It's bad enough that I think of almost everything in terms of processes, steps and the ROI of getting from one point to another with a high focus on the sales math of days and revenue from SQLs to closed deals.
Last Friday, I worked from my Vermont office and with an inside temp of 51, I succumbed to the requirement of lighting the wood stove for the first time of the season.
Here are the fundamentals of the math exercise:
- In 1980, I made the decision in building the house that it made sense to heat with electricity. Although there were a number of factors that went into that, it was a very bad decision! Electric costs in Vermont have been out of control for years due to inept state politicians with another rate increase expected this winta'.
- Normal weeks in the winter, I'm in Vermont only 3 days a week which results in an electric bill of $1,000/month from December through March even given that it's a utility load-control program shutting off the electricity during the peak demand hours. The wood stove shown here heats the top two floors, but not the first.
- Back-in-the-day, I cut my own wood from my woodlot. I then realized that I touched one piece of wood 7 times from cutting the tree, to cutting the 18" pieces, to putting the pieces in the ATV cart to drive to the splitter, then to the woodshed both in and out, and finally to the wood stove. Add to that the inevitable accident of bruised fingers and back strains, but at least the direct cost was "free". Of course, I was not considering the offset of my consulting time that I should have been doing instead. I also believed that cutting and stacking one's own wood was both fulfilling and relaxing ...being out in nature and all of that, but those were on the picturesque, good days and not in the early fall snow and biting cold.
- A cord of perfectly seasoned wood delivered in front of the woodshed cost $600.
- On Saturday, my fall cleanup crew of 6 young men and women stacked the wood perfectly in 30 minutes right at the beginning of their day-long fall cleanup and winter prep, so the cost for stacking was $100. The alternative would have been 6-8 hours I should have been spending time with my customers or my students.
- The ROI on the math is easy when you break this process into pieces allocating less expensive labor...and stronger backs...where it can be better utilized.
SO, NOW, LET'S TAKE THE SAME DETAILING TO YOUR SALES TEAM
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When you're qualifying an MQL from Marketing, have a BDR at $60K-$65K/year do that rather than an AE who is being paid substantially (2x-3x) more. Let's look at the simple math of a BDR working directly on lead qualification only in the applicable hours per year, and that number comes down to $30/hour. working 2,080 hours. Using the same applicable math for a solid AE, the number is $115/hour but, there's a longer math discussion here (call me if you want) about productivity hours for an AE. Plus, we have found with thousands of interviews, AEs do a terrible job at pure qualification, and they rush too quickly to Discovery calls and worse yet, to demos.
Add to this math that a BDR who handles that MQL and fully qualifies it including setting up a Discovery meeting for the AE, can easily service two AEs in addition to being responsible for list of other activities.
- That first step taken by that BDR begins your own detailed, step-by-step process, customized to your sales cycle. For the AE steps which begin with Discovery and end with closing the deal "X" number of days later, are driven by both your AEs and championed by your head of sales who becomes a Player-Coach and is involved in varying degrees depending on the prospect.
It all sounds simple, and with the right people and the formality of everyone being 100% committed to the same process and using the same language and the same tools, the overall architecture becomes "The Way We Sell"...and it works! It just takes a management commitment to change!
- Internally, at the company it significantly improves productivity at a lower cost with improved output in a shorter sales cycle which was the point of my Vermont wood story.
- Externally, the impact of a more efficient sales process is more pronounced today given the significant change during the past two years in exactly how B2B buyers want to be sold. In a 2024 McKinsey Pulse study of B2B buyers across a broad spectrum of markets, approximately a third prefer in-person meeting, a third will only meet by phone or video, and the final third require only digital self-service gathering the data they need and buying directly online. No salespeople! The results were the same with deal price points of $250K.
- Gartner recently reported that approximately two thirds to three quarters of buyers prefer a rep-fee experience.
Enjoy today and this week of what looks like typical fall weather!
Got a question of how sales processes are built and their ROI...just connect with me anytime.
Jack is a Managing Partner of Derby Management, a strategy consulting firm and he is the founder of the Derby Entrepreneurship Center at Tufts University, where he has taught for 20 years. Every semester in his marketing course, six teams of six students work directly with the senior managers of six companies over the period of 13 weeks building marketing plans customized to the objectives of management who provide 40% of the team grade.
At Derby Management, Jack and his team architect and build business strategies focused on sales and marketing processes, tools, and technology platforms.
www.derbymanagement.com | Derby Entrepreneurship Center at Tufts