NSN sales transformation project Best Practice Funnel Creation 1 For internal use ©2013 Nokia Solutions and Networks. All rights reserved. Best Practice Sales Funnel Creation In order to foster an innovative environment we propose to introduce on a half-yearly basis some industry best practices based on research from: Miller Heiman Salesforce.com Salesmanagement.org (SMA) Practice or Process - Lead Qualification & Lead Scoring Measure or KPI – Sales Cycle Times/ Velocity 2 For internal use ©2013 Nokia Solutions and Networks. All rights reserved. Practice or Process: Lead Qualification & Lead Scoring Why do it? You can track the customers level of interest in your solution (engagement) in addition to your interest in them. By combining both factors you can truly send qualified leads to sales. This will lead to prioritizing the portfolio of leads and a better qualified pipeline. Pro’s CT’s/ Sales can focus on the high quality leads and not waste time on prospects that aren’t a good fit or are not ready Opportunities will be prioritised in which resources should be deployed – important for the identified growth cases Reduced funnel leakage (withdrawn, cancelled, lost) Con’s Lead scoring is not needed if the sales team does not have enough leads Lead scoring will not work if we don’t have the right or any lead intelligence 3 For internal use ©2013 Nokia Solutions and Networks. All rights reserved. Concept 1: Enhanced Lead Qualification Lead Qualification and Lead Scoring: As part of the Gate 3 Bid / No Bid decision the Sub-Region Sales Development Head will formalize the process in a review. Attendees would include: o Sub-Region Approval Body: SD Head, GS Solutions Head, MBB Solutions Head o Case Owner(s) o CT Head(s) Topics to be covered include: o o o o o o o o Case Summary Bid/No Bid Assessment Lead Score Case Value Win Probability Business Line Planning Team Setup Gate 4/5/6 Planning Enhanced Bid/No Bid template: 4 For internal use ©2013 Nokia Solutions and Networks. All rights reserved. Concept 1: Enhanced Lead Qualification Lead Scoring Example 1: LTE entry 5 For internal use ©2013 Nokia Solutions and Networks. All rights reserved. Concept 1: Enhanced Lead Qualification Lead Scoring Example 2: Expansion Case is not exactly ideal to pursue due to small size of historical revenue from customer, but they do have an allocated budget for a solution and it may be a high GP/OP business case. Recommendation would be to use CSSC rather than tie up APAC resources. 6 For internal use ©2013 Nokia Solutions and Networks. All rights reserved. Measure or KPI: Sales Cycle Times/ Velocity Why do it? NSN doesn’t know the actual length of sales cycle for CT’s or of different sized cases Taking analysis to the next level – understanding the different levers to drive sales Implement the leading indicator to measure sales cycle times/ velocity of cases Pro’s Measure the days in each stage of the Sales Cycle Benchmarking in order to start accurate forecasting Measure the effort or efficiency of the sales organisation Con’s May have to make some assumptions with current database, as historical gate information may be incomplete. If not implemented, only fallback is to rely on OPEX i.e. The measure of an organization’s sales effectiveness translating from revenue generated for a fixed or variable cost. 7 For internal use ©2013 Nokia Solutions and Networks. All rights reserved. Concept 2: Use of Leading Indicators Sales Cycle Length (Velocity): Sales velocity measures the time taken for opportunities to flow from one stage to the next or from the current stage to the end, and it is a critical predictor of sales success. Research has shown that, on average, it takes 150% longer to lose a deal than it does to win one. That’s in part because that deals that get stuck in a stage for an unnaturally long period of time tend never to close at all. Measure - Average # of days in each opportunity stage o By tracking the average number of days in each opportunity stage, sales managers can get a better idea of which pipeline opportunities are likely to close, thus allowing them to forecast more accurately (leading to benchmarking) o This will allow us to measure the days in each stage of the Sales Cycle, the sales cycle of certain sized cases or the Sales Cycle of CT’s. 8 For internal use ©2013 Nokia Solutions and Networks. All rights reserved. Concept 2: Leading Indicators Example Output: Average # of days in each opportunity stage Gate Approved in period P7-13 P8-13 P9-13 P10-13 P11-13 P12-13 Avg Days Total Value (m€) Avg Days Total Value (m€) Avg Days Total Value (m€) Avg Days Total Value (m€) Avg Days G3 54 42 303 43 306 55 225 62 314 37 47 G4 316 70 22 69 162 63 358 71 274 133 75 G5 384 77 61 60 79 81 25 63 196 49 69 219 191 Sales Cycle 189 172 199 196 Total Value (m€) Avg Days Avg Days Total Value (m€) Lost* 5 190 7 210 9 170 7 160 5 200 186 Cancelled* 6 95 8 105 10 85 8 75 6 100 92 *Dummy Data 9 For internal use ©2013 Nokia Solutions and Networks. All rights reserved. BACKUP: Research on Sales Funnel best practices 10 For internal use ©2013 Nokia Solutions and Networks. All rights reserved. Renewed approach to implementing Funnel Management Best Practices Create Manage Measure Follow a standardized process for qualification Align to support the customer buying process Using Leading Indicators Strategy/ Account planning best practices Lead Scoring Lead Qualification ü 11 For internal use Redefine the funnel around the buying decision process - Global Sales Funnel Health Benchmarking of Lagging & Leading Indicators: Pipeline to Target Ratio # Qualified Leads Average # days in each stage (Sales Cycle Length/ Velocity) Stage-to-Stage Conversion Ratios Hit Rate ©2013 Nokia Solutions and Networks. All rights reserved. Create Create: From Strategy to Opportunity • Region Pipeline 3:1 Leads 2 3 Prospects Deals 1 X * Pipeline Multipliers: The Math Just Does Not Work 12 For internal use To avoid the sales rollercoaster, prioritize 1st time spent on closing/ negotiating deals, 2nd qualifying leads, 3rd tendering/ assessing customers stakeholders. Benchmarking: Companies that manage a pipeline of 3X or less had a 32% better conversion/close rate*. Where: X = ( C x C) x V Capacity Conversion Velocity : # of active opportunities : % of active opportunities that close : Sales Cycle Length Therefore, there needs to be a greater focus on qualifying leads as they enter the funnel Increasing the number/value of the pipeline opportunities does not have a linear effect on decisions won. ©2013 Nokia Solutions and Networks. All rights reserved. Sales and marketing best practices SELF-ASSESSMENT Assessment for SD Heads to take: http://www.inflexion-point.com/self-assessment-2013/ This short self-assessment addresses three key areas that are critical to the success of any B2B sales and marketing organisation: focus, processes and programmes. The questions draw upon the best practices being implemented by many of today's most successful growth-stage B2B-focused companies. 13 For internal use ©2013 Nokia Solutions and Networks. 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