Destructive B2B Sales Practices

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:

1. 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).
2. A high performance sales force can boost share of customer by an average of 8 to 15 percent.
3. 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:

1. 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.
2. 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.
3. 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.
4. 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:

1. 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.
2. 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.
3. 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?