Three Ways Running a Startup Mirrors Being a Father

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I am the first to admit, I am not the best father, nor am I the best startup CFO ever. That said, being the father of seven children (you read that correctly☺), and having worked with more than seven startups, I have a bit of experience with both, so here it goes…

No means, no, almost always

“Can I go to Vegas for …? Can I borrow your car for …? Can I have money for…?” Are all things I have heard from employees and have (or likely will) hear from my children. Two simple questions: 1. Is it in the budget? 2. If not, how are you planning to pay for it? Very simple, but not always easily understood by the receiving party.

My kids are the best at everything. So are my employees. Just ask them

My children ask for raises in allowance, and my employees ask for raises in salary (and more options) because they are simply the best. Your first response to either should be: SHOW ME THE MONEY! Kidding. Your first response should be “show me the data.” All good CFOs know (or have access to) comp data. This is not a VP of HR’s job, this is a CFO’s job. If they have the years of experience and the aptitude for a title change and/or a raise, give it to them. If not, ask for an offer letter from someone else willing to pay more (my children love this one).

Trust is a hard thing to earn and an easy thing to lose

Read Steven Covey’s book The SPEED of Trust. All officers of companies expect the truth at all times, no matter how much it may hurt. I expect the same from my children. Break that trust, however, you do it (going to Cancun, while saying you are on a mission trip might be one example), and it will take years to earn it back as a child. Do it as an employee and you might want to find a new employer. We’ve all seen it at some point. Dishonesty leads to two outcomes: being outright fired, or likely worse, staying in the same job at the same pay, forever!

Moral of the blog: do the right thing. Listen to your dad (and/or CFO).

Happy Father’s Day!

3 Ways to Prevent Zombies in the Middle of the Funnel

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Flawed thinking has it that there’s nothing important or exciting about the “middle.”  Just ask Jan Brady or any nose tackle on a defensive line.  But the middle of your sales funnel is really important – opportunities have to be watched and decisions made based on status and progress.  Which ones will make it?  Which ones will fall out? What’s my next step?  The decisions we make on opportunities in the middle of the pipeline will prevent surprises later and will help us to put the right resources on the right deals at the right time.  If we don’t make the right decisions, or worse, neglect these deals, it usually results in fallout, or what I call “zombie” deals that linger around cluttering up the pipeline. These zombie deals steal time away from us on thought process, manager conversations and important resources.  If we do go about it the right way though, more closes, faster cycles and accurate forecasts happen.

So, in order to make the right decisions and make an impact in time, the focus should be on these three things:

  1. Deal Progress – This is your step-by-step sales process.  Most companies use stages to track deals and move them to the next stage as milestones are achieved and questions are answered.  Sales reps qualify deals for authority, need, urgency and money. I want to emphasize “authority.”  The information received on opportunities must be validated by the decision maker while anyone else tied to the deal is just to win them over.  Having a sales process aligns the reps for consistent behavior.  Details on deals are usually discussed verbally between a sales rep and their manager, but ideally all details should be recorded in the CRM.  By having this data up to date in the CRM, the manager can review deals and spend more valuable time discussing what plays to run and pointing out important pieces of the deal that are missing.  Also, if this detail is recorded in the CRM, analytics can be used to improve the sales process.
  1. Deal Momentum – This is where I look to find deals that are stuck and deals that have the right buyer engaged.  Typical things I look for to determine proper velocity are:
  • When was the last activity date?
  • When was the last communication with someone in authority?
  • Is the next meeting scheduled?
  • How compelling of a need is this that it can make someone buy now?

 

Once again, it’s better to have these things recorded in the CRM.  I do my prep work for the Monday sales meeting on Sunday, and I don’t want to contact reps on the weekend for questions or updates.  Also, at the end of the sales period, I want this information in the CRM for me to apply analytics on sales process improvement and performance.

 

  1.  Ideal Customer Profile – This is information about the ideal prospect, which provides more confidence that a close is inevitable.  For B2B sales, this is usually size, market or industry and whether you are engaged with the appropriate buyer who has purchase authority.  For B2C sales, I know an example of a company that sells solar panels and they look for certain credit scores of residences, homes where the roof faces south and for prospects to bring their utility bills to the meeting to compare the cost savings.  Once again, this is ideally recorded on every lead and opportunity in the CRM to track for analytics.

Do not engage resources or include pipeline deals in the forecast until you have a good handle on the above three things.  Applying a score, as a deal moves through the process on these three criteria helps enormously.  It is critical in determining how many will make it through the pipeline, which are worth resources, and which to apply to the forecast.

