Trade Shows Are War

Note: this post is applicable to trade shows, conferences, symposiums, and other cross-company gatherings.

Last week a first-time founder asked me about getting ready for a trade show. The summary of our conversation was:

Trade shows are the ultimate zero-sum game.

Whether you attend a trade show as an individual scoping out a new industry, as a startup breaking into a market, or as an established industry player, you have a single goal: monopolize the time and attention of your targets to maximize the probability of continuing the conversation after the event.

I generally deplore zero-sum thinking. In the world of startups and technology, I always want to expand the pie rather than fight over a fixed pie. But trade shows are a weird, backwards universe. You’ll spend copious amounts of money and time and you will not close any business or recruit any candidates at the event. None. Therefore your goal is to maximize the probability that your targets want to speak to you after the show so you can actually make something happen.

It’s important to recognize that at a trade show, every single person, piece of signage, video reel, coffee station, workshop, afterparty, etc is your competition. Everything and everyone are competing for the fixed amount of attention that your targets could otherwise devote to you.

Make no compromises in taking as much of their time as you possibly can. Trade shows are war for time and attention that masquerade as civil discourse.

Here are some implications of this lens:

1. Trade show time is precious. Therefore, you need to be on your A game at all times. Therefore, do not drink. Trade shows, either directly, or indirectly through after-parties, hand out what amounts to effectively unlimited alcohol. Do not waste your time getting drunk. You have cooler friends back at home you can get drink with. If you drink, you will talk to less people than you otherwise would have, you will be sloppier in your conversations, and you will not be on your A game the next day.

2. About a month before the event, identify everyone who will be at the show that you want to meet with and coordinate explicit meeting times and places with them. Naturally, you’ll want to meet with them somewhere where you can control their attention. Do not try to meet with your targets in your booth or at a location in the exhibit hall. The exhibit hall is effectively raw anarchy: a state of unmitigated entropy. There is simply too much noise and too many other people vying for your target’s attention on the show floor. As a startup, you likely won’t have the budget or staff to justify have a private meeting room in your booth or to rent out a private suite near the exhibit hall. So instead, meet your targets just outside the exhibit hall, or in a food area. Anywhere that’s easy to find and that has less stimulation than the show floor.

3. I suspect that > 50% of trade show attendees are scrounging for battery cables by 6pm. Turn off all non-essential services on your phone to maximize battery life. Get an external battery pack if necessary. Don’t let your phone’s (lack of) battery distract you from your targets.

4. 50–90% of the people you meet will not be worth your time and attention. Put those business cards in one pocket, and the valuable business cards in another. In the evening, after not drinking, write custom follow ups to each person whom you care to do business with. Make sure to remark on your specific conversation so they know it wasn’t a mail-merged email template. Do not expect a response the next day. In your note, make sure to let them know that you’ll reach back out to them ~2 days after the end of the show, and do exactly that. Do not be afraid to email them multiple times after the show. Your only goal at the show was to get follow ups after the show, so you better damn well make sure that you do.

5. Do anything you can to be memorable. Anything. Trade shows are stimulation overload. Within three days of leaving a trade show, no one will remember what your booth looked like, or even what you looked like. Most people will just remember the hotel they stayed that and some particular events they attended (e.g. a workshop or an after party). The average attendee likely speaks with over 200 people at an event. Of those 200 people, that attendee will likely remember five of those people. Do whatever you have to in order to be one of those five. Unique and tasteful attire is solid, but do more. Have a unique opening. Memorable business cards. An amazing pitch. Whatever. It. Takes.

Understanding The Sales Funnel

B2B Sales pipelines are more telling than most people realize. In this post, I’ll outline how to think about sales funnels, and the implications of the sales funnel on the rest of the business.

What are the stages of the sales cycle?

There are five stages that prospects go through during the sales cycle. These stages will be referenced a few times in this post.

What should a sales pipeline look like?

There are, broadly speaking, three shapes a sales funnel can take (on a # of customers basis; you can see some odd shapes if you track projected deal size throughout the lifecycle of a deal): Conservative, moderate, and aggressive.

