Connecting the Dots on Sales Performance

Leveraging the 2012 Sales Performance Optimization Study to Inform Sales Effectiveness Initiatives

the economic rebound will only take sales organizations so far. It is time to play a smarter game. how they are choosing to invest (typically spending on sales force technology). Connecting these three points can be a winning solution for CSOs and their organization as a whole. they are realizing from their choices. Closing sales should be as simple as that game you used to play—connect the dots. in the last three years. drawing a line that links traditional sales tactics to improved sales outcomes is no longer a valid move. Customers are spending again.In 2012. and what results. or lack thereof. albeit in a more measured way. the difference between the data for quota attainment in 2011 and 2012 is less than one percentage point—a clear indicator that the recovery is not helping sales organizations to achieve their goals (see Figure 8). To boost sales effectiveness. In fact. between 36 to 47 percent of sales representatives have failed to reach their annual sales quota numbers. Accenture asserts that CSOs have to look deeper to fix a fundamental disconnect between where they see issues in their sales organizations (primarily in sales methodology and Page 2 | Connecting the Dots on Sales Performance . chief sales officers (CSOs) are breathing a cautious sigh of relief. CSOs can instead proceed strategically to achieve lasting sales effectiveness by improving across three key areas in the organization: • Customer-centric sales methodologies and processes • Sales talent acquisition and retention practices • Sales tool adoption. The CSO Insights 2012 data clearly shows that CSOs are missing an opportunity to address their organization’s underlying sales effectiveness issues. bringing optimism along with it. Although the business mood is more ebullient. application of process). While some CSOs may chalk that up to challenging times. Knowing this. which is giving rise to investments in sales effectiveness. The global economy has modestly improved from a couple of years ago. Right? Not quite. According to Accenture analysis of the 2012 Sales Performance Optimization Study sponsored with CSO Insights.

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customer satisfaction and discounting are additional metrics that CSOs may use to track sales effectiveness.9 percent) and improving up-selling/cross-selling at 38.3% 12.” CSOs across the globe say that their top priority this year is to increase sales effectiveness (56. For some CSOs.Top priority to increase sales effectiveness No matter how they “play the sales game.9% 38.5% 8.3% Page 4 | Connecting the Dots on Sales Performance . For others.3 percent).9 percent (see Figure 1).3% 51. it is about reducing the sales cycle or the cost of making a sale. followed by increasing revenues (51. They will rethink the game and refine their strategies. especially with mobile solutions that provide a distinctive sales representative experience.5% 37. Increase sales effectiveness Increase revenues Improve up-selling/cross-selling Improve customer loyalty/satisfaction Capture new accounts Improve margins/reduce discounting Improve team selling Optimize lead generation Reduce sell cycle time Increase reorder/renewal rates Other (please specify) Source: CSO Insights 2012 56.8% 17. customer-centric sales methodologies and processes that sustain customer loyalty • Embed more science into sales talent acquisition and retention practices • Drive adoption of sales tools through alignment with processes. Win rates. Figure 1: The main objective for CSOs is to increase sales effectiveness.7% 8. the connotation relates to improving sales productivity and quota attainment. CSOs striving for high performance will inspect the inner workings of their sales organization and determine which levers will truly improve sales effectiveness. and the ensuing strategies and tactics that organizations take to achieve it.0% 29. can vary considerably. but it begs the question: What do CSOs really mean by “sales effectiveness?” The definition of sales effectiveness. Based on Accenture’s experience with multiple clients and our analysis of the CSO Insights 2012 data. Increasing sales effectiveness is clearly a worthy response.2% 4.9% 38. we assert CSOs have an unprecedented opportunity to achieve significant gains in sales effectiveness by focusing on three key areas: • Develop consistent.

