Artificial intelligence is one of those buzzwords that is underestimated and over rated at the same time. We experienced the power of AI everyday while interacting with Alexa, while writing emails, while getting a delivery from Amazon or while planning a trip. Yet we are skeptic about its viability and fearful of AI replacing humans.
The focus of our discussion is to uncover some of the misalignments that impacts sales productivity and demystify the role of AI in enabling sales. The question is: Will AI replace sales professionals, or will it empower them? Can artificial intelligence be used to automate, predict, and supercharge the way they work, or will it completely replace certain role in the sales cycle such as inside sales?
Rob Kall, CEO and co-founder of Cien, an AI powered tool that helps sales professionals be more productive and uncover areas of improvement. He’s also a serial entrepreneur who has founded and sold many successful companies.
SUMMARY
- There is no single thing that makes a great salesperson, you have to have a bunch of different skills at a minimum acceptable level.
- If you’re a sales leader, important thing is to understand, are you providing a fair playing field?
- With Cien, we could measure the intangible factors and we could measure the value of territories and leads; basically explain sales in a whole new way.
- AI can be used to fix the bad data, so that it becomes better data. That would become 100% perfect and you can still make a lot of meaningful inferences out of it.
- AI isn’t going to put salespersons out of jobs, it is here to empower them
- We, at Cien, are able to track every single one of the intangible measurements separately because it’s been measured on a daily basis with same consistency.
- AI can fix what you’re falling short of, the deficiencies like in the way you are communicating that is different from your peers, so that you can improve it.
WHAT IS THE MOST UNDERESTIMATED IMPACT OF MISALIGNMENT IN SALES THAT MOST COMPANIES COMPLETELY IGNORE?
The important trait of a great salesperson is the ability to do discovery and present the value proposition, communications skills. When we ask this question every single person gives a different answer. Someone says, we’ve got to have that killer instinct that really closes the deal. Another person says nothing beats hard work. If you’re not really going out there and pushing it every single day, you’re not going to have success. The third person will say something like the most important thing is effective listening skills. The fifth person will say something like the most important thing is that you truly understand the technical aspects of the products. You can explain it well and I always come back to the same question.
To answer the original question, what’s the biggest misalignment is that, there is no single thing that makes a great salesperson. They’re all there. The truth of the matter is that you have to have a bunch of different skills at a minimum acceptable level, and when you reach that, you can get to “quota”. You can have reasonable success and if you’re exceeding them across the board then you will have outsize results. That’s what people do not often understand and they try to “clone” their best rep or do something like that. Every single person has their own strengths and weaknesses, and your job is not necessarily to expand that we have as strengths even further, but to mitigate the weaknesses that are preventing them from being successful.
There’s a misunderstanding as how these traits add up, because they don’t add up. You don’t say first you need a portion of product knowledge and then you need a portion of work ethic. Then you need a portion of closing ability. It doesn’t work like that. It is that they are multiplying with CRO and the second one of them goes close to CRO, multiplication by CRO. And then you don’t have success.
Obviously these are what we call intangible traits. They are not in your current KPIs; they are not in your current Salesforce reports. So the first thing is just to measure them. And then the second one is to understand what the impact of each one of them has.
We’re seeing that the impact is not linear. There are inflection points where all of a sudden if you get past that particular point you get much, much better results. And that’s what we’re seeing all the time when we’re working with the companies. They have reps who are struggling and almost inevitably there are one or two things that those people are doing that is significantly worse than their peers. When we will look at their top performance, they are not superstars, they are not the best of the best in every category, but they are consistently above that “average limit”.
IF YOU REALLY WANT TO SET STANDARD BARS, YOU TRY TO REPLICATE THE SKILLS OF STAR SALESPERSON OR TRY TO EMPOWER THEM TO MAKE THEM BETTER?
The problem with trying to replicate Messi or Ronaldo is that they are one in 7 billion. They just don’t exist. So trying to “replicate” Messi is probably a full zero. But what happened with us is that customers come to us and say, 80% of our revenues come in from 20% of our reps. Those reps are not Messi but they are really good. The challenge, if you’re a sales leader, is that you probably have a bunch of people that are not producing. And second, it is also important to understand that as a sales leader you are somewhat in control of your reps’ results simply by doing things like territory assignment, lead distribution and so forth.
And this is something that most salespeople are under estimating in what they’re doing. When you’re looking at their Messi; the two or three people, they’re doing two or three times, even four times as well as that “average rep”. When we look at those reps, their value that they receive in leads, accounts, territories, opportunities, you name it, depending on how the sales structure is set up is much, much higher than the rest. So those reps are never bad. They don’t have these weak areas we’ve talked about before. They’ve already eliminated those, and they have also given us a lot more than the rest of them. And those two factors together give them that outsized results.
If you’re a sales leader, important thing is to understand, are you providing a fair playing field? And if not, you will probably have these 80/20 rule that we just talked about. And two, are you mitigating for these people who have weak areas and are giving yourself the long tail of various low results? And can you manage out those reps right?
WHAT ARE THE CORE PROBLEMS IN SALES TEAMS?
I’m kind of a geek. My first couple of companies, I was a CTO. And then for the last 10+ years I’ve been the CEO of the businesses that I’ve been starting. The problem that I’ve seen every single time is as you scale the team, the productivity, the output per rep or per hour work or whatever, it keeps going down. And it happens almost always and it’s a huge problem. SAS businesses today are extremely highly valued at least until this week’s market crash. And it is because you’re creating this recurring revenue stream that can, in theory, run forever for each customer. And you only acquire the customer once. But because it’s something that is so valuable, companies flow so much cash at the customer acquisition process, and as you do that, the efficiency of that process keeps going down and down.
