A Framework for Sales Success
Jan 08 2019
We recently released the results from our 2018–2019 Sales Performance Study. This annual study seeks to gauge the state of sales performance to determine what’s working and what’s not. The timing of the release of these results is no accident. Most of you are knee-deep (or deeper) in 2019 planning, and this data should help.
Over the next few weeks, we’ll be releasing several blog posts, which go into the results of the study and give additional perspective on what these results might mean for your situation. If you’d like to access the full report, you can download it here, but be sure to revisit our blog as well. These posts give our analysts more freedom to add additional insights around the results of the study, and we believe they will be well worth reading.
We’ll start this series of posts with a look at a favorite benchmarking and analysis tool of our analysts and their clients: the SRP Matrix.
3 Key Takeaways from The SRP Matrix
We all know that both sales process and customer relationships are important to sales performance. The SRP Matrix plots each of the nearly 900 sales organizations in our study on two axes: depth of customer relationship and formality of sales process.
Once plotted, we analyzed key operational metrics such as revenue plan attainment, quota attainment, win rates and salesperson attrition. As you might expect, those in Level 3 generally outperformed those in Level 2, who outperformed those in Level 1.
Next, we sought to understand what made these organizations different by assessing all the other items in our survey against these three levels. This analysis uncovered three key differentiators:
Level 3 organizations were more likely to:
- Say that their culture was customer-centric (versus sales, service or process centric)
- Have a high level of alignment between sales process and customer’s path
- Be much more confident in their sellers’ ability to provide insights and perspective to customers as a critical element of their sales approach
Digging a little further into each of these areas, here’s what we found:
Customer-centric cultures – Not only were Level 3 organizations far more likely to say
they had customer-centric cultures (50.6%), but they were also about twice as likely to have this kind of culture as Level 2 organizations and even more so compared to Level 1 organizations. Interestingly, having a customer-centric culture had strong correlations to both higher levels of relationship and higher levels of process, effectively moving organizations both up and over on the matrix.
Another intriguing finding was that process cultures didn’t necessarily have a dynamic sales process (one that is defined, formalized and measured), and sales cultures didn’t always enjoy the best relationships. In fact, sales cultures were more often associated with being an approved vendor or preferred supplier, the lowest two levels of relationship. Very few sales cultures (13%) were perceived to be at the top two levels of relationship.
Customer’s path alignment – Significantly more Level 3 organizations (49.4%) reported deep levels of alignment between their sales process and the customer’s path as compared to Level 2 organizations (10.2%) and Level 1 organizations (7.1%).
Our 2018 Buyer Preferences Study goes into greater detail about the changing dynamics between buyer and seller. Today’s buyers are more informed, more experienced and less open to guidance as they make decisions. As the balance of power has shifted to the buyer, so too, should the sales process. Salespeople must map their selling actions to the buyers’ processes, rather than the reverse. Download our 2018 Buyer Preferences Study if this is an area you need to work on in your organization.
Providing perspectives – The 2018 Buyer Preferences Study also found that most buyers (90%) were willing to engage salespeople in their buying processes earlier when the opportunity met one or more criteria:
- New for the buyer
- Perceived as risky for the organization
- Perceived as risky for the buyer themselves
- Complex (e.g., impacted several departments)
These were all situations in which a knowledgeable, customer-centric seller could provide perspectives that helped the buyer see their challenges and potential solutions in new and clearer ways.
Our 2019 Sales Performance Study underscores the results of the 2018 Buyer Preferences Study. Nearly two-thirds (64.9%) of Level 3 organizations met or exceeded expectations in providing customers with thought leadership and perspectives to advance their thinking, whereas only 40.2% of Level 2 organizations and 26.3% of Level 1 organizations did so.
When salespeople exceeded expectations in providing customers with insights and perspectives to advance their thinking, organizations were perceived as strategic contributors or actual partners more than half (58.6%) the time.
Customer-Centric Organizations Get it Right
Let us now add a little of our own perspectives on these results. That more than half of Level 3 organizations said they had a customer-centric culture is interesting, but not conclusive enough to show that customer-centricity matters. After all, it doesn’t take much effort to claim to be customer-centric.
However, the findings on customer’s path alignment and providing perspectives also show that these Level 3 organizations are putting their beliefs into practice. Customer’s path alignment takes effort, especially at the dynamic level where an investment in advanced selling technologies often becomes necessary. Providing perspectives also requires that the salespeople get out of the traditional selling mode where they march their prospects through a pre-defined sales process toward a close. The ability to provide perspectives shows that sales recognizes the customer’s need to follow their own path and that the salesperson is a guide on that path, not a warden.
If you look at these results holistically, one thing becomes abundantly clear: Customer-centric organizations are more likely to be Level 3 performers than those who focus on sales or process. In other words, customer-centric organizations are getting it right, and their efforts are paying off in improved performance.