Accenture Connecting Dots Sales Performance

7/28/2019 Accenture Connecting Dots Sales Performance

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Connecting the Dotson Sales Performance

Leveraging the 2012 Sales PerformanceOptimization Study to Inform SalesEffectiveness Initiatives


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Page 2 | Connecting the Dots on Sales Performance

In 2012, chief sales officers (CSOs)are breathing a cautious sigh of relief.The global economy has modestlyimproved from a couple of yearsago, bringing optimism along with it.Customers are spending again, albeitin a more measured way, which isgiving rise to investments in saleseffectiveness. Closing sales should beas simple as that game you used toplayconnect the dots. Right?

Not quite. Although the businessmood is more ebullient, theeconomic rebound will only take

sales organizations so far. In fact,drawing a line that links traditionalsales tactics to improved salesoutcomes is no longer a valid move.

According to Accenture analysisof the 2012 Sales PerformanceOptimization Study sponsoredwith CSO Insights, in the last threeyears, between 36 to 47 percentof sales representatives have failedto reach their annual sales quotanumbers. While some CSOs maychalk that up to challenging times,the difference between the data forquota attainment in 2011 and 2012is less than one percentage pointaclear indicator that the recovery isnot helping sales organizations toachieve their goals (see Figure 8).

It is time to play a smartergame.

To boost sales effectiveness,Accenture asserts that CSOs haveto look deeper to fix a fundamentaldisconnect between where they seeissues in their sales organizations(primarily in sales methodology and

application of process), how theyare choosing to invest (typicallyspending on sales force technology),and what results, or lack thereof,they are realizing from theirchoices. The CSO Insights 2012data clearly shows that CSOs aremissing an opportunity to addresstheir organizations underlying saleseffectiveness issues.

Knowing this, CSOs can insteadproceed strategically to achievelasting sales effectiveness byimproving across three key areas in

the organization:Customer-centricsales

methodologies and processes

Salestalentacquisitionand

retention practices

Salestooladoption.

Connecting these three points canbe a winning solution for CSOs andtheir organization as a whole.


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Top priority to increase

sales effectivenessNo matter how they play the sales game,CSOs across the globe say that their

top priority this year is to increase saleseffectiveness (56.3 percent), followed byincreasing revenues (51.9 percent) andimprovingup-selling/cross-sellingat38.9

percent (see Figure 1).

Increasing sales effectiveness is clearly aworthy response, but it begs the question:What do CSOs really mean by saleseffectiveness? The definition of saleseffectiveness, and the ensuing strategies

Figure 1: The main objective for CSOs is to increase sales effectiveness.

Source: CSO Insights 2012

and tactics that organizations take toachieve it, can vary considerably. Forsome CSOs, the connotation relates toimproving sales productivity and quotaattainment. For others, it is about reducing

the sales cycle or the cost of making asale. Win rates, customer satisfaction anddiscounting are additional metrics thatCSOs may use to track sales effectiveness.

CSOs striving for high performance willinspect the inner workings of their salesorganization and determine which leverswill truly improve sales effectiveness.They will rethink the game and refine theirstrategies.

4.3%

8.2%

8.7%

12.5%

17.3%

29.8%

37.0%

38.5%

38.9%

51.9%

56.3%Increase sales effectiveness

Increase revenues

Improve up-selling/cross-selling

Improve customer loyalty/satisfaction

Capture new accounts

Improve margins/reduce discounting

Improve team selling

Optimize lead generation

Reduce sell cycle time

Increase reorder/renewal rates

Other (please specify)

Based on Accentures experience withmultiple clients and our analysis of the CSOInsights 2012 data, we assert CSOs havean unprecedented opportunity to achievesignificant gains in sales effectiveness by

focusing on three key areas:Developconsistent,customer-centric

sales methodologies and processes thatsustain customer loyalty

Embedmorescienceintosalestalent

acquisition and retention practices

Driveadoptionofsalestoolsthrough

alignment with processes, especially withmobile solutions that provide a distinctivesales representative experience.


