Archive for the 'Leadership' Category

18
May
12

Reflections On Developing the Go-To Market Strategy

By Dave Stelzl's Blog Leave a Comment
Categories: Leadership
Tags: , , , , ,

It’s not often that I get to Chicago and the weather is just right – low 70′s, low humidity, clear skys, and best of all, no traffic to or from the airport!  It’s been a productive week.  Some lessons from this week’s strategy meeting are in order…

1. It’s never about the product.  We spent two full days on strategy, only naming product in passing, or by accident.  Marketing strategy that builds on features and functions is destined to fail.

2. Synergy among the leadership is so important.  We had this, and it showed…Jim Collins is right (of course), when he says, “Get the right people on the bus, others off, and make sure everyone is in the right seat before getting started with strategy.

3. Most of the resellers are competing on the same items – this makes everyone look the same, reduces margin across the business, and pushes up the cost of doing business.  There is a better way – in fact we discovered several.

4. Many of the things vendors are pushing VARs to do with MDF are useless…again, there are better ways to spend marketing dollars, and I believe we found some that will change the course of business over the coming months.

5. A clear vision of where the company needs to go is essential – it is the filter that everything else gets measured by.  We started here, taking the time to come up with a clear, concrete, unified vision, and it paid off through the two days.

PS. Note the photo taken from my window seat…down town Chicago.

 

© 2012, David Stelzl

17
May
12

Chicago, Day Three – Marketing Strategy

By Dave Stelzl's Blog Leave a Comment
Categories: Leadership and Marketing
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It’s my last day in Chicago, at least for this week (I’ll be back next week).  Last night when I returned to my room I looked at the front page of the Wall Street Journal – Headline, Meet the Meeting  Killers.  Keep in mind, I’ve just spent 8 hours meeting with a group of business leaders, discussing business and marketing strategy; everything from “who we are” to “what we need to become” as the tech market continues to evolve.  Unlike this article, which is the norm, our meeting was highly productive.  In fact, we didn’t have any of the problems highlighted in the picture to the left…why?  Here are some things we did to avoid problems:

  • The premeeting, meeting; First, I did take the time to talk with all of the participants before coming up here. I wanted to understand each person’s needs and goals for this meeting before having the meeting – this makes for an effective, highly focused meeting.
  • Our agenda is highly structured.  Not that we don’t have brainstorming and flexibility in our meeting – just the opposite.  But we have planned times to create and think outside the box in an organized way; we have a way to organize and consider ideas – and ways to stretch the imagination of each participant.
  • We have a facilitation process that works.  Rather than just talking, I use a process called The 6 Thinking Hats, developed by Dr. Debono.  Of all of the facilitation programs I have seen, this one really works.  I learned this method from a certified 6 Hats Trainer; I’ve also studied more than one book on the subject. If you want to run effective meetings, you need something to move people from spectator to involvement, but with order.  But you also need a way to draw out ideas from those who might not see themselves as creative.  You need positive perspective from the naysayer, and you need the optimist to consider the cautions.  You need a way of getting everyone in the group to consider things from many angles.  Debono refers to this as, “Lateral Thinking”.

By planning, structuring, and using a great facilitation tool, I believe the group would agree, we’ve accomplished in one day, what many groups take weeks to sort through.  And by the end of today, we’ll have a plan to execute on.

© 2012, David Stelzl

15
May
12

Hiring and Firing – Thoughts as I Prepare to Speak

By Dave Stelzl's Blog 1 Comment
Categories: Leadership
Tags: , , , , ,

Hiring great people – next week I will be speaking to business leaders in Chicago on the subject of hiring great people, along with a few words on when to call it quits.  While preparing, I was going through hundreds of interviews I have conducted with college graduates, sales people, technical people, and those I interview now through my mentor program.  So much of an interviewer’s time is spent on analyzing skills (which are important), yet most of the firing I see, happens as a result of character flaws.

The skill set is important, but when I think of the superstars I’ve hired, (and perhaps some of you are reading this right now,) it was a character trait that drove them to excellence, whether they had the skills or not.  One hiring decision comes to mind; a person who had very little in the way of technical expertise, but a strong determination to learn and excel.  I hired him as an entry level SE, but within a year (just 12 months) his billable revenues exceeded every other engineer on the team (and the clients he was serving were extremely happy).  His appetite for learning was so great, he pursued the certifications, learned how to sell and manage, and went on to run a very successful technology company after working with me for over five years.

