When talking about sales planning, we often think of how to improve what we are already doing—how to make our data more robust, our quotas ambitious enough, how to forecast more accurately, how to hire better, etc…
What we don’t think about is, does this plan actually work? Am I thinking about the problem right way? This is why I found Rick Smolen’s short interview on Bowery Capital Sales Podcast quite thought provoking. At the risk of spoiling it, here are 3 key learnings I found interesting.
Most of us learned about the Law of Diminishing Marginal Utility at some point, but we often fail to take it into account when it comes to writing out a sales plan. The common reasoning usually goes along the lines of: I get an average quota per Account Executive, so to know how many AEs I need to hire, I can just divide my target ARR by that quota… As Rick says, this fits nicely into a spreadsheet, but tends to hit a wall when early adopters start to run out, and new opportunities are no longer coming in. Sales reps end up spending most of their time prospecting rather than actually making deals.
The key to avoid this pitfall, he explains, is to focus on forecasting the top of the funnel. This means fostering a better alignment between marketing and sales teams, where marketing generates the leads, so that sales teams can go ahead and make it happen.
You know how birthdays can sometimes be bittersweet? Well a sales opportunity that’s been worked on for a year is just bitter. That is why demand generation is so important. New leads should be coming into the pipeline constantly. Account Executives who have too many opportunities tend to do better than AEs who have just enough because they can focus on closing the right ones and come back when the opportunities are ready.
It is very common for sales representatives to be solution-oriented. And that makes sense — you jump into a market with a solution, and your goal is to sell that solution. The limit to this approach is that it quickly deviates from the actual problem. AEs are often so focused on the solution, that they forget to spend time on their potential client’s pain points and what it would mean to solve these pain points.
This reminds me of what a marketing manager once told me, “In the end, it’s not about giving people what they want, it’s about giving them what they need.”
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