Sales Productivity Blog

Channel Marketing from a Sales and Marketing Perspective

2012-02-01T11:48:00.001-05:00

By Gerry Murray

Complexity and Diversity at Scale

Channel marketing in large high tech companies is one of the most complex and diverse operational activities in all of marketing. Complexity and diversity are pervasive across: market, product, program, even organizational structure. Channel Management groups typically report to either marketing or sales. The trend today favors the sales reporting approach, especially for regions outside of the US. The in-country channel manager will either be or report to the regional head of Sales. Channel Marketing typically sits within channel management or corporate marketing. In many companies the main function of the channel marketing team is to act as a conduit between business units/product management and worldwide channels. This creates an inherently complex organizational structure from which a wide range of additional sources of complexity and diversity must be managed.

The Sales Perspective

From a sales perspective, channel management is all about recruiting and performance – identifying key opportunities and the partners best suited to capitalize on them, and investing in their success. This typically involves working with key partners to develop business plans, including staffing, investment planning, and performance goals. However, it is rare that these business development plans include specific marketing plans developed in conjunction with the vendor's channel marketing team.

This is a critical point of failure for many channel programs. Most partners do not have the marketing expertise needed to manage full scale, long term strategic branding and lead generation campaigns. Many do not even have marketing staff. As a result, much of the marketing effort focuses on discrete expenditures such as events – it is not managed as a coordinated set of campaigns optimized for a multi-channel, multi-touch, long sales cycle lead generation process.

The Marketing Perspective

From a marketing perspective, channel management is all about programs. Programs for recruitment, training, and of course, performance. Given the immense diversity in the channel it is impossible to offer a one-size-fits-all approach to channel marketing programs. But it is equally impossible to individually serve the needs of every partner.

The Partner Perspective

From a partner perspective, channel management is about of all things, consistency. It takes on average about a year for new partner programs to be fully adopted and implemented so changes must be highly rationalized and carefully rolled out by vendors.

Standardization and Specialization

Thus the need to find a balance between standardization and specialization. To find the right balance, specialization decisions have to be made first and the first specialization decisions that have to be made are about standards. The question is: what can we offer to every partner in each category and what opportunities/requirements are there for custom programs? This should be asked across a defined set of categories:

y Partner class: (Platinum, Gold, Silver, etc.): this one is obvious and universally addressed.

y Partner type: (Dev, VAR, ISV, SI, etc.) This one is also obvious but there is a lot of room for creativity. For example, do VARs get a special "turnkey" product offering that is not available to others?

y Region: This is an especially challenging area for channel marketers as there are real market differences in terms of culture, technology adoption/maturation, regulation, as well as language that make regional marketing more decentralized.

y Technical/Product focus: The need for specialization here is largely determined by the breadth of your offering portfolio. But companies with hundreds of solutions need to be especially careful not to overwhelm the partner community.

y Strategic alignment: Making changes to your market direction or product mix requires a huge commitment from the channel and they will require not only special programs but also special monitoring and guidance to ensure effective changes are made. Data is particularly important and additional incentives for feedback may be necessary.

y Partner potential: This is a two-fold problem - identifying the high potential partners and understanding the specific drivers of their business with your brand. Getting these research issues right is critical to moving the most valuable growth opportunities up the performance curve.

Standard marketing programs, campaign models, events, collateral and other go to market assets can be designed for each of these categories. Then specialized programs can be overlaid to facilitate coverage of partner capabilities relative to market opportunities.

It is important to understand that marketing programs for high tech sales must be highly leveraged over a wide range of media and market segments. They must be managed with a long term perspective. Most MDF, JDF, co-marketing approval processes focus on short term, discrete activities such as an event and are measured on 30 day or 60 day timelines. However, this is not an effective way to market complex solutions that require great education and deliberation on the part of the buyer.

IDC Recommends

To address this, IDC recommends that companies better coordinate their sales and marketing teams with respect to channels. Channel marketing should develop marketing plans as a normal part of the business planning and market development process. In addition, the partner community should be researched and assessed with the same depth and regularity applied to the markets they serve so any changes in business drivers can be quickly identified and incorporated into channel programs in the most appropriate way.

What's Killing the Traditional Sales Funnel?

2011-12-19T14:24:00.001-05:00

by: IDC's Kathleen Schaub, VP CMO Advisory Service

B2B Buyer behavior is undergoing an extraordinary sea change triggered by Internet technology. Tech marketing and sales teams haven't caught up. They still rely on a 112-year-old sales funnel model. To remain a winner, you need to adapt your customer creation process to the way customers really buy.

The Internet tsunami had radically changed B2B Buyer behavior.

Before the Internet, the B2B buyer making a complex decision had few sources of information. Vendors leveraged that knowledge gap. The sales person was the primary gateway to information the buyer needed to decide – a tremendously powerful position. Fast forward to today. The Internet and social media have triggered a turbulent change – the rich dialog has shifted on-line - and away from the sales person.

As a result, the B2B Buyer in a complex sale is now an expert with very different behavior and expectations than in the past.

Buyers are constantly on-line. IDC research shows that IT buyers find online search and the vendor websites more valuable sources of buying information than face-to-face conversations.
Many times, buyers know more than sales people. 55% of buyers think sales people are only somewhat prepared or not prepared for initial meetings.
B2B buyers, who are life-long consumers, bring buying expertise to work and expect concierge service.

The Internet tsunami has massively changed IT Buyer behavior. Yet, we’ve seen surprisingly little change in the traditional marketing and sales funnel.

The Empowered Buyer is Killing the Traditional Sales Funnel

The traditional sales funnel is 112 years-old and bears the unmistakable marks of the industrial-era. Buyers are treated like widgets that sellers manufacture into a product called a customer.

But today's empowered Buyer is far from a widget. The industrial-era funnel is out-of-touch with reality – and the results show up in poor funnel health. Conversion rates are unsustainable. It takes over 1000 targets to get one sale. Time to convert is lengthening. The average time to create a large B2B tech customer has lengthened by 15% in the last year.

Symptoms of a sick funnel show up inside tech vendor companies, too. Sales and marketing teams bicker over leads. Companies lack data to judge performance and predict the pipeline. Sales people don’t have the tools needed to sell, in spite of the fact that they have access to a tonnage of content. Prospects fall out of the pipeline and no one knows why.

A New Customer Creation Framework

To ensure that prospective buyers want to become customers, tech companies need a new framework that better aligns with the way buyers buy today. This framework should maintain what is valuable about the industrial-era funnel. For example, the graduated stages of the traditional funnel are a practical tool for measuring progress. To meet the needs of the 21st century tech buyer, this new framework, which IDC calls the Customer Creation Framework (Figure 2), must advance from tradition in three important ways:

Buyer-centric: Act like a Concierge Replace the manufacturing mind-set with a service orientation. Act like a concierge who delights guests with information and support services that guide them through their "Buyer's Journey".

Integrate Marketing and Sales Instead of the hand-off between marketing and sales silos, the IDC Customer Creation Framework calls for an orchestrated collaboration between the two functions. Since the new Buyer never, ever, goes off-line, marketing, as the owner of the company’s digital dialog, can never disengage, can never hand-off. The sales team cannot simply wait for the “good leads”. Sales people must be adaptable, prepared to serve the Buyer at whatever stage he happens to be at. Marketing must be more active enabling the sales conversation.

Smart: Data-driven The entire customer creation process contains data that can be harvested to use as a feedback system. By analyzing this data, barriers and opportunities will be revealed. Companies can then use marketing and sales tactics like knobs and levers to tweak the behavior and outcomes of the pipeline.

This is an exciting time for marketers and sellers. Changes in Buyer behavior enabled by the Internet may be killing the traditional sales funnel. However, these same changes are opening up opportunities. Companies that transform their Customer Creation process into a buyer-centric, data-driven, well-orchestrated pipeline will see success. Our job at IDC is to help you with that transformation.

More Good Advice From BtoB Technology Buyers to Increase Sales Productivity

2011-12-14T21:19:00.000-05:00

Throughout each year, our Sales and CMO Advisory Practice teams collect valuable insight from BtoB technology buyers through focused studies, surveys, in-depth interviews and panel sessions. Why? Because that is the source of some of the greatest ideas for improving our sales and marketing success. . . from small improvements to big, groundbreaking ideas. This past summer I reviewed the results of our 2011 Buyer Experience Study where we learned that buyers want to reduce their buying cycle by 40% and how to do that.