I remember another hire I was involved with.  He started out as an entry level technician, but he was ready to do whatever was required to find new business, with aspirations of becoming a great seller.  He was eager to learn and to master the art of selling.  While his eagerness lacked some of the skills and understanding, he was willing to read the books, listen to instruction, attend some classes, and practice he presentation skills. Today he closes most of the business his company sells.  I can honestly say, he is an excellent sales person, and it didn’t take him years to master selling.

On the other hand, I think of many who road upon their certifications, but refused to work as team members.  Some didn’t show up to meet their commitments, others were slack with their sales efforts, and many just couldn’t work alongside their peers.  In the case of great character, there is always a chance to help that person get what they need or move to a position they can master, if their current job isn’t a fit.  But with those who just can’t get along; can’t acknowledge authority, or who are just too lazy to get moving in the morning, their just isn’t much hope.  Character isn’t something you are just born with.  It might have a lot to do with your upbringing, but it’s never too late to start building character.  For a list of essential character traits to look for in your next hire – check out the section on character in my latest book, From Vendor to Adviser.  The adviser must have great character if they are to win.

© 2012, David Stelzl

21
Mar
12

The Services Compensation Deception

By Dave Stelzl's Blog Leave a Comment
Categories: Leadership
Tags: , , , ,

Resellers can’t compensate sales people on revenue…

Chances are you compensate on gross profit (GP) if you manage a reseller sales team – and it goes without saying, if you are in sales, your compensation is based on GP.  But there is a bit of deception here that will take a business from profitable to unprofitable very quickly.  There are two places where money continues to leak from retained earnings – 2 holes in the bottom of the ship.

The one I am concerned about here deals with services compensation.

Speaking to Business Owners and Managers

Speaking to owners, VAR presidents, and sales management, are your sales people really paid on GP when it comes to services?  If you pay out based on services revenue, you are killing your company.  If you pay based on projected GP:  (sale price) – burden, you may still be paying on revenue.  Here is what I see happening…

The deal is sold for $1600 (as an example).  If the project is estimated to take 8 hours, the burden might approximate to $800 (using round numbers – yours will vary).  So the GP on the deal is simply $800, and the rep gets a percentage of this.   But what if the actual project time spent on the project is 2 hours over?  Is the cost of the project recalculated, raising the burden to $1000, and leaving only $600 in GP?  It should be.  If you keep the rep whole – by paying them on their estimate, this is actually still a revenue based payout, just at a different percentage than you pay on other things.  It’s revenue because you are not actually counting the true cost.

The Sales Person’s Perspective

The sales person at this point might argue, “But I don’t control the efficiencies of the delivery team, therefore I cannot be held responsible for the loss of GP.”  This is a valid point, but neither can the rep control the street price on product, yet GP is still the metric used for compensation.  When the sales person is compensated without taking the actual invoiced services into account, the company suffers financially.  My advice is to move your compensation to actual GP, and train sales people to value price their deals (meaning you are using fixed prices).  Chances are you can’t bill any significant overage anyway, so why fight this.  Sales managers should also be reporting GP by project on a regular basis to see which reps are accurately quoting services deals.  In most cases I find there is a pattern here.  One group will be on target, and this change won’t really affect them.  Another group will likely have a track record of under-quoting.  This group will resist the change, but the change is necessary.

But First

Before doing anything, make sure your top sales people’s projects are reviewed, and that you have a way to make sure they continue to make good money.  You don’t want to lose them.  Those who are mediocre or poor in performance, may leave – that’s actually good.  Redistribute your territories, rebuild your profits, and when the time is right, replace those who have left.  Your financial picture can be turned around in a matter of a few months.

© 2012, David Stelzl

 

16
Mar
12

The Incompetent Adviser

By Dave Stelzl's Blog Leave a Comment
Categories: Leadership
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Micheal Bosworth, back in his 1995 publication of Solution Selling, wrote, “Power buys from power.” He goes on to explain that executives (people with decision making power) are looking for someone to advise them, and that person must be competent (a person commands authority with advisory power). But how do they know you are that powerful person before they buy?  Over time it will become evident, but what about right now while you are working your way into the account.

A problem arises here – the typical sales person gets a new job, feels great about the new position, and goes out with a new brand behind them, hoping to conquer new and bigger accounts.  It feels great at first.  But, regardless of what the recruiter told you, the job is always harder than you expect.  Sale is hard work!  Weeks go by, calls are not returned, emails are deleted, and your ego starts to deflate.  At some point you start second guessing just how great of an adviser you really are.  Your message goes from abounding confidence to a gentler, softer sell.  You are starting to wonder if anyone will ever talk to you.

