CSO Inisghts Sales WP 08

Sales Performance Optimization – 2008 Survey Results and Analysis
Sales Performance Optimization
2008 Survey Results and Analysis
Compliments of
Jim Dickie ♦ Barry Trailer

CSO Insights CSO Insights
Boulder, CO Corte Madera, CA
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2008 Survey Results and Analysis
Compliments of
Jim Dickie ♦ Barry Trailer
Sales Mastery Press

Mill Valley, California
Copyright © 2008 CSO Insights

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Acknowledgements
First, we wish to thank all of the far-sighted industry executives who unselfishly contributed their
time and insights to the development of the research knowledge base used in the creation of this
publication.
Next, we would like to thank the following sales effectiveness experts for their underwriting and
thought leadership support for this project: Accenture, Kadient, OneSource Information Services,
Salesforce.com, Sales Performance International (SPI), and Corporate Visions.
Finally, we owe a debt of gratitude to many colleagues, mentors, and advisors whose help made
this report possible. To list them all would be impossible, but a few deserve special mention:
Gerhard Gschwandtner, founder and publisher of Selling Power magazine; Bob Thompson,
Founder and Publisher of CustomerThink; Willis Turner, President and CEO of Sales & Marketing
Executives International (SMEI); and Brian Lambert, President of United Professional Sales
Association (UPSA) for their support in this year’s project. Finally, we want to thank our editing
team headed up by Susan Renner.
Compliments of
Table of Contents
2008 Sales Performance Optimization Project Overview ........................................................ 1
Introduction ............................................................................................................................... 5
Sales Force Demographics..................................................................................................... 11
• Percentage of Sales Force Achieving Quota............................................................. 12
• Percentage of Overall 2007 Revenue Target Achieved ............................................ 14
• Percentage of Company Revenues by Sales Channel Type..................................... 16
• Percentage of Company Revenues by Customer Type ............................................ 18
• Primary Sales Focus................................................................................................... 20
• Position in the Marketplace........................................................................................ 22
• Level of Relationship with Customers....................................................................... 24
• Size of Average Annual Quota ................................................................................... 26
• Sales Rep Variable Compensation Package Breakdown .......................................... 28
• Impact of Incentive Plans on Sales Rep Behavior..................................................... 30
• Planned Sales Force Size Changes Over the Next 12 Months.................................. 32
• Current Annual Sales Rep Turnover Rates................................................................ 34
• Experience Profile of New Sales Rep Hires............................................................... 36
• Average New Sales Rep Ramp-up Time .................................................................... 38
• Percentage of Revenues of Generated by Top Reps ................................................ 40
• Sales Rep Time Allocation ......................................................................................... 42
Sell Cycle Analysis.................................................................................................................. 45
• Average Deal Size....................................................................................................... 46
• Length of Average Sell Cycle..................................................................................... 48
• Number of Calls Required to Close a Deal ................................................................ 50
• Lead Generation Analysis .......................................................................................... 52
• Percentage of Leads that Progress to an Initial Customer Discussion.................... 54
• Percentage of Initial Discussions that Progress to a Presentation.......................... 56

• Percentage of Presentations Resulting in a Sale ...................................................... 58
• Percentage of Proposals Resulting in a Sale ............................................................ 60
• Percentage of Deals that Close as Forecast.............................................................. 62
• Outcome of Forecast Deals........................................................................................ 64
Sales Strategy Development Assessment ............................................................................. 67
• Ability to Prioritize Accounts upon Which to Focus ................................................. 68
• Ability to Develop Strategic Plans for Key Accounts................................................ 70
• Ability to Thoroughly Research New Accounts before Calling Them ...................... 72
• Ability to Generate the Necessary Number of New Leads ........................................ 74
• Ability to Qualify and Prioritize Properly the Opportunities ..................................... 76
• Ability to Incubate Leads Who have Interest, but No Time for Action...................... 78
Sales Cycle Execution Assessment ....................................................................................... 81
• Ability to Understand Clearly the Customer’s Buying Process................................ 82
• Ability to Effectively Present Your Offering’s Features and Benefits ...................... 84
• Ability to Differentiate among Competitive Products/Services ................................ 86
• Ability to Align Solution to Customer’s Needs.......................................................... 88
• Ability to Generate Accurate Bid/Configuration/Proposal ........................................ 90
• Ability to Cross-sell and Up-sell................................................................................. 92
• Ability to Sell Value/Avoid Excessive Discounting ................................................... 94
• Ability to Close Deals Accurately, in the Timeframe Originally Forecast ................ 96
• Top Three Reasons Why Companies Win Competitive Deals .................................. 98
• Top Three Reasons Why Companies Lose Competitive Deals .............................. 100
Account Management Assessment...................................................................................... 103
• Ability to Effectively Introduce New Products......................................................... 104
• Ability to Farm Additional Revenues from Existing Customers............................. 106
• Ability to Effectively Communicate with Customers .............................................. 108
• Ability to Generate Repeat or Renewal Business from Existing Customers ......... 110
• Ability to Create Customer Loyalty.......................................................................... 112
• Ability to Create/Maintain Case Studies/References............................................... 114
Sales Management Assessment........................................................................................... 117
• Ability to Hire Sales Reps Who can Succeed at Selling Offerings ......................... 118
• Ability to Provide Managers Access to Timely/Accurate Sales Metrics................. 120
• Ability to Accurately Forecast Business ................................................................. 122
• Ability to Easily and Accurately Calculate Sales Commissions............................. 124
• Ability to Regularly Conduct Win/Loss Reviews..................................................... 126
• Ability to Continually Adapt Sales Process to Market Changes............................. 128
• Ability to Proactively Identify Which Reps Need Coaching/Mentoring .................. 130
• Ability to Share Best Practices Across the Sales Force ......................................... 132
• Amount of Change Impacting Your Sales Reps ...................................................... 134
Sales Process Assessment .................................................................................................. 137
• Annual Investment in Training Per Sales Rep......................................................... 138
• Change in Amount of Sales Skills Training ............................................................. 140
• Change in Amount of Product Training ................................................................... 142
• Change in Amount of Customer’s Marketplace Training ........................................ 144
• Change in Amount of Purchase Justification Training ........................................... 146
• Change in Amount of Sales Management Training................................................. 148
• Change in Amount of CRM System Usage Training ............................................... 150
• Adherence to Use of Sales Methodology ................................................................ 152
• Impact of Sales Methodology on Performance ....................................................... 154
• Type of Sales Methodology Used in Sales Process................................................ 156
• Sales Methodology Adherence Rate........................................................................ 158
• Attitudes Toward Recommending Sales Methodology Vendor.............................. 160
Customer Relationship Management (CRM) Utilization ...................................................... 163
• Organizations that Have Formally Implemented a CRM System ............................ 164

• Organizations Planning to Formally Implement a CRM System in 2008 ................ 166
• Type of CRM System(s) Implemented...................................................................... 168
• Length of Time CRM System Installed..................................................................... 170
• CRM System Implementation Time.......................................................................... 172
• CRM Application Adoption Rate .............................................................................. 174
• CRM Project Costs: Actual vs. Budget .................................................................... 176
• Benefits Resulting from CRM Usage ....................................................................... 178
• Additional CRM Applications Installed .................................................................... 180
• Satisfaction Rating of Primary CRM Vendor ........................................................... 182
• Buy From Again/Recommend Primary CRM Vendor .............................................. 184
• Plans to Replace Existing CRM Solution in 2008 .................................................... 186
Internet and Sales Knowledge Management Utilization ...................................................... 189
• Uses of the Internet to Support Sales and Marketing Efforts ................................ 190
• Impact of Internet Usage on Sales and Marketing Performance ............................ 192
• Ease of Access to Sales Knowledge Management Components ........................... 194
• Sales Knowledge Management Improvement Priorities ......................................... 196
Sales and Marketing Alignment............................................................................................ 199
• Assessment of Marketing-Generated Sales Collateral............................................ 200
• Assessment of Marketing-Generated Lead Quality and Quantity .......................... 202
• Marketing’s Self-Assessment of Lead Quality and Quantity .................................. 204
• Timeframe for Marketing Programs to Start Generating Sales............................... 206
In Closing: Where Do We Go From Here?............................................................................ 209

