Anneke Seley on Sales 2.0 (Part 4)
From chapter 4 of Sales 2.0: Improve Business Results Using Innovative Sales Practices and Technology by guest authors Anneke Seley and Brent Holloway.
SALES 2.0 RESULTS AND REWARDS
SALES 2.0 COMPANIES SEE BETTER RESULTS
There is a compelling reason to plan a transformation from Sales 1.0 to Sales 2.0 now: Sales 2.0 companies produce superior business results. The CSO Insights sales performance optimization report includes a Sales Relationship/Process (SRP) MatrixTM, which shows that the best performing sales organizations—as measured by key metrics such as the percentage of reps making quota, the percentage of overall company plan achieved, and the percentage of forecast deals won—are those with the best customer and prospect relationships and the most advanced use of consistent, yet flexible sales processes to maintain these trusted relationships. In Sales 2.0 terms, the best performers define and follow Sales 2.0 practices.
Another indicator of a company’s better-than-average sales performance is its use of the Internet to engage with customers—also a common Sales 2.0 practice. CSO Insights’ data show that all surveyed companies’ usage of the Internet in the sales function has increased substantially in recent years, and the top-performing 10 percent of their survey population had the very highest Internet-usage rates to support sales. Additionally, sales leaders who use Sales 2.0 process and metrics to manage their sales teams have better performance results than those who do not. Customers are clearly responding positively to companies with a Sales 2.0 approach. These companies are making it easier for their clients to do business with them by recognizing customer preferences and priorities. Those businesses that score at the highest levels of customer engagement and continuously improve their processes are being rewarded with more revenue.
INVESTORS REWARD SALES 2.0 COMPANIES
In the start-up world of Silicon Valley, new companies with Sales 2.0 business plans are winning, too. Investment professionals are realizing that companies dedicated to Sales 2.0 practices have a better chance of succeeding than those that aren’t. Ray Lane is Managing Partner at Kleiner, Perkins, Caufield, & Byers (KPCB), one of the best known and well-respected venture capital firms in the world. KPCB’s web site describes the company as “passionately committed to helping their portfolio companies succeed.” Ray has a history of building outstanding companies. Before joining KPCB, he served as president and chief operating officer of Oracle Corporation. During his eight-year tenure, Oracle’s revenues grew from $1 billion to over $10 billion. Before that, he was senior partner with Booz-Allen & Hamilton where he pioneered and led a worldwide consulting practice targeted at helping senior management achieve better results from information technology.
Ray brings his extensive knowledge of sales strategy and technology enabled selling to his role as a venture capitalist, providing funding and expertise to new startups. One of the companies formerly in his portfolio, Visible Path, helps businesses and application providers integrate social networking into the tools people use at work. Ray says, “We quickly identified that Visible Path needed to change its traditional enterprise selling model and redeploy its salesforce, using Sales 2.0 practices. The company added lower-cost Inside Sales resources, streamlined its sales cycle, closed more deals, and became more profitable.” As a result, Visible Path had a successful exit; the company was acquired by Hoover’s, Inc., a Dun & Bradstreet Company, in January 2008.
There is clear evidence showing that companies employing Sales 2.0 practices are seeing better business results than companies still stuck in the Sales 1.0 world. Sales 2.0 companies outperform Sales 1.0 companies in terms of company revenue goals achieved, percentage of sales reps making quota, and forecasted deals closed. They also reap the ultimate benefit of stockholder and investor confidence.
This segment is part 4 in the series : Anneke Seley on Sales 2.0
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CRM was seen as a universal elixir by sales vps from when it was first introduced until the cat was out of the bag, numbers of years later–salespeople resisted signing on to their CRM systems unless they were threatened or provided with incentives to do so. The reason? There was nothing in it for those salespeople. CRM, once it supplanted strong SFA (sales force automation) tool, took the salesperson-centric focus from the application. CRM was designed for and benefited management. Salespeople were little more than data entry operators.
For many companies CRM wound up being technology that automated the chaos that existed in their sales organizations. Sales vps thought that CRM would instill process and discipline. It quite often did just the opposite.
Sales 2.0 sets many of the same false expectations. It is not the foundation upon which to build sales effectiveness. The opposite is true. Once a company has the sales infrastructure, methodology, process, learning, reinforcement, measurement, people and manual tools in place, that’s the time to layer in Sales 2.0 capabilities.
I run a research firm that focuses on sales performance improvement programs, tools, approaches and the companies that provide them. I have strong reservations about Sales 2.0 for many companies.
Here is what we observe in the field. Sales people and their managers are being distracted by all the hype around Sales 2.0 and taking their eye off the target of achieving sales excellence first. Here is a blog post that provides some more detail: Sales 2.0: Does It Enable Effective Selling Or Is It Yet Another Decoy? http://tinyurl.com/ahyblo
Hi Dave.
I appreciate your comments. And we don’t disagree. As you can read in Parts 1 and 2 of this series, my perspective is that Sales 2.0 is about a lot more than just the technology.
Best,
Anneke
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Commenting on Dave Stein’s comment, much of the reason that CRM systems haven’t delivered the results that people expected (i.e. improved revenue), is that by itself CRM is only *half* of a complete solution. CRM solutions are good at capturing data and automating / standardizing sales processes. But, if you don’t have the right sales processes in place (as Dave comments), then a CRM solution will just enable you to do the wrong things faster.
The missing second half is analytics. You need to analyze your sales data to figure out what’s working and what isn’t. You need to see the trends. You need to be able to identify the characteristics of your best deals, and focus on the deals in your current pipeline that share those characteristics. CRM solutions just provide simple reporting, not the analytics you need to really become an effective Sales 2.0 organization.
Dave comments that you need to have reinforcement, measurement, etc in place before you automate your sales process and focus on Sales 2.0. Though that sounds logical, it’s not practical. How can you get the right process is place if you have no reliable way to capture information about the process and analyze it? Attempting to capture information manually and then manually analyze it (e.g. in Excel) is tremendously error prone. You need a standard way of capturing what’s happening in the process, *even if* it’s not the optimal process. To optimize the process, you need a reliable way to analyze it first. And to analyze it, you need the data. If you don’t have a CRM solution in place (e.g. salesforce.com), and you don’t have CRM analytics to see what’s working a what’s broken (e.g. LucidEra), any other approach is very, very risky.
I think we’re debating a chicken-and-egg situation here, Ken.
You and I see the implementation order differently–I as an independent researcher and analyst–and you as a co-founder of Lucidera, a provider of analytics solutions.
ES Research Group went to great lengths to certify the performance measurement approaches and tools of four leading sales training companies: Wilson Learning, The Complex Sale, Performance Methods, and Sales Performance International. We audited those vendors’ capabilities to measure and adjust sales process effectiveness, salesreps’ behaviors and the resultant performance in live client situations.
In each case, based upon the output of the measurement system, adjustments in people, process and behavior were made where required. Performance improved at least as well as was expected.
This was all done manually. Once the clients and their partner vendors are certain that the process is working and salespeople are complying with the process, that’s the time, in our estimation, to automate the measurement and analysis. I stated that in my prior comment.
You suggest that capturing information and analyzing manually is risky. The vendors, their clients and ESR found that not to be the case at all. Hard work? Sure. But the focus was on process development, validation, training, coaching and assuring that effective learning was accomplished and performance was improving.
We see the risk from the other approach– bringing up a CRM system and installing analytics software with too little attention having been paid on the nuts and bolts. We’ve seen too many companies try it that way and fail.