5 Ways to Fix Sales in High-Tech Companies

Sales forces in high-tech industries are encountering some persistent problems. Specifically, companies are struggling with underperforming salespeople, with retaining top performers, and with hiring and compensating the right salespeople, according to new survey research sponsored by Accenture*.

The research yielded the following results pertaining to sales reps: salespeople spend nearly two thirds (65 percent) of their time on activities other than selling; a majority of them (57 percent) don't make their sales quotas; and the highest performers leave their companies more often than midrange and low performers.

Furthermore, the results revealed shortcomings in hiring practices: three fifths (60 percent) of companies don't know how much they spend on sales compensation; nearly half (44 percent) hire salespeople who don't succeed; and approximately three-fourths (72 percent) plan to add people to their sales force, yet nearly half (46 percent) struggle to do this well.

All of these shortcomings can be costly. High-tech companies spend up to $40 billion a year on their sales processes, and each company allocates between 8 and 20 percent of its annual revenue on them. Despite these outlays, the firms do not generate commen­surate returns, because their sales processes, compensation, technologies, and models are mostly outdated and inefficient.

To solve these problems, high-tech firms should consider several important changes.

Make retention of high performers the highest priority. The research finds that the top 20 percent of salespeople bring in 62 percent of the revenues. To retain them, companies should invest more time and money to ensure that this high-performing group is appropriately compensated, because the cost of losing them is especially steep. When star salespeople leave, the company absorbs a disproportionately big blow, which the percentages above only partly indicate

For in addition to losing their productivity, companies create a gap from the time a sales star leaves until someone else can even attempt to duplicate his efforts. Getting a salesperson up to speed often takes as long as a year. And only a small percentage of the new hires turn out to be top performers. A star salesperson's departure, then, may impact the company for a long time to come.

Disinvest in low performers. Another costly mistake companies make is spending too much time and money on trying to turn their lowest-performing salespeople into high-performing ones. This is unproductive, because more often than not there is a ceiling on how much low performers can improve. It's unrealistic to expect them to become high performers.

Teach midrange performers how to be high performers. Companies should set aside more time teaching midrange sales people how to emulate the behaviors of their high achievers. The majority of a company's sales force will inevitably fall into this middle range. If companies lift many more of these midrange achievers to the upper echelon, this will translate into much higher productivity and revenues. The sheer number of midrange performers who can be made into high performers makes them a key target for investment.

Use analytics to generate better insights. Salespeople struggle to make sense of the sales and customer data they receive. It is voluminous and disorganized. As a remedy, companies need to employ analytics to synthesize it. Salespeople can then develop insights about the data, guiding them toward well-informed evaluations and decisions that accelerate and increase sales.

Eliminate disaggregated silos. High-tech companies should build a sales operating model that eliminates disaggregated silos—which are too widespread—separating marketing, service, and sales. And they should tap into broader and more dynamic sales networks outside their companies. Collaborating with intermediaries, channel partners, and customers, they could extend their sales reach, corporate reputations, and portfolio of well-targeted products and services.

In the digital business arena, what used to work well in sales doesn't so much anymore. Digital is changing every aspect of high-tech businesses, from sales and marketing to strategy, investments, product development, manufacturing, and after-sales support. In lockstep with businesses, all consumers are digital consumers. A new digital ecosystem is changing sales across the board.

Old playbooks for selling should be discarded. In this new sales arena, playing in innovative and nontraditional ways is the name of the game.

*Sources: Accenture sponsored research by CSO Insights. The data cited in this article is derived from two surveys, the 2014 Sales Performance Optimization Study and 2014 Sales Compensation Study. This article's content also encompasses Accenture's analysis and insights about that data as well as widespread global experiences with high-tech sales executives.

Sami Luukkonen is the global managing director for Accenture's electronics and high-tech business. He can be reached at sami.luukkonen@accenture.com.

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