I'd like to share some more recent insights from a buyer panel that we just held in October to refresh our connection with the buyer and their feedback about their interaction with our own sales teams and marketing outreach efforts. The quotes represent what our CIO panelists had to say:

Buyers still like to buy from trusted people: "Just as vendors will follow good buyers from account to account, we (buyers) will follow good sales reps from vendor to vendor."
Just in case you've missed this piece of advice before. . . "Trusted advisors don't sell products, they solve problems."
Marketers and inside sales teams, watch out for the quality of your lists!. . ""Apparently I got on a mailing list as someone that's investigating a cloud solution. I got at least 20 calls yesterday from cloud consultants I never heard of!"
Sales team, watch your pricing strategies! . . .. "After going through an entire RFP selection process, we called the losing vendor with the bad news. They said they would match the winning bid, which meant they were willing to substantially cut fees in the face of competition instead of giving a real bid up-front. This did not please me!"
What's your strategy for shifting accounts into different sales models across your organization? "A vendor switched our account rep midstream and moved us to an enterprise-class account. The result was a doubling of their price. One week later, after several phone calls to set the record straight, the price was back to the original model. Needless to say, we did not do business with them again."
CIOs and IT are striving to become trusted advisors for their internal LOB customers; and as technology vendors we need to help them achieve this status: "There is growing awareness and ability for LOB to go directly to the cloud and implement low-cost solutions and then request integration, security services, and so on from us, the CIOs; and we need to better connect with our internal customers earlier on in the process in an intelligent way."
And if you think that means you need to go around the CIO as part of your sales process, watch out!. . . . "As CIO I want to trust vendors not to go around us and sell directly to LOB and exacerbate the rogue IT problem."
And finally. . Here's another reason why IDC research indicates that over 1/2 of sales reps show up to their first prospect visit unprepared: "We will take the time to educate account managers on our business but don't want to do the same for every product line rep that wants to sell." (refer to Bldg. the Intelligent Sales & Mktg. Org.)

Any of this sound familiar? Have your own stories to share? Please feel free to comment below, or contact our team directly to learn about strategic, operational and tactical solutions for these challenges. (mgerard@idc.com or izvagelsky@idc.com or gmurray@idc.com) Clients of IDC's Sales Advisory Service should contact us directly for additional details about the above meeting.

Advice for Sales Executives. . . Sincerely, "your CEO"

2011-11-12T19:13:00.000-05:00

What can sales and sales operations executives learn from a panel of 2 CEOs and 1 Chief Sales Officer? A lot! I recently attended a CEO panel session for sales sponsored by NETSEA (New England Technology Sales Executives Association). The panelists included Bill Hewitt, CEO Kalido; Stephen Orenberg, Chief Sales Officer Kaspersky Lab; and Patrick Morely, CEO Bit9. Here are some of the highlights from the meeting including quotes from the panelists [with my commentary in brackets]:

Help your CEO to sleep better at night: (and it may help you keep your job as well)

"I'm already tracking the deals. . . it's what I don't know that concerns me." [Keep your CEO in the loop. . . be it good or bad news!]
"My best sales executives provide visibility, consistency, honesty & transparency to me regarding our sales activities, pipeline, forecast, etc."
"I just want the reality of our situation. Give me time to react, such as adding monies into specific programs."

Sales' "Credibility Factor": [Understand your CEO's expectations of you as a sales executive (i.e., in addition to "exceed revenue and/or profit targets"), and build your credibility]:

"We get our weighted reports, forecasts, etc; however, it is still very much a mix of art and science to really assess what's going on. (e.g., I discount my sales teams' forecast by 30%. . . I call it the 'credibility' factor.)"
"As a CEO, I look at Salesforce.com every day to assess our standard metrics." [A sure way to ensure that your sales team actually uses your sales force automation system]
"I need to know if my sales executive can analyze new situations across their group as well as across the market, understand how sales needs to change and then drive that change." [Have you asked your CEO about their expectations of you as a sales executive? Do you know how much you invest in sales? Are you allocating your investment correctly and demonstrating this strategic intent to your CEO? Do you have a next generation sales operations team in place to help drive strategy and productivity?]

Creating a culture of sales across your organization

Trip reports: "Our reps log all sales visits in a standard report format and make them available for the entire company to review." [Admittedly "sales 101ish" by the CEO, but certainly a great way to get customer insight into marketing and product development. Sales operations at larger organizations may wish to mine this type of information to improve sales productivity and effectiveness.]
"We're planning to leverage Chatter to improve sharing of sales insight across the organization." [IDC defines this as "Social Business for Sales"]
"Our VP sales has concept deal dissections. Every Friday a sales person has to speak for 15-20 min. about a deal (won or lost) start to finish; and it's not just sales at these meetings. (e.g., VP engineering)"

Value of sales methodologies?

"Sales is about listening, not selling. . and it's not about the specific sales model. [Agreed, however, there does need to be a consistent sales model used across the organization including a standard taxonomy, processes, etc. unless you're a small company. CLICK HERE to participate in IDC's 2011 Sales Methodology Survey]

What steps can sales reps take to pursue CEOs?

"I get 15-20 solicitations a day. . most have done no research on me and it's obvious. Tim Haller of Sales Gauge is someone that I've turned to for teaching my reps how to prospect."
"Reps try to get a hold of me, but why aren't they going to my functional leads whom I depend upon for these recommendations/decisions?" [Check out IDC's annual buyer experience insight.]

Marketing & sales alignment around lead management: [check out IDC's upcoming lead management webcast]

"We have an unrealistic expectation that marketing will deliver an enterprise deal to us on a 'silver platter'! First, it takes many touches by different parts of marketing and sales to win a deal; Second, I don't care where the lead came from."
"Sales and marketing sit down in the middle of every quarter to plan campaigns and lead generation expectations."
Value of lead scoring: "For enterprise sales, it's too complex in many cases to depend entirely on lead scoring process (i.e., buyer behavior, human dynamics and organization behavior play a big factor here).

Best-in-Class Sales Organization Strategies for 2012

2011-11-01T10:29:00.000-04:00

IDC's Sales Advisory Service recently completed its annual Sales Productivity Benchmarks Study just in time to help sales organizations plan for 2012. Companies in this study include many of the largest technology companies in the world with the most complex sales organizations imaginable. $260B in revenue is represented by companies in IDC's updated Sales Productivity Benchmarks Database with an average revenue of $5.8B. This study serves as an opportunity to track the most important trends occurring across large sales organizations, as well as enabling companies to benchmark their sales investment and sales productivity indicators with best-in-class companies.

Key findings from this year's study include:

6% increase in sales investment: Overall, sales program and staff budgets are expected to increase 6% by the end of the current fiscal year, compared to an increase of only 3.8% last year. This 6% closely tracks IDC's expected increase in global IT spending for 2011 of 7.0%.
Field support is increasing: Buyers want to reduce the sales cycle by 40%. Best-in-class sales organizations are striving to improve sales productivity to meet these buyer needs, and one successful response is to ensure enterprise sales teams have sufficient internal and external support. IDC's people-to-program key performance indicator(KPI) shows the percentage of total sales spend that is directed towards people has increased, with the main part of that increase driven by greater investment in field sales support. (IDC's Sales Support Staff KPI = 42% for 2011 versus 39% in 2010)
Maturing sales operations teams are driving increased productivity: This is not "your father's sales operations function". Today's best-in-class sales operations(SO) team is responsible for sales strategy, productivity and automation: A much broader, more strategic role than in prior years. (refer to IDC's Next Generation Sales Operations Team for additional insight) IDC resource allocation guidance is for total SO staff to represent approximately 8-12% of total sales staff, with centralized staff representing approximately 1/4 to 1/3 of total SO staff.
Data management and analysis must be improved across sales. High performing sales organizations are taking concrete steps to improve the quality of their data as well as their team's ability to analyze and interpret key trends and insight from this data. This includes tracking of sales investment and staff allocations versus market share and growth opportunities; improving alignment of marketing and sales assets and other information important for sales enablement; and cleaning up their sales pipeline data and scorecards including related customer information. Next-generation sales operations teams should lead this effort. Output from IDC's 2011 Sales Productivity Benchmarks Study can help provide the foundation for this analysis as well as providing important benchmarking information (e.g., identifying opportunities to improve sales productivity) Figure 1 below provides a small glimpse of this type of information. (click here for IDC's combined sales and marketing benchmarks webcast in December)

Resources should be better managed for a complex sales strategy. With a focus on the largest, most complex sales organizations, IDC can clearly see the challenges and best practices in place by the best sales organizations. And a common thread amongst these companies is a laser focus on identifying where the greatest opportunities are for sales productivity improvements, and then deploying the correct strategies and resources in response to these challenges. For example, with sales reps continuing to struggle in their ability to better leverage their time and companies' resources, best-in-class companies are focusing on making their sales managers better coaches and improving their sales enablement capabilities.

These are only a few of the findings uncovered by IDC's 2011 Sales Productivity Benchmarks Study. Clients of IDC's Sales Advisory Service should refer to IDC's 2012 Sales Investment and Productivity Planner for additional information, or contact Irina Zvagelsky at izvagelsky@idc.com or Michael Gerard at mgerard@idc.com with any questions.