There’s nothing more exciting than adding confidence to a pipeline and forecast, but it’s even more exciting to close more deals at a faster pace by applying these three tenets to managing your pipeline.

Click here if you want to learn how to automate these processes discussed in this blog.

 

Sales Forecasting Is More Than Pretty Dashboards

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Inaccurate sales forecasts are a great way to kill the board’s confidence in you.  So, let me tell you a personal narrative having to do with that. Right after getting out of a board meeting once, I found out that my sales forecast was way off.  A few of my bigger deals fell out that really changed the outlook.  It was one of my first board meetings with this particular group of investors, and I was hoping to gain a lot of confidence out of the gate. This did not help.

My dashboards for the sales forecast and analytics looked incredible. I spent a lot of time working on the visualization. However, they lacked real substance.

So, here are three things I now make sure to review. I hope this will help you as well in understanding how to supercharge your sales forecasting and analytics. By doing so you will be able to close more deals, and do so faster.  It also will allow you to have a real handle on which opportunities are going to close in the sales period, which in turn will build confidence within your board and other stakeholders.

1. How are most sales managers/executives forecasting and staying on top of their pipeline today?
2. What’s missing? What are best practices? And why is the process in need of an overhaul?
3. How can current, proven and available technology accelerate deals through the pipeline and predict which will close?

HOW IT’S DONE TODAY

Sales forecasting today is predominantly made by the gut feel. It may seem at times like there’s some science to it, but the marrying of “system generated forecast” from your CRM and the “feelings-based forecast” from your sales reps is still by the gut. The system generated version is taking a percent from each stage, but how did you come up with that?  By your gut?  Do you have empirical data that tells you what it should be? If so, where did that come from?  Also, what if you have a few really big opportunities in that stage, and they fall out?  How does that affect what you forecasted from a weighted percentage?  You can try doing an average amount and multiplying it by the number of deals in that stage then take the percent, but it will still be by the gut. Not to mention most of us can’t come up with an accurate average sales price.

In addition, we forecast by asking the same questions over and over each week in the sales meeting while also spending too many hours in 1on1s. Sales meetings were designed for more value add, instead of rehashing “what deals will close this period?” and “what deals are you working on this week?”  We should already know these things going into the meeting.  Also, these verbal 1on1s need to have this data captured in the CRM so that opportunities can be analyzed based on their attributes, progress, status and qualitative input by the reps.

WHY FORECASTING NEEDS AN OVERHAUL

So what’s missing?  What should we be doing?  We’ve been forecasting this way forever and it’s long overdue for an overhaul.

First we have to engage the sales reps.  We need to have them frequently update the status of opportunities at each interaction. Updates include:

Stages:   the category of status (ex. Qualification, Defining, Negotiating, Contracts, etc.)
Milestones:   the points that have to happen before the deal advances to the next stage
Attributes:   information about the company and opportunity including market, size of company, price, competition, products, etc.
Qualitative Input: sales reps will provide their personal assessment of what’s going on.

This information HAS TO be captured in the CRM on each deal.  Without it we have no empirical data to support our analytics and dashboards.  We need to understand more about our sales cycles, win rates, performance and deals that fit our wheelhouse.  Most companies now do not have current information or status of opportunities within the CRM, nor do they have these opportunity attributes updated.  So forecasts, again, remain by the gut.

So why aren’t sales reps updating all this fresh information on a frequent basis?  Why do we continue to spend hundreds of hours in 1on1s, all the while not capturing this information?  Why do we spend all this non-value added time in the sales meeting discussing from the beginning what deals we are working and what’s happening?

Because the word is just getting out about new and proven technology available to do three things:

1. Easily capture much more detail about opportunities and record it in the CRM (real time)
2. Analyze, score and give insights on next steps to drive an opportunity forward
3. Predict which opportunities will close for the sales period

Sales forecasting technology is available now and is purpose built with predictive and prescriptive analytics, as well as possessing intelligent mobile capabilities. This makes it super simple to update relevant deal information right after it happens.

Current and modern technology HAS TO be leveraged to keep data clean, current and logical. Systems can be used to alert reps of exactly what should be updated and make it super simple for them to do so, especially by leveraging intelligent mobile solutions.  Advanced analytics are then required to score and predict which opportunities will close, while machine learning continues to learn your process and suggest ways to improve.  Ultimately, this allows your sales team to speed up and win more deals.

So keep the pretty, but get rid of the static dashboards. Utilize the best practices and technology described above to always have confidence in meeting your numbers.

Click HERE to learn more about TopOPPS’s sales performance and predictability solution.