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Turning around sales

Some companies have struck revenue gold with sales effectiveness projects. But experts warn that common pitfalls doom many initiatives to failure.

SAN FRANCISCO -- New research shows that this is the toughest sales climate in recent memory, but some companies are defying conventional wisdom with savvy CRM projects.

At the Smart CRM West conference, two partners from the CSO Insights Inc. consultancy shared the results of their annual sales study.

"The report card is in and it's not good," said Barry Trailer of Boulder, Colo .-based CSO Insights.

The survey of 1,337 companies worldwide found that 51% of sales reps failed to make their quota last year, the first time in the report's 10-year history that a majority had missed its target.

Seven in 10 companies said that their "close rate," the ability to land deals after making sales presentations, is less than 50%.

These figures come as sales organizations are facing intense pressure. Respondents cited more competition, as well as wider and more complex product offerings, as the biggest changes they've witnessed in the marketplace.

People who are being really successful are taking a very structured approach, and they're knocking the ball out of the park.
Jim Dickie, partner, CSO Insights,

Conference attendee Gary Staley, who recently founded Pleasanton, Calif.-based Aperio Software LLC, is a longtime salesperson at several high-tech companies, including Siebel Systems Inc. He said sales organizations are too focused on getting deals signed and not concerned enough with forming relationships that drive long-term business.

Once the ink dried on contracts, "you threw it over the fence and it was somebody else's problem," Staley said.

Success stories

Some businesses, however, are using CRM to turn around problems.

Jim Dickie, the other CSO Insights partner, shared examples of two companies that identified sales snags and how they made their reps more effective.

One division of San Francisco-based pharmaceutical distributor McKesson Corp., wanted to maximize cross-sell opportunities. Its sales team found it nearly impossible to familiarize themselves with the 30,000 products -- made by 300 different manufacturers -- that they sell.

The solution: McKesson armed reps with tablet PCs to carry with them on calls. Reps can now access customers' products, as well as use a built-in commission calculator to see how their pay would rise if they're able to cross sell.

"It's what they call your spouse on a chip," Dickie joked.

In addition, the tablet PC does some data mining to recommend potential products for customers. It also gives reps cheat sheets on those products and scripts that the salesperson can follow when talking with customers. Dickie called it a "product manager in a box."

As an early adopter of tablet PCs, McKesson invested just $18,000, Dickie said. In the first three months, the company increased revenue per rep by 30%. It also logged a 400% jump in new product hit rates and a 1.4% improvement in profits.

Another company, Gaithersburg, Md.-based Global eXchange Services Inc., a business-to-business e-commerce exchange, needed to increase leads from its Web site and call center. It installed software to monitor activity on its site and automatically ping service agents whenever a user searched for volume discounts. The agent then invited that potential customer to a live Web chat.

Sixty-eight percent of users agreed to chat. The company logged those conversations and passed them along to reps who had a better understanding of those customers' needs.

As a result, Global eXchange Services increased the average leads generated daily by each agent from one to seven. New leads also closed 30% faster.

The down side

Not everyone is enjoying the same level of success. In fact, the CSO Insights research found that just 26% of companies said that their sales effectiveness projects resulted in significant improvements.

The chief obstacle cited: trouble populating and maintaining data.

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Dickie said that instead of striving to make sales more effective, organizations must first identify a specific problem they want to solve, such as generating more leads or getting new reps up to speed quicker.

"Success isn't a given," he said. "People who are being really successful are taking a very structured approach, and they're knocking the ball out of the park."

One vendor in the market agreed that a piecemeal approach often works the best.

"Find some very tactical first steps," said Christopher Carfi, chairman and CEO of Cerado Inc., a Half Moon Bay, Calif., maker of sales analysis software. "Identify those , tackle those and make [the project] very modular."

Carfi also recommended getting some sales staff involved from the start and then counting on them to evangelize the project to the rest of the team.

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