Results from the Miller Heiman Sales Best Practices Study provide insight on how best to enrich the development of salespeople.
Putting yourself in another person's shoes can be an eye-opening experience. For professionals in learning and development roles, one challenge is staying connected to the current needs of your internal customers to be able to identify and create the most meaningful development programs. Being well-aligned ultimately will achieve a higher level of success. Looking at the world through the eyes of sales leaders can provide a new perspective and fresh insight on the sales development strategies required to bridge the gaps between where your organization is today and where you want to be tomorrow.
The results from the 2012 Miller Heiman Sales Best Practices Study provide a look at what's on the minds of sales leaders around the world. These insights can help you to validate development plans that are already in place, but it also may help you to predict what's coming next.
On the path to increased revenue, there are key measurements where sales leaders are focused on making improvement, and they are relying on partnerships within the organization to make it happen. To help ensure lasting results from development initiatives, organizations are taking a more collaborative approach to how they invest in the development of their sales teams.
One thing is clear: simply handing off a development initiative to the training team and expecting long-term results is an ineffective strategy. An event-based approach or one that lacks a shared vision and commitment to the results doesn't produce the kind of change required for sales teams to effectively engage with today's customers. Over the long term, training and development professionals must be committed to maintaining a tight connection to the stewards of change in the organization—sales management. Otherwise, the initiative ultimately will fail to deliver desired results.
What world-class sales organizations do
In the study, we seek to understand the activities that are driving sales performance because this is where real change can be made that will improve how sales organizations find, win, and keep customers. This study aims to provide sales leaders with insights to create sustainable revenue growth, not the short-lived peaks that can be created through new product introductions and seasonal promotions.
Every year in our study, we identify a group of world-class sales organizations that were able to insulate themselves better than others through the recent economic conditions. The activities where they focused on outperforming other organizations around the world helped to contribute to significantly better results in many sales performance measurements, including the ability to find and win new business, keep existing customers, and improve productivity among the sales team.
Specifically, we validated the performance of these organizations by comparing their performance in five measurements:
- qualified opportunities
- account acquisition
- account retention
- productivity per salesperson
- quota achievement.
Pictures of sales performance
The question for sales leaders and development professionals alike is: If these are the measurements, then what are the activities that contribute to improvement in these areas? Three distinct pictures emerged from looking at what world-class sales organizations are doing more often than others:
- understand your customers
- prioritize frontline sales management
- highlight technology's role in improving business results.
By further analyzing these priorities, we start to uncover the activities in which training and development can make a measureable impact on performance. In each of these areas, we identified key strategic issues to help organizations uncover the obstacles that are preventing them from achieving the improvement they expect. A strategic issue is a question that requires thought, data, perspective, knowledge, and context for the chief sales officer to be able to answer.
Understand your customers
Strategic issue: How do you improve demand generation and prospecting performance?
Sales leaders are focused on the health of their opportunity pipeline. A leading indicator of future performance is the quality of opportunities coming into the organization. With a need to focus effort and resources on winnable, profitable business, sales teams must be able to identify these opportunities early and articulate the value the customer can expect to receive.
Clearly defining the attributes of the ideal customer profile allows salespeople and teams to better develop their account strategy and prioritize their efforts. Developing an organizational model of the ideal customer allows salespeople and teams to more prescriptively qualify based on the collective experience of the sales organization.
These organizations react quickly when changes occur in the sales cycle, thus allowing their salespeople to spend more time on deals they can win. This not only allows for improved prospecting and higher wins rates; it also results in higher retention. Best practice activities in this area have helped world-class sales organizations increase customer retention by 19 percent over other organizations.
Improving demand generation that will result in viable new opportunities is essential to good funnel health. World-class sales organizations are more effective at targeting and gaining access to qualified prospects. They develop consistent criteria for the types of accounts and opportunities they want to pursue, and walk away from those that aren't a good fit.
The value to individual clients will vary, but the key messages of an organization's value proposition will be based on the input of cross-functional team members and be clearly understood by the entire organization. It is the role of the salesperson to adapt the key messages to communicate value that will be meaningful from the client's perspective.
It is the role of training and development to understand the core competencies salespeople need to be effective in this area and ensure the organization can provide resources to support them in building their skills to be successful in this area.
In your conversations with sales leadership, your goal is to develop a better understanding of the following areas:
- What is management doing to provide coaching in this area?
- How is sales management measuring prospecting activity?
- How are salespeople prioritizing their time in this area?
- What are the skills that are consistently lacking in this area?
