It was an hour full of valuable intelligence and insight for sales training companies and sales trainers in corporate L&D organizations.

Here are some of the points I made during the event. First, a quick review of 2011. (A look at 2012 and beyond will follow in Part 2.)

• Sales training spend was up during the first half of 2011, then down during the second.
  

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• 63% of companies ESR surveyed during 2011 spend less than $3,000 per sales rep per year.
  

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• More and more companies cut back on travel, requiring virtual sales training alternatives.
  

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• We saw some strategic acquisitions:
• Mercuri International acquired the business simulation company, Celemi.
• Miller Heiman acquired channel management specialists Channel Enablers.
• The TAS Group acquired sales performance improvement provider InfoMentis.
  

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• We found larger sales training companies going broader in solution scope, adding capabilities in many areas, such as ROI, business acumen, talent management and more.
  

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• Many smaller sales training providers consolidated their offerings going more niche.  Smart move during a challenging economy.
  

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• In general, our opinion that sales training companies make lousy marketers was proven yet again.  There are notable exceptions, such as Miller Heiman, Richardson, and RAIN Group.
  

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• Training companies need sales leads as much as companies in any other sector.
  

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• During 2011, ESR saw increased demand for process and sales training content in coaching (for sales management) and selling to the corporate procurement function.
  

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• Our sales training buyer community still has a tough time differentiating one sales training provider from another. (That’s why they come to ESR.)
  

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• Here is what generated some buzz during 2011:
• Jeffrey Gitomer is writing the ASTD Sales Training Drivers blog.
• Tom Searcy, author of RFPs Suck, took over Geoffrey James’s blog (formerly Sales Machine) and is now writing for CBS.
• Geoffrey James, who recently published How to Say It: Business to Business Selling: Power Words and Strategies from the World’s Top Sales Experts, now writes for Inc.com.
• A few good books were published, including The Challenger Sale.
• The TAS Group released their Dealmaker Index.
• Some sales experts invested time and effort in social media—CustomerThink, Focus.com, Quora, LinkedIn Groups, and Twitter among others. The question is, will it pay off?

Be sure to catch Part 2, where I will share with you which companies ESR believes are leaders in numbers of different areas. Don’t want to miss it? Then subscribe to this blog:

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Finally, join me this Wednesday, January 18, when I’m a guest for The TAS Group Webinar: The Evolution of Sales—2012 Vision.

Photo source: Endostock/Fotolia.com

Seven years ago I was flown to Lake Como, Italy, by the CEO of a global corporation based in Sweden. I was to facilitate a full-day workshop with ten country managers and division presidents. The subject was strategies for improving sales effectiveness within their business units. Not exactly sales training, but close enough…

I arrived at the resort on Lake Como after three flights—Martha’s Vineyard to Boston, Boston to Geneva (overnight), then Geneva to Milan—exhausted and needing sleep very, very badly. My hosts saw me arrive in the late morning and convinced me to spend a few hours getting acquainted with the team and the venue before a brief workshop I was to run that afternoon. By the time dinner rolled around it was too late for a nap, so I stayed with the group until 10:00, then went back to my room. I would catch a solid 8 hours and be in fine shape for the challenging day ahead.

At nine the next morning, the U.S. country manager banged on my door, screaming, “Dave! Dave! DAVE!” We were supposed to start at 8:30. I had slept through the two alarms I set. And the wake-up call from the front desk never happened.

I jumped into the shower, lacerated my face in three places in my attempt to shave. I was out of the door in 15 minutes. Fortunately I had pressed my shirt and slacks before I went to bed. I ran as fast as I could to the conference room, dragging my open laptop with the power cords trailing…

When I arrived at the conference room, sweaty, out of breath, with patches of tissue staunching the flow of blood from the cuts my face, one of the country managers was in front, moderating a discussion. The CEO cornered me and said, “Stein. You are off to a very, very bad start. I don’t know what you are going to do to recover. I am not happy at all. You have until lunch to get our interest.” With that, he sat down, crossed his arms, and stared at the front of the room. Mamma Mia!

Sharing with my audience the fact that that this had never happened to me before didn’t do anything but anger them further. What I considered a sincere apology didn’t help either.

By the time we took a break for lunch, I got two raised eyebrows from the CEO, which I interpreted as, “Okay, you have my interest.” Evidently I did, because he said we would resume our session after lunch. I decided to eat at a table by myself in order not to make anyone I sat down with uncomfortable. There was only one American in the group, and he stayed away from me. Smart guy.

