The double-digit growth waiting to be ignited in your sales people – here’s how.

“A sale is not something you pursue; it's what happens to you while you are immersed in serving your customer.”

While it is incredibly important for companies to have a solid sales process in place, the best sales happen not when your salespeople are following a handbook, but when the process is so deeply ingrained in them that it is in the very DNA of your company. And the payoffs and additional growth prospects for your company can be tremendous when your salespeople have internalised the process, and adhere to it naturally and unconsciously.

Let me start by sharing my view on where we are in this evolving sales training market. Unfortunately, most businesses have yet to develop or adopt a specific approach or methodology for engaging with their customers. There is a growing number of businesses which recognise the value in adopting a manageable, repeatable, and above all, consistent approach to customer engagement, and I would like to share and illustrate some of the quantifiable benefits that have arisen from doing so.

To illustrate, I will draw from a data pool provided by CSO Insights, a research firm that surveys thousands of sales executives to provide benchmarking trends and insights that help to enhance sales effectiveness. In its 2016 Sales Optimization Study – Sales Process Analysis, it examined the impact of not only having a methodology implemented in a business, but also how impactful the application of the methodology was on key sales performance metrics. What was identified was insightful, to say the least: the research suggested that when greater than 90% of salespeople consistently use a methodology; in other words, it is cultural in its adoption and becomes the way a business engages with clients and is not optional, the number of forecast deals won increased on average by 11% from 45-56%, as you can see in Table 1 below. This is just one of many positive metric improvements, more of which we will discuss later.

So what does that mean for an organisation, in terms of potential growth? Well, let’s illustrate with an example: Company A has 100 salespeople, each with an annual quota of $1,000,000. The total targeted revenue for the year is $100,000,000 (100 X $1,000,000). Now, let’s look at some sales metrics; the average case size is $50,000 which means that each salesperson will need to successfully sell 20 cases of business in the year to achieve that quota. In Company A, the average closure rate is 45%, meaning each salesperson will need 44 opportunities to enter their funnel throughout the year to achieve quota - with me so far?

Now, let’s introduce our methodology and examine the impact this will have on Company A’s target achievements and growth aspirations. According to CSO Insights, if we can get our salespeople to adopt a methodology as their default approach toward engaging with their customers (>90% participative), then we can expect an increase in forecast-win rates of 11%.

So my salespeople now close at 56%, which now delivers the business an extra 5 sales per salesperson (44 opportunities X 56% = 25) as opposed to 20 previously. Assuming my average case size remains at $50,000; Company A now has an extra $250,000 in revenue per salesperson, which is a potential 25% growth on quota. Company A now benefits from $25,000,000 in additional sales revenue, that year all things being equal.

Now you might say, “Well, that’s nice on paper, but what about in the real world?” What I can tell you is that in 2014, one such company, whose name I can’t disclose due to privacy reasons, began the deployment of a market-leading methodology into its US business (Europe and Asia soon followed). Within the first 12 months, in the US alone, it attributed $396,000,000 in additional revenue to the implementation of the methodologies. And when surveyed, 92% of respondents agreed that the methodologies had been, either in full or at least in part, a contributing factor in landing the additional business.

For the Sales Leader reading this and wondering how much such an initiative could cost, let’s take a look at that, as well. In 2015, Jim Dickie of CSO Insights produced research on the appropriate sales training investment per salesperson for sales organisations. Understanding how much investment is required is critical to understanding the likelihood both of attaining the desired increase in sales revenue growth, as well as when calculating ROI. From the responses of more than 2,000 respondents, Jim was able to determine a spread of investment, and the impact those levels of investment would have on sales. Table 2 provides us with the investment per salesperson.

CSO Insights was able to highlight a few critical data points that pointed to multiple significant benefits of the sales training initiative, above and beyond the 11% jump in closure rates. For instance, what it observed was that the number of reps meeting their quotas jumped from 83% - 91%. The number of deals lost dropped by 9%. This would impact the overall cost of sales and efficiencies of the business, as time/money invested in lost opportunities would have reduced significantly. There was also a reduction in salesperson turnover rate, from 26% down to 14%, which translates into yet another cost saving when you consider new salesperson ramp-up time and additional training costs, amongst many other things. These are just a few of the benefits such investments have proven to yield businesses.

Now let’s apply this to Company A’s situation. To get to the 11% increase in forecast deals closed, Jim Dickie suggests we need to spend $286,500 on a sales force of 100 people - not an insignificant investment amount. In Company A’s case, this would have generated a staggering 8,885% return on this investment, based on an increase in sales revenue of $25,000,000. Remembering that our simple example does not factor in other cost benefits of greater efficiency, opportunity resource allocation, shortening of sales cycles, cost of salesperson turnover, and so on and so forth.

I would like to add a couple of final thoughts; Firstly, that the spend per head is an average, and so will be dependent on a multiplicity of factors. Furthermore, the length of time taken for a business to adopt a methodology effectively can vary widely, and is again based on a wide variety of factors, which can effect the level of investment.

The dangerous thing about knowledge is that once you know it, you can’t “unknow” it. If your business was asked to invest in an asset that could drive a 25% growth in sales revenue, and which yielded a ROI that was potentially thousands of times that of the original investment, most businesses would take a very hard look at that opportunity. Well that opportunity exists.

Many parallels can be drawn between the current state of the sales training market, and the progressive rate of adoption for computers in the early 1980’s. While there existed those who were ahead of the curve, as well as late adopters, the cost savings and efficiencies driven by smarter and more effective process execution eventually drove everyone to adopt it – the only question is how far behind the curve you want to be before you decide to do this.

About CSO Insights

CSO Insights is dedicated to improving the performance and productivity of complex B2B sales organizations. We measure and analyze the behaviors, metrics and strategies behind world-class sales performance, providing our members with the research, data and expertise required to build strategies for sales performance improvement.

With over 20 years of sales research experience, the CSO Insights team is comprised of respected analysts with decades of success as sales practitioners and sales executives. This unique perspective, along with our wealth of sales performance metrics and benchmarks, gives us the exceptional ability to collaborate directly with sales leaders around the world to explore the best practices, strategic trends and next generation capabilities driving sales performance.

Our research, data and expertise help sales leaders create and execute strategies to find more, win more and keep and grow more business. CSO Insights’ annual sales and marketing effectiveness studies have become industry standards for sales leaders seeking operational metrics, data and analysis, most notably: the Sales Best Practices Study, Sales Performance Optimization Study, and Lead Management and Social Engagement Study.

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