Why these names? What makes one of these graphs more conservative than the others?

Let’s look at the same graphs, but from the perspective of a single deal that’s halfway through the sales cycle. To analyze the “sales funnel” for a single deal, let’s examine the ratio of the size of top of the funnel to the size of the bottom of the funnel. The smaller the ratio — or in other words, the “tighter” the graph — the more likely that deal is to close.

It’s obvious which of these models is most predictive for a deal that’s halfway through the sales cycle. The conservative model of course! Companies that have a sales funnel that looks more like the aggressive model really don’t know what the probability of closure is for a given deal because it’s not clear how fast the graph will turn in towards the end of the sales cycle.

What can a sales organization do to optimize towards a conservative sales funnel?

Qualify, qualify, qualify!!! It’s pretty difficult to over-qualify deals in the early days. SDRs don’t necessarily need to do all of the qualifying. The larger the ACV, the more information will be needed to really understand if a customer is a right fit for your solution. While a deal is still in Recognition, AEs and/or SDRs should be qualifying as much as possible.

As one point of reference, during my tenure at Pristine, our close rate on a # of customers basis from Determination to close was 93%. On a $ basis, the close rate from Determination to close was actually over 100% as we had under forecasted almost every deal in the earlier stages of the sales cycle. To be fair, we didn’t have any direct competition. We competed against the status quo, so bake-offs and price-based competition weren’t major factors that impacted the sales funnel conversion rate towards the end of the sales cycle. Obviously, competition will dramatically reduce conversation ratios at the end of the funnel.

The larger the ACV, the more conservative the sales funnel needs to be. This makes sense so that the company can accurately forecast and achieve its quarterly revenue targets, but also because the amount of work required on a deal increases exponentially as a deal progresses through the sales cycle. As a general rule, each stage of the sales cycle takes 10x more work than the prior stage, except Acceptance. It’s imperative to qualify as much as possible as early as possible to maximize the efficiency of the sales organization.

Why is it important to optimize towards a conservative sales funnel early?

Developing a sales process that results in a conservative sales funnel requires tremendous discipline and is a strong indicator of general operational excellence. A startup with a conservative funnel knows how to identify, qualify, and close customers in a systematic way.

There are also logistical reasons to optimize towards this early. Changing the shape of this funnel gets harder as sales organizations grow. Processes become more rigid; coordination, training, and re-training become more challenging; egos grow, etc. For example:

In a 100-person sales organization, it’s going to be much more difficult to change the shape of the curve than in a 10-person sales organization. In a 100-person sales organization, making changes at one step of the funnel will require upstream and downstream changes in the rest of the sales organization. A lot of people will need to be retrained, comp plans restructured, team shuffled, etc. In a 10-person sales organization, the CEO and VP Sales can gather the entire sales organization in one room, walk the whole team through the gap in the sales funnel, how it’s going to be addressed, and discuss the implications for each individual over the course of a few hours.

Lastly, a conservative sales funnel makes a startup a generally healthier and predictable business. In almost all cases, CAC increases as a startup scales. Why? Because as startups pursue growth, they inevitably adopt less efficient customer acquisition channels than those used in the earliest days. Moreover, as a startup grows, competition inevitably does as well, which will drive down close-rates at the end of the funnel, dramatically driving up overall CAC. In some cases, once a brand is established, CAC can decrease as the brand itself draws in the customers, but it should be assumed that CAC will never decrease until there’s material evidence to the contrary.

If you assume that CAC will always increase or perhaps eventually flatten out, the importance of optimizing towards a conservative model becomes even more important. The more variable the cost per lead at the top of the funnel, the more variable the CAC will be at the bottom. This variability will increase the more aggressive the sales funnel is. To maintain a healthy LTV / CAC ratio, it’s imperative to arch the sales funnel inwards towards a conservative model early in a startup’s lifecycle.

Note: I’m a huge fan of Insight Squared for sales funnel reporting and analytics. It makes visualizing and understanding a company’s sales cycle simple. I’m sure there are other tools that are just as good, but my experiences with Insight Squared have been superb.

Why Does Sales Ops Matter?

