Smart and effective sales teams win more deals
Latest sales research on sales performance points to sales professionals who are looking hard at sales effectiveness to combat the toughening market conditions.
The CSO Insights report; “Sales Performance Optimisation”, shows the 2nd highest priority for sales management for 2009 (number one is no surprise – increasing revenue), is improving the effectiveness of their sales teams. This report has been compiled from research covering all continents and over 1,500 companies. The profile of the companies included is a broad mix of B2B, B2C, product and services companies.
As budgets are tightened, sales teams either work harder or smarter. This article finds that the firms that have a higher attainment of quota achievement are the ones who choose to work smarter, placing as much emphasis on the science of sales as the art of sales. The difference in quota attainment for the companies who work smarter is significant (13%). In all categories of sales activity they out perform their rivals.
Reading further into the 230 pages of the report it becomes clear that there is no magic pill or killer activity that on its own will secure overnight success. What it does show is that the smarter approach is made up of a number of small improvements across a range of sales activities.
I have taken a cross section of the research material and identified the areas which I believe can be implemented without the need for any fanfare or major programme. If executed consistently by sales professionals, who want to raise their game, they will make a positive difference; the research shows this to be the case.
The raw material of sales, leads
So, let’s start with the raw material of sales, leads. The report found that 63% of companies identified lead generation as an area in need of improvement. Only 25% said that their lead generation met their expectations. Given that leads are so important to the achievement of quota, why is the situation so poor?
The traditional alignment issues between sales and marketing are often blamed. The report, whilst acknowledging this as a potential concern, focuses more on the task of generating leads. It was found that firms who invested more in the quantity and quality of leads had a higher rating in terms of the sales team’s assessment of the leads generated. The impact of feeding the top of the sales funnel is obvious, but if the quality of the leads is not right then the performance and effectiveness of the team is impacted. It reminds me of the old computer adage of “rubbish in, rubbish out”. The trouble is that often by the time the rep realises the lead is rubbish, time and effort have already been spent.
Therefore, it is no surprise that the report shows “revising/enhancing our lead generation programmes” in the top three priorities for sales effectiveness for 2009. We have seen many examples from our clients where this issue has been tackled head on. Whilst the problem cannot be fixed overnight, sales and marketing could consider the following as a way of generating the right quality and volume of leads:
- Identify the top 5 to 7 criteria from the sales qualification process to use as the marketing assessment of category A leads
- Work back from category A, to identify the characteristics of category B and C leads
- Help the lead generation function to ask the right questions using the criteria above
- Agree how leads are to be handled in terms of response times, feedback and CRM
- Review on a regular basis to improve the targeting, categorisation and performance of the lead generation function
Thoroughly research new accounts
“One trend in sales performance that has continued to deteriorate over the past several years is sales reps’ ability to convert leads into opportunities”. This is not something most organisations want to hear, as the implications all round are not good.
In their own admission, a surprising 48% of companies declared that this conversion ratio is in need of improvement. The report shows that there is a marked difference between firms that focus on researching the opportunity prior to calling on the new account and those who declared this area is in need of improvement.
We have all heard the more common example of the five Ps that goes along the lines of “Poor Preparation leads to Piss Poor Performance”. The first impression a prospect has of us is all important, and will shape the way the meeting goes. So, why do so many reps not undertake adequate research? The report points to the internet and the vast amount of data available. One quote the researchers got was “I know the data I want is in there, but I don’t have an easy way to find it”. Worryingly, we are hearing the same comment made about company’s intranets or portals. In fact one was described to us as a black hole, once in there you never come out, let alone find what you are looking for.
What to do? The report is suggesting that some sales operations and training groups are stepping up to find ways to help the sales teams quickly pull the information together. But, it seems to me that there are two strands that should be explored here. The first is identification and access to the data, and the second is the willingness to undertake the task. When I was sold to as a senior manager in large organisations, I felt the lack of research on the part of the sales executive in front of me was a serious lack of respect for me, my time and the company they were representing. If I’m not alone in feeling this as a buyer, and I don’t think I am, then the message is clear.
