It’s easy to identify the highest-performing sales organizations: Obviously, they’re the ones with the most effective sales process. The real challenge is figuring out how they got there.
How do these sales superstars maintain a consistent, comfortable distance between themselves and their competitors? How do they retain and increase market share? In other words, why do they excel? Exactly what is it that sets them apart from the rest of the pack? What do they do that the others don’t—or don’t do as well?
These are among the questions the Sales Performance Report set out to answer… To pinpoints the most effective strategies of “winning sales organizations” (WSOs). The study is part of a long-term analysis of sales trends, issues, success metrics and best practices. More than 21,000 sales professionals have participated in the ongoing effort, making it the world’s largest known continuous research project focused on sales performance.
The 3,900+ sales professionals surveyed in the latest study make up a particularly diverse palette of respondents. Participants range from top executives to mid-level managers to front-line account reps, and they work for companies of all sizes in nearly 20 industries. And while most are based in North America, this year’s survey includes, for the first time, significant international influence: Nearly a third of participants represent organizations based overseas.
But researchers were interested in the biggest way in which participants differ, specifically; what strategies “do-the-best” use to set them apart from the rest. What key sales performance issues are facing sales organizations, how are the better organizations dealing with them, and what are they doing differently than the others. Researchers drew the top performers from among sales executives whose companies met three criteria involving significant year-over-year increases: Revenue; Average account billing (revenue per customer); Acquisition of new accounts…
While nearly 80 percent of respondents reported that revenues were up, most fell out of the reckoning because they couldn’t meet one or both of the other two criteria, after winnowing out all those companies, researchers were left with an elite sampling of 8 percent of respondents that they designated as “winning sales organizations” WSOs.
What Do WSOs Do Well? The study found that “winning sales organizations” excel in five critical areas:
Creating and Prioritizing Opportunities. Seventy-two percent of WSO respondents rely on well-defined methodologies for deciding which opportunities to pursue. That’s almost a third better than other respondents. “In other words, nearly half the non-WSOs have no standard system for identifying the best opportunities,” That’s like fishing and hoping that something will bite on your hook”. WSOs also typically use a proactive, well-defined, highly-focused-approach to sales.
They define the ideal customer, 71 percent report that they align sales efforts to that target, and they understand what compels those clients to buy. At the same time, their efforts include creative thinking and problem-solving skills that customers valued highly. And, they emphasize problem-solving rather than product-pushing: WSOs focus on solution-based selling 26 percent more often. As a result, WSOs tend to achieve better close ratios, shorter sales cycles and fewer instances of discounting; all of which add up to more wins and more revenue.
Non-WSOs, in contrast, “seem to waste resources pursuing business that they don’t really have a good chance of winning”. “Typically, it’s a situation where their products and services are not a good-fit for what the customer is trying to accomplish”. But because salespeople are wired for tenacity, it sometimes takes strong management to convince them to stop chasing those opportunities.
“You have to create clear criteria indicating that not every piece of business is necessarily a good piece of business for your company. Make sure that you’re putting resources on prospects only if you have a good chance of winning them”. When sales seem unlikely, redirect those resources to deals you’re more likely to win.
Managing Opportunities. Winning sales organizations also make better use of those opportunities, according to the study. WSOs get access to more senior-level executives than their peers, and their sales forces are better at persuading those top decision-makers to buy; succeeding about 32 percent more than non-WSOs do. How do they do it?
Overall, WSOs tend to have well-defined processes for moving through the sales funnel from prospect to close; they make sure the right deals get the right attention at the right time. And they’re savvy about customizing their sales approaches to executives’ decision-making styles, adapting quickly when confronted with several different styles.
Above all, WSOs strategize for every meeting with a prospect or client. Winning sales organizations are 30 percent more likely to have a standard approach to sales calls, whereas about 60 percent of the non-WSOs respondents have no regular format for sales calls. “They fly by the seat of their pants and then wonder why they don’t get the right outcome from those meetings.”
Managing Relationships. WSOs, more than most, recognize the importance of long-term customer relationship management, according to the Miller Heiman Study. They know their customers’ businesses as well as their own, and they monitor trends that are likely to affect those clients’ needs. WSOs are also expert at managing in-house relationships. Fifty-eight percent reported working with people throughout their companies to better serve strategic business accounts; that’s 20 percent more often than non-WSOs.
“Sales is no longer the total fiefdom of the sales function. It’s now the responsibility of a much broader part of the organization, and customer relationships are increasingly involving people from across departments.” Sales organizations are hoping to improve both internal and external relationships with standardization: “Having standard systems and process for managing customer relationships. Putting everyone on the same page on how you talk to customers and the strategy around key customer relationships”.
Involving their Companies’ Executives. In a related finding, WSOs tend to involve their own corporate leadership in the sales process. Seventy-seven percent of WSOs said their senior-level executives actively promote and participate in the sales process, which is 20 percent more often than non-WSOs. Highly effective organizations also excel at working with managers of other departments to identify their companies’ most important accounts and develop organization-wide approaches to supporting them.
More than half of WSOs reported working with leaders from finance, marketing, IT, engineering and other departments to accomplish that goal. That means that even though many sales organizations have undergone staff reductions, they can still build strong customer relationships with help from other departments, many of which now directly interact with customers more than ever before. The single most important element in those efforts’ success is strategic coordination. “It requires organization to be organized,”
Account manager have got to make sure everyone else understands the plan and strategy.” The Study credits those cross-organizational efforts with helping sales superstars better understand and more quickly adapt to changing buyer behavior. According to the survey results, WSOs have 16 percent less price pressure in buyer decisions than non-WSOs, and their buyers are less likely to delay their purchasing decisions.
Leveraging Talent. Finally, WSOs strategize around their people. “They put a lot of emphasis not only on finding and retaining the right talent, but leveraging it throughout their organizations as well”. Overall, sales leaders ranked talent maximization as one of their five most pressing issues, second only to ongoing worries about winning and keeping profitable business. But when asked how well they were meeting the talent challenge, participants gave themselves low marks, rating that area fourth out of five in terms of success.
Both responses may correlate to another startling survey result: 24 percent of all organizations surveyed reported an increase in turnover. In delving into the talent challenge, researchers polled respondents about whether and how they maximized use of their top performers, specifically regarding benchmarking, coaching and evaluations.
They asked, “Are you sharing information about what they do? Are you replicating their behavior and processes? Do you profile them, create models and then align hiring standards with them?” People haven’t spent enough time thinking about the natural tendencies or “DNA” of their top performers. That’s an area where WSOs clearly excel.
Sixty-six percent leverage their top performers’ expertise; that’s 25 percent more often than other respondents. They’re also more likely to hire the right people in the first place; 45 percent have what they consider “very effective” processes for hiring top talent, compared with 36 percent of non-WSOs. “You need to understand why your top performers are your top performers”.