Nobody should be surprised that selling has been the business discipline most resistant to technology. The reality is that without process, technology just speeds up the mess.
Organizations strictly enforce a clearly defined process with steps for order entry, billing, inventory control, etc. However, sales is still a challenge, because sales calls are like snowflakes: No two are exactly alike, even when they are made by the same salesperson.
After sales force automation over-committed and under-delivered, customer relationship management (CRM) has been a shining example of how to apply technology to sales. Companies benefit by capturing contact information and seller activities in a secure, centralized database. That said, the primary driver for CRM was to improve forecast accuracy. Many companies have achieved that goal, albeit with some delays. When implementing CRM, companies define standard pipeline milestones, but a sobering reality is that seller opinions are going to be the input.
I hope you would agree that sellers with thin pipelines are more interested in keeping their managers off their backs than in accurately predicting what revenue will close in the next 30 days. Artificially inflating pipelines brings the IT adage into play: “Garbage in, garbage out.”
The benefits of more accurate forecasts come over time. By tracking each seller’s historical close rates at defined milestones, a CRM can apply them each month and become more accurate over time. By knowing how inaccurate each seller has been in the past, the system heuristically improves the accuracy of future forecasts. Prior to CRM, sales managers pared down over-optimistic forecasts using “seat of the pants” approaches. CRM should do a better job.
There are four challenges with CRM:
- It takes time to capture adequate data on close rates for sellers.
- New hires start with no data in the system.
- When sellers leave, their data becomes irrelevant.
- For new offerings or markets, there is no data.
When implementing a CRM system, be aware of the lag time before you begin to see more accurate forecasts.
B2B sales organizations are in the early stages of applying analytics to gain competitive advantages. Once again, the challenge will be how to capture and interpret meaningful data. The traditional view of analytics is that computers crunch terabytes of data in the hopes of finding meaningful trends. This view can be analogous to trying to find a needle in a haystack. It will be a race to see which organizations can apply analytics most effectively to gain an advantage. Metaphorically, a metal detector could accelerate finding the needles.
In his book “The Power of Habit,” Charles Duhigg describes how Target was able to process decades of B2C buying patterns and predict, with a high degree of certainty, if there a given household included a pregnant woman. With this knowledge, Target could send coupons or flyers featuring high-margin items such as cribs, strollers and car seats.
For B2B sales, it is unclear if most organizations have captured sufficient relevant historical data to identify trends. You can imagine how much time it would take to glean nuggets that could be helpful in identifying best sales practices given how much latitude sellers have in how they make sales calls.
Technology works best when paired with process.
The sales approach that I recommend offers a way to more closely define a sales process and the desired outcomes of sales calls with four components:
- Defined milestones for the different types of sales sellers must make
- A common skill set, so sellers are able to execute all steps in the process
- Sales ready messaging® to position offerings consistently for specific buyer titles and goals
- Milestone achievement based on buyer actions rather than seller opinions
By having a common approach to selling and monitoring resultant buyer reactions, sales organizations can significantly shorten the time needed to identify, share and evolve best practices. If successful, they can make the buying experience a sustainable competitive advantage.