Three (Obvious) Priorities for When Sales Gets Difficult (and Why We Do The Opposite!)
I’ve become a bit obsessed with a historical problem.
When the economy makes selling more difficult, would you agree that the following three things are required to thrive?
- Upskill the sales team: As selling gets harder, salespeople need to be better.
- Optimize sales leadership: The importance of sales leadership directly correlates with how difficult the selling environment is. Results and culture are truly tested by difficult selling environments.
- Better “partner” with our customers: When times are tougher, your customers have more problems and less resources to address them. It’s our role to help them prioritize and achieve optimal outcomes.
Anything you disagree with here?
Historically, though, as times get tough, we do the opposite. And, by “we”, I mean…I struggled with this as a leader, too!
We deprioritize enablement (#1 & #2)
Your investors, your CEO, your CFO, your board…as a revenue leader, there’s pressure coming from all angles. Dollars are scrutinized. Every. Single. Dollar.
I’ve had this conversation before…and luckily was prepared for it.
You sit down with your CEO for your 1-on-1, and hear:
“We need to prioritize resources that directly correlate to revenue.” Ok, gotcha.
“You have an enablement leader making $200k + bonus. Our corporate (inside) account executives we pay $70-$80k base to each, and their variable is a percentage of what they bring in.” Ok, all true.
“Why wouldn’t we hire three revenue-generating AEs for the price of that one enablement person?”
In the mind of the place the dollars are coming from, three reps more predictably pay for themselves.
With the training and enablement dollars that are actually available, you can be certain that those dollars aren’t going to build up the skills of the leaders, right? Theoretically and often assumed, you’ve been promoted to leadership, which means you’ve proven that you know how to sell. The thought is: Why would you need an investment in leadership? Well, the incorrect thought.
The Answer to Reducing Enablement Spend?
I have a bias towards enablement. I will readily admit that. I’ve always felt that, in partnership with revenue leadership, investing in a focused effort to upskill individuals and teams at scale is the equivalent of raising all boats. It’s an investment not to be taken lightly because not all enablement professionals are equal, but let’s look at this through a simple calculation…
For the sake of math, let’s say your team qualified 20 new opportunities this quarter. The average value of each was $100,000. Your win rate was 50%.
So, 20 X $100,000 X 50% = $1,000,000
Now, let’s say through simple investments in enablement, you’re able to…
Raise the number of opportunities by just 5%; so, you qualify 21 new opportunities next quarter (1 more).
Raise the dollar amount of those opportunities by just 5%; so, your average deal size is $105,000. Yes, just $5,000.
Raise the win rate by a single deal, so your win rate goes up to 52.5%.
One more deal. A touch more value. One more win. 5% lift in each category.
21 X $105,000 X 52.5% = $1,157,625
In other words, revenue goes up by almost 16%.
Let’s add one additional element. If that training shrinks sales cycles a touch, the lift goes up to 22%. If your average cycle length was 8 weeks…or 60 days: $1,000,000/60 = $16,667. You shrink that by 5%, down to 57 days: $1,157,625/57 = $20,309
That’s 22%! Put in your own numbers. The math is always the same.
A five percent lift in opportunities, deal values, and win rates, coupled with a 5% reduction in cycle lengths = 22% growth.
And as you see above, 5% is minuscule! Enablement (in partnership with revenue leadership) makes that happen! And, when done right, the lifts are significantly better. Take this bold-faced sentence and change each number to 10%? The result is 42% growth!
You can hire additional reps and not train them (so, they’re slow to perform and more likely to be sh*tty), or invest in enablement and lift all boats. The answer was ALWAYS easy for me once this punched me in the face. Don’t stop investing in enablement!
We Increase Pressure
Whether this happens as a result of faulty leadership, desperation, or a difference of opinion on the role of the sales professional, throughout history, as the selling effort has gotten more difficult, the pressure tactics used on customers and prospects have gone up.
Back in the mid-1920s, the economy had just recovered from “The Forgotten Depression” of the early 1920s.
Screenshot of the headline to a 1927 article arguing against high-pressure selling
Hiram Blauvelt, a Vice President of Sales back in 1927, exclaimed,
“Most of us are getting sick of high-pressure selling. We have heard it preached, published and practiced to death. New sales managers and new salesmen coming in with a desire to make a good showing, start off like a steam boiler under high pressure and either blow off ineffectively or blow up altogether. It seems strange that this type of selling has come into such great vogue.”
He added,
“It seems to me we have got away a little too far from the calm, dignified, confidence-inspiring selling of former days when a man looked on selling as a real vocation and became literally wedded to his territory.”
However, Tom Hanlon, a General Sales Manager in Chicago countered,
“If Mr. Blauvelt has any children, he probably will have to engage in high-pressure selling, no matter how much he dislikes it. For those children of his will some day have to be high pressured into going to school. There will come times when they would much prefer to go fishing, swimming, or riding. Because he is a good father, he will use all manner of so called high pressure methods to induce them to go.”
