Leadership

The Most Important Sales KPI Isn’t A Sales Figure

/ Ethan Zoubek / 2 Comments

(As originally posted on OpenView Labs)

Sales is primarily viewed as a numbers game, so it’s common for sales professionals to take a step back and ask “of all of these numbers that I’ve got in front of me – and holy mackerel there are a ton of numbers in front of me – which ones are the most important?”

The answers that most frequently come back are informed and appropriate considerations of metrics like lead flow, pipeline size/ratio, deal velocity, weighted pipeline average, conversion rate, etc. Those are all important, and while some are leading and others lagging, they are all good indicators of the health of the business.

In my opinion, however, the most important KPI relates to the proportion of time dedicated to enablement and training.

There are 21.75 workdays per month on average. At minimum, each person in the sales organization should dedicate one day per month to enablement. One full and focused day. Minimum. That’s less than 5% of their time.

Why is this so important? In sales, many times it’s a game of inches. The product sets of competing solutions are generally on par or they wouldn’t be in an evaluation. Pricing tends to settle into the same general area absent incredible skill at value creation that truly supports premium pricing. Delivery approaches and promises of timing to delivery don’t tend to vary widely.

How can a professional selling organization differentiate then, when all other things are created equal – and beyond our control anyway? I was given the answer by a mentor and sales leader of mine many years ago.

Sales execution. 

We differentiate with our sales execution. And the only way to continually impact sales execution is to foster a culture where training is valued and enablement opportunities seized wherever possible. Otherwise, reps fall back on habit, muscle memory and path-of-least-resistance.

Assume that an enterprise sales rep has a fully-loaded cost of $175,000. A 5% time investment can be equated to a cost of $8,750 per year. If that 5% of time investment in training nets a 10% increase in booked business – either by way of higher close rates or increased deal size, the impact is substantial.

On a $2M annual target that’s an additional $200k in bookings a year.

That’s material, and that’s a compelling return of $200,000 on $8,750 invested – more that a 20x return on money. I’ll do that all day long. All. Day. Long.

How do we accomplish this? We simply choose to make the time. We play the long game rather than lament taking our reps out of the field for a couple of days per month.

We support a culture where learning is valued, preparation is expected, and moving out of comfort-zones encouraged and applauded.

How else can we expect to get better? Great sales professionals weren’t born that way. They were taught by the mentors and leaders that came before them. They observed, they experimented, they worked at it. They were trained. They were enabled to become the skilled professionals that they are.

Without enablement, all we have a right to expect is more of the same.

My most important responsibility is to ensure that every person with whom I interact is better for the time they spent with me, even if the impact is indiscernible to me. Especially when the impact is indiscernible to me.

With my colleagues and reports – direct and indirect – I can do this by ensuring that they know that taking the time to learn and grow is encouraged and supported, that it’s viewed as an important component of how they spend their professional time. My job isn’t to drive yield – it’s to help my team become better versions of themselves. The rest seems to just take care of itself.

What Big Nick Taught Me in High School

/ Ethan Zoubek / Leave a comment

When I was a sophomore in high school in the late 80’s, I was in an elective course that had students from all of the upper classes. One of the students in the class was a senior named Nick. Big Nick.

Nick looked like he was 25, weighed about 250 pounds, and had a pretty serious mustache for high school. Nick was broad shouldered and built like a bouncer. He always wore a light brown leather jacket. I knew of him mostly by reputation and by the undeniable physical presence that he brought to the hallways, where people instinctively parted to make room for him. You did not mess with Nick. Nick was a little scary.

During class, only a week or two into the start of the semester, another student was sharing an observation on whatever it was we were discussing and they used a big word. A juicy, twenty-five cent SAT word like ‘effulgent’ or ‘parsimonious.’

I could not, for the life of me, believe what happened next. Nick – the huge, hairy, scary, badass – proceeded to politely interrupt this student and said “Excuse me, I’m not familiar with that word. Could you tell me what it means?”

I almost fell out of my chair. Never in a million years would I have had the stones to do that.

At sixteen I wasn’t even remotely close to having enough confidence and self-respect to admit that I didn’t know what a word meant. In a class. Out loud. With other people. I can barely do it now, at 42.

But Nick did. Nick just straight-up asked. To him, this was no act of courage. It was natural. He didn’t know what something meant, so he asked.

