Can Sales Statistics be Bad and Good at the Same Time?

Posted by Dave Kurlan on Tue, Feb 20, 2018 @ 22:02 PM

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I received two pieces of bad news relative to statistics.  

The first is about my award-winning Blog.  It seems that readers stay with an article for an average of only one-minute or so.  That means that most readers don't finish the article, fail to get to my summary, and often don't read long enough to get my point.  Basically, everything that comes after the fourth paragraph is not being read.  This could also be good news.  It could mean that I can actually write shorter articles and that would be great for me!

The other piece of bad news relates to my award-winning sales training company, Kurlan & Associates.  I reviewed 5 years worth of statistics on opportunities that weren't closed and it seems that prospects were 6 times more likely to do nothing than to do business with a competitor.  We don't lose very often and I can count on two hands the number of opportunities I have personally lost in the past 5 years.  But it's one thing to rarely lose, and another to learn that 6 times more often than not, a company failed to act.   But these statistics are very misleading. Let me explain why.

Our business is not one where companies always purchase from somebody and it's only a question of from whom (think network copier).  It isn't a given that companies will follow through on training, coaching, sales process, recruiting, evaluating, assessing, sales enablement, consulting, etc.  A few don't have the appetite to spend the money (too late for them).  Some don't believe they really need the help (ego).  Most aren't willing to do the work (change) to achieve results.  

Still reading?  Oh, you're the one who stays past one minute and the fourth paragraph!

These two crappy statistics are connected in that both are related to attention and engagement. 

The one-minute stat is an average.  Some people stay on an article for 5 minutes to thoroughly digest an article while others exit after reading the title or seeing that I am the author.  They must hate me.  It means that there is enough readership so that the average time on page doesn't even matter.  It's a meaningless statistic that might cause some people to find a solution and improve the number.  Not me.  The average is the average and I don't care about averages.  I write for the people who read my articles, not for those who don't.

The same is true for those who in the end, don't buy from anyone.  It means that we are filling the pipeline and the natural attrition in our pipeline is as it should be.  It says that we are qualifying effectively but even that requires some digging to be certain.  Do these opportunities pass through all four stages of the sales process, including a proposal, before the prospects decide to live with the status quo?  Or, are we recognizing their lack of commitment earlier in the sales process and disqualifying the opportunity at that point?  Fortunately, it's the latter.  We usually move on from them before they have a chance to move on from us.  The more meaningful statistic is that we rarely lose!

Are you paying attention to stats like these?  Are they telling you a story about sales effectiveness or lack thereof?  Are the stats suggesting that you need to do things differently?  Do the stats suggest that you stay with an opportunity too long? 

We use a scorecard just like the ones we customize for our clients.  The scorecard keeps us on the straight and narrow and prevents us from chasing opportunities that score below 65 points.  It helps us disqualify very early in the sales process.  Do you have a scorecard that is predictive like ours?

The reality is that there are no bad statistics.  There are statistics that tell a story and those that don't.  There are statistics you can learn from and those you can't.  There are statistics that are forward looking and those that are lagging and that means that there are statistics that are predictive of something and those that aren't.  

When was the last time you looked at some of your statistics to determine what story is being told and the changes you need to make?

Image Copyright iStock Photos

Topics: scorecard, Dave Kurlan, sales metrics, sales process, sales pipeline

The Simple Tool that Simplifies Account, Time and Territory Management

Posted by Dave Kurlan on Thu, Jan 12, 2017 @ 08:01 AM

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Image Copyright 123RF

I've written a lot about scorecards in the past 12 months while Kurlan & Associates created scorecards for more than a dozen companies in December alone.  Companies that are using our scorecards are reporting significantly higher win rates, better use of resources, and much less time spent chasing deals and accounts that they simply can't win. Until now, I have talked only about sales process scorecards used to further qualify opportunities and predict the chances of winning the business.

