Today’s sales manager is faced with a myriad of challenges in an increasing hostile selling environment — deals stuck in the pipeline, frequently missed sales “commits,” sales people not hitting quota, and high sales employee turnover are just a few of the issues that the beleaguered sales managers must tackle day in and day out.
Improving sales effectiveness is a double-edged problem. The smart sales manager is not only concerned about gaining visibility of the sales process, but is also providing the sales representative with the knowledge, tools and informational resources.
It’s Not Just About the Leads
Past research conducted by the Aberdeen Group revealed that 70 percent of organizations directed their sales technology investments toward the needs of sales managers (i.e. the buyer) rather than the needs of the quota-carrying sales executive.
In that baseline study, half of the surveyed managers felt lead quantity and lead quality were the top “Sales Effectiveness” issues. However, when asked the same question, less than 5 percent of sales executives felt the same way. In a recent follow-up to that earlier study, new Aberdeen research reveals that lead quantity is not the primary issue for either sales manager or sales representatives. In fact, increasing the quantity of leads is rated among the lowest strategic priorities of the surveyed organizations.
Across the board, companies are increasingly challenged in their sales performance by longer sales cycles and low sales productivity. Specifically, sales teams are missing revenue targets, not hitting quota and facing stalled opportunities as organizations strive to remain competitive and service increasingly discerning customers.
In response, sales managers are still focused on lead quality, but they’ve also shifted their focus to increasing sales win rates and improving sales representatives’ knowledge of products, customer needs and competition.
Sales Knowledge Management vs. Sales Process Management
Sales people are motivated to close deals and earn commissions, not to input data into a CRM or SFA (sales force automation) system for the sake of their manager’s reporting needs. As such, sales technology investments should be targeted at helping sales people achieve this goal rather than solely addressing the “command and control” needs of the manager.
Survey results show that the firms enjoying Best-in-Class (BIC) performance enable, or are planning to enable, several key process, performance and organizational capabilities, including implementing a structured approach to competitive, market and sales intelligence (91 percent), creating a central repository of account, contact, and opportunity information (96 percent) and utilizing formal and documented sales processes (95 percent).
However, the study also revealed that the BIC generally deploy a two-pronged approach to addressing sales effectiveness issues: 1) increasing sales representatives’ use of information by improving knowledge of products and customers and 2) deploying sales processes to help sales representatives leverage that information, such as increasing the quality of leads and sales win rates.
There are a number of key enablers that organizations are using to address their sales effectiveness problem. Aside from the obvious CRM (81 percent), SFA (71 percent) and contact management (79 percent) enablers, forward-looking organizations have or are already planning investments in sales incentive and compensation management systems (74 percent), forecast management (81 percent), order/quote generation (73 percent) and product configuration (69 percent) technologies.
Looking Toward the Future
Today, sales managers are struggling to attract and hire new salespeople, on-board and train new staff and retain top sales talent (only 23 percent, 19 percent and 30 percent of the BIC respectively rated themselves extremely effective in these areas).
In an ever-changing business environment, it is important for sales management to use all of the tools at their disposal to create a learning organization and knowledge based culture. The research reveals that organizations are developing knowledge-based cultures through the combination of process and information enablers. Historically, these two different types of enablers have been considered mutually exclusive; however, the research also suggests that there is currently a convergence of the two underway.
For example, in implementing formal sales methodologies, 92 percent of the BIC have included guided selling in their future sales management strategies and 63 percent of the BIC plan on increasing the use of “in-product training” — that is, sales methodologies and “mentoring” within a CRM or SFA system.
These types of enablers are information-based, yet process driven. As process enablers move to ubiquity, and information enablers become more prevalent, leading organizations will undoubtedly develop new and differentiating information processes.
There are several steps that companies can take to begin to achieve the same success as the study’s Best-in-Class:
- Stop using spreadsheets and shadow accounting: Too much sales information is scattered throughout the organization and many complex tasks are managed in an ad hoc manner. Organizations must streamline processes and invest in centralizing sales information to eliminate “multiple versions of the truth.”
- Integrate sales processes into the back-office: Pricing, product configuring and order/quote generation are cross-functional issues. Organizations should plan on integrating these sales touch-points to eliminate administrative overheads.
- Invest in formal sales methodologies and information-based processes: With the wide adoption of sales management processes and planned future adoption of information-based individual enablers, organizations must now focus on developing information-based sales processes as a competitive differentiator.
Andrew Boyd is senior vice president and research director for the Aberdeen Group, where he is responsible for customer relationship and experience management practice. Currently, his team’s research agenda focuses on customer-centric business models, the optimization of market-to-order processes and understanding the online customer experience. He can be reached at [email protected].