On the surface, the sales machine seems to be moving along for many organizations. For the third year in a row, sales organizations hit their revenue goals, according to the 2019 World-Class Sales Practices Study from CSO Insights.
But what the top line results don’t show—and what the study reveals—is that the sales machine is faltering. Although revenue plan attainment and quota attainment rose steadily, win rates and conversion rates flatlined. Meanwhile, customer relationships, customer retention and seller retention declined. We believe modern buyers expect more than ever; the sales machine struggles because many sellers simply aren’t equipped to meet their needs.
Positive economies and growing sales forces prop up these strong sales results, but these strategies to boost sales performance by adding complexity and seller headcount aren’t sustainable. As the economy slows down, sales organizations that haven’t taken steps to shore up their selling practices, sales methodology and sales talent will find themselves in a perilous position.
In this and the next two blogs, we’ll explore three trends disrupting modern sales and share insights into your organization can address them. In this post we tackle the first: declining sales performance.
The Hidden Crisis in Sales Performance
While revenue has increased, seller productivity remains stagnant.
Externally, the buying cycle is longer and more complicated than ever. It’s five months or more, and, on average, 6.4 decision-makers play a role in a purchasing decision. Meanwhile, the markets have blurred, and competition for sales has intensified.
Internal factors leading to complexity include:
- Growing sales forces: Organizations saw on average a 9% increase in their sales headcount
- Tech explosion: Most sales organizations use an average of 10 technology tools and invested in four more in 2019.
- Changes in selling functions: Sales enablement grew by 300% while other customer-facing roles, like customer success or sales development representatives, evolved to be part of sales and provide additional support.
Career growth opportunities and an increase in tech tools help sellers succeed, but they often require more, not less, of sellers. Today sellers spend less than a third of their time selling, and sales leaders spend more time on forecasting and administrative responsibilities than on coaching their salespeople.
Those numbers need to be reversed. But how can organizations tame the complexity that’s taking valuable time away from selling? With sales processes, methodology and technology.
Improving Sales Performance Success Requires More Than Processes
In the 2019 World-Class Sales Practices Study, most organizations reported that their opportunity and account management processes need a major overhaul. But it takes more than defining a process to improve sales results.
To win more deals, sellers and their managers need sales processes along with an effective selling methodology—or the “how” behind sales, such as the techniques shared in Strategic Selling with Perspective and Conceptual Selling. Then, to reinforce that methodology, they need sales enablement content, training and coaching. Only then will sellers develop the skills they need to manage customer actions in a productive way that moves deals forward.
Technology also plays a critical role in managing complex sales cycles. But don’t be fooled: technology isn’t a panacea. It isn’t a replacement for process: it’s a complement to process.
Almost all sales organizations use a CRM, but few sellers believe their CRM enhances their productivity—and they’re right: only 3.6% more sellers make goal by adopting a CRM alone. Only half of organizations use a formal or dynamic sales process, but add a formal sales process to the CRM, and nearly 20% more sellers hit their goal, according to the 2018 Sales Operations Optimization Study.
Layering in a sales analytics platform like Scout on top of processes and tech, and you’re looking at a 13% additional boost to win rates. Why? Because analytics help sellers see the methodology-backed actions that lead to more wins and faster sales cycles, and help organizations measure the effects of sales processes and refine them to yield even better results.
How to Overcome Sales Performance Problems
Ready to boost your sales team’s performance? Join us for a webinar led by Miller Heiman Group President and CEO Byron Matthews at 11 a.m. CST on Wednesday, September 18th Matthews will show how increased revenue attainment masks the looming crisis in seller performance, as well as discuss other key market trends and share practical steps to address these challenges.
Save Your Seat: Register for the 2019 Marketplace Trends webinar.