Program: How to Increase Win Rates & Beat Your Sales Goals in 2016
Guest: Mike Schultz
Transcript: 4621 Words
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Paul: Welcome once again to another episode of SLMA Radio. Our host today, Jim Obermeyer is the executive director of the Sales Lead Management Association and I am your producer Paul Roberts coming to you live from our studio here in Costa Mesa California on behalf of our 9200+ members of the sales lead management Association. SLMA Radio is a syndicated show and our archives have over 300 episodes now with an audience reach of 75,000 listeners.
SLMA Radio is part of the SLMA Live Radio Network which offers six programs currently for work listeners with a cumulative audience of over 259,000 people. Easy to subscribe or find us through iTunes, Stitcher or elsewhere. So, let’s get things started, let’s play a little commercial here and bring in one of our sponsors.
Paul: Good advice for anybody as is good advice to listen to Jim Obermeyer when he talks people listen. Hey Jim, how are you this morning?
Jim: I am great Paul. Do you know what today is?
Paul: Today let’s see what is today, it’s January, 2016, I don’t know other than that no.
Jim: It’s our 300th program of the SLMA Radio.
Paul: Goodness, pop the champagne and let’s get the candles out here!
Jim: 5 ½ years and are just a few moments ago we had our 75th download, 75,000.
Paul: 75th download, yeah [laughing].
Jim: 75,000 downloads.
Jim: Can you believe that?
Paul: And when we talked about this was there an audience… same thing when you founded the organization, is there an audience for sales lead management ideas; sales lead marketing ideas, sales lead is that a topic that can be sustained over that long a period of time? And you have proven it. You have constantly come in with great people, constantly coming up with interesting ideas and I think it’s just shows the power of this topic here.
Jim: We’ve got 345 executives plus that have been interviewed and one of them who is coming back to us today who is Mike Schultz. He is the president of RAIN Group and has been associated with us for four, five years and Mike really says increasing win rates even by just a few percentage points has a dramatic effect on a company’s revenue and profitability.
And I have seen a white paper, research paper that they produced several months ago and I think it came out in November – How to Increase Win Rates and Meet Your Sales Goals in 2016. And I read this and I just kept reading it, reading it and I sent it along to sales managers that I know and we just thought it was a great thing to have Mike on the show to talk about just a little bit there.
The RAIN Group studied 472 sales executives and sellers representing companies of all sales force ranging from 10 sellers to 5000. They publish these results in this benchmark report; they analyze what organizational factors are correlated to higher win rates and they results are really significant. So, 22-page report, we are going to have a review on it on the SLMA blog on Monday.
Mike welcome and you’ve got a long history here, you are very renowned sales consultant, best-selling author of three books. You are a sales leader yourself. Tell us a little bit about the RAIN Group and the research; let’s get into the actual results.
Mike: Sure, thanks Jim and thanks for having me on again, it’s always great to be here.
So quick overview of the RAIN Group – the RAIN Group is a sales training and consulting firm; we are global. We have offices based out of the United States as well in Geneva, Mumbai, Sydney, Johannesburg, one is in Toronto and folks in other places and the core of what we do is we help people learn how to sell. Now I know that that is simple but we do it in two ways; one we help new organizations be better at leading and growing their sales organizations to get better results so that’s on the consulting side and then with the sellers we help them understand all the things that they need to understand and gain the skills that they need to be able to succeed in the ever-changing world of selling so that’s us.
Jim: And what prompted you to do this report? This report is so packed, I always try to come up with my questions before the show and I have got so many questions in this that I can’t even hope to cover that this 22 pages covers. I have sent it on to several sales managers I know hopefully many more but what prompted you to do this? And since November and how has the reception been for it since you produced it?
Mike: Sure. So, first what prompted us to do it? So, in 2013, so just a couple of years ago now we did a study of sellers and what sale winners – so sellers that won a major sale – did differently from the seller in actual sale that came in close to second-place and we found that there are some pretty interesting and surprising things that sellers that won did differently. So, we asked ourselves the same question of the organization; for those organizations that consistently achieve better results, is there something that we can see and something that we can find that they do differently that might be interesting or surprise us?
So we have been studying sales organizations for two decades now and analyzing and making recommendations on what they should do to sell and said we have been using our analysis model called the Sales Performance Wheel for so long and we said it’s time to build a benchmark database to understand truly what the organizations gets and not just higher win rates, but higher win rates, better revenue and profit growth, that they are able to achieve their goals but not just achieve them but those goals are challenging because hey, who really cares if you achieve a goal you can sleepwalk to it and as well maintain premium pricing so we thought let’s take a look at that.
