In his blogpost on sales productivity and competency, The Value Shift CEO Dave Fitzgerald, discusses the most important reasons for the ongoing decline of quota attainment. In analysing results with our prospects and customers, we find overwhelming evidence that lack of knowledge and experience are the challenges to overcome.
Let’s have a look at the numbers first. CSO’s yearly study on quota attainment shows a growing problem. The number of companies achieving their revenue plans has decreased.
The number of salespeople making quota is even worse and has declined to 58.1%, according to Jim Dickie at CSO Insights.
For over 25 years people have been looking at sales productivity as the combination of efficiency and effectiveness of their activities. This has been reiterated in a Miller Heiman blogpost from 2014.
Although that definition of the productivity challenge might have been useful to create awareness in the sales community, it has not had the impact of actually improving results. For far too long the discussion has been dominated by sales training and methodology companies linking this challenge to a need for more training and for cloning the practices of top performers. This has spurred an annual spend of $24 billion in sales training, in the US alone, according to ASTD.
Let’s bury the past and analyse the current situation to come up with strategies that actually work in today’s competitive selling environment. Almost everybody agrees that customers are more informed and no longer accept being sold to.
So what has changed?
Sales has been able to cover up their lack of customer knowledge by explaining the features and benefits of their offering preferably supported by demos. The customer settled for that way of interaction with sales as they had no alternative. Yet in today’s market, people are able to educate themselves on these subjects without the support of a sales rep. This has led to revealing the ‘real’ problems confronted by sales teams.
The ability to add value in the sales conversation is the most important factor as proven by CSO Insights research, with 82% of senior executives indicating that content was a significant driver to their buying decision.
This has led to an increase of content production in the recent years and some vendors and analysts claiming that content marketing is taking over from sales.
Yet the 2015 B2B buyers study by SiriusDecisions proves that this has not solved the problem and is based on a misconception. The study reveals that there is an almost 50-50 divide between “digital” and sales interactions. These numbers are almost independent of the buying cycle complexity and the stage in the buying cycle as shown in figure 3. This kills a second misconception – a sales person is forced by the buyer to be involved only at the end of the buying cycle. So let’s stop using the CEB number indicating that 57% of the buying cycle is already done before salespeople are involved. The name of the game is meaningful conversations. Whether the conversation occurs via human interaction or non-human engagement, it’s valid as long as it’s relevant to the answers a buyer is looking for throughout the buying cycle.
Does that mean that investing in sales content and training are no longer effective? On the contrary both are more important than ever as it is more difficult to train sales people on business knowledge and industry expertise than it is to train them on product related knowledge. This calls for additional conversational selling skills as well.
What is all of this telling us as to how to overcome the sales productivity challenge?
Sales leaders need to initiate strategies to increase the salesperson’s ability to add value to the buyer/seller conversation. This is proven by the low rates sales teams are experiencing converting leads to decisions. In fact 60% of opportunities lead to a ‘no decision’ according to another study by CSO insights.
Investing in “efficiency” technologies and processes to have more conversations, albeit the same “bad/poor” conversations that are producing low conversion rates today, isn’t going to increase your productivity as much as investing in strategies focused on “effectiveness”.
Here’s an updated graph from Dave Fitzgerald’s post reflecting today’s B2B competitive selling environment:
Results – can be number of wins, revenue sold, quota attainment, (your choice)
Competency – the ability to do something well
Experience – skill or knowledge that you get by doing something
Knowledge – information, understanding, or skill that you get from experience
Time to implement a solution that works
Our analysis shows over and over that sales with more experience are by far the majority of top quota carriers. They have had the time to learn and improve their competence. So the solution has to have an impact on the ramp up time as well as the length of their tenure. During that time we need to improve knowledge sharing combined with a culture of continuous improvement. This will create the shortest time to experience, adaptive to changes in the marketplace.
In other words the solution needs to create a continuous stream of knowledge and experience sharing to improve the productivity of the entire team. So ask yourself the following 5 questions:
- Is my sales process enabling sales management to coach people on doing the right thing at the right time?
- Do we have content that is adapted to each phase of the buying cycle AND adapted to the different people (Buyer Persona) involved?
- Are you re- packaging marketing content for conversational use by the sales team?
- What is management actively doing to create a culture of knowledge sharing and continuous improvement?
- Is our sales training continuous, snackable and integrating skills, attitude and company specific messaging?
The figures, also based on a CSO insights study, are both aspirational and motivating to boost initiatives based on the 5 aforementioned questions. Talk to one of our experts and get custom and actionable input.