Technology Is Important to Exceeding in Sales, but the Question Is “How Important?”

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There are a number of areas you could look to in defining Customer Management: marketing, sales, service, and support. We test six different metrics in our Sales Performance Optimization survey. These include the ability to: Effectively introduce new products; Farm additional opportunities and develop account to fullest potential; Regular/effectively communicate with customers; Renew business with existing customers; Create customer loyalty; Create/maintain cast studies/references. Survey participants are given four answer options for each metric: Needs Improvement; Meets Expectations; Exceeds Expectations; Do Not Know.

For the purposes of this writing we focused on the middle four options and leave introducing new products and maintaining case studies for another time. This leaves farming additional opportunities, regularly communicating, renewing business and creating loyalty as our customer management filters. The numbers are consistent and point to the value in several areas of managing customer relations–and technology’s role in doing so.

The numbers are both consistent and compelling. As you might imagine, the group that exceeded expectation in all four of our filtering requirements was the smallest being about one quarter the size of each of the other two groups—meets expectations and needs improvement. And, as they say, it was all downhill from the exceeds group to the needs group.

Beginning with implementing CRM technology, 84% of the exceeds group had implemented CRM and 81% of these had done so for more than a year. This compared with 77% for the meets expectations group (67% of which had implemented for more than a year) and 62% of the needs group having CRM (with 55% longer than a year). Depending on your orientation, you could argue a majority of firms that have implemented CRM more than a year still need to improve. True enough. On the other hand, only 15% of firms exceeding expectations in all four areas have not implemented CRM.

Regardless, other metrics will drive you to do better in the area of customer management no matter how you get there. For example, total sales rep turnover was 18.1% for the exceeds group, 28.7% for the meets group, and 42.9% for the needs group (see Figure 1). In other papers we have monetized rep turnover but suffice to say here, 2.4X the turnover will hamstring the needs group of companies in their customer relations and management efforts.



Fueling this turnover may be quota attainment. We know that reps are attracted to companies where they feel they have the best chance to be successful; and they leave companies where they don’t feel this way. The chart shows the percentage of company plan attained by each of our three groups and the percentage of reps that met or exceeded their quota targets (see Figure 2).



Finally, Win/Loss/No Decision rates of forecast opportunities are similarly dramatic between the three sets of companies (see the table below). The companies exceeding expectations in all four customer management areas have a win rate one-third higher than their needs improvement counterparts!

  Win Loss No Decision
Exceeds Expectations 60.2% 23.7% 16.1%
Meets Expectations 50.0% 28.7% 21.3%
Needs Improvement 45.5% 32.8% 21.7%

Technology does not automatically mean that your customer management will improve but the data clearly demonstrate two things. First, that the companies excelling in customer management are six times more likely to have implemented CRM technology. Second, the companies excelling in customer management are enjoying significantly higher performance figures and significantly lower rep turnover rates giving them a tremendous advantage this year and every year that these disparities are in place.

And as noted at the beginning, the companies not doing these things outnumber the ones that are by eight to one which means there is still the opportunity for you to get started and make a huge difference! What are you waiting for?

1 COMMENT

  1. Barry: My takeaway is that technology enables strategy, assuming the performance results you measured are intended rather than accidental. I wasn’t 100% clear on who you queried for your answers, but I think this was a business self-assessment on efficacy.

    I have two questions:

    1) Would the same correlations result if you asked customers about their perceptions on their vendor’s execution?

    For example:

    Farm additional opportunities and develop account to fullest potential
    (Are there needs which your current vendor could be providing solutions for, but isn’t?)

    Regular/effectively communicate with customers
    (Are your vendor’s communications valuable?)

    Renew business with existing customers
    (Are you likely to continue buying from this vendor?)

    Create customer loyalty
    (Do you regard this vendor’s product or service as a long-term strategic asset for your organization?)

    2) Of course, it’s human nature to interpret correlation as causation. But there’s a fallacy in that (e.g. Everyone who eats pickles dies). Given the correlations that you’ve described, are there other variables that you think might have meaningful impact on the results?

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