New research from McKinsey & Company identifies destructive sales practices and prioritizes what customers want from B2B sales organizations.
The research is focused on end users and is statistically significant: McKinsey interviewed 1,252 purchasing decision-makers of high tech products and services at small, medium and large business in the US and Western Europe.
Research on end users and on this scale is relatively rare in the B2B world.
Here are some of the key research findings from McKinsey:
- The buyer’s experience with sales and product or service features were the most important factors in a purchase decison – not price. (All the more interesting given that the survey was conducted during the recession).
- A high performance sales force can boost share of customer by an average of 8 to 15 percent.
- The two most destructive sales behaviors were inadequate product knowledge and excessive customer contact.
In my mind, there are a number of considerations for a B2B sales organization:
- Quantifying the Impact - For a sales organization to change, the impact from poor sales practices will need to be defined. The impact of an 8 to 15 percent customer share increase (per McKinsey) is substantial, especially for high ticket, complex B2B solutions. Prospect and customer surveys (e.g. Win/Loss) on their sales experience can be used to quantify the impact of the sales experience.
- Better Sales Training - Training on solution knowledge and how best to engage customers are two key training areas for sales. McKinsey calls for a centralization of content development and creation of compelling value propositions. This seems to be a call for marketing and sales to align their efforts better on messaging. Rather than grand training programs, it’s interesting that McKinsey calls for experiential training and on-the-job training.
- Raising the Bar on Sales Personnel - Customers are empowered by online information sources and social networks. Knowledgeable sales reps who bring a consultative approach and value to customers are a much better fit to today’s customer. This heightened requirement should help to raise the bar on the calibre of B2B salespeople.
- Innovative Sales Methods & Tools - Innovative approaches to sales and lead generation enable sales to be smarter and faster. Done right, sales can be more proactive and more meaningful in touching customers. The risk is that customer concerns on the frequency of contact could increase should sales not add value or act smarter with that contact.
There are a number of events that could perpetuate rather than reduce destructive sales practices:
- The Sales Funding Squeeze- According to IDC’s Tech Barometer, in 2010 investment in sales will again outstrip IT investment. This gap between revenue and costs will pressure sales organizations to scrutinize training expenditures.
- Unrealistic Quotas- some of the comments on the McKinsey research pointed out that unrealistic quotas and short term horizons create destructive B2B Sales Practices. According to CSO Insights, in 2010 sales quotas continue to rise even though attainment of quota was lower in 2008 versus the prior year and sales resources are less.
- Tech Mergers & Acquisitions - In Q1 2010, $68.8 billion of tech deals were announced versus $19.2 billion for the period a year earlier (source: Reuters). More sales forces will be merged and rationalized consuming resources and creating distraction . A recovering economy will create more opportunities for salespeople. In this environment, sales education will be adversely impacted.
Comments Are Welcome
Are we on the path to resolving destructive sales behaviors? What action will it take to be successful?
Resources
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6 Comments
Great post and I love the hard data. What to do about poor sales performance. I have a few recommendations.
1) Rethink the approach to sales. Bring in an outside sales expert like http://www.enterprise-selling.com. Remember the adage, a doctor that diagnoses himself has a fool for a client.
2) Rethink your approach to marketing. Tear it down and start over. Develop ideal customer profiles, value propositions, buyer personas. Again, bring in an outside experts like, forgive me, http://www.findnewcustomers.net
3) Focus on content marketing. Make a major effort to develop viral content. Hire publishers and writers. They are out there.
4) Create a new position called Chief Content Officer. Let this person own all messaging — social networks, website, webinars, podcasts, etc. One head to pat and one butt to kick ensures consistency and simplicity.
5) Turn your business into a Purple Cow. Be different. Spend a lot of brain cycles on how to be different. Create amusing videos like http://www.suitemates.com. Or http://www.willitblend.com
Do those five things and your business will take off.
Jeff Ogden, the Fearless Competitor
President, Find New Customers
http://www.findnewcustomers.net
@fearlesscomp
During 2009 we worked with several sales teams to change their engagement process. Primarily moving away from technology discussions, and focusing on the business drivers and impact reasons for the purchase. The range of sales growth over 2008 for this handful of companies was 20-47%.
It’s interesting to highlight that these companies experienced the highest level of growth in their business during the toughest economy. The dire situation helped them to realize the investment was necessary, it motivated their sales leaders and sales people to actually implement the training, and it convinced their customers that they could improve their business during a difficult market.
The recommendations above will work, if you have the leadership drive to make it happen.
Great Post Robert! I could not agree more. We just won a major competition and the purchaser threw out a couple vendors with very strong product offerings because the sales people were “idiots” (to quote the buyer).
Regards
Joel Lessem
http://www.firmex.com
Robert – awesome post – thanks for sharing.
The study brings up some questions for me:
How could compensation could be tweaked (other than just quota) to incentify non-destructive behaviors?
The highest percentage (35%) of most destructive sales behaviors was reps contacting the prospect too often – is that more of a sales skill issue or an indicator that there is not a good content / buying process alignment strategy in place?
Robert.: great stuff here. Appreciated learning of McKinsey’s findings + your conclusions from same. Agree with you that sales organizations need to better detect and calibrate the impacts of bad sales behaviors. Often remarkable how much higher performing sales teams can become when armed with feedback on whether or not their sales practices are having an impact on buyer journeys.
Sirius Decisions, at their Summit a couple of weeks ago, concluded this new type of business intelligence for sales will be part of the next big agenda in marketing + sales. If of interest, my summary of their findings (with links to others’ summaries) is available here: http://bit.ly/af0DFT
Trust this will add some value to the discussion. – John
Hi Robert,
Nice post! I especially like McKinsey’s finding that one of the two greatest destructive sales behaviors is too much customer contact. One of the root causes of this problem was evident in the results of IDC’s 2010 IT Buyer Experience study: >50% of IT sales reps are showing up to their prospect and customer meetings “unprepared”.
What’s worse is that sales organizations are striving to increase “facetime” with customers without improving sales enablement and customer intelligence to better prepare their reps. (i.e., key levers for sales productivity)