Tuesday, December 8, 2009

The art and craft of sales - an interview with Scott Chandler

Last week, I had the pleasure of meeting a very impressive sales executive, a true sales rock star. Scott Chandler is the Vice president of strategic sales at Infinera, and served as VP Worldwide Sales for Infinera before that. It's not often that one encounters true excellence along with sincere humility. In the past 4 months, I have had the pleasure and privilege of meeting two such people: Scott and Desh Deshpande. This is a blog post about Scott, another one about Desh is soon to follow!

Here are excerpts from my interview of Scott:

Me: What are the characteristics of a good sales person in your opinion?

Scott: A good sales person is one who has an excellent work ethic, is paranoid and is someone who is creative. An excellent work ethic is a common denominator for most successful people.

Paranoia is very important because a sales person must constantly think and be aware of what his competition is doing, and be prepared at all times to be one step ahead.

Creativity is super important in this business because a good sales person must always create reasons for future meetings with the client, until the sale is closed.

Sales are made based on relationships at the end of the day. It’s important to be very tuned in to the customer and interpret fine nuances in tone and language appropriately in order to be extraordinarily successful in sales.

Me: What characteristics make someone a good sales manager?

Scott: A good sales manager is an excellent team player in addition to possessing all the skills that a good salesperson possesses. He must have the respect and trust of the people who report to him, and must have built up a reputation for fair play. The team must know that their manager has their back at all times.

As one progresses upward in a sales organization, it’s extremely important to understand what motivates each constituency (s)he is dealing with, and respond in a way that addresses that constituency’s concerns. A CEO is seeking a different answer than the VP of technology or the head of manufacturing, and it’s very important for a head of sales to be able to turn on a dime and give different people the responses they are looking for from their perspective. It’s almost like having ADD – there are a number of people who need to be kept happy at the same time, and it’s a very delicate balancing act to pull off. That’s one reason why burn-out is so high among sales managers and not that many people make it to the top sales jobs.

Also, good sales managers in top jobs must have the ability to make quick decisions that will eventually affect practically every part of the company. This requires someone who keeps their finger on the pulse of the customer round the clock, is able to synthesize the information quickly, and can take the heat.

Good sales managers are smart about how they use their time. Common perception is that sales people routinely wine and dine their customers and go on golf outings with their clients on weekends. Personally, I haven’t played golf at all in past year because I don’t have the time.

While dining, golfing with your customers is perceived to be an effective way to create the all-important-relationship necessary for selling, in my opinion, there are other more effective and efficient ways to do this. Remember that the people you’re selling to may not necessarily be looking for new friends and they each have their own families they may like to spend time with!

One of my biggest customers told me “Scott, I am giving you this business because of the relationship you maintained with me even when things were down. The other guys never spoke to me then.” What I did was I reached out to this person periodically every couple of months even when I knew the person did not have a budget, kept him in the loop and let him know what new products my employer was coming up with that would be useful to them when they did have a budget. Being communicative, responsive, and honest is a much more effective way of building these relationships.

A great sales manager is one who is capable of punching someone in the nose and then 5 seconds later, the person who got punched is thanking you for it. That’s an art - it can be honed, but fundamentally, some people just have it and others don’t. Ask my sales guys – they will tell you that I am absolutely capable of bringing you to the ground and stepping on you, and 5 minutes later you will be thanking me. It’s the X factor.

Me: When/How do you decide to promote a sales person to become a sales manager?

Scott: I promote people who have earned their stripes, and I know I can trust them and respect their judgment. I have known all of my top people here at Infinera for more than a decade, and some people have moved 3 jobs with me, so they can work for me. A good manager must inspire that kind of loyalty in his people.

Me: How are incentives structured for the sales manager?

Scott: The incentives for a manager or similar to that of a sales person but on a more macro scale. The quota for a sales person might be $5M, for a sales manager, it will be $50Million. The sales people are incented based on what’s important to the company – sometimes it’s a margin bonus . Other times it’s a new product bonus, or a new customer bonus. The incentive varies depending on what the company needs at that stage.

Me: If you are in charge of worldwide sales, how do you think of and manage territory?

Scott: Territory allocation in an early stage start-up is very easy honestly, it actually starts to get harder as you get bigger. When you are a start-up, it’s you and a couple of other people, and you have the whole planet to sell to. The CEO, marketing and sales teams brainstorm an year before the product is even built – who do we know out there, who are our top customers, who our best customers are, and which customers represent our best chances. We then line up all the potential customers, put them on a list, everyone agrees and pokes holes about why a particular customer is not a good one to be on the list or why isn’t another customer on the list etc., create a top 20 list and then you start calling them.

You know most people if you have been in the industry long enough. You say “Hey, I am now with company XYZ. I know you don’t know anything about this company, but you know me and I think you will find this product interesting…”. Then you look at the list for companies you don’t know people at, and start to hire your first 3 or 4 sales people. I look in my Rolodex and see who I know has a deep relationship with the target customer and go hire them. These people will typically have a relationship with the target customers even deeper than me. When I say “deep”, I don’t mean someone whose the customer’s golf buddy. I am thinking of someone who attended the guy’s wedding, who is a godfather to his child, not merely a superficial business relationship.

Then, when it’s time to grow and expand, there are basically only 5 regions in worldwide sales: Eastern and Western US, EMEA (Europe, Middle East, Asia), Asia Pacific and CALA (Central and Latin America). I then look in my network to see who the best guy I know is for the job in a given market. Once I hire these people, I work with them to bring in their top guys from their personal network based upon what the company needs in its next level of leadership. This works really well when one has been focused on a specific industry for a long time as I have, and pretty much know all the other top players in this industry.

Me: What information systems do you use?

Scott: I will tell you if you promise not to laugh at me, given you’re from MIT. I have a notebook bound in green leather held together by duct tape that I thumb through every morning. I go through every single contact in the book, and check off a mental list – is everything going well with this account? When was the last time I spoke with him? When did this person check-in last, and what was it about? If it’s been a while since I touched base, I pick up the phone and call the person. I do this every single day, first thing in the morning.

Me: Ever hired a salesman who seemed to be the right guy for the job and turned out he was not? What went wrong?

Scott: Oh absolutely! Sometimes, people talk a good game, meet all the criteria on paper but don’t walk the walk. As a manager, it’s very important to be study human psychology and be an astute observer. Some people are terrible new account managers but very good with customer relationships. In such cases, you try to find a home for them. You team up the good hunters with the good farmers because people maybe better at one than the other.

I hired this guy once who had a terrific killer instinct – he was very good at breaking down barriers and landing the initial contract. However, he was pretty bad with following up, keeping in touch with people and doing relationship maintenance. I had the option of firing this guy. Instead, I chose to move him into a role where his skills of breaking down barriers and landing the first contract was important, and moved someone else who’s better at relationship management to do the follow-up.

It’s very important for a good manager to know the strengths and weaknesses of their employees, and position them appropriately to succeed even when the employee himself is not aware of his own strength or weakness.

Me: Suppose there’s a dispute where one sales person has been working on a lead for months and the order comes from a different department/location, how do you decide who gets credit?

Scott: This happens all the time. In fact, I just got off the phone with one of my sales people dealing with this exact thing. These issues are much easier to resolve if your people trust you and believe you’re playing fairly. Often, I end up compensating both people equally, even if it means I need to deal with the CFO later and justify my actions. It’s really important to not have petty bickering in the organization, because it can bring the morale down. Sometimes, I might ask the person to take one for the team secure in the knowledge that their work has been noted and will be acknowledged appropriately down the line.

And this in a nutshell folks, is how the winners think about sales!

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