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Sales Governance

In the end, or is it at the beginning, it is all about Revenue Generation. Strategy Execution will not materialize unless strategies are anchored all the way down to the revenue generation processes.  Of course, there is more to generating revenue than having a good strategic plan, a good annual plan, having hired the best people, and having discipline.  You have to answer the question “Why aren’t the dogs eating [more of] the dog food?”  The answer to that question is never simple; there is rarely a silver bullet.

Extensive win-loss analysis concluded that, eight out of ten, times business is lost because of failures of the sales process, including(14):

  • Real decision-makers are identified and contacted too late in the sale process
  • Energy is focused on people we get along with, but lack authority
  • Inadequate project qualification
  • Account team operating in an uncoordinated manner
  • Proposal lacking cost justification and customer-oriented value propositions

However, beyond an effective sales process, proper Sales Governance requires a complete linkage between, vision, mission, strategies, and sales execution.

Sales leadership starts in the office of the CEO.  CEOs need to realize that it is the organization’s responsibility to see that sales people are successful, and not the other way around.  The office of the CEO must induce a culture of strategic selling to the whole organization.  Selling strategically means implementing a Sales Governance Model and developing competencies at 3 levels: Strategic Components, fundamental to the development of a Go-to-Market plan, which itself leads to Sales Execution capabilities.

The Executive4sights™ Sales Governance Model creates a sales culture which looks at the selling paradigm in its entirety, and is broken into three levels: Strategic, Go-To-Market and Sales Execution.

RGB Global’s Sales Governance Model

Sales Governance ModelCorporate & Sales MessagingMarketing & Demand CreationSales PlaybookSales Cycle MethodologyStraetgic Selling ModelSales CoachingSales EecutionSales ManagementOrganizational Design

Strategic Components

Revenue Management

Most organizations have several, very distinct revenue streams.  In the software industry, for example, an organization may have Software License (usually paid upfront against a perpetual license), Annual Software Maintenance, Recurring Software Subscription fee, Training and Professional Services.  From a value-creation perspective, it should be noted that these different revenue types do not attract the same valuation from investors.  In general, a clear understanding of the value of each type of revenue is critical for focussing the organization on the revenue most desirable for you.

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Competitive Intelligence

Competitive Intelligence is the foundation of a solid Sales Governance model.  Competitive intelligence will influence your market segmentation decisions, your sales organizational design, your strategic alliance strategy, your messaging strategy, your demand creation strategy, and more.

Because of the breadth of their solution portfolio, many organizations face multiple competitors, from niche players to very large  vendors.  One’s ability to create a holistic distinctive identity that remains true in any competitive situation and to set its own go-to-market strategy, including its messaging, requires a formal and documented competitive analysis.

This analysis should include the following (amongst others) for each major competitor:

  • Their websites, brochures, press releases and other public information
  • Their messaging and positioning
  • Their ecosystem (including partners, customers, suppliers)
  • Documenting differentiating features
  • Their strengths and weaknesses
  • Their go-to-market model, including their lead generation and sales engagement process

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Market Segmentation

Market Segmentation is about finding the path of least resistance, or the path of greatest opportunity.  It helps focus resources at the right place.  Territories, Verticals industries and Channels need adequate consideration:

  • Understand and document the rational for territories and channel selection;
  • Document assumptions about Market Segment potential; and
  • Define long-term market plans [Americas, EMEA, APAC].

With limited resources, most organization needs to focus its efforts on their “A” customers/prospects [identified via an ABC segmentation analysis].  All should identify MUST WIN accounts/prospects and build a sales organization capable to handling such “A” customers/prospects.  Furthermore, and particularly so with large customers, the question of YOUR “wallet share” of the customer spend should be well understood.  It is a well-accepted principle that the least expensive sales acquisition model is to expand ones presence inside its existing customers.  Once the selling model is well understood, it can be replicated into developing channel partners and expanding into new territories, and new industry segments.  Depending on the key corporate messaging, the Technology Adoption Lifecycle & Hype-cycles need to be factored in one’s segmentation preoccupation.  Early adopters, Mainstream organizations, and Lagers do not buy at the same time or for the same reasons.

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Organizational Design and Hiring  -  [When in doubt – do not hire]

Recruiting (not to mention retaining) great salespeople is amongst  the most challenge.  And we believe that less than 20% of sales managers and sales people fall in the very-good + category.  And despite that, these are the people you really want.  CEOs have to ensure their organizations rise to that challenge and ONLY hire smart, and hire right, the first time.