By the end of the day everyone was engaged, including the CEO. They were very appreciative of the content, how I managed the session, and my ability to recover from such a disastrous start. I was beyond happy when they invited me to a special dinner for the team. By the end of the evening we were all joking about the incident. (I wrote this story up in an article a year or so after the event. Coincidentally the CEO happened to read it. I got a very nice note from him.)

I got back to my room at 11:00. I had to get up at 4:30 am for the limo to the airport for the flight home.

You guessed it. I stayed up all night.

There were other stories and some great comments on this discussion, including those by Tibor Shanto, Leanne Hoagland-Smith, Josiane Feigon, and Craig Rosenberg.  Lots of fun.

Photo source: ItalianVisits.com

Please take a few minutes and complete the 2011 Sales Person Onboarding/New Hire Sales Training Survey, register for our upcoming Sales Expert Thought-Leader Panel Series, and…

Happy holidays and a healthy and happy New Year to all of you and all of yours.

You may be aware of Executive Conversation, a sales performance improvement company that focuses on executive selling skills around financial and business acumen.  Executive Conversation (acquire ESR’s profile and evaluation of Executive Conversation) says there are five competencies required for B2B selling that are under-appreciated and under-leveraged:

1. Business Knowledge.  The ability to understand a customer’s business model and effectively interpret the macro economic factors impacting their performance.
2. Customer Insight.  The ability to gain the account insight required to identify new opportunities and to credibly engage around a customer’s strategic initiatives.
3. Financial Acumen.  The ability to interpret financial trends and analyze customer financial performance to pinpoint areas of need.
4. Return On Investment.   The ability to credibly quantify the financial impact of investing in your solutions using metrics meaningful to the customer.
5. Executive Engagement.  The ability to credibly engage, build relationships and sell at executive levels within customers.

Certainly Executive Conversation isn’t the only company that serves to transfer financial and business skills to salespeople.  Back in January, Mercuri International acquired Celemi, a business simulation company.  Smart move for Mercuri. Very good news for their clients.

Allow me to introduce another proponent of financial acumen, Jack Malcolm, who runs Falcon Performance Group, and is the author of Bottom-Line Selling: The Salesperson’s Guide to Improving Customer Profits. Jack was kind enough to answer some of my questions.

Dave Stein: Your book is Bottom-Line Selling: The Salesperson’s Guide to Improving Customer Profits.  What does a salesperson has to do to affect their customer’s profits?

Jack Malcolm: At the big picture level, the first step is to see their customer’s enterprise as a vast engine for generating cash. They can improve the cash flow engine in three ways: making it more effective (increasing the customer’s sales and margins), efficient (reduce costs and improve asset efficiency, and fast (reduce cycle time of their business processes). That’s the financial impact. In order to arrive at the financial impact, they have to intimately understand the functional impact: how their solutions improve their customer’s processes, by reducing inputs and risk, and increasing or improving outputs.

DS: There has been a well-defined need for financial selling skills going back decades.  Some training firms deliver this content, and there are few that focus on it alone. Why is it that more B2B companies haven’t taken hold of the proven way to increase sales and combat against commoditization?

JM: Probably the most common excuse is that they say their people are already doing this well, although with just a few questions it’s easy to figure out that they don’t know what they don’t know. As to the real reasons, I have three guesses: One is that sales managers are afraid of showing their lack of mastery of the process. The CFO of one of my clients told me that his own sales leadership does not understand the concepts I teach their reps. In addition, it requires a team effort between sales and marketing to work together to define the connections between their offerings and improving customer’s processes and profits, and that team effort doesn’t seem to be too common. Finally, a lot of companies pay lip service to a consultative, patient approach but at the same time discourage taking the time to fundamentally learn new skills by demanding immediate, short-term quota attainment.

DS: This book could be seen as too big a hurdle to jump for the average B2B salesperson who needs to improve their performance.  Reading a book about financial acumen and selling skills is one thing.  Getting in front of a customer’s finance person and making a business case is another.  What’s the proven path to accomplish this?

JM: It’s an evolutionary process that goes through four stages—familiarity, application, validation, and mastery. The first step is to take the mystery and intimidation out of annual reports and financial statements. If they read the book with their customer’s annual reports in front of them, they’ll start seeing the connections. The next step is to begin applying the ideas by developing hypotheses about the process and financial impacts of their solutions, and then validate those with the appropriate process and problem owners, before they take it to the finance person or ultimate decision maker. Finally, when they do get in front of the finance person, don’t act like you know it all; approach them humbly enough so that they don’t try to shoot you down, and use the champions you have developed during the sales process to support you. Over time, knowledge accumulates and confidence grows. If it could happen overnight, everyone could do it and then it wouldn’t be exceptional.

