Barry Trailer, Jim Dickie, and their company CSO Insights have been the leading sales research firm for 20 years; it’s all they do. CSO is the Chief Sales Officer, and that is who tunes in to anything they say. Every year they do four annual research studies that have so much rich data behind them that Barry and Jim have become the sages of the sales industry. Their four research studies, each with key trends analysis are:
- 21st Annual Sales Performance Optimization Study (SPO)
- Sales Management Optimization Study
- Lead Management & Social Engagement Study
- Sales Compensation and Performance Management Study
The Sales Performance Optimization Study is going on as we speak. If you hurry you can still take it and get your own copy of what was a 214-page study last year when they wrap it up in the middle of February. I got to spend an hour with Barry on a sneak peek webinar last week and picked his brain about some of the things the data is showing. Barry is speaking about highlights of last year and forecasting trends again this week in the 1st Annual Inside Sales Kickoff event that also includes some insightful research from the American Association of Inside Sales Professionals (AA-ISP.)
Bob Perkins and Larry Reeves are the founders of AA-ISP and also contribute annually to the research foundation of the inside sales or remote selling industry. I reached out to them as well as they prepare for their Kickoff and their first full day event on February 12 in San Francisco. I will mention a few things their research has found.
There is also some great research being done in the Inside Sales space by Dr. James Oldroyd, Vorsight, The Bridge Group, and the Reality Works Group.
This year Barry warns that both alarming and exciting things are happening.
Looking back at last year’s study we see some very worrisome trends developing in:
- Quota Attainment
- Revenue Plan
- CRM Usage
- Process Decay
- Forecasting Accuracy
I have a 3 minute video summary here:
Quota Attainment: Percentage of Reps Making Quota in 2009 – 2013 is going down.
- 2009 = 51.8%
- 2010 = 59.4%
- 2011 = 63.0%
- 2012 = 63.0%
- 2013 = 58.2%
The 2009 number was an all time low on the heels of the economic tailspin at the end of 2008. 2013 was the first decline in four years.
Company Sales Plan Attainment: Percentage of Revenue Plan Attainment 2009 – 2013 is also going down.
- 2009 = 77.9%
- 2010 = 85.9%
- 2011 = 89.0%
- 2012 = 89.2%
- 2013 = 83.9%
The downturn in 2013 was also the first such shift in four years across the 1200+ firms surveyed.
CRM Usage: CRM usage is going down for the first time in 15 years. CRM engagement is a leading indicator of the assembly line upon which almost every other sales process and sales application run in the sales industry. Barry thinks we may be taking our eye of the ball. We are missing the blocking and tackling that makes up successful sales. His trend lines and key indicators show that the Great Recession of 2008 was a big wakeup call for companies everywhere and for four straight years sales leaders and teams improved their numbers every year in a row.
Until 2012… Then things leveled off and the last two years they are heading back down. He warns we are all becoming complacent, and like the herd mentality, it looks like we are all doing it together. That leaves great opportunity for those who buck the trend and tighten up their CRM usage and sales process.
Sales Forecasting Accuracy: Barry warns that sales forecasting is as bad, maybe worse, as it has ever been. I joked with him that in years past we could flip a coin and get as good of odds as the accuracy of the average VP Sales guessing what their team would bring in.
“This year it’s worse!” Barry laughed. “Try just over 45% accuracy. Flipping a coin provides better odds than our best sales guess.”
Sales Process: One of the most impactful aspects I look forward to in Barry’s research study is the CSO Insights Sales Relationship / Process MatrixTM. This is probably the meatiest and most proprietary aspect of the study that compares five levels of relationship a provider has with their customers:
- Approved Vendor: Legitimate provider but no significant competitive edge.
- Preferred Supplier: Your marketplace reputation makes you preferred among competitors.
- Solutions Consultant: Your product, insights, or services place you as a consulting resource.
- Strategic Contributor: Above and beyond consulting, you are a source of strategic planning resource for broader challenges.
- Trusted Partner: Your long term contributions—products, insights, and processes are viewed as key to your client’s long-term success.
And the four levels of sales process they employ to leverage their performance:
- Random process: Your Company may be perceived as anti-process.
- Informal process: Process is neither monitored nor measured but exists loosely.
- Formal process: You enforce use of defined sales process with periodic reviews.
- Dynamic process: You dynamically monitor and receive continuous feedback on your formal process and improve it based on key changes in market conditions.
It highlights 3 levels of performance and looks like this:
Those familiar with the work of Barry and Jim will be familiar with their contention that how you sell can be a sustainable competitive edge. The finding originally arose from the trends they observed year-over-year and was based on research they initially published in Harvard Business Review (HBR) in 2006 and then expanded to a paper published in HBR in Europe in 2011. The outcome of those analyses was that the level of sales process rigor applied to the marketplace in sales, combined with the level of customer relationship developed with your client base, directly affect sales performance.
