Optimizing Sales Effectiveness to Achieve High Performance: 2011 Sales Performance Optimization Study

CSO Insights’ 2011 Sales Performance Optimization Study, sponsored by Accenture, shows that sales organizations are performing better, but that fundamental challenges remain. Accenture analyzes the results and proposes areas of focus for the year ahead.

For chief sales officers, 2010 delivered a much more optimistic outlook for sales performance. The economic recovery boosted key indicators, such as percent of plan and sales quota achieved. At the same time, a number of core sales performance factors remained static or trended downward; signaling that now is the time to make bold moves to address sales force challenges.

In this overview, Accenture reviews the key findings from the 2011 Sales Performance Optimization Study in our continued sponsorship with CSO Insights of this research. The study based on 2010 survey results represents CSO Insight’s 17th annual assessment of the challenges facing sales teams, why those problems exist and what organizations are doing to effectively address these issues. As part of Accenture sponsorship of this research, the analysis and insights of this paper focus on companies with at least $ 1 billion in sales revenue.

• Top priority for 61.9 percent of sales leaders was to increase revenues, followed closely by increasing sales effectiveness (49.5 percent) and capturing new accounts (41.7 percent).

• A record 89.6 percent of sales organizations met their increased sales target objectives.

• Voluntary and involuntary sales representative turnover still hovered above 25 percent.

• Approximately 40 percent of sales representatives’ time is spent with customers, with 60 percent spent on activities not related to sales.

• Although 68 percent of sales leaders report they are satisfied with the amount of sales skills, product and customer marketplace training, the data shows there are still major breakdowns in executing the sales cycle through prioritizing accounts and opportunities, conducting research and developing sales strategies targeted to specific customers.

• For two years running, sales representatives receiving between 1 and 15 percent variable compensation yielded the highest percentages of quota, whereas those receiving between 41 and 60 percent delivered the lowest performance and the highest attrition rate.

• Looking ahead, sales leaders said their top sales effectiveness initiatives for the coming year were to improve sales representatives’ access to information (41.7 percent), provide new CRM tools (40.3 percent), and more closely align sales and marketing efforts (37.5 percent).

• Forty-nine percent admitted that their win/loss review process could be improved.

• Forty percent plan to implement new CRM tools during the year.

Despite promising signs, some data sets in the survey showed that organizations are not getting better at executing foundational sales capabilities. A major concern is that turnover in sales staff remains above 25 percent. Attrition is a major cost; on average, it can run as much as four times the fully-loaded headcount cost for a full-time employee.

Sales leaders also indicated that aspects of the sales process need ongoing attention, especially to avoid excessive discounting. Organizations that can increase the amount of time their sales staff spends with customers should be able to increase the number and size of deals.

The sales objectives noted above actually run counter to the pain points sales executives revealed in their survey responses, namely the need to revise the sales process, analyze the buying process and update the hiring strategy for sales representatives. Addressing the gap will be critical in the year ahead.

In sum, the findings suggest that sales executives who refine their efforts in incentive compensation management, sales execution and sales talent stand to benefit the most.

Looking to 2011 and beyond, sales organizations must develop deep client relationships—backed with consistent use of sales methodologies, tools and analytics—to shift the performance curve. Organizations that build enriched customer relationships, and follow and continually update a formal sales cycle process, generate the highest performance across several core sales performance indicators, including quota, plan attainment and attrition.

Given these trends, we recommend sales leaders focus on the following areas in the year ahead:

Sales effectiveness. Assess current sales cycle processes and evaluate customer intelligence data to identify areas to drive sales effectiveness improvement.

Customer-centricity. Work toward creating customer- and influence-driven interactions since traditional strategies where the sales force is focused on coverage and relationship are no longer differentiating companies.

Sales process and methodology. Standardize and consistently follow a comprehensive sales process and methodology, then implement CRM tools to align with these objectives to improve unpredictable results and overcome inefficient execution.

Sales-enabling technologies. Take advantage of cloud, software as a service and mobility solutions to enable more rapid, widespread solution delivery to sales representatives. Develop a strategy for incorporating collaboration and social media into the sales force, using the tools to redesign the routes to market, as well as the customer interaction processes.