The Enterprise Customer Creation Process – Why should Sales Care and What to do about it

2011-10-10T18:59:00.000-04:00

Traditionally companies have constructed their customer facing processes and systems on a departmental or functional basis. Each area – marketing, sales, finance, service, provisioning, support, etc. – made independent decisions about the people, process, technology and data it needed to accomplish its objectives. Unfortunately, this has left many companies with an inability to understand or in some cases even identify their true customers. The result?. . . An inability to optimize revenue and poor customer satisfaction. Case in point, here's what one buyer indicated at an IDC Sales Advisory Service Buyer Panel: “I get at least 2 to 3 calls per week from the same vendor from different sales people, not knowing that the other one called. Do you have a CRM system?” The reason is that there's no overall connection for the entire customer relationship from an organizational as well as a data perspective.

To address this problem, large enterprises are starting to define customer creation as an enterprise process. This has transformative implications for every customer facing function, application, data repository, and business process. One of the critical features of an enterprise customer creation process is customer data standardization. Customer/prospect data must come into and flow through the process in a way that enables transparency and immediacy to all the relevant decision makers. You cannot manage the customer experience without knowing what becomes of a lead, how it performs in the sales pipeline, what kind of deal results, how profitable the relationship becomes, in addition to all the account and contact attributes that accumulate throughout the process. All customer facing functions, in particular sales, need visibility into the whole customer relationship in order to make decisions that have optimal impact on business metrics like revenue and margin growth – instead of departmental KPIs like lead and call quotas.

Companies will need to implement new data standards, governance policies, and infrastructure in order to get there. Sales operations is in a great position to drive impact in this area across the organization: If not leading the charge from a strategy and execution perspective within sales, then at least representing sales and the customer to communicate the importance of this effort to executive management. Companies will have to apply these standards to all customer facing activities. The buying process for customer facing applications will become a multi-functional activity with sales and marketing influencing back end implementations and conversely, finance, fulfillment, etc. influencing technology decisions at the front end. This has big implications for how technology solutions will be sold as the industry consolidates and repositions to reflect the changes on the buy side.

For more details on this subject as it relates to improved sales pipeline management and customer management throughout the buying cycle, please come to our upcoming Sales Leadership Board meeting in Boston on October 25th and 26th. Contact Michael Gerard at mgerard@idc.com to inquire about attending this highly interactive session. Also see the new IDC report Best Practices in Customer Data Management. You may also contact me via email at gmurray@idc.com.

Posted by Gerry Murray

The Customer Cloud: The Killer App for the Social Enterprise

2011-09-23T16:23:00.000-04:00

The old two-step marketing and sales model for customer creation is dead. Today we have a three part model: Socializing, Marketing, and Sales – with socializing taking on increasing importance and marketing being redefined in the process. That’s a good thing for customers but it makes the market more competitive for sellers. Companies have to seek out and engage with both existing and potential customers in radically new ways outside of explicit business contexts with resources previously not thought of as customer facing.

This activity is going on today at a furious pace, but it is highly fragmented. With the introduction by Salesforce.com of Data.com and the social ready rebuild of Database.com at Dreamforce, as well their Chatter and CRM capabilities, customer interactions will come together in what is emerging as the Customer Cloud – the first killer app for the social enterprise.

The Customer Cloud will evolve into the source of record for all account and contact data because it can provide the Holy Grail of the customer creation process – the unified customer record. As a result, it will be the centering point for all customer interactions. It is definitive because:

It is self-regulating – contacts update their own data via social tools such as LinkedIn, Facebook, etc. greatly improving data accuracy and timeliness
It is real time – individuals have a vested interest in updating their social profiles asap
It has practically infinite scalability and reach.
It is equally available to all customer facing functions from marketing to sales, as well as fulfillment, finance, service and support, etc.
It provides insight into relationships – account contacts can be sustained and expanded even in the face of departures, and corporate hierarchies can be better understood and tracked.

A unified customer record provides the basis for breaking down the discrepancies, decay, and dysfunction that currently plague (or prevent the implementation of) enterprise customer creation processes, especially in B2B. It offers companies the potential to coordinate all of their customer facing activities around a single source of information – the lack of which has been the Achilles Heel in all previous efforts in CRM, data warehousing, and other valiant attempts to unify customer facing functions.

Thus at Dreamforce, the announcements of Data.com and the social data readiness of Database.com are major strategic milestones for Salesforce.com. With the addition of the Radian 6 social monitoring last year, this neatly rounds out a very strong play for leadership in the battle to deliver the Customer Cloud and provide the customer facing infrastructure of the future that will be build upon it.

[posted by Gerry Murray, IDC Sales and CMO Advisory Service Analyst]

Do You Have a Vertical Sales Strategy?

2011-08-24T09:28:00.000-04:00

The first question of course is does your specific company need a vertical sales strategy, followed by the question of how deep should this strategy go across your organization? If you are amongst the many BtoB technology companies selling in a rapidly maturing market, you'll want to do all that you can to differentiate yourself from the competition. And ensuring that your sales (and delivery) teams bring industry-specific knowledge to their prospect meetings will certainly help this process.

Based upon IDC's recent technology buyer experience study, the average sales person received a grade of B to B- in their ability to understand and address buyers' industry-specific needs. The top three complaints by buyers about their vendors' sales teams include:

"They market (and sell) their products and services as tailored to my industry, but they are not."
"Their sales force is not knowledgeable about my industry."
"Their implementation teams, or non-sales employees, are not knowledgeable enough about my industry."

Establishing a vertical sales strategy is certainly no simple task, and its effectiveness will depend upon significant investment and support by the entire organization. A couple of places to start:

Collaborate with product management and marketing to identify the industries for which you will get the highest return for developing and executing a vertical marketing and sales strategy. (sales operations should facilitate this process for the sales organization)
Identify the target accounts and segments to pursue by region/territory.
Allocate and align sales resources (and channel partners) based upon these established targets and their location, either leveraging the existing sales coverage model or establishing a new, vertically-oriented sales coverage model if warranted.
Add staff with industry-specific expertise, in the sales organization as well as in other parts of the organization, to speak customers' language and best understand and meet their needs. (training your government sales person to be a pharmaceutical industry sales person is typically not a wise decision)
Enable the sales organization to support this new vertically-oriented approach. (e.g., industry-specific training, vertically-oriented marketing and sales assets, customer profiles, access to industry subject matter experts)
Collaborate with marketing for execution of local campaigns targeted at specific industries. (e.g., sponsor local industry events, host breakfast briefings with industry-specific analysts to bring value to buyers while providing the opportunity introduce them to your sales teams)

Please do provide any comments on this topic below or reach out to me at mgerard@idc.com for additional discussion on this topic or to participate in our upcoming sales and sales operations research. Additional information on vertical sales strategies as well as sales investment and staffing allocation benchmarks are available for clients of IDC's Sales Advisory Service.

Buyers Want to Reduce the Buying Cycle by 40%. What Should Sales Do?

2011-07-19T15:01:00.000-04:00

IDC's Sales Advisory Service recently completed its annual Buyer Experience Study which assesses what is and isn't working for technology sales teams, and gathers feedback from buyers as to what (and how) sales strategy needs to change. This study includes information collected from 339 companies across a variety of industries, including manufacturing, finance, government, healthcare, business or business professional services. Just under 1/2 of participants were directly involved with IT buying decisions exceeding $250k over the past 12 months and 54% of participants are at the director level or higher.

Here are some highlights from our research, including several steps that sales should take to help reduce the buying cycle length:

IT Buyers' Time is Extremely Valuable: About 60% of IT buyers indicate that they will likely spend 46+ hours per week on work-related activities in the next 12 months. More specifically, 24% of buyers' time is spent on post-purchase IT product or solution-related activities. Thus, Technology sales organizations need to optimize the value that they bring to the average IT buyer during their infrequent interactions. Those companies that accomplish this goal will certainly have a competitive differentiator in this difficult economic environment.
The Size and Complexity of Buying Teams are Increasing: On average, 4-5 people are involved in influencing the vendor short list and in making the purchase decision. Sales must have a good understanding of who these individuals are, and ensure that they cater to their specific needs (e.g., identify and target these individuals as part of account planning – clients should refer to IDC's Best Practices in Account Planning, leverage of internal company knowledge and experts to best meet client needs – think sales enablement and leverage IDC's Sales Advisory Service's database of best practices, frameworks and benchmarks in this area).
Vendor Information is of High Importance to IT Buyers: 22% of IT buyers value product demos and proof of concepts the most. Both marketing and sales need to collaborate on developing the most relevant and valuable content for their prospects. Additionally, sales representatives play a key role in delivering the right information to the buyers' teams.
Buyers Wish to Reduce Their Buying Cycle Length by 40%. Even though IDC found that 2/3 of the delay is a result of IT buyers' own buying processes, there are still actions that sales can take to help reduce the length it currently takes for their customers to buy from them. (click to enlarge the below chart) Technology buyers are expecting their vendors' sales teams to:

"Be prepared with information for my needs and not stats about the company"
"Follow up — it really helps to push the project along and to make sure that it's not getting bowled over by other initiatives and then just put on the back burn. Help keep the project in the forefront of the company's mind."
"Come to the table fully prepared to answer all technical questions. That may require inclusion of technical personnel in the initial sales meetings."

