. Probably, indeed, the larger part of the labour of an author (programmer) in composing his work is critical labour; the labour of sifting, combining, constructing, expunging, correcting, testing: this frightful toil is as much critical as creative”- T.S. Eliot

July 26, 2011 Nate Watson News 2 comments

Go Beyond Metrics

Often, our clients come to us believing that they already apply analytics to their business, when in fact, they are actually doing a fantastic job at applying metrics. Metrics provide measurements of variables, while analytics explain the relationships between variables. Although both metrics and analytics work together to provide you with the insights necessary to grow your business, metrics and analytics are not synonyms. To date, metrics have dominated the business intelligence field in the form of dashboards and scorecards. Dashboards display metrics as the measurement of key variables. For this reason, they are very useful for monitoring current business activities and results. While metrics are still very important, analytics goes beyond measurement to provide explanations of the deep relationships behind business metrics. Instead of reporting that something happened, analytics seeks to explain why something happened, when events can be expected to occur, and how we should act to create certain desirable outcomes.
The shift towards analytics is growing in importance because today’s executives need to be able to scale their decision-making in an increasingly complex world with little room for error. While many executives understand the value of data-driven decision making, decision-makers can become overwhelmed when faced with the volume and complexity of available data provided by metrics and dashboards. Analytics provide value to by cutting through the clutter and complexity and providing decision-makers access to the most imports variables, the relationships between variables, and even the accuracy of the analytic model. When using analytics, executives are able to avoid sorting through non-information, and instead, focus on the information which drives their best decision-making.

July 19, 2011 Nate Watson News 5 comments

Why I Blog for Customers Instead of Fans

I stopped blogging in November 2010 after almost a year of daily updates because I realized that, while people were reading my materials, my clients weren’t. I realized then that I needed to change the focus of my writing. Previously I had been writing about what I found interesting and focused on the number of people reading my blog. As a result, this actually had a negative impact on my brand because I was spending my time blogging instead of helping my clients achieve their goals. While I still think blogging is important, my focus has shifted to helping clients meet their Sales, Marketing, Retention, Management and Planning goals rather than on the number of visits per day.
My change in focus has changed how I select content for my blog, how I promote it, and what metrics I use to measure success. I now focus on blogging about conversations that I have with customers, because if one customers values a specific conversation it is likely that other customers will find the post valuable. (This post is actually the result of a conversation with a customer.) Instead of promoting my posts for mass consumption, I now recommend posts to specific people that will find them valuable and encourage them to engage in the conversation. My metric for success is no longer the number of visits to my site or read times, but instead how many people tell me that the content on my blog has helped them with their business.
In the spirit of blogging for customers instead of fans, what specifically would you like me to research and write on?

July 15, 2011 Nate Watson News No comments yet

A Simple 6 Step B2B Sales Process

The following is an introduction to the basic sales process we teach new sales reps at CAN. Our 6 step sales process guides them from selecting the right prospects, making first contact, selecting your sales approach, your first face-to-face meeting, determining next steps, and getting the deal closed. I hope that it will help you build a reliable sales strategy you can use to close more deals. (Learn how we predicted who was most likely to enroll at a Top 10 Online University)

Sales Process Step 1: Select the Right Prospects

Investing the time to carefully select your prospects is essential because you want to make sure that you are investing your time and energy on developing the right opportunities. I recommend looking for people that have the need, willingness and resources to purchase what you sell. Focusing your efforts will help ensure that you invest in providing your prospects with a great client experience. At CAN, in addition using predictive analytics for lead generation, our salespeople spend a lot of time looking through business cards and LinkedIn connections from trade shows and networking events.

Sales Process Step 2: Make First Contact

Once you have selected your targets the next step is to make first contact. Your goal at first contact is to simply get a meeting. This is especially true if you prospect is not familiar with who you are. We have found using a combination of email and LinkedIn messages work the best. One of CAN’s sales reps studied the linguistic patterns behind our most successful emails and developed the following formula to produce good results when sending requests for the first meeting to prospects:
Greeting + Lead in {positive emotion} + profit/growth hook + Who We Are + the product and results + Outcome for Client + Meeting Request with 2 possible options + Close = Meeting
The following is example of a meeting request email from one of the CAN salespeople;

Steve,
Good morning. We spoke briefly at the alumni center after your presentation on CompanyX and building a start-up within a company. Based on your experience and position at CompanyX, I think you might be interested in my company, Contemporary Analysis.

