What is Agile Sales? Part 2
In the last post, we compared the Waterfall and Agile development methodologies. In this post, we’ll take a closer look at how these concepts can be applied to sales teams.
If we take a look at traditional sales models, we can draw a number of comparisons to legacy development methods. Much of what sales teams are asked to do, is determined by the company’s overall financial goals for that fiscal year. As a result, the company’s decision makers will try increasing the activity of their sales reps, as a means to quickly increase revenue.
Sales managers will often impose activity thresholds in the form of emails and calls on all sales reps. The logic is that if a rep hits X number of dials, emails and new leads, the sales team is sure to hit their quota, and therefore the company is sure to hit their overall financial goals.
This works out great for Sales Leadership as they are able to retain complete control of the team. Since tracking sales activities is often quantitative, it becomes extremely clear which reps are high performers and where there is room for improvement by low-performance.
Besides maintaining control over activity, this method allows sales leadership to control the messaging across the sales floor. It’s common for new reps to be handed prewritten e-mail sequences and call scripts explaining the company’s value proposition. This helps ensure that every customer is getting a consistent, and scripted, sales experience.
The biggest issue with activity based sales is the way quotas are determined. Many companies determine these quotas by reviewing the previous year’s revenue numbers, and adding an arbitrary growth percentage. This should work in practice, but there are often many more (predictable) factors that should inform the quota. It becomes clear very early that setting activity thresholds based on an uninformed, and possibly unachievable quota is a hopeless cause.
Additionally, while sales reps deliver consistent messaging in the activity based sales model, they often experience the “hamster-wheel effect”. The model gamifies and incentivizes the rep to hit their activity thresholds, without necessarily contributing to the company’s overall revenue goals. This quantitative over qualitative measurement of performance results in disengaged sales reps, pursuing arbitrary metrics as opposed to meaningful sales activities.
To summarize, let’s take a look at the pros and cons of Activity Based Sales:
Pros:
- Leadership retains full control
- Unified messaging
Cons:
- Relies too heavily on initial quota
- Creates “Hamster Wheel Effect” for reps
Look familiar?
Enter Agile Sales
Sales teams in the tech industry can benefit from applying functions of the Agile methodology into their overall strategy.
The most successful sales teams are ones that are not only flexible, but also quick to adapt to product changes. This is especially true for small to medium sized tech companies as changes to the product often lead to changes in their prospects’ demands.
Beyond this, it is also commonplace for tech companies to sell into multiple verticals. This is usually the side effect of an evolving product, which can lead to new use cases. Sales teams who rapidly and efficiently sell into new verticals, can ensure exponential growth in revenue.
Although the Agile methodology includes multiple aspects that are beneficial to sales teams, it would be short sighted to not retain the best aspects of traditional sales models — namely, the high level of activity required. It is difficult to deny that high levels of activity among sales reps leads to a higher revenue numbers. It is important, however, to readjust how the activity is executed on a day-to-day basis.
Development teams had a similar issue when applying the Agile Method. In order to ensure developers remained productive with the introduction of Agile, teams started to organize tasks into “sprints”.
Fortunately, applying vertical specific sprints to sales is a natural fit. The result is an iterative approach where sales reps reach a large number of prospects that fall into the same general profile. There is an added ability to reflect on the results after the sequences, or “Sales Sprints”, have been completed.
Within a short amount of time, the results of multiple sales sprints can be compiled. The data gives a comprehensive top-down view into how specific prospects are reacting to different stages of the Sales Sprints. This analysis proves invaluable in preventing anecdotal evidence from affecting long-term strategy.
Applying a more iterative approach to sales also solves the “Hamster Wheel Effect” for reps because they are empowered to apply new messaging techniques between, and sometimes during, Sales Sprints. Agency in their approach will result in a more engaged team, performing more meaningful approaches to their sales methodologies.
Most importantly, Agile Sales solves the issue of inaccurate forecasts. Since all data associated with each Sales Sprints is recorded, demo booking rates and close rates can be determined not only on a micro level but on a macro level as well.
Curious about how the Agile Sales process works? Check out this post that breaks down how to apply Agile Sales in your team in 5 steps.
Questions? Email me at shane@agilesales.ca
