With Sales Effectiveness Down, Companies Should Rethink Their Sales Process
For 24 years, CSO Insights has been gathering primary data on the challenges facing sales teams, why those problems exist, and how companies are leveraging people, process, technology, and knowledge to overcome those issues. Looking at the data recently gathered for the 2018 Sales Effectiveness study, from a worldwide audience of nearly 900 sales professionals, the sales performance trends are disconcerting on the surface. And then when you look deeper into the metrics, real concerns emerge.
Let’s start at the highest level. One key gauge of sales success is looking at the percentage of salespeople who are achieving their revenue goals. The chart summarizes the trend we have witnessed from 2012 to the quota achievement results for 2017.
Here we see that after a four-year decline in performance, we had a modest bump up in 2017. So should this be a source of optimism regarding improvements in sales effectiveness, or just the result of worldwide economic growth last year? To start to answer that question, we looked at 23 more detailed operational metrics collected during the study, including sales competencies such as prioritizing which accounts to pursue, gaining access to key decision makers, building a solid business case to justify a purchase, penetrating other business units within customer accounts, and so on.
Of these, only eight metrics had a “meets or exceeds expectations” rating of greater than 50 percent across the study population. Said differently, that means there were 15 aspects of selling where the majority of companies had subpar performance. More disturbing was that when we looked at the performance numbers from five years ago and compared them with this year’s figures, we found only a single metric where sales performance was better today, and that was a scant 0.3 percent improvement. So sales effectiveness is actually on the decline, which begs the question: What do we do about it?
The answer may very well lie in the wisdom of Michael Hammer, the guru of the concept of reengineering, who in the late 1980s observed that “automating a mess yields an automated mess.” Looking over the past five years, there have been major innovations in our ability to collect and analyze both structured and unstructured data, and this has been accompanied by significant innovations in AI technology coming to the worlds of sales, marketing, and support. That should set the stage for significant increases in sales effectiveness, but they will not happen without a major mind-set shift.
Let’s be honest: At most companies today, forecast management sucks, market segmentation is archaic, on-boarding takes way too long, the process of sales coaching is outdated, and so on. Again, let’s look to the words of Michael Hammer: “Don’t automate, obliterate!” Unless we are willing to throw out old ways of doing things and replace them with fundamental new processes for doing business, access to new data and new technology will continue to generate old results. Based on the performance erosion over the past five years, that would be the kiss of death for many corporations.
Jim Dickie is an independent research fellow and cofounder of CSO Insights, a division of Miller Heiman Group that specializes in benchmarking CRM and sales enablement initiatives. He can be reached at firstname.lastname@example.org or on Twitter @jimdickie.