From Vendor to Trusted Partner. A Blueprint for World-Class Solution Selling. A Sales Performance International White Paper

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1 From Vendor to Trusted Partner A Blueprint for World-Class Solution Selling A Sales Performance International White Paper

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3 From Vendor to Trusted Partner Page 1 Why the Level of Sales Relationship Matters Over fourteen years of extensive sales performance research spanning more than 1,000 international companies has found that there are five levels of relationships that a company can have with its customers and prospects. CSO Insights conducted its annual Sales Performance Optimization survey and the benchmarking underscores the significance of several key dimensions to selling. Sales Performance International (SPI) has developed this paper as a result of the CSO findings and our own twenty plus years of experience. What we ve found is that great salespeople are truly multi-dimensional and that it is the skillful and well-planned execution of six different dimensions that determines who will win and who will lose.

4 Page 2 From Vendor to Trusted Partner Elevating the Customer Relationship An examination of the five levels of relationships as defined by CSO Insights provides the foundation for the discussion of this document. Sales organizations should aspire to move upwards in the scale ultimately becoming a Trusted Partner to their valued customers. Level 1. Approved Vendor: You are seen by the majority of your customers as a legitimate provider of the products or services you offer, but are not recognized for having any significant sustainable competitive edge over alternative offerings. Level 2. Preferred Supplier: Based on your marketplace reputation and past dealings with your customers, while competitors may offer alternatives, you are normally seen as the preferred vendor with whom to do business. Level 3. Solutions Consultant: Based on a specific set of product-related, value-added knowledge or services you offer, your customers see you as not only a vendor, but also a consulting resource on how to best use your products or services. Customer Value 1 2 Approved Vendor 3 Preferred Supplier 4 Solutions Consultant 5 Strategic Contributor Trusted Partner Depth of Relationship Level 4. Strategic Contributor: Above and beyond the products and services you offer, your customers view you as a source of strategic planning assistance for dealing with broader-based challenges they are currently facing. Level 5. Trusted Partner: At this highest level, you are seen as a long-term partner whose contributions, products, insights, processes, etc. are viewed as key to your client s long-term success.

5 From Vendor to Trusted Partner Page 3 Sales Relationship Level Correlates to Sales Process Adherence Looking closely at the data from all the firms that took part in the 2008 study, and aggregating their performance based on which Matrix quadrant they fall into, a clear trend emerges. On average, the more you rely on the science of selling versus the art, the more success you will achieve. What exactly is this statement based on? First, several key metrics were identified that contribute to sales success: percentage of reps making their quota; percentage of the overall company plan achieved; percentage of deals resulting in a win, loss, or no decision; and sales force turnover (both voluntary and involuntary). Finally, the numbers for all of the firms in a given Matrix quadrant were combined. Two quadrants in the Matrix that were virtually empty are reflected in the correlation analysis. Companies consistently functioning randomly do not achieve a trusted partner level of relationship. Similarly, in reviewing dynamic process firms, they are nearly always able to figure out a way to be at the preferred supplier level or above in their relationships with customers. For the remainder of the Matrix, individual successes and failures in each relationship/process category were identified, and upon comparing the average sales performance numbers for each of the quadrants in the Matrix, three clear classes of performance differences emerged Successful Years, Challenging Months, and Sleepless Nights. Trusted Partner Depth of Sales Relationship Strategic Contributor Solutions Consultant Preferred Supplier Approved Vendor Sleepless Nights Successful Years Challenging Months Ad Hoc Informal Structured Dynamic Level of Process Maturity

6 Page 4 From Vendor to Trusted Partner % Of Reps Making Quota % Of Company Plan % Of Forecasted Deals Won % Of Forecasted Deals Lost % Of Sales Force Turnover Sleepless Nights Challenging Months Successful Years CSO Insights, Sales Performance Optimization 2008 Survey Results and Analysis Over time, the Challenging Months class of firms (nearly one-half of the firms surveyed) will outperform their peers in the Sleepless Nights category in all the metrics above. Examining the Successful Years category (17% of study participants), it becomes more apparent that with the combination of strong relationships and process adoption come rewards. These companies enjoy significant performance advantages over their competitors by excelling at most aspects of sales, and are in fact turning how they sell into a strategic competitive advantage.