In an instant my impression of Nick changed so dramatically as to have stuck with me for the next twenty-five years. It was the first time I could remember seeing someone so comfortable with who they were that they didn’t have to pretend for anybody.

This does not happen frequently in high school. It doesn’t happen frequently anywhere.

In that moment Nick shifted from being a big scary dude with whom I could never possibly interact to someone who was genuine, someone who told the truth, someone I could trust.

Simply because he was authentic and real.

We Can’t All Be The Smartest Person in the Room

We all fake it sometimes. We all find ourselves in situations where we can either choose to be authentic and say “wait, hold on a second – I’m not entirely sure I’m following you” or we can choose to just nod along and pretend that we know exactly what someone is saying – even if we have no idea what they’re talking about.

Why do we do it? Because we’re afraid of looking stupid. Because we’re afraid of what other people will think of us if we admit that we don’t know something. This fear of being found out, this imposter syndrome, isn’t natural. It’s something we were taught.

Nobody Really Cares

The reality is that the amount of time we spend worrying about what others think of us is directly proportional to precisely how much nobody else cares.

Everyone has got something on their mind, everyone has issues of their own. We walk around thinking that people are watching us, always judging. It’s just not true. We’re too busy thinking about ourselves to spend more than a few seconds thinking about anyone else.

Somewhere along the way we learned that we are to be perfect and infallible from the very start, from the moment we show up. And we’re supposed to know everything when we get there. How could we not be afraid of being found out? So we pretend that we know things we don’t, all to avoid being exposed. It’s exhausting.

There is a cost to this habit of just nodding along. When we pretend that we know what’s going on when we really don’t, two things happen:

  1. We rob ourselves of the opportunity to learn, and
  2. We rob others of the chance to know who we truly are.

A small authentic act of being genuine, unpretentious and real is a tremendous thing because it is only in that authenticity that we are able to feel a sense of connection with others.

Choose Authenticity

Pretending to know something you don’t, pretending to be something you’re not – it serves no purpose. Authenticity breeds connection, respect, and admiration. People are naturally drawn to it, and they want to be around authentic, genuine people.

The most fearlessly authentic people that you have known are the ones that attract the most to them in the form of friends, esteem, success and admiration. They are the happiest of people.

My profession is sales. I know for a fact that the most consistently successful salespeople are very genuine and authentic while not being afraid to show up with a point of view and to challenge a customer’s conventional thinking with new ideas and new approaches. They don’t pretend to know things they don’t, they are open to learning, and they maintain a genuine desire to help where they can.

In the executive ranks, the most admired and respected leaders have an authenticity and humility to them – they are the leaders that have legions of employees ready and willing to do whatever they ask, just because they ask. Wielding fear and shame as a tool for motivation can have short-term impact, but it is fleeting and ultimately toxic. It is not leadership, it is tyranny.

In everyday interactions with friends and colleagues, the people who are truly authentic are the ones who everyone seems to like, for no other reason than they feel like true, real people – and we yearn to be close to that because it brings that out in us.

Nick taught me that when you’re honest, genuine and real you can have a deep and meaningful impression on someone, even if you have no idea that you’re doing so.

To practice, start with something simple. The next time you’re in a small-talk situation at a cocktail party and someone makes reference to a topic with which you’re unacquainted, simply acknowledge that you’re not familiar with the subject and ask them to explain. It could be a movie, a current news event, an industry article – doesn’t matter. Just practice. Ask some questions. Then pay attention to how you feel, and how the other person responds to you.

I promise that you will be better for it. You will find it to be freeing, invigorating, and refreshing.

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Stop Calling it a “Close Plan”

/ Ethan Zoubek / Leave a comment

The importance of a plan to address the ‘last-mile’ of a sales cycle cannot be overstated. It is critical, especially for large and complex deals, that the sales executive draft and review with their sales leader a detailed plan to earn the business in question. Doing so is how we ensure that things don’t get missed, that the account team is in alignment, that senior executives are clear as to what is required of them to support the deal and that everyone is focused on the most important tasks to reach the desired outcome: closed business that will bring clean revenue to the company and a valuable solution or product to the customer.

Close Plans Are Necessary

Most evolved sales organizations have a process for this. At certain stages in the sales cycle, for deals of certain dollar amounts or strategic importance, sales leadership will require that the sales executive convene a review in which the sales executive presents the plan. Sales leadership will help strategize on tactics and iterate the plan until a final list of action items is determined. Most of the time, this plan is referred to colloquially as a Close Plan.