Are Your Sales Teams Leveraging Social Collaboration to Reach Prospects? 20% of buyers have been contacted by sales reps through Twitter, LinkedIn or other social media applications. Research shows that independent party blogs/communities are the most highly valued by IT buyers, with vendor blogs/communities not lagging far behind. These findings indicate that technology buyers do value social media channels, and IDC expects this trend to expand. Therefore, technology vendors should continue to increase their investment in social media from the marketing and sales perspective. IT buyers are also looking at sites like YouTube for product demos, LinkedIn to check references, and follow vendors on Twitter.

Clients of IDC's Sales Advisory Service should contact us for a full, customized overview of this study. Sales Advisory Service clients can also access additional frameworks, sales benchmarks data and best practices recommendations and case studies to address their greatest sales challenges at www.idc.com/salesadvisory.

A Lesson in Sales Transformation at the Recent Sales 2.0 Boston Conference

2011-06-23T12:26:00.000-04:00

There's no doubt that sales organizations are in a constant state of flux, however, how many of these organizations are changing for the better? And what foundational elements can we establish to create a more agile sales organization that can react to internal and external forces. In past blog posts I've mentioned the need for a next generation sales operations team, sales intelligence and sales enablement competencies as well as greater investment in talent management. Gerhard Gschwandtner's recent Sales 2.0 conference in Boston provided some great insight into key elements necessary for developing a more agile sales organization. Here are just a few highlights from this valuable conference:

Kevin Purcell, ESSN Americas Sales Transformation Leader, Hewlett Packard (ESSN – enterprise servers, storage and networking)

Yes, HP does have a group dedicated to sales transformation!
Helpful framework: Hiring – On-Boarding – Measuring – Motivating – Managing – Rewarding
On-Boarding: (clients of IDC's Sales Advisory Service should refer to a recent best pratices study in preparing sales managers to be coaches)

"I asked my top sales performers what worked best for their 30-60-90 day on-boarding plan"
"We've created a buddy system to help new reps get on-board."
On-boarding training: 30 day period, 3 components: "Know your company" (HP history, culture, ); "Know your customers and market" (who are they, what products & solutions best fit them); "Know your role" (your comp. plan, sales methodology)

Measuring & Managing:

5 sales metrics: get a letter for low marks & you need an improvement plan; 3 letters and you're out
Field Advisory Board to get feedback on the organization

Rewarding: top 5% selected on quota and behavioral criteria (not just quota); for example, recommended by a sales leader; don't overlook other reward methods (e.g., email from sr. sales mgr.)

Chuck Penfield, VP CRM On Demand, Oracle

Again, focus on customers' needs: "For every customer that complains, 26 others didn't bother to complain."
A demo of what Oracle's sales teams leverage as part of their customer view: High churn potential, update of active projects, basic market and company information, recent customer interactions, live chat potential with subject matter and product experts, ability to post meeting notes right in iPa

Keith Hontz, VP Sales Line of Business Solutions, East Region, SAP America

"Customers are driving the conversation": Keith rightly points out that buyers know more about our companies than ever before prior to that first sales call; and we need to better engage with them. "Sellers have to adapt to new buyers"
"Sales insight - providing transparency and real-time information for better decisions": SAP provides a holistic 360 degree account view for their sales teams, including: purchase history, marketing activities, service record insight, customer satisfaction details, etc. "It used to take 50 emails by sales to get the insight they now receive with our 360 degree account view."
Sales collaboration: SAP provides an interactive, collaboration workspace for their sales teams leveraging SAP StreamWork
Anytime, anywhere access to sales intelligence for its sales force: SAP has rolled out 3,500 iPads to date to their sales force with >15,000 more to go. No doubt there's significant process infrastructure required to support this effort.

Please do provide any comments on this topic below or reach out to me at mgerard@idc.com for additional discussion on this topic or to participate in our upcoming sales and sales operations research.

Is Your Sales Organization Cross-Selling?

2011-06-02T16:24:00.000-04:00

Cross-selling is one of the most common untapped strategies for increasing revenue across organizations. And becomes all the more important when over 50% of sales reps aren't making their quota.[2010 IDC Sales Advisory research] Cross-Selling is a very lucrative way to help sales reps boost their numbers and is something that all sales organizations should consider as part of their sales strategy. However, finding the right balance and incentives around cross-selling for sales teams is often a difficult and challenging endeavor. Based upon IDC's analyst expertise and interaction with best practice sales organizations, several key success factors include:

Assign a team direct accountability for your cross-selling strategy. This will ensure that there is one group specifically responsible for this initiative, thus, decreasing the risk of it being overlooked.
Obtain and leverage executive sponsorship of this program. Ensure that metrics (i.e., adoption, number of referrals, closed deal value, conversion rates, etc.) are rolled up on a consistent basis to the higher ups within the company. Even more, make it known to the sales organization that these metrics are being reported on. Sales people, being competitive in nature, will surely not want to be on the bottom of any list or stack rank that is going to be seen by their boss's boss and others above.
Promote cross-selling across the entire organization, not just reps. Offer incentives to entice other people within the sales organization (i.e. engineers, implementation specialists, etc.) an opportunity to submit referrals that would fall into the cross-selling bucket and reward these individuals upon deal closure.
Provide product maps as part of your sales enablement process. How can sales reps properly cross-sell if they do not have an idea of what products/solutions goes with what other product/solution? Moreover, how far are reps going to get in the sales cycle if they do not know the right questions to ask if they think a particular product/solution is in play? If you need to and it makes sense, make the product map industry specific. You must also have a cross-selling page on your sales enablement platform. Here, marketers and program organizers can post these product maps and other useful information to help enable the sales organization to cross-sell.
Advertise the rewards of the program publicly and recognize top performers. If you are a sales rep, imagine hearing, "Last year, someone got paid $30k for cross-selling." If you have competitive and motivated sales reps on your team, their initial thought will be, "How can I do that?" Of course the program organizers may decide to put a limit on the amount that can be paid-out for cross-selling. If that's the case, make it known to the organization at large how many people reached that limit over the course of a set time period. Additionally, it may be necessary to set a minimum to award incentives, both for reps and their managers. An example of this minimum could be that reps have to have 5 cross-selling referrals completed during the course of a fiscal year. Likewise, sales managers will get an award if at the end of the year, their entire teams meets the 5 referral minimum each.
Make cross-selling part of your sales culture. This is easier said than done and is a large endeavor to take on. However, with the factors indicated above, including proper organization, advertising, executive sponsorship, etc., it can be accomplished.

Sales Advisory Service clients can access additional frameworks, quantitative data and best practices recommendations and case studies to address their greatest sales and sales operations challenges at www.idc.com/salesadvisory.

By Irina Zvagelsky

Do You Consider 'Sales Intelligence' to be an Oxymoron?

2011-05-20T14:06:00.000-04:00

I certainly hope not. But most of us have no doubt experienced this attitude across marketing and sales organizations throughout our career. And Scott Adams' Dilbert clip below has certainly been based on some part of society's belief that the expectations from sales can be quite low.

Regardless of what you may think, most high performing sales reps are smart, hard working, experienced individuals that know how to get at the right information, at the right time to help move their opportunities forward. And our sales operations teams need to better integrate with marketing along the areas of "customer intelligence" and "sales enablement" to improve these folks' productivity and to help our "B" players be more successful.

Here are a few ideas to help this process (i.e., in addition to past posts on this blog regarding sales enablement and customer intelligence for sales):

Get marketing and sales operations folks out on sales calls to help break down the barrier between your quota-bearing headcount and the "rest of the customer creation team";
Create a regional helpdesk for sales reps to call into when they can't find something on your sales enablement portal/platform, or if they're simply new to the organization and need help with other related activities. Provide a social media channel to better leverage this helpdesk. (e.g., the helpdesk personnel could play a dual role, acting as the internal, community moderator)
Develop a longer term approach to investing in your sales teams' skill-set and knowledge development. (e.g., establish a standard curriculum for sales managers and sales reps that extends beyond their on-board training) Not only will this help their learning process, but more importantly, it will send a strong message to them that you value their continued education.
Get your first and second line sales managers on-board with your sales enablement processes, and provide them the training and tools that they need to be better coaches to their sales reps. (clients of IDC's Sales Advisory Service should refer to a recent best practices study in sales manager coaching)

Please share any additional tactical ideas or examples that you may have below, or send them to me directly at mgerard@idc.com.