In fact.9 percent of CSOs indicated they wished to help sales representatives more thoroughly research prospects prior to sales calls.) The number drops to 55 percent for representatives who use a methodology less than threequarters of the time. 92 percent of representatives who consistently used a sales methodology achieved their quota. whereas only 86 percent of representatives reached quota without the methodology. 60. (This question was not asked in the 2012 survey. Thoroughly research prospects prior to call Sell value/avoid discounting Develop sales strategy plans for key prospects Properly qualify and prioritize opportunities Clearly understand customer’s buying process Close deals in time frame originally forecast Prioritize which accounts to focus selling efforts Align solution with customer’s needs Effectively present features and benefits 60.9% 60.6% 52. with another 31 percent using it up to only three-fourths of the time (see Figure 2).see Figure 3). sales representatives who use an organization’s sales methodology 90 percent of the time achieve 70 percent of their targets. customercentric sales methodologies and processes Despite the sophistication and success of global companies in the survey. Likewise.4% 46. >90% 12% Don’t know 4% <50% 25% 76-90% 28% 50-75% 31% Source: CSO Insights 2012 Figure 3: CSOs cited sales methodologies and processes as key targets for improvement. Accenture knows that improving adoption of sales methodology has a direct correlation to results.0% 24.9% 46. This inconsistency is compounded with the findings that the maturity level of many sales organizations’ existing sales methodologies and process is too low.8% 43.0% 43.Consistent. according to last year’s survey.6 percent) and helping representatives to develop their sales strategy (52. This was closely followed by finding ways for sales representatives to sell value and avoid discounting (60.5% 35. Onequarter of CSOs indicated their sales force consistently uses their sales methodology less than half of the time. When asked which sales efforts require improvement in their organizations. Figure 2: Sales representatives are not consistently using their organization’s sales methodologies and processes.1% Source: CSO Insights 2012 Page 5 . CSO Insights 2012 data indicates that sales organizations across every industry are underutilizing their sales methodology and failing to use common go-to-market processes.9 percent .

customers are increasingly likely to change brands or partners.3% 21.6% 20% 15. indicating how rapidly buying behaviors are diverging—and how existing sales organizations’ efforts are not sufficient to counteract the trend.1% Exceeds expectations Don’t know or N/A 41.6% 50% 39. Case in point: Almost one-half (42 percent) of CSOs report that the average length of time it takes to close a deal with a new customer is more than six months (see Figure 4).50% 2009 Source: CSO Insights 2012 Page 6 | Connecting the Dots on Sales Performance .2% 26.It is important to note that all of the sales parameters CSOs want to fix are related to sales methodology or process issues. According to the Accenture 2011 Global Consumer Research. Inconsistent and immature sales processes can reduce the sales organization’s ability to close business and can significantly extend the sales cycle.2% 2010 2011 1. Average sales cycle to close a deal with new customers 25% 22% 20% 16% 15% 11% 10% 9% 8% 42% takes >6 months to close 18% 15% 5% 0% <1 Month 1-3 Months 4-6 Months 7-9 Months 10-12 Months >1 Year Do Not Know Source: CSO Insights 2012 Figure 5: CSOs indicated that their ability to create and maintain customer loyalty is dropping.2% 60% 49. This statistic is up more than 13 percent over last year’s data.7% 40% 30% 27. The extension of the sales cycle shows that organizations are losing focus in the sales process for reasons ranging from inadequate sales planning to an inability to properly incubate leads.6% 17.2% 10% 1. which has widespread implications for how sales organizations go about maintaining and expanding their customer base. The issues with sales methodology and processes are exacerbated by the fact that customer loyalty is eroding more quickly than ever before. Ability to create customer loyalty Needs improvement Meets expectations 55.9% 0% 3. inaccurate forecasting efforts and the inability to understand how particular customers buy. The CSO Insights 2012 data shows that almost 40 percent of respondents think they need to improve their organization’s ability to create customer loyalty (see Figure 5). including poor discounting practices. especially with new customers. Figure 4: CSOs indicated that the sales cycle is getting longer. which decreases speed to revenue.

India. a leading research and benchmarking resource for chief sales officers. In addition. the reasons those problems exist. including electronics and high technology. manufacturing. Page 7 . Brazil. the analysis and insights of this paper focus on companies with at least USD $1 billion in sales revenue. the Web-based survey collected data on more than 100 metrics related to sales performance from a broad base of enterprises across multiple industries. and on CIOs. While the survey is directed at CSOs.CSO Insights results relevant across the enterprise Accenture. 218 respondents were from enterprises with more than $1 billion in revenue. communications and others. the 2012 research results are relevant to executives across the enterprise. who are looking for ways to improve operational performance. recently completed the 18th annual study on sales performance optimization. in collaboration with CSO Insights. who are responsible for the technology related to sales tool enablement. challenges facing sales teams. banking/ insurance.500 companies worldwide to assess current sales performance. The research surveyed more than 1. Latin America. who want to cultivate better sales performance. and what organizations are doing to effectively address these issues. As part of Accenture sponsorship of this research. United Kingdom/Ireland and Europe. The data implications have a direct bearing on CFOs. Data is also parsed by geographies: Nordic. on COOs. Canada. In this year’s study.

