Thursday, September 16, 2010

Measure to Manage - Driving Sales Enablement Success

Selling B2B solutions certainly has changed over the past decade, and these changes are only accelerating, driven by significant customer challenges:
  1. Information Overload - Buyers are inundated with more marketing pitches and sale calls than ever, and suffer from a severe case of information overload. The right messages and tools are needed to break through and reach overloaded prospects;
  2. Frugalnomics - Reeling from the impact of two economic downturns, the last one particularly severe, executives are demanding more scrutiny on every proposal and buyers now demand quantifiable poof of bottom line impact and value from each investment;
  3. Internet Driven Buying Cycles - With more information from more sources available than ever, buyers are engaging sales teams later in the sales cycle, and are taking control of the buying cycle more than ever, creating a disadvantage for those firms who don’t engage with a compelling dialogue early and often.
Transferring knowledge to sales representatives, and then helping these reps more effectively share this knowledge with customers and prospects is the mission of sales enablement, and it has become a vital best practice to overcome Information Overload, fight Frugalnomics and take control of Internet driven Buying Cycles.

 
Sales Enablement Investments are Significant
As a result, B2B vendors are recognizing the importance of sales enablement, and have invested significantly in empowering sales professionals to consistently and systematically have a valuable conversation with the right set of customer stakeholders at each stage of the customer's problem-solving life cycle. So how much is spent on sales enablement?
  1. According to Forrester, companies are spending on average 19% of their SG&A costs, some $135,262 per quota-carrying salesperson, in sales support related activities;
  2. SiriusDecisions, focusing on marketing costs per sales person indicates that on average companies invest  $43,011 / salesperson, an estimated 3%-7% of the opportunity value of the sales pipeline.
 Though required, is the enormous and important investment in sales enablement paying off?
 
Research by IDC recognizes that sales enablement investments are significant, but may not be delivering on promises. Surveys reveal that buyers are not satisfied with the value sales professionals are delivering to engagements. In a recent survey, 24% of buyers indicated that the sales reps are not prepared for presentations at all, 30% indicate that they are somewhat prepared , and only 29% indicate that they are well prepared. The lack of preparation has been directly shown to drive inefficient conversion, longer sales cycles, more discounting, and higher competitive losses.

 
Can't Manage What you Haven't Measured
So how can sales enablement stakeholders help to drive better performance. The secret to management is often measurement, and SiriusDecisions recently recommended a series of best practices to help drive better sales enablement performance and success. There advice, a formal effort to better enable a sales force must be paired with formal measurement of the effort.

 
SiriusDecisions recommends that the performance of sales enablement programs and investments be tracked in four dimensions, successively implementing these metrics to assure sales enablement return on investment:
  1. Usage and Activity – are the tools you are providing being used to the scope and level expected? Are there issues with the adoption of these tools related to awareness, usability, and acceptance? Are there issues with sales people not understanding that customers have changed and require a different approach? Measuring usage and activity can help determine if the large number of tools and content are actually being used, or not;
  2. Feedback – do the sales professionals like the tools you are providing? Feel that the tools match what customers need to drive the buying cycle forward? Surveying the community for feedback can add a dimension of quality to the quantity metrics, and help shape potential improvements to drive better usage and activity;
  3. Sales Effectiveness – measurement of before and after sales performance metrics including reductions in sales cycle length, increases in average deal size and increases in close rates;
  4. Sales Productivity – a measurement of how much time sales professionals spend on critical engagement tasks, and how much time sales enablement can help reclaim to yield more time to engage with customers, such as the time savings in customizing presentations, preparing proposals, and developing business cases.
The Bottom-Line
With the growing importance of sales enablement and increasing significant investment, it is vital that sales enablement stakeholders recognize measurement as a tool to drive better sales enablement programs, tools and investments.

We have seen organizations create centers of sales enablement excellence, with a focus on tracking the value of sales enablement investments as a key objective.

Organizations with a focus on measurement are more able to meet changing customer challenges, grow sales enablement programs, and as a result drive better sales efficiency and effectiveness.

 
Sources:
  1. IDC Executive Tele Briefing on Sales & Marketing Strategies for 2010
  2. Uncovering The Hidden Costs Of Sales Support, Forrester Research, Inc., April 2009 
  3. Sales Enablement: Measuring its Impact. SiriusDecisions Perspectives.

 

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