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Greg Alexander: Hello, everybody. This is Greg Alexander, CEO and founder of Sales Benchmark Index, and welcome to the weekly podcast series. Today, we have a special guest, Stuart Kerst, who is the vice president of sales operations at HP. Stuart has 20 years of experience helping to improve the productivity of sales teams within leading enterprise companies with stops at places such as HP, SAP, and he began his career at ADP, one of the great sales organizations in the world. Stuart also holds a degree in business and French from the University of San Diego. Stuart, give us a little French.
Stuart Kerst: Bonjour ça va.
Greg Alexander: Very good. Stuart, welcome to the show.
Stuart Kerst: Thank you, Greg. I appreciate it. Thanks for having me on.
Greg Alexander: All right. Today’s topic is how to improve sales productivity and specifically looking at the key measure of time. It’s our perspective that salespeople have about 2000 hours of available selling time and that’s a simple calculation which is basically 40 hours a week times 50 weeks in a year. Now, sales teams might work more than 40 hours a week and maybe they take more than 2 weeks off a year, but usually average is around 2000 hours. Stuart, I know selling time versus non-selling time is something that you spent quite a bit of your time on studying. Share with the audience your point of view as to what the percentage of these 2000 hours should be spent selling versus non-selling.
Stuart Kerst: Yes. Greg, we have done a considerable amount of work on this over the last few years within Hewlett Packard and trying to move more of our salespeople towards the customer facing time. It’s been a pretty significant challenge for a variety of reasons. We find that the numbers vary around the globe by country, by region. For the most part, our teams were hovering around 55% of their time in customer-facing. We’d like to move that upwards of 60-65% of their time in customer-facing. There were a few areas that we targeted over the last few years to really drive those numbers in that direction.
The first area that we obviously looked at was some of the sales operation component, whether it’s a coating and configuring product and getting those quotes out to customers whether we’d follow up on purchase orders and customer’s data, and how quickly we can get back out to customers and whether or not it was … A lot of the admin worked that salespeople do today to support their relationships with their customers, as well as the admin work that they have, internally around forecasting, planning and just general management with our managers.
Greg Alexander: You know, if you think about a 5-10% lift which is what you’re going after and you multiply that across … How many salespeople in the group?
Stuart Kerst: Within our enterprise group, we’ve got about 10,000 customer facing.
Greg Alexander: Wow. Let’s call that somewhere between a hundred and 200 hours times 10,000 people. It’s a great case study and that even a small movement there could have a huge impact on productivity.
Stuart Kerst: Yeah.
Greg Alexander: You know, you mentioned several things, configurations, following up and purchase orders, post-sale support after the sale, et cetera. We kind of lumped all those things into the category known as sales support. The goal there is to make HP easier to sell for. When you think about your sales teams and the work that you’ve done in this area, was the fix mostly process work? Was the fix things like CPQ when it comes to quoting? What was the blend between process and technology automation?
Stuart Kerst: Between process and technology, it’s … I think the two go very much hand in hand, and I would say that we had … In some areas, we had pretty strong process on the field operation side. We understood what the workflow of the CPQ process was and we needed to drive technology and automation into the process to truly move the needle there. As an example, over the last few years, we have gone through a radical change within our CPQ process, so that we have implemented big machines. We’ve implemented technologies like PROS to allow us to do pricing. We’ve allowed built technologies, so that the salespeople can do self-serve quoting without going through the sales operations organization. We’ve had to do work throughout that entire workflow to essentially drive a turnaround time, which was very poor from an industry perspective to now one of the best in class turnarounds.
We are really focusing on the set of opportunities that we manage today manually, that account … Let’s call it 60% of our opportunities that are low value transactions. They’re huge in numbers but they don’t generate the big numbers in terms of revenue. We’re trying to push more and more of those two self-service with our salespeople or even no-touch, friction less orders through that process, quoting and the ordering process into a friction less motion, so that we can eliminate upwards of 50 or 60% of the transactions out there, which allows, again, more time to be spent on the higher value or higher importance, more strategic opportunities.
