In my experience, the problem is rarely sales skills or fundamental product issues. Almost always, the decline in sales results is driven by one of two critical issues:
- Sales people do not align with critical business issues when they first engage with their prospects. Instead, they are unconsciously positioning for a features & benefits slugfest with their competition. These top of funnel activities drive mediocre conversion rates (second meeting, third meeting, etc.), limit access to other key stakeholders and ultimately leads to the downward spiral of “who’s willing to sell more cheaply.”
- Sales people do not have the resources to be successful, including alignment with the buyer’s journey created/curated by marketing, business value analysis resources, detailed customer implementation stories, or the training & background to effectively engage in business value discussions. Sometimes they simply need more time to prepare (less administrative load) or more/better/targeted sales coaching from their manager.
With the results of the data analysis, we then take a look at sales enablement practices. Typically we find gaps where the data shows weak or declining conversion rates. Occasionally this is driven by external market forces — new competitors coming into the market, customers shifting internal strategies or structural (economic) factors.
More often, we simply find a disconnect between need and investment, as many (perhaps most) sales enablement investments are focused on addressing symptoms rather than root cause.
Fixing the Symptoms
I recently spoke with executives at a fast-growing midmarket cloud security company. In a quest for continued growth, they initiated a focus on enterprise accounts…and ran into a more mature, educated, complex set of buyers. As a result, their enterprise deal close rates are lower and less profitable than midmarket. Their initial response was to seek help with negotiating skills. But lack of good negotiating skills isn’t their primary problem…they weren’t establishing business value with the right set of stake holders in the early stages of conversation.
And their sales metrics reflect the difference:
- Higher conversion rates and velocity at top of funnel for midmarket versus enterprise
- Lower connection with C-level enterprise executives
- Lower access to VPs, directors, perhaps even managers for mid-pursuit discovery in enterprise accounts
Fixing the Problem
We’re in the early stages of a sales productivity project for a large technology vendor. Analysis of their quarterly earnings reports provides early indicators of the problem:
- Declining product revenue
- Declining service renewal rates
- Fundamental changes in their market (which they’ve helped to drive)
Win/Loss Analysis…Why Bother?
Interestingly, few companies leverage win/loss analysis to help identify the problem(s). It seems there’s little appetite for understanding why a specific company said “no.” Yet an understanding of what went wrong during the engagement can provide tremendous insight into how to fix the problem!
And if done properly, the information has the weight of statistics to help ensure appropriate investment to solve the problem.
The issue of sales productivity has many levers…and knowing which levers to push is not easy. It takes both a strategic approach and good pattern matching abilities.
I’ve just scratched the surface on this topic…one that’s central to the success of any business. If your numbers aren’t what you think they should be, let’s talk further…