We developed SalesPath+ to help sale leaders implement the sales effectiveness recommendations made in these three Harvard Business Review articles summarized here:
Insights from the Authors
Jason Jordan and Robert Kelly published research in Harvard Business Review confirming that “companies with a formal sales process generate more revenue.” The research states that companies with a clearly defined sales process grow revenue 18% faster than companies that do not have a process.
Jordan and Kelly’s research also suggest companies that have (1) a defined sales process, (2) spend at least 3 hours a month on pipeline management, and (3) train managers on pipeline management, grow their revenue 28% faster than companies that do not use these best practices. Note that pipeline management is not managing the revenue forecast, but it is coaching sellers through each deal.
In “The Sales Playbook of Successful B2B Teams,” authors Cleghorn, Lee, Kennedy and Huey explain that, “despite spending billions annually on technology to try and systematize operations, business to business sales remains remarkably ad hoc and opaque.” We translate that statement to mean most organizations still think of sales as an art and not a science. Those companies have not implemented formal sales processes and playbooks.
The article explains that, “a sales play system has begun to catch on among progressive companies worldwide”. Their catchphrase - Moneyball for sales.
The research found that high performing B2B sales organizations are 2.7 times more likely than laggards to outperform in the following 5 best practices:
In the article, “The End-of-Quarter Sales Rush Costs Companies Money,” Ken Krogue examines the worst, and most common practices that plagues sales organizations who are under intense pressure to "hit incredibly high numbers” every month and quarter. "To comply, firms turn up the pressure tactics and close last-minute deals in unnatural ways.” We are all guilty of providing additional discounts in the hope, and low probability, that a deal can be accelerated.
His research indicates this practice is very unprofitable. At month-end, a seller will close three times as many deals than earlier in the month, but they will lose eleven times more deals in the last week of that month. The combination of additional discounts, smaller deal sizes, and an increased loss rate result in $98 million dollars less in revenue per company annually.
Krogue’s research analyzed 9.8 million sales transactions from 151 companies over nine consecutive quarters. Collectively, these companies sold $54 billion for an average of $360 million each. He recommends:
Most sales leaders know the solutions that improve sales productivity and hit quotas:
So, if we know the best practices to improve sales productivity - why have we not universally implemented them?
It’s simply because we have not provided our front-line sales teams with the right digital tools to enable them to implement those best practices. Best practices that sales leaders intuitively already know. Today our sales teams use CRM, whiteboards, Microsoft Office, Google sheets, and other apps to try and do the job. However, that is not the digital transformation that sales management needs.
To be fair, though, technology alone is not sufficient. Executive sales management and revenue operations must lead by defining their vision on sales best practices/processes and then using training, coaching, and technology to implement and enforce their vision across the entire organization.
In our next blog post, “The Rationale and Research behind SalesPath+” (Part2), We will look at some statistics and behaviors that are byproducts of the inefficiencies mentioned earlier. We will do a deep dive into a compelling solution.
Good Luck and Good Selling!