There was a significant amount of work on technology, I would say, around CPQ, but then in the area of process, we had to do a lot of work in terms of the way that we manage our internal forecasting, pipeline management, one-on-ones with all of the sales management around the globe. There was a lot of process work that we needed to focus on there, and now we’re getting to the point of starting to think about the technologies that will support those process layers.
It’s really a mixed bag when you think it through. The sales operations was about trying to drive automation on some process that existed, and then on the flipside from a sales management perspective, we had to do some more diligence about … Or the processes that we have out there working today. What do we need to do to change and then how do we automate those new process that we put in place?
Greg Alexander: Let’s talk a little bit in greater depth regarding some of the used cases that you just mentioned. We’ll talk about configured price quote and then we’ll talk about the PROS, Pricing Optimization Software. I’m particularly interested because obviously you have a massive sales organization with 10,000 people, but the added complexity here is you sell multi-tier distribution. Did you extend the CPQ functionality all the way through your channels?
Stuart Kerst: That is the intent. We haven’t gotten there yet. The expectation is that we do build a solution that works both for the internal team as well as our partners, as our partners are an extension of our organization.
Greg Alexander: Right.
Stuart Kerst: It’s an ongoing … I mean this is about a 3-year project for us and we’re still in the middle of driving that to fruition. That is the long-term intent.
Greg Alexander: Yep, okay. Then same thing on the PROS pricing software or is that happened already?
Stuart Kerst: The PROS pricing software is mainly internal at this point in time, but it is … Obviously, it’s giving us the guidance that we need to use to really get to the right market price faster. What we are finding is we are going back and forth on pricing, especially with partners. Oftentimes we are at a starting point. We go back and forth 3, 4, 5, 6 iterations of pricing to eventually get to the right market price. With the PROS software, we’re able to get to that market price much more quickly and find that we can turn around our quotes with our partners, especially in a way that we just haven’t historically. It’s led to an increase in the number of quotes that we’re seeing from our partners as well as an overall positive impact in both revenue and margin.
Greg Alexander: Yeah. That’s a great success story. I know IT customers, IT decision makers, when they ask for a quote, they get frustrated when it takes too long to produce a quote. Anything you can do which just sounds like you’ve done a lot to reduce that time. Not only is it beneficial to you in revenue and margin, but it also improves customer satisfaction as well as channel satisfaction. That’s actually a great story.
Stuart Kerst: It really is. What’s interesting about that, Greg, is there’s a secondary component here. Not only are you seeing the faster turnaround. Therefore, you’re seeing partner satisfaction increase. When a partner has a pretty poor experience with you as a vendor and it takes 4 or 5 iterations to get through a cycle versus your competitor who can turn it around in 1 or 2 iterations, they stop quoting you. They stop thinking about you. They know that it’s going to be a problem and a half to transact with you. They oftentimes will try to find an alternative solution.
There’s business that you don’t even realize you’re losing because it’s not even coming your way. As we’ve implemented the PROS solution, we started to see those volumes increase. We’ve started seeing partners that had not been quoting us now start to quote us and really start to increase those volumes again.
Greg Alexander: Yeah. I mean the challenge is selling through a channel is channel mind share. Right?
Stuart Kerst: Exactly right.
Greg Alexander: If you’re easier to do business with than the bad guys, so to speak, you will increase your mind share so that’s a great success story.
Stuart Kerst: It is. There was a massive team that worked here within HP to really pull that off. I’d love to take credit for it, but again that was part of the sales operations team, our sales comp operations team. There were people at the global level. They’ve been working on it for a few years and we’ve seen the fruits of the labor this year.
Greg Alexander: Yeah. We’re talking with Stuart Kerst, vice president of sales operations for the Enterprise group at HP. We’re going to take a quick break here. The team wants to make the audience aware of a new piece of content we have available to them. When we come back with Stuart, we’re going to talk a little bit more about this sales productivity issue and increasing the customer face time. We’ll be back in a moment.
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Greg Alexander: Welcome back, everybody. This is Greg Alexander with Sales Benchmark Index. You’re listening to the SBI weekly podcast series. Today’s guest is Stuart Kerst who leads sales operations for Hewlett Packard. Prior to the break, Stuart and I were discussing how to increase channel mind share by reducing the amount of time it takes to turn around a quote. He was giving credit to the sales operations team and letting us know that this was 3-year project and it’s no easy feat.
