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Welcome to
2004!
The start of the New Year
begs for a newsletter with a forward looking theme
so we're not going to disappoint. In this
edition we focus on thinking ahead - forecasts,
trends, predictions, and the outlook for the coming
year. Like all of us in the Information Technology
industry, we're optimistic about the prospects
for the New Year; however we know improvement will
not come overnight, but gradually, and require
that each of us work harder than we ever have before.
To help make that work a
little less burdensome, this edition includes an
article from one of our partners, Next Level Consulting,
on the subject of effective sales forecasting. We
also look at the selling and buying trends for
technology in 2004 and discuss a sales trait that
can improve business through sales productivity. Lastly,
we ask for your opinions in a survey about some
of your plans for the coming year. We hope
you'll find this newsletter informative and helpful,
and we wish each of you a happy and prosperous
New Year.
Hire Well & Good Selling!
Ross, Sara and Pam
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Technology
Trends for 2004
By Ross Rich, Managing
Principal, Selection Strategies, Inc.
In December 2003, I attended
a seminar hosted by the Technology Executives
Club http://www.technologyexecutivesclub.com,
a business networking organization based in Chicago. This
seminar, entitled "2004 Tech Sector Forecast
and Buying Intentions," was attended
by approximately 170 business professionals. Two
panels of speakers were featured, one representing
the sell-side and consisting of representatives
from IBM, Microsoft, Intel, Oracle and T-Systems. The
buy-side panel consisted of CIOs and CTOs from
local corporations ranging from small to mid-sized
to global corporations, including companies like
ABN AMRO, Dade Berhing and Mitsubishi.
The sell-side panel began
the discussion with their outlook for the coming
year. All participants agreed that corporate
IT spending would continue witnessing slower than
desired times due to several factors impacting
technology buyers. A survey distributed prior
to the seminar (and reviewed before the formal
panel discussion began) showed cautious optimism
for increasing IT budgets for 2004, but stressed
that any increases should be underwritten by the
business units that will directly benefit from
the project or solution because IT no longer has
the freedom to spend on their own.
The continuing downward pressure on IT budgets, like
most corporate spending, was seen as a direct reaction
to factors like under funded pension plans and the
increasing costs of health benefits. It was
estimated that, on average, a company must see a
4% increase in annual sales simply to break even
based on these rising costs. Coupled with budgets
that remain flat due to the desire for companies
to do more with less, the panel did not see a return
to the heavy spending of the late 90's. However,
the sellers were generally optimistic that gradual
and consistent improvement would take place and the
survey results reinforced this view since a majority
of respondents (69%) from the buy and sell sides
believed that IT budgets would rise modestly during
2004. (Full
Article)
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Linking
Forecast to Future...a
look at sales forecasting.
By
Bobby Knight, Partner, NextLevel
Consulting
For many companies, the
sales forecasting experience can be summed up in
the lyrics of the Jimmy Buffet song "A Semi-True
Story"...
"It's a semi-true story...Believe
it or not
I made up a few things...And there's some I forgot"
In this mini White Paper,
we'll identify many of those things that contribute
to a "Semi-True" forecast. Our intent is
to raise your level of awareness about a few of
the complexities faced when working with forecasts,
and to offer a logical, practical approach to resolving
this dilemma. So...Why do sales organizations
continue to struggle with forecasting?
Frequently, there is little
or no correlation between Sales' selling cycle
and the Customers' buying cycle. This lack
of consideration and understanding of the Customers
internal clock for making decisions, leaves salespeople
few choices but to manage the deal by their sales
process.
If you doubt this, take
an informal survey of sales executives and ask
them how many deals slide from quarter-to-quarter
carrying a 50% close expectancy. Answer:
few.
Now ask how many deals slide
from quarter-to-quarter carrying an 80-90% close
expectancy. Answer: many.
This strongly suggests the
sales person is in the latter stages of their sales
effort, while the deal sliding from quarter-to-quarter
suggests the Customer may be no more than midway
to reaching or making a decision. This one
factor - lack of correlation between
buying and selling cycles - is a
major contributor to inaccurate forecasting. (Full
Article) |
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TARGET
ON TALENT: Assessing Sales Talent
Reading Between the Lines: The
Fine Art of Discernment
By
Pam Burton, Consultant,
Selection Strategies,
Inc.
The new Sales VP was reviewing
his first quarterly forecast and the rep in Dallas,
Jim, forecasted the Acme Manufacturing deal to
close in Q4 with a 90% probability. The VP
hadn't been able to get to know each rep in-depth,
but this was a big deal and the VP's first impression
of Jim was certainly going to be positive if this
deal closed. Excited about a deal closing
with $750K in software and $1.0M in services, the
VP picked up the phone to get some more details
from Jim before his 2:30 forecast review with the
CEO. Jim told him he was confident the deal
would close and the VP asked him where he was in
the process.
"I gave them several
references to call." was Jim's response
and the VP asked how those calls had gone.
"They haven't called
them yet." he answered. "Why not? We're
getting down to the wire on this." the VP
responded, a bit agitated.
"Well, they're checking
references but not the ones I provided, they
told me they have identified some of their own." replied
Jim.
"Some of their own?" the
vein on the VP's temple started to pulse. "What's
going on here, you have this deal forecasted to
close and now you're telling me they're calling
other references. Who are they? Where
did they get them? The competition?"
"I don't know." Jim
said.
"This didn't seem strange
to you? Didn't raise any red flags?" the
VP asked.
It didn't take too many
more questions for the VP to get a queasy feeling
in the pit of his stomach and realize that Jim
didn't have any situational awareness. The
VP hung up the phone with serious questions about
Jim's judgment in forecasting a deal with such
high probability to close in the current quarter
when he really didn't have any control of the process
so late in the game. Out maneuvered by the
competition? Probably! Jim was losing
and didn't know it.
A frightening scenario? You
bet, except this is a sanitized version of an actual
deal and not an uncommon one unfortunately when
a salesperson lacks a critical characteristic we
call Discerner - the ability to read between the
lines, have an intuitive "feel" for the situation,
and pick up on the unspoken and unseen events that
give clues about the real events that are unfolding
in an account. Despite suspicious activity,
strange developments and other indicators that
the deal was out of control, Jim's lack of awareness
shows a lack of discernment that ultimately finds
a sales rep believing they're winning a deal only
to find that they've lost it to the competition
long before they had a clue the deal was out of
control. (Full
Article)
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During the week of January
19, 2004, we'll be distributing a survey to ask
your opinions about the coming year. We'll share
the results with all of you and hope the
results of this survey will help to further
clarify the opportunities and possibilities for
a more productive and prosperous 2004.
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Selection
Strategies, Inc.
2109 W. Grace
Street, Suite 200
Chicago, IL 60618-4901
773.244.1609 p
773.244.1803 f
www.selectionstrategies.com |
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