It happened to me in my last company. It went from two to a hundred sales reps, and in my “numbers”, I figured we would get 50 times as much sales and of course we didn’t. And out of frustration of not being able to explain the reasons why the new reps that were on boarding were not succeeding when we had that success prior. That’s where Cien came out. And the idea was that we could measure these intangible factors and we could measure the value of territories and leads and so forth. And with those two pieces, we call these things the tangible factors or value chain. With those two things, you could all explain sales in a whole new way. Because when you’re saying it’s all about the mystics, there are relationships, the special things; I say no, it’s all possible to break down into smaller, much more understandable components. It’s just that you can’t do it using the usual spreadsheet models, but you have to use stuff like artificial intelligence to do it.
HOW CAN AI SOLVE THESE PROBLEMS?
When our customers are saying, ‘our data’s crap, can you still help us?’ And the answer is, in most cases, yes. Because, we use AI to fix your crappy data and then make it more consistent. What people consider crap data are duplicate accounts or inconsistent entries into the same form fields. It’s changes in methodology where you used to do it one way but now you’re doing it another way is the fact that they know that some of their reps are not updating their CRM in a consistent way as they should be. All of those things are going on in every single sales team in the country right now. And they are usually big impediments to get meaningful analytics out of the CRM system that they have.
And the sales ops teams around the country are always struggling with their stuff and being told that their reports are not meaningful because they are not able to compensate for that. What we are doing is essentially saying, this is a problem of pattern matching and what is better source of pattern matching than AI. Especially using AI to fix the bad data, so that it becomes better data. That would become a hundred percent perfect, but you can still make much a lot of meaningful inferences out of it and then using that much enhanced data to make predictions of what’s going to happen and try to assess these intangible factors, understand the quality of leads and the value of them and so forth. So, it is a multistep process. And if we hadn’t done that, our analysis would be pretty much useless. But because we spent a lot of time understanding how data is bad in all the myriads of ways it can be bad and then mitigate that, we can scale a lot of those problems.
SALES IS A HUMAN2HUMAN FUNCTION- DOES AI TAKE AWAY THAT ASPECT?
Human intelligence is 10 or a hundred times or whatever times smarter than any AI that’s on the market today. The only difference is that AI can do this stuff for every single record in five seconds, whereas a human will have to spend five weeks on it. And in many cases not be able to capture every single aspect of it. AI isn’t going to put salespersons out of jobs, it is here to empower them.
WHAT ARE SOME OF THE MUST HAVE TOOLS THAT EVERY SALES TEAM SHOULD INVEST IN?
The beautiful thing about AI is that it can be run every single day. You can run the same algorithm, every single model, every single day to assess what’s changed since yesterday. When you’re highlighting these specific issues that we talked about before, people take action. Not only are you able to see what you should do, you can also see the progress that you’re making and the way we are doing this stuff. We have this concept called hidden revenue. For example, if you have a team that is doing $10 million of bookings in a year, what we typically find is between 20 and 40%, maybe between two and three and $4 million of hidden revenue. These are not the revenue that you’re missing because your team is not Messi, everybody cannot be Messi, right? But it’s the thing where one person should be operating at a particular level on one of these categories we talked about before, perhaps he does not know the product well enough, so it’s significantly below that and therefore he’s losing out on a lot of sales opportunities because of that. You bring him up not to Messi level, but just to the same level as everybody else. That’s what we call hidden revenue. What we have found is that if you have this hidden revenue, a portion of that, teams fix themselves because people figure out stuff on their own. Maybe they fixed 20% of these problems on their own so every time a problem pops up, some of it gets mitigated automatically. What we’re able to help people with, is to say 20% is not good enough, let me bring it up to 30% or 40% or 50% and that adds up to a lot of dollars and it also gives you that “satisfaction” of seeing progress on your own initiatives.
And that is something that as a consultant or as a leader, you are always frustrated with. You know what you want to do. You tell everybody that you’re doing it, then you have a feeling that things are getting better and hopefully at the end of the day you can see better results, but better results are not directly attributed back to the initiatives that you have. We’re changing that and we are able to track every single one of these measurements separately because it’s been measured on a daily basis using the same consistent measurements.
HOW CAN YOU BUILD A CULTURE OR MINDSET THAT IS MORE ACCEPTING OF AI IN SALES?
What’s your role as a sales professional today? It is to be able to understand your customer’s problem, possible solution, and understand what, if anything, would prevent the customer from seeing value in that solution. All of those things are not possible to solve for AI today, but what you can do is to understand where you’re falling short. Perhaps you’re missing out or following up on specific accounts that you should have folded up, or perhaps you’re spending too much time on one activity and you should be spending less time on that versus something else. Perhaps there are deficiencies in the way you are communicating that is different from your peers etc.. And what we’re helping people do is to essentially get people to call it up. If you understand what that one or two things are, then you can improve it, as opposed to, ‘Oh, I just don’t know how to sell’, which is not the case.
You have a guide, practical, real world examples of how to leverage artificial intelligence to improve sales productivity. Understanding where to focus and identify the misalignment gaps is essential for everyone to do our job. Though for sales growth, it is mission critical. It has a power to uncover intangible gaps and provide the needed direction for the sales.