Stuart, I know you’ve been with the company so you might have an answer to this question if you don’t know big deal. Somebody at some point identified this as a problem. Somebody at some point or team of people determine that this was a problem worthy of solving. How was the “turnaround time” identified as an issue in the first place?
Stuart Kerst: It’s a good question because, obviously, there’s a list of priorities longer than my arm that we have to solve here. We do customer surveys, if you will, to our salespeople every year and we do that from a sales operations perspective. We looked out across the globe and asked them for time study, as well as what are the areas of concern within the business? Were are they seeing the benefit and where do they see that we have room to improve.
The time study is something that we’ve done for years and it gives us visibility into that original customer-facing time points that you made originally. What we found over the course of the few years is that we were … As we were making tweaks to things like customer or … Excuse me … CPQ, we were not having the impact on driving the 5 or 10% improvement that we wanted to see in customer-facing time. The organization really made a big bet around CPQ and said, “We’re going to drive a much more advanced process and technology behind it.”It really starts from that annual process where we do essentially a customer satisfaction review with our salespeople. Where are you spending your time? How are you spending your time and then what are the technologies that are supporting you in the field?
Greg Alexander: I think about the daunting task of surveying 10,000 salespeople. Were the salespeople willing to respond? What were your response rates like? How long was the survey? Talk to the audience a little bit about that annual survey process.
Stuart Kerst: Yeah. I think that the survey process occurs, as I said, once per year. I think our response rates are around 50 or 55%. I have not owned this historically. In my prior role as the vice president of sales strategy and field operations for APJ, I was on the receiving end of it and I pushed our teams to try to respond as much as we could, so that we could get the insight. On the global level, I think our numbers were 50-55% response. What we are really looking for from them is to tell us where are you spending time. A lot of our time in our salespeople is spent on forecasting, unfortunately. This is one of our top priorities as we move forward. How do we start to eliminate the work around forecasting for our salespeople and what can we do, not only from a process perspective but what can we do from an automation perspective, so that you can have really a seamless view from the sales rep all the way through the country MD, and then into the region and then into the global view.
A lot of the work that we’ve done around Salesforce implementation. As you know, we implemented Salesforce 2 years ago that’s allowing us to drive much more automation through that process, which will have a huge impact on customer facing time.
Greg Alexander: Rolling out salesforce.com across 10,000 reps. There must have been a huge initiative. What’s the adoption rate there? How is that going?
Stuart Kerst: It actually is going extremely well. We are the largest single instance of Salesforce in the world. The launch took place over about a 12-month period. We rolled it out to the entire Hewlett Packard organization. I think we had 29,000 people in Salesforce if I remember the original numbers. That’s not just on the enterprise side obviously.
When we look at the use of Salesforce, we see a considerable increase from where we were within [inaudible 00:16:39]. We find the sales rep … We have about a 90% utilization rate. Eighty-seven percent, I think, the last number I saw around utilization, which is up dramatically from prior system, which is very, very good. Then our sales managers, a little bit lower than that, but it’s style in the … I want to say below 80 range in terms of the utilization.
What we’re starting to really look at now are the nuances with how the teams utilize Salesforce. As you start to think about things like team orientation and teamwork across the multiple business units that we have within each of our business groups, and then the work across business groups from an account team perspective. Those are the nuances and that’s the game that we’re trying to get from Salesforce now.
For example, when you’re doing an account plan, your account plan … I’ll break down the Hewlett Packard structure for a minute. Within the enterprise side, I have the Enterprise Services team. I have the Enterprise group. I have software organization and I have financial services team. That is the new entity for Hewlett Packard enterprise.
Within each of those groups, I could do an account plan for the Enterprise Services team. I could do an account plan for the Enterprise group. I could do an account plan for software and cloud, and for financial services or I could do an account plan across the customer for all 4 of those business groups.
What we found historically is that we’ve been doing account plans for the business units inside each of our business groups, and then we’ve been trying to align the business groups so that we have a single account plan across the organization, but it’s not as cohesive as we’d like it to be. Through the use of Salesforce and through some of the other technologies out there, we’re starting to broaden our approach to account planning. We have a single customer view and we have a much broader appreciation of how to impact the customer from a business outcome perspective. Customer business outcome. What are the HP solutions across that Enterprise organization that are going to help our customer achieve their goals around risk or driving agility, or improving their employee experience or their customer experience, or driving growth in their business.
