CSO Insights Blog Posts

Start-Ups and Other Adventures

Last week I had the good pleasure to co-present to a group of start-up CSOs, CMOs and CEOs. The companies were different sizes, and maturities, mostly high-tech (some software, others hardware and manufacturing). Also presenting was Anneke Seley, founder of PhoneWorks and author of the new book Sales 2.0, and Bill Binch, VP Sales at Marketo. Bill talked about sales and marketing alignment and marketing automation-the New CRM. Anneke defined Sales 2.0 and gave examples of various client success stories. I presented data from our 2010 Sales Performance Optimization study comparing Start-Ups metrics with companies identified as Dominant players in their markets.

Not surprising, Start-Ups overall attained less of their 2009 targeted revenue than the Dominants (69% versus 83%) and a lower percentage of their sales reps met or exceeded their quotas (50% versus 56%). Other metrics were also in line with expectations. Start-ups had smaller average deal sizes, had a lower percentage of qualified leads result in first customer calls/meetings, lower percentage of presentations and proposals resulting in sales, and lower win rates on deals forecast to close (43% versus 52%).

What was surprising were the many metrics where there were not significant distinctions between Start-Ups and Dominants; and, the significant differences that existed within the Start-Ups. As a deeper dive into the Start-Up category, we defined Overachievers where greater than sixty percent of reps met/exceeded quota and Underachievers where less than fifty percent of reps met/exceeded quota. The Overachievers realized 85% of their 2009 revenue target versus 50% for the Underachievers. 83% of Overachiever reps met/exceeded their quotas, versus 17% for the Underachievers!

So being a start-up doesn't automatically relegate your team to subpar performance. And being a dominant player doesn't automatically assure that you will blow away your number. What does make a difference? One chart that was strikingly similar among both the Start-Ups and the Dominants was the reason we WIN deals. The chart below compares answers from both these groups.

Comparison of Win Reasons for Start-Ups and Dominant Players

You can see the variances in answers; for example, Dominants' #1 reason for winning is Brand Equity/Reputation, Start-Ups' is Existing Relationships. But what's significant is the first area completely within the grasp of Sales to control--Sales Process Execution-is in fifth place for both groups!This strikes me as an area with huge upside potential. If you haven't seen our SRP Matrix you may want to read more about it in our 2010 Sales Performance Optimization Report. Suffice to say, firms employing higher levels of sales process implementation and enjoying higher level customer relationships consistently fare better than those further down each scale. How much better and does it really make a difference?

If we return to the Overachievers and Underachievers, their quota and revenue attainment figures were far different. So were their sales process implementation figures (see chart below).

correlation between quota attainment and sales process type

While two-thirds of Underachievers operate with little attention to sales process, 55% of the Overachievers have implemented sales process at the higher levels (one-third at the highest level).

You can continue to ignore sales process but the data continues to affirm that you do so at your own peril.

Next Week: Metrics that Matter

Sell Well,

Barry Trailer

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Intelestream

Web Based CRM

Thursday April 15, 2010

Great article. We agree that whether you are a new start up or an existing small or medium size business, sales and marketing alignment is a must to fully optimize sales potential.
At Intelestream we've created and designed "intelecrm" with marketing automation in mind. intelecrm bridges the traditional gap between sales and marketing by tying all data together under one environment. Users can pinpoint demographics, find leads, communicate with contacts, and segment target groups.
To become and/or remain a dominant player in your market give our software a free 30 day trial be visiting www.intelestream.net/intelecrm
The Intelestream Team

Stuart Armstrong

Book of Business or a Book of Process

Saturday March 13, 2010

Barry, thanks for great insight. Hiring a sales rep with a "book of business" (=$$ relationships) is the best short term tactic. (perhaps that should be a "book of industry specific knowledge")

As Lenny Bruce(standup comic from 60's)cracked about having kids, "why bring strangers into the house". People will always TEND to buy from people they know, trust- to the extent that the new company's solutions are a fit AND the company has $$ to buy from this trusted advisor.(2009 saw a shortfall there).

However, I believe in these tought times, where in B2B IT, telecom, software, etc. you need 250-1000 top of funnel nurtured prospects to drive quota.

IF you have a well thought out benefit message + accurate ICP (ideal customer profile) + clean database(CRM) + combo automated inbound/outbound tools to drive leads = a scalable, measurable PROCESS that can reach strangers, create demand and manage the flow, a relatively NEW rep will outsell a connected rep within 12 months.

IMHO ramp up times are 6-9 months for the "book of business rep" anyways. Also, the companies that RELY on book of business reps have POORER sales process and after the rep runs out of contacts (about 50), then they are back to cold calling etc. and you can see from CSO Insight reports whee that leads. Having industry knowledge and no one to call or no one calling you- is like gold on the Moon. (MANY of those reps in the CSO surveys have a book of business and industry knowledge).

In to-days sales 2.0 world with sales reps able to buy these SaaS tools themselves (ie Jigsaw, etc.), there is no reason to wait until the new sales manager has figured out "sales 1.0 thinking" is not cutting it.

SO a Book of business or a book of process??

regards,
Stuart

regards,