DS: I would expect that anyone you would hire to sell for you would have to have the understanding and skills you outline in your book.  What would you say to sales managers regarding their own professional development and the people they would hope to hire in the future.

JM: Sales managers have to set the example with the application of these skills; they need to coach to them and coordinate the internal and external resources to support the financial selling approach. In my experience teaching these concepts, it’s the curious, learning-oriented individuals who take them and run with them. If I were hiring, I’d hire for smarts, teachability and business sense rather than old-line sales experience. Sometimes bad habits can be very hard to break.

Jack Malcolm is President of Falcon Performance Group, which is dedicated to improving the effectiveness of sales professionals in the complex sale. He began his career as a banker, which seems like a strange qualification for a sales consultant, but it gave him a solid grounding in business and financial knowledge which he uses to teach a unique mix of business acumen and complex-sale strategy and skills that today’s demanding customers require from top sales professionals.

There are several relevant and important subjects that we covered, including a review of 2011, leaders in 15 different categories.  You know by now that ESR doesn’t believe there is a single “best” sales training company.  In fact, pursuing that line of thinking has gotten many companies seeking sales performance improvement in a great deal of trouble.

We also looked at the changing sales training buying patterns, the impact of technology on sales training, and a look at 2012 and beyond.

I discussed the challenges faced by sales trainers and sales training firms of different sizes.  Of course every training firm is different, but here are some generalizations:

Among the challenges for firms with less than $1 million in sales are:

• The trainer’s need to build equity.  Since there is only so much one trainer can make training, speaking and consulting, trainers look for additional sources of value though books, virtual learning programs, etc.;
• The difficulty in having enough money to invest in marketing. Guerrilla marketing is cheap, but you often get what you pay for; and
• Getting past the $500k/year ceiling. ESR has some proven insights and strategies for growing smaller training businesses.

For firms from $1 million to $15 million in sales, some of the challenges are:

• Developing and executing a serious growth strategy incorporating services, products, geographic and market expansion, and scaling the sales and delivery function;
• Deciding on and recruiting professional management;
• Allocating the funds and making the right strategic investments in technology;
• Getting invited to more evaluations; and
• Balancing life style versus company growth.

For those sales training firms over $15 million in sales, among the challenges are:

• Continually innovating to keep the content relevant, compelling, and competitive;
• Having plan for achieving market domination;
• Slowing down old customer attrition;
• Maintaining margins during tough economic times and low-ball competition; and
• Leveraging alumni (in some cases numbering over a million).

These points were chosen from a much larger list accumulated through interviews with more than 150 sales training company owners and principals.

The archive of The State of The Sales Training Industry is here. (Free registration required.)

Photo source: Fotolia.com

Strategic procurement/buying/sourcing isn’t a new trend. It’s been around for years.  Although they didn’t invent it, I look at Walmart as the organization that drove execution of the strategic sourcing model to new levels in the 90′s.

Desperate to reduce expenses beginning in late 2008, executive leadership in many corporations looked at the Walmart model and tweaked or entirely revamped how they would deal with suppliers going forward.

So now, as a result of a glut of information available to buyers, salespeople enter into the customer buying cycle much later, then have to deal with a buying organization that may have little regard for their customer, or, and this is the troublesome part, the business unit acquiring the product or service.  ESR has been on the sell side of this process, and it isn’t fun.

As the fourth in our Sales Thought-Leader Series, I’ve invited four experts in the area of dealing with strategic sourcing.  We’ll be having a conversation on that subject Wednesday.  No PowerPoints, no scripts, no rehearsed responses, no B.S.  Plus live questions by phone from the audience.  If you’re interested in the archived panels we’ve had, you can find them on this Sales Thought-Leader Panel Series page.

Selling To and Negotiating With Today’s Tougher, Strategic Procurers/Buyers/Sourcers

This panel has already taken place.

Panelists:

One more thing:

ESR is offering a complimentary webinar for sales training and sales performance improvement providers only on Wednesday, December 7, 2011 at 12:00 ET.  You can find more information and registration about the  sales trainer-only webinar here.

Photo source: Fotolia.com

This tendency is one of the most important reasons to hire the right people (with the relevant personal traits for the job) and provide those people with the structure, processes, and tools to assure that only the positive elements of subjectivity (reading people and situations, instinct (to a degree), and other capabilities one might classify as the “art” aspect of selling) impact their decision-making and how they pursue business. At ESR we know that objectivity is a critical selling capability.