2008 Sales Performance Optimization Project Overview

This report presents the summarized findings of our 14th annual sales effectiveness study. Once
again this year, we have focused on assessing the specific challenges that today’s sales teams
are facing, and why these problems exist. Perhaps more importantly though, we sought to
discover what companies are doing in order to overcome these issues and optimize their sales
performance.
To solicit sales executive participation for this study, we partnered with Selling Power magazine,
CustomerThink, Sales and Marketing Executive International (SMEI), and United Professional
Sales Association (UPSA) to invite professionals directly involved in the management of their
organizations’ sales forces to give us feedback on 100+ unique sales performance metrics. More
than 1,500 firms participated in this study.
Looking at the profiles of the firms who took part in the 2008 study, it became apparent that again
we had attracted a broad base of support across multiple industries. Figure 1 profiles the industry
sector segmentation at the highest level: Manufacturing, Services, and Other (including retail,
government, non-profits, education, distribution, etc.).
Figure 1
Within these sectors, several industries had representation of over 100 firms, including financial
services, software, hardware/technology, professional services-business, and professional
services-high tech, etc. In early 2008, we plan do an additional analysis of the study data for
these vertical industries, to understand more clearly the specific challenges firms are facing and
how they are dealing with those issues.
Geographically, 70% of participating firms were from North America, 9% from the Pacific Rim
nations, 7% from Europe and the remaining 14% were from the rest of the world.
Looking at the size of the firms, we focused on two metrics: company revenues and the number
of salespeople employed. In Figure 2, you see the breakdown of participants by revenue into
what we consider small businesses (under $50M), medium-sized firms ($50M to $1B), and large
enterprises (>$1B).
©CSO Insights 1
No portion of this report may be reproduced or distributed in any form
or by any means without the prior written permission of the authors.
Figure 2
An initial review of the data has shown key differences in terms of the challenges companies
face, and also the types of sales effectiveness initiatives they are able to successfully take on,
based on their relative revenue size. Therefore, we will be doing further analysis of the 2008
survey results for small, medium, and large businesses.
In Figure 3, we see the breakdown of study participation based on the second size metric,
number of salespeople currently employed.
Figure 3
©CSO Insights 2
As in the past, we used a web-based survey approach for this research project to collect the data
from participating firms. Prior participants and other candidates invited to take part in this study
were initially pre-screened based on their job function. These executives were then emailed an
invitation to take part in the study.
Those who accepted were directed to a website where they could take the online survey. We also
provided a direct link to the survey from our website, www.csoinsights.com. The survey
instrument was designed to take up to 30 minutes to complete. Participants had the option to sign
off from the site, return, and continue where they left off if they needed to get more information or
had a time constraint.
Survey questions focused on sales performance metrics relative to ten key areas:
! Sales Force Demographics: Number of salespeople, percentage of sales reps making

quota, average tenure of salespeople, percentage of revenues from various sales
sources (field sales, telesales, channel, OEM), ratio of sales reps to sales support
personnel and sales managers.
! Sell Cycle Analysis: Average sell cycle length, number of calls required to close a deal,
pipeline conversion rates (number of leads resulting in a discussion, discussions resulting
in a presentation, presentations and proposals that result in a sale), average win/loss/no
decision rates, percentage of deals that close as forecast.
! Sales Strategy Development Assessment: The ability to target the right accounts to
pursue, develop strategic account plans for key accounts, thoroughly research accounts
prior to contacting them, generate enough leads, and properly qualify prospects and
incubate leads who have interest but no current time.
! Sales Cycle Execution Assessment: Ability to understand the customer’s buy cycle,
effectively present features and benefits, differentiate from the competition, align solution
to customer’s needs, generate a proposal/bid/configuration, cross-sell/up-sell, sell
value/avoid discounting, and close business. In addition, we looked at the key reasons
why companies win and lose deals.
! Account Management Assessment: Ability to introduce new products, farm additional

business from existing customers, effectively communicate with customers, renew
business, create customer loyalty, and generate/maintain case studies and references.
! Sales Management Assessment: Ability to hire reps who will succeed, provide
managers with timely and accurate sales metrics, accurately forecast business, calculate
commissions, conduct win/loss reviews, adapt the sales process to changes in the
marketplace, proactively identify which reps need coaching/mentoring, share best
practices across the sales force, and manage the rate of change impacting sales reps.
! Sales Process Assessment: Percentage of firms using a formal sales process, their
adherence to that process, analysis of sales organizations that develop their own versus
license a commercially available methodology to support the process, analysis of which
commercial offerings they used, and the overall impact sales process is having on their
sales performance.
! Customer Relationship Management (CRM) Utilization: Percentage of organizations

that have evaluated/implemented a CRM system, comparison of licensing a commercially
available system versus building the application in-house, analysis of the impact that
CRM is having on a sales force’s ability to sell, and usage of outside resources to
implement CRM systems.
©CSO Insights 3
! Internet and Sales Knowledge Management Utilization: Beyond the traditional CRM
applications, this section looks at how reps are leveraging the Internet and access to
sales knowledge to support their selling efforts.
! Sales & Marketing Alignment: How sales rates the level of support they are receiving
from marketing in terms of tools/collateral, as well as the quality and quantity of leads.
The following report summarizes the input we received from participating firms in each of these
areas. To help put the data into perspective and increase relevance to your sales organization,
we recommend that research clients take the survey either prior to, or after, reviewing this report.
(Contact your CSO Insights partner if you need the link to the online survey.) We also urge you to
read both the following Introduction and the Closing remarks (see page 209), which contain
additional considerations for the strategies and tactics you may want to include as part of your
sales optimization initiatives for 2008 and beyond.
In this study, where applicable, we also refer to other analyses we have completed on topics such
as lead generation, sales process, sales management, CRM, sales effectiveness best practices,
etc. These are listed immediately following the front cover. If an area covered in the report is of
particular interest to you, you can access the related documents via the research client portal or
our website: www.csoinsights.com.
As you review our report findings, you will be able to compare your company’s performance to
other sales forces and determine where your team excels, equals, or lags behind your peers. In
doing so, you will see where your specific areas for improvement are. Research clients who may
then want a more targeted look into their performance, based on industry, company size,
geography, etc. should contact their CSO Insights partner.
We hope the information in this report will help you more effectively chart the course for your own
sales effectiveness efforts for 2008. While we believe the issues raised have broad applicability,
we encourage you to use this information simply as the basis for brainstorming and goal planning,
and to identify and prioritize your organization’s operational challenges. Everyone can benefit
from understanding the strategies and tactics of other companies, but in the end, you have to
implement solutions that fit your specific business needs, not those of other firms.
If you have any questions or comments regarding this report, please contact:
Jim Dickie Barry Trailer

Managing Partner Managing Partner
(303) 530-6930 (415) 924-3500
jim.dickie@csoinsights.com barry.trailer@csoinsights.com
©CSO Insights 4
Introduction
For decades the debate has been, is “sales” an art or a science? Having completed our 14th
annual Sales Performance Optimization study, and reflecting on the feedback that we received
from over 1,500 companies worldwide, it is clear we have firms entrenched in both camps. So the
question this situation raises is, does it make a difference? The answer we are finding is a definite
YES!
If you remember the Closing Comments section in our 2007 Sales Performance Optimization
report, we introduced the concept of the Sales Relationship/Process (SRP) Matrix, shown here
again in Figure 4.
Sales Relationship/Process (SRP) Matrix™

Trusted
Partner
Strategic
Contributor
Solutions
Consultant
Preferred
Supplier
Approved
Vendor
Random Tribal Wisdom Formal Dynamic

Process Process Process Process
Figure 4
To provide a framework for the comments we will make about the art versus science debate, let’s
review the premise of the SRP Matrix.
Over the years, we have found through our benchmarking efforts that there are five levels of
relationships firms can have with your customers/prospects, and four levels of adherence to sales
process for building these relationships.
Five Levels of Sales Relationships
# Level 1—Approved Vendor: You are seen by the majority of your customers as a
legitimate provider of the products or services you offer, but are not recognized for having
any significant sustainable competitive edge over alternative offerings.
# Level 2—Preferred Supplier: Based on your marketplace reputation and past dealings
with your customers, while competitors may offer alternatives, you are normally seen as
the preferred vendor with whom to do business.
©CSO Insights 5
# Level 3—Solutions Consultant: Based on a specific set of product-related, value-added

knowledge or services you offer, your customers see you as not only a vendor, but also a
consulting resource on how to best use your products or services.
# Level 4—Strategic Contributor: Above and beyond the products and services you offer,
your customers view you as a source of strategic planning assistance for dealing with
broader-based challenges they are currently facing.
# Level 5—Trusted Partner: At this highest level, you are seen as a long-term partner
whose contributions – products, insights, processes, etc. – are viewed as key to your
client’s long-term success.
Four Levels of Sales Process
# Level 1—Random Process: Your company may be perceived as being anti-process,

though what you really lack is a single standard process. Essentially every sales rep does
their own thing their own way.
# Level 2—Informal Process: Your company exposes your salespeople to a sales

process and indicates that they are expected to use it, but that use is neither monitored
nor measured.
# Level 3—Formal Process: Your company regularly enforces the use of a defined sales
process (sometimes religiously), and you conduct periodic reviews of the process to see
how effective it is, and then make changes based on that analysis.
# Level 4—Dynamic Process: Your company dynamically monitors and provides

