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Welcome to 2004! 

The start of the New Year begs for a newsletter with a forward looking theme so we're not going to disappoint.  In this edition we focus on thinking ahead - forecasts, trends, predictions, and the outlook for the coming year.  Like all of us in the Information Technology industry, we're optimistic about the prospects for the New Year; however we know improvement will not come overnight, but gradually, and require that each of us work harder than we ever have before. 

To help make that work a little less burdensome, this edition includes an article from one of our partners, Next Level Consulting, on the subject of effective sales forecasting.  We also look at the selling and buying trends for technology in 2004 and discuss a sales trait that can improve business through sales productivity.  Lastly, we ask for your opinions in a survey about some of your plans for the coming year.  We hope you'll find this newsletter informative and helpful, and we wish each of you a happy and prosperous New Year. 

Hire Well & Good Selling!

Ross, Sara and Pam

Technology Trends for 2004
By Ross Rich, Managing Principal, Selection Strategies, Inc.

In December 2003, I attended a seminar hosted by the Technology Executives Club http://www.technologyexecutivesclub.com, a business networking organization based in Chicago.  This seminar, entitled "2004 Tech Sector Forecast and Buying Intentions," was attended by approximately 170 business professionals.  Two panels of speakers were featured, one representing the sell-side and consisting of representatives from IBM, Microsoft, Intel, Oracle and T-Systems.  The buy-side panel consisted of CIOs and CTOs from local corporations ranging from small to mid-sized to global corporations, including companies like ABN AMRO, Dade Berhing and Mitsubishi. 

The sell-side panel began the discussion with their outlook for the coming year.  All participants agreed that corporate IT spending would continue witnessing slower than desired times due to several factors impacting technology buyers.  A survey distributed prior to the seminar (and reviewed before the formal panel discussion began) showed cautious optimism for increasing IT budgets for 2004, but stressed that any increases should be underwritten by the business units that will directly benefit from the project or solution because IT no longer has the freedom to spend on their own. 
The continuing downward pressure on IT budgets, like most corporate spending, was seen as a direct reaction to factors like under funded pension plans and the increasing costs of health benefits.  It was estimated that, on average, a company must see a 4% increase in annual sales simply to break even based on these rising costs.  Coupled with budgets that remain flat due to the desire for companies to do more with less, the panel did not see a return to the heavy spending of the late 90's.  However, the sellers were generally optimistic that gradual and consistent improvement would take place and the survey results reinforced this view since a majority of respondents (69%) from the buy and sell sides believed that IT budgets would rise modestly during 2004. (Full Article

Linking Forecast to Future...a look at sales forecasting.
By Bobby Knight, Partner, NextLevel Consulting

For many companies, the sales forecasting experience can be summed up in the lyrics of the Jimmy Buffet song "A Semi-True Story"...

"It's a semi-true story...Believe it or not
I made up a few things...And there's some I forgot"

In this mini White Paper, we'll identify many of those things that contribute to a "Semi-True" forecast.  Our intent is to raise your level of awareness about a few of the complexities faced when working with forecasts, and to offer a logical, practical approach to resolving this dilemma.  So...Why do sales organizations continue to struggle with forecasting?

Frequently, there is little or no correlation between Sales' selling cycle and the Customers' buying cycle.  This lack of consideration and understanding of the Customers internal clock for making decisions, leaves salespeople few choices but to manage the deal by their sales process. 

If you doubt this, take an informal survey of sales executives and ask them how many deals slide from quarter-to-quarter carrying a 50% close expectancy.  Answer: few. 

Now ask how many deals slide from quarter-to-quarter carrying an 80-90% close expectancy.  Answer: many. 

This strongly suggests the sales person is in the latter stages of their sales effort, while the deal sliding from quarter-to-quarter suggests the Customer may be no more than midway to reaching or making a decision.  This one factor - lack of correlation between buying and selling cycles - is a major contributor to inaccurate forecasting. (Full Article

TARGET ON TALENT: Assessing Sales Talent

Reading Between the Lines: The Fine Art of Discernment
By Pam Burton, Consultant, Selection Strategies, Inc.

The new Sales VP was reviewing his first quarterly forecast and the rep in Dallas, Jim, forecasted the Acme Manufacturing deal to close in Q4 with a 90% probability.  The VP hadn't been able to get to know each rep in-depth, but this was a big deal and the VP's first impression of Jim was certainly going to be positive if this deal closed.  Excited about a deal closing with $750K in software and $1.0M in services, the VP picked up the phone to get some more details from Jim before his 2:30 forecast review with the CEO.  Jim told him he was confident the deal would close and the VP asked him where he was in the process. 

"I gave them several references to call." was Jim's response and the VP asked how those calls had gone. 

"They haven't called them yet." he answered.  "Why not?  We're getting down to the wire on this." the VP responded, a bit agitated.

"Well, they're checking references but not the ones I provided, they told me they have identified some of their own." replied Jim.

"Some of their own?" the vein on the VP's temple started to pulse.  "What's going on here, you have this deal forecasted to close and now you're telling me they're calling other references.  Who are they?  Where did they get them?  The competition?"

"I don't know." Jim said.

"This didn't seem strange to you?  Didn't raise any red flags?" the VP asked.      

It didn't take too many more questions for the VP to get a queasy feeling in the pit of his stomach and realize that Jim didn't have any situational awareness.  The VP hung up the phone with serious questions about Jim's judgment in forecasting a deal with such high probability to close in the current quarter when he really didn't have any control of the process so late in the game.  Out maneuvered by the competition?  Probably!  Jim was losing and didn't know it.

A frightening scenario?  You bet, except this is a sanitized version of an actual deal and not an uncommon one unfortunately when a salesperson lacks a critical characteristic we call Discerner - the ability to read between the lines, have an intuitive "feel" for the situation, and pick up on the unspoken and unseen events that give clues about the real events that are unfolding in an account.  Despite suspicious activity, strange developments and other indicators that the deal was out of control, Jim's lack of awareness shows a lack of discernment that ultimately finds a sales rep believing they're winning a deal only to find that they've lost it to the competition long before they had a clue the deal was out of control. (Full Article

During the week of January 19, 2004, we'll be distributing a survey to ask your opinions about the coming year.  We'll share the results with all of you and hope the results of this survey will help to further clarify the opportunities and possibilities for a more productive and prosperous 2004. 

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