- Are there established criteria for spending quality time with customers?
Prioritize frontline sales management
Strategic issue: How do you support sales managers so they can drive a greater return for the organization?
Sales leaders recognize that one of the most significant opportunities to improve sales rep productivity is through the sales management level. It isn't adequate to simply promote top-performing salespeople into the role of sales management and expect success without proper training and support. Improving the effectiveness of this level has far-reaching benefits due to the potential to increase the productivity of the many team members who can be affected by each individual manager.
Frontline sales managers typically have several hurdles to work through before they reach a position of high performance. They nearly always have the characteristics of a top-performing salesperson, but the biggest gap continues to be the lack of the attributes of an effective sales manager.
There is more pressure to perform, more responsibility, and more at stake for poor performance. But even with this increased visibility, many companies still do not invest enough in sales management training and development.
Sales managers who are effective in coaching consistently deliver more value to their organizations. They understand the timing differences between providing sales call feedback and providing real sales coaching. It is a smart area to invest.
Here are a few questions to validate whether current resources are providing the greatest support for sales management:
- What is the role of sales management in salesperson development?
- What is the value of developing leadership skills?
- How are sales managers executing on the company strategy?
- What are the most critical measurements of success?
- What are the greatest pressures facing sales management today?
Technology's role in improving business results
Strategic issue: How do we use analytics to manage and drive our business?
What gets measured gets done. That's why world-class sales organizations' chief sales officers review and adapt their sales performance metrics to ensure they match up with the goals they have set.
Results, activity, and opportunity, pipeline, or forecast data provide the historical, current, and future representation of the sales organization's ability to perform. Customer relationship management (CRM) systems have proved their ability to capture and display tangible data from financial systems, as well as intangible data that must be obtained from salespeople.
The difference between world-class sales organizations and the rest of the pack is not the technology they use, but rather it's the management discipline to coach and adopt the principles of their sales methodology and sales processes. Confidence is not in "CRM data" alone. It's the knowledge that the salesforce finds value in following the established guidelines for data entry and data management.
To better understand how your CRM system is being used to reinforce and measure desired behaviors of the sales team, training and development professionals should be asking questions such as:
- Are performance metrics well aligned with our business objectives?
- Are there incremental measurements of progress toward proper behaviors?
- What data does the sales team have access to regarding performance metrics?
- How are these analytics incorporated to improve coaching?
In last year's study, we noticed a significant shift in confidence in CRM data among world-class sales organizations. It was like a switch was flipped compared with prior years' numbers.
Year-over-year confidence in CRM data among world-class sales organizations jumped by 50 percent, while other organizations remained unchanged (see table on page 49). Nearly all the world-class sales organizations reported their organizations have clearly defined the activities required for each stage in their sales funnel, where only 30 percent of other organizations have taken this step. This precision and consistency in how world-class organizations communicate about opportunities and funnel movement drives the confidence in data coming from the CRM.
In the current year's results, three times as many world-class sales organizations have confidence in CRM data compared with other organizations. World-class companies are definitely getting more leverage out of CRM technology.
Priorities for sales leaders
In 2012, Miller Heiman expects to see significant emphasis on growing customer intimacy among companies that are pursuing improvements in their sales performance. Programs that facilitate customer feedback and offer greater discipline in analyzing and using the findings will continue to mature as companies seek to better understand key pivot points in the customer relationship cycle. The salesforce will undoubtedly benefit from these initiatives.
Collaboration in companies as a key mechanism to pursue and retain business will remain a hot topic through the coming year. The relationship with customers that extends beyond the sales organization can be tapped to uncover new opportunities, monitor customer satisfaction, and reveal risk factors.
The focus for frontline sales management in 2012 will be to orchestrate change. As companies look to define and execute on their growth plans, the role of sales managers is to drive the action necessary to achieve the results. Their role should be viewed mainly as a conduit to drive action, which is highly dependent on their leadership and coaching skills. Top-performing organizations are figuring out that there is more science and measurability in the "soft" side of coaching and that effective coaching is tightly correlated to results.
Miller Heiman conducts this study annually and shares the findings with sales leaders around the world to help support their strategies and decision making. During the nine years of this study, we have consistently seen that the best practices identified among world-class sales organizations are a leading indicator of what other organizations will be focused on during the coming year.
Staying connected to these trends and the specific priorities of your sales leaders, and linking these priorities to the strategic objectives of your organization, will help you continue to enrich your sales performance development plans and deliver results that will be recognized.