Credit to InsideSales.com for the graphic.

This post is intended for B2B SaaS founders.

“Companies fail for one of two reasons: spending too much money before achieving product/market fit, and not spending money fast enough after achieving product/market fit.” — Marc Andreesen

The first reason is intuitive: the company couldn’t build the right product, or find the right customer acquisition channels, or the market just wasn’t there. These are all obvious reasons why companies fail.

The second reason is less intuitive. After you’ve really, truly found product/market fit, failing feels a lot less acceptable. After all, if you’ve built something that solves a real problem, you’ve got word-of-mouth growth, you’ve established customer acquisitions channels, then why would your company fail if everything is working?

Competition. The more successful you are, the more competition you’ll beget. If you don’t out-execute them, they’ll out-execute you.

This leads us to sales ops. It is one of the most under-appreciated forms of “execution.” Sales ops processes can lead to improvements across all fronts: more lead volume, higher conversion rates through the funnel, shorter sales cycles, higher ACVs, and longer customer life cycles.

Once you’ve found product/market fit, you need to scale marketing, sales, customer success, product, and back office (finance, HR, etc) organizations. There are lots of operational best practices to employ in each area.

A VC once told me “sales is sloppy.” By this, he meant that, in general, sales professionals tend towards entropy. Without specific boundaries and guidance, they do whatever they want, and not what’s necessarily in the best interest of the company. They want to do things their own way. They generally have little regard for how their activities impact others (eg finance for forecasting, customer success, engineering, etc),

Sales ops is fundamentally about automating every aspect of the sales process that can be automated: building sales training materials, figuring out lead assignment, and all the way through sending out contracts, signing them, and receiving payment. By automating these functions, the entire customer lifecycle becomes more predictable: deals close on time and for the forecasted amount; customer success doesn’t have to over-deliver; and engineering doesn’t have to perform miracles to make customers happy.

It’s not intuitive for many VPs of Sales to think “how can I design a series of processes using software that prevent my reps from making any mistakes in our otherwise well-known and established sales process?” VPs of Sales think in terms of people, not how to systematically reduce the number of decisions their people make. In other words, many VPs of Sales haven’t fully digested the magnitude of the statement “software is eating the world.”

Most founders don’t recognize just how much of the sales process can be automated, and the enormous value that derives from automation. In the best run sales organizations, virtually no value exists at the “edge” of the network — the sales people. Instead, all of the value lies in the infrastructure itself — all of the processes. Every path through the sales cycle has been considered, and the best response is known. The fewer decisions that that sales professionals have to make, the more scalable, repeatable, and successful the sales organization will be.

Most importantly, sales professionals lose leverage against the organization as sales ops matures. As training new sales professionals becomes more clear, concise, and automated, it’s easier to hire and train new sales professionals. It’s also easier to assess which ones aren’t going to make the cut. And by automating the daily sales functions, sales people require less training to get through the daily logistics (finding documents, setting pricing, sending proposals, etc) of their jobs. This leads to faster ramp ups / sales professional, more efficiency / sales professional as they’ll make fewer mistakes, and larger deals as they don’t make stupid pricing mistakes that force the company to leave money on the table. The multiplier of good sales ops on sales efficiency, CAC, and LTV can be enormous.

A Simple Example

For example, in the early days, startups are typically building sales collateral as it’s needed. After achieving Initial Scale — $1–1.5M ARR — the startup will amass 10–30 different pieces of sales collateral that can be used throughout the sales cycle. Those PDFs will be organized and stored in a folder somewhere. Since the marketing team probably made the collateral, the documents will probably be in the Marketing folder somewhere. Hopefully they’re all in 1 folder, and not spread out across 5 folders.

There’s nothing particularly difficult about grabbing a file, attaching it to an email, and getting it out to a customer. Even if it’s in the marketing folder, it shouldn’t be a big deal for a sales professional to grab it, right?