This often leads to steeper discounts, desperate measures, and pleading with the prospect to do something.  Anything!

I was on a coaching call the other day discussing this very dilemma.  In fact I spoke with two sales people back to back sharing similar stories.  It’s common for this to happen to anyone working a new region, or to a rep in new with a new company having a lesser brand in that territory.  So what should you do?

There are many factors here, and of course, the right marketing strategy is going to be important.  It’s clear to me that pure cold calling, brute force tactics, won’t do it in this market.  But that is not my focus here…my focus has more to do with the self-talk that takes us from feeling confident and able, to subdued and defeated.  A couple of words to keep you going are in order:

  • It’s tempting to sell everything, but the trusted adviser is a specialist.  You can’t advise on something you don’t know – that means picking an area and becoming the best in it.  Jim Collins gives us this advice in his book, Good to Great.  Collins is talking to companies, but the same applies to the rep.  You can expand later, but don’t be all things to all people – you’re just not big enough.  Instead, pick a hot area and learn how to sell it. Lead with it, and learn to expand your presence once in the account.  If you pick an area that is much needed in today’s business economy, you can be sure that most of the people you call need what you sell.  The secret here is knowing how to apply educational marketing strategies to drive your offering.
  • Stop listening to the local rock station while driving to appointments.  Instead, buy some of the great educational MP3s available today.  I’ve mentioned various titles in the past, but the point here is, stop wasting your drive time on empty entertainment.  Rock music actually puts your brain into a sort of trans that eases the pain, but does nothing productive for you (other than, perhaps keeping you awake after staying up too late).  Teaching tapes (MP3s) by successful people bring encouragement and structure to your sales call.  You want to enter these meetings with confidence, even if your numbers are terrible.
  • Use your downtime wisely.  The temptation is to thrash from email to email, reacting to anything that comes along.  Don’t be deceived – wise planning is better.  Take time to study.  Learn about the needs of the people you are calling on, write, read, plan out your calls, and make every thing you do into a quality effort.  When a call comes, plan and execute.  Build marketing materials, build your social brand online, and carefully plan out marketing efforts.
  • Don’t waste time networking over long lunches with people who can’t really help you.  Do reach out by phone to people who bring encouragement and perhaps sound input. Consider using a coach.  Coaches consistently show a strong return on investment because they do encourage and bring accountability to the process.  I know many people shy away from spending the money, yet often the coach’s six month fee is completely covered in one good sale.  That’s pretty strong if you ask me.

© 2012, David Stelzl

02
Mar
12

Cure Sagging Profits

By Dave Stelzl's Blog Leave a Comment
Categories: Leadership and Wise Counsel
Tags: , , , ,

Sales seem to be building for some companies – perhaps business will grow this year.  But will it be profitable?  I was talking with a client yesterday about this – their sales are growing, and their company’s reputation is strong; however, despite a long history being “in the black”, they admit, it’s getting harder.

I expect to see more resellers pulling out of the market this year.  After a couple of down years, those who have failed to build recurring revenue, cash in on higher level consulting business, and who have continued to partner with the low margin, big iron companies, may not have the cash to continue.  You can’t simply sell your way out of this one.

If you are in sales management, or better yet, running the company, make sure you are applying wise financial principles to your sales organization.

  1. First, make sure you keep your top sellers.  Raising the bar on the entire team, in order to make up for lackluster sales reps, is not the answer.  I’d rather have 4 top performers than 8 mixed performers;  4 on the verge of bankruptcy, while the other four are considering a move to the competition.  It’s a hard job, but an obvious solution.
  2. Jack Eckerd wrote an interesting book back in 1994 called, Why America Doesn’t Work.  Amazon shows 5 stars but only 7 readers rated it.  People in leadership should read this book – have you noticed a lack of diligence among your team?  Read this and find out why – it has a lot to do with acknowledging achievements and compensation; but it’s never just a matter of raising everyone’s pay.
  3. Are you watching and reporting on sales?  Big mistake for the small / medium sized reseller.  GP should be top of mind at all times.  Who cares about revenue when margins threaten to creep into the single digits?  Fix this – start watching monthly GP, compensating on GP, and pushing higher GP projects.  This may require some retooling of the team; those that continues to look at big iron with no services, but are lacking in sales.  Also, take note, GP on services means that you understand your burden rates and are calculating the hours used on each project.  What many call GP based compensation, is actually paying based on sales in disguise.
  4. What about recurring revenue?  There was a time people would pay a multiple of a reseller’s sales to acquire them.  I don’t see that coming back any time soon.  Valuation requires recurring revenue – too many acquisitions have ended with the newly acquired people heading for the exit sign.  If you don’t build your recurring revenue, your valuation is likely low.
  5. Evaluate your customers.  There are customers and their are leeches.  Customers understand the balance of fair pricing and profit.  They know that your services will be better if you are making a profit.  Those that pay late, shop your prices, and stretch payments out are not your friends.  Fire them!  At the same time, look for ways to constantly improve customer service for your customers.

