Back in 2009, Aaron Ross wrote an article on the 7 fatal mistakes made by CEOs and VP of Sales that directly impact revenue growth. Are you still making these mistakes?
- CEO does not take responsibility for understanding Sales & Lead Generation
- Management thinks sales people should prospect & close deals
- Your channel partners will do your selling for you
- Wrong sales talent is hired (1.0 experience when 2.0 experience is needed for example)
- Focus is on pushing product rather than listening to customers
- Wrong metrics are tracked
- Command & control management – employees are not treated like mini-CEOs
This post briefly touches on item #1 – “CEO does not take responsibility” by sharing a recent personal experience of mine with a small technology company who does business-to-business (B2B) sales. I’ll discuss the remaining 6 items in future posts. If you’d like to add to this list, drop me a line. I’d really like to hear your ideas and thoughts. Marylou
It all begins with the CEO
A technology company was focusing on new customer growth (as opposed to trying to squeeze every last bit of revenue out of their customer base). At the annual kickoff meeting, the VP of Sales presented sales projections for 2011. The target – 15 new account acquisitions for 2011. How the heck did he come up with that number? Guess what last year’s new account acquisitions were? Four. I’m sure my mouth dropped to the floor.
The 15 number must have been the result of too many cocktails with Board Members and the CEO. There was no plan in place to get to 15. No marketing budget, no outbound prospecting plan, no nurturing process, no list planning, no ideal customer planning. Nothing. We did not even have a way yet to measure our successes (no dashboard, agreed-upon metrics, nada). Needless to say, they are not even close to the 15 number. They are actually closer to the 4 number again. Fingers crossed.
The CEO fell into the fatal over-projecting trap:
- CEO (with Board and perhaps VP of Sales) sets an aggressive 2011 revenue target (mostly based from new customer acquisition)
- VP Sales/CEO divides revenue goal by expected quota to determine the number of salespeople needed to hit the target
- As of the start of 3rd quarter, 2011, sales reps are missing key targets because the ramp-up has gone MUCH more slowly than planned (lead generation efforts are not producing enough qualified opportunities for sales, list issues, training issues, you name it)
- By Thanksgiving, they will not even be close to the 15 new client mark (an extra helping of pain and a side of stress is all they can count on)
- By end-of-year, VP of Sales will be gone, a new VP of Sales hired, and the dreaded cycle starts all over again
Don’t make this mistake.
Take full responsibility for educating and developing yourself on what your lead generation and sales process looks like, then be realistic with your projections.
- What is your Ideal Customer Profile (“ICP”)
- Do you have a list of targeted prospects that map to your ICP?
- How long, honestly, are your sales cycles?
- How many leads do you need to “disqualify” before you have a Qualified Opportunity?
- How many Qualified Opportunities turn into real sales?
- What metrics are you using to track Qualified Opportunities, Opportunities, Sales, Revenue?
- Who on your team is responsible for generating Qualified Opportunities, and are they spending at least 80% of their time doing that?
- Do you still believe that your sales reps’ rolodexes work in the 2.0 world?
Next item we’ll cover: Multi-tasking sales reps – what you stand to lose if you don’t specialize