Contemporary Analysis uses mathematics and big data to predict and influence human behavior. One of our products, Pulse, applies predictive analytics to analyze the profitability, loyalty and activity of individuals in your client portfolio. This allows you to focus your marketing and customer service efforts, anticipate trends in your portfolio, and engineer greater retention and profitability by contacting the right people at the right time. I would like to explore how you could use Pulse and perhaps some of CAN’s other solutions to increase sales for the CompanyX family. Are you available to meet this week or next at our office at 1209 Harney #200, online via Skype or over the phone? I am available on Monday after noon and Tuesday at 10am and 1:30pm.

Thank you,

Jefferson

As a tip, I recommend scheduling your meeting request emails to be sent at 7:00 am on a Monday or Tuesday. This is optimal because most people check their emails when they first get into the office, and on a Monday or Tuesday their schedules are the most open to explore new opportunities. Also, it makes people feel like they were your first priority of the day. If someone does not respond to your email, I recommend connecting with them using LinkedIn or another social network.

Sales Process Step 3: Select your Sales Approach

Once your prospect has agreed to meet with you it is important to prepare for your face-to-face meeting. One of the most important steps in preparing is to select your sales approach. Different people require different approaches, and while it take a little bit of research selecting the right approach will help you make the best first impression possible. The following are 5 typical sales approaches. The key to success is imitation of the person. You don’t want to mock the person, but you want the person to be able to see a little bit of himself or herself in you. If you can successfully do this, the people that you talk to will be more trusting and will connect with you quicker.
1. The Ego: This person wants to feel important, and they will most likely respond to you and possibly purchase your product to satisfy an egotistical need.
2. The Expert: The person considers themselves to be an expert in their field, and will expect you to have a minimum knowledge of their field, or to be an expert if you are approaching them about something in their field.
3. The Good Samaritan: These people are very open to being contacted, but they don’t want to be sold. They want to help out and listen to someone.
4. The Skeptic: With skeptical people you want to lead with facts and figures. They won’t agree to a meeting with you unless you have Case Studies, Testimonials, and or an impressive client list.
5. The Explorer: These people are very open to being contacted, because they love learning about new things. When you approach them about an opportunity, it has to be unique and also be exciting. If it is these to things you will most likely get a meeting.

Sales Process Step 4: The Face-to-Face Meeting

Typically in business-to-business sales your prospects are only able to meet with you once or twice before they decide whether or not they are going to purchase. Because of this, it is essential to make the most of your face-to-face and then move the sale forward using emails and voicemail.
During the first meeting you want to make sure you understand what your prospect the person wants to achieve, what their budget is, and who the key decision makers are. Your goal is to ask as many questions as possible, because this establishes rapport with the prospects and it becomes harder to get answers to the tough questions once you are on longer face-to-face or over the phone.

When learning about your prospects goals make sure to remember that people buy things and companies pay for them. So you don’t want to focus just on the company’s goals, but also the aspirations your prospect has and what pressures they are under. While your solution still needs to produce results for your client the company, helping your client the person will help you win the contract and future contracts.

Sales Process Step 5: Determine Next Steps

During your face-to-face meeting you want to move the call as far as possible towards a decision as possible. However, it is highly unlikely that you will be able to get a decision either for a sale or no sale during your first meeting. The following are definitions that the CAN sales team uses to evaluate the outcome of every client interaction, and this helps us determine where opportunities are in the sales cycle. Having clear definitions of where opportunities are in the sales cycle allows our sales team to determine what next steps to take and which opportunities to prioritize to make sure we meet our sales quotas for the next 15, 30 and 60 days.
Advances (Successful): An advance is when an event takes place either during the call or after the call that moves the sale toward a decision. The events need to represent an agreement with the customer that moves the sale forward toward the ultimate decision. Advancements take many forms, but invariably they involve an action that moves the sale forward. Typical advances might include:

A customer’s agreement to attend an off-site demonstration.
A clearance that will get you in front of a higher level decision maker.
An agreement to run a trial or test of your product.
Access to parts of the account that were previously inaccessible to you.

