People often ask us, “What should we do to drive sales success?”
It’s a complicated question. You’ll need to consider the following factors, among many more:
This kind of analysis stymies many a company leadership team. Walk into any conference room after a sales strategy meeting and you might find something like this on the white board:
When we began analyzing sales teams years ago, we saw the need for an organizing framework to cut through all the complexity and provide a lens to view sales organizations with a clear eye. The result: the Sales Performance Wheel.
The Sales Performance Wheel provides a broad understanding of the 8 drivers of sales performance. We can then use these as the basis for leading a sales performance analysis and ultimately plan a strategy for better results in your organization.
Based on decades of sales research and behavioral science, the Sales Performance Wheel is a guide to help leaders analyze where they are now, where they need to be, and how best to get there. The Wheel has been the central model in hundreds of sales organization performance analyses.
The Sales Performance Wheel categorizes the various influences on sales success into eight buckets. The first four concern the organization itself and the performance environment for its sellers. The second four categories relate directly to sellers and sales managers. Our research on what the best sellers and sales managers do differently offers a closer look into the individual factors that influence success.
These 8 categories are all deeply interrelated. Many leaders look for that one thing they should be doing to drive sales success, but there’s no silver bullet. The secret is in finding the right mix of relevant factors that will drive your results to the next level.
Next, you’ll need to learn where you excel and where you can improve to develop a strong sales performance improvement strategy.
Sales performance analysis is a complex process. It’s no easy task to figure out how to improve, change, or build a sales strategy. However, it’s necessary for sales leaders looking to optimize sales performance.
Sales performance optimization doesn’t happen overnight, often taking quarters or years. It’s an odd fit in the world of selling, where the line of sight rarely extends beyond the end of the current quarter.
Even so, this longer-term view tends to generate outsized returns, much like the Warren Buffet-led Berkshire Hathaway. In the Harvard Business Review article, “What It’s Like to be Owned by Berkshire Hathaway,” a key takeaway is that leaders are encouraged to take a long-term view of investing in their business to gain a competitive advantage, saying, "A long-term investment horizon improves operating performance."
Unfortunately, short-termism is rampant in sales.
In one RAIN Group Center for Sales Research benchmark report, we presented a list of 19 challenges to sales and strategic account management leaders. The number one most prevalent challenge faced by 58% of average and below-average performers: "Pressure to focus on short-term vs. long-term results."
For those leaders willing to pull their noses out of this week’s pipeline report and take a long-term view of sales performance optimization, the next step is to lead a sales performance analysis. After all, if you don’t know where you are, it’s tough to figure out where you want to be and how to get there.
For any sales performance analysis you run, consider the following 9 guidelines for getting the result that you need.
Driving sales performance improvement at your organization requires examination of all sorts of tactical areas, from people and training to enablement and operations. None of these address the fundamental questions: where are we going? What are we doing to achieve our goals? Who will lead us there?
The Strategy category of the Sales Performance Wheel focuses on the factors that most affect the direction of the sales organization.
Go-To-Market Strategy: Every sales organization has a direction, but it might not be the right one. Sales leaders must make conscious decisions about how they drive value for their market, how they generate revenue, how sales, marketing, and delivery operations work with each other, why they win and grow, and their expectations for what the sales organization needs to do to bring their vision to life.
Value Proposition: When we say “value proposition,” we don’t mean in the sense of an elevator pitch. We mean, from a strategic perspective, what value the overall organization brings to the table. This area also covers your competitive position. You need a firm understanding of why buyers buy, and why they buy from you.
Priorities: Every sales organization has priorities. The question is whether they have the right priorities, the right plan to execute those priorities, and the right leadership and team to execute them.
According to our research, 69% of Top-Performing Sales Organizations prioritize improving sales force effectiveness. Only 57% of The Rest do. Further, only 51% of The Rest agree that “when company leaders set a priority, the priority gets done.”
