Sales Force Automation (SFA) – How To Get Your ROI

I just had a chance to read “The 2009 Sales Automation Report: Best-in-Class Strategies for Increasing Returns on SFA Investments” by the Aberdeen Group. It is a good report that provides some good research and hard numbers to help companies understand what they need to do get the ROI they planned for from their sales force automation (SFA) investments. I recommend this report to anybody who has an under performing SFA system or is thinking about implementing some type of SFA system for their sales team. I would like to highlight here a few sections that made an impression on me.

Aberdeen uses a maturity model to distinguish Best-in-Class performers from Industry Average and Laggard organizations. Best-in-Class are the top 20%, Industry Average are the middle 50%, and Laggards are the bottom 30%.  The gap between Best-in-Class and Average organizations is staggering. Consider these numbers:

  • Average percent of reps achieving quota:  Best-in-Class =  79%; Average =  59%
  • Improved revenue year-over-year: Best-in-Class = 63% and averaged 9% increase, Average = only 35% and averaged a mere 1% increase.
  • Convert more than 25% of leads in pipeline: Best-in-Class = 80%; Average = 43%

What a tremendous performance gap.  This economy appears to be separating the men from the boys.

Early in the report the Aberdeen Group identifies the Top Strategic Actions taken by Best-in-Class organizations versus All Others. I found this part of the survey interesting not because the percentages and statistics were so unexpected but because of the story they told when looked at together. Let me explain.

Here are the top strategic actions for Best-in-Class companies in descending order

  1. Customize SFA/CRM to match business processes (47%)
  2. Unify customer service, sales, marketing information onto a single platform (42%)
  3. Unify fragmented customer/prospect data (36%)
  4. Reduce the amount of time sales reps spend searching for relevant info (31%)

Now here is the stack ranking of strategic actions for All Others:

  1. Unify customer service, sales, marketing information onto a single platform (50%)
  2. Customize SFA/CRM to match business processes (40%)
  3. Reduce the amount of time sales reps spend searching for relevant info (36%)
  4. Unify fragmented customer/prospect data (31%)

The picture I see painted by this data is that Best-in-Class companies are focused on a sales automation implementation as enabling a set of business processes and prioritize that in their implementation. Because they are focused on the business process they comparatively de-emphasize the issue of saving time for the sales rep opting instead to emphasize adding value to what the sales rep is doing. In contrast, All Others are more focused on data and not emphasizing the business processes enough. Instead of engaging and adding value to the sales reps they work to appease sales reps and gain compliance with a relative emphasis on saving time.

One of the lessons learned, and re-learned by those who get involved in SFA implementation is that aligning to a company’s unique business processes is critical to success. This is a message that Best-in-Class companies have heard. Given the tremendous performance gap of Best-in-Class companies, can those who are not Best-in-Class afford to not listen to this wisdom?

Transforming Your Sales Team – It Is Hard Work

A few weeks back I attended a great discussion and presentation sponsored by the Kellogg business school alumni titled “Selling Strategies In A Challenging Environment”. The event included a panel discussion with four sales executives who answered questions about their efforts to evolve and transform their sales organizations. During the course of the conversation, a couple of  question came up about turnover – how much was there? had these sales leaders worked to reduce turnover?

Across the board, these executives had experienced turnover within their organizations, and a lot of it. Turnover in each case had exceeded 50%. I don’t think this is the answer that any of us wants to hear but I think it is realistic and a challenge that sales leaders who want to transform their organizations will need to face sooner or later.  It is not that individuals are or intend to be cut throat or malicious to successfully transform their organization, but change is hard and not everybody is going to make it. Consider:

The willing but incapable: Perhaps your transformation requires a different style of selling, a different market or product, a different level of executive conversation.  There is probably at least a few in your organization that may have the right attitude but just cannot, for whatever reason change their skills to fit in the transformed organization.

The capable but unwilling: These exist in every organization as well.  Skilled individuals who are not willing to make the change that the organization has asked them to make.