Continuations (Unsuccessful): Where the sale will continue but where no specific action has been agreed upon by the customer to move it forward. Continuations are often a way to politely get rid of a seller. These calls do not result in an agreed action, yet neither do they involve a “No” from the customer. Typical examples would be calls that end with a customer saying:

“Thank you for coming. Why don’t you visit us again the next time you’re in the area.”
“Fantastic presentation, we’re very impressed. Let’s meet again some time.”
“We liked what we saw and we’ll be in touch if we need to take things further.”

Orders (Successful): This is when the lead closes the deal by signing a contract or paying. This is not a “I am 99.9% likely to close,” event. Orders have to be contractual or monetary.
No-Sale (Unsuccessful): This is when a customer actively refuses your principal call objective. Good examples of this are when a client tells you that they aren’t interested, won’t agree to a future meeting or denies your request to see a more senior person in the account.
Your goal is to choose next steps that continue to move the sale forward until you either receive an order or a no sale.

Sales Process Step 6: When and How to Close the Deal

Once you have led your prospect to the realization that they have the need, willingness and resources to purchase what you sell, the simplest close is to simply ask for the business and then wait until your prospect breaks the silence. Even if it takes 10 minutes, they will eventually break the silence, and if they are confident that you have the solution necessary to achieve their goals they will most likely respond by agreeing to purchase what you sell.

Learn more about the right sales leads for your business:

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July 8, 2011 Nate Watson Featured Posts, News 54 comments

Presenting Business Intelligence

At CAN we spend a lot of time developing better ways to present and communicate our ideas, because our systems only produce results if people understand how to use our insights. Presenting business intelligence is based on the business question, the audience and what is important. The following is an explanation of how we decide how to present:

Select a Business Question

We start every project by defining the business question to be answered. We do not worry about what techniques or methodology we are going to use to answer the questions. Instead, we determine what is the most important question to be edited. We only start a project once our client is able to answer “What question, if answered, would have the largest impact on your business in the next 6 months?”. (Related Post on ROI)

Select an Audience

Who you are presenting to determines what information you present and in what order. There are three presentation styles, but they depend on who you are talking to. The graphic above outlines each presentation.
When presenting to generalists you want to start with the conclusion and then explain how you reached that conclusions. By starting with the conclusion, you provide generalists, who are typically decision makers, a filter to understand and develop questions during the rest of your presentation.
When presenting to experts, you want to start your presentation by providing background information, and then explain step by step how you reached your final conclusion. This is useful because the experts want to know that you know what you are talking about, and presenting background information before you reach conclusions will help you establish trust with the experts.

Justify Each Element

The best presentations start on time, end early and leave plenty of time for questions. The key to success is to curate your presentation by justifying the existence of each sentence, graph and data table. If you can not provide a good explanation for something you included in your presentation, you must take it out.

Focus on Results

After a successful presentation, your audience will know exactly what the next step is; who they need to call, what they need to buy and what they need to do. If there is no clear action they must take after hearing your presentation, then your research and presentation have been wasted.
Learn how you can use business intelligence to make data-driven decisions.

June 30, 2011 Nate Watson News 3 comments

Why and How to Develop a Reliable Sales Team

Every company has to have sales. Most companies have a sales team, however very few companies have a true sales system. Unfortunately without a sales systems companies are not able to sustain themselves during downturns or pursue aggressive growth trajectories. The reason that most companies don’t have a sales system is because there are significant barriers to entry in time, money and talent.

