lead-to-win 2012: managing people, process and technology to optimize the last mile of the sales...

Lead-to-Win 2012 Managing People, Process and Technology to Optimize the Last Mile of the

Sales Cycle

March 2012

Peter Ostrow

Lead-to-Win 2012: Managing People, Process and Technology to Optimize the Last Mile of the Sales Cycle

© 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

Executive Summary Contemporary technology tools hold significant promise for better sales team performance in 2012, as top-performing selling teams search to reduce their sales cycles and increase their win / loss “batting average.” Companies that fail to keep up with the Best-in-Class, on the other hand, will find themselves struck in the difficult selling environment of the economic recession, with a restricted ability to close deals at the bottom of the customer acquisition funnel.

Best-in-Class Performance In October and November 2011, Aberdeen surveyed 295 end-user organizations about their sales effectiveness practices. Aberdeen used the following three key performance criteria to distinguish the selling organizations within Best-in-Class companies:

• 92% average overall team attainment of sales quota in the last measured year, compared with 56% among Industry Average firms and 13% within Laggard companies

• 10.7% average year-over year increase in average number of proposals, quotes or RFP responses delivered to customers/prospects, per sales rep, per month, versus a 3.4% increase for Industry Average firms and a 4.2% decline among Laggards

• 4.2% improvement in (reduction of) the average sales cycle, versus a 1.3% improvement for the Industry Average and a 3.0% worsening of (increase in) the cycle time among Laggard respondents

Competitive Maturity Assessment Survey results show that the firms enjoying Best-in-Class performance share several common characteristics, including:

• 88% have legal compliance ensured by pre-approved quotes, NDA’s, proposals or contracts

• 71% have executive-level sponsorship for initiatives aimed at shortening the sales cycle

Required Actions In addition to the specific recommendations in Chapter Three of this report, to achieve Best-in-Class performance, companies must:

• Reduce friction in this “last mile” of the sales cycle by ensuring that process and technology initiatives are focused on shrinking the average sales cycle, as well as on winning more deals

• Evaluate the ROI of configure / price / quote, contract management, electronic signature, CRM, and content management solutions

Research Benchmark

Aberdeen’s Research Benchmarks provide an in-depth and comprehensive look into process, procedure, methodologies, and technologies with best practice identification and actionable recommendations

This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

“The number one change I am trying to implement is to get sales management to recognize that the customer buying process is different than when we started 10 years ago.”

~ Daniel Sise, Director of Business Development, Laser

Technology



Table of Contents Executive Summary ....................................................................................................... 2

Best-in-Class Performance ..................................................................................... 2 Competitive Maturity Assessment ....................................................................... 2 Required Actions ...................................................................................................... 2

Chapter One: Benchmarking the Best-in-Class .................................................... 4 The Maturity Class Framework ............................................................................ 5 The Best-in-Class PACE Model ............................................................................ 6 Best-in-Class Strategies ........................................................................................... 6

Chapter Two: Benchmarking Requirements for Success ................................... 9 Capabilities and Enablers ...................................................................................... 10

Chapter Three: Required Actions ......................................................................... 18 Laggard Steps to Success ...................................................................................... 18 Industry Average Steps to Success .................................................................... 18 Best-in-Class Steps to Success ............................................................................ 19

Appendix A: Research Methodology ..................................................................... 21 Appendix B: Related Aberdeen Research ............................................................ 23 Figures Figure 1: Business Pressures Creating Sales Process Friction ............................ 4 Figure 2: Best-in-Class Strategic Actions ................................................................. 7 Figure 3: Additional Best-in-Class Achievements: Current Performance ..... 11 Figure 4: Sales Funnel Management Effectiveness by Best-in-Class ................. 12 Figure 5: Sales Contract Accuracy by Best-in-Class ........................................... 13 Figure 6: Critical Lead-to-Win Enablers by Best-in-Class ................................. 15 Figure 7: Sales Tools Managed without IT, by Best-in-Class ............................ 16 Figure 8: Bottom-of-Funnel Sales Effectiveness by Best-in-Class ..................... 17 Figure 9: Lead-to-Win Budgets on the Rise .......................................................... 20 Tables Table 1: Top Performers Earn Best-in-Class Status.............................................. 5 Table 2: The Best-in-Class PACE Framework ....................................................... 6 Table 3: The Competitive Framework ..................................................................... 9 Table 4: The PACE Framework Key ...................................................................... 22 Table 5: The Competitive Framework Key .......................................................... 22 Table 6: The Relationship Between PACE and the Competitive Framework ...... 22



Chapter One: Benchmarking the Best-in-Class

Sales opportunities represent a net-new customer potentially spending for the first time, or an existing account that may buy again, or be up-sold or cross-sold into new products or services. Once a sales lead or opportunity is officially “in the pipeline,” the typical field or channel sales representative or “closer” has every motivation to move the opportunity through the sales cycle as quickly as possible, hopefully to a positive outcome. A successful sale results in incentive compensation, quota achievement, professional pride and even promotional opportunities for sales professionals who consistently meet or beat their quota. Still, the potential barriers to a quick, decisive “win” can be many: complex pricing negotiations, detailed product configurations, gaps in communications, insufficient access to internal resources, competitive bids, and even trigger-shy prospects or customers. Aberdeen’s research shows that lead conversion efficiency is the top pressure creating friction in this vital and complex sales cycle (Figure 1).

