Sales Enablement’s Dirty Big Secret

Attending the Forrester Sales Enablement Forum, one research metric was presented that just blew me away.

According to Forrester, the average company spends more than $135,000 in sales support costs per year for EACH salesperson. That’s $135 large a year folks on the hidden cost of sales!

This does not include sales compensation, incentive or benefits – just the incremental annual investment trying to make sales professionals more effective and efficient. Spending on sales training, methodologies, technical sales support, CRM, PowerPoints and other sales content – all costing you a small fortune each year.

I you are a company with 1,000 sales professionals, this hidden cost of sales is costing you a whopping $13.5 M each year.

With so much being spent each year, this hefty investment must be yielding great efficiency and effectiveness results, right?

Not necessarily. For many organizations, Forrester reports that Sales actually has quite a low ROI – that when examining corporate financial statements, for every dollar of incremental revenue, too much is being spent on Sales to justify the gains. Single digit returns are not uncommon.

The poor Sales ROI could be a spending issue, where the cost of sales is too high, or an effectiveness issue, where Sales yield is just not what it should be, or perhaps both.

The evidence as to where the problem lies might come from a Forrester survey of executives, where a paltry 12% of sales professionals are viewed as value / outcome focused. The vast majority of sales professionals are still seen as pitching products or pseudo-solution sellers, asking a few cursory questions before jumping into “death by PowerPoint”. Unfortunately, Sales engagement skills are not changing fast enough to meet heightened buyer expectations.

With Frugalnomics in full effect:
  • Buyers are more empowered – with the Internet and social media, buyers can research everything there is to know about you and your competitors before the call. Sales value add is diminishing / changing as a result.
  • More stakeholders per deal – Over the past three years, IDC reports a hefty 40% increase in number of stakeholders per deal. At the same time, the diversity in the types of decision makers at the table, and behind the scenes, has increased. Each buyer has a unique point of value, and connecting with them around the right role-based value messages and quantification is harder than ever before.
  • Short attention span theater – Buyers have been forced to “do more with less”, leaving less time than ever to consider and work with vendors on new projects. Breaking through and having an impactful engagement is harder than ever.
  • More frugal – more than ever, buyers are sticking with “business as usual” versus considering change. In fact, SBI indicates that its now 58% of a typical sales pipeline. In order to get these buyers to advance you have to help them answer key concerns:
    • Why Change? – Quantify the Pain
    •  Why Now? – Justify the Gain
    • Why You? – Prove Your Not the Same
Your customers have fundamentally and permanently changed, and your sales support and enablement investments have likely not kept pace with these changes. High cost + low yield = Low ROI.

The Bottom-Line

So how to best reduce the hidden cost of sales, improve selling effectiveness / yield and drive higher Sales ROI?

First, some investments are just not paying off:
  • Why keep developing PowerPoints when we know customers despise them?
  • Why continue to invest so much each year on the same old sales training, when it is not being adopted / used to advance the customer engagement in ways that they now expect to be engaged?
As Einstein says “Insanity is doing the same thing over and over again and expecting different results.”

At the same time we have to advance the customer engagement, making it more:
  • Provocative, to break through the noise and emotionally connect with the buyer in a unique manner,
  • Value-focused, to rationally justify your solutions to today's more economic-centric customers,
  • Role-based to address the increased and more diverse set of decision makers in each of your deals.
We think we have the remedy, packaged into a ground breaking tool that can help drive better, more effective customer engagements – helping to improve sales yield in a more cost effective manner. To learn more, click here.

Would like to get your feedback on other dimensions of this hidden costs and low ROI issue, and of course on our remedy.


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