A New Reality - Sales' Travel & Entertainment Budgets to Remain Flat

2011-04-27T16:14:00.000-04:00

65% of technology sales organizations reduced their travel and entertainment budget in 2009, and since then, these budgets have remained essentially flat. In IDC's recent 2011 Sales Barometer (soon to be published Doc.#227923), 80% of companies will either further reduce their T&E budget or simply leave it flat. What's a sales person to do if they cannot see their client/prospect in person on a regular basis?

Well, fortunately there are many alternatives for today's sales person to maintain their competitive edge in this new reality and keep in close touch with their customers. Here are just a few suggestions:

First and foremost, increase the quality of existing interactions with customers/prospects. For example, make the most of on-site meetings through better preparation. Reps. . . better leverage your company's sales intelligence processes, applications and tools. Sales operations teams. . . improve sales enablement and leverage of CRM, better align with marketing and better prepare your sales managers to be coaches.
Understand how to best engage with customers in this new environment. IDC's recent customer experience study of IT buyers indicates that customers have, in the past year alone, significantly increased their amenability to interacting with vendors through social media channels. (IDC Sales Advisory Service clients, contact us for an on-site review of our 2011 Technology Buyer Experience study for you, your sales executives and/or your sales teams) And sales reps are taking advantage of this trend; for example, over 20% of technology buyers have been contacted by a sales rep via Twitter, Linked-In or other consumer-oriented social networking sites.
Leverage new technology. There are some great examples of new (and not so new) technologies that can help us stay better connected with our customers and prospects, and to help better connect them with our companies' resources. These may include:

Web conferencing applications: Glance; GoToMeeting; Microsoft Lync Server/Online; VSee; and WebEx to name a few
Social platforms: Lithium, Jive Software, GetSatisfaction amongst many others.

Did I miss a hot, new company above? Do you have any stories of how you're better connecting with customers/prospects today or helping your sales team to accomplish this objective? Please join the conversation below or email me at mgerard@idc.com.

2011 - The Year of Stabilitization for Sales Teams

2011-04-15T17:05:00.000-04:00

IDC's Sales Advisory Service recently completed its annual Sales Barometer study to analyze the direction of technology sales resource expenditures and priorities for the next 6-18 months. 2/3rds of participants represent companies whose annual revenues are $1B or over, and total revenue represented in the study is over $230B.

Here are some highlights from our research:

2011 will be the year of stabilization. Research shows that both the length of sales cycles and the number of leads necessary to close a deal will mostly stay at the same levels as in 2010, rather than increasing as in years past.
Sales productivity continues to be a top priority. Companies are concentrating their efforts in keeping old customers, acquiring new ones, all while continuing to work on improving sales productivity. Although sales productivity has been in the top 3 of the priority list for several years, it's only recently that sales organizations have begun to make a dent in improving it. Specifically, within sales productivity, sales organizations plan on improving their forecasting & pipeline management, sales training, and sales enablement. However, sales talent management continues to be overlooked as a strategic initiative by even the largest companies.

Sales automation increases in importance. Once the "people " and "process" are in place, it's time to put some money behind the technology investment. On average, about 48% of sales automation is paid from sales’ budget, and 49% from IT’s budget. Regardless of where the monies originate from, these two groups need to be in alignment. What specific categories of sales automation will receive the most focus? SFA, customer intelligence, and sales enablement will expect to see the most increase in investment levels. Do you know how much you are spending? More importantly, do you know where it’s going? Do you have a sales automation roadmap? We’re finding that too many sales organizations are investing in multiple applications meant to accomplish the same goals. Sales Advisory Service clients can refer to our sales automation framework for additional guidance.
Proper sales and marketing alignment is still proving to be easier said than done. Year over year, marketing is more optimistic than sales is when it comes to rating how effective marketing was at optimizing sales' worldwide efficiency and effectiveness. One area that has seen some improvement is alignment at the executive/management level between marketing and sales. This is a good sign as strategies come from this level. However, there is much more work to be done deeper down within the organization. It will be incumbent upon sales operations to team with key folks from the marketing organization around these areas. Specifically, 3 areas to focus on include:

Clients of IDC's Sales Advisory Service should contact us for a full overview of this study.

Please join the conversation by providing comments below or email us directly. Sales Advisory Service clients can access additional frameworks, quantitative data and best practices insight and case studies to address their greatest sales challenges at the following link: Sales Advisory Service.
[blog post by Irina Zvagelsky]

Building the Intelligent Sales & Marketing Organization

2011-03-21T16:59:00.000-04:00

IDC's best and brightest analyst teams were in Boston and San Jose for IDC Directions during the past two weeks to present their latest insight and guidance for creating the global intelligent economy; focusing specifically on the impact of social, mobile and virtual technologies on this vision. Morning speakers discussed how to position for the third wave of IT industry growth driven by mobility, clouds, big data and intelligent industries. In the afternoon, one of the many tracks included presentations by IDC's Sales and Marketing Advisory team about the vision of the intelligent sales and marketing organization and the key success factors required to achieve this vision. A few key take-aways from each of the presentations in this track are provided below:

Executing for Marketing Excellence in 2011 by Rich Vancil

Start – or accelerate – your social business transformation

With communication cycle-times dropping and the purchase decision influence continue to shift to buyers, a shift to "social business" is imperative for your success
41% of businesses have already implemented an enterprise social software solution
Focus on building "peer-to-peer" connections, not "vendor-to-customer"

Make a deeper investment in intelligence and operations

Drive marketing operations and market intelligence initiatives and investment down through the organization, across the business units and into the regions
Better establish and govern the processes for sales enablement and data quality to improve sales intelligence and their ability to leverage insight and resources.

Build a better budget (IDC CMO and Sales Advisory clients should refer to IDC's combined marketing and sales investment benchmarks data)

As marketing budgets recover, allocate new investments with the needs of a new reality – digital marketing is here to stay, and is only increasing in its ability to drive awareness building and demand generation; and greater alignment with sales will require continued investment in campaign management, sales enablement and lead management extending into what has traditionally been considered sales' domain

Building the Intelligence Sales Organization by Michael Gerard

Listen to your buyers:

Technology buyers indicate a desire to reduce their buying cycle time by 40%
Two-thirds of the delay between desire vs. actual buying cycle time is the result of buyers' internal funding and decision-making processes; however, vendors' sales teams can impact this part of the delay!

Drive sales to be more strategic by investing in a next generation sales operations team which focuses on: 1) sales strategy; 2) productivity; and 3) automation
Team with marketing, your learning and development organization and IT to close gaps in sales intelligence – customer intelligence for sales and sales enablement
Push the limits on sales performance measurement (refer to IDC's Directions presentation for detailed operations staff profiles and benchmarks data)

Establish a sales analyst function to better measure sales productivity
Improve data quality with the aid of other parts of the organization
Analyze the sales pipeline, rep performance and the impact of sales productivity improvement initiatives to facilitate strategic and tactical decision-making

The Sales & Marketing Automation Imperative by Gerry Murray

Investment in sales and marketing automation continues to increase as companies recognize the value of technology in adapting to new market realities
However, sales and marketing need to better align across their own teams as well with other parts of the organization to create a more holistic experience for customers (e.g., marketing, sales, finance, services, support)
Your company should establish a customer data czar, with team members in sales and marketing, to execute and govern data quality processes
Evolve to a more comprehensive sales enablement platform (i.e., beyond a content portal) centered on integrated customer experience management

Clients of IDC's Sales Advisory Service and CMO Advisory Service should contact us for a full overview of any of these areas as well as access to our latest research schedule and listing of published research.

Please do provide any comments on this topic below or reach out to us to participate in upcoming sales and marketing research.

Sales 2.0 Conference in San Francisco, March 2011

2011-03-11T12:26:00.001-05:00

I was fortunate enough to be a Day 1 Keynote speaker for Selling Power's Sales 2.0 conference in San Francisco earlier this week. With almost 500 attendees across sales and marketing, a great line-up of speakers and topics and good representation from the sales automation space it was an event not to be missed.

Key sales-specific themes based upon Day 1 of the event:

New sales automation technologies continue to increase the potential for companies to drive productivity improvements across sales.
However, sales organizations are only just starting to put in place the organizational structure, skill-sets and processes needed to better leverage these technologies; and to be a more strategic contributor to companies' successes.
Sales' continued collaboration with marketing at key intersection points will greatly facilitate improvement of companies' customer creation processes and buyers' experiences. (e.g., lead management, sales enablement and competitive intelligence)

Here are some key take-aways that I had from the first day's sessions [with my commentary in brackets]: (I missed day 2 of the event since I needed to fly back to Boston for IDC's Directions event, however, refer to the below links to other attendees' event wrap-ups)

Jennifer Rakiey, Sr. Business Operations, Mercury Computer Systems, described how she has leveraged Qvidian's sales playbook technology to improve sales productivity at Mercury.

