5 Sales Blind Spots That Are Costing You Millions

Transcription

1 5 Sales Blind Spots That Are Costing You Millions Key Results from the Apttus and Adobe 2014 Sales Survey When it comes to closing deals, is your sales process an asset or a liability? Recently, Apttus and Adobe partnered on a survey to understand how sales leaders in Fortune 1000 companies are performing in regard to sales effectiveness and process efficiency. The results reveal that many organizations are unaware their processes are lengthening sales cycles and bleeding topline revenue. While 50% of survey respondents admit to ineffective sales processes, large percentages are confident in their sales enablement methodology. And although on the surface it appears that all of the pieces are in place, a deeper dive exposed a number of glaring process blind spots that are not being addressed. In sales, ignorance is not bliss, it s a huge disadvantage. This report reveals obstacles and blind spots that impede sales goals for companies worldwide. It also outlines a plan for improving visibility, which will in turn improve sales efficiency and effectiveness APTTUS & Adobe

2 About the Survey Apttus and Adobe assessed the impact that sales automation solutions, specifically Configure Price Quote, Contract Management and E-Signature, have on an organization s revenue and sales cycles by partnering to launch a world-wide benchmarking survey. The survey consisted of 35 questions about company revenue goals, sales and contracting systems in place, and internal processes for closing deals. More than 140 respondents from Fortune 1000 companies across a spectrum of industries were polled. Below is a visual breakdown of respondent firmographics (note: there is respondent crossover): About the Respondents By Industry By Business Department 66% 7% 2% 10% 7% 16% 3% 3% 75% 4% 14% 12% 2% 2% 5% 15% 6% 1% 19% 13% 2014 APTTUS & Adobe 2

3 The Results at a Glance 1 in 4 companies don t know their average pipeline multiple, deal size, Quoteto-Cash cycle time or win rate What are the top obstacles to achieving your sales goals? 4 out of 10 companies require 3 days or longer to generate a quote 45% of companies report that it takes over a week to get a contract signed Sales Effectiveness Process Efficiency Entering New Markets Sales Channel Productivity Insight into Customers Changing Market 24% 33% 32% 32% 30% 48% 50% of companies have experienced costly mistakes on quotes 1 in 3 companies are not managing renewals effectively and are missing opportunities to capture value Scaling the Business Tech Infrastructure Brand & Product Awareness New Product Launch Customer Retention Channel Turnover 21% 18% 18% 14% 12% 11% 20% of companies say forecasts are chronically inaccurate and negatively impact planning and spending Monetizing Acquisitions Regulatory Compliance Improving Product Quality 4% 3% 6% 2014 APTTUS & Adobe 3

4 What You Don t Know Is Costing You! The Five Most Critical Blind Spots for Sales Organizations 1. Poor Visibility into the Sales Process 1 in 4 survey respondents do not have any insight into key sales performance metrics A surprising number of the Fortune 1000 companies are struggling with sales blind spots. While some of the survey results can be attributed to an individual s lack of knowledge, the prevalence of checkered responses indicates alarming gaps in many organizations ability to quantify and/or share critical sales cycle data. 20% did not know / couldn t estimate their win rate 25% didn t know their average pipeline multiples Almost 10% didn t know revenue results from 2013 And perhaps the most compelling blind spot: 25% of sales professionals cannot say if their company is successful or not Even though increasing sales effectiveness is a top priority for a majority of respondents, without visibility into the current state of the business, it is impossible to take the necessary steps to eliminate friction and improve the sales process. As a result, companies are doomed to repeat the same costly mistakes that have been eating away at revenues and making it difficult to reach their sales goals APTTUS & Adobe 4

5 2. Delayed Quoting & Contracting Process Less than 1/3 of businesses can get a quote to the customer in 24 hours or less and 45% report it takes over a week to get a contract signed When you re nearing end of quarter or in a dead heat against a competitor getting an accurate and easy-tounderstand quote or contract in the customer s hands is critical. Yet less than 3 out of 10 businesses are able to turn a quote around in a 24 hour period. And almost half hang on to contracts for over a week! When product and pricing rules are centralized and up-to-date, and discounting rules are clear and enforceable, the quote should be the easiest part of the sales process. So for many businesses, generating a quote in under 24 hours should be a realistic benchmark. Yet, 70% of respondents can t get a quote in front of a customer in that time frame, and 40% of companies polled took longer than two days. Average Quote Turnaround Time Slow quotes are caused by a number of factors, including complexity of product catalogs and pricing, poor product knowledge among sales reps, error-prone manual steps, lack of anytime, anywhere access to quoting tools and business rules, and limited mobility. If a rep has to be tied to a desk to create a quote, getting a reliable 24 hour turnaround time is impossible. The final challenge many organizations face when it comes to quoting is syncing quotes with contracts. The sales process doesn t end when a quote is submitted, yet many organizations have no way to quickly turn quotes into contracts, or to speed along the signing with efficiency tools like E-Signatures. In fact, almost half of our survey respondents were not using E-Signature to automate getting the deal closed APTTUS & Adobe 5