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Consistent, customer-

centric sales

methodologies and

processesDespite the sophistication and success ofglobal companies in the survey, CSO Insights2012 data indicates that sales organizationsacross every industry are underutilizingtheir sales methodology and failing to usecommongo-to-marketprocesses.One-

quarter of CSOs indicated their sales forceconsistently uses their sales methodologyless than half of the time, with another 31percentusingituptoonlythree-fourthsof

the time (see Figure 2).Accenture knows that improving adoptionof sales methodology has a directcorrelation to results. In fact, according tolast years survey, sales representatives whouse an organizations sales methodology90 percent of the time achieve 70 percentof their targets. (This question was notasked in the 2012 survey.) The numberdrops to 55 percent for representativeswhouseamethodologylessthanthree-

quarters of the time. Likewise, 92 percentof representatives who consistently useda sales methodology achieved their quota,whereas only 86 percent of representativesreached quota without the methodology.

This inconsistency is compounded withthe findings that the maturity level ofmany sales organizations existing salesmethodologies and process is too low.When asked which sales efforts requireimprovement in their organizations, 60.9percent of CSOs indicated they wished to

help sales representatives more thoroughlyresearch prospects prior to sales calls. Thiswas closely followed by finding ways forsales representatives to sell value and avoiddiscounting (60.6 percent) and helpingrepresentatives to develop their salesstrategy(52.9percent-seeFigure3).



Figure 2: Sales representatives are not consistently using their organizations sales

methodologies and processes.

Figure 3: CSOs cited sales methodologies and processes as key targets for improvement.

horoughly research prospects prior to call

Sell value/avoid discounting

Develop sales strategy plans for key prospects

Properly qualify and prioritize opportunities

Clearly understand customers buying process

Close deals in time frame originally forecast

Prioritize which accounts to focus selling efforts

Align solution with customers needs

Effectively present features and benefits 24.1%

35.0%

43.5%

43.8%

46.0%

46.4%

52.9%

60.6%

60.9%

90%

12%

Dont know

4%


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It is important to note that all of the salesparameters CSOs want to fix are relatedto sales methodology or process issues,including poor discounting practices,inaccurate forecasting efforts and the

inability to understand how particularcustomers buy.

Inconsistent and immature sales processescan reduce the sales organizations abilityto close business and can significantlyextend the sales cycle, which decreasesspeed to revenue. Case in point: Almostone-half(42percent)ofCSOsreportthat

the average length of time it takes to closea deal with a new customer is more thansix months (see Figure 4). The extension ofthe sales cycle shows that organizations arelosing focus in the sales process for reasonsranging from inadequate sales planning toan inability to properly incubate leads.

The issues with sales methodology andprocesses are exacerbated by the factthat customer loyalty is eroding morequickly than ever before. According to theAccenture 2011 Global Consumer Research,customers are increasingly likely to changebrands or partners, which has widespreadimplications for how sales organizations

go about maintaining and expanding theircustomer base.

The CSO Insights 2012 data shows thatalmost 40 percent of respondents thinkthey need to improve their organizationsability to create customer loyalty (seeFigure 5). This statistic is up more than 13percent over last years data, indicating howrapidly buying behaviors are divergingandhow existing sales organizations effortsare not sufficient to counteract the trend.

11%

16%

22%

18%

9%

15%

8%

0%

5%

10%

15%

20%

25%

6 months to close

1-3 Months 4-6 Months 7-9 Months 10-12 Months >1 Year Do Not Know

Figure 4: CSOs indicated that the sales cycle is getting longer, especially with new

customers.

Figure 5: CSOs indicated that their ability to create and maintain customer loyalty is

dropping.