Pricing Strategy: Organizations must make numerous pricing strategy decisions. Some organizations discount because they must, and some do so intentionally as a part of a larger plan. Some seek to achieve premium pricing, while others are content with market rate. Some pursue high pricing to build strategic competitive advantage. Some pursue low pricing for the same reason.
58% of Top Performers agree that “our pricing strategy allows us to capture maximum prices in line with the value we provide,” compared to only 41% of The Rest. Regardless, you need to define the best possible pricing strategy for your organization.
Leadership: Who leads the sales organization, with what styles, how they collaborate with the rest of the organization, and how they collaborate and communicate with the sales team are all critical factors in sales efficacy and optimization. Without strong leadership, even the best sales strategy will fail.
The tactical steps you take to improve sales performance should all be informed and guided by a strong sales strategy and sales leadership.
With all of these factors in mind, what actually separates Top-Performing Sales Organizations from The Rest? To find out, the RAIN Group Center for Sales Research gathered data from 472 respondents representing companies with sales forces ranging in size from 10 sellers to 5,000 plus and published the results in the Top-Performing Sales Organization Benchmark Report.
We considered the following when defining Top Performance:
The Top Performer group represents the top 20% of respondents to our study.
One surprising finding is just how much higher Top Performer win rates (from proposal to close) are compared to The Rest: 62% vs. 40% respectively. This represents a 22-percentage point difference. Even incremental improvements in win rate have a dramatic impact on revenue and profitability.
The following four factors are among the most important when it comes to increasing win rates, beating sales goals, and improving performance—in other words, striving to be a Top-Performing Sales Organization.
Top Performers are much more likely to focus on driving maximum value for their customers than The Rest (81% versus 61%, respectively). Those companies that are Value-Driving are much more likely to grow revenue, have higher win rates, and have lower undesired sales turnover (i.e., they’re able to retain top sales talent).
Value makes a difference. The organizations that can create and deliver value, align their structures and processes to do so, and invest in sellers’ ability to be more valuable to their buyers get better results.
Optimizing your sales process and improving sales opportunity approach are two key priorities for maximizing seller time and energy with their biggest opportunities. Top-Performing Sales Organizations are more likely to have mature sales processes than The Rest. Furthermore, 68% of Top Performers agree their sellers have the skills they need to drive and win sales opportunities, representing the highest sales skill area we asked about (only 50% of The Rest agreed).
Sales process and sales opportunity management exist to help sellers win sales. When companies have optimal processes for winning individual sales, their sellers perform better and win more often.
Download Optimizing Sales Opportunity Management: 12 Critical Questions Sales Leaders Must Ask. >>
Before we analyzed the data on the Top Performers, we assumed that stronger sales skills would correlate with better performance. Not only was this assumption correct, we were surprised by just how large the gap is between Top Performers and The Rest across sales skills. In each of the nine sales skill areas we studied, Top Performers are significantly more likely to have the sales skills they need to succeed.
Furthermore, we found a significant correlation between sales training maturity, effectiveness, and investment to higher seller skill levels.
We also found sales training investment and effectiveness significantly impact seller motivation and attitude. When sellers believe their organization is investing in them, they’re more confident in themselves when selling and more motivated to achieve top performance. The end result: you get a team selling with hustle, passion, and intensity consistently over the long-term.
We now know that improvements in key areas of the sales organization will drive win rates higher. But you’ll need to identify multiple areas of focus. Based on our findings, most organizations have a lot of work to do to reach the top. For any kind of change initiative, leadership needs to take control.
Interestingly, more than half (57%) of The Rest already prioritize improving sales performance. However, Top Performers are much more likely to achieve their priorities once they’re set (69% vs. 51%). When sales leaders provide the structure and support necessary to improve sales performance, it’s easier for sellers to focus on their own improvement.
The leaders and organizations that prioritize sales performance improvement make the right choices on where to focus, invest in their sellers, and achieve their goals.
It’s an ongoing process, but planning and consistency pays off, enabling you to stick with a strategy that will transform your team and boost your sales performance.