Failure to hire the proper sales executives or sales people will have tremendous negative impact in time, money, opportunity and morale.  Just consider the time aspect.  One has to recruit (3-4 months), hire (1 month), ramp-up (4-6 months), realize the sales leader is not delivering (6-9 months), de-hire (1 month), recruit the replacement (3-4 months), ramp-up (4 months).  In all, a hiring mistake, at the sales leadership level, will cost an organization from 18 months to 30 months.  No one can afford this waste of time, not counting the direct financial cost in hiring and de-hiring fees and the even greater opportunity cost in list potential transactions and market position.

Caliper, a human resources consulting organization in Princeton, New Jersey, conducted a study in 1999 on the personality traits and attributes common to great salespeople.  Their intent was to provide managers with a foundation for making hiring decisions; to uncover the inner workings of truly great salespeople and distill those qualities into a list of traits to look for in new sales reps; and to help organizations find successful salespeople.  By determining which potential hires or current employees possess these traits, you can pinpoint and nurture those likely to be future stars. 

In the end, you need to have the right sales people that have the right basic selling skills.  Interviewing to hire the right sales person is very difficult; it goes well beyond the person’s record of accomplishment.  A sales person must have a successful track-record, but more importantly, he/she must now why they have been successful.  They must understand what it is that they do that makes them win, and what it is they did not do, when they lost.  As you probe into their stories, look for these traits:

  • Ego Strength
  • A Sense Of Urgency
  • Ego Drive
  • Assertiveness
  • A Willingness To Take Risks
  • Sociable
  • Abstract Reasoning
  • A Healthy Sense Of Skepticism
  • Creativity
  • Empathy

Not every salesperson is going to possess every one of these traits, nor will every potential new hire.  However, these traits should help you assess topnotch new talent.  While about two thirds of Caliper’s survey top performers did come from other organizations (meaning you might have to poach from your competitors), a more telling statistic is that one third of those sales stars did not have prior sales experience.  If employees in other departments of your organization possess these traits, by all means, recruit them. 

These 10 traits are only a starting point.  You need to see if there are others traits that are necessary for success in your industry, and then prioritize those traits during the interview process.  Pick the five most important for a first interview; if a candidate possesses those, pick another five, and continue until you find someone with 80% of the desired traits.

The 10 traits offer an important framework for hiring, because they must be inherent. One of the fallacies of the sales training arena is that training can correct traits, but the reality is that these traits cannot be trained, in any short periods.  When you hire a sale rep, you get what you get and you are stuck.  So you better know what you want and hire that.

Hiring a great Sales Leader is even more critical and difficult because, to be a good sales leader, a person has to have been a great sales person, and therefore they can sell themselves.  Unfortunately, very few great sales people can turn into great Sales Leaders.  Great sales leaders encompass the following traits:

  • Been a star sales rep
  • An eye for good talent
  • A sense of urgency
  • A knack for numbers
  • Active listening
  • Strategic thinker
  • Clarity
  • Consistency
  • Leadership and mentoring skills
  • Enormous egos need not apply
  • Empathy
  • Experience counts
  • Organization fit
  • Ability to delay gratification


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Alliances, Partnerships and Channel Strategy

Strategic Alliances only work effectively within a defined framework.

Organizations, from very large to very small, build Ecosystems of partners to support their growth and strengthen their long-term viability.  The reasons and motives for establishing specific relationships are unique to each pairing, and may include:

  • Expanding market credibility by associating with larger players and market gurus
  • Expanding market reach either geographically, vertically, by size of accounts, by the use of Distributors, Value Added Resellers and Resellers
  • Expanding footprint by incorporating additional complementary solutions

No matter the reasons, successful strategic alliances share a common characteristic: they are mutually beneficial by design.


A Strategic Alliance framework encompasses both a planning/development portion, as well as an execution/deployment portion.  The first is focused on Strategic Alliance design and value creation considerations, while the latter is focused on execution and trust building.  The former is a corporate function, the latter a field function.

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Performance Management

Performance Management is about making the whole revenue generating machine deliver the  expected results against a set of targets.  The notion of On Target Earnings (OTE) is a best practice in result-oriented organizations.  An OTE model establishes a base salary commensurate with the scope of responsibility of a specific position and a target/achievement-based compensation component.  The latter part is paid, of course, to the degree that achievements meet or exceed targets, and are sometimes pro-rated, although not always in a linear fashion.

In any case, meeting targets (or missing) should be consequential for all staff.