Jennifer presented Mercury's SF.com "ecosystem", including all of the SaaS vendors that they utilize for different sales and sales operations needs (e.g., iCentara, Qvidian, Cloud9, Oracle as back-end, etc.) [Great to see sales operations developing a current view of all of their current applications and associated vendors. Good first step for assessing gaps, reducing redundancies and creating an automation roadmap for the future vision.]
Mercury has embedded Qvidian within their SF.com deployment, enabling sales reps to follow specific steps within the sales cycle in an automated fashion. Reps get value from the process by ensuring that they're following the necessary steps of a successful sales process, and they're exposed to strategically placed assets and coaching wizards during the process. Sales managers can then track their reps' progress across opportunities within the pipeline.
Mercury's use of Qvidian has given their first line sales managers the ability to understand what stages the reps are at, analyze that data prior to weekly meetings, and give them the ability to have more targeted conversations with sales reps based on facts vs. only hearing reps' "stories".
Mercury serves as a great example of how Qvidian can add value to reps' selling processes and sales managers' management efficiencies. A good question posed by Gerhard in a later session was right on target. . . "Are sales playbooks more liberating or confining for sales reps?" [As with many of the best questions, the answer is 'it depends'. . . on the company's use of playbooks, their value and relevance to sales reps and the level of maturity of those reps.]

Session: Accelerate Sales and Streamline your Processes with Smarter Sales Metrics (moderated by Gerhard Gschwandtner; panelists included-Brian Frank, Head of Global Sales Operations, Linked-In; Tyler Sloat, CFO, Zuora; Kamlish Gandhi, Dir. Global Deal Ops with Brocade)

Brian has had to rapidly focus his sales teams on the more important sales metrics and related SFA reports. One somewhat unique metric tracked by Brian: pilot conversion rates.
Tyler: "we like that Xactly (sales compensation vendor) ties to salesforce.com: We want sales reps to 'live' in SF.com" [Good goal to reduce the complexity of sales reps' lives: Minimize the disparate applications that they need to go to throughout their "average" day = productivity improvement]
Tyler: "One metric we track and pay on is "cash collection'". [With cash management being one of the greatest challenges in a smaller company, this sounds like a good strategy for Zuora; however, do you really want your sales reps spending their time with collections vs. your account receivable team doing this?]
Kamlish: "We've built in a margin component for sales analytics"
Kamlish: "I tell my team, don't produce any metrics or reports that won't get consumed. Therefore, we determine upfront what our sales leaders/stakeholders need from a metrics perspective." [Nice strategic thought by a sales operations team!]
Kamlish: "We leverage 'rear view mirror' metrics to identify trends; however, we don't depend solely on these metrics for our strategy." [More forward-looking metrics I suspect being used at Brocade include forecast data, sales pipeline related information, etc.]
[Not a lot of unique metrics discussed beyond the more traditional financial metrics; but some great process-related issues were brought to the forefront. Refer to IDC's Sales Performance Measurement Study for a framework of unique sales and sales operations related metrics. Clients of IDC's Sales Advisory Service have full access to this study.]

These were just a few of the key speaker insights since there was simply too much information at this event to capture in one blog entry. Here are a few other blogs that may be of interest in learning more about what transpired at the recent Sales 2.0 conference this week:

Better Sales Enablement will Yield $100 M in New Revenue

2011-02-15T09:38:00.001-05:00

Is sales enablement a new concept? Certainly not. Marketing and some sales organizations have been attempting for decades to equip their direct and indirect sales channels with the "right information at the right time in the right format and in the right place to assist in moving specific opportunities forward." [IDC, 2007] However, companies' inability to get their sales and marketing teams aligned around the right processes and technologies (or at least consistent ones) has cost them upwards of 10% or more of revenue per year; or $100 M for a $1B company.

Cost drivers of this continued misstep in strategy include an inability for sales reps to engage their clients in a strongly desired dialogue by buyers to solve their greatest problems; and a poorly performing lead pipeline requiring 2,000 to 5,000+ contacts at the front of the pipeline to yield 1 closed deal over a 17 month average buying cycle. (i.e., for BtoB, large revenue deals, from marketing through to sales) This insight, sourced from IDC's Sales and CMO Advisory Service research, has trended as such consistently over the past several years.

As any smart executive knows, the best way to begin solving a problem is to focus your resources on it; and that's exactly what the better companies are beginning to do by establishing formal sales enablement roles in both marketing and sales. Within marketing, 3 out of every 100 marketers today are sales enablement professionals. On the sales side, sales enablement has begun to take hold in the better sales operations teams, however, the roles and responsibilities are not quite as consistent across companies as in the marketing function. (Sales enablement is one of the key levers in IDC's Sales Productivity Framework)

These sales enablement teams will be focused on driving new processes, new technologies and new metrics. A few examples of these include:

New Processes:

Marketing and sales asset creation lifecycle
Campaign and sales program management
Customer intelligence for sales
Sales readiness

New Technologies:

Sales enablement platforms
Social media applications
Sales intelligence applications

New Metrics:

Marketing and sales alignment metrics

Sales and marketing investment as a % of revenue
Marketing to sales expense ratio
Marketing investment per sales person
IDC's sales enablement proficiency index

Sales platform usage metrics

Registered users
Log-in frequency
Page clicks, views, downloads
Content usage (ratings, favorites, recommendations)
Search term results
Content and asset relevancy by sales cycle stage
Content and asset leverage

The organizations that treat sales enablement as a strategic initiative instead of a tactical maneuver will be best positioned to compete in an increasingly competitive and complex market.

Please contact us if you are interested in IDC facilitating a two to four hour on-site sales enablement strategy session for your sales and marketing teams. This session is free of charge for clients of IDC's Sales Advisory Service.

Please do provide any comments on this topic below or reach out to me at mgerard@idc.com for additional discussion on this topic or to participate in our upcoming sales and sales operations research.

Doesn't "Talent Management" Mean Firing Those who Under-Perform?

2011-01-18T17:20:00.001-05:00

How much strategic thought have you given to elevating sales reps' knowledge and capabilities? Sure, we all have extensive product training (solutions training in the better cases), sporadic "injections" of deep sales process training and "booster" training in other areas such as skills training during the annual sales kick-off meetings. But how many companies have thought more strategically and, dare I say, holistically, about the overall talent management process? (refer to the below figure, IDC's Sales Productivity Framework, referencing Talent Management as one of the key levers to be managed by sales in improving productivity)

The data of our current state in this area speaks for itself: [IDC's annual productivity study]

Sales rep hiring process rating across sales teams: 5.9 out of a top score of 10
Time to 100% efficiency for new sales reps: 2 years
53% of sales reps. failed to make quota in 2010
Sales rep skill-set assessment process (if you have one): 5.6 out of a top score of 10

And results from our annual buyer experience study reflect these challenges from the customers' perspective:

Quality and value of information from sales reps during customer meetings: 2/3rds of buyers indicate a score of 3 out of 5, or worse
Of the companies that switched vendors during the past year, 65% of them switched as a result of a poor relationship with the existing vendor or a better one with the new vendor

So what can we do here to help improve some of our talent management challenges, particularly in the larger organizations where scale and diversity of offerings increase the complexity of the situation. Here are just a few ideas to consider:

Establish a consistent hiring process that fulfills the needs of your company and your customers (a joint effort between HR and sales)
Focus on building the next generation sales rep skill-sets, in addition to the traditional rep skill-sets (examples below, however, brainstorm internally to identify company-specific competencies and skill-sets)

Consultative selling skill-sets: Establish a dialogue with buyers versus simply giving the corporate pitch; bring innovative ideas and insight to buyers
Sales intelligence: Ability to leverage customer intelligence from multiple internal and external sources. (e.g., multiple databases, SMEs, Internet)
Resource management: exposing the best of what your company has to offer to your prospects (e.g., technology, staff expertise and insight, research, tools)
Relationship building: Ability to build relationships at the C-level as well as the director and VP level. (i.e., decision makers and influencers)

Establish a consistent, formal and in-formal on-boarding process
Elevate your sales managers’ coaching abilities (contact us to participate in IDC’s Best Practices in Sales Coaching Study)
Ensure that sales managers, from executive level to the first line manager, understand the value of the processes that you're executing. (e.g., Insight from our 2010 account planning best practices study: “Our sales managers aren’t even sure why they enforce the account planning process.”)
Develop a consistent skill-set assessment process for sales managers that is:

“Fact-finding” and not “fault-finding” (i.e., part of continuous improvement and not intended for hiring vs. firing decisions with HR)
Easy to use and understand by your sales managers
Helps drive improvement measures

Clients of IDC's Sales Advisory Service should contact us for a full overview of this topic, including access to our talent management dashboard.

Please do provide any comments on this topic below or reach out to me at mgerard@idc.com for additional discussion on this topic or to participate in our upcoming sales and sales operations research.