Right-sizing the sales team: Many transformation efforts include changing the structure of the sales organization.  Does an inside sales team need to be added? Is the size of the each managers sales team changing? Are two organizations merging and redundancies need to be removed?

A couple of conversations last week with family business owners, again caused me to reflect on how hard transformations can be. A third generation business owner shared his journey from running the family business to selling that business to an investor and to becoming professional management for another business owner. He shared how it had been impossible to layoff the overpaid, under-performing employee as the business owner but could recognize the need and take action when he was hired management. Transformation is hard, necessary perhaps for continued success but very, very hard.

This morning I read a blog posted by Buckley Brinkman about how difficult transformational change is.  He is in the process of making career changes and moving to a new city which has caused him to reflect (again?) on how hard change is. Buckley is a “Change Catalyst” and in the business of making change happen for companies that he works with.  Yet even this master of change, has to dig a little deeper to find the benefits that make the pain of change worth going through.

Read Buckley’s Blog Post on Change.

How have you managed challenging transformations within your sales team?

Assess Your Sales Organization – 8 Questions

I just read a GREAT blog post by Melissa Raffoni on the HBR Now blog. I have long believed that many organizations are leaving money on the table because they do not have a clear sales strategy or an effective sales organization to execute the sales strategy.  Too often as I talk to executives about sales and what they are doing to improve sales the extent of the work being done is to consider training or compensation and there are so many other elements that can to be considered and leveraged to improve the sales team effectiveness. Melissa in her blog considered the question of sales effectiveness and by asking good questions suggests some of the opportunities that are out there for companies to capitalize on.

Here are Melissa’s questions. Can your organization answer these questions?

  1. “Okay, tell us again, what’s your value proposition? Why should customers choose you over the competitors?” It’s so basic, isn’t it? Yet, I continue to be amazed at how difficult it is to answer this question well. With the constantly changing competitive landscapes and customer needs, every company should take a second look at what they are pitching and why it still resonates today. I’m sure, for most, the value proposition needs a face lift.
  2. “What is your sales process and how does your organizational structure map to it?”
  3. “Do you think your overall cost of sales is where it should be? What makes you think that? Are you comparing to an industry standard or mapping to a projected financial model?”
  4. “What key measures are you using to track sales effectiveness? Do you have a sales dashboard?” Is it cost of sales as a percentage of revenue, close ratio, sales person productivity? Something else? You can’t really optimize if you don’t know which lever you want to move.
  5. “If you believe there are two ways to drive sales–increase the funnel and/or increase the close ratio–what are you doing to achieve those increases?”
  6. “Is sales compensation driving the right behaviors?” Is there enough of a variable compensation component to make a difference?
  7. “It’s a new world, how are you taking advantage of it?” Partners are willing to talk, new talent is on the street, customers are looking for high ROI offerings, social media is changing how people communicate. Are you experimenting?
  8. “Do you have the right people?”

Check out Melissa’s entire blog post here: Eight Questions To Assess Your Sales Organization

Social Media Marketing for Business

I have been having a lot of conversations with my clients recently and with other professional service providers about the merits of social media marketing or digital marketing for business-to-business marketing. I am convinced that many of the new technologies absolutely can be used to reach business buyers.

David Meerman Scott has written a book that I have been reading and recommending: “The New Rules of Marketing and PR”. He was the keynote speaker at the BMA (Business Marketing Association) annual conference this summer. At the beginning of this video, which includes his entire speech he asks a few questions which are great to ask if you are reluctant to take the plunge or don’t see the need to move quickly into digital marketing.

In the last one to two months, have you, either privately or professionally,…

answered a direct mail advertising?

have you gone to mainstream media (newspapers or magazines) to research a product or service?

have you used the yellow pages to research a product or service?

have you used Google to research a product or service?

If online is where people are researching products and services isn’t that where you should be?

Watch the first couple of minutes of David’s talk and he makes his point quite eloquently.  If you have time, the full talk is worth taking 50 minutes to watch.