6 3. Too Many Errors in Quotes 50% of companies have lost business due to quoting mistakes In addition to lengthy quote cycle times, many survey participants indicated that errors in quotes hurt revenue and margin, while increasing exposure to risk, and damaging the customer experience. A staggering 50% admitted to these costly mistakes. This number is higher when adjusted for unreported mistakes. Mistakes are commonly the result of manual steps, unapproved terms and complexity in selecting the right products and services. When selling in an extremely competitive industry, even small quoting errors can make the difference between winning and losing the deal, as the survey results corroborate. 60% of companies who experienced errors identified sales effectiveness as a top barrier to achieving their sales goals, whereas only 35% of companies that did not report errors in their quoting process, reported sales effectiveness as a top barrier. Mistakes are commonly the result of manual steps in the quoting process, use of unapproved, and risky, terms, and complexity in selecting the right products and services for the customer. In addition, byzantine, difficultto-understand quote proposals and informal back and forth chain quotes can confuse customers and slow down the approval process. Without an integrated contract management system, manual entry of information increases the potential for mistakes in the contracting process and can unintentionally cost companies untold revenue APTTUS & Adobe 6

7 4. Struggle with Selling to Existing Customers 1 in 3 companies are missing opportunities to capture value from existing customers through contract renewals Selling to existing customers is one of the most effective ways to meet goals for revenue, margin and growth. Unfortunately, even though most businesses generate at least half of their revenue in renewals with almost 35% of respondents generating 80% of revenue through renewals businesses have an abysmal amount of visibility into their renewals. Companies are commonly unaware of both where it comes from and how effectively it is captured. One third of survey respondents admitted they don t know what their annual increase clauses are, or if their deals even contain them. To compound the pain, the survey data shows that half of all companies are not successfully upselling and cross-selling at the time of renewal. Point blank, many companies are simply leaving money on the table Business Tied to Renewals 2014 APTTUS & Adobe 7

8 5. Forecasting Inaccuracies 20% of businesses reports their forecasts are not effective for business planning and spending decisions Revenue forecasts determine what purchases can be made, how much employees are paid, what programs are adopted and what interest rates money can be borrowed at. And for public companies, the forecast directly effects market capitalization and stock value. Despite the importance of accurate forecasts, many firms admit they are at risk for revenue shortfalls, and, in extreme cases, revenue restatements because their revenue forecasts are inaccurate. 50% of these firms report that forecasts are occasionally inaccurate, while 20% report their forecasts are chronically inaccurate and negatively impact planning and spending. For many organizations, a lack of visibility into contract data specifically, insight into the latest agreed-upon terms, commitments, and pricing contributes to errors, especially when it comes to revenue recognition and forecasting. What You Need to Know About Forecasting The average forecast error is anywhere from 13% to 39% (Courtesy of Forecasting Blog) 74% of industry leaders have a process for tracking prospect engagement (Courtesy of salesforce.com) About 40% of companies think that forecast inaccuracy has impacted their stock price by at least 5% (Courtesy of KPMG) Accurate forecasters performed noticeably better, growing share prices by 46%, which is 12% above average (Courtesy of KPMG) 2014 APTTUS & Adobe 8

9 Optimizing the Organization Reduce Blind Spots and Close Faster with Quote-to-Cash and E-Signature Solutions Quote-to-Cash is the end-to-end business process between the buyer s interest in a purchase and the realization of revenue. It includes creating a quote, submitting a proposal, negotiating and managing the contract, getting the contract signed, fulfilling the order, tracking payment and managing renewals. In addition to being more capable of effectively managing the five aforementioned blind spots companies that are able to sell effectively and efficiently have an advantage in three other key aspects as well: Control, Visibility, and Speed. 1. Control If you re familiar with customer relationship management (CRM) tools such as salesforce.com, you know that CRM effectively tracks the activities that move a lead to an opportunity to a closed deal. However, there is often a knowledge gap between what happens between the opportunity and the realization of revenue. An effective Quote-to-Cash solution, consisting of Configure Price Quote (CPQ) integrated with Contract Management and E-Signatures, eliminates costly, potentially deal-killing errors, halts maverick discounts and speeds time to revenue. With CPQ automation, managers can define what a good deal looks like including discount level, product, status, customer restraints and required approvals to ensure reps deals are aligned with important company goals. The addition of Contract Management and E-Signatures ensures customer and quote data is automatically merged from the system into the contract, eliminating mistakes due to data re-entry. If required, additional customer data can be collected as part of the approval process, further ensuring process consistency. Why Quote-to-Cash and E-Signature? 70% of CPQ users agree that they have a standard selling processes, which is 20% higher than non-user 80% of CPQ users agree that they price their products fairly and accurately, which is more than 10% higher than non-user Without e-signatures, 35% of people take 1-2 weeks to approve and sign sales contracts, and 10% take over 2 weeks to approve and sign With e-signatures, 30% get contracts approved within a day, and 45% in a week 2014 APTTUS & Adobe 9

