No matter what industry you operate in or what your role is, it is pretty clear that we live in a fast pace world where customer experience is primordial and mass customisation / personalisation is a given. If you happen to be involved with the sales of products and services and are at the cold face with the customers then you would also know how much “sales” has actually changed. The biggest driver behind that change has been the Internet, not only its existence but most importantly, its availability and mobility through the use of smart devices.
20+ years ago, when I started my sales career in B2B software sales, we would generate our leads through series of mailers and cold calls, advertising in in-flight magazines and attending big trade shows. We would send expensive brochure packs, and host breakfast briefings to educate our target market. Our days were filled with activities related to understanding issues and working out solutions. We would listen to their pains, tactical and consequential and we would formulate a solution aligning our products and services perfectly so our path was the best one to solving their problems and meeting their KPIs.
We were solution selling. We were the golden boys and girls of sales. We had the knowledge and knowledge was power.
As a consumer, I would also turn to a financial advisor to help me pick the right insurance products and superannuation plan because he was the expert, he had the knowledge. And for pretty much everything, that’s how commerce functioned; we would turn to experts in the field to get the advice, recommendations, or even just being pointed in the right direction.
The new world
The internet and Wi-Fi have turned that model on its head. Now, I can go online and get a few quotes for income protection insurance for example and compare them side by side. I can Google search a model of washing machine and compare prices online, while standing next to a same one in a store.
Knowledge is truly at our fingertips, anytime, anywhere.
As a sales person today, our target market educates us; and for many of us, it’s a hard lesson to learn.
A study of more than 1,400 B2B cross industry customers by CEB Global, revealed that 57% of a typical purchase decision is made before a customer even talks to a supplier.
The reality is that customers don’t need us the way they used to.
The rules of engagements have been changed, not by us, but by the customers. Customers are informed; they have access to information and can formulate possible solutions and shortlist possible providers on their own.
The expectations on sales people on the other hand haven’t. Organisations still need to return shareholder value, and they need a sales team that performs and achieve its targets.
What’s sales effectiveness?
If you are not too familiar with sales then you need to know that essentially sales is a process, each step is an opportunity to succeed or fail to move to the next step.
Sales effectiveness is about a sales team ability to successfully align their sales process to the customers buying process and to win each stage and ultimately earn the business within an acceptable timeframe and at an acceptable cost of sales.
There are some very important elements in this definition:
- Sales team
- Sales process
- Buying process
- Acceptable timeframe
- Acceptable cost
This means that the sales effectiveness is not solely the results of the action of the sales team, but in fact of the whole organisation. It combines methodologies, processes and soft skills in management. Most particularly of course, it focuses on sales but also on marketing, because marketing generate those warm leads that fill up the sales funnel.
Sales effectiveness strive to increase the organisations revenues through customer acquisitions, increased sales volumes through existing and new product, and but cross and up selling to existing clients.
Sales under the new paradigm and the Sales Quota
There is no doubt that the new rules of engagements described above are representing a significant challenge to businesses and especially to sales professionals. New methodologies (such as Challenger) are gaining ground. New processes and touch points that leverage technology and new services are also coming into play, e.g. social selling, using LinkedIn, Facebook, Twitter, Pinterest etc… and this applies to B2B as well as B2C models. People talk about Sales 2.0 and inbound marketing. CRM platforms have grown multidimensionally to encompass activities related to marketing, services and social media.
However, some aspects of sales and their impact on the Sales Quota haven’t changed. Customers are still looking for value for money and low risks and they still need to understand what they are buying. If you want to impact your Sales Quota you should listen to what they want.
So with all the emphasis on the new toys such as social selling, etc. it is easy to get sucked into the hype vortex forget the obvious.
With a customer far much more well informed and who has formulated a solution it is even more important for a sales person to have a deep understanding of that customer’s needs, and in a B2B situation, the industry trends and challenges, and be able to present alternative solutions that will give better returns and long term shareholder value for example.
In financial services situation for example, the amount of product choices and options is enormous. For consumers, it has become information overload. The responsibility of selecting the right product and options is now on the customer and even with access to information on the web, it is no easy task to compare like with like and make the right choices.
Providing an accurate quote, proposal or statement of advice in a timely manner should be a given, yet, again because of the multitude of options and variations, errors are easily made. Such errors can have devastating consequences, e.g. in a case of under insurance.
But there is hope!
The sales process hasn’t totally change in its entirety
Over the recent years, there has been a significant growth in the use of technology in sales. From lead gen, to eCommerce and CRM. One piece of technology, referred to as CPQ (i.e. Configure – Price – Quote) has been experiencing significant growth and gaining momentum.
As its name indicates, CPQ software focuses on those critical and often complex steps of the sales process, where a customer needs have to be identified and matched with a suitable product(s), and product features and then priced accordingly. It also includes that final step where the quote is formalised and presented into a suitable manner for the customer, whether that is on a webpage (in a self-service mode), a call centre sales agent screen, or a printed Statement of Advice for example.
CPQ technology was born in the late 1980s and first introduced in the manufacturing sector, but over recent years forward thinking organisations have adopted the technology as part of their sales process.
The benefits of CPQ technology directly impacts an organisation’s bottom line with significant improvements such as 100% quotes accuracy, 50% increase in the number of quotes produced, 27% reduction in length of the sales cycle, 17% increase in leads conversion rates, 3.9% renewal rates and overall better Customer Experience according to the Aberdeen Group (May 2014).
In their September 2014 report the Aberdeen Group found that:
- Best in class firms turn 30% more quote into sales and
- CPQ users increase customer retention by 3.9% annually
However, not all CPQ technologies are the same. Many product configurators can handle guided selling scenarios, needs analysis and the ability to produce a quote, but they fall short when faced with complexities such as compliances, multiple layers of business rules and mixed distribution channels.
Complex manufacturing has pushed technology providers to develop significant capabilities into their CPQ tools, and the best are built upon a robust rules and knowledge engine.
Nonetheless, it is that ability to simplify the complex and handle multiple layers of rules such as compliance, distribution channels and tapping into various backend systems (including analytics) that can empower a financial services institution to create new, innovative and personalised products and bundles that are unique to the individual, and become best in class for sales effectiveness and customer experience.