Is Sales Enablement paid to solve the important problems or simply the acknowledged ones? I’m not being snarky. I’ve worked in some large companies, and know how dysfunction sets in and works. I understand and sympathize with the social and political forces at play. This article provides you with some encouragement–along with a challenge to pursue excellence.
Enablement Pros are Under Pressure.
There is pressure to show results. As a relatively new discipline, sales enablement needs to show value within its own organization.
The politics impacting sales enablement are complex and undeniable. You are required to satisfy cross-functional masters, align functions who feel things worked just fine before, soften fiefdoms who used to be able to call their own plays and optimize their processes without messy collaboration.
Enablement is also under pressure to meet a variety of stated priorities: short tem goals, quarterly goals, annual goals, key deal goals, sales cycle goals, win rate goals. Each of these goals competes for time and resources, yet all equally important on any given day. I get it.
Credibility is the coin of the realm and you build credibility by helping sales leader meet goals. And who in this environment welcomes a new goal into the mix?
Sales Enablement Is Already a Change Agent. Now, Pick the Right Battles.
Here is my challenge to you: look wider and think bigger. Own responsibility for the future of your company’s revenue line. To do this, you need to decide what enablement’s role is vs. what it could be at your company. We often think of sales enablement as a discipline to help us do things right. Many enablement pros take the view that doing the right things (aka setting the priorities…even trying to influence them) is outside sales enablement’s job scope. Such thinking is the first step to being a cost center rather than being part of the revenue center – and taking a role in company leadership. Working as part of a cost center carries recession risk. Being a lemming is certainly safe…until it isn’t.
Are The Stated Goals the Right Goals?
Sales Mastery recently released these results of sales ops improvement goals for the next 12 months. Notice how low improving margins is.
A recent result published by CSO Insights was even more disturbing: It doesn’t even appear on the radar screen (or maybe they didn’t even ask):
My takeaway: achieving higher margins is a low to non-priority in most companies. Higher priority items are definitely worth your attention, but let’s analyze what might be driving that priority.
Pricing Leverage ROI Math:
Increasing margins has much higher ROI than any other sales performance initiative. For the average company, a $1 increase in price is $1 in increased profit, where a $1 increase in sales (at average Fortune 1000 profit levels) yields a $.09 in profit. Bottom line: learning to value price carries an 11:1 ROI advantage over increasing revenue. The math argues that this seldom-acknowledged priority is one of the most impactful options available.
Real-World Emphasis on Profitable Pricing: Frighteningly Rare
Only a quarter of sales forces have a significant part of their compensation tied to profitability…in spite of the fact that sales is the only role in a position to sell value. If anyone can achieve higher pricing through some discretionary action, it’s sales. And yet, they are often paid to not care.
Only about a quarter of companies have even a portion of their sales compensation plan tied to profits or margins.
My warning: If you follow the stated priorities of these companies, you aren’t doing the right things. You are a lemming headed for a cliff.
The challenge: getting your organization to do the right things…which starts with getting them to want to do the right things. Then, work on capability; that’s enablement’s expertise, right?
Now: Let Me Point Something Out
I genuinely understand the gravity of the challenge and feel your apprehension…but think about it:
This is the same barrier we ask our sales people to break through. Every. Single. Day.
We enable salespeople to provide commercial insights. We train them to shake up how customers think. We coach them to build credibility by offering high value perspectives that reshape the customer’s current concept of their problems and opportunities. We develop them to have executive business conversations on total value, not some immediate self-diagnosed “stated need”. We tell salespeople to engage high and wide to build optimal consensus.
Your internal challenge is exactly the kind of elite selling you are supposed to enable a salesforce to practice. If you fail at this…or fail to even try, what does that say about your enablement chops?
Do the Right Thing, THEN Do the Thing Right.
You know what the right thing is. Now you need to figure out how to build the company consensus.
Start with your CFO or CEO. They look at the world through “profit goggles”. Have information for them:
- Understand your current sales compensation plan(s), and how heavily margins weigh in it.
- Collect your discounting/price exception data (alternately, measure gross profits, usually a good substitute). Find out how many discount dollars you gave away to your customers last year, last quarter, last month. Is it going up or down? Why?
- Can’t get that data? Holy cow. Ask why. Often, the salesforces who don’t track discounts are the ones who need it most. Don’t be lulled into the easily tracked discounts (like for payment terms). Maybe you need to start tracking discounts. Now.
- Learn your process for obtaining price exceptions. How much is a salesperson allowed to discount before engaging anyone? Sales manager? What’s the exception/pricing process for big discounts? Are any salespeople or regions getting disproportionate discount dollars? Does this system have blind spots?
- After you have measured the profit drain, have an idea of what to do about it. Next, compare that profit stream against all of the other sales enablement priorities you are balancing. By the way, I have some good news: you should be able to instill value pricing discipline within your existing process and methodology without a major rip & replace program.
Do you need to bring in an outside expert to help with a difficult conversation? Sometimes, that’s a good strategy. If it makes sense, get somebody like me to facilitate a discussion. I’m happy to provide an experienced perspective…no charge.
You Can Do This.
I can help you justify why enablement efforts should emphasize value selling, value discipline and pricing acumen. I help companies put value discipline into their existing sales processes and methodologies. It’s a passion, because I’ve managed P&Ls and know that discounting is often the largest profit leakage at many companies.
Contact me if you want to simply bounce ideas around, or talk about how to start your journey to world class profitability..
Comment, like or share if this article impacted you at all.
To your success!