continuous feedback on sales reps’ use of your formal sales process. You also
proactively modify the process when you detect key changes in market conditions.
As you look into the Matrix concept based on these relationship and process levels, examples of
sales forces probably come to mind for you. And as we further reflect on how sales organizations
actually sell based on which quadrant they fall into, we start to realize that art and science are not
mutually exclusive by any means. But we do see noticeable degrees of differences.
Let’s consider two hypothetical firms. The first is Approved Vendor/Random Process (R1/P1) and
the second is Trusted Partner/Dynamic Process (R5/P4). Because those definitions mean very
different things, we would see clear differences in how the companies operate. We would not see
the case where one is pure art in selling and the other is pure science, but we would see a
propensity towards one over the other.
The R1/P1 firm lacks science at the organizational level, and is relying on the art of individual
reps to close deals. But at the rep level we would see that they have their own unique level of
science that they bring to the table to win. And within the R5/P4 firm, we clearly see science
reinforced and enforced across the sales teams, but for specific opportunities reps may need to
rely on their personal artistry to win.
So what we see here is a blending of art and science. But in looking closely at the data from all
the firms that took part in the 2008 SPO study, and aggregating their performance based on
which Matrix quadrant they fall into, we see a clear trend. On average, the more you rely on the
science of selling versus the art, the more success you will achieve.
What exactly are we basing that statement on? First, we identified several key metrics that
contribute to sales success: percentage of reps making their quota; percentage of the overall
company plan achieved; percentage of deals resulting in a win, loss, or no decision; and sales
©CSO Insights 6
force turnover (both voluntary and involuntary). Then we calculated the combined numbers for all
the firms in a given Matrix quadrant.
Before we start our summary of this analysis, we should point out that we found two quadrants in
the Matrix that were virtually empty, reflected in the Figure 5 as the grayed areas of the Matrix.
Companies consistently functioning randomly do not achieve a trusted partner level of
relationship. Similarly, in reviewing dynamic process firms, they are nearly always able to figure
out a way to be at the preferred supplier level or above in their relationships with customers. For
the remainder of the Matrix, while we found individual successes and failures in each
relationship/process category, when we compared the averaged sales performance numbers for
each of the quadrants in the Matrix, three clear classes of performance differences emerged, as
shown below.
Sales Relationship/Process (SRP) Matrix™
Figure 5
The sales performance numbers of the five quadrants in the Sleepless Nights class were fairly
similar to each other, and markedly different from the performance of the firms in the Challenging
Months category. And the difference in performance between Challenging Months and
Successful Years also existed as can be seen in the aggregated performance numbers of these
three classes of sales forces (see table below).
Sleepless Challenging Successful

Nights Category Months Category Years Category
(34% of firms (49% of firms (17% of firms
surveyed) surveyed) surveyed)
% Reps making quota 56% 62% 69%
% of Company plan 86% 90% 93%
% Forecast deals won 44% 49% 55%
% Forecast deals lost 35% 28% 25%
% Forecast deals no decision 21% 22% 21%
% Sales force turnover 32% 31% 23%
©CSO Insights 7
Even after just a quick scan of the numbers, the logic behind our naming convention for these
three classes should start to become clear. In general, in the Sleepless Nights world of sales
(roughly one-third of the study population), when the marketplace experiences a major shift (e.g.,
economic downturn, changes in customer’s buying habits, the emergence of a new competitor,
etc.) these companies tend to have problems quickly adapting their sales effectiveness.
Over time, the Challenging Months class of firms (nearly one-half of the firms surveyed) will
outperform their peers in the Sleepless Nights category in all the metrics above, but this does not
mean that life is always easy. Again, when major market shifts occur, the relationships these
firms have with their customers can buy them some time as they make changes in how they sell;
and their adherence to process may make it easier to determine what changes to make. Still, the
net result is that they will have to make adjustments and, in doing so, could experience a series of
turbulent weeks or months.
Finally, in the Successful Years category (the remaining 17% of study participants), we see that
with the combination of strong relationships and process adoption come rewards. These
companies enjoy performance advantages over their competitors by excelling at most aspects of
sales, and are in fact turning “how” they sell into a strategic competitive advantage.
Optimizing Process and Relationships
We present the Matrix model here in the introduction, because we feel that it needs to be the filter
through which you view all of the rest of the information we present in this report. Let us explain
why we feel that way. In Figure 6, we see a summary of the responses from this year’s study
participants regarding their top three sales objectives for 2008.
Figure 6
Folklore has credited Albert Einstein with the observation that Insanity is doing the same thing
over and over again and expecting different results. So let us pose a question: if in 2008 you want
higher revenues, increased effectiveness, more market share, higher customer loyalty, etc., what
is going to be different from 2007 in terms of how you sell?
©CSO Insights 8
As you start to think about the changes you need to make to achieve your sales objectives for this
year, you will find that the strategies and tactics that will help you get there will vary widely
depending on where you are (or where you want to be) on the Matrix. Your Matrix position can
alter how you hire, compensate, train, support, and manage your sales reps.
In the remainder of this report we lay out the Report Card, if you will, of sales. The data will give
you a foundational understanding of the “As Is” state of selling, based on the feedback of 1,500+
of your peers. But then that information needs to be personalized into insights.
To do that, we first encourage you to reflect on each of the metrics presented and assess how
you would rate your organization. Walking down this path will help you surface all the things you
could do to improve. But which ones should you go after?
In prioritizing your sales effectiveness improvement plans, we encourage you to refer back to the
Matrix and remember that you have two objectives: optimize your relationships and optimize your
processes. Therefore, your attention needs to focus on: 1) what is the best thing to do for the
customer (what can you do to optimize the value you bring to the table), and then 2) what is the
best way to go about it?
At the end of the day, the goal for every CSO can be simplified to Sell More, Now! Leveraging the
analysis in this study to prioritize changes aimed at helping your sales teams achieve their new
revenue goals, will provide you with a foundation on which to build improvements.
Research clients who feel they would benefit from additional insights into how to accomplish their
objectives should feel free to call their CSO Insights partner. If you can share what you want to
do, we can put you in touch with other research clients who are 6 to 12 months ahead of you in
dealing with that challenge, or review the benchmarking results we have obtained from them, so
you can leverage their experiences to increase the odds of your own success.
We welcome your feedback. If you have any questions or comments regarding this report please
contact:

Managing Partner Managing Partner
(303) 530-6930 (415) 924-3500
©CSO Insights 9
©CSO Insights 10
Sales Force Demographics

Introduction
This section looks at a number of metrics related to the sales force make-up, including quota
attainment, business focus, the size of the sales team, how they are organized, their level of
experience, where they work, how they spend their time, etc.
• Percentage of Sales Force Achieving Quota............................................................. 12
• Percentage of Overall 2007 Revenue Target Achieved ............................................ 14
• Percentage of Company Revenues by Sales Channel Type..................................... 16
• Percentage of Company Revenues by Customer Type ............................................ 18
• Primary Sales Focus................................................................................................... 20
• Position in the Marketplace........................................................................................ 22
• Level of Relationship with Customers....................................................................... 24
• Size of Average Annual Quota ................................................................................... 26
• Sales Rep Variable Compensation Package Breakdown .......................................... 28
• Impact of Incentive Plans on Sales Rep Behavior..................................................... 30
• Planned Sales Force Size Changes Over the Next 12 Months.................................. 32
• Current Annual Sales Rep Turnover Rates................................................................ 34
• Experience Profile of New Sales Rep Hires............................................................... 36
• Average New Sales Rep Ramp-up Time .................................................................... 38
• Percentage of Revenues of Generated by Top Reps ................................................ 40
• Sales Rep Time Allocation ......................................................................................... 42
©CSO Insights 11
How Would What percentage of your sales force achieved quota?
Key Findings Observations
! The number of This is the metric we always use to begin our annual sales performance
sales reps report, and this year’s number is good news to kick things off! Average
making quota is quota attainment is up to 61.2% – 4.2 full points above last year, and
up significantly. over 60% for the first time in five years.
! Quota attainment It would appear that investments in CRM, sales training, and other sales
is up over 60% improvement efforts could be paying off. However, as you will see later
for first time since in this report, many of the other metrics that would support the notion
the hot “tech that effectiveness initiatives are succeeding have actually remained
bubble” days. relatively flat.
! However, the Still, while it’s important to celebrate success, it is also important to
reason for understand what is causing success.
improvements is
not clear cut. We’ve written about the four levers available to sales management to
increase sales effectiveness: 1) People; 2) Process; 3) Technology; and
4) Knowledge. Adding people boosts revenue and we see that this
continues to be a popular strategy for many CSOs. However, this does
not boost individual quota attainment. In fact, some would argue it
threatens individual results as more reps are added and territories are
reduced and/or accounts reassigned.
Sales process adoption/adherence rates are fuzzy (see the metric on

page 152). While there was a slight increase in the percentage of firms
with formal sales processes (Level 3), there was an equal percentage of
firms joining the random/ad hoc process segment (Level 1). Dynamic
process firms (Level 4) also decreased.
©CSO Insights 12
There continues to be a yawning gap in the area of sales knowledge