And we spent about six months on it and we studied and we had several thousand responses to the study but we were only studying organizations of a certain size; midsized and larger organizations selling to organizations that have less than 10 sellers we cut out. We really wanted to look at the system that is led and managed and is an ecosystem in which sellers sell their world in which they have to form what looked differently than the ones that are getting those better results or not.
We are fascinated to find the answers and you said it was 22 page packed report, there were over 1000 pages of statistical data tips that came back, you like the two page report I will get you a couple little over 1000 pages reading and you will laugh and cry, you will read them again and again and it was just filled with fascinating stuff.
And the last thing I will say on the intro, we wrote that report you read on win rates but we also have overall reports on just what the top-performing sales organizations do differently so we can talk about any and all of that today.
Jim: Well it’s not unusual that a good sales consultant would say let’s study the salespeople, let’s study the top salespeople and top emerging salespeople, new salespeople should do what top salespeople do – don’t follow your own path and do what losers do, do what winners do. In this case you studied organizations, determined who the winners are and now you are presenting data that says these organizations should do what the winners do.
And you covered four areas: becoming a value driving sales organization, optimize the sales process and opportunity, prioritize sales skills and training and take the lead – now all of those things sounded pretty good until you get into it and I start looking at must be 25, 28 different 30 different charts in here. Out of all of these, what do you mean by becoming a value driven sales organization? That’s a buzzword but not everybody knows what it means. What do you mean by that?
Mike: So, we’ve looked at three different categories, we categorize all respondents into three different areas for the study. And we studied what we call the elite performers, the top folks in the database in terms of the win rates and the results and all of that kind of stuff, the top 20% which were the top performers and the group that we call the rest.
We also categorized them in a different way and the way we categorized them differently was we looked at five different questions that we asked in the report that focused specifically on value. One of the questions was our sales organizations focuses on driving value for the customer I think 61% of “the rest” answered that yes but 91% of the elite performers didn’t. I
We also asked questions about whether the sales process was flexible to adapt to whatever the various buyers needs and preferences are or whether it was rigid. We asked whether company leaders prioritized their sellers to actually be valuable to buyers and 16% of the 472 respondents answered yes to all five questions and we just gave them the category “value driving sales organizations” and they had much higher win rates and they had much better revenue growth and they had lower turnover, they had more motivated sales force, it was just pretty wild what the difference in the value driving sales organizations compared to the rest.
Jim: I would love to get into some of the charts here but we don’t have the time to do that, the whole idea here is that people really get interested enough to look at this report and do something with it.
You mentioned the prioritizing sales skills and training, it’s fairly common, as soon as the sales are doing poorly in the company the first thing everybody jumps up and says well I guess we should train salespeople and maybe it’s their value proposition, maybe it’s their sales process that’s broken, maybe it’s their lead generation process that’s broken but they always seem to turn to sales training as the first thing whether it is needed or not but you really made me a believer here when you say prioritizing the sales skills and training.
And you said top performers are significantly more likely to have skills that they need to succeed in each of the nine areas you studied. Now can you give us a hint about those nine areas? I know I am coming at you here kind of blind but you probably know this backwards and forwards so what are the nine areas?
Mike: There are several. Before I get to the nine areas I just want you to add a thought. So, you said if the sales organization is not performing let’s get them some training? That actually happens in my experience. The first thing that most leaders do when they say the sales organization isn’t performing is fire people – that’s not necessarily the best thing to do but usually what they do is change people.
The second thing that’s the most common they do is they change their compensation – well the compensation must not be working, they must not be driven for the compensation. So, I think just like your point though is that they hope to something. They make this leap of illogic when they say they are not performing it has to be blank when the point is that it could be all sorts of different kinds of things but you should actually figure out what those things are.
Jim: I totally agree with you, I see fire in the sales… by the time I used to be and brought in from a sales consulting standpoint they have already changed a lot of the people over. They have made changes midyear in the comp program and that disrupts everybody and then they are into the sales training issue and then they are looking at other things. But go ahead. What are some of those nine areas that are so important?
Mike: Sure. So, nine areas that we studied were driving winning sales opportunities – one. Two – core consultative selling which we defined as understanding the needs, crafting a compelling solution to those needs, demonstrating impact, building the pipeline, driving account growth, developing executive relationships, managing time, focus and personal effectiveness, advanced consultative selling which we defined as helping buyers see things in new lights and educating them with new ideas and perspectives that they find valuable, coaching and managing sellers and sales negotiations – so those were the nine areas that we studied.
Jim: Wow, and your charts here shows significant increases for performance on those groups do well in those nine areas.