The use of some of those tools that if you had to do it historically without a Salesforce.com implemented, it would take way too much non-customer facing time to pull that together. Now, through the use of the technology, we’re able to achieve a much greater progress in an area like account planning without burdening our sales teams with incremental time in the field or away from the field.
Greg Alexander: Especially for an organization like yours. You probably have global account teams. Now, you had 1 account plan in the cloud, visible to everybody. I’m sure that there’s increased collaboration amongst the different HP representation for a single customer across multiple continents.
Stuart Kerst: It is and that’s really what it’s all about. Right? If I can allow or if I can enable an account team to really coordinate on a single strategy within a customer, it not only drive a significant amount of efficiency and effectiveness of that account tea, but it also allows the customer a much improved experience from HP because they’re not hearing 5 different strategies from 5 different business groups with 5 different selling motions. They’re instead hearing common messaging from us on a global scale.
Greg Alexander: Yeah. I hope everybody listening is inspired by Stuart’s story here. I mean I hear often from our clients that they’re frustrated with the level of adoption that they’ve gotten from the field in terms of using Salesforce.com. Here’s the largest technology company in the world with 10,000 salespeople, the largest single instance in Salesforce.com and they’re getting great adoption rates. Then the reason why that is is that there’s value added in the tool. I mean just think about that one example and I’m sure there’s several others on how the customer is benefiting from this technology because the account teams spread across the globe are now collaborating. They’re all talking the same language to the customer, making sure they’re focused on the customer’s issues regardless of where they’re located. That’s a fantastic story.
Stuart Kerst: Sorry. I was just going to add one other point on that. You have the ability when you roll out Salesforce, to roll it out as exactly the old CRM that you had. You really don’t have to make a change to your process. You can leverage Salesforce the same way that you leveraged your old system and really get no impact and no gain from the transformation. What we found is there are specific areas that we wanted to focus on to drive some of that integration, that cross-team collaboration that we needed to get out of Salesforce. By focusing on those areas, we’re able to see gain.Just through the implementation, you’re not going to see the gain. It’s about ensuring that you understand a process that you want to impact and leverage the two to be able to deliver that process.
Greg Alexander: Yeah, that’s a great point. I mean why bother unless you’re going to get some new capability. Right? That’s a great point. Okay, we’re going to take a quick break here. We have an offer we would like to present to the audience, something that podcast listeners will get some value out of. We’ll be back with Stuart Kerst from Hewlett Packard in a moment.
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Greg Alexander: Welcome back, everybody. This is Greg Alexander with Sales Benchmark Index. We’re on our weekly podcast series with today’s guest Stuart Kerst, the vice president of sales and operations at the Enterprise group within Hewlett Packard. We’ve been talking about this issue of sales productivity of which stood as 20 years helping sales teams improve their rate of productivity across some of the largest enterprise customers in the world. We were just discussing some success stories with things like configured price quote, price optimization, account planning, automated through Salesforce automation and Salesforce.com.
I’d like to switch the conversation now to … There’s so many things that you’ve done that is made it easier to sell for HP. Based on my knowledge of what you’ve been working on, you’ve also made even more progress and thinking HP easier to do business with from a customer’s perspective. When you did your productivity analysis and you looked to do something like increased customer face time. Part of that analysis … I’m imagining, although I want to put words in your mouth. You thought about it from the customer’s perspective and how easy or difficult you were to do business with. Is that true? If so, what did you find?
Stuart Kerst: Absolutely. The experience that our customers were getting from HP a few years ago, there were a couple of it stand out in my mind. One of the common complaints that we got was we have been selling literally as multiple companies of Hewlett Packard. We would get from our CIOs. Here are the 55 business cards that I received from your team in the last 12 months. You have too many people coming to see me and the right hand doesn’t know what the left hand is doing. A lot of customer concerns about our ability to coordinate across the organization. We spent a lot of time working on that. We’ve done a lot of work like I mentioned earlier about account planning and trying to coordinate across the organization.