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Corporate and sales messaging

Corporate and sales messaging is the first component of a scientific selling model.  It is about creating a compelling and unique value proposition.  Power Positions highlight what is IMPORTANT to customers and UNIQUE to youIt is about clearly understanding and articulating your Power Positions.

Creating good messaging is hard, very hard.  You need to understand your target customer very well, you need to understand your competition very well, and you need to identify those elements that are important to your customers and unique to you.  Each of these three steps needs to be executed with disciple and methods that ensure you’re dealing with reality and not internal perceptions of the customer needs and competitive position.

Messaging needs to align in all aspects of your business.  You cannot afford to have contradictory or misaligned components.  For example, if you are claiming to be a world’s leader in you field and your sales reps dress like hobos, then your messaging is misaligned.  Clearly, messaging is not only about the words you use, but also about the image you portray in your brochures, on you website, in the kind of people that work for you.  It is about your corporate culture as well.

In Jim Clemmer’s book “Growing the Distance”, a poem by James Allen offers a powerful vision of how our conduct reveals our core values and shapes your messages:

    You Tell On Yourself
    You tell on yourself by the friends you seek
    By the manner in which you speak
    By the way you employ your leisure time
    By the use you make of dollar and dime
    You tell what you are by the things you wear
    By the spirit in which your burdens bear
    By the kind of things at which you laugh
    By the records you play on the phonograph
    You tell what you are by the way you walk
    By the things of which you delight to talk
    By the manner in which you bear defeat
    By so simple a thing as how you eat
    By the books you choose from the well-filled shelf
    In these ways and more, you tell on yourself.

In these ways and so many more you tell about your organization, your solutions, your motives and many more. 

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Marketing & Demand Management

Once you have your messaging well articulated, you need to let the world know.

Marketing and Demand Creation is an extremely large topic.  However, as a first rule: there is no need for marketing and demand creation, if you cannot handle effectively your current pipeline of leads.  That question is not asked enough - Do we need more leads, or do we need to get better at closing the ones we have?

Lead Generation is generally a function of marketing.  Marketing is there to support research, branding, sales, community and marketplace building, M&As, IPO, thought leadership, and even internal communications, locally and abroad.  Marketing should be able to deliver, internally or via outsourced services functions such as:

  • Branding  (organization Name, Product Names, Tag Lines, Colors, Key Messages, …)
  • Creative services (Ads, Images, Metaphors, PowerPoints, …)
  • Collateral Material creation
  • Web-site design and other related services
  • Seminars, conferences and Trade shows (Themes, Organization, Execution, Speaking opportunities, Analyst coverage, …)
  • Advertising placement
  • Public Relation
  • Technical writing (White papers, bi-line, speeches, …)

In the end, all of these activities are only there for one reason: to generate more sales.

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Win/Loss Analysis

A key step in setting an effective go-to-market plan is to better understand why you have been successful, or failed in the past.  This requires that you take a long and hard look at your best customers, and ask them, or at least yourself, why did they buy from you back then, and what will it take for them to buy from you again?  And also, you should take a long, hard and brutally honest look at the deals you have lost and really understand the reasons for the prospects decision. 

If you are being told you win business because of great salesmanship, or that you lose business because of price, you are being snowed!  It is actually the other way around.  You always lose business because of poor salesmanship – i.e. you have been outsold by the alternative solution; and you never win business because of price – but rather because the customer perceived value

Because bad sales leadership is just as lethal as poor closing skills, because going after the wrong market is just as ineffective as delivering sluggish customer presentations, because keeping underperforming sales people is just as expensive as working on unqualified prospects, Win/Loss analysis needs to be done, on all deals, forever. 

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Sales Playbook

Your science of selling needs to be documented into your Sales Playbook.  This is a living document, updated regularly that will include the following:

  • The Meta Message (including THE BIG picture)
  • 5-10 Power Positions, including for each Sound Bytes, a Big Picture, a detailed explanation, competitive positioning, contrasting stories (current pains and future gains), grabbers (What ifs, Word/Number plays, 3D props, mini drama, cooking demo)
  • Customer Benefits, including market trends, ROI, case studies
  • Competitive analysis of each major competitor (including status-quo) including positioning, positioning evolution, competitive SWOT, and Win/Loss analysis
  • Staking your Claims (at what are you the Only, First, Biggest, …)
  • Profile of the Zebra (the perfect prospect) describing the path of least resistance to a sale
  • Organization credentials
  • Probing / disqualifying questions
  • Criterion to assess your current position in a sales situation
  • Objection reframes
  • Presentation story board
  • Modules and pricing
  • Alliances & partnerships
  • Professional or delivery services
  • Contract, legal and administration