management, between reps’ current access to useful knowledge and the
desired state of gathering, synthesizing and sharing information.
Initiatives to improve in this area rank second with survey respondents
for 2008 (see page 210).
Of the four levers, technology is showing the most improvement this

year. The percentage of firms implementing CRM, levels of user
satisfaction, and rates of user adoption are all up. This technology ROI is
allowing reps to do more faster – the efficiency component of selling, as
can be seen on page 178 which overviews the benefits of CRM. But
what about increasing effectiveness?
You will see that effectiveness measures remain essentially flat. Average
deal size increased only slightly and not uniformly across all industries.
Conversion rates on qualified leads to first calls, initial discussions
leading to presentations, hit rates on presentations and proposals that
eventually close all are similar to last year.
So where is this increase in quota attainment coming from? An initial

interpretation of the data might suggest that reps are simply pursuing
more deals, working more leads, developing and connecting with more
prospects and customers than ever. But as you read through this report
you’ll find it’s not quite that simple. Each metric has its ups and downs;
its gainers and losers. You’ll do well to see which sub-groups are
achieving breakout success and how.
Yes, celebrate success from 2007! Okay, the party’s over. Time to get
back to work; we have another year ahead of us, and new revenue to
bring in. As we highlighted in the Sales 2.0 analyses we published at the
end of last year – Part 1, Time to Run Away and Join a New Circus, and
Part 2, Think, Think Differently, Think Again – 2008 is going to be a year
where we get more innovative in how we sell if we are to meet our
revenue targets.
Notes:
©CSO Insights 13
How
What Would
percentage of your company’s 2007 overall revenue target was achieved?
! Renewed Metric: This is a renewed metric. Since 2005, the figure for overall attainment of
Attainment of the company’s revenue plan has actually declined by just over one point.
overall company This raises an important question: What has happened when reps make
plan is less than their numbers and the company does not?
90%.
The answer lies partly in the fact that you as CSO can over assign quota
! This figure has too much. When you take your revenue target for the year and add ten to
remained flat in thirty percent before assigning it across your sales teams, you are
comparison to hoping the action will provide the cushion you need to get to plan. The
two years ago. assumption is that some reps will blow out their numbers by
overachieving while others will fall short.
! Rational basis for
sizing and Referring back to the prior metric, the percentage of reps achieving their
assigning quotas individual quotas is up 3.6% from 2005, but company revenue plan
continues to be attainment is down slightly. Have individual quotas not grown as quickly
elusive. as company growth plans? This may be the case, especially in light of
the fact that individual rep achievement has been declining in the past
three years.
In effect, companies have had to recognize that if average reps are not
making their numbers, then we can’t continue to arbitrarily assign even
higher numbers. One alternative is to throw more bodies at the problem.
Since individual rep quotas can’t be raised, say 20%, but the overall
revenue plan calls for precisely this, then the approach is simply to hire
more reps. But typically, quotas will still be raised even as territories are
reduced – a double whammy of a different sort for each rep.
©CSO Insights 14
The numbers seem to suggest that this approach is being utilized in

some companies. And yet, there are important reasons why this is a self-
limiting game plan; not the least of which is, cost of sales as a
percentage of revenues will then become too high.
This insight raises another important and difficult question. Every rep
knows his or her quota is going to increase in the coming year, although
the increase is often more than expected. In our opinion, a completely
legitimate question for each rep to ask when assigned higher quota is,
“What has changed to make this possible?”
Even with this year’s improved quota attainment by individual reps

(61.2%), four in ten are not making their number. So what rationale
exists to suggest that raising a rep’s quota by 15-20% is any more
attainable? It may be that the company has already introduced or will
introduce a new product, enter a new market, and/or launch new
marketing campaigns. Or, that with a new CRM system, a significant
enhancement to the existing system, or other process improvements, the
higher number is reasonable.
However, this year we received more calls than usual from sales
operations surrounding the issue of quota assignment and territory
sizing. We believe these are increasingly challenging issues, and will be
doing specific research in this area in the first quarter of 2008.
Notes:
©CSO Insights 15
How
What Would
percentage of your company’s revenue comes from the following sources?
! Numbers have Like a takeoff from the title of a 1966 movie, it seems we keep hearing
been fairly and proclaiming, “The Channels are coming! The Channels are coming!”
constant for the Indeed, most companies (79%) are including alternatives to direct sales
past two years. in their mix of sales channels, leaving only one in five firms generating
revenues exclusively from direct field sales.
! Direct sales are
still the primary When we consider the strictly direct sales model, we see that
go-to-market professional services firms are most represented (29%). Many of these
modality for most firms are smaller on average (revenues <$10M) and have slightly longer
companies. sales cycles (4-6 months), larger average deal size, and slightly higher
percentage of self-generated leads (59% vs. 51% for the general
! Smaller firms are population). Turnover is slightly better (26% vs. 30%), as is forecast
less likely to rely outcome of 50/28/22, versus 49/30/21 (%wins/%losses/%no decisions).
on channels.
The chart above is nearly an exact copy of last year’s figures. Telesales
moved up a half point and direct sales increased a full percentage point.
These increases came from channel sales, while other revenue source
levels remained unchanged. So are channel sales increasing, or not?
The short answer seems to be not on average.
However, and not surprisingly, there are differences according to size of

firm. Companies with under $10M annual sales rely least on channels
(10%). Channel revenue contribution climbs steadily along with
increasing company size, peaks at mid-size companies in the quarter- to
half-million dollar range (23%), then drops down in larger firms (see
following table).
©CSO Insights 16
Total Annual Channel

Revenues Contribution
<$10M 10%
$10 - $50M 12%
$51 - $150M 19%
$151 - $250M 17%
$251 - $500M 23%
$501M - $1B 19%
>$1B 18%
This analysis suggests that as companies grow, channels are

increasingly a part of the equation; but for very large companies the shift
takes longer. We are also seeing evidence of differences that occur as
companies grow, and the changes that need to occur so that growth
continues. We will be exploring these differences later this year in two
report supplements looking at small and medium businesses (SMB) and
very large enterprises (>$1B).
Meanwhile, telesales continues to make solid contributions (9-13%), with

smaller firms leveraging this resource the most often. It’s interesting to
note what the numbers seem to suggest – that adding direct field reps
helps the smallest firms (<$10M) get to the second level ($10-$50M),
and channels then boost sales to the next levels ($51-$500M).
Research clients interested in seeing how more firms are looking to

leverage their calls centers to focus not just on service but revenue as
well, should refer to the report we published entitled Transition in the Call
Center: Sales & Service.
As a matter of curiosity, we also looked to see what the direct/channel

sales mix was for the highest performing teams (>85% quota
attainment). We found it was almost a tie in each category; so, we’ll look
at other metrics for clearer correlation to breakout performance.
Notes:
©CSO Insights 17
What percentage of your revenues comes from the following customers?
! Business from For all the talk about total lifetime value of customers and emphasis on
existing developing customer loyalty, it appears only minor progress is being
customers is up made in gaining a greater share of business from existing customers.
once again. Although business from existing customers is up by about one
percentage point from last year, the number remains firmly fixed below
! Developing and 70% (the highest level recorded was 65.8% in 2005). Is this a problem?
leveraging
customer loyalty Apparently, many companies do not think so. In rating their reps’ ability
remains elusive. to communicate effectively with customers, renew business with existing
customers, and create customer loyalty, nearly half reported that their
! Extending reach teams meet expectations in each regard. A significant additional group
within existing (18%) rated their reps as exceeding expectations in these same
customer base to categories. And yet, 57% of these same firms felt they needed
include other improvement in farming additional opportunities and/or developing each
offerings and/or account’s full potential.
areas is also
difficult. The underlying theme seems to be: Customer loyalty does not equate to
incremental business.
To test this theory, we looked at companies that rated themselves as

exceeding expectations in all these key areas, as well as companies that
reported above average levels of business from existing customers.
Companies whose sales reps exceeded expectations for communicating

regularly, renewing business, and farming additional opportunities did, in
fact, enjoy a higher percentage of business from existing customers –
2% higher (66%). This hardly seems to be an overwhelming
©CSO Insights 18
endorsement!
Next we looked at companies that did at least 10% better than average,
realizing 75% or more of their business from existing customers. (The
average for this group actually came in at 84% revenue from existing
customers.) And these same companies reported an 89% overall
achievement of their company revenue plan, with 63% percent of reps
making their individual quotas.
For companies doing much worse in terms of gaining business from

existing customers (achieving only 44%), their overall plan and individual
quota achievement figures were 89% and 61%, respectively. In other
words, realizing nearly double the rate of business from existing
customers may favorably impact your cost of sales, but it makes very
little difference in your ability to make your number. One conclusion
could be that focusing on new customer acquisition, perhaps even
diverting some resources (certainly the sales force’s time/energy), is as
good a strategy for hitting revenue targets as fostering existing
relationships!
Intrigued by this possibility, we looked at levels of relationship reported

by each group. The results are shown in the table below.
Low % Existing High % Existing

