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Salesforce.com’s Own Sales Practices: How to Do it Right

27 November 2009

Last week at the Dreamforce conference, a meeting in San Francisco of almost 20,000 salesforce.com customers and partners,  I learned about new features and a user interface re-design planned for salesforce.com’s product set as well as Chatter, salesforce’s “Collaboration Cloud” offering.  These announcements, presented at length (no exaggeration – the keynote was about 3 hours long) by salesforce.com’s CEO Marc Benioff, have already been covered extensively by members of the press, analyst and the blogger community.   I could chime in with my recollections of what Marc was like as an early Oracle sales employee (I was his first manager) and how his talent was evident at an early age (it was, but managing a visionary who doesn’t want to follow any rules was often challenging for me as a young inside sales manager, trying to make nice with a dominant, demanding field sales organization). But what I’d like to share instead is what I learned in breakout sessions from salesforce.com sales executives about how salesforce.com uses its own products to enable it’s clearly articulated Sales 2.0 strategy, organization and process, which has driven the company’s success.

The majority of the clients we work with in my consulting business, Phone Works,  are salesforce.com users.  They’ve chosen salesforce.com’s Sales Cloud2 (TM)  (CRM product) for all the right reasons: to give sales reps a tool for staying close to their customers, to track and measure the sales process, and ultimately to increase sales productivity and effectiveness and optimize revenue.  But more often than not, we see companies struggling with their salesfore.com implementations, reps complaining about having to use the tool- or just flat out not using it, and managers frustrated by the lack of data and reporting coming from the system.  These problems are not unique to salesforce.com customers; they commonly exist for users of other CRM products and for Sales 2.0 technologies in general. Why?

Most companies don’t have a clearly defined sales strategy and process that helps their sales reps sell and their customers buy.  They don’t focus on designing business processes before rolling out new technology.

Salesforce.com is one of the companies that gets it right – and it shows in their user adoption and sales results, as I learned from Robert Zimmerman and Dan Del Dago, two of salesforce.com’s sales executives (also former colleagues of mine from Oracle) in their meaty overview of the company’s sales organization and pipeline management practices that made me want to hang out with their sales teams and observe them in action.  Here are some of the key points.

Salesforce.com has an Executive-Supported Sales 2.0 Strategy and Organization, Mapped to Its Customers.

1. In a Sales 2.0 organization, organizations are designed to meet the unique needs of different customer markets.  Sales teams are structured and optimized to use the most appropriate and cost-effective sales channels to reach new and current customers in both large and small companies.  Phone and Web selling is used extensively to increase responsiveness to customers – especially those in smaller companies – while boosting sales productivity and efficiency. At salesforce.com, there is a Field sales organization and a Corporate (insides) sales group.  But unlike many companies, at salesforce.com, the Field and Corporate sales territories are differentiated purely by size of company rather than size of order.  Rather than have a dividing line of say, $50,000 – orders over $50K go to the Field and $50K and under go to the inside team – the Corporate sales team can sell orders of any size in their territory of small medium-sized companies (defined at salesforce.com as those under 1,000 employees).  Salesforce.com prefers this to the “revenue bar” approach, which can cause reps to manipulate or fight over opportunities near the dividing line.  The down side for customers in order-size-defined-territories is they get “passed” from one sales rep to another as their order increases.  This can cause confusion or unhappiness if the hand-off isn’t handled well by the sales team.

2. Field Sales and Corporate Sales are both supported by Sales Development (lead qualification), so quota-carrying reps can focus on the middle and end of a customer’s buying cycle rather than trying to build new pipeline while closing orders.  Sales Development, chartered with filling the pipeline with qualified leads for all the selling teams, is divided into two groups: SR’s (Sales Reps, who receive inbound leads via round robin routing system that metes out calls in an equal fashion to east and west teams) and EBR’s (Enterprise Business Reps, who make outbound prospecting calls).

3. There is a culture of continuous improvement and flexibility as market conditions change.  Earlier this year,  salesforce.com launched economy-related initiatives such as an aptly named “Clean Your Room” program, focused on improving data quality and accelerating next steps in opportunities.  Understanding the importance of strong customer relationships as budgets decrease, they also made customer outreach a priority, using marketing “drip” campaigns to stay front of mind whenever there was valuable news to share.