Sales may flatten or decline while making some of these changes, especially if you are making a new move into managed services.  That’s great, sales are secondary.  Build your profits, save your cash, and look for ways to grow through improved marketing programs and by building more profitable adjacent markets.  2012 has great potential as we focus on the right things.

© 2012, David Stelzl

 

09
Feb
12

Chasing Sales People…Away.

By Dave Stelzl's Blog Leave a Comment
Categories: Channel Management, Leadership and The Bottom Line
Tags: , , , , ,

Good Sales People Won’t Stand On Unemployment Lines

Talking with my son the other day (he’s sixteen right now), I was telling him, “Regardless of what you do in life, learn how to sell”. Unemployment numbers are high in the US, yet all of my clients are looking for sales people!  So there are jobs, but not jobs for just anyone….there is always a job for an excellent sales person.

Here’s the problem…

If you have great sales people, make sure they are happy!  Here’s a trend I run across frequently, and today is no exception.  I was talking with a top sales person for a large high-tech company this morning (one everyone who know the name of).  His sales last year were great – many of the reps I see on a daily basis would give a lot for the accounts this guy calls on, and would be living well if they closed the business he closed last year.  But 2011 is over, and 2012 is on us – so as you might have guessed, his quota is higher.

Raising quota is normal, so neither one of us are surprised.  The problem is, his management feels like they should double his quota, not because it’s low (and in fact it is far from low), but because he did well.  He shared with me, that the remaining money to be collected on just one of his Q4 deals would have bought a small house in 2011, but with the new comp structure, he can buy a half-decent used car with his Q1 collections.   What’s happening here?

A sales team has big hitters, those with potential, and a handful (which might be big or small) of non-performers.  Sales managers have a hard time letting people go, so instead of promoting large commissions for big winners, they tend to spread the wealth by propping up low performers.  By propping up, I mean setting ridiculously low quotas for one rep, while imposing astronomic quotas on their high-performance colleague.  Helping one person to make enough to live on even if they produce almost nothing, while controlling another’s income because if “just seems to high”.

Why This Never Makes Sense

When this happens, and it happens all the time, the bad performers stay, while the superstars look for new jobs.  For some reason, many sales managers are making choices to have a large sales team of mediocre performers, rather than a smaller team of big hitters.  Big hitters will always outsell the mediocre team – while costing the company far less to maintain – why would they do this.  I believe it’s fear.  It’s hard to fire people, especially when they are great people (great to spend time with on social occasions), with a forecast that always seems to sound good.  Everything is at 50% and is supposed to close next month…but every month, that same list rolls over to the next month.

The Goal Should be…

The goal of the sale team is to sell.  When managers choose to meddle with comp plans rather than replacing low performance sales people, they are making a trade.  It seems easier to change the comp plan, rather than sending someone out on the street in a bad economy.  But the trade off is this…sales managers can either fire the low performers, or the good people will leave.  You can’t have it both ways – you just can’t afford to keep everyone happy.

© 2012, David Stelzl

17
Jan
12

Where’s the Plan

By Dave Stelzl's Blog Leave a Comment
Categories: Leadership, Sales Strategy, Solution Strategy and Wise Counsel
Tags: , , , , ,

I’ve written before, no plan is a plan to fail.  It’s January – the start of the year for many.  And even if your company isn’t on the calendar year, chances are you think about your income that way.  Do you have a plan to grow this year?

Most of the people I ask, don’t really have a plan.  Instead, they have put together a budget (which is not a bad start), which details what will be spent to keep the business running, and calls for a certain quota on sales.  If the sales numbers are not met, the budget will not produce the expected profit.  Half way through the year, managers will be sitting around wondering why they are not hitting their numbers, and hoping to make it up in the second half.  This is not a plan.  This is not a strategy.

Some companies will have an annual kick off meeting.  Many companies are doing that this month.  What will they accomplish?  If they focus on product training, sales number reviews, and parties, I will be a waste of time.  No one will remember these things as the year begins.