Customer Revenue Customer Revenue
Approved vendor 25% 25%
Preferred supplier 13% 26%
Solutions consultant 25% 25%
Strategic contributor 26% 18%
Trusted partner 11% 7%
While familiarity may not in this case breed contempt, at a minimum it

may breed complacency. Enjoying preferred supplier or consultant status
may lull sellers into not pursuing higher level strategic discussions; or,
their familiarity may have a discounting effect on the discussions being
held (“been there, discussed that”). Either way, while being the
incumbent may grant you easier access, it does not necessarily ensure
sales success.
Notes:
©CSO Insights 19
How Would What is the primary selling focus of your sales force?
! Vast majority of Once again this year, B2B organizations represent the super majority of
survey survey respondents (72.8%). B2C responses were unchanged at 10.1%.
participants We added a new category this year, Business to Retail to Consumer
engage in B2B (B2R2C), which in the past most likely would have been reported as
sales. either B2C or Blended. In fact, the 2% decrease in B2B combined with
the 3% decrease in Blended respondents, roughly equals the 5%
! B2B leads in reported in this new category.
technology
adoption; B2C There are similarities in many of the reported metrics across all four
lags most in this types of organizations, but we are always most interested in the areas
category. that are different. Not surprisingly, B2C respondents report generally
shorter sales cycles (38% <1 month) and smaller deals (40% <$10K)
! B2C and B2R2C than B2B, with 8% and 19%, respectively.
show the fewest
no decision Another area of clear distinction is the introduction of technology. Fifty-
cycles; B2B faces four percent of B2C firms have not implemented CRM (vs. 26% for B2B);
the greatest and 60% of the remainder have no intention of doing so in the coming
uncertainty. year. B2C companies continue to increase investments in training,
principally sales skills and product training, but rely heavily on internally
developed programs (75%).
B2R2C’s numbers are very similar to B2C’s in average deal size and
sales cycle length. Thirty-eight percent of this group has not
implemented CRM, and 69% of the remainder does not plan to do so. In
looking at their sales methodologies, only 42% of this group relies on
internally developed programs. B2R2C also has the highest reported
levels of sales process implementation (Levels 3 & 4 combined) and the
©CSO Insights 20
highest reported levels of forecast outcome. Figures for all four focus
types are presented below for comparison.
Level of Process Implementation

Random Tribal Formal Dynamic
Process Wisdom Process Process
B2B 17% 44% 25% 14%
B2C 19% 46% 24% 11%
B2R2C 9% 43% 34% 14%
Blended 23% 35% 26% 16%
Outcome of Forecast Deals

Won Lost No Decision
B2B 48% 30% 22%
B2C 4% 33% 19%
B2R2C 56% 28% 17%
Blended 52% 29% 20%
It is unclear whether the retail sector forces greater time-based structure

on those that sell into it (e.g., holiday products must be available for
th
order by July 15 ), or whether their wealth of sales metrics (e.g., same
store sales year over year, quarter by quarter, day of week, time of day,
etc.) simply reduces uncertainty. Perhaps it is both. What is clear is that
there is little room for ad hoc processes in this space, and the payoff
seems to be seen in better than average win rates coupled with lower
than average no decision cycles.
Notes:
©CSO Insights 21
How Would How is your company perceived in the marketplace?
! Seeing little Dominant and lead players make up 65% of this year’s population, down
change in how slightly from 69% in last year’s report. In fact, each category decreased
companies see 2% year over year.
themselves in the
market. It is also worth noting that the percentage of participating start-ups is up
another point compared to the data in our 2007 report. This discovery is
! Dominant players supported by the resurgence of venture capital actively investing after a
enjoy higher few years of waiting patiently on the sidelines.
results in their
respective However, even with renewed investor interest in start-ups, it is still an
markets. uphill grind. While 67% of dominant players’ reps made quota, only 52%
of start-ups’ reps were able to do so.
! Start-ups spend a
disproportionate Another contributing factor to start-ups’ lower quota attainment is that
amount of time on their reps spend twice as much time evangelizing and generating leads
lead generation, than is required of dominant players’ reps (34% vs.16%); and, as a
reducing result, they have less available selling time (28% vs. 39%).
available selling
time. When we look at forecast outcomes, we see that while dominant players
have won 55% of their forecast deals, start-ups won just 46%. We find it
interesting that on these forecast opportunities, start-ups lose to the
competition less often compared to dominant players (25% vs. 27%) but
have a higher no decision rate (29%, vs.18%).
The other two groups to discuss are “one of lead” players and “one of
many” players. Since lead players represent nearly half (46%) of this
year’s survey population, they are a good barometer for things to come.
©CSO Insights 22
And only3% expect to reduce the size of their sales forces in the coming
year.
The average level of quota attainment for leaders’ reps was 63%,
reflecting the exact same proportion of lead generation and selling time
as the dominant group. However, forecast accuracy fell off for this group,
as seen in their won/lost/no decision rates of 48%/31%/21%.
If being dominant means you’re the gorilla in the space, and a lead
player makes you one of several chimps, then there are many monkeys,
too. “One of many” reps’ activity levels are much higher and their results
lower: 58% made quota and the outcome of forecast deals was
45%/34%/21%.
There is a straight downhill relationship from the dominant players’ level

of quota attainment and win rates to those of the start-ups. Smaller,
quicker craft can maneuver more easily; but in deep rough seas, size
brings safety. With turbulent economic times forecast for 2008, smaller
companies will want to do all they can to move up the food chain.
At the same time, any size firm would do well to not delude itself
regarding its real standing in the marketplace. The following excerpt is
taken from our interview with GE’s Jeffrey Schaper:
One of the practices that we have seen a number of our divisions

generate a lot of value out of is creating customer advisory boards.
These types of groups can really help open your eyes to what the
marketplace thinks of you, instead of what you think.
I remember taking part in my first advisory board a number of years ago.

During our initial meeting we asked our clients what they thought of us,
and they rated us a B+ on presentation and an F on execution. That was
one of the more humbling experiences I’ve ever had. But it was critical
for us to hear their feedback, and we took it to heart.
Notes:
©CSO Insights 23
How
What is Would
the level of relationship that you have with the majority of your clients?
! Fewer firms We have been describing levels of relationship for more than fifteen
reported the years and the concepts still resonate. Detailed definitions of each level
highest levels of are provided in the Introduction to this year’s report, as well as in our
relationship this Harvard Business Review featured research article. However, in brief,
year. approved vendors understand their offerings; reps at this level talk about
features and benefits of their products. Preferred suppliers have some
! Data supports track record, and also understand how customers use their
that higher level products/services to attain better results.
achievement
goes with higher At the solutions consultant level, reps understand their customers’
level relations. business issues and their customers’ customers; these reps talk about
how their products help them to compete more effectively. Strategic
! Lower levels of contributors not only understand and are able to convey how their
rep turnover also offerings will help their customers compete more effectively in their
align with higher industry; they also foster significant peer-to-peer communications
level customer between their respective companies.
relationships.
At the trusted partner level, reps are discussing issues on a more distant
planning horizon, within a longer timeframe. Thirty-day trial offers are not
the topic, but rather, proof of concept projects that may affect the
customer’s product line in the coming year(s). These discussions involve
mutual resource commitment and risk sharing.
The definitions are easily understood, particularly when we consider the

levels of relationships in the context of the pyramid illustration below:
©CSO Insights 24
Levels of Relationship
As you know, the center of mass is toward the bottom of a pyramid, and
the volume decreases as you ascend. And in fact, the pyramid
represents perfectly the distribution of the data for this metric. Only 9.3%
of companies believe they are perceived as a true partner, representing
a slight decrease from last year.
At this point, you may feel compelled to ask a couple questions: Do

higher level relationships really matter? And, does the time and energy
required to attain them actually pay off? In both cases, and as seen in
context with the prior metric, the answer is absolutely yes.
Fifty-three percent of vendor company reps made quota, compared with