Wrong. This seemingly trivial process is fraught with opportunities for error:

When you onboard new sales people, they will not read all 15 pieces of marketing collateral you have. They will read 2, maybe 3. So they don’t even know what content is available.
Even if they knew all of the content that was available, each piece of content is designed with a specific audience in mind, and designed to be shared at a particular stage in the sales cycle. Sales professionals definitely won’t remember when to share what piece of content with whom.
At some point, marketing will start archiving old iterations of documents, and names of particular files will change. This will befuddle the sales professionals as their cherished documents are seemingly gone.

There are probably 10 other stupid logistical problems that can arise from this trivial process of attaching a PDF to an email. Instead, the right approach is to implement a tool like Showpad that automates all of the “thinking” so that sales professionals can’t make these kind of mistakes or run into these problems. With Showpad, it’s virtually impossible to make any of the mistakes outlined above.

Another Example: Repeatable Outbound Cold Outreach

Managing cold out reach is incredibly challenging for humans. Even with just a few sales development reps (SDRs) reaching out to 50+ leads / day on a standard 7x7 touch schedule, knowing who you should reach out to on what day can be a huge pain. SalesForce in no way provides infrastructure to do this correctly.

Then imagine compounding this problem by layering in A/B testing of various messages.

It’s pretty much impossible to know: how much work each SDR is doing, who each SDR should contact on each day, what messages are actually effective, and how each SDR is actually doing. There are just too many intertwined variables. Enter SalesLoft, which solves all of these problems, and more. SalesLoft is the purest expression of sales ops: design the system, and plug people into it, and let them focus on pure execution.

Sales Ops: How You Scale Your Brain

Another way to think of sales ops: as you scale an organization, you can’t make every decision. But what if you could? If you had the time, wouldn’t you? As founder, you can synthesize far more variables, draw on more experience, and understand customers better than your sales professionals. Other than time constraints, you are the best person to make many decisions. Sales ops is an awesome way to multiply your decision-making ability by codifying your decisions into software that everyone else can follow and learn from.

Sales ops is literally a multiplier of your brain. If you and your leadership really understand the best things to do at each stage of the sales process, in consideration of every know-able variable, you can automate that process. Every automation is worth investing in. As you get past Initial Scale — $10M ARR — you’ll find that every marginal improvement in sales ops has a huge impact downstream on ramping up new employees, close rates, revenue growth, and customer success.

What Is The Essence Of Sales?

Last week I had three nearly identical conversations with three different early stage startups about pricing. Specifically, how to price, when to share pricing, and how to gain leverage in pricing negotiations. Those conversations inspired this post. This post will be most applicable for B2B SaaS companies selling novel solutions (not commodities), ideally with an ACV > $50,000.

Everything in life is a negotiation. Especially sales. Negotiations are about leverage. When you’re selling to a potential customer, the customer has all of the leverage. She has the money, and you want the money. You have no leverage. She has all of it. How do you turn the tables?

The essence of sales is about inverting who has the leverage in the negotiation. To do that, you must create value in the mind of the customer. Sales isn’t about persuasion, being the nice guy, or hustling to get the deal. Sales is purely one thing: creating value in the mind of the customer so that you can invert who has the leverage in the negotiation.

If knowledge is power, then empowering your customer by creating value in her mind should work against you. The more she knows, the more she can hold over you, right? Wrong. This sounds counter-intuitive, but educating your customer — creating value in her mind — is the best method to extract as much cash from your customer as fast as possible, while maximizing probability of project success.

How To Turn The Tables

Irrationality always beats rationality. Always. See Donald Trump vs climate change. Donald Trump wins every time.

If you sell your product for $100,000, then you need to be unlocking at least $400,000 of value to the customer. Ideally $500,000 (note, the ratio of value-creation you can capture plummets if the costs are soft costs and not hard costs) . Early in any sales conversation, every customer will ask “how much does it cost?” If you tell them $100,000, you just lost the deal.

Why?

Because the customer hasn’t yet recognized how you’ll unlock $400,000 of value. Customers will naturally come up with a number that they feel should be the “cost.” That number has virtually no bearing on reality, on your costs to deliver the solution, or most importantly, the value the customer will unlock by using your solution. It’s a meaningless number, and it will be an order of magnitude lower than the price at which you’d like to sell your solution.