We actually launched a pilot last year to start a 1HP organization where we looked at 6 accounts or so on a global scale. Because HP is so large it’s not as easy as saying let’s put an AGM across all of your top 250 accounts and let’s run it as a single organization. Because of the breadth and depth and the scope of the Hewlett-Packard organization we really had to think it through what the pilot would look like, how would those organizations run, how would you manage an account team of that size, what does the org construct of the sales organization need to look like so that you can not only be able to from a customer facing perspective have a real positive impact with them, but you also have to have the insight internally to be able to deliver a value to your customer across the products and services that you are selling.
It was a complex problem. We spent a lot of time over the last few years really working on that issue and I think you’ll see HP make some inroads in that this year and next. In fact, as we separate the organization this year on November 1 of FY15 we obviously will be 2 organizations, Hewlett-Packard Enterprise and HP Inc. That will obviously help us really focus on the way that we sell and the products and services that we sell in each of those entities. That’s one key area that are customers were coming back to.
The other area that our customers were coming back and asking us for a bit more support was really around that CPQ area and our ability to deliver information to them, product services quotations across the organization much more effectively. As we look at … Let’s say the enterprise services team is selling a solution across the enterprise group, across the software organization including products and services from our PC division. The coordination of all of those entities across company was a burden and it took far too long for us to be able to produce those quotes and get that information out to our customers in a timely fashion.
We spend a lot of time and cycles on CPQ1. How do we start to drive those processes and improve those processes so that our customers see a solution from HP, they don’t see products and services from each of the entities within HP?
Greg Alexander: Yeah. I have some positive anecdotal feedback for you. In our practice we deploy what’s known as mystery shopping so many of our clients sell technology solutions to global CIOs. We’ll pose as a vendor if you will or in some cases as a prospect. As a result of that witness firsthand what the customer experience is. That oftentimes includes us speaking directly with CIOs about who’s doing better and who’s not doing better, etc.
I have heard within the last 90 days and, again, this is a small sample size, but for what it’s worth that you’ve become easier to do business with, more responsive. One CIO in particular who I won’t mention their name because I didn’t ask their permission mentioned that in times past if they wanted a nonstandard configuration it was like getting a law passed through congress. Now it’s not the case. I mean obviously not irresponsible in that regard, but you’re willing to listen and in many cases approve these nonstandard configurations. Is that true?
Stuart Kerst: It is. I think it’s … What I would say, I can’t mention, I can’t speak directly for the nonstandard configurations but what I can say is there’s a concerted effort around improving the customer experience. We’ve got folks across our business units, we’ve folks across our functional teams to really find those ways that we just aren’t an effective partner with our customers. Now, what do we need to do to improve the experience of the customer? Because we have a portfolio that is second to none, we have a breadth and depth that is second to none and it’s not a competitive advantage if the customers can’t take advantage of it.
I think Meg has brought a lot of focus into the organization on this and she’s put the right leadership team in place that has really come together to say, “We know that our strength is not as individual entities but our strength is as an organization.” Therefore it’s put a lot of pressure on teams like mine and field operations, organization to think about ways that we can impact both partner and customer experience in a positive way.
Greg Alexander: Yeah. We’re going to take a quick break. We’ve got one more segment here and after the break Stuart and I are going to talk about how to get all these things done as a leader of sales ops and still have a life. We’ll be back right after the break.
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Greg Alexander: Okay, welcome back everybody. This is Greg Alexander with SBI. We’re on our weekly podcast series. Today’s guest is Steward Kerst Vice President of Sales Operations at HP and we’re talking about improving sales productivity. In this last segment, Stuart, you mentioned earlier in the interview that you have a to do list longer than your arm. That’s pretty common in most sales ops environments.
Up to this point we’ve been discussing improving the productivity of sales teams. What I’d like to talk about now is improving the productivity of sales ops team. How do you get everything done?
Stuart Kerst: When I find the answer for that I will be a very wealthy man.
Greg Alexander: It’s a tough question.