Hanlon polished his turd argument with,
And the counterpoint article headline – arguing that convincing and high-pressure is exactly what’s needed!
“It would be a wonderful thing if every prospect appreciated at first glance the value of the various articles offered him by salesmen. All of us have to be convinced, and often the better the thing is for us, the more strenuous convincing is necessary.”
The Answer to Increasing Pressure?
We as human beings don’t buy when we’re “convinced”. If we do, we’re probably not very satisfied shortly thereafter. We are prediction machines. We buy when we can predict. The key to optimizing the path to purchase, where customers stay, buy more, and become advocates, is to reinforce the idea of being a partner to our customers. To help them predict!
That means seeing the world through their eyes, and helping them understand the rewards and the risks; helping them understand what’s going to be given up in exchange for the reward; to help them achieve optimal outcomes whether it’s with your solutions, or with someone else’s, as quickly as possible!
High pressure selling may get you the deal, but due to the blowhorn by which individuals can share their experiences being louder and more pervasive than ever, it may cost you 4+ others you never knew existed. Inbounds will dry up. References will dry up. Your “Net Dollar Retention” will have quite a few holes in it.
Do you see it?
When selling gets harder, we all agreed that sellers need to be better, leaders need to be more effective, and our role as salespeople requires a consultative touch…yet, our inclinations seem to lean towards doing the exact opposite.
Be aware of these inclinations, and understand the impacts of them. When we follow those inclinations, we’re making it worse…every time!
Invest in your teams and people…even over headcount. And remember, transparency sells better than perfection. And, as the great Arthur Sheldon proclaimed in 1911:
Arthur Sheldon, the G.O.A.T. Sales Philosopher (as far as I’m concerned)
“True salesmanship is the science of service. Grasp that thought firmly and never let go!”
I speak and teach revenue organizations on how to leverage transparency and decision science to maximize their revenue capacity. It’s what I do…teach sellers, their leaders, and really entire revenue organizations the how we as human beings make decisions, then how to use that knowledge for good (not evil) in their messaging (informal and formal), negotiations and revenue leadership. I wrote a 3x award-winning book (𝘛𝘩𝘦 𝘛𝘳𝘢𝘯𝘴𝘱𝘢𝘳𝘦𝘯𝘤𝘺 𝘚𝘢𝘭𝘦), and have a newish book out (𝘛𝘩𝘦 𝘛𝘳𝘢𝘯𝘴𝘱𝘢𝘳𝘦𝘯𝘵 𝘚𝘢𝘭𝘦𝘴 𝘓𝘦𝘢𝘥𝘦𝘳) now that just won its first award!
Reach out if you want to discuss The Transparency Sale sales methodology, or really…anything else (sales kickoffs, workshops, keynotes, the economy, history, etc.)! Email info@toddcaponi.com or call 847-999-0420.
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The article header photo is from a 1924 sales management class
What if I disagreed with the three “needs to” (Devils Advocate)
My assumptions:
1) People buy for emotive reasons based on logic.
2) Sales is about persuading change
3) and facilitating decisions making.
Putting my sales hat on being on the customer side- I feel you’ve made an assumptive close on me. Specifically – how you framed the three “need to’s”.
Emotively, I could buy it, but logically I can’t get there. Let me publish my thinking, and perhaps you can persuade me.
I’ve been a VP of Sales in a downturn. Remembering that time, the argument scares me to death.
1) Citing 1912 – I have my CFO in the back of my head saying – good lord, our accounts get CPE credits every year to stay modern… big credibility buster
2) Emerical data – what study or data do I have to support these? I can’t go to the EC and say, “Let’s optimize my managers and me” – because I’ll get “When do we get revenue from that and… when I dont have an answer – optimize means my head,”
3 “Let’s raise our partnership with our customers” might lead to
-Why didn’t you do that already?
– Good idea. We will get the development team to do that
– Customer Success “We are already on that”
Trying to role-play here. Where is my WIN as the VP / the CEO?
Love it!
The 3 “needs to” are just saying that – when anything gets harder, we need to be better. Whether it’s sales, you’re facing a great opponent in a sport, or when you’re challenged in life. As the challenge rises, we have to rise with it. Are you with me there?
– So, salespeople need to be better.
– Leaders need to be better.
– We need to understand our customers better.
Then, as I wrote, the tendency is to do the opposite…and it’s for all the reasons you explain. How do we make the connection between a training investment and ROI on an enablement spend versus our clear sales-person-productivity measures? You’re absolutely right! Therein is the problem.
With #3, it’s not “aren’t we doing that already”. It’s the historical problem where leaders and sellers have let anxiety guide them OUT of being partners with their customers…when we look to the mid 1920s, it meant the demise of the perception of the profession. “High pressure” selling became the trend. “Convince” buyers instead of being a partner. So, my argument is, “be careful!”.