Shifting the conversion ratio just a few % points can make a world of difference to the chances of making quota. Whilst there are no overnight fixes for this issue, there are some things that are worthy of consideration:
- Review the marketing and sales operation resources with a view to undertaking a brief but comprehensive (1 pager) research of each category A lead on behalf of the sales team
- Engage a research consultant to undertake some research and to develop a short training programme for the sales team on opportunity research
- Address the behavioural side of reps not undertaking the research
Properly qualify and prioritise opportunities
A SVP of Global sales once said to me that, “bad news early is good news”. In the same vane the report suggests “if you are going to lose a deal, lose it early in the process”. This is often easier said than done, especially if you do not have that many leads or opportunities.
The issue is one of ensuring time and investment is spent on opportunities that have a higher propensity to close. The report suggests that qualification, as well as positive commitment signals from the prospect, is a good indicator that the sale is still on track. The researchers also found a very strong correlation between the strength of the relationship and the rep’s ability to qualify/prioritise opportunities. “Nearly 80% of firms who attained a value-add relationship with their customers either met or exceeded expectations. Only 16% of firms operating at a vendor relationship level were able to attain similar results”.
Given that hope is not a sustainable strategy for winning business, reps might like to consider the following approaches:
- Make qualification a religion. If a formal process does not exist, develop one or at least a check list by thinking through the characteristics of the last 5 wins and what you learnt from the last 5 losses. It will be better then no process
- Look for commitments from the prospect at each stage of the sales process that indicate you are on track and they are serious
- Build and work your relationships to gain a better feel as to how your bid is being received
Effectively Cross and up-sell
This should be a complete no-brainer of an activity, but over 48% of firms said this was an area requiring improvement. It goes hand in glove with the next section on farming existing accounts, but it seems to be more a more complex issue than first indications suggest. The research shows 3% more firms are declaring the need for improvement over last year.
The issue seems to be more acute with companies that have extensive product or service lines. In these cases the ability of the sales rep to cross sell depends, to some extent, on their product knowledge and the underlying business benefits they can deliver.
However, the research found that additional product training did not make that much difference. Where there are signs of the situation improving is where companies are investing in Sales Knowledge Management solutions to help capture and share more of the how best sell a particular product or solution rather than just have good product knowledge.
This is an easy area to understand, but the solution is more complex than just raising the product knowledge of the sales team. Companies should also consider:
- Capturing the “how” to sell specific product lines from the top performing sales executives
- Accept one size will not fit all product lines and accommodate some diversity in the team
- Review the concepts and practice of sales knowledge management to support a longer term performance improvement
Farm additional revenues from existing customers
Given the commonly held view that an existing customer is somewhere between 6 and 10 times easier to sell to than a new name, it is surprising that 57% of firms surveyed reported this as an area that needs improvement. It would appear investment is being made in account management but it is not necessarily translating into the level of additional revenues expected.
We find that account management is either managed in a fairly loose way or is managed through a rigorous account planning process to bring a level of business return and control. The main instrument used in the latter is the account plan. The common view of account plans is you hate them or love them, rarely is there any middle ground.
The account plan should be appropriate to the task in hand, e.g. if the objective is to build the relationship and drive the revenue then the plan should focus on people and opportunities. We have seen too many plan structures which, in my view, are plans for planning’s sake. Consider the following in terms of helping to drive more revenue from your existing accounts:
- Review your account plan structure, does everything in it link to developing relationships or opportunities? If not consider removing the section
- The report suggests the common balance of existing to new name accounts is about 2/3rd to 1/3rd. Review your balance, are you exposed in any way?
- Review the ROI on your account management function, are you getting the returns you expected
It is clear to us that our opening comment of “there is no magic pill or killer activity” that will cushion the pending sales crunch but a solid review of the basics will produce benefits and from the findings of this report will keep you ahead of your rivals. We mentioned Sales Knowledge Management (KAM) earlier in this article and we would like to finish by listing the top three KAM priorities for 2009, you could do worse than to consider investing in some or all of these.
Sales Knowledge Management improvement priorities for 2009.
- Competitive analysis information
- Best practices used by the Sales Force
- Strategic account plans
Throughout his career David has been passionate about performance management. More recently this passion has led to David setting up and running Perperitus www.perperitus.com. David began his career in Engineering, subsequently moving into IT and has an MBA from City University (London). David has a strong professional services, sales and management track record of achieving goals and building effective teams.
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