The gray section of the SRP MatrixTM illustrates that if companies are totally random with process, individual sales contributors may reach the status of trusted partner with their own clients, the company as a whole does not get to that level. Here is a backwards glance at the comparison of what happened last year in 2014 between the three levels:
They ask CEOs, which sales organization would you rather have? As investors, which company would you rather own stock in? And as for the Chief Sales Officer, which level of sales organization do you want to lead in 2015?
They point out that the distinctions that separate these organizations have been consistent over the last seven years and are becoming wider each year. In 2008 the SPO report showed the outcome of forecast deals at Level 2 were 5 points higher than Level 1; today that spread is 9 points. And the range between level 2 and Level 3 firms has increased to 7 full points. Barry warns that the only thing Level 1 companies see are the tail lights of Level 2 and Level 3 companies.
And sales process is wholly in your own hands.
Instead we are taking our eye off the ball and letting our sales processes decay. Again a backwards glance at the three levels show a peak in companies operating at Level 3 and Level 2 in 2012:
You will have to quickly take the study by the middle of February to see what happened last year.
So what areas of 2014 are exciting?
Inside Sales or Telesales This next generation of sales is widening the gap between the tradition model that hasn’t adjusted to the virtual sales model defined as professionals sales done remotely model that has been called inside sales. This approach is often now being referred to by enterprise companies like Cisco, whose own Luca Felli and many others coin the phrase Virtual Sales or the Next Generation Sales Model.
The AA-ISP report their most recent research shows that 52% of companies are increasing headcount this year in their Inside Sales department, while 85% are increasing their training programs.
The Top Challenges in the Inside Sales arena was looked by the AA-ISP from two perspectives, the individual sales reps, and sales leadership.
The Top 3 Challenges of frontline sales reps in 2014 were:
- Quality and Quantity of Leads
- Career Development
The Top 3 Challenges of sales leadership in 2014 were:
- Recruiting & Hiring
- Lead Quality & Quantity
Traditional field or face-to-face models have already embraced a hybrid design that combines outside and inside or remote sales together as outside reps are spending more and more of their day on the phone and web conferencing resources as buyers have less time and need to meet face-to-face. Barry moves from this SPO study to a special research project around the Telesales initiative in March.
Social Media Social Media is finally coming of age. Even last year Barry warned it wasn’t producing the actual Sales Performance results all the hype and buzz were indicating. No longer. Social selling with social media is finally getting the traction that the trend was indicating. Barry says that there will be more specific data in the third study this year called the Lead Management & Social Engagement Study.
There is a great article by my Forbes colleague Jayson DeMers called The Top 7 Social Media Marketing Trends That Will Dominate 2015
Sales Tools & Technology There are more sales tools for sales acceleration than ever before. This may be the most exciting trend for organizations who need leverage to improve the velocity of their next generation sales models (as long as they keep their sales process from delay and decay.) Be warned that there are specific sales acceleration technologies and specific sales acceleration principles and best practices that are needed to wring the most value out of the trends that arising.
The AA-ISP contribute some interesting tidbits around technology use: 65% of sales organizations still do not use video in their sales efforts, while only 6% use it regularly. 20% of sales reps now actively use text messaging to reach out to customers.
Top Sales Objectives for 2014
It will be a very interesting update to see what this years top objectives are. Which, with Barry’s permission we will update when the research comes out. A slide right out of the webinar Barry and I did shows the Top Sales Effectiveness Initiatives for 2015:
The research I have highlighted that Barry provides is only a small fraction of the overall Sales Force Demographics Analysis in the study. Barry and Jim do a deep dive into real critical answers to questions like:
- Your Team’s ability to hire sales reps that will succeed.
- How will your sales force change in size this year?
- What is the annual turnover rate in your sales force?
- How do your salespeople spend their time?
- What is the average quota of your salespeople?
- How long does a sales rep take to ramp to productivity?
- What is the average size of a sales deal?
- How long is the average sales cycle?
- What rep behaviors does your comp plan actually motivate?
- What percentage of your sales force is “actively engaged” in their selling?
The survey is just finishing up and you can still participate if you are in management of a sales team and you want access to this incredible data about sales performance trends in 2015. Barry summarizes his advice based on this entire study in one line:
Find More, Win More, Keep & Grow More.
You can watch Barry’s most recent sneak peak webinar or tune in to his overview with the AA-ISP and nearly 50 other thought leaders all summarizing in about 5 minutes what they learned in 2014 and the trends of 2015. I am hoping to do a follow up article that summarizes each of their predictions.