4. Executives from Marc Benioff down demonstrate commitment to and usage of the systems.  When reps see that senior management relies on the data they provide, they are motivated to provide complete, accurate, up-to-date information (or perhaps scared they’ll get fired if it is discovered that they are not using salesforce.com!)

Salesforce.com has a Sales 2.0 process, which is measured, tracked, clearly articulated and consistent, and integrated with Marketing.

1. Managers measure everything. KPI’s (Key Performance Indicators) drive performance.  With the slow economy, sales management instituted stricter minimums in metrics such as calls per week (25), meetings per week (10), and pipelines per month ($100K) earlier this year.  Key metrics fall into four categories: visibility(e.g. forecast vs actual variance, % quota achieved), process effectiveness (e.g. win rate, % reps achieving quota), productivity (e.g. selling time), and lead management (e.g. conversion rate, lead volume, lead response time). Customer follow-up is rigorously tracked and enforced to a 24-hour turnaround requirement.

2. Because it has captured sales process and customer data including SIC and zip codes for ten years, the company maximizes close rates through segmentation and customer insights.  Managers can predict a given customer’s buying propensity by industry, geography, etc.  This sales intelligence also help managers create new, equitable sales territories based on data rather than gut feel.  Reps at salesforce.com undoubtably have a hard time arguing that their territory assignment isn’t fair.

3. Marketing campaigns are measured according to pipeline impact.  Weekly and monthly reports include number of leads generated, number of opportunities generated, etc. by marketing program.  Marketing and sales alignment is a major component of Sales 2.0.

4.. Links to dashboards are auto-emailed weekly  to management, keeping everyone on target.  If KPI’s drop, there is no place to hide; the only excuse for low performance is being on vacation. :-)

Salesforce.com Supports and Empowers its Account Executives.

1. The highly segmented organizational structure based on company size offers sales professionals many opportunities for promotion within. Insides sales reps have a career path within their own group. There is less frustration when they don’t immediately have an opportunity to move to a field sales territory.

2. Industry, customer, and role-specific sales tools and sales kits are constantly developed and made available through a Sales Central system to increase productivity.  In a separate session which warrants its own blog post (stay tuned!), Elay Cohen, VP of Global Sales Productivity, and key members of his 40-person team gave an extensive talk to an audience of mostly sales operations managers on salesforce.com’s commitment to providing standardized certification programs, skills plans, on-boarding plans, customer success stories and other tools and content for sales enablement (aka sales effectiveness) that are localized around the world.  This not only increases productivity metrics (Cohen claims a measurable 93% improvement in total pipeline and 84% increase in new business after a recent training program) but also boosts morale.

3. Using its ideas.salesforce.com platform, the company encourages reps to share ideas on how to be more productive in their roles.  Rather than coming from management, these ideas are readily accepted by the reps, especially when they come from top-performing peers.

4. In many companies,  field sales training is different from inside sales training.  At salesforce.com, sales methodology is consistent across sales teams; everyone from Sales Development to Field Sales speaks the same language regarding stages of opportunities. At salesforce.com there is an 8-stage sales process from identifying and opportunity to closing.  Regular training supports the consistent use of common methodology.

5. Sales management is predictable and transparent. Reps know exactly what is being measured and evaluated.  Successes are celebrated; when deals of a certain threshold close, an automated e-mail is sent to the core management team, recognizing the rep’s accomplishment.

6. Opportunity reviews, called “Pimp My Deal” (!) exist purely for the benefit of the AE (Account Executive). Managers strive to add value by coming up with a minimum of 3 new action items within half an hour, representing creative approaches to winning a deal.

These are just some of the highlights of how salesforce.com succeeds with Sales 2.0. Their carefully constructed and refined, innovative  business processes, tightly integrated with their own products, make them a company to learn from when it comes to superlative implementation of Sales 2.0 practices and technology.  I am eagerly awaiting salesforce.com’s own implementation of Chatter; the company will likely be a model of how to incorporate collaborative, social tools into their sales and services processes to increase productivity and accelerate results.

What can you learn from salesforce.com’s sales practices? Are your reps fighting your CRM system or other Sales 2.0 tools? Is there a strong strategy and process foundation for your enabling technology to make sure it “sticks”?  What results have you seen?