Figure 1: Business Pressures Creating Sales Process Friction

48%

29% 26% 26% 24%

10%

20%

30%

40%

50%

We don’tconvertenoughleads

to sales

Insufficientvisibility into/

control of sales pipeline

Lost efficiency“re-inventingthe wheel” in

contract orproposalcreation

Our averagedeal size

is toosmall

Our costof salesis toohigh

n = 295

Perc

enta

ge o

f Res

pond

ents

All companies48%

29% 26% 26% 24%

10%

20%

30%

40%

50%

We don’tconvertenoughleads

to sales

Insufficientvisibility into/

control of sales pipeline

Lost efficiency“re-inventingthe wheel” in

contract orproposalcreation

Our averagedeal size

is toosmall

Our costof salesis toohigh

n = 295

Perc

enta

ge o

f Res

pond

ents

All companies

Source: Aberdeen Group, November 2011

Converting more leads to sales is a common theme in Aberdeen’s research into both Sales and Marketing Effectiveness, and both lines of business tend to agree on the importance of making the conversion process more efficient. In Aberdeen’s benchmark study on Sales and Marketing Alignment: The New Power Couple (December 2011), the leading business goal among 385 survey respondents was increasing top-line revenue – a refreshing aspiration to see among primarily marketing-oriented survey respondents– at 65%, followed by improving the quality of leads provided to sales (38%) and improving up-sell / cross-sell opportunities (23%). Only 21% of companies indicated that sending more leads from marketing to sales, i.e. quantity over quality, was a goal associated with better sales / marketing alignment. The lesson of the current research is to reduce friction in the process of converting better quality leads, more quickly and profitably, into

http://aberdeen.com/Aberdeen-Library/7002/RA-sales-marketing-alignment.aspx


http://assessment.aberdeen.com/zX6t00I5kH/index.aspx�



closed sales deals. The additional business pressures cited in Figure 1 complement this idea of maximizing “deal velocity;” companies recognize the need for better visibility, efficiency and cost containment as components of successful sales operations.

The Maturity Class Framework Aberdeen used three key performance criteria to distinguish the Best-in-Class sales organization respondents from Industry Average and Laggard organizations:

• Current average overall team attainment of annual sales quota • Year-over- change in the average number of proposals, quotes or

RFP responses delivered to customers/prospects, per sales rep, per month

• Year-over-year change in average sales cycle – in which a decline or shortening of the cycle represents a positive trend

Organizations with top performance based on these criteria earned Best-in-Class status, as described in Table 1. For additional details on the Aberdeen Maturity Class Framework, see Table 5, The Competitive Framework Key, in Appendix A.

Table 1: Top Performers Earn Best-in-Class Status

Definition of Maturity Class

Mean Class Performance

Best-in-Class: Top 20%

of aggregate performance scorers

92% average overall sales team attainment of annual quota 10.7% average year-over year increase in average number

of proposals, quotes or RFP responses delivered to customers/prospects, per sales rep, per month; 68% showed improvement 4.2% average year-over-year improvement in (reduction of)

average sales cycle; 39% showed improvement

Industry Average: Middle 50% of aggregate

performance scorers

56% average overall sales team attainment of annual quota 3.4% average year-over year increase in average number of

proposals, quotes or RFP responses delivered to customers/prospects, per sales rep, per month; 35% showed improvement 1.3% average year-over-year worsening (growth) in


Laggard: Bottom 30% of aggregate

performance scorers

13% average overall sales team attainment of annual quota 4.2% average year-over year decrease in average number

of proposals, quotes or RFP responses delivered to customers/prospects, per sales rep, per month; 12% showed improvement 3.0% average year-over-year worsening (growth) in



“Make sure your system flags the status of quotes (i.e. pending signature, signed, billing approval, etc.) so there's no question as to their status.”

~ Stelios Valavanis, Founder and President, onShore

Networks



Now, let’s take a deeper look at how the best sales performers manage their people, processes, services, and technology to consistently out-perform the competition around these metrics.

The Best-in-Class PACE Model Achieving corporate goals with best practices in sales effectiveness requires a combination of strategic actions, organizational capabilities, and enabling technologies and services summarized in Table 2.

Table 2: The Best-in-Class PACE Framework

Pressures Actions Capabilities Enablers We don’t convert

enough leads to sales Our average deal

size or contract value is too small Our cost of sales

is too high

Maximize up-sell / cross-sell to existing customers Improve our

understanding of prospect / customer buying behaviors Ensure that

customers/prospects can measure the value of their product or solution

Automated reminders of critical customer expiration or renewal dates Executive-level sponsorship for

initiatives aimed at shortening the sales cycle Replication of “A players” by

identifying and sharing their winning documentation Centralized repository for sales

proposals or contracts Defined metrics for analyzing the sales

productivity impact of changes in our sales cycle

Incentive/ comp management CRM/SFA Sales forecasting/ analytics Lead management Web analytics/ visitor tracking Sales intelligence Sales performance management

(SPM) Sales contract management Electronic/digital signature Video for sales/ marketing Content management (incl. sales

playbooks)


Best-in-Class Strategies In response to the pressures above, the Best-in-Class are creating an environment more conducive to sales effectiveness, and then using these practices to achieve better business results