The 2012 data shows that only 11.no decisions % Sales force turnover Informal process Formal process Dynamic process Performance level 3 33% of firms Performance level 1 24% of firms Performance level 2 43% of firms Level 1: 2011 results 55% 85% 43% 34% 23% 31% Level 2: 2011 results 61% 89% 49% 28% 23% 25% Level 3: 2011 results 68% 92% 54% 24% 22% 20% Source: Accenture analysis. Accenture analysis shows that when sales organizations are viewed as trusted partners or strategic consultants that create solutions aligned with customer’s problems. Organizations that achieve the highest customer loyalty metrics. can shift the performance curve. Figure 6: CSOs who cultivate customer loyalty achieve better results.losses % Forecast . sales representatives are 13 percent more likely to make quota and six percent more likely to attain plan (see Figure 6). although the data shows that almost 75 percent of business comes from existing customers. data from CSO Insights 2012 Page 8 | Connecting the Dots on Sales Performance .2012 SPO survey analysis Trusted partner Strategic contributor Solutions consultant Preferred supplier Approved vendor Random process 2012 Sales performance optimization study level comparison % Reps making quota % of Company plan attainment % Forecast .5 percent of CSOs believe their companies have achieved this coveted trusted partner status so far. After seeing advancements in performance in the CSO Insights data over the last three years. CSOs said it is getting harder to get into the door with 21 percent saying their ability to renew business with existing customers needed improvement.wins % Forecast . with strong customer relationships combined with dynamic sales methodologies and processes. Sales Relationship/Process Matrix™ . this trend has reversed in 2012.In addition.

On the upside.5% 64.Scientific sales talent acquisition and retention practices As in years past. the 2012 data shows that more organizations are improving at hiring the right sales people with 35.9% No impact 19.4% Source: CSO Insights 2012 Figure 8: A large percentage of sales representatives continue to miss annual quota targets. CSO Insights 2012 data shows an overall lack of rigor in sales organization acquisition and retention processes.3% 2011 46. the percentage of sales representatives attaining quota is not improving. Rapidly changing customer behaviors. the CSO Insights survey questions delved into how organizations acquire and retain sales talent. 2011 and 2012 data differs by less than a percentage point. it is making it more difficult for CSOs to find.5% Improves hiring success rates 53% No 47. a startling 36 to 47 percent of sales representatives have not reached their annual sales quota numbers. Figure 7: CSOs believe competency testing can significantly improve hiring success rates.0% 2009 2010 60% 53. In fact. the blurring of lines of multiple industries and an ongoing shift from product focus to business solutions are altering the sales landscape.5% 50% 40% 36% 30% 20% 10% 0% Meets or exceeds quota Source: CSO Insights 2012 Under quota Page 9 . Despite the economic upturn.7% 38. Impact of sales aptitude/competencies assessment method on ability to hire the right sales people? Significantly improves hiring success rates 12. Even as they celebrate the progress. yet few are doing it. such as using competency testing to hire sales representatives. the data shows that very few organizations are actually pursuing a more systematic hiring practice. delivers greater sales effectiveness. hire and keep the right people. a 10 percentage increase over 2011 data.6% As part of your new sales rep hiring process do you conduct any sales aptitude/ competencies assessment testing? Do not know 14. indicating that the improved business environment is not helping sales representatives meet expectations (see Figure 8). In the last three years. As such.5 percent of CSOs believe that a scientific approach. CSOs know there is still work to be done as 65 percent of new hires are not succeeding.3 percent of CSOs saying that they consistently hire representatives who succeed at selling.6 percent) of CSOs surveyed say their organizations are not conducting sales aptitude and competency testing (see Figure 7). Although a full 65. As a more critical bottom-line indicator.6% Yes 52. 70% 61. nearly half (47.

000-$75.9% 15.9% 30.001-$100. According to Accenture analysis. since talent hiring and retention policies impact as much as 10 percent of the top line per year. Figure 9: Using scientific hiring and retention practices can have a direct impact on revenue. Average annual quota Average annual sales force turnover rates: voluntary vs.5% 12. involuntary 37.88K Source: Accenture analysis Turnover rate = 21. CSO Insights 2012 data indicates that the annual sales representative voluntary and involuntary turnover is at 21 percent—meaning that over one-fifth of hired sales representatives either choose to leave their organizations or are counseled out every year. This inability to retain sales representatives is most likely due to bringing in unqualified people in the first place.6% X X 22.Finally. organizations are continuing to experience high attrition problems.0% 9. as well as the time it takes for sales representatives to become proficient and make quota (see Figure 9).000 13.001-$150.3% Impacts 7 to 10% of the top line per year US$1 billion % Voluntary turnover (rep leaves) % Involuntary turnover 0-6 7-12 >1 Year Months Months Average annual quota ~$147.7% Page 10 | Connecting the Dots on Sales Performance .000 $50.3% <$50.1% 8.0% 11.000 >$200.9% Reps with time to proficiency > 6 months = 77.001-$200.000 $100.000 $150.000 $75.4% Average time for new sales rep to be fully productive 47.9% 13. it is imperative for CSOs to use scientific profiling to reduce attrition rates.