Mike: Those were actually pretty wild. I mean people, we need performance, we need our sellers to sell and I’m going to give you an example of the way that we looked at some of the data that’s not even in that report. So, we ask sales leaders what their priorities were for the coming year for their sales forces and they had about 20 different options. One of the options was driving sales with existing accounts; that was the number one option picked as a priority. 50% of the database selected that as a priority.
Now we studied 72 different factors across the sales performance wheel. The place that was the biggest difference, the biggest difference between the top performers and the rest were that the organizations that were the top performers were that much better at driving sales than the existing account but as well the biggest difference was that their sellers had the skills to do it. So, everyone had the priority to drive sales of the existing accounts but the folks that were not in the good part of our database they just literally didn’t have the skills, it was the biggest difference out of 72 factors.
Now I want to say one more thing about this is that the smallest difference, the 72nd factor out of 72 factors that was the difference between the top performers and the rest was we have advantages in our offering set an hour offering set offers us significant growth opportunities. They both answered that question statistically the same. So essentially the products and services that they have are the same and the ones that get all the best results are where the sellers have the skills to actually be able to bring them out into the market.
The fourth biggest difference of all of the differences was that the sellers had skills in driving winning sales opportunities. So literally if you think about it what organizations want and what their people can do are completely different things. So literally at the organizations that we called “the rest” which was 80% of the database, so that means four out of five companies in our database we asked them if we they had the skills for driving account growth, only 43% of the organizations in the rest have those skills which means six out of 10 sellers literally do not, the organization believes they do not have the skills.
So, what are they paying these people for? Only 50% of them have the skills for driving winning sales opportunities. How can you be in a sales job and not have the skills to drive and win sales opportunities? But more importantly how could you be a leader at a company and tolerate that? What are you paying them for? It’s literally crazy!
Jim: We have been speaking with Mike Schultz, president of RAIN Group and we have been talking about his research report especially focusing a lot of time on this figure 17; sellers have the skills they need to find and win business consistently.
We are going to take a quick break and when we come back let’s talk a little bit more about this figure 17 and all of those nine areas and the most important ones. Paul over to you.
Paul: And now back to Jim and his guest.
Jim: We have been speaking with Mike Schultz, president of the RAIN Group and we have known them for quite some time. It’s great that we have got Mike on our 300th program today and we have been covering his research report: Increasing Win Rates and Meeting Your Sales Goals in 2016.
Now one of the items on this figure 17 which I really like to see is this filling the pipeline and there seems to be between the elite top, the rest 77, 52 and 37 which is some big number but I really would have expected that because I see this filling the pipeline really (which is) a big differences in so many organizations. Mike could you speak to that a little bit?
Mike: Sure I just think that when it comes to filling the pipeline, this is probably the place where most sellers get the job and are gone in three months or are gone in six months and when I was first starting in selling back when it was all just fuller brushes, when I started selling it was still a common strategy to give a seller a phone, a phone book or a business directory, a desk and say go and they were left to their own devices.
However at the time you could call and say hi, this is Mike Schultz the calling from ABC company and the reason that I am calling is because we have a long history of success with companies like yours so if I could have 20 minutes of your time to go over our capabilities et cetera et cetera, that was all fine because sellers or buyers couldn’t get information about sellers capabilities without talking to sellers. Now you have all of this information at their fingertips so it’s that much harder. It is also buyers communicate online, buyers communicate on social media, buyers communicate in LinkedIn; you can find buyers on LinkedIn.
There are hundreds of sales performance technologies to help you prospect and connect with buyers and as they say cold calling is dead. I think the phone is alive and well in selling but you are just going to rely on the phone you are going to fall apart. And one of the things in the whole trend toward inbound marketing which I believe is very relevant part of the world of selling, still 50% of sellers have to fill their own pipelines by themselves, they just can’t sit there and wait for marketing to feed them with leads. So, you might imagine that the organizations that are in the group “the rest” are not very good at it with only 37% having the skills and that’s pretty bad because if they did they would probably lead better sales organizations.
Jim: Well I see this problem consistently and as I go out to talk and to companies. Now you give so much to talk about in this report, let me get back to something you said earlier; what do these sales managers doing sitting on their duffs when their salespeople are not trained well enough to perform whether it’s filling the pipeline or having with the core consultative selling capabilities or driving these winning sales opportunities. Can you address the leadership issue? I mean we could talk about the salespeople and what they should do but usually the sales manager is the last one to get fired in most… well not all organizations but they don’t get rid of the coach soon enough when their sales organizations are failing. Can you address that?
Mike: Sure. So, one of the things we also studied was that leadership prioritized sales force effectiveness and in the higher performing groups it was a significantly higher than the company that were in “the rest,” only about 15% of “the rest” said that their leaders prioritized their own effectiveness so they are focused on something else. They are focused on M&A, they are focused on product, they are focused on something but they are not focused on sales.