Stuart Kerst: I took a global position about 8 or 9 months ago as I came back from Asia. What I found … The data between working in the country, working in the region and then working at the global level is that your focus and your priorities have got to be very much aligned. Number one, you can’t do everything. It just isn’t possible. I think we as a … Well, I’ll speak for myself. We’ve tried to take on too much. We’ve tried to have too many areas of impact and in an organization of this size, the organization can’t consume everything that you can deliver. Therefore, you actually don’t get the productivity gains from the organization and your team tends to be splintered across too many areas of focus and they may produce mediocre results because they’re splintered across so many initiatives. Ultimately those initiatives can’t get consumed by the organization so you don’t win anyway.
What I’ve come back to is really trying to focus the organization in 3 or 4 areas that we’re going to have an impact and doubling down the resources in those areas to deliver the result. Now those 3 or 4 areas of focus have got to be aligned with what the regions are able to consume and what the countries are able to execute. Therefore, if you can drive that alignment between the global, the region and the country team you can actually start to improve the productivity of not only your global sales operations groups that are driving this initiative but you can also see the actual impact and execution occurring in the field. The field doesn’t feel like it’s just a barrage of changes that are coming at them from the global organization.
Greg Alexander: I’m listening to you talk and global, country, region leaders picking 3 or 4 things that everybody can consume because there’s only so many initiatives an organization can take on at one time even for a company like yours that has vast resources. I’ve got to tell you, there’s some people who are going to be listening to this and might call BS on that.
Here’s what they would say, because I’ve had this debate and I agree with you on philosophy is they have internal customers and their internal customers have to be satisfied or sales ops earn a bad reputation. As a result of that they say yes to everything. How do you say no without destroying your political capital?
Stuart Kerst: I would say the proof is in the pudding. If you look at the number of initiatives because we have initiatives that start at the country level. If I’m an MD of a country there are certain ways that I want to manage my business and therefore I have my team start those initiatives. I want to change X, Y and Z about our operating cases for example.
At the region level the managing director of the region said, hey, there are things that we need to do to drive improve customer stat or focus on a certain customer segment or drive a different approach to the market. Then there are initiatives that start at the global level and they start from your business units and your business groups. Ultimately, there’s not 3 or 4 initiatives that are being driven globally but there’s 110 initiatives that are country, regional and global in nature.
When I look through the list of requests that we’re getting and the request that the country teams, the regional teams and the global teams are demanding a lot of them sink together. A lot of them they’re the same request it’s just with a nuance of country, regional or global team. Trying to align what those requests are and coming out with a common strategy is a good way to do it.
Now, ultimately you’re going to have to say no. you’re going to have to say just as in any IT plan of record process you’ve got to be able to put together the laundry list of those activities that people are asking for and what is the true impact to the business? What is the risk of doing that? What is the implementation cost of doing it? What is the financial ROI of doing that initiative? If those 3 sync up and you can say, “Yes, we as an organization can consumer this then we would go down and work to initiate that plan.
If it doesn’t meet the criteria then we push back and say, “Listen, for whatever reason one of the 3 that I just detailed were not going to do it. If that makes me lose political capital then I’m going to lose political capital.
Greg Alexander: Right. Our perspective on this and we’ll conclude with this because we’re up with our time allotment here. We look at initiatives through 3 lenses. First is what’s the size of the prize? So if we’re going to put forth effort on this which could be a multi year investment if we’re successful is it worth it. Second is, what’s the level of effort? We’re going to have to hire 1000 people to pull this off or is this something that normal group of individuals can pull off.
Third is what’s the probability of success? Given my environment, my competitive landscape, the maturity of my sales organization, the state that my company is in, can I actually do this? These things have to be put into the proper context. When you use Stuart’s screening criteria or if you use ours or a combination of the 2 that’s a good way to build a list of items and have … When you day no, at least have a logical answer as to why you’re saying no.
Listen, Stuart, as always you were great. You are a leader in the sales operation field. You’re pioneering many, many things. You were inspirational today especially in the area of salesforce.com implementation and account planning and optimizing time. I really appreciate you jumping on the podcast today and sharing your wisdom with others and I think some people’s careers will be enhanced as a result. Thanks again.
Stuart Kerst: Greg thanks for having me on. I really appreciate it.
Greg Alexander: Okay. Take care.
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