Carve a Competitive Edge by How You Sell
CSO Insights, now an MHI Global Research company, recently released the results of a Sales Performance Optimization (SPO) survey of more than 1,000 companies worldwide to assess the challenges facing their sales teams. CSO sought to understand why those challenges exist and, more importantly, what actions are needed to overcome those challenges.
As part of the study, CSO also asked participating sales executives to share their top three goals for this year. Figure 1 summarizes the responses we received:
Naturally, new accounts and more revenue topped the list; however, our attention was drawn to number two on the list: Increase sales effectiveness.
What’s interesting is the relationship of that objective to the eleven others listed. I posit that if we can optimize sales effectiveness, one might well expect to see improvements in all the other objectives cited.
First, let’s ask what is sales effectiveness and how does a sales organization increase it? Is it doing certain actions particularly well? Is it following a prescribed sales process? Or is it simply closing deals?
Let me see if I can offer a definition with this research. CSO Insight published an analysis of sales performance based on the strategies and tactics companies used to engage their clients. It has found that companies adopt one of the following four levels of sales process:
Level 1. Random Process: A company may be perceived as being anti-process though what it really lacks is a single standard process. Essentially every sales rep does their own thing their own way.
Level 2. Informal Process: A company exposes its salespeople to a sales process and indicates that they are expected to use it, but that use is neither monitored nor measured.
Level 3. Formal Process: A company regularly enforces the use of a defined sales process (sometimes religiously), and it conducts periodic reviews of the process to see how effective it is, and then makes changes based on that analysis.
Level 4. Dynamic Process: A company dynamically monitors and provides continuous feedback on the sales representative’s use of its formal sales process. The company also proactively and continually modifies the process when it detects key changes in market conditions.
CSO’s analysis demonstrates that as a company moves up the levels of the sales process, sales performance and sales predictability increased significantly. The summary finding also shows how the structured process appears to be a key way for companies to compete more effectively in their marketplace; that is, the logical expression of sales effectiveness.
The CSO research study expands its analysis to include another key factor: levels of relationship. It establishes that vendors achieve different levels of relationship with their customers. Again, looking at the firms which took part in past studies, it found that vendors were perceived by the majority of their customers to be at one of the following five levels of relationship:
Level 1 – Approved Vendor: A company is seen by the majority of its customers as a legitmate provider of the products or services offered, but are not recognized as holding any significant, sustainable competitive edge over alternative offerings.
Level 2 – Preferred Supplier: Based on a vendor’s marketplace reputation and past dealings with customers. While competitors may offer alternatives, Level 2 vendors are normally seen as the preferred vendor with whom to do business.
Level 3 – Solutions Consultant: Based on a specific set of product-related, value-added knowledge or services vendors offer, customers see Level 3 firms as not a vendor, but also a consulting resource on how to best use the products or services they purchase.
Level 4 – Strategic Contributor: Above and beyond the products and services vendors offer; customers view Level 4 vendors as a source of strategic planning assistance for dealing with broader-based challenges they currently face.
Level 5 – Trusted Partners: At this highest level, Level 5 firms are viewed as a long-term partner whose contributions—products, insights, processes—are viewed as key to their client’s long-term success.
Using the study data, CSO Insights then created a relationship and process matrix model that allowed them to segment sales performance based on the combination of these two factors. As an example organizations with “random processes” rarely achieved a level beyond solutions consultant (Level 3) while “dynamic process” rarely fell below preferred supplier (Level 2) and mostly achieved strategic contributor (Level 4) or trusted partner (Level 5).
The study further shows that sales organizations which optimize their sales processes for engaging and working with clients significantly outsell their less adept competitors, thereby achieving sales performance edges such as:
17 percent improvement in overall revenue plan attainment
21 percent increase in percentage of sales reps making quota
31 percent increase in win rates of forecast deals
- 43 percent decrease in sales force turnover
You may believe your informal or formal sales process is getting you the results you need. But even incremental improvement—using a dynamic sales process that’s repeatable, with a common language, embedded in your company’s culture—can achieve greater results.
On the PGA Tour, for instance, the difference between number one in the world and number 100 in scoring average on the FedEx standings is only a 2.13 stroke difference. What accounts for the difference? Driving fairways in regulation? Hitting the green in regulation? Accuracy in putting? It’s fair to say, it’s the whole process of being a champion.
Those firms that become world-class at sales process optimization, which shapes how you sell, will see selling effort decrease as sales effectiveness improvements increase. Their sales teams will target prospects that are more likely to buy, complete sell cycle tactics in fewer calls, streamline enterprise and external communications, all resulting in deals closing in less time with fewer calls.
It’s a fiercely competitive world in business today, especially given information-empowered buyers, so you need every edge you can hone. Make your sales process, how you sell, one of those edges.
See you on the upside, Bill
For more information on how to simplify the complex sale, go to www.pleinairestrategies.com
Or call Bill in San Diego at 858.759.8637 or 213.598.4700