A good friend just called to report that he had received a healthy year-end bonus. As a member of the management team, the payout was based on his company's performance against quota for both Q4 and the second half of the year. Nicely enough, Q4 performance was sufficient to trigger the second half bonus. Talk about a hockey stick!
So I asked my friend what his company is doing to ensure quota attainment for this year...what the management team is doing to ensure Q4 and second half bonus payouts this year. His response reflected the challenge faced by many growing companies:
We just got back from Sales Kick Off...we're not thinking about Q3 or Q4. Ask me again in September!
His response is symptomatic of many tech companies, large and small. Q1 holds lots of activity -- territory reshuffling, new product launches, training, unfocused optimism. The team is tired from the hard push in Q4, closing deals, pulling in business, and it wants a break from the focus on sales development.
Unfortunately, September will be too late to affect Q3 or even Q4 results. Companies need to plant the seeds now to ensure a good harvest later. If a typical pursuit takes 6 months, waiting until April or May to identify likely suspects and to start those engagements will ensure that many will not end well.
Savvy companies start early in the year with their account development...engaging with prospects early on, understanding the buying process and getting into sync. You just can't rush this process...seldom will a prospect adopt the seller's compelling event (quarter or year end) as their own. While discounting practices move some buyers to act, this tactic destroys profitability and the vendor's credibility as anything but a price discounter.
A few sophisticated companies don't get caught in the quarterly and annual sales cycle. These are artificial constructs, applied by Wall Street and traditional sales management. These sales cycles don't match their buyers' business cycles, timing, sometimes even fiscal year budget cycles. Those companies that can match their selling cadence to their customer's buying cadence and timelines are far more likely to be considered trusted advisors rather than vendors.
But most companies are still getting the basics wrong. The sales funnel looks like a martini glass, with a lot of activity at the top. There's a lot of wasted effort here, chasing bubbles.
A small percentage increase in identifying and moving qualified opportunities from the top of the funnel holds tremendous impact on top line revenue. Most companies are pretty good at managing opportunities through the mid-part of the process; the key is to getting good qualified opportunities started.
What steps are you taking now to ensure your year-end bonus?
Objective -- create better, more profitable relationships between buyers and sellers
Monday, January 30, 2017
Did You Get Your Q4 Bonus?
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