Invariably, there will be components of this plan that require collaboration with the buyer to do things like:

  • Align incentives “…and to confirm, we’ve agreed to this pricing structure with the understanding that you’ve agreed to take reference calls and sign the contract by the 25th of this month…”
  • Validate steps “…and you’re sure that the procurement director approves and then sends to the CFO for signature…”
  • Confirm dates (“…and we are certain that the CFO isn’t taking a trip to Bora Bora the week that we are planned to have him sign…”

A plan created in a vacuum isn’t a plan – it’s a hope and a dream until we confer with our buyer.

Don’t Call Them Close Plans

So, being fortunate enough to have one of those top deals in the pipeline and recognizing that it’s necessary to consult with our buyer on the items in the plan, we call our buyer and we propose that we sit down together to review our plan.

When this happens, please – for the love of all that is holy, DO NOT REFER TO IT AS A CLOSE PLAN.

To some this may be a statement of the obvious, but I can’t tell you how many times I’ve heard sales professionals and their managers actually state to their prospective customer that they would like to review their Close Plan with them.

But why wouldn’t they? For months or years everyone in their sales organization has talked simply about the Close Plan. After a period of time, muscle memory and habit kick in. If we consistently refer to something as a Close Plan when we’re inside the four walls of our organization, it’s a safe bet that we’ll refer to it as a Close Plan outside those four walls.

Words Matter

The words we choose matter. They convey the motive behind our actions and the intent that we bring to an engagement. When we talk about a Close Plan, we de-humanize our buyer and we diminish the importance of their needs and values in the process. We turn them into an object that is to be conquered, a deal to be won. We turn them into a thing.

Buyers sense this – consciously or unconsciously. They must. The result of choosing our words inelegantly is that we turn what may have been a very collaborative and mutually respectful process up to this point into a tug-of-war that trades on angles and leverage, a zero-sum game with a winner and a loser.

What the buyer hears us say when we use the words Close Plan is “this has been nice up until now, but I’ve got to get to work and close this deal. And that means I’ve got to close you.” It signals to the buyer that the situation has changed and that they must now be on guard against tactics designed to extract as much money from them as efficiently and smoothly as is possible. And we are the person with whom they must be on guard.

This is unfortunate. Most sales professionals genuinely enjoy their work and the opportunity to be of assistance and utility to the customers they serve. Most attempt to be as genuine and authentic as they can. Most work for organizations that legitimately believe in the importance of customer satisfaction and shared success. It is an error of sales culture and a result of bad habit that a couple of irresponsibly chosen words can undermine what are otherwise thoughtful and deliberate efforts to provide genuine value.

Sales Leaders: Lead

Sales leadership bears the bulk of the responsibility for shifting the tone of the sales organization and the words that our teams use, both in the field and in the office. Our people look to us to get direction – both spoken and implied – as to how they are to engage with the market, the competition, our prospects, our customers and our co-workers.

This is encouraging, because it means that in many ways all we have to do to start to engender a more value-driven culture is to choose our words more carefully. This is a discipline that is easily begun and, with practice, develops reliably. It does demand awareness, however. Many of us run-around barely conscious of the words that spew out of our mouths, oblivious to the emotional wake that we leave and the downstream impact of the words we choose. So we must consciously decide to begin.

There are any number of ways to convey the intent of a close plan – mutually agreed upon steps to reach a mutually beneficial outcome – without calling it a Close Plan. If you’re a sales professional, I’d encourage you to share this post with your leadership to initiate a conversation on the subject. If you’re a sales leader, discuss this with some of your managers and sales executives to collaborate on some new terminology that more accurately reflects the type of organization that you want to be.

For the past number of years I’ve favored the term “Engagement Plan” and have required my teams to use it in lieu of “Close Plan.” It maintains the word “plan,” and it’s important to call things what they are as simply as is possible. The term “engagement” conveys a sense of collaboration and forward momentum.

Next week I’ll spend some time reviewing what I’ve found to be the best approach for structuring an Engagement Plan and when to present it to your buyer. Hint: it is NOT at the end of the sales cycle. To make sure you know when it’s published, click here to sign-up to be notified.