[Given the sales funnel theme of the past week, I thought it would be helpful to republish a post from December of 2007.]
That is the question. Is it Commit? Or is it Best Case? If it is Commit, why? If your Commit is light, you have some explaining to do. If Commits move back to Best Case, not good. If they move to Closed, you are a hero.
Though most of you have no idea what I am talking about, many of you know exactly what I mean. In fact, this subset has probably woken up at night in a cold sweat after hearing these questions in their sleep. You know who I am referring to: account executives (“AE”) at Zayo, Envysion, and ICG Communications (in 2005/06).
I learned this brand of sales management methodology from a former collegue of mine, Neil Hobbs of Level 3 Communications. Though I didn’t realize it at the time, I have come to appreciate how incredibly valuable it is. The approach centers on the following concept: an effective AE should be able to identify those orders that he or she expects to close during a given month. ”Commit” means that the AE expects a certain order to be signed prior to the end of the month. If all their Commits are summed, it indicates the total amount of sales the AE anticipates delivering.
The methodology, when properly implemented, requires that the AE puts a stake in the ground early in the month. That is, the salesperson is expected to foreshadow how much they will bring it during the month, even though early in the month they are dealing with a lot of unknowns. Showing little or nothing in Commit will trigger questions about why the person is expecting a bad month. On the flip side, once an item is identified as Commit, the AE has to be ready to justify why.
Okay, I’ll admit that the next sentence might be a bit of wishful thinking. Confident and capable account executives appreciate this process. First, it allows them to demonstrate the command and control they have of their patch. They can show you the deals that are out there and can display they know what it takes to get them to the finish line. Attention–and isn’t that one of the two things most salespeople thrive on?–is high. Second, management can focus on helping AEs get the most-likely contracts to closure. As it becomes more clear what is holding a deal up, management encourages other organizations–marketing, engineering, finance, or operations–to help remove the roadblocks. The good AEs are able to use this to their advantage, ensuring the rest of the organization rallies around them. Orders get signede. Commission checks are beefy–isn’t this the other item sales professionals live for?
Conversely, poor AEs don’t like this methodology. If their funnel is weak, it is hard to pinpoint certain deals as highly likely to close. If they put a deal in Commit, they know the questioning they are likely to get will expose their weak funnel.
I cannot over-emphasize the importance of a well-defined and vigorously implemented salesforce methodology. Later in the week, I will focus on why methodologies associated with probabilities are not to my liking.
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Sales management makes me giggle. It’s a topic near and dear to my heart since I’m an AE myself. All in all, I’m a newcomer to the sales world, with a little over 3 years under my belt. Having watched for years from the marketing seat, I decided to throw my hat in the ring. I listened to the age old argument from some of the best sales managers I knew at the time–that you just can’t predict when business will close. I must confess, I’ve made it myself time and time and time again in the early days. Sure, in some ways, I still agree because things can spin out of your control. However, now that I’m inside and fairly successful as an AE, I can say definitively those should be the exception to the rule. If I can’t predict within reason when my customer is going to buy, there’s a great chance that I haven’t invested the time into the relationship. I can’t speak for other AE’s, but in my own head, it boils down to this: There is a relationship to be built and a game to be won–and if you are successful at both, then to “Commit” is less of a risk and more about bragging rights than anything.
The first lecture I was given as I entered sales was this “Whatever you do, don’t think that you are going to be one of those ‘Executive Sales’ sorts who travels all the time to visit customers.” I remember laughing to myself at the very thought that the head of sales and the COO had no understanding of the power of relationship selling vs. just selling. I laugh more now that neither did I. My first “Road Warrior Trip” brought with it the following month the best month of sales our team had seen for the year. The simple rules are listen more than you talk, propose a solution that solves the problem, close the business and go make it happen internally. All of these steps went into creating powerful relationships with my customers–because we established trust. It amazes me continuously that most sales teams have customer visit requirements from their management. I can’t understand how an AE expects to be successful in this industry without them. So, really, requiring me to visit anyone is like requiring me to breathe. I will do it because I need it to survive.
The funny part though, as I’m writing, is that what I’ve learned over the last 18 months is that building relationships is really just “Layer 1.” As my relationships with customers have grown, so has my ability to extract the exact data I needed in order to close business with the highest margins while still getting great customer feedback. I like to be face to face with customers to read all the subtleties. Don’t they say that more than 90% of all communication is non-verbal? That ability to read and predict action is definitely “Layer 2.” Relationship selling isn’t just about getting to know your customers so that you can call them a friend, play a round of golf, attend their retirement parties…it’s also inherently about knowing how they operate inside and out, so that you can maximize your information to close business. My care for them is genuine; however, there is a line between the friendship and making money for my company, which is what I’m paid to do.
If the AE has strong relationships with the account, the ability to predict business becomes less of a guessing game and more of a solid science. I would say it’s a lot like a good game of poker. I need to listen and observe as I play my cards, so that I can know the approach to take with each player. The more games we play, the more I observe about how much risk one player will take, how often they bluff, how often they are NOT bluffing, etc. So, it stands to reason–the better I become at knowing my opponents and applying the appropriate strategy to the cards I’m dealt, the more likely I am to secure a win. Within reason, I know when deals are going to close, because I know my customer, how they usually buy, how much I can trust what they say, who they will and won’t buy from, who the competition is on the deal, and usually the price it will take (and ABSOLUTELY not necessarily the lowest) to make all the factors line up for a win.
In my opinion, as an AE I don’t know all of those things because someone told me I should–I know them because there is a game every month that I have to win and this is the only way I know in my head and heart to do it.
So, from the cheap seats down here, I guess that’s a long way to go about saying “I agree.” However, this being said, as all AE’s, I reserve the right to say that I was wrong.
I am not particularly religious but the only proper response to this is borrowed from my Catholic upbringing:
Hal-le-lu-iah. Hal-le-lu-iah. Hal-le-lu-iah. Hal-le-lu-iah. Hal-laaaay–luuuuu-ia