Only 53% of sales representatives are meeting or exceeding their quotas (CSO 2018 World-Class Sales Practices Study). This is the 5th straight year of decline. Sales require support to be successful.
High performing people, regardless of their role, focus on the intersection of what matters and what they can control. For the sales manager, that means managing the right activities and coaching the related behaviours (leading indicators) that lead to the desired results (lagging indicators).
Coaching is a key concept here. In a sales context, coaching is a leadership skill that draws out a salesperson’s full potential by getting them to focus on the activities and behaviours that lead to the desired results.
CSO Insights research found that a formal or even dynamic coaching process helped more salespeople to achieve their quota (by 10%), and win rates could be improved even more.
Sales managers should focus on leading indicators (activities and behaviours) to achieve lagging indicators (sales results).
This does not mean there shouldn’t be a focus on sales results. It’s a matter of what the sales manager needs to focus on – how to achieve the desired results instead of focusing on measuring the results afterward.
You can’t manage results, you can only monitor them. By the time you know what your results are, e.g., revenues and orders from last week or last month, they are already history.
For sales managers to ensure that these sales results can be achieved, they must focus on the related leading indicators that tell them if they are on the right track to achieve the results.
The 2017 CSO Insights World-Class Sales Practices Report uncovered some major findings related to sales organisations.
Growth requires change. “Making the number” is harder than ever.Quota attainment averaged across all geographies, industries and size companies has dropped from 63% of salespeople in 2012 to 53% in 2016.The good news is that world-class companies are defying this trend, and their methods can be replicated.
Putting best practices on the map. The report identifies the Top 12 best practices that distinguish World-Class companies from their less successful competitors. These practices can be taught, applied and measured.
Miller Heiman presents them in the context of the Sales Relationship Matrix, a framework of customer relationships and sales processes that quantifies performance levels and offers a tool any sales organization can use to assess their current level and recognize the specific practices associated with reaching higher levels.
You can’t stand still. Buyers are getting better at buying faster than sellers are getting better at selling. This creates downward momentum: Standing still (trying to maintain the status quo) is actually moving backwards. Successful companies are running up the buy/sell escalator fast enough to counteract the forces (buyer expectations, new competitors, etc.) that are combining to pull them down.
Moving up. Downward momentum can be overcome through a strategic and intentional approach. The Miller Heiman Sales System can be used as a roadmap that gives clear directions to both individual sellers and to the sales organisation as a whole. It’s a comprehensive model that covers every facet of the sales function: People & Organization, Operations & Enablement, and Management Execution at the broadest level and, with the customer always in mind, it then extends to Create Opportunities, Manage Opportunities and Manage Relationships.
Simply having a sales process will make no difference.
However, having a process defined, integrating it into your day-to-day selling activities, supporting it with appropriate technology and evolving it through lessons learned makes a big difference.
How big? There are several ways to judge this but quota attainment across the sales force is the simplest. Firms with no sales process and no supporting technology see 63% of their sales reps attaining quota. Firms with both sales process and supporting technology in place–like Contact Management or CRM– averaged 72% of their sales reps attaining quota—9% better performance.
Sales process is only one part of integrated selling activities and success (orders) will depend on the leading activities to produce quality leads and then the quality and robustness of the sales process itself – something many organisations have not clearly defined.
This is an extract from a CSO Insights White Paper. Contact us now for the full report.
The 2016 CSO Insights Sales Performance Optimization study identified that the number one objective for sales organisations in the coming year was to optimise lead generation – they wanted to do a better job of filling the funnel!
This may be the case but another interesting fact came to light – when assessing the outcome of forecast deals, the average win rate came in at a lacklustre 46.9%. This suggests there is a bigger challenge around “closing” that needs to be addressed. Forecasting indicates we are wrong more than half the time.
So where did the rest of the deals go? The average competitive loss rate came in at 29.3%. We can’t expect to win them all, but is losing 3 out of 10 acceptable? Then – a real eye opener: an average of 23.8% of those forecast opportunities ended as “no decisions.” Lots of time and effort invested across the whole organisation, and the net result is nothing?
So where and how are things falling apart?
Looking at specific aspects of the sales cycle, experience shows there are areas that hat sales teams struggle to effectively execute, including:
- Understanding the customer’s buying process
- Gaining access to all decision makers
- Conducting a thorough needs analysis
- Differentiating versus the competition
- Building a solid business case/ROIContact Excelorate if you would like to discuss this further
- These are all symptoms of key flaws in how we are selling. So before we start pouring more leads into an ineffective sales process, we need to optimise effectiveness at closing the leads we already have in the sales funnel.