Posted by Mansfield Sales Partners on Sat, Jun 26, 2010
As product and service differentiation becomes more difficult to achieve and competition intensifies, effective sales channels are vital to growing and defending your market share. Many companies face growing pressure to reduce field sales investments and to produce more with less. With ever increasing resource constraints, sales leaders have used external cross-industry efficiency benchmarks to fully assess the performance of their field sales staff, to validate their resource allocations and to determine if strategic outsourcing of some sales functions is warranted.
Three factors play a critical role in sales force performance:
- Sales team size
- Resource allocation to target markets
- Sales team productivity
In order to optimize sales team size, validate resource allocation, and evaluate overall sales team and individual sales rep productivity, it is essential to establish valid benchmarks. Most companies measure the success of their sales force based on sales results – revenue growth, actual sales vs. plan, average order, order frequency, close rates and so on. And this makes sense, until you really examine it.
If the benchmark for a sales team’s success is beating last year’s performance, how do you know if that is the right goal?
What if your sales team was inefficient last year? Wouldn’t a sales goal of a modest increase over last year just be asking your sales team to be a little less unproductive? On the other hand, if you have the most productive sales team in the industry, do you need to put programs in place to make sure that your competitors don’t steal your star performers? And are there functions that can be more cost-effectively achieved by external partners? Should you consider outsourcing some sales functions?
Establishing effective sales performance benchmarks
For a truly informative benchmark, compare your team to leading competitors across your industry. In addition, benchmark internal productivity measures [cost per qualified lead, cost per sale, revenue per sale, and so on] to outsourced supplier results. Benchmarks can help you and your sales management team identify gaps and determine where to focus efforts to improve sales productivity and accelerate sales growth.
The most common sales productivity gaps
- High cost per lead OR low cost per lead with a low close rate: This usually indicates a gap in your company’s lead generation process. A review of your marketing strategy and lead process is in order.
- Low close rate: Investigate carefully to identify the root causes. Are the leads really qualified prospects? Are there gaps in the sales process? Is your company at a competitive disadvantage in service delivery, pricing or other significant factors? Is your sales team properly trained and managed? Is there a gap between your marketing message and the sales presentation?
- Sales growth from existing accounts lags the industry: Determine if your sales and service teams are doing what it takes to maximize the profitability of existing accounts. This gap usually indicates that your clients’ needs and expectations are not being fully met. The root cause could be a real product/service gap or it could be a poorly constructed sales presentation that overpromises what your company can deliver.
- High customer attrition rate: High rates of customer loss are the most troubling problem. Quickly identifying the cause and increasing customer retention rates is the single fastest way to increase sale revenue.
How do you address misaligned strategy and/or poor productivity in your sales team? These are some of the questions we address directly when we join forces with you as a sales partner. Contact us for more information about sales outsourcing.
Photo Credit: CPX Interactive
Posted by Mansfield Sales Partners on Wed, Jun 23, 2010
It’s a competitive world and it’s getting harder and harder to break through all the clutter and reach new prospects in the sales process. Market leaders don’t just do more than their competition – they rewrite the rules. And one way to rewrite the rules, is to become an information resource for your clients.
Companies know that in order to succeed they need to develop a sales strategy that sets them apart from the competition. In the past, a company could increase revenue just by adding more reps, leads, phone calls, emails, letters and meetings. But now it is essential to increase the effectiveness of every customer contact – and one way to do that is to build a relationship with every target customer.
You can increase the effectiveness of every target prospect or customer contact by making your company’s sales contacts valuable to your highest-value target prospects. One very effective strategy is to include useful information in the sales pitch. Add a white paper, case histories and other material that will help your clients do a better job and be more successful.
One CEO instituted a very simple program to support his company's entry into a new market. He received a market research report from his Marketing Department about a high-value emerging market along with a recommendation that the company enter this market. The research report identified key sector trends, challenges and successful business strategies in this industrial sector. The report was intended for his company's internal use to help quantify the size of the opportunity, justify investment in the new market entry, and to help marketing create relevant collateral and sales material. The research report was carefully circulated to key executives and marked: "Confidential – not for distribution."
After the CEO read the market research report, he asked his sales team to use the data to create a white paper on trends and challenges in this industrial sector. The VP of Marketing was at first concerned about releasing all of this valuable information, but very quickly understood the concept and prepared the report. The sales team then offered this report to key prospects and clients. They also worked with the Marketing Department to put together a trend presentation and offered an on-site presentation to the most valuable prospects. The creation of this report and presentation not only created new high-value relationship marketing opportunities; it also established the company as a credible expert in a new sector.
One simple idea helped this company move from being just another player in a sea of competitors to a highly valued partner for their key prospects and new customers. The trend presentation became a relationship-building opportunity that allowed them to get to know their key prospects and understand their customers' needs and business challenges in an intimate way.
How to Create Content that has Real Value:
- The information offered must be current, accurate and insightful – and it should be new information to your key prospects.
- Make sure the report, presentation or white paper is professionally written and presented.
- Keep it exclusive and only offer it to key qualified prospects and clients. Do not offer it to anyone who will give provide an email address on your website. You can create less information-intensive whitepapers for free download to the general public.
- Design the report so that it is proprietary and difficult for your competitors to replicate quickly.
- Plan for follow-up communication in advance so you are ready to build on this opportunity and continue the dialog with new prospects and new customers.
By being a value-added information resource for your prospective clients, you build a stronger relationship with them and show that you have much more to offer than a sales pitch.
We can offer you advice and help you with your sales processes. Contact us for more information.