Two surveys released a number of months ago by a major bank and one of the big 4 accounting firms both confirm that growing revenue and finding enough of the right people to do that are firmly back at the top of strategic priorities for Boards and their CEO’s.
Growth may be back but selling has never been more difficultIt has never, ever been more difficult to sell. Whether you’re selling state-owned utilities, sophisticated technology solutions or the simplest widgets, the cards have never been so heavily stacked against the sales force. And like it or not, that situation is unlikely to change any time soon.
Consider the following statistics gathered by our group from interviews with CEO’s and Sales Directors:
- 42% of sales people fail to make their quotas;
- 88% of sales opportunities fail to close as forecasted;
- 68% of sales leads are never followed up by the sales team; and
- 74% of solution selling initiatives and 77% of new product launches “misfire” and fail to achieve their revenue and/or margin objectives.
Old thinking can’t solve new problemsAlbert Einstein once famously said, 'We can't solve problems by using the same kind of thinking we used when we created them.'
For the last forty years, the tonic of choice for the ailing company top line has been more training for the sales force. As often as not, this has been accompanied by the departure of the previous sales manager and a few sales reps and the arrival of shiny new ones – with the cycle often repeating itself every few years.
Since the late 1990’s Customer Relationship Management (“CRM”) systems have challenged sales training as the panacea for the problem of how to grow revenues. Global vendors including the likes of Siebel, SAP, Oracle and Salesforce.com have come to market with ever more advanced technology offers promising the Holy Grail – consistent top line growth.
During the mid to late 2000’s global spending on CRM and sales training exceeded $200 billion and $150 billion respectively. During this time the combined global corporate spend on CRM and sales training grew by more than 10% per annum.
With that level of investment being thrown at a problem, one would have expected it to be well and truly licked by now. Well – it isn’t. In that same period the average conversion rate of business sales pipelines fell by nearly 100% to be just under 3%. For every 100 selling opportunities that began their journey as “leads” fewer than three resulted in closed sales and new customers.
And yet as their companies emerge from the Financial Crisis and prepare for growth, many CEO’s and Sales Directors are still turning back to training and technology “silver bullets” unaware that the world has moved on and the challenges they face in growing their top lines in the 21st century, are beyond the scope of one-dimensional 20th century solutions.
Marketing and Sales: “Process free zones!”If only three out every 100 sales opportunities succeed, that means 97% fail. Any CEO worth their salt discovering a key business process operating at an error rate of 97% would surely be all over the problem personally - and with a big microscope! Particularly when it’s the business process charged with producing the company’s oxygen supply!
And yet precisely the opposite is happening. The broken sales process remains fundamentally broken as evidenced by the anaemic 3% pipeline conversion rates. Frustrated and unable to figure out a meaningful solution, they continue to throw bodies, training and technology at a problem even though recent history has shown us that these tired, linear solutions do not and will not work anymore.
Business process and performance measurementThe answers to the revenue performance dilemma have actually been readily apparent for some time. And they’ve been applied successfully to every other aspect of business for decades.
For success in anything to be sustainable it must be repeatable. And for anything to be repeatable there must be a process.
What are you doing to embed a process that will enable you to drive double digit growth over the mid-term that is any different to the past?