Sales Require Organizational Overhaul, Better Data
Only slightly more than half of sales representatives (53 percent) met or exceeded their quotas in 2017, CSO Insights reported earlier this year in its “World-Class Sales Practices Study.” While this is concerning, even more concerning is that 2017 was the fifth straight year of decline. In 2012, 63 percent of salespeople made quota, and the numbers have been going down ever since.
While the reasons for this are many, a main conclusion that can be drawn from CSO Insights’ “2018 Sales Operations Optimization Study” is that sales operations need to take on more of a leadership role, particularly as sales departments struggle with new innovations and old infrastructure issues.
Currently, nearly two-thirds (63.9 percent) of sales teams have a dedicated sales operations organization. And these organizations are heavily involved in or took on a leadership role in 15 out of 16 sales transformation initiatives, such as sales tool and technology management (47.8 percent), forecast and pipeline management (46.8 percent), seller performance metrics (45.2 percent), and sales process definition (44.3 percent).
The study highlights a number of areas where sales operations still struggle with existing infrastructure and processes. For example, organizations with a formal or structured approach to forecasting had significantly higher win rates (62.5 percent) than those with a subjective or casual approach (49.9 percent). Yet almost half (45.7 percent) of respondents use a subjective or casual approach.
“This study shows that sales operations, a long-established yet broadly varying discipline, is undergoing a period of marked change,” Seleste Lunsford, managing director of CSO Insights, concludes. “The end point may well be a bigger seat at the table and the ability to create a larger, more positive, and more sustainable impact on sales performance.”
The study also provides an explanation for why the modest rise in CRM adoption rates since 2013 hasn’t resulted in significant performance improvements. In organizations with CRM adoption rates of 75 percent or more, those with a formal or dynamic sales process outperformed those with only a random or informal sales process by 14.9 percent in win rates and 19.3 percent in quota attainment.
“By ensuring formal sales processes are codified in CRM, sales operations can drive higher adoption rates, increase the impact of CRM on efficiency and effectiveness, and improve tactical tasks such as forecasting,” Lunsford says.
Another problem is that while CRM systems have been almost universally implemented, actual adoption rates still remain low. Only 47 percent of study participants reported an adoption rate of greater than 90 percent within their sales organizations.
CRM wasn’t the only technology area that is not living up to its potential. Respondents to the study were using, on average, 10 sales tools and were preparing to deploy at least four more. Yet despite this explosion in sales tool investments, very few had adoption rates of greater than 50 percent.
A big factor, according to the report, is that sales leaders aren’t getting the data they need from existing systems. And while there is more sales data available than ever before, the accuracy of this data is often suspect.
A shocking 93 percent of sales leaders would like to be in a better position to provide key decision-making data to executives over the next two years, but that might not be possible under current conditions. While sales executives, by necessity, are being asked to be more data-driven—and they themselves are being more demanding about the quality and quantity of the data they need for decision making—a full 86 percent of sales organizations think they need to improve the accuracy of their sales forecasts, and only a quarter (24.9 percent) of salespeople say they have confidence in the quality of their CRM data, the research found.
Taking advantage of CRM to provide sellers with real-time insights is becoming increasingly complex. But by ensuring formal sales processes are codified in CRM, sales operations can drive higher adoption rates, increase the impact of CRM on efficiency and effectiveness, and improve tactical tasks, such as forecasting, Lunsford concludes.