There are additional uses for scorecards:
  • Marketing - to score a lead.
  • Recruiting - to score a candidate.
  • Account/Territory management - to score accounts so that you can objectively determine the accounts on which your salespeope and/or account managers should be spending most of their time.

In the table below, you can see a generic Kurlan scorecard for time/territory management as well as account management.  You can modify the weighting for the 9 criteria based on how important each one is to you and your business. Just make sure that the totals equal 100.  

account-territory-mgmt.jpgAfter you have prioritized each category and assigned points, score each account in the territory.  Salespeople and/or account managers should invest their time in direct proportion to the scores for each account.  You can hire an additional salesperson to work on the accounts that aren't as important, but still need to be touched on a regular basis in order for growth to occur while at the same time assuring retention.

What other criteria can you include in your account/territory management scorecard?

  • % of products or SKUs 
  • Years a customer
  • Loyalty
  • Referral source
  • Quality of the Relationship with the Account Manager
  • Distance to Travel
  • % of Their Total Business

Here are some of the other articles I've written on scorecards as a part of the sales process.

Topics: account management, territory management, time management, scorecard, Dave Kurlan

Companies Rush to Get This One Thing in Place for their Sales Teams Before January

Posted by Dave Kurlan on Thu, Dec 01, 2016 @ 06:12 AM

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I've been writing about the importance of having a milestone-centric sales process for a decade and Objective Management Group's (OMG) data is showing that companies - and their salespeople - have finally begun to make some serious progress in this area.  Ten years ago, only 9% of the sales population was following a formal, structured sales process.  Today, that number has crept up to 32%.  

Over the past few years, the majority of calls and emails I have received about sales process have been from companies asking for help buiding a sales process that their salespeople will actually follow and, more importantly, one that will work.  But that's changing too.

Over the past few months, the majority of the calls and emails coming in have been to get help building predictive scorecards.  Yesterday alone I spoke with the CEO's from 3 companies about building and slotting scorecards into their existing sales processes.

Why the sudden rage over scorecards?  

Eariler his year I wrote about scorecards a couple of times.  In February I raved about Membrain's built-in scorecard and in October I wrote about scorecards as the key to a predictive pipeline.

So the question is: Is this hype or is the scorecard a true game changer?

I don't know how many scorecards the experts on my team have built for our clients, but my personal clients tell me that the scorecard I built for them has changed their world.  Their win rates are way up, their sales cycles are shorter, their salespeople are more confident about the opportunities they have decided to pursue, and they have more time and resources to devote to those opportunities.

In short, scorecards are the scientific way to transition from going after every opportunity and hoping to close a small percentage of them, to identifying which opportunities to pursue and closing all of them.

Scorecards are a simple concept but they get tricky in the final stages.  You must be able to accurately:

  • Identify consistently predictive conditions
  • Weight them properly
  • Set the proper cut-off

If you fail to get each of those things just right, you'll have scorecards that won't work the way you hoped.  It's crucial to get all three variables right the first time.

Topics: sales process, scorecard, win rates, shorten the sales cycle, closing deals, Dave Kurlan

The #1 Key to Making Sales Forecasts Accurate Again

Posted by Dave Kurlan on Mon, Oct 24, 2016 @ 15:10 PM

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What is they key to accurate sales forecasts?  Sure, it's all of the things I've written about before, like sales process, uncovering compelling reasons to buy, selling value, thoroughly qualifying, etc.  But haven't you witnessed more than enough opportunities where all of that was completed at an acceptable level and the business still failed to close?  Don't too many of those well qualified opportunities become delayed closes or losses?  So what is it?  What is the one thing that will accurately predict whether or not an opportunity is strong enough to pursue with everything you've got?

It's the scorecard.

For the past year we have been insistent on including a sales scorecard as one or more steps of the sales process.  You might recall that I wrote about scorecards once before, although in that article it was more about how excited I was that Membrain included a scorecard building functionality in its CRM application.  This time, I want to emphasize how important it is to build a scorecard and not just any scorecard, but one that is predictive enough to make your forecasts accurate!