Ability to create customer loyalty

27.3% 26.6%

39.7%

49.6%

55.1%

41.2%

21.2%

15.2%17.6%

1.9% 3.2% 1.50%

0%

10%

20%

30%

40%

50%

60%

2009 2010 2011

Needs improvement

Meets expectations

Exceeds expectation

Dont know or N/A


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CSO Insights results

relevant across theenterprise

Accenture, in collaboration withCSO Insights, a leading researchand benchmarking resource forchief sales officers, recentlycompleted the 18th annualstudy on sales performanceoptimization. The researchsurveyed more than 1,500companies worldwide to assess

current sales performance,challenges facing sales teams, thereasons those problems exist, andwhat organizations are doing toeffectively address these issues.As part of Accenture sponsorshipof this research, the analysis andinsights of this paper focus oncompanies with at least USD $1

billion in sales revenue. In thisyears study, 218 respondentswere from enterprises with morethan $1 billion in revenue.

Inaddition,theWeb-based

survey collected data on morethan 100 metrics related tosales performance from a broad

base of enterprises acrossmultiple industries, includingelectronics and high technology,manufacturing,banking/

insurance, communications andothers. Data is also parsed bygeographies: Nordic, Brazil, India,Latin America, Canada, UnitedKingdom/IrelandandEurope.

While the survey is directed atCSOs, the 2012 research resultsare relevant to executivesacross the enterprise. The dataimplications have a direct bearingon CFOs, who want to cultivatebetter sales performance; onCOOs, who are looking forways to improve operational

performance; and on CIOs, whoare responsible for the technologyrelated to sales tool enablement.


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Sales Relationship/Process Matrix - 2012 SPO survey analysis

Trusted partner

2012 Sales performance

optimization study level

comparison

Level 1:

2011 results

Level 2:

2011 results

Performance level 3

33% of firms

Performance level 2

43% of firms

Performance

level 1

24% of firms

Level 3:

2011 results

% Reps making quota

% of Company plan attainment

% Forecast - no decisions

% Sales force turnover

55%

85%

23%

31%

61%

89%

23%

25%

68%

92%

22%

20%

Strategiccontributor

Solutionsconsultant

Preferred supplier

Approved vendor

Random process Informal process Formal process Dynamic process

% Forecast - wins

% Forecast - losses

43%

34%

49%

28%

54%

24%

In addition, although the data shows thatalmost 75 percent of business comes fromexisting customers, CSOs said it is gettingharder to get into the door with 21 percentsaying their ability to renew business with

existing customers needed improvement.After seeing advancements in performancein the CSO Insights data over the last threeyears, this trend has reversed in 2012.

Organizations that achieve the highestcustomer loyalty metrics, with strongcustomer relationships combined withdynamic sales methodologies andprocesses, can shift the performance curve.Accenture analysis shows that when salesorganizations are viewed as trusted partnersor strategic consultants that create solutionsaligned with customers problems, salesrepresentatives are 13 percent more likelyto make quota and six percent more likelyto attain plan (see Figure 6). The 2012 datashows that only 11.5 percent of CSOs believetheir companies have achieved this covetedtrusted partner status so far.


Figure 6: CSOs who cultivate customer loyalty achieve better results.

Source: Accenture analysis; data from CSO Insights 2012


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53.3%

46.7%

61.5%

38.5%

64.0%

36%

0%

10%

20%

30%

40%

50%

60%

70%

Meets or exceeds quota Under quota

2009

2010

2011

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Figure 7: CSOs believe competency testing can significantly improve hiring success

rates, yet few are doing it.

Figure 8: A large percentage of sales representatives continue to miss annual

quota targets.

Scientific sales talent

acquisition and retention

practices

As in years past, the CSO Insights surveyquestions delved into how organizationsacquire and retain sales talent. Rapidlychanging customer behaviors, the blurringof lines of multiple industries and anongoing shift from product focus to businesssolutions are altering the sales landscape. Assuch, it is making it more difficult for CSOsto find, hire and keep the right people.

