CSO Insights Blog Posts
Sales Relationship Process Matrix - Part II
Last week's blog introduced the SRP Matrix and defined its two axes: levels of sales process implementation and levels of relationship. With this foundation in place, this week we look at the relative performance of various matrix tiers. The past three years we've segmented the matrix based on data gathered in our SPO survey. The metrics we used to do this were: percentage of annual revenue plan attained; percentage of reps meeting/beating quota; sales rep turnover; and forecast accuracy (won/lost/no decision).
Based upon the survey data, the various matrix cells fell into three performance levels (see Figure 1).
It's worth noting that two cells represent what we call "no fly" zones: Random Process-Trusted Partner and Dynamic Process-Approved Vendor. Although individual reps may be able to operate at these extremes, we don't find a representative sample of companies doing so. It seems that to reach (or by reaching) Trusted Partner level, some amount of process needs to be in place. Similarly, firms that reach the Dynamic level of process implementation generate enough "lift" to become at least Preferred Suppliers.
Originally we labeled the Red zone: Sleepless Nights; the Yellow zone: Challenging Months; and the Green zone: Successful Years. These titles reflected both the improved performance moving up and over on the grid and also the increased predictability that accompanied this movement.
However, the challenges of 2009 showed that even the Yellow and Green were not immune to economic times and tides. As a result, this year we've renamed the three zones Performance Levels 1, 2, and 3. As you can see, less than a quarter of firms made it to Performance Level 3 this year (Performance Level 1 gained a point from each of the other two levels, up from 29% the prior year.)
The question needing to be answered, of course, is does any of this make a difference? In past years it has and 2009 it did as well. To be sure, even Level 3 companies were impacted. Revenue attainment was down from 92% (2008) to 84% (2009), and percentage of reps meeting/exceeding quota was similarly down from 65% to 60%. Still, these levels exceeded Levels 1 and 2 each year. [For a complete discussion of this check out 2010 SPO Key Trends & Analysis.]
More interesting is to see that moving up a level from one year to the next would have enabled companies to essentially hold their own rather than getting swept back (see Tables 1 and 2).
The data show that even in tough times, elevating your level of relationship and/or level of process implementation will pay off. A worthwhile exercise is to assess what cell your sales team is in today, and where you would like it to be six months from now. Then determine a couple key initiatives to move you in that direction. (Hint: moving over is easier than moving up!)