Figure 2 displays the most popular strategies Best-in-Class companies use to improve sales effectiveness around the “last mile” of the sales process (companies could select their top-two). By more than a two-to-one margin over other companies, these top performers indicate that better up-selling and cross-selling was a key business strategy. Aberdeen research published in Leveraging the 360 Degree Customer View to Maximize Up-Sell and Cross-Sell Potential (September 2011) explored this business imperative in depth, finding that Best-in-Class companies (evaluated by customer retention rate and annual improvements in team sales quota attainment and reducing the sales cycle) showcased in their ability to maximize the “share of wallet” among their customers. In addition to creating a more efficient single view of their prospects and customers, these top performers used sales proposal / quote configurator solutions more frequently than Laggards (54% to 43%), along with sales contract management software (48% vs. 46%) and CRM plug-ins to enable content management (29% vs. 26%). In the context of the current research, the opportunity to use these technology enablers to support up-selling and cross-selling existing customers into fresh and

http://aberdeen.com/Aberdeen-Library/7074/RA-cross-sell-sales-effectiveness.aspx




enhanced spend is a wise strategy, particularly if we subscribe to the popular sales maxim that “it costs far less to keep an existing customer spending, than to find a new customer to allocate budget to us.”

Figure 2: Best-in-Class Strategic Actions

29%29%

49%

57%

27%

33%37%

28%

0%

10%

20%

30%

40%

50%

60%

Maximizeup-sell/

cross-sell

Betterunderstand

buyingbehavior

Influencesales

prospectsat a more

seniorlevel

Ensureability for

customersto

measureROI

n = 295

Perc

enta

ge o

f Res

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Best-in-Class All Others

29%29%

49%

57%

27%

33%37%

28%

0%

10%

20%

30%

40%

50%

60%

Maximizeup-sell/

cross-sell

Betterunderstand

buyingbehavior

Influencesales

prospectsat a more

seniorlevel

Ensureability for

customersto

measureROI

n = 295

Perc

enta

ge o

f Res

pond

ents

Best-in-Class All Others


Respondents are also trying to “better understand buying behavior” among prospects and customers in order to improve sales effectiveness at the bottom of the funnel. This behavior is also more popular among the Best-in-Class than other firms, by a 32% margin (49% vs. 37% selecting this as a top-two action). Much as marketing / sales alignment is supported by a marketing team’s ability to better identify, communicate with, and intrigue prospective buyers based on optimally satisfying their business needs, so too can the sales team use elements of the opportunity management cycle to link this kind of knowledge to better quota attainment results. As we will see in the next chapter, when the sales team has a better understanding of buyer behavior, supported by a more frictionless process, all parties in the buyer-seller relationship benefit. By using seamless sales contract management that identifies customer requirements faster, configure / price / quote (CPQ) deployments that take into account a buyer’s specific product / solution needs, and customer-centric content management solutions, contemporary sales teams can achieve the results demonstrated by their top-performing peers, colleagues and competitors.

“There is need for all departments to be on the same page with regards to product offering and customer relationship management, so as to increase project/sales wins and ROI.”

~ Robert Munjanganja, Executive Director,; Business

Development and Stakeholder Engagements, Macbeth Trading



Case Study — AAA

AAA is a leading provider of auto, insurance, travel and financial services, based in the U.S, and serving more than 50 million customers (both businesses and consumers) across the country. AAA NCNU is the division serving customers across Northern California, Nevada and Utah. The company was concerned about the economic instability's potential impact on its average deal size, in addition to other challenges regarding its cross-sell and up-sell effectiveness and its sales pipeline. To address these pressures, it focused on sales process automation. “We’ve decided to replace most of our manual sales processes with more automatic processes in order to improve our sales productivity at each stage of the selling cycle and help our sales reps continually move deals through the funnel,” says Melissa Felder, VP of Sales Operations at AAA NCNU.

One of the building blocks of AAA NCNU’s sales productivity initiative was implementing a new CRM system on April 2010. Previously, the company was using an in-house program to manage its selling activities, and it was struggling with visibility into crucial information such as sales volume and the number of opportunities at each stage of the sales cycle. “With the implementation of our new CRM system, we can now easily access our sales volume and average deal size, and identify opportunities to better manage leads at each sales stage, explains Felder.”

Another key component of AAA NCNU’s sales productivity initiative is the workflow to manage its contracts and sales collateral. When the customer signs a contract, the company automatically uploads that contract to a centralized document repository system, where it can track all records based on customer information. In regards to the impact of technology on their sales productivity efforts, Felder notes: “We’re increasingly doing more business in the digital format and technologies such as electronic signature are immensely helpful in speeding our sales processes.”

AAA NCNU’s sales productivity programs have demonstrated their impact; the company has improved key sales effectiveness indicators, including average deal size and quota attainment results, despite the impact of economic instability. In addition, it has improved its customer retention / renewal rates. “Looking forward, we’re constantly aiming to streamline our sales processes for continuous improvement in results of our efforts at each stage of the sales cycle,” concludes Felder.



Chapter Two: Benchmarking Requirements for Success

Effective sales operations deployments play a critical role in an organization's ability to turn the strategies identified above into profit. The following sections discuss how top performers distinguish themselves from other companies through implementing capabilities and enablers that support sales effectiveness, particularly around the final stages of sale funnel management.