10 2. Visibility Lack of visibility into the sales cycle can cause a variety of problems, all of which can result in lost revenue. Companies with optimized sales processes understand that visibility comes in three varieties: ensuring managers have visibility into what reps are doing, giving reps full visibility into their pipeline, approvals and product catalog, and finally, ensuring customers and partners have insight into pricing and the products and services catalog. When all three parties are informed, the experience is a vastly more efficient and effective sales process. Sales organizations equipped with an automated CPQ solution can enhance sales effectiveness with system driven intelligence. CPQ allows sales leaders to manage strategies for different channels or geographies by giving full visibility into sales trends and channel effectiveness, so executives can course-correct when needed. Easy to use guidance for the right products and services, pricing, margin targets, customer s existing assets and contracts help steer reps towards optimized deals so money isn t left on the table. An automated CPQ solution integrated with Contract Management will make the sales process more efficient. Once contracts are sent for E-Signature, the approval status is automatically updated throughout the entire cycle. Sales managers and reps can view the approval stage and status; in addition, they can easily find previously signed documents and maintain a detailed audit trail at the same time. This will also ensure revenue opportunities aren t being overlooked. Automating contract renewals and streamlining the approval with E-Signatures improve renewal rates and revenue growth, in some cases, by 15% or more, which at the enterprise level can boost your top line by millions. Linking quotes to contracts is a crucial step in aligning once siloed processes into a full Quote-to-Cash solution, which will provide greater organization wide optimization and improved sales numbers APTTUS & Adobe 10

11 3. Speed By automating quoting processes, sales organizations can tame complex catalogs, eliminate manual steps, and drastically shorten quote generation time. Getting a quote in front of a customer before the competition is critical; first-mover advantage, in many cases, will seal the deal. But the benefits of speed can be lost if contract management and approval isn t also automated. What s the value of having an accurate, speedy quote if the deal is bottlenecked at the contracting phase and doesn t get signed in a timely manner? Or, if all of the quote information has to be manually entered into another point solution or, even worse, transferred to paper, re-exposing the deal to the risk of costly errors? If it takes weeks to negotiate terms and conditions and get a signed contract, many of the advantages of an automated CPQ solution can be nullified. Quoting should flow seamlessly into a contract so deals close and get booked as fast as possible. One important way to accelerate contracting is by integrating E-Signature into the process, which can cut contract finalization time from weeks or days to minutes. Speed is one of the most valuable assets to any business. Companies that have created a full integrated Quote-to-Cash process experience a much more streamlined and efficient sales cycle, resulting in: CPQ: Yes CPQ: No Companies with CPQ Report Greater Overall Win Rate 4% 28% 28% 16% 10% 14% 6% 20% 30% 16% 2% 28% 500% faster signature-based approval times 28% shorter sales cycles 105% larger deal size on average 26% more reps achieving quota 49% higher proposal volume 17% higher lead-to-conversion rate 2014 APTTUS & Adobe 11

12 Closing Comments The Apttus and Adobe sales survey revealed that organizations that have automated CPQ, Contract Management and E-Signatures have a clear advantage over those that didn t. They are more aware of and better manage the sales blind spots that erode sales and revenue. They also benefit from shorter sales cycles and face fewer obstacles in rapidly reaching their sales goals. Apttus and Adobe will continue to conduct market research to identify further points of friction in critical sellside business processes and ways to improve them. About Apttus Apttus, the category-defining Quote-to-Cash software company, drives the vital business process between the buyer s interest in a purchase and the realization of revenue. Apttus is delivered on the Salesforce1 Platform, the world s most trusted and comprehensive cloud delivery infrastructure. Applications include Configure Price Quote (CPQ), Renewals, Contract Management and Revenue Management. Additionally, Apttus patent pending X-Author technology enables Microsoft Office to be a user-interface with full interaction and control between Salesforce and Microsoft Office. Apttus is based in San Mateo, California, with additional offices in London, UK, Bozeman, Montana and Ahmedabad, India. For more information visit: apttus.com. About Adobe EchoSign Adobe EchoSign is an e-signing solution, trusted and used by businesses of all types, including Fortune 1000 companies, healthcare organizations, and financial institutions, to accelerate critical business processes in Sales, HR, Legal, Procurement, and Operations. From the global leader in secure digital documents for more than 25 years, EchoSign quickly integrates with existing systems, extends mobile productivity, and reduces signature cycle times from days to minutes. For more information, visit: echosign.com 2014 APTTUS & Adobe 12