2011, The Year to Shine for Best-in-Class Sales Operations Teams

2010-12-14T21:01:00.000-05:00

What should be your sales executives' top priorities in 2011? The first priority should be to upgrade you sales operations function, especially if you haven't already begun this process. That is, sales operations needs to be the driving force for productivity improvements across sales, setting its vision for the future and maintaining the path towards this vision. This "Rise of the Sales Operations Function" will be the catalyst for productivity improvements across the best BtoB companies in 2011. For more details regarding this top priority and other sales executive priorities for 2011, refer to "The Pathway to Sales Productivity for 2011".

Still not convinced of the potential rewards for increasing your investment in this area? Based upon a detailed assessment of the technology industry's largest and best sales organizations, IDC identified three common characteristics of sales leaders in its Sales Performance Matrix:

A relatively mature sales operations team;
Sales is advanced in the areas of "customer intelligence for sales" and "sales enablement"; and (for IDC Sales Advisory Service clients: IDC Doc # 225791 and IDC Doc #219182)
Consistent use and leverage of a sales force automation system.

Where are you relative to other organizations in establishment of a mature sales operations team? In a recent webcast that I presented to an audience of sales and sales operations executives, I polled members regarding the maturity of their sales operations team. As presented in the figure, only 15% of companies believe that they are "advanced" in the area of sales operations, while almost 2/3rds of companies are at the intermediate stage. And from IDC Sales Advisory Service's research, I'd say that most of these companies in the intermediate stage have only reached this point during the past 6 to 12 months.

If you'd like to see a replay of this sales operations webcast click here. You'll get access to:

A detailed evaluation and analysis of the best and emerging practices across sales operations teams at the technology industry's largest and best-performing companies;
A framework to help sales operations teams identify key weaknesses and gaps in their current structure; and
Guidance regarding the key components required to enable the transition to the next-generation sales operations team, including recommendations for sales operations staffing levels

Finally, keep on the look-out for an update to our 2011-2012 sales and sales operations executive guidance as we launch our annual IDC Sales Barometer study in Q1 2011.

Please do provide any comments on this topic below or reach out to me at mgerard@idc.com. Sales Advisory Service clients can access additional frameworks, quantitative data and best practice recommendations and case studies to address their greatest sales challenges at http://www.idc.com/eagroup/sales.jsp.

Happy Holidays and have a great New Year!

Do you have an Executive Sponsor Program for Your Largest Customers/Prospects?

2010-11-17T11:40:00.000-05:00

How can you differentiate your organization as the technology industry matures, competition becomes fiercer, and technology buyers' budgets remain under pressure? One way is to increase the level of service and attention provided to your customers and best prospects, increasing the attention and value that they receive from your company. Connecting your best customers and largest prospects to your executive staff through an executive sponsor program is one method that can help you achieve these goals and better equip your sales reps to be more productive.

IDC recently conducted interviews with five hardware, software, and IT service companies with revenues ranging from $4 billion to $30+ billion that have an active executive sponsor program. Here are a few highlights from our research:

Matching the right executive with the right customer is a critical first step in executing a successful executive sponsor program. Above all else, proper "fit" between the executive and external account should be the most important requirement when selecting and matching executives.
Targeting only the largest revenue clients and potential revenue prospects for the executive sponsor program will enable you to optimize resources.
Involving the account managers throughout the entire process, from account selection to gathering executive feedback, will enable them to have a sense of ownership to the program, which is a must for this program to succeed.
Defining roles and responsibilities of both participating executives and account managers is a start. Companies should take this exercise a step further by aligning and communicating responsibilities to one another.
Training, coaching, and guiding executives should be at the forefront of the program. Moreover, organizations should consider having veteran executives of the program train the rookie executives who have recently been selected to participate.
Establishing metrics and targets to gauge the impact of the program should be a key initiative. Examples include customer satisfaction and related feedback, client retention, revenue growth, share of wallet, and account team feedback.
Rewarding executives for a job well done will go a long way. Even something as simple as public recognition during a board meeting, company meeting, or QBR will be appreciated by executives involved.

(IDC Sales Advisory Service clients should reference IDC Doc. #225024 for additional information regarding developing and deploying an executive sponsor program.)

Establishing and maintaining a successful executive sponsor program can provide technology vendors with one of the missing links that is needed to build deeper executive relationships with priority customers and prospects. Companies that have an executive sponsor program in place and are executing it effectively will have a clear competitive advantage in the market as competition continues to increase and customers demand more from their vendors.

Does your company have a well deployed executive sponsor program? If so, how is it impacting your sales organization?
[blog post by Irina Zvagelsky]

Are You a Technology Sales Leader?....or a Laggard?

2010-11-04T13:20:00.000-04:00

New for 2010, IDC has developed the Sales Performance Matrix to take an objective and quantitative approach to stratifying sales leaders and laggards. This matrix draws a direct correlation between a company’s sales operational efficiency and its effectiveness in execution in the marketplace. Our objective is to assess the key sales management priorities and actions taken that have led to excellence in results. The basis for this analsyis is IDC's annual Sales Productivity Benchmarks study coupled with insight from best practices studies and other research conducted by IDC's Sales Advisory Service. (note that the below figure represents larger organizations, with 70% of companies having $500M+ in revenue and an average revenue of ~$5B)

Measurement of a sales organization's efficiency is composed of four key attributes: Sales Investment; Sales Staff Efficiency; Maturity across IDC's Sales Productivity Levers; and Sales Infrastructure. Each attribute is composed of several key performance indicators that are derived through IDC Sales Advisory Service's research efforts, and provide indicators as to the level of maturity of the respective productivity attributes.

This Sales Performance Matrix certainly provides a great industry-level view of the maturity of companies' sales organizations as well as insight into best-in-class companies; however, the real value comes when we look at individual companies' sales productivity scorecards to assess their performance and drive recommendations for improvement. IDC's Sales Productivity Scorecards include analysis of all key performance indicators for each of the above-mentioned productivity attributes. For example, the below figure provides an industry-wide assessment of the gaps across just one of these attributes, IDC's sales productivity levers:

Do these industry challenges sound familiar? How effective has your organization been at deploying the above-mentioned strategies in response to some of these challenges? Please comment below to join the conversation or contact me at mgerard@idc.com. Sales Advisory Service clients can access additional frameworks, quantitative data and best practices recommendations and case studies to address their greatest sales challenges at www.idc.com/salesadvisory.

Please do contact me if you'd like to learn more about how we can leverage these frameworks and results from our recent Sales Productivity Benchmarks study for your organization.

The Pathway to Sales Productivity for 2011

2010-09-23T13:11:00.000-04:00

The results of IDC's annual Sales Productivity Benchmarks survey are in. Many of the technology industries' best and brightest participated in this study, with over $200B in revenue represented by participating companies. The Sales Advisory Service's team conducted interviews with over 90% of these participants to best understand their challenges, confirm the quality of the investment data they provided to IDC and to hear their vision and direction for the future. The objective?. . . provide sales productivity benchmarks and insight into what sales and sales operations executives should do in 2011 to impact sales productivity. Here are just a few of the key IDC guidance areas and accompanying data from this study: (note that no data is provided on a company-specific basis to protect participants' confidentiality)

Upgrade Your Sales Operations Function: Sales operations needs to be the driving force for productivity improvements across sales, setting its vision for the future and maintaining the path towards this vision. Go to Rise of the Sales Operations Function for guidance on staffing levels and roles and responsibilities to transform this function into the next generation.
Elevate Sales Reps' Knowledge: Technology buyers are telling us that they aren't satisfied with the knowledge and service provided by their vendors' sales teams. One sure way to approach this challenge is to better equip our sales reps with the knowledge, insight and skill-sets they need to improve customer engagement. Focus on three key areas to make the greatest impact in 2011:

Customer Intelligence: Someone from sales must represent sales reps' interests in ensuring that they get the right information and training from the organization to optimize their customer intelligence. (e.g., customer interaction history, share of wallet, role-based intelligence) Sales operations is in an ideal position for this; but regardless of who is responsible within sales, they need to collaborate with marketing and the business intelligence teams.
Sales Enablement: Sales operations needs to orchestrate the process and technology to get the right information to the right folks at the right time, place and format to move an opportunity forward. Sales enablement should be an organizational strategy, not a tactical maneuver. (e.g., start with the organizational structure first, followed by process and technology)
Talent Management: Challenges(opportunities) abound: 25% of companies lack a formal, new rep on-boarding process; and it takes 2 years for a new rep to reach 100% productivity. Some ideas: Develop a consistent new rep and ongoing training strategy, with both formal and informal elements; collaborate with HR for staff development (e.g., "we have a program to groom 'super reps' to become managers); and formalize a coaching program (e.g., ~1/3 of first line sales managers' time should be spend coaching).