Aberdeen Group analyzed the aggregated metrics of surveyed companies to determine whether their performance ranked as Best-in-Class, Industry Average, or Laggard. In addition to having common performance levels, each class also shared characteristics in five key categories: (1) process (the approaches they take to execute daily operations); (2) organization (corporate focus and collaboration among stakeholders); (3) knowledge management (contextualizing data and exposing it to key stakeholders); (4) technology/service (the selection of the appropriate tools and the effective deployment of those tools); and (5) performance management (the ability of the organization to measure its results to improve its business). These characteristics (identified in Table 3) serve as a guideline for best practices, and correlate directly with Best-in-Class performance across the key metrics.

Table 3: The Competitive Framework

Best-in-Class Average Laggards

Process Automated reminders of critical customer expiration or renewal dates

58% 52% 47%

Organization

Legal compliance ensured by pre-approved quotes, NDA’s, proposals or contracts

88% 76% 68%

Executive-level sponsorship for initiatives aimed at shortening the sales cycle

71% 57% 52%

Replication of “A players” by identifying and sharing their winning documentation

56% 42% 38%

Knowledge Centralized repository for sales proposals or contracts

83% 76% 67%

Fast Facts

√ Answering the question, “Which single metric is the most important measurement of how sales technologies impact your company’s performance?,” 63% of the Best-in-Class indicated “revenue growth,” compared to 55% among the Industry Average and 40% of Laggards.

√ Corporate revenue grew on an annualized basis by 17.7% for the Best-in-Class, 4.4% for the Industry Average, and dropped by 2.1% among Laggard companies.



Best-in-Class Average Laggards

Enabling Technology

96% Incentive/ comp management 94% CRM/SFA 90% Sales forecasting/

analytics 88% Lead management 86% Web analytics/

visitor tracking 82% Sales intelligence 79% Sales performance

management (SPM) 76% Sales contract

management 68% Electronic/digital

signature 67% Video for sales/

marketing 43% Content

management (incl. sales playbooks)

















Performance

Performance analytics against agreed-to objectives (metrics) are reviewed regularly

74% 60% 39%

Defined metrics for analyzing the sales productivity impact of changes in our sales cycle

54% 45% 41%


Capabilities and Enablers Based on the findings of the Competitive Framework and on interviews with end users, the Best-in-Class demonstrate that certain corporate capabilities and technologies can lead to measurable business success in sales operational management. These deployments help create both the measurable business results shown in Table 1 above, which were used to define the Best-in-Class, and additional benefits summarized in Figure 3. Each of these key performance indicators (KPI’s) is crucial to effective sales team management:

• Customer renewals are clearly important for any business. With 46% and 66% higher rates than Industry Average and Laggard firms, the Best-in-Class are essentially “working smarter instead of harder,” based on the safe assumption that maintaining business is a more effective way of reaching sales quotas than locating net-new opportunities. A high customer retention rate does more than reduce burn-out or industry churn pressures on the sales team; the sales cycle can be more easily understood, and forecasting accuracy



improved, when working with a known commodity – an existing account – than with a less-familiar first-time buyer. The Best-in-Class customer retention rate in the 360º Customer View research referenced above was 91%, compared with 83% and a remarkably low 10% among Industry Average and Laggard companies.

Figure 3: Additional Best-in-Class Achievements: Current Performance

17% 19%

83%76%

40%

57%47%

26%

50%

0%

15%

30%

45%

60%

75%

90%

Customerrenewal

rate

Repsachieving

quota

Leadconversion

rate

n = 295

Perc

enta

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f Res

pond

ents

Best-in-Class Industry Average Laggard

17% 19%

83%76%

40%

57%47%

26%

50%

0%

15%

30%

45%

60%

75%

90%

Customerrenewal

rate

Repsachieving

quota

Leadconversion

rate

n = 295

Perc

enta

ge o

f Res

pond

ents



• With more than three-quarters of sales reps achieving their annual sales quota, Best-in-Class companies are significantly reducing the strain of turnover and under-performance felt by the Industry Average and Laggard cohorts, who see fewer than one-half and one-fifth of reps hitting their number respectively. Aberdeen research published in Sales Performance Management 2012: How the Best-in-Class Optimize the Front Line to Grow the Bottom Line (December 2011) demonstrates the high stakes associated with sales turnover, with a $119,830 average “fully loaded” annual cost of a field sales professional, and a $35,670 estimated average cost to replace a single contributor in the same role. The lesson here: more reps achieving quota is good for everyone involved.

• Finally, the fact that Best-in-Class companies enjoy a lead conversion rate more than double that of the Laggard performers (40% vs. 19%)—showing that they are more successful at responding to the top business pressure cited above. The Best-in-Class strategies and capabilities have led to a direct solution for their biggest problem.

“Become very familiar with your marketing automation software and manage the leads in your sales funnel based on the trigger events that indicate buying signs. Build and enforce the right business processes between sales and marketing teams and track performance of these processes based on the metrics that matter to your organization.”