7 From Vendor to Trusted Partner Page 5 A Blueprint for World-Class Solution Selling The term Solution Selling may, for many business professionals, equate to an intensive sales training class or event that they have attended. While training sales people on new methods is a critical part of improving the sales relationship, training alone will not drive the levels of process execution and adherence required to sustain trusted partner status with customers. In other words, to institutionalize the process and behaviors that truly elevate the selling relationship, training must be augmented with other key dimensions of world-class selling. We refer to these six dimensions as the Blueprint for World-Class Solution Selling, as depicted below. The following sections of this white paper explore each of these key dimensions of performance excellence. Technology Enablement Solution Marketing Training and Continual Learning Management Systems and Disciplines Sales Knowledge Management Buyer-Aligned Process and Methodologies Blueprint for World-Class Solution Selling

8 Page 6 From Vendor to Trusted Partner Buyer-Aligned Sales Process and Methodologies How are we going to sell differently? Why have a sales process? The simple answer is that it provides everyone involved in the sales effort a road map of what to do next, which leads to a higher probability of consistent, repeatable success. Few sales campaigns today are orchestrated by a single individual. And it doesn t matter if your sales cycles are single-event transactions or a series of events over a long period of time; knowing what to do, when to do it, and how to do it is critically important to improving core sales metrics. 58% 49% 39% Quota Attainment Win Rates Turnover 65% 55% 29% Level 1 - Ad Hoc Level 2 - Informal Level 3 - Structured Level 1 - Dynamic Lack a single sales process Multiple, random approaches Less predictable but not necessarily unsuccessful Skills-based training Sales process exists, but not reinforced Not measured or monitored Represents nearly 50% of surveyed organizations Formally defined and reinforced sales process and cadence Measures lagging metrics Role-based training Process is adjusted based on real-time metrics Fully integrated with other departments Tightly linked to business objectives The Value of Sales Process Adherence Again, sales performance research conducted by CSO Insights vividly illustrated the payoff for defining and adhering to a structured sales process. Companies that make the investment in defining and adhering to a buyer-aligned sales process see material improvements in virtually all key performance metrics. Patterns of customer behavior have changed. Today, consumers may be well along their buying process before you get the first hint of a lead. Consequently, sales organizations should redesign and in some ways reinvent the selling process.

9 From Vendor to Trusted Partner Page 7 What Is a World-Class Sales Process? Customer Buying Process Sales Process Steps Activities / Milestones Verifiable Outcomes Roles Methodology Based Skills, Sales Aids and Tools Management System 10% 20% 50% 75% 90% 100% There are many common misconceptions about what it means to have a sales process. When asked, most executives will claim that their organization has a defined sales process. However, we find that organizations often confuse sales process with the nomenclature in their sales funnel, or with the steps provided by the CRM or sales automation systems they are using. Not only do these so-called sales processes fail to include the critical functions of planning or implementation, they almost never include the enabling sales methodologies. By definition, a process is a systematic series of actions, or a series of defined, repeatable steps to achieve a result. When followed, these steps can consistently lead to expected, verifiable outcomes. A sales process defines and documents those endto-end steps that lead to increased sales performance. In addition, a well structured sales process identifies specific selling and management roles and activities, and integrates specific methodologies (how-to s) for successfully executing the process. The sales process also provides a structured context for sales management and coaching activities. How a Buyer-Aligned Sales Process Elevates the Sales Relationship 1. Ensures sellers are aligned with customer buying process 2. Clearly identifies roles and accountabilities for customer engagement 3. Provides structured diagnosis method for solving customer problems