such as creating reports. CSOs and their CIO partners must focus on implementing technology to support specific objectives and provide value directly to the sales representative. CSOs need to exploit the newest capabilities in mobile technology that deliver a distinctive experience to both sales representatives and customers. % Sales force using tablet to support sales activities Do not know 5% CRM tool adoption rate <25% 6% 25-50% 17% >75% 12% 46% 51-75% 7% 26-50% 16% <10% 23% >90% 34% 51-75% 23% 10-25% 37% 76-90% 20% Source: CSO Insights 2012 Source: CSO Insights 2012 Page 11 . indicating that CSOs need to get a jump start on incorporating mobile CRM tools into their overall methodologies and processes. The transition to mobile CRM may already be providing the catalyst that CSOs need. simply transitioning existing CRM functionality to mobile devices is insufficient. Instead. And at all times. more than 90 percent of firms are actively using or starting to use tablet devices in their sales organization (see Figure 11). rather than assisting in driving productivity Sales tools should exist to promote the adoption of optimized sales methodologies and processes. when only 45 percent of survey respondents had provided their sales forces with mobile-enabled sales capabilities. According to CSO Insights 2012. Figure 10: CSOs indicated that CRM tool adoption rate is less than 50 percent. they think the tools fulfill an administrative function. This number has increased significantly since 2011. Why is it so difficult for organizations to get their sales representatives on board and using deployed tools? According to Accenture client experience. Tablet devices provide an exciting opportunity to drive adoption of selling methods. 46 percent of CSOs surveyed say that their CRM tool adoption rate continues to be low (see Figure 10. However. However. nearly half of the organizations surveyed in 2012 do not yet have a formal program around tablet usage. so that the organization can track what representatives are doing. companies are still struggling to get sales representatives to use their CRM technologies.Enterprise and mobile sales tools that deliver a distinctive experience Consistently. sales representatives often believe that CRM tools exist for management. According to CSO Insights 2012. processes and tools. In reality. these tools are often creating an administrative burden for sales representative.). Or. One particularly bright spot in the CSO Insights 2012 data indicates that mobile access to CRM technology is at an alltime high with smart phones and tablets rapidly being incorporated into the sales process. reduce cycle times or increase insights about customers. This value could be in the form of helping sales representatives to sell more quickly. Figure 11: Sales organizations are rapidly adopting tablet devices in their sales efforts.

Understanding the disconnect Based on the 2012 data. or focusing on how to leverage sales tools to help the sales representative sell more effectively. and sales tools adoption. enhancing lead generation programs. there was little investment planned on the very areas CSOs cited as requiring improvement. CSOs indicated that they saw three areas in which to drive strategic change in their organizations: existing sales methodologies and processes.5% 14.4% 14. Unfortunately.5% 41. the majority of respondents indicated their sales effectiveness initiatives were related to deploying technology. fewer than 15 percent of organizations achieved improved win rates from implementing sales tools—mobile or otherwise.6% 16. CSOs are collectively failing on the second step.5% 21. sales talent acquisition and retention practices. Figure 12: CSOs say sales technology deployments are not delivering expected results. The unvarnished truth is that a technologycentric approach has consistently failed to achieve results.6% 8.7% Over 85% see no benefit to revenue Hardly anyone sees improved sales cycle Fewer than 15% get improved win rates Improved sales rep/manager communications Improved forecast accuracy Reduced administrative burden on sales Reduced new sales rep ramp-up time Improved support of channels Improved best practices sharing Improved order processing accuracy Improved win rates Other Increased revenues Shortened sell cycles Source: CSO Insights 2012 Page 12 | Connecting the Dots on Sales Performance . which is to challenge historical behaviors and avoid succumbing to technology-focused investment in lieu of solving systemic sales process and organizational issues. 51.7% 27. To make matters worse. revising sales talent processes. across the board.2% 16. Yet when polled on areas CSOs planned to invest in 2012. Ironically. more than 85 percent of organizations surveyed did not increase revenue from technology deployments and more than 90 percent did not reduce the time it takes to close a sale (see Figure 12).5% 21. Recognizing the challenges in the sales organizations is a first step to making improvements. Honorable mention investments included improving customer interactions. According to the CSO Insights 2012 data.4% 17.