~ Randy Shattuck, Founder, The Shattuck Group


http://aberdeen.com/Aberdeen-Library/7097/RA-sales-performance-management.aspx




Figure 4: Sales Funnel Management Effectiveness by Best-in-Class

29%

72%

44%

67%

37%

58%

25%

35%

45%

55%

65%

75%

Rapidly and effectivelyresponding to RFP’s /other formal biddingopportunities from

current / prospectivecustomers

Avoiding “no-decision” saleslosses, i.e. sale is lost not to

a competitor, but to theprospect / customer simply

not moving forwardwith a purchase

n = 295

Perc

enta

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indi

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g 4/

5 on

1-5

sc

ale


29%

72%

44%

67%

37%

58%

25%

35%

45%

55%

65%

75%

Rapidly and effectivelyresponding to RFP’s /other formal biddingopportunities from

current / prospectivecustomers

Avoiding “no-decision” saleslosses, i.e. sale is lost not to

a competitor, but to theprospect / customer simply

not moving forwardwith a purchase

n = 295

Perc

enta

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f res

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indi

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To improve the lead conversion rate, sales leaders should focus on overall efficiency and reducing the friction within their portion of the corporate sales cycle. Figure 4 summarizes survey respondents' self-assessments of their organizations' core competencies; the figure shows the percentage of each maturity class which indicated they had a high level of performance (answering 4 or 5 on a 1-5 scale) in certain best practices. The Best-in-Class believe they are faster and more efficient in reacting to externally-provided sales opportunities, as well as in raising their sales “batting average” through fewer no-decision results. But how do the capabilities and enablers they adopt contribute to these achievements?

Process The Best-in-Class put more energy than other firms into automated reminders of critical customer expiration or renewal dates. Aberdeen research presented in The Extended Sales Enterprise: Channeling Better Results (April 2011) showcased a Best-in-Class performance group that yielded better total corporate quota attainment results and annualized lead conversion rate and deal size growth than other firms. Forty-seven percent (47%) of these top performers deployed automated renewal / upgrade notifications for themselves or partners, compared with 35% among Industry Average firms and 19% of Laggards. Knowing when a contract, service agreement or other chronologically-defined business relationship is pre-positioned to end or expire, making all relevant parties aware of the pending deadline with plenty of advance notice, and maximizing customer retention by building a process around this predictable event, is a common-sense capability better understood, and more widely adopted, by the Best-in-Class.

http://www.aberdeen.com/Aberdeen-Library/6865/RA-channel-partner-sales.aspx



Additional process capabilities adopted by a majority of Best-in-Class companies include:

• Process for streamlining proposal, contract, quote and / or sales collateral workflow (72% vs. 59% of all others)

• Process for sales representatives to share 'sales tips' or other best practices with colleagues (52% vs. 47% of all others)

Organization Aberdeen's survey measured how much inefficiency plagued respondents' ability to close and manage customer business effectively, by asking respondents to indicate how many of their final contracts were subject to post-sale amending (Figure 5). The majority of firms indicated that they had fairly manageable processes around corrections, amendments and changes, which speaks to a generally strong level of performance across the board. The Best-in-Class, however, are 24% more likely than others (47% vs. 38%) to claim their contracts were “nearly perfect,” while 21% less likely to indicate they experienced “regular quality control issues.”

Figure 5: Sales Contract Accuracy by Best-in-Class

47%38%

12%3%

38%46%

10%5%

0%

10%

20%

30%

40%

50%

Our finalcontracts arenearly perfect,

and rarelyrequire anypost-sale

adjudication oramendment

Our finalcontracts holdup well, but weregularly seeminor quality

control issuesor other

amendments,post-sales

Our finalcontracts often

requireamending after

the sale,sometimes with

significantchanges

The majority ofour final

contracts areamended after

the sale is made

n = 295

Perc

enta

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f Res

pond

ents Best-in-Class All others

47%38%

12%3%

38%46%

10%5%

0%

10%

20%

30%

40%

50%

Our finalcontracts arenearly perfect,

and rarelyrequire anypost-sale

adjudication oramendment

Our finalcontracts holdup well, but weregularly seeminor quality

control issuesor other

amendments,post-sales

Our finalcontracts often

requireamending after

the sale,sometimes with

significantchanges

The majority ofour final

contracts areamended after

the sale is made

n = 295

Perc

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Organizations that reap these results are more effective at replication– both in pre-approved legally compliant documentation, and the sales content within proposals, quotes and contracts that the best performers on the team are using to achieve success. The idea of replicating “A players” is sustained by Aberdeen research within Sales Training 2011: Uncovering How the Best-in-Class Sustain, Reinforce and Leverage Best Selling Practices (October 2011), which found that Best-in-Class firms (those with the most reps achieving quota and yearly improvements in average deal size and lead conversion rate)

“Remember the keys to pipeline success: Value, Velocity, Volume, Conversion and Win Rate.”

~ Mike Bernard, Sales Team Lead, Hyland Software

http://aberdeen.com/aberdeen-library/7083/RA-sales-training-effectiveness.aspx




are more likely than others to identify this approach as a top-three strategic action (28% vs. 24% among the Industry Average and 21% for Laggards).

Additional organizational capabilities adopted by a majority of Best-in-Class organizations include:

• Administrator-level control over proposal or contract templates (76% vs. 69% of all others)

• Managerial and executive visibility into all customer-facing documentation (70% vs. 66% of all others)

Knowledge Management In addition to the benefits of marketing / sales alignment described above, Aberdeen has shown the value of centralizing marketing materials in Marketing Asset Management: Managing Brand Compliance in Distributed Marketing Environments (March, 2010). In that report, Best-in-Class companies achieved better Return on Marketing Investment (ROMI), brand consistency and reduced time-to-market by deploying library and digital asset management technologies, as well as a process to disseminate information on best practices in managing marketing assets to both sales and marketing teams. In the sales world, a similar capability pays off for companies more adept at achieving quota. The Best-in-Class are 24% more likely to adopt sales collateral repositories than Laggard performers. Indeed, the top corporate strategic action seen in the 360º Customer View research referenced above, “integrating multiple internal sources of data into a single view of each customer,” leads to a similar effort in which all stakeholders – not just sales, but marketing, service and other customer-touching team members – have role-specific access to the proposals, quotes and contracts that impact them all.

