Are Too Many Moving Parts Slowing Down Your Sales?

CSO Insights just released its 2007 Sales Optimization Survey data. The report uncovers the growing challenges Chief Sales Officers face in a tougher market.

Over 1,300 companies (the majority are Selling Power subscribers) participated in this survey. One of the surprising findings is that sales leaders are waging too many battles on too many fronts. The result: Sales productivity dropped across the board.

Here are some of the key trends.

Hiring plans – Up: The majority of companies surveyed (68 percent) plan to expand the size of their sales forces. The number of companies with aggressive hiring goals (over 30 percent) has slowed from last year’s 11.3 percent to 9.4 percent. Given the high cost of hiring, companies are trying to streamline recruiting through online assessments prior to interviewing.

Time spent selling – Down: Just two years ago, salespeople spent 46 percent of their time with their customers (phone conversations and face-to-face meetings). In 2006, that amount of time has been whittled away by a host of other tasks down to 35.7 percent. Salespeople seem to spend more time in meetings, training, research, administrative tasks, or making service calls.

Number of calls to close – Up: The survey shows that a) it takes more time to close a sale, b) sales get slowed down by more decision makers, and c) only 8 percent of companies can close a sale in two calls.

Leads generated by sales reps – Down: More companies shift the lead generation task from sales to marketing. Three years ago, salespeople generated 47 percent of the leads in their sales funnel. This year the number is down to 40.8 percent.

Deal forecasting accuracy – Unchanged: While more companies are using CRM technology, the sales team’s ability to predict “how much?” and “by when?” remained level with last year’s. Only 37.4 percent of companies report their forecast accuracy is greater than 50 percent.

Training for sales managers – Up: For the second year in a row, companies invest more in management training. This year the increase is 40 percent. Top managers believe that a new and improved skill set can lead to better results.

CRM user adoption – Down: Although 67.3 percent of all companies surveyed have installed a CRM system, user adoption is still below expectations. The number of companies with user adoption rates of 75 percent or higher has dropped to 56.8 percent. It is not surprising that only half of the companies surveyed were satisfied with their CRM vendor.

The CSO’s Sales Optimization Action Plan
The survey tracks the growing dissatisfaction of sales leaders with the many moving parts of their organization that demand improvement before they can realize productivity gains. Below are the areas that sales leaders are likely to improve in 2007.
• Streamline hiring
• Align sales with marketing
• Improve lead generation
• Improve forecasting accuracy
• Improve qualifying and prioritizing prospects
• Differentiate your offer against the competition
• Conduct win/loss reviews
• Share best practices with the entire sales force
• Build value instead of discounting
• Improve cross-selling and upselling
• Outsource data entry tasks
• Spend more time understanding the customer’s buying process
• Improve the salesperson’s ability to present a solid business case
• Match the sales process to the way customers want to buy
• Improve your customer’s buying experience
• Adapt the sales process to changing customer/market demands
• Research, capture, and document customer references

Given the fact that the average tenure of a Chief Sales Officer has decreased to 21 months, it’s time to change – before the CEO changes management.