70% of those rated partner. In addition, voluntary rep turnover in vendor
companies was 19%, and percentage of leads from partners/referrals
was 18%. Conversely, for partner rated firms, voluntary rep turnover was
11% and percentage of leads from partners/referrals was 25%. The
numbers show that it is, in fact, lonely at the top. It’s also better. The
challenge is how to elevate your level of relationship with your
customers.
Notes:
©CSO Insights 25
How Would What is the size of your average sales rep quota?
! Quotas are If you expect your number to be higher next year, you’re probably
generally, but not right…. But you may be wrong. This year, based on company size and in
uniformly, up. certain brackets, quotas have dropped. For example, when looking at
companies with <10 sales reps, we see that quotas <$500K increased
! Size of sales from 39% to 45%. Within that same company size, quotas greater than
force can impact $4M remained flat.
quota size, but
other determining At the other end of the scale, the number of companies with >750 sales
factors also exist. reps that reported quotas <$500K dropped from 24% to 18%.
Meanwhile, for quotas greater than $2.5M, the numbers increased from
! Quota and 33% to 35%, year over year. With so many brackets and shifts, the
territory following table may prove easier to follow.
assignment
continues to be a 2008 Under $500K- $1.0M- $1.5M- $2.5M- Over
challenge to sales 2007 $500K $1.0M $1.5M $2.5M $4.0M $4.0M
executives and <10 45% 26% 12% 8% 4% 5%
sales operations. <10 39% 28% 13% 9% 8% 5%
11-50 21% 25% 20% 15% 13% 7%
11-50 17% 23% 22% 23% 8% 7%
51-250 23% 20% 20% 12% 14% 12%
51-250 16% 18% 20% 16% 13% 17%
251-750 21% 21% 16% 14% 12% 18%
251-750 11% 22% 14% 14% 20% 19%
>750 18% 16% 13% 18% 17% 18%
>750 24% 12% 11% 21% 16% 17%
©CSO Insights 26
We hope the table above is useful, but it’s important to remember that
clearly, segmenting by sales force size alone is only one dimensional.
The data becomes much richer and more meaningful when factors such
as industry are considered as well.
For example, companies with 51-250 sales reps in the software industry
reported average quotas this year that represent some interesting jumps
from last year. In our 2007 report, quotas up to $1M represented 34% of
overall assignments, but comprised 39% this year. That is, a higher
percentage of reps now have this low-end quota. For the mid-range, $1-
2.5M in average sales quotas, the percentage dropped from 54% to
39%. But at the very high end, $2.5M+ quotas doubled from 11% to
22%!
It should also be noted that in the past year CSO Insights has received
more calls than ever before from CSOs and directors of sales operations
wrestling with determining appropriate territory and quota assignments.
Because this is often the primary, if not sole determinant of judging
performance, these execs are interested in equitable and rational
approaches. We will be investigating this entire topic in more depth
during the coming year.
Notes:
©CSO Insights 27
How Would
What percentage of your sales rep compensation package is variable pay?
! Seeing a uniform During the past year, there has been a uniform shift of variable
retreat from compensation from the two higher segments to the three lower segments
higher levels of in the chart above. This causes us to ask whether there has been an
variable accompanying shift in compensation philosophy.
compensation
within the past Last year, we reported that the highest percentage of reps making quota
year. and the lowest rates of rep turnover occurred in the middle ranges of
variable pay. Furthermore, forecast accuracy tended to decrease as the
! Variable variable pay component increased. As we continue this analysis, it is
compensation worth noting that while variable pay has reduced overall, forecast
and voluntary rep accuracy has not improved, as discussed on page 122.
turnover appear
to share an A few metrics that fluctuated most, depending on the level of variable
inverse compensation, were individual quota attainment, rep turnover, and
relationship. forecast accuracy. Reps with the highest variable compensation (>60%)
and the next highest (41-60% variable pay) had quota attainment
! Farming existing percentages of 59% and 58% respectively. Meanwhile, reps with the
accounts, cross- lowest range of variable compensation (0-15%) actually achieved the
selling and up- highest average quota attainment at 66%.
selling need
improvement at The highest organizational quota achieved was 91%, and occurred
all pay levels. within the 41-60% variable compensation segment; the lowest was 85%,
occurring within the 0-15% segment. The other three segments all
averaged 89% overall plan achievement.
Many CSOs fear that low variable compensation will encourage high
performing reps to leave. The data supports this position, with the
highest voluntary and total rep turnover occurring at the lowest variable
©CSO Insights 28
compensation levels (see table below).
Level of Variable Voluntary Sales Involuntary Sales

Compensation Turnover Turnover
> 60% 15% 12%
41%-60% 15% 15%
26%-40% 15% 13%
16%-25% 18% 15%
0%-5% 18% 14%
We noticed the opposite reverse relationship between variable

compensation and forecast accuracy. Reps with lower levels of variable
pay had the highest levels of won deals as a percentage of forecast
(50%). Conversely, reps with high levels of variable pay won 48% of
forecast deals. This same type of relationship holds true for sales cycles
ending in no decision, with the lower two variable compensation levels
reporting 19%, and higher levels coming in at 23%.
Again this year, we’d like to point out that a correlation does not
necessarily indicate causation. Still, it is interesting to note that the
practice of selling value and avoiding discounting was a bigger problem
among reps with mid- and lower-variable compensation ranges; and that
finding suggests that these reps may not feel an acute negative impact
of price discounting. Along these lines, reps with the lowest level of
variable compensation were also the ones with least competence at
differentiating from the competition or understanding the customer’s
buying process.
Perhaps not surprisingly, firms whose reps are at the low end of the
variable pay scale saw the highest percentage of business from existing
customers (69%), while firms allotting high variable pay saw the lowest
percentage from existing customers (59%). Sixty percent of the latter
high variable group rated themselves as needing to improve at farming
existing accounts, but so did 50% of the low to no variable pay
companies.
As noted above, the highest variable group (>60%) needed little

reminder not to discount (38% rated needing to improve in this category).
However, half of the next highest variable group (41-60%) reported
needing to improve at holding prices; this number tapered down to 41%
for the low to no variable pay group.
Notes:
©CSO Insights 29
Howimpact
What Would does your compensation plan have on your sales reps’ behavior?
! Companies with This metric is about how companies try to direct the nature and quality of
compensation their sales reps’ work with money earning plans. These plans have
programs that become increasingly detailed and complex over the years. With that in
consistently drive mind, we began asking whether or not those plans are working. That is,
desired selling does the design of your sales compensation plan elicit the behavior and
behaviors are results your company is seeking?
reporting
significantly better As noted in the prior metric, developing customer accounts’ full potential
results. does not appear to be solved by establishing any particular level of
variable compensation. So, are there other key sales activities that are
! Companies that both desired and reinforced through appropriate compensation schemes
feel their that would help realize that potential?
compensation
programs have Among the groups charted above, we compared those that felt their
minimal impact compensation program consistently drives desired behaviors (A Group)
also identify the and those that feel their comp plans have minimal impact (B Group). As
need to improve Henry Ford said, “Whether you think you can or you can’t, you’re
selling skills in probably right.” The firms that believe their comp programs are working
many more consistently also report much higher performance results and fewer
areas. areas needing improvement; those that believe the opposite reported
lower performance and many more areas needing improvement.
! More useful sales
performance Group A’s average of reps attaining quota was 70%, while the B Group
metrics are now reported just 55% – a 15% differential. Group A also reported better
becoming more performance – 25% better. As noted in the prior metric, all companies
readily available. feel their sales reps could improve their ability to farm existing accounts
and more fully develop their potential. However, while 46% of the A
©CSO Insights 30
Group feels the need for improvement here, a larger 65% of B Group
participants feel the same way.
The numbers are equally disparate when we look at the need to improve
account development strategies (A’s = 41%, B’s =75%), and new lead
generation (A’s = 52%, B’s = 70%). Of the dozen other sales abilities we
discuss in this report’s Sales Assessment sections (pages 67 - 114), a
majority of the A Group reported their reps meeting expectations while a
majority of B Group reps need improvement in eleven of these areas.
The good news is that if you feel your compensation program is not
consistently driving desired performance, there’s room for improvement.
At a recent meeting including finance, sales and sales ops executives,
we found that there is still tremendous variance among companies
regarding their compensation plan complexities, number of rules,
number of exceptions, etc. The rules figures alone ranged from 15 to
more than 400!
A second and more compelling issue, is that most if not all proven
abilities upon which compensation is based, and with which managers
manage, are lagging indicators (e.g., percentage of quota achieved,
number of new accounts added, etc.). The timeframe in which a
particular activity occurred is part of the sales rep’s history. So, the
evidence can reinforce attitudes but cannot impact past behavior.
However, with broader adoption of CRM sales analytics technology and

higher implementation levels of sales process, true leading performance
indicators are becoming available (e.g., consistent execution of sales
process, percentage of calls where buyer action to advance was gained,
etc.).
The newly evolving space of sales performance management (SPM) and

its extension, managing/coaching in a process-oriented way, are gaining
momentum.
Notes:
©CSO Insights 31
How
HowWould
will the size of your sales force change over the next 12 months?
! Market demand For the fourth year in a row, we’re seeing that companies plan to grow
remains strong their sales forces, albeit at a slightly reduced rate from last year. The
for new reps as number of companies planning to decrease headcount remains the
most companies same, while those planning no change have grown by 3%.
continue to grow
their sales teams. Paradoxically, within the group planning the least amount of change –
firms with fewer than 10 reps – are firms which are planning the greatest
! The largest sales rate of change. While 38% of these smaller firms expect their sales
organizations teams to remain the same size, 17% are expecting their teams to grow
plan the biggest by more than 30%. Even taking into account that this plan may result in
reductions, hiring only 1-3 new reps, it still represents healthy growth.
though only by
one in twenty While only 3-5% of the mid-size firms – 11 to 250 sales reps – are
reps. planning this same high-end growth rate of 30% or more, an additional
one in five plans to grow between 21-30%. Forty percent of this strata
! It appears that plan to grow less than 10%, and 29% are expecting to remain the same.
CSOs continue to
chase higher Some of the largest firms – over 250 sales reps – plan the biggest
revenue targets decrease in size of their sales teams; 6% expect to become smaller and
with their historic another 28% expect no change, together accounting for one-third of the
tactic of higher total. Another 43% foresee growing their sales force by less than 10%. It
headcount. is worth noting that while 6% expect to reduce the size of their sales
forces, only 3% expect to see a lower total revenue target in the coming
year. This discrepancy means that these companies will be looking for
increased productivity from their remaining reps.
©CSO Insights 32
However, in the heavily weighted mid-range revenue increases – 1-10%