10 Page 8 From Vendor to Trusted Partner Solution Marketing The Messaging Gap Many, perhaps most, salespeople do not know how to position the value of their offerings properly. A study attributed to the American Marketing Association reported that as few as 1 in 10 salespeople know how to position value and use messages correctly and consistently. If true, such a figure means that companies simply remain inept at teaching salespeople to effectively position defensible value with customers. The American Marketing Association s Customer Message Management Forum estimates that up to 90% of marketing tools and sales support materials never get used in the field. And B to B Magazine reported 70% of companies grade their marketing messaging and sales support functions as D or F on a scale from A to E, or F. Often marketing remains seriously disconnected from sales, and marketing materials are fundamentally not aligned with what a company s sales force needs. The Value of Messaging Alignment While the marketing and sales disconnect is endemic, research by Sirius Decisions revealed that 80% of companies say that they have no formalized vision for achieving sales and marketing alignment. CSO Insights has done a variety of correlation studies, and their analysis indicates that companies that are world-class in customer message management tend to outperform their peers significantly, as follows: They tend to out-distance their peers in quota attainment by 25% They have 20% higher win rates than their competitors, and significantly higher forecast accuracy They are three times more successful in winning business after issuing proposals They tend to experience much higher up-selling and cross-selling success They are five times less likely to discount, compared to their peers

11 From Vendor to Trusted Partner Page 9 World-Class Messaging What is required is a formal process that can be implemented to create strong links between marketing and sales organizations. This process includes multiple steps, including the development of a problem-solution map, the identification of the different types of differentiators, critical business issues and the development of Solution Messaging Cards. Sample Customers Sales Overlay Indirect MarCom Step 1: Develop Problem/Solution Mapping Segment B Step 2: Document Defensible Differentiators Proprietary Comparative Holistic Step 3: Build Critical Business Issues Menu Step 4: Develop Solution Messaging Cards Step 5: Build Sales Tools (and other Marketing Tools) Sales Tools Field Marketing Collateral White Papers MarCom Product Marketing Segment A Website How Solution Marketing Elevates the Sales Relationship 1. Provides sellers with highly relevant business issues to investigate 2. Provides clear navigation from problem scenarios to coherent vision of the solution 3. Helps customer understand unique differences between potential alternatives

12 Page 10 From Vendor to Trusted Partner Training and Continual Learning The Event Based Training Dilemma In over two decades of global sales training, one of the key discoveries that we have made is that there is a very short half-life of training. We are referring to training by itself, that is. When training is showing people new skills, new abilities, new techniques, new ways of conducting their sales profession and not reinforced, the value of that training is lost within a matter of weeks. In fact, our research has found that the average half-life of a sales training event is about 5.1 weeks. Said another way, after 5 weeks half of the content from the training event will disappear from the minds of the learner unless sufficient reinforcement of the learning is implemented. More than a year Seven months to a year Three to six months Two months One month Less than one month 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% % of Retention Further, we found that on average, 84% of that content is lost after just 3 months. These results are very consistent with similar studies that were conducted in the 1980 s and consistent with results from some pioneering behavioral psychologists like BF Skinner in the 20s and 30 s -- this half-life represents a general principle of human knowledge retention and behavior. Sales training is no different from any other kind of learned skill. Sales training alone just doesn t work. It does produce some incremental improvements initially but they can fade away very rapidly. Preserving the Training Investment Through Continual Learning In order to protect what is often a significant financial investment in sales training, it is crucial to think in terms of a continual learning environment for sales professionals and managers.

13 From Vendor to Trusted Partner Page 11 Define Sales Process Identify Sales Roles Identify Sales Activities Isolate Required KSA s Re-Assess and Measure Business Outcomes Perform KSA Assessment Coach, Reinforce and Measure Application Test Understanding and Review Deliver Mixed Modalities Develop Curriculum The continuous learning process begins with the sales process definition, and the identification of specific sales roles and activities to execute the process. This provides the ability to accurately record the required knowledge, skills and abilities (KSA s) for sales people and managers. At that point, a structured KSA assessment can be performed to assess people on the level of knowledge, skills and abilities that they have and identify the gaps. Then, it is possible to align specific curriculum or curricula for multiple sales roles (and managers). To deliver training we recommend mixed modalities, so that you can minimize time out of the field and help tune those messages to the way that people actually learn. It is critical to conduct regular testing of understanding review sessions. It is equally important to involve management in recurring coaching, reinforcement and measurement of actual application of new skills. Finally, it is essential to assess the impact in terms of desired business outcomes. How Training and Continual Learning Elevate the Sales Relationship Teaches sellers how to identify latent pain and higher value business issues Teaches structured approach to problem diagnosis Teaches sellers how to jointly develop a vision of the customer solution