communications. Page 13 . where CSOs indicated that nearly 25 percent of business is under pressure. Customer Loyalty The inability to maintain business with existing customers is most severe in the communications industry. The numbers are slightly lower in the insurance (24 percent) and banking (21 percent) verticals. industries was generally only 50 percent—or approximately onehalf of the time. instead of telecommunications. which forecast electronics and high technology what is likely to happen in future. Sales methodology and processes even those sales organizations that CSOs indicated that their ability to are running analytics are typically adapt sales processes to keep pace relying on descriptive analytics. The statistic is especially surprising in the high technology world. which provide a review of what with the change in the insurance. using analytics. with approximately 11 percent respectively experiencing churn. However. which is usually considered to be a progressive and fast-paced industry. shows in the manufacturing industry at some revealing trends: more than 40 percent. and predictive analytics. The electronics and manufacturing industries represent the best results with customer retention. in which 35 percent of electronics and high tech. Exceptions appear Accenture analysis of CSO Insights in the banking and insurance 2012 data by industry.Sales effectiveness metrics across industries Analytics The data shows that only 25 percent of CSOs surveyed are using analytics to look at their business and processes. including industries. respondents indicated they are manufacturing. has already happened. with even more banking and insurance.

consistency and collaboration. Collaborate with other leaders and balance the definition with the strategic intent of the CEO. Then create a business case that clearly defines how to drive sales productivity within the organization with a roadmap focused on three points: 1. focus on delivering a distinctive.Connect the dots and emerge the winner What is the next move for you as a CSO? Keep in mind that it is important to approach sales effectiveness holistically. Instead of building the tools to serve the needs of sales managers. It is a game that is definitely worth winning. and modular roll out with localization capabilities. Contact us: For more information about the Accenture Sales Transformation offering and how Accenture can help your organization improve sales performance. or strategically positioning the sales force to achieve new levels over the next several years. Build an ongoing competency development program to continuously improve and retain sales representatives. 2. quick start up.com or contact: Yusuf Tayob Partner. Perhaps it is achieving quota and revenue numbers. Accenture Sales Execution and Enablement yusuf. value-based experience to sales representatives. sales execution and sales operations. To get started. across business planning and strategy. Commit to a process of continuous evolution and improvement in the tools deployed to sales. CSOs that connect these dots will be able to significantly improve sales effectiveness while also emerging the winner in other ways through increasing revenues. 3. or fulfilling sales plans with fewer sales representatives. especially the newer capabilities available with mobile. ease of use. capabilities and behaviors that lead to high performance sales representatives in your organization.a. Establish a clear understanding of the competencies. penetrating new markets and developing value-oriented selling skills across the sales organization. visit Accenture. To get the most out of sales technologies. Tailor recruiting and hiring practices to fulfill this benchmark.com Page 14 | Connecting the Dots on Sales Performance . develop a plan that addresses the key challenges your sales organization faces. Based on the collaborative definition of sales effectiveness. Document these refined processes to improve consistency. Invoke management discipline and implement the right mix of incentives and management by objectives to improve sales representatives’ adoption rate. as well as the objectives of the chief marketing officer and chief financial officer. Automate with sales force technology that delivers distinctive value to sales representatives and ultimately customers. Increase maturity and customer centricity of sales methodologies and processes. Accenture recommends defining what sales effectiveness means in your organization. it is important to first design and model the sales tools against institutional. as a multi-year journey guided by the principles of standardization.tayob@accenture. Embed more science into sales talent acquisition and retention practices to create a measurable impact on finding and keeping the right sales representatives. mature processes.

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About Accenture Accenture is a global management consulting.5 billion for the fiscal year ended Aug. 31. with more than 246. global reach and delivery experience have made us a worldwide leader. its logo.accenture. Accenture collaborates with clients to help them become high-performance businesses and governments. technology services and outsourcing company.000 people serving clients in more than 120 countries. across virtually all industries.com. . sales and customer service functions to support accelerated growth. comprehensive capabilities across all industries and business functions. 2011. Its home page is www. insight and innovation. Our research. and High Performance Delivered are trademarks of Accenture. Copyright © 2012 Accenture All rights reserved. Combining unparalleled experience. including most Fortune® 100 companies. Accenture. increased profitability and greater operating efficiency. About Accenture CRM Solutions Accenture’s Customer Relationship Management business domain helps organizations achieve high performance by transforming their marketing. The company generated net revenues of US$25. serving thousands of clients every year. and extensive research on the world’s most successful companies.