Selective attention is an interesting behavior to study when it comes to salespeople.  Basically, it’s deliberate, focused attention. (Here is a detailed description.) The problem is, as I see it, that many salespeople focus their attention on what they want to see, rather than what’s really there. Some of you may remember that I often use the quote, “We see things not as they are, but as we are.”  Or, the more popular and humorous, “Denial ain’t just a river in Egypt.”  That one is attributed to Mark Twain.

So here’s a video for you. I’d like you to watch it, then come back to me with your response to this question:

Do you agree or disagree that selective attention is an issue that must be addressed in a strategic sales effectiveness initiative?

Here is the YouTube link to the video below, in case you’re on an iPhone or iPad:  http://www.youtube.com/v/vJG698U2Mvo

Before the event, Donal asked if I would preview their new Dealmaker Index sales effectiveness assessment tool prior to its release.  I spent 15 minutes or so completing a series of questions about my personal selling approach, actions, and activities, and those, on a higher level, of ESR.

Before I tell you what I got for my effort, here is some background from The TAS Group’s press release.  “Based on an analysis of 92 sales performance factors, mapped against proven successful approaches, the Dealmaker Index measures the effectiveness of sales organizations and sales individuals across areas such as deal close rates, sales cycle management, value creation and sales opportunity development. It analyzes their activities, behaviors and attitudes and their strategic alignment with their companies and the resulting sales velocity they can achieve.”

The output was a very detailed road map of what I and my company needed to do to elevate performance. There are three outputs:

• The Executive Summary Report identifies 5 key action areas for immediate improvement, as well as an overview of the company’s Dealmaker Index.
• The Company Detailed Analysis and Recommendations Report, provides guidance to the company on Strategic Alignment, Sales Process Analysis, Sales Velocity, Sales Coaching, Social Media, Customer Retention, Competitive Differentiation, Sales Methodology, CRM and Revenue Performance Management. This comprehensive report, tailored for the individual company typical exceeds 3000 words of in-depth advice.
• The Personal Dealmaker Index Report looks at the performance of the individual sales professional, analyzing his or her capability, how he or she approaches a sales engagement, his or her personal sales perspectives and the efficacy of his or her use of sales systems and infrastructure.

Click on the graphic to see a full-size view of an excerpt of my results. This is one of the outputs from the tool.  Here is another.

I analyzed the reports from the Index comparing what its findings and recommendations and what I know to be ESR’s (and my personal) selling strengths and challenges.  After all, one of the services ESR providers to our sales training buyer clients is evaluating their sales effectiveness. That’s a core competency here at ESR. What I found is in the areas where the Dealmaker Index was inaccurate, I was somewhat inconsistent with my responses to the questions. ESR has a bit of an unusual selling model with a number of components, markets, channels, and products. I didn’t do a very good job of delineating them. GIGO.

For the average salesperson or sales manager, this tool is a really good place to start with a diagnosis of your selling challenges, validation of your strengths, and recommendations for both.  I don’t see any weaknesses in the tool.  If it were to provide an inaccurate report, the reason would be the person inputting the information wasn’t able or willing to provide accurate data.  Unlike the best psychometric tests, you can fool the Dealmaker Index, but who’d want to?

My recommendation is go to http://www.dealmakerindex.com. It’s free.  It’ll take you 15-20 minutes.  Read the output reports carefully.  I’d be very surprised if you didn’t learn something important.

By the way, Donal Daly will be delivering a complimentary webinar Thursday, November 17th at 8:30am PST / 11:30am EST 4:30pm GMT / 5:30 pm CET.  The subject: 92 Signposts to a Roadmap for Sales Success in 2012.  Here is a registration link.

The results show that, over the past two years, rapid advancements in technology, combined with a sluggish economy, have produced a dramatic leap forward in both the types of training provided and the subject matter delivered through virtual training.

The report was published today. Here is the press release: ESR’s 2011 Report on Virtual Sales Training.

These changes represent a significant and unprecedented evolution for the sales training industry. There is no going back to what everyone was doing just three or four years ago.

Here is some of what is covered in this Report:

• Average investment in sales training by salesrep
• Who makes sales training decisions
• Who is responsible for the sales training budget
• Mandates for virtual training
• The reasons companies train virtually rather than in traditional classrooms
• How long the improvement from virtual training lasts
• The differences between live virtual training and asynchronous (on-demand) virtual training
• The strengths and weaknesses of each
• What sales training content is best delivered virtually
• Delivery methods, including Internet- and computer-based
• Customization trends
• Relative increases and decreases in virtual versus live training
• Barriers to adopting virtual training and classroom training

This information is vital for sales organizations and training providers that want to thrive in this new environment.