This week I am headed out to my company planning meeting.  It’s a time to look back at what was accomplished, what went well, and an honest assessment of what did not go well.  It’s a time to review who performed and who didn’t.  In my case, the number of employees I have makes that easy, but for most, it’s an important and difficult step.  It’s a time to consider what must change in the vision of the company, the mission you carry out, and how you are approaching the market – it’s strategic, not tactical.  This should be taking place on a business level as well as on a personal level.  It involves setting the high level goals with a plan to meet them.  It means going beyond the dream of hitting a certain number and figuring out how it will be met.  It also means getting rid of dead weight – things (or people) that don’t produce fruit.  This year I will spend four days on this process – why?  Because it’s likely the most important thing I do all year to make sure I am headed in the right direction.

© 2012, David Stelzl

06
Dec
11

Looking at the 2012 Opportunity – It’s Time to Get a Plan Together!

By Dave Stelzl's Blog Leave a Comment
Categories: Leadership and Value Proposition
Tags: , , , ,

“Have you been reading the investing forecasts for next year? The most optimistic forecasts expect more of the same—slow economic growth, a stock market that’s vulnerable to every little hiccup, continued high unemployment and a sluggish housing market.”…Dave Ramsey

I expect Dave is right, however that doesn’t mean your business can’t grow over the next twelve months. Whether you run a company, or sell for one, or are in charge of marketing, there are some simple things you can be doing to continue  steady deliberate growth.  Some things you should be considering before year end:

1. Have a Plan!  Your plan can’t just be, “We need to grow the bottom line,” or “Let’s grow 50% in the coming year.”  I see these kinds of statements all the time, and they don’t materialize.  A plan involves the primary solution areas you will focus on, marketing plans and schedules, and strategy.  Plan out marketing events and campaigns through the year, not just next month’s effort.  Consider training needs as well.  But also look at where time was wasted in 2011, what efforts failed and why, where gross profit was lost and why, what kinds of projects seem most profitable, and what client profiles are working well.  Managers and owners should be scrutinizing the team. Make sure the right people are on board, and trim non-producers.  Also, consider where each player should be focused in the coming year.  This might be a great time to consider doing a joint strategy session – I am scheduling companies right now!

2. Look at your value proposition. It might be time to invest in strategies that are driving business in this economy.  If you have been working on some area for five years and it’s not working, it might be time to move on.  Also, consider your opportunities with security.  Security offerings gave resellers an incredible boost in 2011, while other technology areas did poorly.  Consider attending my online workshop – Making Money with Security (Click for more info), in January…This program has been a game changer for many over the past seven years.

3. Build you consulting capabilities.  Learning to interview, discover, and assess is absolutely a differentiator.  Companies that just “sell products” are in trouble, unless they have something very unique to offer.  I don’t need to name names here – just look around.  If you are a typical reseller, selling the big names, you are likely seeing it too.  Your value must come from your own ability to consult and make application to the products you sell.  Big name manufacturers are not going to drive your profits in 2012.  I just completed an important book, From Vendor to Adviser, this year.  Read it…but also consider getting some training in this area.  I have been running free webinars on topics presented in this book, and have a workshop which will be announced shortly.  The goal being, to bring sales people up to speed on the skills consultants use to sell and fulfill very large projects.  Check it out here…(Click)

Don’t wait until January to plan – remember, a business without a plan, is a plan to fail.

© 2011, David Stelzl

31
Oct
11

Lessons from Senator Daniel Webster

By Dave Stelzl's Blog Leave a Comment
Categories: Leadership
Tags: , , , ,

Last night I was watching a video of Daniel Webster, former Florida State Senator, on leadership.  In it he describes 5 key elements of leadership that helped him achieve some remarkable things…before reviewing these  you should know, Daniel Webster ran for office unopposed for 28 years, was appointed house speaker against major opposition, and retells one account where he was flying somewhere to sign up to run for another term and while exiting the plane, ran into a man who introduced himself as someone getting ready to run for the state senate.  When he learned that we was talking to Mr. Webster, he turned around, got back on the plane and flew home.  Here is what he said:

Commit to:

1. Invest time in other’s agendas, helping them acheive success, rather than focusing on yourself.

2. Expect no more from others than you are willing to do yourself.  Never say, “That’s not my job.”

3. Give up the right to be in charge – focus on your own responsibilities rather than always pointing out other’s short-comings.

4. Accept responsibility – give up on expectations.

5. Earn the right to be heard.

Some wise words from someone who continues to win over their opponents.

© 2011, David Stelzl

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