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.

productivity01

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.

 

productivity02

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.

productivityCDoes 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”.

productivity04Here’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?

 

productivityEThe 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.


Every day we’re being confronted with increasing sales costs and margins under greater and greater pressure. In this blog, we explain why this is happening and look at the solution in detail.

Increasing sales costs and greater pressure on margins are usually the result of inadequate or non-existent internal sales training and supervision. There are also a few die-hard habits that many companies and sales reps cling on to which can cause even bigger problems for sales performance.

Directors will already be familiar with the changed buying behaviour and understand the impact it has on their sales and marketing organisation. The fact that up to 75% of decision-making criteria are influenced online means it’s important for us to allow sales to start a dialogue with customers at different times and with different messages.

If sales is forced to wait until customers are ‘ready-to-buy’ or in the quotation stage before they spring into action, it’s impossible to sell customer value, so:

  • Margins continue to fall
  • Products and services are experienced as commodities

This habit comes from:

  • Managers being mainly interested in the time frame that deals are agreed in
  • Sales who think it’s a waste of time to enter into a buying process early, and prefer to wait for ready-to-buy leads from marketing
  • Sales who are willing to start the buying process early and influence the customer, but don’t have the necessary skills and messages to appeal to customers in this early stage

The solution: do the right thing at the right time with the right person
Management behaviour and how to direct sales teams is crucial here, although that’s a separate topic just in itself. But how can we arm sales to face these new challenges?

  • Train sales to detect and facilitate the entire buying process
  • Implement a sales process that allows your team to document opportunities based on the customer’s willingness to buy (buying process) – and embed this in the CRM
  • Document messages for each product-market combination, and teach sales to use these messages at the right time in their comfort zone using ‘how to sell’ training with role plays

The buying process in figure 1 shows the complete customer journey. Whether it’s for existing or new customers determines how sales deals with it.

For existing customers, sales mainly need to convey ‘why customers need to stay’ – combined with behaviour that we label as ‘account development’ rather than ‘account management’. With existing relationships, detailed knowledge of the customer and their environment provides a great opportunity for increasing the value perception, and so embedding the relationship more deeply.

For non-customers, the first question is: ‘Has the customer already decided to change?’ Has the customer not decided to change yet? Then it’s best to base your messages and interactions on breaking the status quo, and so increasing the willingness to change. Customers aren’t usually aware of what improvements are possible. Or the customer thinks the risks that come with the change look too big. Or they’re not familiar enough with exactly what’s required.

These ‘why change’ messages assume the customer’s point of view and are the best way of developing prospects. And this is where the biggest challenge is identified in terms of sales performance. Various studies and analyses of our customers show that up to 60% of opportunities simply disappear from the forecast without any decision being made by the customer. The biggest competitor isn’t another supplier, but the customers themselves simply not deciding to buy anything. So messages about how good your company and its solutions are, or the extra benefits that you can offer, won’t help stimulate the buying process.

Has the customer already decided to buy? Then the next question is of course: who should I buy what from, and how much for? Sales responds to this with messages that underline why the customer should choose them. These ‘why us’ messages are most effective at this point in time. Most companies and a large proportion of sales reps score quite to very highly in this area.

Figure 2 shows when these three types of messages are most effective from a sales perspective

In summary, we therefore need to enable sales to convey three different types of messages convincingly according to the situation and depending on the product-market combination:

  • Why change
  • Why choose us
  • Why stay with us

How much do your sales convey these three sets of messages? And to what extent can they discuss them with the customer at the right time? You can compare your sales performance and customer orientation with best in class companies in the Sales Performance Benchmark


We recently had a visit from the American research bureau, CSO Insights. This company develops benchmarks for how best to utilize employees, processes and technology to optimize sales. It surveys over 1500 organizations all over the world every year to support this development.

The survey repeatedly concludes that companies with formalized sales processes work their way up to being a strategic adviser far more than companies that adopt a more ad hoc approach to sales. Best-in-class companies also ensure that these processes are flexible. If these results don’t sound valuable to you, then you must be one of the 33% of large companies that already use a formalized and flexible sales process.

A company with processes such as these is constantly monitoring how its salespeople are using them. They receive feedback so the processes themselves are adapted when there are radical changes in the market: new competitors, altered legislation, changing economic climates, and so on.

Well-organized for better results

It’s easy to predict that well-organized companies will achieve better results. The differences are very evident. Well-organized companies score better in all areas: more sales people achieve their targets, better execution of the sales plan, more deals are won, fewer customers delay projects, and a much lower churn rate.

source: CSO Insights 2013

source: CSO Insights 2013

This last point speaks for itself, as CSO Insights agrees: where would you prefer to work? In an organization where leads have a much greater chance of success, or where you have to be satisfied with a lower success rate? For an organization that always have to fight for attention, or for a company that customers consider to be a valued adviser?

This becomes even more important the more the market picks up, warns CSO Insights: sales people that can rely on a reliable team, tried and tested processes, and who feel certain they will be well received by the customer are much less likely to respond to a telephone call from a headhunter.

Fortunately, it’s never too late to climb to a higher level. CSO Insights gave the example of Fairchild Semiconductor, who in the space of just one year rose to the highest level, and saw its profit margin increase by 7%.