and 11-25% – it still appears that CSOs are, resorting to a headcount
tactic of throwing more bodies at the problem. If revenues are expected
to grow up to 10%, then the sales force size is also projected to grow by
approximately 10%, regardless of company size.
Evidence of this tactic begins to taper off as we reach firms whose

revenues are expected to grow 11-25% and more. In these cases, sales
force growth tracks at slower rate than the projected revenue growth. For
example, while 56% of firms expect revenue increases of more than 10%
over their current year, only 40% plan to increase their sales force by
10% or more.
Whenever this question of growing revenue without growing headcount

comes up, we are reminded of John Williams, our favorite exemplar; we
profiled him in our book, The Sales and Marketing Excellence Challenge.
Over a four year period, John grew revenues at StorageTek from $600M
to $2.2B without adding a single headcount. That’s tripled growth with
zero additional bodies!
Notes:
©CSO Insights 33
How WouldWhat are your current annual sales rep turnover rates?
! Rep turnover For the fourth straight year, the rate of voluntary turnover has declined.
rates continue to In fact, this figure is down two points from last year and is half the rate at
decline for a which reps were moving on four years ago (31.6%). Involuntary turnover,
fourth straight when reps are let go, is also down for a third straight year. This
year. increased stability should be good news for all concerned: employers,
customers and the reps themselves.
! As reps stay put,
recruiting B2B has the lowest total turnover rate of 27%, comprised of 14%
experienced voluntary and 13% involuntary departures. B2R2C has the highest rates
sales/industry of rep turnover. Compared to B2B, their voluntary turnover is double at
talent becomes 28% while involuntary turnover came in at 15%, just slightly higher.
more difficult. Thus, the total for B2R2C is 43%.
! The emergence A low sales rep turnover rate is important because it relieves some of the
of Sales 2.0 puts pressure to recruit replacement reps in addition to the new incremental
pressure on headcount discussed in the prior metric. However, although the relatively
stable sales stable employment conditions mean fewer incidences of replacement
teams to continue hiring, when companies do hire, the process is more difficult. Because
to develop new there are fewer reps seeking new positions, the need to hire away talent
skills and abilities. from competitors increases. As seen on page 36, the preferred hiring
profile includes same-industry sales experience.
With more reps staying put, new hires will sometimes come from outside
your industry; or, and this is increasingly the case, from the recent
college graduate populations. One study reports that over one million
new sales openings are created each year in the US alone. And, many
of these new hires will require a higher level of training including product,
industry, and sales skills.
©CSO Insights 34
Still, stasis is only inherently good in a static environment, which is

hardly the case in business today. Even tenured reps are challenged to
get up to speed on new systems and products, and meet escalating
customer expectations. Simply staying where you are and continuing to
do what has been done in the past is not a formula for success. So, what
is the winning combination?
A new model is now emerging, labeled Sales 2.0 (S2.0). The first Sales
2.0 conference was held in late October 2007 in San Francisco, and
discussions focused on the various aspects of this new brand of rep. In
short, S2.0 means coordination of sales process with the customer’s
buying process, and leveraging technology – especially collaborative
Web technologies – to advance sales cycles.
For insights into how to more effectively hire salespeople who can
succeed and will stay with your firm, research clients should review the
previously published analysis entitled, Optimizing Hiring Effectiveness:
Getting the Right Team on the Field.
Notes:
©CSO Insights 35
How Would
What are the experience levels you are looking for in new sales rep hires?
! The practice of When we combine the prior two metrics’ results, namely an overall trend
hiring recent to continue to grow sales force size to meet revenue growth targets and
grads with no the continued decline in overall rep turnover, we see that new hires must
sales experience come from somewhere besides competitors. This is reflected in the
is growing. figure above. The biggest change in preference from last year is a two
and one-half point, or 20%, increase in hiring new reps without previous
! Experienced selling experience.
sales reps with
industry specific The number of firms that prefer searching for reps with both previous
background are sales and industry experience is down 3% from 58.6% last year. The
still favored. preference for hiring reps from outside the industry, but with previous
selling experience, is up the remaining half point.
! Quota attainment
figures are Whether poaching experienced sales reps within your industry, retaining
comparable, but your own best reps, realizing returns on prior investments such as CRM
quota assignment and SKM, or a combination of all of these, one fact remains: quota
figures are not. attainment has improved. Average quota attainment across all surveyed
companies this year was 61%, an increase of four full points (7%) over
the previous year’s 57%.
In looking more closely at this year’s data, we see that companies which
most prefer hiring recent grads or professionals with no prior selling
experience averaged 64% quota attainment, while companies that hire a
majority of experienced sales reps within their industry averaged 62%
attainment!
©CSO Insights 36
Before jumping to a specific conclusion, lets’ keep in mind a couple other

key areas that impact quota attainment: quota size and turnover.
Experienced reps within a particular industry are going to be paid higher
salaries than newbies. Firms will generally offset that investment by
assigning higher quotas and/or granting shorter ramp-up periods to
reach full productivity. The data gathered for this metric supports this
notion.
Companies that hire the majority of recent grads assigned 49% of their
reps’ quotas in the <$500K range; 20% were assigned at levels >$1.5M.
Conversely, the companies with experienced industry reps had higher
overall quotas: 25% were <$500K, and 41% were assigned at over
$1.5M (see table below).
Assigned Quota Ranges

Recent Grads Experienced In
Industry
<$500K 49% 25%
$500K - $1M 21% 20%
$1M - $1.5M 10% 14%
>$1.5M 20% 41%
Rep turnover is the other main consideration affecting quota attainment.

Companies with a majority of recent grads or reps with no prior selling
experience see higher total turnover: 34%, versus 27% for the
experienced group (see chart below). It might be fair to say that reps with
experience in sales and in their industry have a better idea what they are
in for, and thus, are better able to weather trying ramp-up conditions.
Rep Turnover Comparison

Recent Grads Experienced In
Industry
Voluntary turnover 19% 14%
Involuntary turnover 15% 13%
Notes:
©CSO Insights 37
How Would What is the average ramp-up time for a new sales rep?
! Rep ramp-up This year’s numbers are slightly better than last year, but not enough to
times have be excited about. Reps getting up to speed in less than a quarter is up a
improved slightly half point, and reps taking longer than a year is down 3.3%. That’s the
at the high and good news. But 3-6 months is down a half point and 7-9 months and 10-
low ends of this 12 months are each up a couple points.
scale.
Long story short, it’s still taking far longer for reps to reach full
! Hiring experience productivity than it did back in 2003 and earlier. And, it appears there is
does not equate no shortcut out of these deep, dark woods. If you think hiring
to a shortcut to experienced reps will shorten ramp-up times – think again (see chart
productivity. below).
! Harnessing Rep Ramp Up Time to Full Productivity

process, Recent Grads Experienced In
technology and Industry
knowledge in a <3 months 7% 5%
coordinated 3-6 months 24% 24%
fashion can 7-9 months 21% 23%
increase return 10-12 months 21% 22%
on investment in >1 year 24% 25%
new people. Don’t know 3% 3%
The chart above reinforces the experience many CSOs and sales ops
people have seen time and again. Companies opt for talented and
tenured sales reps, thinking they’ll bring their “Rolodex” (to use an
antiquated term) with them. Often these reps do bring relationships and
access to key players, but it does not necessarily translate to immediate
©CSO Insights 38
business. If the client bought into the rep’s value proposition and quality
at the rep’s prior company, then they’re likely to still believe in that value
even though the rep has decided to move on.
Often, the best case scenario is when the established relationship allows
the relocated rep to tell their current employer’s story and be given a
shot at displacing the incumbent (the rep’s former company) when a new
or replacement buying cycle starts. Of course, it will take time for that
next buying cycle to occur; so, even though a relationship is in place, the
rep’s ramp-up time is still extended.
Today, many other factors are contributing to extended timelines to full