So when you tell the customer the solution costs $100,000 and she’s assigned $50,000 of value to your solution, the deal is over. Paying $2 for a $1 bill is obviously non-sense. This happens all the time, even if the solution would have unlocked $1,000,000 of value for the customer! Customers almost never really quantify the value of a new solution on their own accord. They need to be guided to recognize the value that can be unlocked. But naturally, they won’t see it. And that’s why…

…Irrationality always beat rationality. Always.

So your goal in sales is to make the customer realize that your solution will unlock $500,000 of value for her business. And if you do that successfully — if the customer really, truly believes that your solution will unlock $500,000 of value, then she would be stupid not to pay you $100,000.

Who wouldn’t buy a $5 bill for $1?

When you create that value in the mind of the decision maker, and they really believe in the value of your solution, you have turned the tables. You’ve taken all of the leverage away from the customer. Now you run the show. You have all the leverage.

The customer becomes the rational one. She wants to pay you because you will generate more profits for her, which will impact her take-home pay. You can afford to be irrational, and you can probably get away with it (within reason). Because really, even if you up the price to $110,000, the customer is still saving $390,000! Who would turn that deal down?

How To Deal With “What’s The Price?” In The Real World

Now, getting to this point of value realization — the “aha” moment — can be incredibly difficult. The larger the ACV, the more work it will take to build a true ROI realization model or business impact model. In many cases it can take months of working with business analysts to build a sophisticated ROI realization model. Many customers may not be willing to put in that work up front. The best you can do in these scenarios is to try to ballpark the potential ROI to get the decision maker excited enough to allocate 50–100 hours of other people’s time to figuring out the value realization model. If the decision maker doesn’t want to explore, the deal is dead.

Many customers will want to know the price before they do the heavy lifting of understanding the value. But that is the backwards approach. It leads to failure every time. When you share the price that early, you artificially cap your revenue opportunity, or say a number so high that you offend the customer. This always leads to a dead deal.

So how do you deal with the “what’s the price?” question when it inevitably comes up early in the sales cycle? Easy. Remember, it’s not about you. It’s all about the customer.

“Bob, if we can only deliver $50,000 of value to your $20,000,000 business, is that worth your time? Probably not. As VP of [division/company] you probably don’t waste your time on $50,000 problems. So if we can only deliver $50,000 of value, then we will gladly walk away and leave you to your business. We don’t try to hide pricing, we just recognize that if the project isn’t worth your time, then who cares what the price is.”

You’ll feel uncomfortable saying it at first, but it works everytime. As long as you make it about the customer — and not about yourself — you’ll be fine. No one can hate you for saying “you may be too big/important/good for us.” No one.

Savvy customers may use your logic against you and may respond with “well we have a finite budget this year and if it’s higher than the budget, it’s a no-go regardless, and I don’t want to waste your time. What’s the price?”

For which you can respond with “If I save you $1,000,000 this year and the unallocated budget is $50,000, is it not rational to find an extra $100,000 so you can spend $150,000 to save $1,000,000?” If they insist on rigid budgets still, then the deal is dead. There was never a deal to be had. Their organization is too irrational to do business with. Irrationality always wins.

Irrationality may beat rationality, but don’t let irrationality suck you dry. Cut your losses and move on.

You Have No Leverage Until You Have All Of The Leverage

Sales is a beautiful thing. It may have a poor connotation among laypeople, but true, systematic, structured sales is the ultimate sophistication. There is nothing more rewarding than turning the tables of a negotiation. And when you do, everything changes. You generate more revenue per customer, the deployments run smoother because your project is a higher priority to the decision maker, and you’ll have more reference-able customers… to help you sell more customers!

It's Not About Me. It's All About You.

Google “common salesforce stage names.” You’ll find a bunch of articles that outline the basic sales process. Depending on the assumed annual contract value (ACV) of the article, you’ll typically see a list that looks something like this. The lower the ACV, the fewer items in the list.