So how can you build the perfect scorecard?

It's a somewhat complicated process where you must follow these steps:

  1. identify potential criteria that might be predictive
  2. narrow it down to 5-6 criteria that should be predictive
  3. for each criteria, create 3-4 conditions
  4. weight the criteria in order of predictive value
  5. assign points to each of the conditions
  6. make sure that if someone meets the ideal condition for each criteria the maximum number of points is equal to 100
  7. test the scorecard on several opportunities that were won and make sure that the score would have predicted a win.
  8. test the scorecard on several opportunities that were lost and make sure that the score would have predicted a loss.
  9. if your first attempt was not predictive, make some changes and retest, finally setting a cut-off score
  10. install your scorecard as a step in at least two stages of the sales process - expect the score to change over time

With some variations,This example should apply to every company:

Criteria - Level of Decision Maker Reached - Value 15 points

Conditions:

C Suite  15 points
VP 10 points
Manager 5 points
User 0 points

Can you come up with 4-5 more criteria that are always predictive of a sale in your business, with your customers, and against your competition?

Finally, you need to have the discipline to not follow up when a score falls below your cutoff, and to follow up with even more firepower when the score suggests you can win the business.  Discipline is more difficult than building the scorecard!

Last chance to register for my presentation of the 6 Hidden Weaknesses That Impact Sales Results on Tuesday, October 25 at 11 AM Eastern.  Register here.

Topics: sales process, scorecard, Dave Kurlan, predictive pipeline, accurate sales forecast

Sure Fire Way to Know Which Sales Opportunities are the Best Sales Opportunities

Posted by Dave Kurlan on Wed, Feb 24, 2016 @ 06:02 AM

I just love it when cool gets cooler and I'm not talking about the winter weather in New England.  About a month ago, I wrote this article on Targeting and shared a generic model for scoring opportunities.  George Bronten and Henrik Oquist, CEO and COO of Membrain, took note and already developed the concept as a new feature for their world-class CRM application, Membrain.  You have to see how we integrated this new feature into the Baseline Selling version of Membrain.  In the image below, you can see that we added a scoreboard milestone at two stages of the sales process.

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This allows us to purposefully rescore an opportunity as we learn more about it.  The next image has a little more of the scoring detail.

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As you can see from our own instance of Membrain, we score the size, title, urgency, timeline and amount of competition for a particular opportunity.  This opportunity would have received a much higher score if there it was a smaller company, there was greater urgency and the timeline were this month instead of this quarter.  You might be questioning why the score would be higher if the company was smaller...A bigger company has 10 times the number of things that could delay or prevent a sale from closing and while all of those things could also occur with a mid-market or smaller business, they are far less likely at this stage in the sales cycle.  Don't believe me?  Then you don't have enough experience with enterprise size accounts!

Finally, in this listing we can rank opportunities by their scores (right-hand column).

scorecard-display.jpg

Some CRM applications have the ability to rate the likelihood of closing based on assigned weights to various milestones or stages.  While that is better than when salespeople enter an arbitrary percentage, it's not nearly as good as when you have created specific criteria and values.  Neither man nor machine can skew those things!

In just a few days, this scoring system has had a tremendous impact on our company.  We are able to look at opportunities through a different and more accurate lens, allowing us to make better decisions about sales forecasts, resource allocations, and specific opportunities.

Thanks, Membrain!

Topics: Dave Kurlan, sales process, sales pipeline, membrain, sales forecast, scorecard

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Best-Selling Author, Keynote Speaker and Sales Thought Leader.  Dave Kurlan's Understanding the Sales Force Blog earned a medal for the Top Sales & Marketing Blog award for six consecutive years. This article earned a Bronze Medal for Top Sales Blog post in 2016 and this one for 2017. Read more about Dave.

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