This is one of the 10 charts in the 32-page Report that reveals changes in the sales training environment. (See note at bottom of post.)

Click on the image for a full-size rendition.

If you are an ESR sales training buyer or sales training provider subscriber, click here to access the Virtual Sales Training Report. The Report is included in your subscription.

Click on the link to purchase the Virtual Sales Training Report.

Important note: Written permission is required from ESR for quotation from this chart and/or any content in the Report or Executive Summary.  Getting permission to link to this post is not required.

Only once did a client say to ESR, “Yes, off-the-shelf training is just fine for my organization.”  Most companies feels that they are unique, that their problems are unique, and that only a unique training program can maximize their sales effectiveness potential.

Change vs. Status Quo

When an organization brings in a sales training company, there is a challenge that the organization is trying to overcome or an opportunity to leverage.

This fundamentally implies that a change is needed—that the status quo is not sufficient to propel sales growth to a new level. Therefore a sales training company is brought in to effect change in the behaviors of sales people in order to stimulate that sales growth.

Two Types of Customization

By acknowledging the need for change, it’s important to understand the meaning of sales training program customization. There are two types of customization:

1. Tailoring—adapting the training materials to reflect the sales organization’s products, services, sales force characteristics, as well as market and corporate specifics;
2. Modification—altering the intellectual property of the sales training company resulting in different learnings and/or outcomes, or modifying the instructional design of the program so that there is a core difference in the way the materials are presented.

Tailoring is almost always useful. Tailoring materials gets your company name in front of the sales people and personalizes the experience. Tailoring can replace canned, generic workshop examples with actual examples from your sales force’s existing pipeline, or recent wins or losses, personalizing the experience and maximizing the probability that the sales person will identify with the program, and benefit from it. Tailoring, if limited to phrasing, word usage, workshops and case study examples, is often helpful.

Modification is a two-edged sword. Modification can be helpful if there are processes within your sales organization that you know factually and empirically work, and if you can separate these working best practices from those processes which you know, or suspect, may be constraining your sales growth.

The Risk of Modification

Modification carries a potential risk—LCD—”lowest common denominator.” There is an observable tendency among course and methodology modifiers, resulting from pressure from certain stakeholders, to fine tune the new methods and processes taught in the course materials to such an extent that they are “devolved” into a mere reflection of the existing, flawed sales methodology. Customizing course materials to make the program “more like our business environment” can effectively negate the original objective of the program, which was to effect behavioral change.

Avoiding “Devolution”

How do you avoid “devolution” in your customized sales training programs? There are four considerations:

1. Invest in a comprehensive, objective assessment of how your customers buy and the identification and prioritization of any gaps that exist between that knowledge and how your team currently sells;
2. When documenting and implementing best practices, make sure that you have empirical metrics that denote that those practices do, in fact, stimulate behaviors that increase sales;
3. Evaluate your sales training company’s methods for modification of educational programs. Each Sales Training Provider Profile and Evaluation that ESR publishes rates the customization capabilities of that sales training company.  We know the provider’s approach to customization is a very important buying criterion for most companies;
4. Stick with tailoring of your training provider’s content, assuming you’ve selected the right partner.

Number three is important. Some sales training organizations resist modification of their programs at all. Some have a core set of learnings that are assembled and designed around a study of your organization’s best practices. Others have designed proprietary systems or methodologies for modifying course materials that are specifically designed to maximize the value of nomenclature tailoring, while minimizing the probability that the structural integrity of a course will be damaged by the customization effort.

Recommendation

My recommendation is this: Don’t make a snap decision on either a trainer or on your customization approach.

What have been your experiences with customization.  Am I right about this?

Source: The Value and Perils of Customized Training, an ESR/Brief.

Photo credit: © bugman – Fotolia.com

There are scores of articles and blog posts about why sales training fails. Unfortunately, many have been written by sales trainers with an agenda. With more than six years of ongoing independent research, ESR understands why sales training fails, and more importantly, what sales professionals, their managers, and sales trainers can do about it.

Update: On Friday, August 5, 2011, I delivered a webinar sponsored by SMT’s Center for Sales Excellence.  During that webinar I shared with participants the primary reasons sales training fails and specific, proven strategies to overcome this decades-old challenge. The webinar is archived here.