CSO Insights 2012 data shows an overall lackof rigor in sales organization acquisition and

retention processes. Although a full 65.5percent of CSOs believe that a scientificapproach, such as using competency testingto hire sales representatives, delivers greatersales effectiveness, the data shows thatvery few organizations are actually pursuinga more systematic hiring practice. In fact,nearly half (47.6 percent) of CSOs surveyedsay their organizations are not conductingsales aptitude and competency testing (seeFigure 7).

On the upside, the 2012 data shows that

more organizations are improving at hiringthe right sales people with 35.3 percentof CSOs saying that they consistently hirerepresentatives who succeed at selling, a 10percentage increase over 2011 data. Evenas they celebrate the progress, CSOs knowthere is still work to be done as 65 percentof new hires are not succeeding.

Asamorecriticalbottom-lineindicator,

the percentage of sales representativesattaining quota is not improving. In the last

three years, a startling 36 to 47 percent ofsales representatives have not reached theirannual sales quota numbers. Despite theeconomic upturn, 2011 and 2012 data differsby less than a percentage point, indicatingthat the improved business environmentis not helping sales representatives meetexpectations (see Figure 8).



Improves hiring

success rates53%No impact

19.5%

Do not know

14.9%

Significantly improves

hiring success rates

12.6%

No47.6%

Yes52.4%

Impact of sales aptitude/competenciesassessment method on ability to hire theright sales people?

As part of your new sales rep hiring processdo you conduct any sales aptitude/competencies assessment testing?


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Finally, organizations are continuing to experience high attrition problems. CSO Insights2012 data indicates that the annual sales representative voluntary and involuntaryturnoverisat21percentmeaningthatoverone-fifthofhiredsalesrepresentativeseither

choose to leave their organizations or are counseled out every year. This inability to retainsales representatives is most likely due to bringing in unqualified people in the f irst place.

According to Accenture analysis, since talent hiring and retention policies impact as muchas 10 percent of the top line per year, it is imperative for CSOs to use scientific profilingto reduce attrition rates, as well as the time it takes for sales representatives to becomeproficient and make quota (see Figure 9).

Figure 9: Using scientific hiring and retention practices can have a direct impact on revenue.

Average annual quota Average annual sales forceturnover rates: voluntaryvs. involuntary

Average time for new sales repto be fully productive

Average annual quota ~$147.88K Turnover rate = 21.9% Reps with time to proficiency> 6 months = 77.7%

US$1 billion

X X

Impacts 7 to 10%

of the top line

per year13.1%

8.0%

11.9%13.6%

15.9%

37.5%

12.0%

9.9%

22.3%

47.3%

30.4%

% Voluntaryturnover(rep leaves)

0-6Months

7-12Months

>1 Year% Involuntaryturnover

$200,000

Source: Accenture analysis


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Enterprise and mobile

sales tools that deliver a

distinctive experience

Consistently, companies are still strugglingto get sales representatives to use theirCRM technologies. According to CSOInsights 2012, 46 percent of CSOs surveyedsay that their CRM tool adoption ratecontinues to be low (see Figure 10.).

Why is it so difficult for organizations toget their sales representatives on boardand using deployed tools? Accordingto Accenture client experience, salesrepresentatives often believe that CRM

tools exist for management, so that theorganization can track what representativesare doing. Or, they think the tools fulfill anadministrative function, such as creatingreports. In reality, these tools are oftencreating an administrative burden for salesrepresentative, rather than assisting indriving productivity

Sales tools should exist to promote theadoption of optimized sales methodologiesand processes. And at all times, CSOsand their CIO partners must focus on

implementing technology to support specificobjectives and provide value directly to thesales representative. This value could be inthe form of helping sales representativesto sell more quickly, reduce cycle times orincrease insights about customers.

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Figure 10: CSOs indicated that CRM tool

adoption rate is less than 50 percent.

Figure 11: Sales organizations are rapidly

adopting tablet devices in their sales

efforts.