Prospect

Marketing lead

Marketing qualified lead

Sales accepted lead

Sales qualified lead

Opportunity

Discovery

Online Demo

Onsite Demo

Negotiations

Proposal

Legal/Procurement

Closed Won

Closed Lost

This stage naming convention is not useful. It tells the selling organization very little about where the customer is in the buying process. The are a few problems:

1) These stage names are a series of actions the account executive (AE) has done with/to the customer. More importantly, these stage names do not reflect where the buyer is in their decision making process. If a deal is listed in Discovery, the selling organization knows the deal is still early in the sales cycle, but that’s about it. “Discovery” doesn’t indicate anything about the customer. These stage names do not highlight the problems the customer is facing in making a decision.

2) The more complex the sale, the less linear it is. This naming scheme attempts to force a non-linear sales process into a linear progression.

3) There is no consistency in the naming. In English class, we were taught that lists need to be consistent. A list of 6 items shouldn’t include 3 verbs, 2 adjectives, and a noun. This isn’t about being grammatically correct, but rather highlights that there is in fact something wrong with this naming convention.

The Right Approach

It’s called the Enterprise Integrated Sales Process (EISS). Full disclosure: I was taught the bulk of this by my good friend and mentor, Jim Banks of ShadeTree Technology. Although it’s designed for larger ACV sales, the frame of reference is usable for lower ACV opportunities. The stages are:

1) Awareness

2) Recognition

3) Determination

4) Justification

5) Acceptance

I’ll walk through these in reverse order because the key to the sales process is to reverse-engineer the deal from the end to the beginning.

Acceptance — an opportunity moves into Acceptance once every requirement from every stakeholder in the buying organization has been addressed. This includes legal and procurement. If all redlining has been finished, IT has approved security requirements, budgets have been allocated and approved, fee schedules set, use cases validated, and workflows understood, then the only remaining step is to initial paperwork.

In many organizations large and small just getting the signature can take days. Those few days are the Acceptance stage. By moving an opportunity to Acceptance, the AE is signaling to her company that every obstacle has been overcome. Nothing that was foreseeable can stop the deal now.

There are instances where procurement organizations will lie to the AE and a deal will move back to Justification from Acceptance. This should only happen when truly every foreseeable requirement was fulfilled, and then out of nowhere, something comes up at the end. “[Competitor] just offered us a price that’s 25% less than yours. If you don’t match it, no deal.” It’s unfortunate, but many procurement organizations are designed to do exactly this to vendors.

Justification — this is typically the longest stage of the sales cycle. An opportunity graduates from Justification into Acceptance when every foreseeable requirement for every stakeholder has been fulfilled. An opportunity moves into Justification from Determination when all of the requirements to close a deal are known. Thus, to move to Justification, an AE needs to understand the requirements of:

Approver — the person who literally signs the check. This is typically a procurement person, or in some cases, the VP whose budget is paying for the solution.

Decision Maker — typically the VP whose budget is paying for the solution. The DM and Approver can be the same person, although this is uncommon.

Recommender — these are people the VP looks to in assessing the solution. These can be Directors, or they can be SMEs. There may be a few Recommenders in a deal.

Influencer — like Recommenders, but they have less clout with the DM. This can include business analysts who help build business cases, or lower ranking SMEs who sit in on demos. There can be more than dozen Influencers.

IT — Although you could categorize IT as an Influencer or Recommender, they are an organization that almost always has its own unique of set of technical challenges that other Influencers and Recommenders don’t. As such, IT warrants its own role and in SalesForce. Note: if you’re selling into IT organizations, this this doesn’t make as much sense as most of the stakeholders are by definition in IT.

Legal — again, a functional group that AEs always have to deal with. Make sure that AEs know who these people are and what they want in a deal.

Procurement — again, a functional group that AEs always have to deal with. Make sure to know who these people are and what they want to see in a deal.

Each stakeholder in the buying organization has her own thoughts and views of the solution they’ve been asked to evaluate. Very few of them will directly shares their views with the AE. But most of them will share their opinions of the seller’s solution if the AE asks. The imperative of the Justification stage is to ensure that no one in the buying organization has any reason to object to the seller. NONE. If anyone has a reason to object, the deal is likely lost.

In order to fulfill everyone’s requirements, AEs first have to figure out what people want.