Additional knowledge management capabilities adopted by a majority of Best-in-Class organizations include:

• Centralized repository of marketing and product information (84%)

• Centralized repository for sales collateral (71%)

• Guided selling methodology to help sales reps identify the optimal message and timing at each stage of the sales cycle (52%)

Technology Enablers While the five enablers associated in this research with lead-to-win success are not as broadly adopted as those highlighted in Table 3, most are nevertheless seen as more vital to business operations by the Best-in-Class than by other firms. Figure 6 shows how often each technology was rated as a 4 or 5, on a scale from 1 (least important) to 5 (most important) based on its overall value to corporate sales performance. Respondents predictably felt that the foundational technologies of customer relationship management (CRM) or sales force automation (SFA) were important; Best-in-Class were much more likely than Industry Average and Laggard firms to

http://www.aberdeen.com/aberdeen-library/6338/RA-marketing-digital-asset-management.aspx

http://www.aberdeen.com/aberdeen-library/6338/RA-marketing-digital-asset-management.aspx




see these technologies as critical. A content management / sales playbook was the only enabler more likely to be identified as valuable by under-performing firms than by Best-in-Class firms—possibly due to a still-uncertain economic climate in which the most successful sales teams have been required to control costs by asking their marketing counterparts to own more of the content creation and management function. Fifty-five percent (55%) of Best-in-Class firms in the Sales and Marketing Alignment research referenced above believed that the marketing team should own the lead nurturing process, compared with 46% and 36% of Industry Average and Laggard companies respectively; more under-performing companies felt that sales leaders should spend their precious resources on the nurturing process, which can include the use of content management and playbooks. Finally, users of content / playbook solutions receive a measureable benefit—these companies all show annualized improvement in corporate revenue, lead conversion rate, average deal size, and both team- and rep-level quota attainment, while non-adopters report average performance declines in each of these five areas of sales performance metrics.

Figure 6: Critical Lead-to-Win Enablers by Best-in-Class

33%

21%

40%

22%

86%

45% 42%

27% 24%

69%

34% 33%38%

22%

63%

10%

30%

50%

70%

90%

CRM orSFA

CPQ Salescontract

management

Contentmanagement/

playbooks

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33%

21%

40%

22%

86%

45% 42%

27% 24%

69%

34% 33%38%

22%

63%

10%

30%

50%

70%

90%

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CPQ Salescontract

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Extensive Aberdeen research addresses the other technology enablers showcased in Table 3, and are indicated in Appendix B below.




Technology Insight: Letting the Line of Business Own the Enabler

While many of Aberdeen’s research studies focus on the Information Technology function with the enterprise, other practices, including Sales Effectiveness, tend more to the line-of-business (LOB) leader responsible for achieving business results, regardless of the technologies they employ. Table 3 shows that technology enablers are crucial to lead-to-win success, but in Figure 7 we also discover that the most successful sales operations or leadership team members are less likely to rely on their IT counterparts for effective technology deployments. Figure 7: Sales Tools Managed without IT, by Best-in-Class

13%8%

3%6%

44%

35% 35%33%

30%

37%

25% 24%

18% 19%

26%

0%

10%

20%

30%

40%

50%

CRM orSFA

CPQ Contentmanagement/

playbooks

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Salescontract

management

n = 295

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13%8%

3%6%

44%

35% 35%33%

30%

37%

25% 24%

18% 19%

26%

0%

10%

20%

30%

40%

50%

CRM orSFA

CPQ Contentmanagement/

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Figure 7 indicates the percentage of respondents in each maturity class (Best-in-Class, Industry Average and Laggard) who indicate that minimal or no IT support is involved in their use of each of the five lead-to-win technology enablers. Given the proliferation of cloud-based technologies at LOB managers' disposal, and the speed and efficiency required to successfully reduce selling friction, IT is thus enabled to focus its energies elsewhere, while sales operations and leadership deploy their own technologies.

Performance Management Detailed and objective return-on-investment (ROI) measurements for lead-to-win sales enablement require mutually-defined and accepted performance targets. The Best-in-Class are nearly two-times as likely as Laggards not only to measure sales effectiveness in this area, but to regularly review the metrics used to do so – “keeping it real” to ensure the yardsticks they use to gauge success remain relevant. As the saying goes, “you can’t manage what you don’t measure,” and the Best-in-Class clearly see value in both managing and measuring sales closers. Regular measurement also helps reinforce behavior



(e.g. logging contact records in an SFA), and allows sales managers to adjust their team’s focus or development efforts as needed, to adapt to the ever-changing needs of their business. Plus, most Best-in-Class companies formally define metrics for analyzing the sales productivity impact of changes in their sales cycle. They understand that sales cycle data alone does not translate directly to peak performance; rather, they achieve success in a number of measurable areas around revenue and quota attainment, while reducing their lead-to-win window.

Figure 8: Bottom-of-Funnel Sales Effectiveness by Best-in-Class

28%

11%

50%

40%

20%

37% 38%

16%

28%

0%

10%

20%

30%

40%

50%

Percent ofquotes

resultingin orders

<15 days avg.contract-

requestedto signature

Percent of sales contracts

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Figure 8 highlights the Best-in-Class performance results of optimized bottom-of-funnel sales management: more quotes yielding revenue, shorter time-to-signature cycles and greater use of electronic signatures.



