• October 22, 2001
  • By Jim Dickie, research fellow, Sales Mastery

Companies Face Challenges in Increasing Sales Effectiveness

In August of 2001 I started to profile the results of our latest CRM marketplace research project, where we surveyed 226 companies regarding the business challenges they faced and the role technology could play in addressing those issues. When we asked the survey participants to identify the top objectives they had for their sales organizations, increasing sales effectiveness was the most frequently mentioned goal.

That response begged a follow-up question: Where do you currently feel you are ineffective? To get that answer, we asked the survey participants to rate their effectiveness in specific sales-related business areas. We gave them a list of 25 functions that sales organizations are typically asked to perform, then asked them to rate their own performance in each of these areas:

Share Best Practices: Companies have a significant asset in their best practices for how to work with clients--sales strategies, qualification techniques and objection handling, for example--yet very few companies reported doing a good job of leveraging that knowledge effectively across the sales force. If companies did share ideas, it was most often done very informally, leaving a major corporate asset under-utilized.

Building Customer Loyalty: Collapsing product lifecycles have often made product offerings ubiquitous, allowing a customer to get the same product or service from multiple sources. This has caused many firms to re-examine turning how they sell and service an account into a competitive advantage. But achieving this distinction in the marketplace is still a challenge that few firms reported effectively handling.

Support Channel Partners: Many companies reported that they intended to increase their sales via channel partners. They were finding that the tools they provided their own sales representatives did not always work effectively when used by the channel. Companies reported the need to greatly simplify their operations if they were going to use channel reps to sell their products and services.

Ramp Up New Reps: As product lines broaden, and individual offerings grow more complex, getting new reps up to speed quickly is becoming a greater challenge. In 1999, 66 percent of companies reported ramp-up times of six months. This year's number has increased to just over 72 percent.

Introduce New Products: The rate of new product introductions is hitting an all-time high for many companies. This places a huge burden on sales staff to make time to continually get up to speed on these new offerings while continuing to manage opportunities already in the pipeline.

Forecast Accurately: Only 3 percent of the surveyed companies said their forecasts were always accurate, while an additional 29 percent rated their forecasts normally accurate. Since companies make key business decisions based on their forecasts, inaccuracies in projections causes enterprise-wide problems for many organizations.

Generate and Qualify Leads: Many salespeople, in order to meet their revenue goals, have to generate leads on their own. Targeting potential prospects and then developing and implementing local direct marketing programs is time consuming and difficult. Once a potential prospect is identified, the challenge then shifts to qualifying which product or service offering best fits their needs before significant selling resources are committed to the opportunity.

Service Existing Accounts: Earlier we mentioned that salespeople have less and less time to devote to servicing existing accounts. Salespeople often find it difficult to navigate their own company to get the answers their customers seek regarding their account. This is causing customer satisfaction ratings to decrease in many cases.

Maintain Product Catalog: Collapsing product life cycles make it difficult for companies to keep the sales force current on features, functionality and pricing. As customer expectations increase in terms of the product knowledge they expect salespeople to have, the inability to maintain current product catalogues is becoming an issue.

Cross Sell and Up Sell: In addition to constantly changing products, many companies continue to expand their product lines. With so many things to sell, companies report that they are doing a poorer job of cross selling and up selling to their clients.

Generate Bids and Proposals: The complexity of the orders themselves, and the number of sign-offs required to approve non-standard deals, are making sales representatives ineffective at completing these two critical tasks.

Minimize Discounting: Market pressures are forcing companies to continually justify their prices to customers. When the sales force cannot easily articulate the true value of what they sell, companies report that they are increasingly turning to discounting in order to close deals.

Easily Access Information: Some companies struggle with getting information to the right place at the right time. First, the reps were being bombarded by too much information--new product announcements, price changes and competitive bulletins--making it very difficult to stay current. Also, reps ended up wasting significant amounts of time hunting for the information they needed. In both cases, managing the flow of information more effectively was seen as crucial for improving sales effectiveness.

Selling today is more difficult than ever before. Sales forces have to be empowered in a way that allows them to determine which accounts they should focus their efforts on and then determine which of their products or services best meet the client's needs.

With this information in hand, they then need to have access to all the resources they require to properly educate prospects on why the company's solution is a better fit than a competitive alternative. In today's tight economic environment, they also need to build a sound business case for why the purchase should be made immediately.

Once sales get an order, they need to ensure that it is correctly fulfilled in a timely manner. Following that, they need to see that the account is provided exceptional service so they can build customer loyalty.

Companies that focus on achieving these objectives through their CRM efforts will be in a position to turn how they market, sell and service into a sustainable competitive advantage.

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