14 Page 12 From Vendor to Trusted Partner Management Systems and Disciplines Effectively selling solutions requires that sales managers be highly capable of more than managing the numbers. They must also be capable of legitimately coaching and mentoring sales people to follow a defined process and to apply specific selling methods. When selling solutions, the ability to coach and mentor is highly dependent upon the presence of a well-defined sales process. The sales process creates the essential context for common language, defined accountabilities, problem diagnosis, verifiable customer outcomes all of which provide a foundation for consistent, repeatable selling practices. To provide effective coaching, sales management needs to be highly educated and literate in all fundamental Solution Selling disciplines including territory management, account planning, strategic opportunity management, and sales execution. Management by Exception D I A G N O S E Identify Skill Issue Analyze Pipeline Analyze Opportunity Update Database C O A C H Coach Skill Issue Follow-up Coach Opportunity This illustration depicts a closed loop system of analyzing pipeline and diagnosing skills or opportunity level issues. It emphasizes the need for coaching at either the opportunity or skill level. Managers need to conduct follow-up meetings, update the opportunity management system and then re-analyze the pipeline. To support the adoption of the sales process and new selling methods, this approach to management needs to become an integral part of the rhythm of the business. The Value of Effective Sales Management Effective sales management can be a significant lever in overall sales effectiveness. Research by CSO Insights indicates that regular, consistent coaching and mentoring activities pay off. For example, conducting regular win/loss reviews can result in quota attainment levels as much as 12% higher, and a 12% improvement in forecast accuracy.

15 From Vendor to Trusted Partner Page 13 How Management Systems and Disciplines Elevate the Sales Relationship 1. Helps create consistent, professional buyer/seller interaction 2. Provides essential coaching and mentoring for consultative sales methods 3. Ensures that customer needs are aligned with sales approach Sales Knowledge Management The Challenge Recent research by CSO Insights reveals that competitive activity, product line complexity and breadth, changing market factors, new product launches, and entry into new markets are all increasing for a significant percentage of companies. As expected, the pace of change and complexity has amplified the already daunting challenge of Sales Knowledge Management (SKM). Selling time is down from 46% two years ago to 36% (ES Research) Sales ramp-up times continue to trend upward 80% of knowledge remains undocumented 44% of sales organizations are dissatisfied with best practices sharing Customer objection handling information 40.1% 25.3% 14.2% Strategic account plans 32.0% 24.0% 18.8% Best practices used by the salesforce 39.6% 19.7% 15.0% Competitive analysis information 39.6% 19.7% 15.0% Customer reference/case studies 43.3% 19.3% 9.1% Details on clients marketplace/industry 43.5% 19.6% 8.1% Details on past marketing/selling efforts 37.6% 21.4% 11.4% Details on client s executives 39.6% 16.6% 11.8% Proposal/business case templates 35.0% 12.3% 9.9% Details of past customer purchases 34.0% 14.6% 6.6% Customer/prospect contact information 29.1% 8.9% 2.7% 0% 10% 20% 30% 40% 50% 60% 70% 80% Information gathered by CSO Insights in their most recent survey suggests that there is a new mandate for sales organizations. While traditional vehicles for sales training and continual learning remain essential for professional development, they do not address the precise, on-demand knowledge requirements needed in today s connected world. The dividends for addressing the sales knowledge challenge can be compelling.

16 Page 14 From Vendor to Trusted Partner The Value of World-Class Sales Knowledge Management Overcoming these knowledge access challenges can pay significant dividends to a sales organization. The sales performance gap between companies that rate themselves good versus poor in SKM is striking, including: 17% difference in quota attainment 10% difference in closure rates 18% difference in voluntary turnover 10% difference in forecasted deals that close 7.2% improvement in revenue/employee The Path to World-Class Sales Knowledge Management Sales Knowledge Management entails much more than technology. It is important to create a Knowledge Architecture that aligns with the overall sales process and Solution Selling blueprint. The following table illustrates some of the core knowledge assets that are required to execute at a world-class level. Key Knowledge Assets Knowledge Architecture must support the sales process and the overall Solution Selling Blueprint Sales Process and Methodologies Sales Process Templates Process/Methodology Mapping Sales Tool Linkage Solution Marketing Problem/Solution Maps Defensible Differentiators Business Issue Menus Product/Solution Information Competitive Intelligence Solution Selling Tools Training and Continual Learning Process Navigation Methodology Help Sales Tool Templates Best Practices Library Learning Modules Linkage Management Systems and Disciplines Process Navigation Methodology Coaching Sales Tool Templates Best Practices Library KSA Linkage