Determination — this stage is all about diagnosing. The AE has to 1) figure out who all of the stakeholders are, and 2) what their requirements are. This is an explicitly divergent problem, whereas Justification is a convergent problem.

“Here are the 12 people you’ll need to engage with. John makes the decisions around here. He needs to see a 25% ROIC and 12 month payback period to do a deal. He will rely on Sally and Bob’s judgement about the real value you can deliver. John will work with Jim and Jane on building a business case. And he’ll turn to Janet in legal, Nancy in procurement, and Dylan in IT to get their blessing. Here’s everyone’s contact info. Oh, and Nancy will be the one that signs the check. I know you care about that.”

That has never been said in the history of sales. AEs have to uncover all of that information and more.

During this stage, AEs need to rely on their Champion inside the buying organization to navigate. The Champion will be involved in Justification too, but the bulk of the work the Champion will do be in Determination.

Recognition — A deal exits Recognition when the AE has asked her primary point of contact these 2 questions:

1) “Will you be my champion? That is, will you help me navigate your organization and understand the pitfalls and processes that we’ll need to work through together?”

2) “If it’s not going to work out, will you be the first to tell me so that we don’t both waste our time?”

When the champion has agreed to those criteria, a deal moves to Determination. Recognition is about selling one person. The remainder of the sales cycle after Recognition is about selling the rest of the organization.

The most common reason deals fail in Recognition is when the contact in the buying organization says “let me get my colleague involved for a demo” before the two questions above have been asked. This almost always results in failure. Why? Because that statement implies that AE’s current contact isn’t Champion material. Champions by definition need conviction in the solution they’re bringing into the organization. Without conviction, there’s no Champion. Without a champion, there’s no deal.

Most contacts that a sales organization is talking to at the Recognition stage have never championed a project through before. They rarely understand how their organization buys solutions, or even that champions need to exist to shepherd deals. This is why question #1 above is so important.

Question #2 is just as important. This will be the first time that anyone from the sales organization expresses vulnerability to the buying organization. This is a crucial moment of trust-building. It also creates a commitment from the champion to be honest with the AE.

Awareness — Awareness means that at least one person from one side of a transaction is aware of and interested in the other company. For inbound leads, Awareness translates to unqualified marketing leads. For outbound sales efforts, Awareness-stage deals are all untouched, qualified prospects. A deal moves to Recognition when one individual from each side of the deal has expressed interest in the other. At this point, the sales organization has to convince this person to be the champion.

Note: most sales organizations will transition account ownership from an SDR to an AE when a deal moves from Awareness to Recognition, or after the 1st or 2nd conversation in Recognition.

The Power of EISS

So why is the EISS naming-scheme so much better than traditional naming conventions? Because these stages tell all parties inside the selling organization what’s going on in the deal. For example, is it more useful for a CEO or CFO to see “Demo” or “Determination” as the stage for a given deal?

“Demo” is a meaningless term. Demos can happen in Recognition, Determination, and Justification. But Determination means that there’s a champion, and that the AE is trying to figure out who else needs to be involved. With that information, the CEO/CFO can ask hard questions such as “What is the background of the SME/Recommender on this deal? Has she led prior technology implementations that impacted this population of employees?”

Another example. If an AE has listed as a deal as “Negotiation,” the natural inclination is to ask about the terms that are currently being negotiated. But this is the wrong first question about any negotiation: “Have we (the selling organization) diagnosed every issue and requirement possible, and fulfilled the key requirements to ensure that the customer realizes the potential value of our solution?” If an AE lists a deal as “Determination” but begins talking about pricing, that’s a red flag. How could the customer possibly be willing to pay the maximum possible price if the customer doesn’t yet know what the real value of the solution is?

One of the most challenging aspects of sales is to orient EVERYTHING through the lens of the customer. This post just touched on one component of view: stage naming. Terms like “Demo” and “Negotiation” are actions that the sales organization does with the buyer. But those actions don’t represent where the buyer is in their buying process. The EISS provides the framework that sales organizations should use to map all actions and descriptors through the eyes of the customer.