Chapter Three: Required Actions

Whether a company is trying to move its performance in sales effectiveness from Laggard to Industry Average, or Industry Average to Best-in-Class, the following actions will help spur the necessary performance improvements:

Laggard Steps to Success • Measure to manage by establishing performance analytics around

lead-to-win processes, and regularly evaluating whether those KPI’s remain relevant as the business environment changes. Only 39% of Laggards are establishing and reviewing key sales performance metrics – such as revenue, lead conversion rate, sales cycle contraction, deal size, quota attainment – that 60% and 74% of Industry Average and Best-in-Class companies respectively are already implementing; this is a crucial action to take among Laggards.

• Manage contracts to win more often by implementing sales contract management technologies. Laggards are 24% less likely than other firms to maximize the daily time spent selling by their team, and to improve their customers’ experience working with those personnel. The results the Best-in-Class have achieved around customer renewal rates, team attainment of quota and lead conversion rates and, ultimately, the overall sales effectiveness of the enterprise demonstrate the material value of implementing this technology.

Industry Average Steps to Success • Move up the corporate ladder by obtaining executive-level

support for lead-to-win initiatives. While the Industry Average do this more frequently than Laggards, they trail the Best-in-Class significantly in obtaining the C-suite’s buy-in. The best practices and enablers detailed in this research can improve the goals the C-suite treasures – revenue growth, bigger profit margins, and increased customer spend.

• Go paperless using electronic signature capture technology – do you really need your reps waiting by a fax machine for the sales order? Electronic signature-enabled sales teams are, by definition, automating a process, eliminating “choke points” in the selling / closing cycle, and minimizing their non-selling time. While this enabler is still in its “early days” in terms of absolute adoption (only 26% of companies use it currently), the Best-in-Class use electronic or digital signatures 36% more often than Industry Average firms.

Fast Facts

√ Best-in-Class companies are more adept at acquiring new customers, with 51% of their yearly revenue obtained from net-new spenders; these rates drop to 46% and 43% respectively among Industry Average and Laggard companies.

√ The Best-in-Class make more of an investment in their field sales force, with 59% of their overall sales team represented by outside sellers or account managers. Among all other companies, this rate drops to 54%.

√ The expectations of this field team are higher among the Best-in-Class, however, who report an average field sales quota of $1.29M, compared to $1.07M among Industry Average firms and $951k for Laggards.



Best-in-Class Steps to Success • Integrate CPQ into CRM – ASAP. Behind the acronyms is the

fact that while the top performers lead in integrating configure / price / quote solutions with the CRM deployment, they are still only 42% likely to do so. The benefits of joining these two technologies together are many, both for sellers – more streamlined auto-population of product, contractual and RFP document specifics – and buyers, who will receive a more accurate, crisper and professional proposal less likely to go through as many of the kind of corrective adjustments or iterations that slow the sale and undermine the credentials of the seller.

Like the Boy Scouts, “be prepared” for crucial bottom-of-funnel sales activities by enabling the team with sales playbooks and / or content management solutions with which they can create case-specific messaging to help seal the deal. While the Best-in-Class outpace other firms in adoption of this enabler, fewer than half of them empower their teams with a valuable tool to showcase their consultative and listening skills to their accounts.

“Ensure that your sales tools are intuitive and able to help salespeople identify, qualify, propose and close sales.”

~ Carolynn Ferris, Director of Global Sales, Process

Management, Tyco Fire Protection Products



Summary: Continued Investments in “Sealing the Deal”

Analyzing the “last mile” of the sales cycle is all about helping closers, channel partners and anyone else tasked with “sealing the deal” make the most of the sales opportunities they are handed. Aberdeen research is rich in content that helps users of marketing automation, outsourced teleservices bureaus, and even inside sales teams effectively provide closers with both quality and quantity leads. Here, the mission is for the sales team expected to move those deals efficiently to closure, often dealing with cumbersome Requests for Proposal (RFP’s) and other end-of-cycle barriers, without re-inventing the wheel for each deal.

Figure 9: Lead-to-Win Budgets on the Rise

50%34%

74%

50%47%

30%

39%

20%

28%30%

1% 2%

3%

2%2%

0%

20%

40%

60%

80%

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Increase No change Decrease

n = 295

50%34%

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1% 2%

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Increase No change Decrease

n = 295 Source: Aberdeen Group, November 2011

In Figure 9, we see that across the board, companies plan to increase spend in most of the five major technology enabler categories, further demonstrating their value to companies pursuing better enterprise sales results. By adopting the best practices of the top performers, end-users can improve velocity, shorten selling cycles, grow revenue and, perhaps most important to selling professionals – hit their number.



Appendix A: Research Methodology

During October and November of 2011, Aberdeen examined the use, the experiences, and the intentions of 295 enterprises using services and technologies that impact the performance of their sales teams.

Aberdeen supplemented this online survey effort with interviews with select survey respondents, gathering additional information on strategies and experiences in managing their sales cycle and their results.

Responding enterprises included the following:

• Job title: The research sample included respondents with the following job titles: CEO / President (20%), Manager (19%), EVP / SVP / VP (17%), Director (15%), General Manager/Managing Director (5%), Consultant (8%) and other (16%).