Invest in Next Generation Sales Automation (and its adoption!): Start off by getting everyone on the same sales force automation application; and then leverage newer applications and technologies to improve the areas mentioned above. (e.g., OneSource, InsideView or Stratascope for customer intelligence; SAVO, SANT or iCentera for sales enablement) Refer to IDC's Sales & Marketing Automation Framework for additional guidance.
Get Your Sales Pipeline in Shape: Leverage a sales operations "analyst" to analyze and interpret internal and external data into actionable recommendations for your sales teams. Initial steps will no doubt include cleaning up the data, improving process and technology consistency and then identifying trends and leveraging benchmarks information.
Establish and Track Operational Metrics: Sample metrics from IDC's Sales Productivity Scorecard include: (averages across all technology companies)

Sales Budget Ratio (sales spend as a % of revenue): 11.2%
Sales Staff Spend KPI (staff spend as a % of total sales spend): 78%
Sales Operations Staff Level: Target 10-15% with 1/4th to 1/3rd represented by a Center of Excellence Team

If you would like to participate in this ongoing study/survey and receive a full overview of the results, please contact Michael Gerard or Irina Zvagelsky.

The IDC Sales and Marketing Automation Framework

2010-08-24T15:56:00.000-04:00

Sales and marketing organizations are seeing a rapid evolution of solutions for automating their core business processes. While we are years away from anything like an integrated ERP-class solution that can manage the full range of sales and marketing activities, the building blocks are available today. CRM vendors have established that a single system of record is within reach for the sales team, and an emerging group of companies are starting to prove that this goal is attainable for the marketing side of the house as well.

However, automating these two organizations will be a major undertaking for large companies. There will be significant process, cultural, and technical challenges. But the benefits are self-evident: lower cost, higher efficiency and productivity, greater accountability, better performance, improved customer experience, and potentially shorter sales cycles.

The Need for Alignment
The 80/20 Rule and the 50/50 Rule: IDC research shows that up to 80% of the content marketing generates is not used by Sales, even though a lot of it is specifically created for channel and sales enablement. Additionally, customers say that Sales reps are insufficiently prepared for their initial meeting 50% of the time. Clearly a massive disconnect is at work.

IDC's Framework for Sales and Marketing automation is, therefore, focused on the tight alignment of key Sales and Marketing processes. This framework represents only those processes that must be coordinated (potentially integrated) between the two organizations. It is not meant to be a comprehensive map of all the processes in which each organization must engage to be successful – there are many activities on each side of the dynamic that do not have a corollary on the other. (IDC's Sales Advisory Service clients should reference IDC Doc. #224215)

Each high level process in Sales that has a counterpart in Marketing must share:

A common set of definitions for inputs and outputs
Proportional allocation of budget and resources based on overall business objectives
Phase-appropriate performance metrics
An integrated IT ecosystem

Implementation

Sales and marketing automation efforts must be tightly coordinated across both organizations so that the customer experience and lead management processes are handled seamlessly by all parts of the infrastructure. Even if a marketing implementation will have no sales users and vice versa, the data definitions and flow will be critical for both organizations. IDC recommends that:

Sales Operations [refer to Rise of the Sales Operations Function] and Marketing Operations meet regularly to plan, review, and asses automation projects, with both teams having senior level sponsorship.
Marketing and sales need to be develop a set of pipeline definitions and processes for how leads and lead details will flow into the SFA/CRM environment.
Sales needs to be diligent in making sure marketing is capturing the high priority prospects and the high priority details so that lead acceptance criteria is routinely fulfilled.

Next Steps
One of the key issues for automating sales and marketing is establishing a shared automation road map. Upcoming research from IDC will help you prioritize your plans based on business impact and implement best practices to be most successful.

Contributing author: Gerry Murray, Research Manager, IDC Executive Advisory Group

Rise of the Sales Operations Function

2010-07-27T16:05:00.000-04:00

Sales costs are outpacing revenue growth, sales organizations are increasing in complexity, and IT buyers continue to indicate that sales reps are out of touch with their needs. What actions should sales executives take in response to this difficult environment? One of your first steps should be to expand the roles and responsibilities of your sales operations (SO) team. This team's responsibilities should no longer be limited to the more tactical roles of sales IT maintenance, order management and sales administration. If you're striving to create a best-in-class sales organization, then your SO team must be in a position to drive productivity changes across your key process areas, taking on a more strategic role.

Some starting points for enabling the rise of your sales operations team include addressing the following questions:

What should sales operations be responsible for? IDC defines the sales operations function as follows: Global and local sales staff responsible for developing and orchestrating the processes and systems required to enable an efficient and effective sales organization: strategic planning, financial management, sales performance measurement, sales infrastructure, marketing and sales alignment, and overall sales excellence. The sales operations function encompasses: Sales strategy and planning, sales forecasting, sales analytics, sales compensation, sales enablement, quote-to-order sales operations and sales automation infrastructure
How big should my sales operations team be? IDC resource allocation guidance is for total SO staff to represent approximately 10–15% of total sales staff, with centralized SO staff representing approximately 1/4 to 1/3 of total SO staff.
How do I determine where to start in transitioning my current SO team? Assess your team's current gaps and weaknesses, which will provide valuable information toward developing the subsequent strategy for improvement. Clients of IDC's Sales Advisory Service can leverage IDC's Sales Operations Maturity Matrix to aid this process as well as the following figure.

What's the ideal organizational structure for a global SO team? My typical consultative answer would be, 'it depends'; but let's get a bit more prescriptive than that. The success of the next-generation SO team will depend upon establishing a center of excellence organizational structure. A few key facets of this team include establishing a global VP of sales operations reporting to the global sales executive, a global SO team driving consistent process and technology changes across the organization, and alignment with SO teams and other internal groups across the world collaborating on improved sales productivity.
Does my current SO team have the skill-sets and competencies to be more strategic? The SO team skill sets and competencies must be improved to enable the transition to more of a strategic than a tactical role. In addition to developing the ability to improve key processes, the SO team must also be in a position to spearhead next-generation technologies that will be key enablers of improved sales productivity (e.g., automation of sales enablement and customer intelligence for sales).
How do I measure the impact of my sales operations team on sales productivity? Establish a clear set of objectives and quantitative and qualitative metrics to assess your SO team's impact on the sales organization. Leverage benchmarks data from IDC's Sales Productivity study to aid this process. (contact me at mgerard@idc.com to complete our 2010 survey and get access to industry-level productivity benchmarks data)

The sales operations team must be the key driver and catalyst for increased productivity across the sales organization, setting the vision for its future and maintaining the path toward this vision. However, significant organizational and structural changes are required with sales operations teams to achieve this goal. With the right strategy and individuals in place, sales operations teams have the potential to be the catalyst for establishing a best-in-class, agile sales organization.

You're Spending Too Much Time in Front of Prospects

2010-06-23T15:53:00.000-04:00

What? How can we ever spend too much time in front of our buyers? Well, if your reps aren't well-prepared, then the point of diminishing returns for prospect interactions will certainly be hit quickly. And this is what IT buyers are saying about their vendors based upon IDC's 2010 Buyer Experience Study:

Over 50% of sales reps are insufficiently prepared for customer meetings
47% of buyers are dissatisfied with the quality and value of information from IT vendors
Sales reps are unable to put aside the generic sales pitch to have deeper conversations with their prospects/customers
Sales reps don't know when to bring the right people to the table (i.e., from their organization) at the right time

And what are sales organizations plans for customer interactions in the next 6 to 12 months?

"We need to get our sales reps to spend more time in front of prospects."
Sales organizations want to increase the time reps spend directly interacting with customers by 20%. [IDC's 2010 Sales Barometer study]

Sounds like we're forgetting about the age old saying "work smarter, not harder", not to mention an inability to listen to the voice of the customer.

Part of working smarter is investing more time and resources into helping sales reps better prepare for customer interactions. IDC research indicates that only 17% of rep time is spent on activities related to 'preparing for customer interaction'. We can argue about the value of data that comes from time motion studies that are the source of this type of data or even how much time a rep should really spend here, however, the main point is that the quality of time spent preparing for customer interaction is poor. This provides an ideal opportunity to improve sales productivity.

Where to start? Talent management and sales methodology are certainly two areas to evaluate. Other areas of opportunity and investment that have historically been neglected include sales enablement and customer intelligence. Although we have a long way to go, much progress has been made in the past 12-18 months in the area of sales enablement. Customer intelligence (CI), on the other hand, has yet to leave the starting blocks.

Some questions to ask regarding your CI capabilities include:

Who is accountable for CI in your organization? The importance of CI to the sales organization requires sales operations to take a leading role in ensuring that this productivity lever receives the attention that it deserves.
Is there one source of truth for sales reps to access customer purchase and relationship history?
How easy is it for sales reps to leverage CI information as part of their standard sales process - both internally developed and externally sourced information? (e.g., CI embedded within your SFA of record)
Are you leveraging more sophisticated CI analysis? (e.g., share-of-wallet information, up-sell tools)

Certainly more to come from IDC's Sales Advisory Service in these areas as we complete our annual benchmarks study and other sales operations research. Contact me to participate in our research.