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The Sales Leadership Roundtable Lists Ten Trends Every Exec Must Know in 2011

My thanks go to Robby Burch, sales person extraordinaire at Alexander’s Mobility Services for sending me this material authored by the Sales Leadership Roundtable, a division of the Corporate Executive Board. This list is an excellent tutorial on how the culture has changed and how sales people who want to succeed must change with it.

 

Overview

Few would argue 2010 was a year of tremendous change in Sales. Increased customer risk aversion, coupled with ongoing solution complexity were among the leading reasons a new set of buying behaviors evolved. The most progressive sales organizations are reflecting on 2010’s key lessons and positioning themselves to succeed in 2011 by capitalizing on these emerging sales trends.

The Ten Fundamental Shifts in Sales That Will Play Out in 2011

1. Extinction of the true decision maker

As buyers make efforts to mitigate risk and better respond to the breadth of solutions being sold, organizations involve an increasing number of voices, gatekeepers, required signoffs, and committees to recommend a purchase decision. Complex purchases already require plenty of decisions by the customer, but throw in a network of stakeholders, and the sheer number of decisions becomes nearly unmanageable. The orchestration of stakeholders, their opinions, and ultimate decisions will become an increasingly greater responsibility and will require new sales capabilities.

2. Obscuring of customers’ buying processes

Partly an implication of trend #1, customers more often find themselves in unfamiliar terrain when making complex purchases. What was once a clear buying process with clear stakeholders has given way to unknown stakeholders, unpredicted signoffs, and unforeseen steps required. In one example a CSO recently shared with us, an extremely large forecasted deal was in the customer’s CEO’s hands for signoff when the CEO realized the board had to be involved. Naturally the board didn’t meet until the following quarter. It’s an extreme example, but it shows there is no certain degree of customer clarity.

While IBM taught us years ago to map sales process to the customer’s buying process, what happens when the customer doesn’t have one? Sales processes will invariably become more adaptive.

3. Eroding effectiveness of traditional discovery skills

In 2010, members invested more in discovery skills than any other sales skill training. However, as customer processes obscure, traditional discovery and the subsequent qualification will be harder to properly execute. Increasingly, customers won’t know timelines, full sets of stakeholders, or even next steps, let alone be able to neatly convey information. In other words, it doesn’t matter how good the questions are and how hard reps probe, customers simply know less and less. The solution requires closer proximity to customers and an ability to work across groups of stakeholders within a customer organization. In many cases, information management and helping customer stakeholders arrive at a decision will be more important skills to develop than traditional discovery skills.

4. Permanently higher cost of sale

Perhaps more of an emerging trend as opposed to a defined one, there is a strong belief that given increased consensus purchasing, and greater creativity to finalize sales, the supplier’s time, energy and resource requirements will vastly increase. Further, we’re seeing more investment in deal support desks and (re)investment in sales operations (see trend #8 below).

Many would argue that larger deal size and relationships outweigh the costs, but many also cite that margins erode as creativity finds its way into the deal. Winning organizations will carefully monitor this cost/benefit tension.

5. A shift from sales efficiency to sales effectiveness

Swings from efficiency to effectiveness often follow periods of economic instability. As one F100 CSO told us, the companies that will win through the recovery are already running hardest to sales innovation. This will result in more adaptive sales processes, and unique manager support to creatively deviate from sales process to land significant deals and grow relationships. We believe winning suppliers will take increased risks and place bigger bets to win freeing capital and business, particularly in emerging markets.

6. A shift from finding business to making business

Long-viewed the responsibility of the marketing organization, demand generation will be increasingly placed in the hands of sales reps. Ideas such as social demand-generation within a single account’s stakeholders are starting to emerge as a potential way to drive consensus more quickly. The top reps, account managers, and sales teams will increasingly leverage insight to teach customers unrealized opportunities to improve their business, and decrease the sales cycle time.

7. A mass extinction of sales reps who sell on features and benefits

The role of the sales rep is shifting from transactional reps who present information, to Challenger reps who teach customers how to improve their businesses. Differentiation on features and benefits no longer works. Customers believe your brand and products are good  they also believe your competitors’ brand and products are good too. This is no longer a game of what you sell, it truly has become a game of how you sell and the insight delivered in that sales experience.

8. Less customer face time

Examining rep time spend from 2004 to 2009 shows that reps have increased time spent on pre- and post-sales 15%, and time spent on administrative duties has increased 21%. Time spent with the customer? You guessed it – down 26%. The problem is that cycle time isn’t decreasing at nearly that rate. Sales organizations are feeling this pressure and seeking to support increasingly complex sales with support desks and better information.

We think winning organizations will invest here, but also admit that reps jobs no longer end with the sales presentation. Increasingly, organizations will focus on arming their reps with the skills and

knowledge to navigate a customer beyond initial agreement, to consensus among stakeholders, and ultimately won business.

9. External consultants’ increasing receptivity to supplier value

The increased prevalence of the purchasing consultant was a major trend through 2010 (the healthcare industry withstanding, of course). Where cost alone was the only rule of engagement, many of our most progressive members are seeing a shift towards total value of purchases by these consultants.

Instead of working around the consultants, or conceding to price demands, these suppliers are treating the consultant as a channel partner of sorts. Arming the consultant with industry insight allows them to make smarter decisions on behalf of their clients, as well as deliver new value-based offerings to their clients not to mention understand the supplier’s value prop to a much better degree.

10. The emergence of “science” around customer buying styles

You’ll have noticed that many of these trends signal a higher degree of resources required by your sales organization. We’d largely agree that there is much hard work and evolution ahead for most organizations. But, we also believe that despite all the variability and unpredictable customer behavior, winning organizations will start to pattern how their customers tend to make decisions.

In many cases, winning reps will ‘work smarter’ by helping their customers learn how to make complex purchase decisions and reach consensus across stakeholders. Understanding a customer’s buying profile will better inform the conditions under which, and how a rep engages the customer. This will reduce the variability reps are challenged with, and help decrease cycle times.