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CRM easier, sales harder, study shows

An annual sales performance study shows that the lengthened buying cycle has made selling more difficult, but CRM technology is becoming more user-friendly.

The life of a sales rep isn't getting any easier, the latest sales performance survey from CSO Insights shows.

The latest annual survey from the sales consultancy, based in Boulder, Colo., and San Francisco, found that the percentage of reps making quota had remained steady, but quotas had increased an average of 20%.

"Things clearly are improving," said Barry Trailer, partner with CSO Insights and co-author of the report. "Is that because people are working harder or working smarter? What was interesting to us was many of the metrics we look at to see if the life of the sales rep is improving were either static or declining. In our view, reps are working harder."

One clear reason for the increased difficulty is the change in the buying cycle, Trailer noted. With the Internet providing so much information, the buying process often starts long before a sales rep even gets involved. No longer does someone simply "raise [his] hand" and ask for information from a salesperson.

"That has serious implications down the line," he said, "because in addition to getting a late start -- with all the info available through Web sites, demos, webinars, customer blogs, online reviews -- when someone finally does sort of visibly raise their hand, the nature of the conversation is much different."

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The shift in the buying cycle has companies re-evaluating their sales goals, according to the survey. An increase in revenues remains the No. 1 priority for sales organizations, but it is followed by increased sales effectiveness and increased market share.

The role of CRM software in the life of the sales representative is evolving as well. Nearly 60% of the firms that have implemented CRM have seen adoption rates above 75%, a far cry from the 1990s, Trailer said. In addition, more than a third of respondents said CRM made significant improvements to sales performance, and though 56% reported no measurable improvements or only minor improvements, there were some significant results for others, according to the report. One professional services firm increased its lead conversion rate by more than 300%, a medical products firm shortened its sell cycle by more than 35%, and a financial services firm increased its close rates from 45% to just under 80%. Much of that is thanks to the increased emphasis on ease of use and the rise of the Software as a Service (SaaS) CRM vendors that made implementations easier, Trailer said.

"The credit really goes to the vendors -- and maybe it's a reflection of CRM maturing -- but in the late '90s or 2000, when everything was irrationally exuberant, professional service fees were three or four times the license fee," Trailer said. "A lot of that was simply implementing CRM. Now, professional services fees are lower and going more toward integrating the front and back office or add-ons to the base application."

Also, more firms are opting to buy instead of build. In 2004, 19% of respondents said they were building their own CRM software rather than purchasing it out of the box. That fell to 15% in 2005 and 12% this year, but Trailer still believes the "build your own" crowd has done well implementing CRM; it just hasn't received the press.

"Internally developed is still the quiet group; they stay below the radar," Trailer said. "They see it as a competitive advantage and are not sharing their results. I think there's a lot of interesting stuff going on there that people are not tuned into."

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