The transition to mobile CRM may alreadybe providing the catalyst that CSOs need.One particularly bright spot in the CSOInsights 2012 data indicates that mobileaccesstoCRMtechnologyisatanall-

time high with smart phones and tabletsrapidly being incorporated into the salesprocess. However, simply transitioningexisting CRM functionality to mobiledevices is insufficient. Instead, CSOsneed to exploit the newest capabilities inmobile technology that deliver a distinctiveexperience to both sales representativesand customers.

Tablet devices provide an excitingopportunity to drive adoption of sellingmethods, processes and tools. According toCSO Insights 2012, more than 90 percent offirms are actively using or starting to use

tablet devices in their sales organization(see Figure 11). This number has increasedsignificantly since 2011, when only 45percent of survey respondents had providedtheirsalesforceswithmobile-enabledsales

capabilities. However, nearly half of theorganizations surveyed in 2012 do not yethave a formal program around tablet usageindicating that CSOs need to get a jumpstart on incorporating mobile CRM tools intotheir overall methodologies and processes.

Source: CSO Insights 2012 Source: CSO Insights 2012

CRM tool adoption rate % Sales force using tablet to support sales

activities

25-50%

17%

75%12%

Do not know

5%

51-75%

23%

76-90%

20%

>90%

34%


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Understanding the

disconnectBased on the 2012 data, CSOs indicatedthat they saw three areas in which to drive

strategic change in their organizations:existing sales methodologies and processes,sales talent acquisition and retentionpractices, and sales tools adoption.

Yet when polled on areas CSOs planned toinvest in 2012, the majority of respondentsindicated their sales effectivenessinitiatives were related to deployingtechnology. Ironically, across the board,there was little investment planned onthe very areas CSOs cited as requiring

improvement. Honorable mention

Figure 12: CSOs say sales technology deployments are not delivering expected results.

Over 85% see no benefit to revenue

Hardly anyone sees improved sales cycle8.7%

14.6%

16.5%

14.6%

21.4%

17.5%

21.4%

16.5%

27.2%

41.7%

51.5%Improved sales rep/manager communications

Improved forecast accuracy

Reduced administrative burden on sales

Reduced new sales rep ramp-up time

Improved support of channels

Improved best practices sharing

Improved order processing accuracy

Improved win rates Fewer than 15% get improved win rates

Other

Increased revenues

Shortened sell cycles

investments included improving customerinteractions, enhancing lead generationprograms, revising sales talent processes,or focusing on how to leverage sales toolsto help the sales representative sell more

effectively.Theunvarnishedtruthisthatatechnology-

centric approach has consistently failedto achieve results. According to the CSOInsights 2012 data, fewer than 15 percentof organizations achieved improved winrates from implementing sales toolsmobileor otherwise. To make matters worse, morethan 85 percent of organizations surveyeddid not increase revenue from technologydeployments and more than 90 percent didnot reduce the time it takes to close a sale(see Figure 12).

Recognizing the challenges in the salesorganizations is a first step to makingimprovements. Unfortunately, CSOs arecollectively failing on the second step, whichis to challenge historical behaviors and

avoidsuccumbingtotechnology-focusedinvestment in lieu of solving systemic salesprocess and organizational issues.



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Sales effectiveness

metrics acrossindustries

Accenture analysis of CSO Insights2012 data by industry, includingelectronics and high tech,manufacturing, communications,banking and insurance, showssome revealing trends:

Sales methodology and processesCSOs indicated that their ability to

adapt sales processes to keep pacewith the change in the insurance,telecommunications, andelectronics and high technologyindustries was generally only 50percentorapproximatelyone-

half of the time. The statistic isespecially surprising in the hightechnology world, which is usually

considered to be a progressive andfast-pacedindustry.

AnalyticsThe data shows that only 25percent of CSOs surveyed are usinganalytics to look at their business

and processes. Exceptions appearin the banking and insuranceindustries, in which 35 percent ofrespondents indicated they areusing analytics, with even morein the manufacturing industry atmore than 40 percent. However,even those sales organizations thatare running analytics are typically

relying on descriptive analytics,which provide a review of whathas already happened, instead ofpredictive analytics, which forecastwhat is likely to happen in future.

