Series Introduction: In February, CSO Insights published the results of our 19th annual Sales Performance Optimization (SPO) study, based on survey data we gathered from over 1,200 companies worldwide. The figure from that 220 page analysis which generated the most input from our research clients was related to the outcome of forecast deals. The average close rate across all the firms that took part in the study was 45.7%. What happened to the rest of the forecast? It wound up in the win column of a competitor or it faded away into a no decision. The main questions we received were related to what is causing low win rates, and then what can be done about this problem. Based on those findings, we have committed to doing a series of blog posts on that topic. This is the second post in the series.
Tracking Buying Behavior: Are They Really Into You Or Not?
A standard practice for assessing the likelihood of a deal closing is tracking selling behavior. If reps are logging activities into their CRM system, a manager can easily see what they have been doing with the prospect-whether they have conducted a qualification call, emailed product information, completed a needs analysis review, sent a “pain review” letter, conducted a presentation or demonstration, submitted a proposal, etc. But, as our 2013 Sales Management Optimization (SMO) study found, an average of only 45.7% of forecast deals are closing today. So tracking what sellers are doing is clearly not enough. What about the other side of the equation: tracking buyer behavior? How often is that happening?
The chart above is a summary of the responses received from 1,700+ companies that took part in the Sales Management Optimization study, and it sheds some light on the answer to that question. We asked sales managers how often they ensured the buying cycle was tracking with the selling cycle. Less than one in four firms is doing that on a continual basis.
I recently delivered a keynote at a sales effectiveness conference at the New York Stock Exchange. One of the questions I received after my presentation was how, exactly, do you go about assessing buyer behavior? My response was to either ask them or watch them. Asking them made sense to the Chief Sales Officer I was talking with, but I got a follow-up question on the concept of watch them, as this sales executive’s sales team were all telesales reps.
I shared with her that I recently received a briefing from Austin Texas-based Handshakez, and saw an innovative way that technology can enable buying behavior tracking. Handshakez has developed a sales collaboration platform designed to enhance buyer/seller collaboration. The cornerstone for collaboration is information sharing. The traditional method for doing this today is email. Salespeople send loads of information to prospects in the form of data sheets, PowerPoint presentations, RFP responses, proposals, etc. The issue with this process is that while you know the information went out, you have no idea what the prospect did with the information (if anything).
Handshakez changes that way of collaborating. Their model starts with reps creating private, web-based collaborative deal rooms for each prospect. These rooms are populated with all the information and knowledge prospects and vendors want to share. The advantage of this approach is that Handshakez manages the information sharing and tracking. When a prospect wants access to information assigned to the room, Handshakez delivers the latest version of that knowledge to them. The key benefit is that it also tracks that activity and shares this information with the sales team.
Now, even an inside sales rep can watch what their prospect is doing. This provides many useful insights. For example, the prospect may be playing their cards close to the vest in regards to their interest, but by tracking their activity such as reviewing collateral, watching customer testimonial videos, viewing online presentations etc., the rep can validate that the prospect is investing time to learn about their products. Conversely, a prospect may be telling the rep that they are one of the finalists. However, if the sales person checks and sees that the contract’s T’s & C’s have not been reviewed and the proposal has barely been opened, they know that prospect may likely have decided to go with a competitor.
In looking at the sales performance numbers based on how often sales is tracking buyer/seller alignment, we see that moving from not doing this at all to doing it continuously throughout the sales process can increase win rates of forecast deals by up to 12.5%. So, if you can’t say for certain if prospects are really into you, learning how to track buyer/seller alignment can generate a great ROI.