Salesenomics - Many Sales Organizations Are Stuck in the 1980's

Posted by Dave Kurlan on Mon, Nov 22, 2021 @ 07:11 AM

1980s

Today is moving day for Objective Management Group.  When we first toured our new space, John Pattison, OMG's COO said, "It looks like something the 1980's barfed up!"  I'm happy to report that thanks to big-time help from PENTA Marketing CEO Deborah Penta, our new space is bright, cheery, modern, energetic, open and functional! 

Thinking about the 80's got me thinking...

When was the last time you saw a black and white television or even a console color TV?

How about an electric typewriter?

Or a car that didn't have anti-lock brakes?

You would have to return to the 1980's to see those things and when it comes to their operations, some sales organizations are still in the 1980's.

For example, check out these statistics from OMG's evaluations of 30,000 sales teams and more than two million salespeople.

31% of companies don't use CRM.

44% do not have a way to track the opportunities in their pipelines.

89% do not qualify their proposals.

39% do not track whether their salespeople are under/over quota.  

54% do not track win rates

51% do not know their average order size

74% do not track the length of their sales cycle

40% do not track the number of opportunities in the pipeline

65% do not track the quality of the opportunities in the pipeline

35% do not track margins!

90% do not track the number of meetings required to close

96% do not track the cost of a sale

Unfortunately, there is more, but these are the head turners and it makes me wonder...

It's been widely reported for years now, that fewer than 50% of salespeople are hitting quota.  From the data shown above, we know that 39% of companies don't even track that.  What percentage of their reps do you think are hitting quota?  My guess is less than 20% (think 80/20 rule) so how much worse would it be if those companies were included in the data?  I'm guessing we would learn that fewer than 33% of all salespeople are hitting quota.  That's much closer to what I from companies every day.

We are no longer in the early stages of the information era.  Data is king so how can companies operate without this crucial information?  Even prior to the dawn of the information age, companies found ways to track this information, so why would some choose to ignore this today?

I'm guessing that most of the companies in question are small with less than $20 Million in revenue and fewer than 8 salespeople.  I assume that they are not tech companies and more likely than not come from older industries, like building materials, small manufacturers and small industrial distributors.  But I'm just guessing.

You can easily track everything you should be tracking with the right CRM application.  OMG has an integration with what we believe is the best sales-specific CRM application in the world, Membrain.  It's user-friendly, ideal for complex sales, easy to customize, produces the most important data and reporting out of the box, and you won't have to nag your salespeople to use it. And for fans of Baseline Selling, there is a BLS specific edition of Membrain too.

Image copyright 123RF

Topics: Dave Kurlan, sales pipeline, crm, omg, KPI's, objective management group, sales team evaluation

Fewer Sample Requests and Sales Proposals - What's Wrong?

Posted by Dave Kurlan on Wed, Apr 10, 2013 @ 17:04 PM

less is moreTwo clients called this week to express their concerns.

Client #1 was concerned because their most important metric is sample requests and their requests are down from the same period last year.  I asked what drove sample requests and he told me that sales visits led to sample requests.  

During the past 6 months we dramatically changed what their salespeople were doing on sales visits.  They used to show up, take five minutes to present their product and then the prospect would ask for samples.  Now, they completely qualify the reasons, expectations and time allotted for that visit, have a meaningful conversation about their prospect's business, and get commitments to have their products specified on future work.  They are enjoying much better conversations, achieving much better engagement and getting much stronger commitments.  

I suggested that the decrease in sample requests was simply a byproduct of better sales calls.  My client wondered how better sales calls could possibly result in fewer sample requests and I explained that previously, the sample request was simply a token request - a put-off - and it wouldn't actually lead to anything except a sample being filed away in a drawer somewhere.  Now, instead of sample requests, they're getting commitments to do business and when they are ready, the sample requests lead to sales.  My client agreed.

Client #2 was concerned because their most important metric was proposals and the number of proposals are down from the same period last year. I asked what drove proposals and he told me that RFP's and sales calls led to proposals.

During the past 6 months, we dramatically changed how their salespeople responded to RFP's and what they were doing on sales calls.  They used to respond to an RFP by taking a day or two to write and submit a proposal with fewer than 10% converting to sales.  They used to show up, talk about features and benefits and ask if they could submit a proposal (remember it was a key metric so the more the merrier).  Now they call the prospects who send RFP's and have meaningful conversations to differentiate themselves from their competitors (who are sending proposals).  They learn if they is a fit, a real opportunity, and how they can do business together.  Sales calls are no longer presentation-centric.  Instead, their salespeople have meaningful conversations about business problems they could solve and propose solutions only when the prospect is serious about doing business with them.  

I suggested that the decrease in proposals could be the result of more effective selling, salespeople choosing not to propose to everyone, and a much more comprehensive qualification.  I also asked for the latest conversion ratio for proposals to sold.  It was up to 45% meaning that there was a 400% improvement in efficiency and effectiveness!

You probably have a key metric that's old school too.  By old school, I'm suggesting that it was once a metric that was a key indicator of future business but now it's only a measurement of what you're measuring - in these two examples - sample requests and proposals.  There are better metrics for both of these companies.  Instead of sample requests, they should be measuring the number of new commitments to specify their products.  And instead of proposals, a more telling metric could be qualified opportunities.

Review what you used to believe was meaningful and ask yourself whether it is truly a key indicator of future business or if you are simply using convenient, old, comfortable metrics because you always have.  Less is usually more.

Topics: Dave Kurlan, sales process, KPI's, sales metrics

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Best-Selling Author, Keynote Speaker and Sales Thought Leader,  Dave Kurlan's Understanding the Sales Force Blog has earned medals for the Top Sales & Marketing Blog award for nine consecutive years. This article earned a Bronze Medal for Top Sales Blog post in 2016, this one earned a Silver medal for 2017, and this article earned Silver for 2018. Read more about Dave

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