Customer LoyaltyThe inability to maintain businesswith existing customers is mostsevere in the communications

industry, where CSOs indicatedthat nearly 25 percent ofbusiness is under pressure. Thenumbers are slightly lower inthe insurance (24 percent) andbanking (21 percent) verticals. Theelectronics and manufacturingindustries represent the bestresults with customer retention,

with approximately 11 percentrespectively experiencing churn.


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Connect the dots and

emerge the winnerWhat is the next move for you as a CSO?Keep in mind that it is important to

approach sales effectiveness holistically,asamulti-yearjourneyguidedbythe

principles of standardization, consistencyand collaboration, ease of use, quick startup, and modular roll out with localizationcapabilities.

To get started, Accenture recommendsdefining what sales effectiveness means inyour organization. Perhaps it is achievingquota and revenue numbers, or strategicallypositioning the sales force to achieve

new levels over the next several years,or fulfilling sales plans with fewer salesrepresentatives. Collaborate with otherleaders and balance the definition with thestrategic intent of the CEO, as well as theobjectives of the chief marketing officerand chief financial officer.

Based on the collaborative definition ofsales effectiveness, develop a plan thataddresses the key challenges your salesorganization faces. Then create a business

case that clearly defines how to drive salesproductivity within the organization with aroadmap focused on three points:

1. Increase maturity and customer

centricity of sales methodologies and

processes, across business planning andstrategy, sales execution and sales operations.Document these refined processes to improve

consistency. Invoke management disciplineand implement the right mix of incentives andmanagement by objectives to improve salesrepresentatives adoption rate.

2. Embed more science into sales talent

acquisition and retention practices tocreate a measurable impact on finding andkeeping the right sales representatives.Establish a clear understanding of thecompetencies, capabilities and behaviorsthat lead to high performance salesrepresentatives in your organization. Tailorrecruiting and hiring practices to fulfill thisbenchmark. Build an ongoing competencydevelopment program to continuouslyimprove and retain sales representatives.

3. Automate with sales force technology

that delivers distinctive value to salesrepresentatives and ultimately customers.To get the most out of sales technologies,especially the newer capabilities availablewith mobile, it is important to firstdesign and model the sales tools against

institutional, mature processes. Insteadof building the tools to serve the needsof sales managers, focus on delivering adistinctive,value-basedexperiencetosales

representatives. Commit to a process ofcontinuous evolution and improvement inthe tools deployed to sales.

CSOs that connect these dots will be ableto significantly improve sales effectivenesswhile also emerging the winner in other waysthrough increasing revenues, penetrating

newmarketsanddevelopingvalue-orientedselling skills across the sales organization.

It is a game that is definitely worth winning.

Contact us:For more information about the AccentureSales Transformation offering and howAccenture can help your organization

improve sales performance, visitAccenture.com or contact:

Yusuf TayobPartner, Accenture Sales Executionand [email protected]


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About Accenture CRMSolutions

Accentures Customer RelationshipManagement business domain helps

organizations achieve high performanceby transforming their marketing, sales andcustomer service functions to supportaccelerated growth, increased profitabilityand greater operating efficiency. Ourresearch, insight and innovation, globalreach and delivery experience have madeus a worldwide leader, serving thousandsof clients every year, including mostFortune 100 companies, across virtuallyall industries.

About Accenture

Accenture is a global managementconsulting, technology services andoutsourcing company, with more than246,000 people serving clients in more

than 120 countries. Combining unparalleledexperience, comprehensive capabilitiesacross all industries and business functions,and extensive research on the worldsmost successful companies, Accenturecollaborates with clients to help thembecomehigh-performancebusinessesand

governments. The company generated netrevenues of US$25.5 billion for the fiscalyear ended Aug. 31, 2011. Its home page iswww.accenture.com.

Copyright 2012 AccentureAll rights reserved.

Accenture, its logo, andHigh Performance Deliveredare trademarks of Accenture.

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