• Department / function: The research sample included respondents from the following departments or functions: sales and business development (50%), corporate management (11%), IT (11%), marketing (9%), operations (6%), and other (13%).

• Industry: The research sample included respondents exclusively from software (23%), IT consulting and services (16%), %), industrial product / equipment manufacturing (11%), telecommunications equipment / services (7%), health / medical / dental devices & services (6%), financial services (5%), industrial product/equipment distribution (6%), Pharmaceuticals / Life Sciences / Biotechnology (4%), and other (28%).

• Geography: The majority of respondents (76%) were from the Americas. Remaining respondents were from the EMEA region (16%) and Asia-Pacific (8%).

• Company size: 12% of respondents were from large enterprises (annual revenues above US $1 billion); 27% were from midsize enterprises (annual revenues between $50 million and $1 billion); and 61% of respondents were from small businesses (annual revenues of $50 million or less).

• Headcount: 24% of respondents were from large enterprises (headcount greater than 1,000 employees); 24% were from midsize enterprises (headcount between 100 and 999 employees); and 52% of respondents were from small businesses (headcount between 1 and 99 employees).

Study Focus

Responding executives, primarily in sales management roles, completed an online survey that included questions designed to determine the following:

√ The degree to which “lead-to-win” activities are deployed in their organization and the impact they have on achieving their business goals

√ The structure, effectiveness and satisfaction with existing “lead-to-win” implementations

√ Current and planned use of “lead-to-win” activities to achieve desired changes in average sales cycle, team attainment of quota

√ The benefits, if any, that have been derived from “lead-to-win” initiatives

The study aimed to identify emerging best practices for managing sales productivity and sales cycle, and to provide a framework by which readers could assess their own management capabilities.



Table 4: The PACE Framework Key

Overview Aberdeen applies a methodology to benchmark research that evaluates the business pressures, actions, capabilities, and enablers (PACE) that indicate corporate behavior in specific business processes. These terms are defined as follows: Pressures — external forces that impact an organization’s market position, competitiveness, or business operations (e.g., economic, political and regulatory, technology, changing customer preferences, competitive) Actions — the strategic approaches that an organization takes in response to industry pressures (e.g., align the corporate business model to leverage industry opportunities, such as product / service strategy, target markets, financial strategy, go-to-market, and sales strategy) Capabilities — the business process competencies required to execute corporate strategy (e.g., skilled people, brand, market positioning, viable products / services, ecosystem partners, financing) Enablers — the key functionality of technology solutions required to support the organization’s enabling business practices (e.g., development platform, applications, network connectivity, user interface, training and support, partner interfaces, data cleansing, and management)

Source: Aberdeen Group, February 2012

Table 5: The Competitive Framework Key

Overview

The Aberdeen Competitive Framework defines enterprises as falling into one of the following three levels of practices and performance: Best-in-Class (20%) — Practices that are the best currently being employed and are significantly superior to the Industry Average, and result in the top industry performance. Industry Average (50%) — Practices that represent the average or norm, and result in average industry performance. Laggards (30%) — Practices that are significantly behind the average of the industry, and result in below average performance.

In the following categories: Process — What is the scope of process standardization? What is the efficiency and effectiveness of this process? Organization — How is your company currently organized to manage and optimize this particular process? Knowledge — What visibility do you have into key data and intelligence required to manage this process? Technology — What level of automation have you used to support this process? How is this automation integrated and aligned? Performance — What do you measure? How frequently? What’s your actual performance?


Table 6: The Relationship Between PACE and the Competitive Framework

PACE and the Competitive Framework – How They Interact Aberdeen research indicates that companies that identify the most influential pressures and take the most transformational and effective actions are most likely to achieve superior performance. The level of competitive performance that a company achieves is strongly determined by the PACE choices that they make and how well they execute those decisions.




Appendix B: Related Aberdeen Research

Related Aberdeen research that forms a companion or reference to this report includes:

• Sales Performance Management 2012: How the Best-in-Class Optimize the Front Line to Grow the Bottom Line; December 2011

• Sales Training 2011: Uncovering How the Best-in-Class Sustain, Reinforce and Leverage Best Selling Practices; October 2011

• Leveraging the 360 Degree Customer View to Maximize Up-Sell and Cross-Sell Potential; September 2011

• Chance Favors the Prepared Mind - Understanding the Science of Sales Intelligence; July 2011

• Sales Forecasting: How Top Performers Leverage the Past, Visualize the Present and Improve Their Future Revenue; July 2011

• The Extended Sales Enterprise: Channeling Better Results; April 2011 • Streamlining the Top of the Funnel: How Inside Sales Teams Source,

Qualify and Close Business; February 2011 • Sales Mobility: Quotas Untethered; November 2010

Information on these and any other Aberdeen publications can be found at www.aberdeen.com.

Author: Peter Ostrow, Vice President and Research Group Director; Customer Management, Sales Effectiveness ([email protected]) LinkedIn Twitter

For more than two decades, Aberdeen's research has been helping corporations worldwide become Best-in-Class. Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide organizations with the facts that matter — the facts that enable companies to get ahead and drive results. That's why our research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of the Technology 500.

As a Harte-Hanks Company, Aberdeen’s research provides insight and analysis to the Harte-Hanks community of local, regional, national and international marketing executives. Combined, we help our customers leverage the power of insight to deliver innovative multichannel marketing programs that drive business-changing results. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 854-5200, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com.

This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc. (2011a)







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