17 From Vendor to Trusted Partner Page 15 Leveraging a Web 2.0 SKM Platform There are a number of technology options for SKM deployment, ranging from structured file based approaches to sophisticated content and knowledge management platforms. One of the most intriguing recent developments is the emergence of wiki technology, and many sales organizations are experimenting with wikis to address their knowledge management needs. SPI s SalesWiki which provides a structured, integrated Web 2.0 platform for sales knowledge management incorporates a full array of internal and external collaboration mechanisms. This neural network for the sales organization provides a globally accessible platform for knowledge sharing and collaboration inside and outside the enterprise, including: Solution Selling training and learning materials accessible in a searchable, web-based encyclopedia Sales process, key activities, methods, techniques, and your own best practices can be accessed anywhere in the world Marketing, sales, and customers can easily collaborate on solutions to business problems How Knowledge Management Elevates the Sales Relationship 1. Increases seller s understanding of customer company and market environment 2. Allows rapid response to customer s questions and issues and provides immediate access to problem/solution maps 3. Can creates unified platform for buyer/seller interaction and problem solving

18 Page 16 From Vendor to Trusted Partner Technology Enablement CRM Adoption and Sales Process Adherence Linkage We already know that sales process adherence brings numerous measurable benefits. In addition, recall that companies that attain high levels of sales process adherence are the most successful at moving from vendor to trusted partner status with their customers. In their studies of process and technology enablement, CSO Insights has discovered a strong correlation between process maturity and CRM adoption. In other words, where there is a commitment to a structured sales process, CRM adoption is much higher. Firms with 90+% CRM Adoption 70% 64% 60% 50% 40% 33% 36% 32% 30% 20% 10% 0% Ad Hoc Tribal Formal Dynamic Level of Sales Process Maturity The Value of Technology Enablement CSO Insights has extended their research on sales process adherence to compare the effectiveness of sales organizations who have implemented a formalized sales process that can be actively tracked and analyzed using CRM applications against those who have not. Compared to their peers, those firms who successfully implemented process and technology to focus and support their sales forces efforts are achieving: An 11.3% improvement in the number of sales reps achieving quota Significant increases in success rates at major stages of the sales cycle An 11.4% improvement in win rates of forecasted deals A two-fold improvement in the number of firms generating significant ROIs from their CRM investments

19 From Vendor to Trusted Partner Page 17 Leveraging Technology Across the Solution Selling Blueprint Beyond CRM, there are numerous other technologies that can be insightfully applied to each area of the Solution Selling Blueprint and improve overall selling effectiveness. The following table illustrates some of the technology enablers that support the blueprint and provide higher value. Key Technology Enablers Technology must support the sales process and the overall selling blueprint Buyer-Aligned Process and Methodologies CRM/Process Alignment Jigsaw Inside View OneSource/First Research Solution Selling Software SalesWiki Solution Marketing Value Mapper Solution Selling Software SalesWiki Management Systems and Disciplines CRM/ Process Alignment Management Dashboards KSA Assessment SalesWiki Training and Continual Learning KSA Assessment GeoLearning LMS SalesWiki How Technology Enablement Elevates the Sales Relationship 1. Alerts sales team to current developments within customer s environment 2. Improves team s ability to coordinate resources and function as a consultative resource 3. Accelerates problem solving acumen of sales team

20 Page 18 From Vendor to Trusted Partner Conclusion The Blueprint for World-Class Solution Selling includes six distinct and very important dimensions that must be addressed if sales teams are to succeed:»»»»»»»»»»»» Buyer-Aligned Process and Methodologies Solution Marketing Training and Continual Learning Management Systems and Disciplines Sales Knowledge Management Technology Enablement Once these factors are properly implemented and are deeply embedded in the sales culture, the organization has a greater ability to fundamentally improve their relationship with customers. Becoming a Trusted Partner, therefore, should be the goal of every sales organization and Sales Performance International s Blueprint for Solution Selling provides the foundation that elevates the relationship you have with your customer.

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