The Ammo: While there are sales people that can close deals with their bare hands, they are rare, expensive and often temperamental. The first step in building a system is to develop the necessary marketing strategies and materials. Marketing is the ammunition of sales. The important pieces in your arsenal are having a defined product, price, placement and promotion. Once you have the basics down, I recommend developing your most important piece of collateral, your business card. Once you have built your marketing arsenal, the next step is to develop your sales strategy.
The Strategy: The key to developing a sales strategy is to make sure you understand the factors that determine the capacity of your sales pipeline and how much cash flowing through it at any specific point in time. For example do people purchase your product on a daily, weekly, monthly or quarterly cycle. To keep your sales strategy grounded you need to develop and test a variety of hypotheses. If you want help developing your sales strategy check out how we can help your sales team.
The Tools: A Customer Relationship Management System is the most important tool to building a sales system, because in addition to allowing your sales team to track their prospects, deals, tasks and cases, the data from your CRM can be used to influence your operations, customer service and marketing efforts. For more information read Why and How to Use a CRM. At CAN we use 37Signal’s Highrise.
In addition to the Highrise CRM we also use the following tools as apart of our sales systems:

Easy Virtual Meetings: When you request a meeting with a client you want to make joining the meeting as quick and simple as possible. At CAN we use Glance.net for virtual meetings, because the software is ridiculously simple and requires virtually no resources from our clients or their computers.
Contract Management: At CAN we use EchoSign to make it easy to send contracts, our clients to sign them, and to store them. Even if you don’t process hundreds of contracts a month, EchoSign can be an essential tool, because it eliminates any hassles/excuses keeping your clients from signing your contract right now. At the end of the day a prospect only becomes a client when they sign on the line that is dotted.
Coordinating: In order to know what to promise and ensure that their promises can be fulfilled Salespeople need to be able to coordinate with Operations, Customer Service and Marketing. At CAN we use Skype to handle informal meetings and communication between salespeople and other departments.
Standardize Customization: Customers like and often require customized marketing materials, communications and contracts, however it is not economical to create everything from scratch. At CAN we use Backpack to keep clean copies of all of our standard marketing, emails, and contracts, that salespeople can download and customize for each client.
The Moneyboard: At CAN we use Geckoboard to keep the important numbers in front of our sales team at all times, letting them know how much money we need to bring in in the next 15, 30 and 60 days, what money we need to collect and what opportunities are about to close.

The Incentives: The first step when building your sales team is to develop and fine tune your sales structure and incentives. Most people become salespeople because they are hunters and respond well to direct incentives. It is important to strike the right balance between salary and commissions. In addition to having your salepeople be invested in your success, it is important to have them know that you are invested in their success. You want to provide your sales people with enough of a base that they aren’t distracted or pressured to close unqualified prospects. However, you also want your salespeople to be incentivized to close deals and be invested in the future of your organization. A basic rule of thumb is to set someone’s base salary just below their cost of living, and set their commission rate so that if they sell an average number of contracts they will receive an average total compensation when compared to other professional positions.
The Team: Some of the best sales management advice I have ever received was to make your first sales hire a sales manager. However, hiring a sales manager is no easy task. If you hire someone who is a good fit for your organization they will hire, train, and lead your sales team to victory. However, if you hire the wrong person for your organization, industry or product, they will quickly dry up your coffers and leave you for dead. They key is to carefully understand the drivers of success in your industry, carefully craft your job description and screening process, and actively avoid hiring a false positive.
Sales Managers are not necessarily the best sales people, but instead are people that are able to consistently execute a specific sales system to produce reliable results, and have the willingness and ability to train others on their sales methodology. Other than that what you look for in a sales manager should be unique to your company, product and industry
The Targets: Once you have everything built it is time to aim your sales sales system at your ideal client. Narrowing your sales on a specific target can be challenging, however without a clear target or directive it is nearly impossible for your sales people to achieve their goals. Also, setting a specific target will also help your sales team avoid wasting time on unprofitable, unloyal or inactive prospects that are not likely to purchase. For companies with thousands or millions of customers a mathematical system is essential to segmenting clients and determining the drivers of profitability, loyalty and purchasing activity. For companies with hundreds of customers one of the easiest, quickest and cheapest way to build a sales target is to have your sales people describe their 5 most recent closed sales, and look for patterns in demographics and psychographics.

June 29, 2011 Nate Watson News No comments yet

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