I highly recommend you view this since she provides great insights on Gartner's research on the future of IT sales.
The main takeaway is the following: Companies will have to find a way to overcome "Sellers' Dilemma," which is as she says in the webinar, "Finding the means to reinvent the sales organization and go-to-market models to meet new market demands while at the same time continuing to protect and defend the existing customers and deliver net new revenues."
During the Q&A, she answered three questions (the first two questions were asked by me). As you will read in this post, she provides great insights on the compensation model that will have to change, training that will be required to make the transformation, and the challenges traditional companies will likely face in moving to the innovative sales model.
I have edited her answers to make it more readable, but you can could view the webinar to get the complete context of her answers after she delivered her webinar..
Note, I have made some minor edits to her answers to make it more readable, but you should view the entire webinar to get the complete context of her answers which took place during the Q&A after delivering her presentation.
Does sales compensation have to change with the way sales has been today, what sales compensation is effective for both the company and the salespeople?
Tiffani Bova Answers:
Whoever asked this question, you nailed it because as you know that salespeople are very "coin operated." They do what they are compensated to do and even if there is something that may be better for the customer ---if they are compensated to sell something else that is what they are going to do. So I would say this to you, absolutely, sales compensation has to shift.
[How could companies make this happen? Have salesperson guide appropriate expert meet with the customers since they value that more than talking to the salesperson.]
So I will give you an example of something that I heard that I thought really was an effective way to meet the new buyers. So for example, if you are going to start to sell to new buyers, let's just pick the chief marketing officer (CMO) as an example. At the end of the day, the chief marketing officer wants to have a conversation that is more marketing oriented, and why wouldn't you hire someone who used to be a marketing manager or a product manager to go and sell to that front office buyer so they can have absolutely a marketing led conversation using the right buzzword and they understood the pains of the person who was sitting across from them.
What's interesting in that idea is the fact that a product marketing guy or a someone who used to be a chief marketing officer or a head of marketing never was really paid in a quota bearing compensation model.
So If you paid them differently with no quota, it wouldn't disrupt them in a way that they would say. "Wait a second, wait, how much money I am going to make" or "what's my quota?" or "How am I going to get compensated? What's my total comp? and putting a ceiling on how much I make?" They are not going to ask those kinds of questions.
So it's just an example of do you put accountants in front of trying to sell to the CFO because it is about having business conversations and guiding them to where technology can really bring them. And it means though that you got to think about partnering up that person who is behaving in the role of sales--who may have never sold before---with someone on the engineering side who can start to talk about how does the delver of this technology actually happen.
So, great question.
[What sales model to use?]
So, you can go to more management by objectives; you can go to more, are we selling to more front office and have we mixed the mix of it, not so much deal by deal by deal.
Or you even think about take variable comp altogether and pay them a little bit more money and you pay them on MBOs at the end of the year.
So, really great question.
Because absolutely, none of this is going to work if you don't compensate the sales force.
[What does this mean for the existing sales force?]
Now, not a question, but I am going to dig into one more layer and tell you. It is probably highly likely that half or two thirds of your existing sales force will not be able to make this transition to more guide like selling, business outcome selling, selling to the front office because they are very good selling to the back.
[What should organizations consider doing?]
So your expectations need be that you should be seeing and looking for hiring new sales force altogether anyway.
What kind of training do you recommend for sales so they add value to the customers?
Tiffiani Bova Answers:
Another really great question.
As part of the series [on] "Future of Sales, we actually have a note written about ...I know some of you have asked question about technology on sales force automation and other things.
One area where have seen increase on is actually investing in tools and technology around training and around really starting to think about that it can't be about it can't be about pipeline management and a process of I made ten calls; I got two responses and I went and gave presentations
It has to be a lot more about training mentoring and soft skills around what is sales doing and where are their gaps? So when you start thinking about what kinds of training?
Supporting with a technology internally is part of your CRM or PRM tools is really important. Thinking about it, at the end of the day, you got to start considering adding in to your CRM how can we start to manage sales from a "skilling" perspective in that environment; they are not doing this; they doing that; the ones that are really effective do these three things pretty consistently. It will really help you to get a feel for where you got gaps and where you can actually train your sales force differently.
Can you please share the best example of a sales model innovation in recent years?
Tiffani Bova Answers:
This is a tough one. And I get asked this a lot. Once again this is that benchmarking question of from a traditional IT provider who has had on-premise solutions historically and is now moving to a more of a hybrid portfolio, i,e,. they are introducing cloud. Their ability to compete with somebody who is only in the cloud is very challenging. The only in the cloud provider---born in the cloud provider---has a much more fluid and different and lighter selling model than the guy who is traditional on-prem who is trying to get to hybrid.
So when you ask the question, who's got great sales model innovation? I have to answer it differently based on where they are in their own journey because sales model innovation, if you look at someone born in the cloud could be that they did it completely online.
[How did the cloud guys do it?
- they had very limited sales force on the field
- they did it by mouth
- it was peer
- it was early in the hype cycle
- the technology trigger happened
- it became a buzz on its own in the technical community
- and then it sort of grew itself.
[How do the traditional guys do it?]
You can say that's innovative....very different then someone who says
- we are going to launch a product
- we are going to go out with a press release
- we've trained our sales force
- we've trained our indirect channels
- we got the segments spun up
- we got marketing launching and they you say what is innovative in the traditional delivery model? It gets much more challenging.
[What does Gartner consider innovative?]
For me, innovation has to be:
- Are they starting to sell to the front office?
- Are they starting to include the nexus of forces in their selling model?
- Are they using social as a vehicle to sell?
- Are they using social to get customer sentiment about what's happening with them in a market?
We of course have done tremendous amount of research around the chief marketing officer projected to outspend the CIO in coming years. A lot of that is around digitizing the environment so that the engagement with the customer can now become much more fluid. That same kind of energy has to happen around the selling resources themselves.
You see it, but we see it much more in the born-in-the cloud guys than we see it in the traditional guys today. We see some making movement into this hybrid portfolio where they are starting to get better usage.
[What should we be looking out for when an acquisition takes place?]
But the M&A that is happening should be very telling to you of where the provider is heading. But then watch what they do with the sales model? When a traditional guy buys a cloud guy, do they just try to deploy the same model they used in their existing business in the cloud and you'll slowly watch; salespeople start to leave and their effectiveness start to decrease.
So let innovation happen and more importantly make sure you connect with your customers---going forward---in a real meaningful way.
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