CSO Insights recently released their 2011 Sales Management Optimization Key Trends Analysis. This report summarized responses from more than 850 firms focused primarily on Sales Management development, sourcing and assessment.
The key observations of the report are:
Win Rates of Forecast Deals Remain Flat No gains were made in forecasted deal win rates last year, and this category is down significantly from 5 year ago.
Sales Management Training Effectiveness is Dropping Budget reductions for sales manger training had a direct impact on sales manger effectiveness.
Rep Access to Managers is Decreasing Sales manger to rep span of control increased by a half headcount. Couple this with the significant time sales managers spent on forecasting and internal meetings and the result is less than 50% of manager time is available for their reps.
Without Process and Tools, Managers Struggle to Succeed Managers know what they should do but lack the proper processes, tools, and analytics to become best-of-class managers.
The report covers a number of critical areas but a major one is the correlation between the level of sales process employed by a company and the percentage of reps making their quota. CSO Insights categorizes company sales process adoption into four levels.
Level One – Random Process
Every sales rep does their own thing their own way.
Level Two – Informal Process
Salespeople are trained in a process, but usage is neither monitored nor measured.
Level Three – Formal Process
Salespeople are trained in a process that they are required to use. Periodic reviews of the process reveal how effective it is, and changes are made based on that analysis.
Level Four – Dynamic Process
Salespeople are trained in a process, which they are required to use. The process is continually monitored and it is proactively modified when key changes are detected in market conditions.
The data below from this study delivers a clear picture of the relationship between reps making quota and the level of sales process within a company.
Percentage of Reps Making Quota as Related to Level of Sales Process
Level 1: Random Process 48.6%
Level 2: Informal Process 53.1%
Level 3: Formal Process 58.4%
Level 4: Dynamic Process 62.1%
As you see, simply moving from an informal to formal process yields a 5% improvement in the number of reps making their sales plan. This can result in a significant increase in new revenue – depending on the size of your sales team and overall company targets.
If you are Chief Sales Officer for your company make it your 2011 priority to implement a standardized selling process across your organization. The key is to start with a simple, common sense process that can be measured and adjusted as you move forward. Don’t try to make it too complicated or you will never get it implemented. More importantly, require all participants to use the process and add it as part of an annual performance review.
For ideas to help you get started…by