Companies that take the professional development of their sales teams seriously will have an advantage over their peers. But they've got to do it right.
After gathering insights from thousands of business-to-business sales professionals who rely primarily in subscription sales models, I've got advice for you.
There's a trend across a large number of sales organizations. Many are falling below 80% of goal. A few superstars can no longer cover the contributors who miss their targets.
Sales management typically points to a lack of talented salespeople, a declining market, or the aggressive growth targets as reasons they are falling short. But is that truly the case?
The Swiss Cheese Model
The root cause can be best explained by applying the Swiss Cheese Model for Accident Causation, developed by James Reason. His model has been used to make improvements in aviation, engineering, healthcare, and as the principle behind computer security.
For a catastrophic error to occur, the holes in the cheese need to align at each step in the process, allowing defenses to be defeated. This indicates an inherently flawed system, because it allowed a problem at the beginning to progress all the way through, and adversely affect the outcome. Each slice is an opportunity to stop the advancement of the error. The more defenses you put up, the better. Also, the fewer the holes and the smaller the holes, the more likely you are to catch and stop errors that may occur.
James Reason views the problem of human fallibility with 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 defences to avert errors or mitigate their effects
Pattern of Failure
Having worked with many rapid growth organizations, I see a pattern occurring. Applying the Swiss Cheese Model to this pattern looks something like this:
- Companies hire more affordable SDRs/AEs – e.g. those early on in their career
- These new hires lack knowledge on sales, as most school curriculums aren't directly relevant to sales
- Once started, the company gives them a 1-2 week onboarding, but it doesn't personalize that education to their specific needs as new salespeople
But then, unlike any other trade:
- These companies put the untrained employee in a critical function – directly in line with revenue generation (both in SDR and AE roles)
When results are falling behind, leaders fall back into a pattern of the "person approach" – or blaming the individual. However, using the system approach, the holes in the cheese can be identified. They are often big, and line up perfectly in many SaaS sales organizations.
Hiding the problem
There are often circumstances that SaaS sales organizations that mask the problem.
1. Rapid Growth
Growth is a fickle thing, and to achieve it up to 20% year-over-year in an established market is hard. In SaaS sales, we see the demand for rapid growth in excess of 25%, and sometimes as high as 500%. Such growth is often fueled by venture capital in which a round is raised to hire a sales team needed to respond to a growing market demand.
However markets with such a growth potential often bring on competitors seemingly out of thin air in hordes. Why? A few hands working together out of a garage, fueled by a couple hundred thou’, powered by a basic website, and using a low cost marketing automation service can compete nearly overnight. This means competitors must build a skilled salesforce to set themselves apart.
2. Compress the buying cycle
Customers are shopping for solutions to solve problems they are having right now. They can’t afford an 18-month buying process. This requires a compressed sales cycle with a bell curve between 30 and 90 days. The impact of speed exponentially increases the complexity of a deal. There are no opportunities to recuperate from a mistake made anywhere along the sales process.
3. The entire sales team needs to perform
Most B2B sales companies were once dependent on a few top performers. Sometimes called "rainmakers," these top performers brought in the highest value contracts each year, representing perhaps 80% of revenue. Managers would say things such as, "I was lucky to have the likes of Vince closing a multi-million dollar deal with Disney, Calvin with Dish, and Tina with Amazon."
In the subscription business however, we work at a fraction of these contract prices. This makes SaaS sales organizations dependent on every performer rather than just a few of the top ones.
4. Modern “sales” processes have changed into educating customers
No one wants to be sold to. Period. Pushy salespeople are avoided like the plague. B2B customers wish to be educated on the problem, potential solutions, the market, their competitors, their peers, and so on.
Such a radical change requires modern sales organizations to excel in consultative techniques, even for the smaller SMB deals. Traditionally, this technique took several years to master following many years in conventional sales. Today’s teams need this as a starting position.
5. The rise of the millennial sales professional
The profile of a sales professional has shifted significantly. About 10 years ago a B2B sales organization was made up of salespeople in their mid 40s, traveling every week ,Monday till Thursday, and filing paper and expense reports on Friday.
Today most SaaS sales organizations are centralized, with just a few of account executives traveling more than once or twice each quarter to an event or to meet customers. This new salesperson is usually in their mid-20s to early 30s, has two to five years of experience across three jobs.
This has caused a gap that can't be overcome in a two-week onboarding program or a two-day sales kickoff.
How To Close the Gap
Here's a quick sum of the issues:
- Rapid growth in response to customers needing a solution results in the need for a compressed buying cycle (30-90 days)
- The increased speed makes selling more complicated
- The SaaS subscription model usually means average selling prices are lower, and that means sales organizations can't depend on a few top performers
- The success depends on a lionshare of the team to hit at least 80% of quota
- B-performers who lack persistent training fall back on outdated sales techniques
- The buyer doesn't like being sold and wishes for a consultative experience
- Clients are not being helped, and thus are not buying, sales cycles are delayed, or worse, clients go dark
The solution to this problem is not revolutionary. Many companies have dealt with untrained talent that had to excel in a stressful performance-driven environment – think of the armed forces, athletes, and students. The steps for this are clear:
Step 1: Establish a process
Listen to your past customers, and use their insight to outline what made you successful with them. We have done this for over 100 companies, and we've found the process to be incredibly helpful for most SaaS sales businesses.
Step 2: Create specialized functions
You cannot expect a person at the start of their career to know what took your best people 10 to 20 years. However, if you simplify the process and create specialized functions with constant upward mobility, it will help. For example:
- Sales Development - five levels
- Sales/Account Executives - three levels
- Post sales - four levels
Step 3: Teach/train/coach/drill to excellence
There are no shortcuts to success. Someone needs to train someone to do it the right way. Over the past few years, we have learned to put this in playbooks – but when we tried to teach these playbooks, we ran into the following issues:
- 1-2 day Training: great reviews post-training but retention beyond a few key skills was bad
- 1-2 sessions per week for 12 weeks: Although retention significantly improved, the implementation into the daily workflow of a B performer was still an issue. The discomfort of implementing modern skills exceeded the discomfort of doing it the same way and counting on occasional success
So what was the solution? Look around you – you can either force them to sit in your classroom watching a boring sales coach – or you can go into their world.
Step 4: Enable experts
Today's sales teams require real-time updates. They can’t wait for new information to make it through the pipeline over the next weeks. They need the most relevant information for their prospective customer the very moment it becomes available. This makes sales enablement a critical function. Platforms such as Showpad thrive in a place where hundreds to thousands of sales professionals need the most relevant information on their mobile device as soon as possible.
Step 5: Measure what works
Key in today’s world it to measure what works. This so you can stop doing what does not work. It sounds easy enough, but many managers will just keep piling on what to try next. The only way to focus on making something work is to stop doing what doesn’t work.
Step 6: Reward the right behavior
Some of you maybe thinking “here we go again … this is where the consultant says we need to pay sales more money." Nope. By reward, I mean recognize them in a way that benefits their career for the years to come.
Sales is a trade that operates under duress. It has situations that can only be taught in real-life scenarios. But those situations are less than 10% of the job. The remainder 90% is based on executing proven processes and by using known skills – skills that must be developed into muscle memory.
The most important muscle all sales people need to develop is their ability to teach. How do they help a customer solve an important problem?
So let’s stop the pitching, the objection handling, and other forms of harassment. Instead research your customer, learn to ask a relevant question, share meaningful insights, educate a customer on the options, and assist where needed to help with a decision. Even if that means they have to get a second opinion.
The deal will follow.