We also ask the question, if leadership has a priority that priority gets done only 50% of “the rest,” I think about 51% of “the rest” answer that question in the affirmative. So you think about it like this, if it takes 50% prioritized seller effectiveness and only 15% of leaders are effective in getting their priorities done you’re only looking at 25% of the time that you are actually making any progress so 75% of the time in the rest either is not a priority or the leaders can’t lead their way out of a paper bag.
So, I think that for the leaders that actually believe that they want to do something; some people pay lip service to it but they just don’t care. They believe that they want to do something, they have to go through this maturation process, I like to think of sales organizations sometimes being like children: no matter how you dress them up they still grow up as fast as they are supposed to and it takes a while and they have to take their lumps. They have to realize this is hard, this needs investment.
I got a call from a company about a month ago that said that they had this big product launch, it had to be a success, the company’s future is hinged on it being a success and it needed to work so they needed sales training and they literally had four hours allocated towards it at a conference and I had to tell them it had to work and I said we can’t do anything else, we haven’t really done much for sales training and I said I wouldn’t necessarily do this but if you do don’t expect it to work and if it doesn’t work because they said leadership wasn’t going to invest in the sales training any more than that and if it doesn’t work I hope that leadership gets the sense that you actually can’t get done what you want to get done with the effort you want to give it.
But those companies that realize that this takes a lot of work and you can’t just fix compensation to where we started and you can’t just fire salespeople and rehire them and you can’t just give them if folder on the desk and say go and you can’t give them no training and expect them to succeed. You have to look at all of these things together.
It’s less common than you think that leaders are hell-bent on making sure that this stuff works and have a certain amount of personal effectiveness to actually make a sales organization mature the way that it is supposed to.
Jim: You know I take a look at this year I am not a great football fan but this year look how many coaches of NFL teams have been changing over and some with some recent success and they still decide they are going to change them over because they are still not successful enough. And others have been there years too long and others within one or two years they are gone invariably some of them had great teams and how many times they had great talent and a new coach comes in and all of a sudden this team springs to life yet it doesn’t translate over into business; sales coaches are still there, I have not criticized the sales coaches enough when I have gone and do some consulting.
This is really interesting work you are doing not only in the training in your company but this kind of research is so important to the people that care and anybody that wants to grow their sales organization has to care.
Tomorrow we will have a review on the SLMA blog about your white paper. How does someone get in touch with you Mike and how does someone get the paper? I can see your website up here, it is easier to get the white paper up from your website but tell us a little bit about yourself and how somebody can reach you.
Mike: Sure. So, if you google “Mike Schultz RAIN Group” you are going to fight me okay. Our website is www.raingroup.com and if you just hover over “resources” you will find white papers and it is there. If you want the full research, the full research is only available to our clients and as well to people on our research panel. If you want to inquire about joining our research panel you can send me an email to firstname.lastname@example.org.
I would like to make this one more comment if I can.
Mike: you mentioned that it’s often times the coaches that is the problem. I think it goes really back to leaders. You mentioned all the football coaches getting fired, so the Brooklyn Nets just fired Lionell Hollins and was it Lionell Hollins fault that they weren’t winning or was the team not invested in properly and was the leader looking at throwing money at a problem and hoping it got him a winner?
Well the leader is Mike Prokhorov and he has had five coaches over the last five years and have absolutely positively no drafts picks left and they have no team to put on the court because he thought he could shortcut his way to the performance and I just don’t think that works. You can’t buy your way into it, you have to make it work the right way. I hope that our research helps sales leaders in some small way do that.
Jim: So, this is only available to your customers and who else?
Mike: To our research panelist. So, for sales leader’s organizational leaders who want to get access to all of our research, we need people to answer questions a couple of times a year on various different sales topics so if you want to join the research panel you will get access to all the research.
The white paper that you read, the free white paper has a series of graphs and charts and that’s the white paper on increasing your win rates in 2016 and that’s free on the website. But to get the full research and to know everything that we found you can either read client at RAIN Group or you can join the research panel. But again, if you are interested in joining the research panel you just email me at MSchultz@raingroup.com.
Jim: Great. We have been speaking with Mike Schultz, president of the RAIN Group looking at his terrific research report and you can go to the RAIN Group, you can send them an email. Thank you very much Mike. Paul over to you for our next MSP now radio program!
Mike: You have been listening to SLMA Live Radio Channel with Jim Obermayer and yours truly Paul Roberts on behalf of the 9200+ members of the sales lead management Association. If it has to do with Sales Lead Management Association and sales lead marketing it starts here with the SLMA Live radio hour.