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Sales Execution

Sales Management

Like other business processes in the organization, sales management is governed by processes.  Sales management is one of the most important business processes as it provides an early indicator of future business health.  One of the most challenging sales management activities is sales forecasting.  It is our philosophy that all sales forecast should bare the mention “Objects on this page are smaller and further away than they appear” because sales forecast are produced by optimistic sales people, tempered down by optimistic sales managers, and further watered down by hopeful sales executives.  We do not adhering to Management-by-Hope principles, we want to see plans.

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Sales-cycle Methodology

Sales-Cycle Management covers aspects of effectiveness and efficiency of the sales process.  Best in class organizations have a documented five to seven step selling process.  At the minimum it should include phases such as Identifying or Qualifying, Getting In or Solution building, Getting Considered or Shaping the deal, Getting Evaluated or Building Momentum, Getting Selected or Staging the close and Getting Bought or Closing.  The sales execution process assists the sales team to understand how advanced a sales situation is, the outcome of previous activities and the forthcoming activities.  It will identify resources required from both the prospects and your own side.  It will assist in defining the time horizon in which a particular transaction may materialize.  It will require, and even force the implementation of a structured account planning process, it will require involvement of the whole organization in relationship building, it will maximize the likelihood of success.

7-Stage Sales Process

Strategic Selling Model

A Strategic Selling Model implements a structured approach to selling in today’s complex and highly competitive selling environment.  We subscribe to the Power-Base selling methodology introduced by the Holden Corporation in 1990.  We have expanded the Power-Base selling model and use this approach to move sales personnel to a Stage-IV selling paradigm.  Stage-IV selling is about owning 100% of a customer’s business by leveraging an entire ecosystem to create a high degree of dependency, and therefore stickiness, all the while developing a strong vendor/customer partnership.  It is highly beneficial to both the vendor and the customer and particularly effective with larger organizations.

4-Stages of Selling

 Our approach to selling follows many military strategist and consists on winning on paper first.  As such, account and opportunity management should include such activities as:

  • Account Strategy Definition using RGB’s Opportunity Vulnerability IndexTM
  • Account SWAT Team Building
  • Doing and maintaining a SWOT Analysis
  • Setting sales goals for the campaign (even before you speak with the customer/prospective customer)
  • Assembling Competitive Intelligence (Identify and learn about the allies and the enemies)
  • Shaping the Deals  (reshape customer requirements to meet your criteria)
  • SWAT Communications (Inform and instruct the armies)
  • Sales Messaging
  • Engaging Alliances and Partners
  • Ensuring execution is synchronized and flawless
  • Re-strategizing regularly

Great strategic sales people use these practices.  They recognize that the battlefield is the target customer org. chart.  They start with a comprehensive account profiling process to clearly understand the battlefield.  Then, decisions need to be made (and adjusted through the sales process) to balance Speed, Depth and Breadth of the opportunity.  Then an account strategy is developed to create the demand (usually by emphasizing the pains) in the Must-Win accounts.  Then the sales process engages by meeting people.

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Sales Coaching

A great sales person will manage his/her sales cycles to mitigate other weaknesses in the organization’s selling paradigm, but it would be a mistake to believe all your sales people are at that level of efficiency and effectiveness.  Less than 10% are.

To make the other 90% of their sales people more successful, organizations should look at their sales model in a holistic manner.  It is our belief that organizations are responsible for the success of their sales people, and not the other way around.  And as a consequence, sales and deal coaching is of paramount importance, and the primary purpose of sales leaders.

It is always easier to get in when you have a warm introduction and then navigate from one warm intro to the next (upstream, as the case may be).  The major components of an effective sales campaign include:

  • Qualifying
  • Cold Calling
  • Strategic/Consultative/Solution
  • Navigating Organizations
  • Presentation Skills
  • Objection handling skills
  • Getting to YES
  • Negotiations
  • Closing

Effective sales execution is not easy.  Remember that “selling starts when the prospects says NO!”  Until then you’ve been taking orders…  Finally, you want to use Getting to YES, even if it means using psychology tactics such as Reciprocation, Consistency, Social Validation, Liking, Authority and Scarcity.

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Operational Alignment Leading and Managing Change

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Operational Alignment Stakeholders Value Creation


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Published at 20:01

11 March 2011

RGB Global Executive foresight
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