rep productivity: more complex products, more complete (broader)
product lines, higher competitive activity, and more complex
organizational structure and/or alternative channels to be
understood/managed. Examples are knowing when to bring a partner
into an opportunity and which partner(s) to bring, or taking certain deals
directly but turning over others to inside sales.
This is an exciting and fast changing time in sales. New channels are
emerging and new buying processes and buyer behaviors are extending
new hire runway length. If these factors are not calculated into your
hiring and compensation plans, you may find yourself in the same
position as one company we surveyed. In this company, it was taking 18
months for reps to become fully productive – 50% longer than was built
into their revenue plan. And they were putting many reps on probation
and firing them in month 19!
Providing easier and more complete access to relevant sales knowledge,

sharing proven best practices, and providing rep specific metrics-based
coaching can all help address the challenge of getting and keeping reps
productive, sooner.
Notes:
©CSO Insights 39
What percentage of your total year’s revenues was
How Would generated by the top 20% of your reps?
! New Metric: In This is a new metric for 2008 and our intention is based in part on
most companies, Pareto’s Principle, commonly referred to as the 80-20 Rule. The notion is
the top 20% are that a great majority of results are generated by a much smaller set of
contributing a causes. For example, that 80% of malfunctions are caused by 20% of
disproportionately machines; or, that 80% of employees will use 20% of available sick time;
high share of etc. For the purposes of this study, we are asking: Will 20% of sales reps
revenue. generate 80% of revenues?
! Major top 20% Clearly, the answer is no, as seen in the above chart. Although the
contribution does number is much closer to 60%, this result is disconcerting nonetheless.
not ensure overall The top 20% of sales reps is contributing slightly more than 3X their
corporate quota share of revenue. Of course, this finding also means that the remaining
achievement. 80% of reps are contributing just under 0.5X, or 40% of total revenues.
! Overall To further our analysis, we compared two sets of companies: those

performance is whose top 20% of reps contributed either 30-50% or 50-70% of total
enhanced by revenues (see table below).
raising mean
performance and Top 20% Reps Corporate
reducing Average Achieving Plan
variance. Group Contribution Quota Attainment
30% - 50% 40% 63% 95%
50% - 70% 61% 62% 93%
For both groups, average sales rep and overall company performances
were surprisingly similar. Forecast accuracy, average deal size, and
many other metrics were also very similar. The area of greatest
©CSO Insights 40
distinction was rep turnover, with the lower contributing group (40%)
experiencing lower voluntary turnover at 15%, and involuntary turnover
at 11%. The higher contributing group’s turnover rates were 16% and
13%, respectively. One possibility is that these high flyers leave because
they feel they/their contributions are not fully appreciated (via recognition
and/or monetarily). Another possibility is these biggest contributors are
prime targets for poaching by competitors.
Generally, the disproportionate level of contribution: a) does not seem to

be a healthy distribution; and b) is not resulting in overall breakout
performance. To investigate more deeply, we decided to turn our lens
around. First, we indexed outstanding corporate performance and then
looked at what level of contribution their Top 20% reps were making.
We defined outstanding companies as those with overall revenue

achievement greater than 100% and more than 50 sales reps. After all, if
a company has, say, 15 reps, then pulling out the top 20% leaves in
absolute numbers, a relatively small remaining pool of talent. As you can
see in the table below, the average quota attainment for these firms was
114%. Average rep quota attainment was 71%, and the top 20% of reps
contributed 51% of revenues. The remainder of the survey’s companies
with overall quota achievement <100% is listed for comparison.
Top 20% Reps Corporate

Average Achieving Plan
Contribution Quota Attainment
<100% 57% 55% 78%
>100% 51% 71% 114%
Since this is our first year tracking this metric, we do not have trend or
comparative data against which to judge performance; but these
numbers do bear out an important reality in performance management.
When improving any performance metric, you want to raise the mean
performance while reducing the overall variance. That is, an organization
is healthier and better performing if the top reps are contributing a lesser
percentage (in this case 2.4X, vs. 3X) and the remaining reps’ mean
performance is higher. The net result is a sixteen point (29%) better rep
performance!
Notes:
©CSO Insights 41
How Would How do your sales reps spend their time?
! Selling time is up In reviewing this metric, we have bad news and good news to report.
for a third straight Rep time spent generating leads and researching accounts is up three-
year. quarters of a point from the data in our 2007 report. Presumably, this is a
beneficial activity, though it is an expensive way to get this type of work
! Return on done. Said another way, 1.5 of every 8 hours each day go to this task.
technology
investments, Unquestionably good news is that face-to-face and phone selling time
particularly Web has increased by nearly two full points within the past year. This
and collaborative represents a 10.5% increase in selling time and no doubt contributes to
Internet selling the 7% increase in average quota attainment over the same period. Very
tools, may be simply, more selling time with prospects and customers is inherent
reflected in goodness.
improved overall
performance. Less obviously good – and possibly negative – is that rep time spent in
meetings and attending to administrative tasks is also up by nearly a full
! CSOs must still point. If the meetings were to strategize deals, receive specific and
maintain vision individualized coaching, organizing and communicating progress within
and vigilance in accounts and/or opportunities, then this is likely time well spent.
getting their reps
to value their However, if these meetings are spent doing pipeline reviews, adjusting
most precious forecasts, modifying marketing materials for presentations, or double
resource – time. checking commission payments, then it is lost or “corrupted” selling time.
Account service calls are also up by three-quarters of a point. Again, this

calling activity can be interpreted in a couple of different ways.
Strengthening relationships, propagating access and reach into other
areas/divisions of an account, resolving disputes – all of these tactics are
©CSO Insights 42
good. But tracking lost orders, writing emails and documentation to

create a paper trail defense, resolving incorrect billing or shipment
details – all of these activities are not good.
This year we included “training/education” with our “other” category.

Taken as a whole, this segment of rep time is down the greatest amount:
3.1 points, or 20% from last year (11.9% down from 15.0%). If this
decrease means that reps are becoming more efficient at route/trip
planning, use of Internet collaborative selling tools, and are shifting time
to do more selling, then progress is definitely being made.
However, if this significant down shift is due to reduced training and

education efforts, it will be a short-term gain and long-term pain. Said
another way, this is a false economy, given all the change taking place
with which reps need to stay current, conversant and competent.
Literally, at the end of the day the most precious resource reps have to
manage and allocate is their time. This resource will be spent fully each
day, week, and month. As discussed above, the impact of these shifts in
time allocation may be for good or ill. It is the intentionality of these
investments of time which determines whether they are useful and
appropriate – or wasteful and profligate.
In general, the trend appears positive. New tools and technologies are
allowing reps to cram more into, and thus derive more out of, every
working hour of the day. Still, it is imperative that you as CSO maintain a
clear vision and transmit this vision to each of your reps regarding the
value of their selling time. And, that you are vigilant in seeing that this
time is not siphoned off in ways inconsistent with your objectives and
priorities.
Notes:
©CSO Insights 43
©CSO Insights 44
Sell Cycle Analysis

Introduction
This section contains sales cycle metrics related to the types of deals sales reps are pursuing in
relationship to opportunity value and effort required to close a deal; and an analysis of the
success rates experienced in converting prospects from one stage of the sales process to the
next.
• Average Deal Size....................................................................................................... 46
• Length of Average Sell Cycle..................................................................................... 48
• Number of Calls Required to Close a Deal ................................................................ 50
• Lead Generation Analysis .......................................................................................... 52
• Percentage of Leads that Progress to an Initial Customer Discussion.................... 54
• Percentage of Initial Discussions that Progress to a Presentation.......................... 56
• Percentage of Presentations Resulting in a Sale ...................................................... 58
• Percentage of Proposals Resulting in a Sale ............................................................ 60
• Percentage of Deals that Close as Forecast.............................................................. 62
• Outcome of Forecast Deals........................................................................................ 64
©CSO Insights 45
How Would What is your average deal size?
! Customers are For the past three years, as companies were coming out of the last
starting to get economic downturn, we have seen the average deal size increase. In
cautious again in general, buyers began feeling more comfortable making larger dollar
terms of the size commitments. Looking at this years’ data however, we see evidence that
of deal to which the trend is reversing itself, as the average deal size is heading back
they commit. down.
! The higher the For example, last year 36% of the firms surveyed reported an average
level of deal size of $25,000 or less. This year, that number is now just over
relationship, the 43%. Since the vast majority of companies are planning increases in
larger the revenue targets (see page 209), we will continue to watch this area in
average deal the first half of 2008. Any further deterioration of deal size values could
size. hurt top and bottom lines.
! Excelling at Based on client feedback, we completed additional analyses to see if

cross-selling and certain factors impacted deal size, and found two trends worth noting.
up-selling will First is the impact that the level of relationship with customers has on the
also help to size of the commitments they are willing to make.
maximize deal
size. As we profiled on page 24, we have found that vendors earn one of five
levels of relationship with their customers. In the following table, we
compare the deal size responses of companies that were relating to
clients at the vendor level (relationships 1 and 2), compared to those of
firms who had established a value-add position (relationship levels 3, 4,
and 5).
©CSO Insights 46
Levels 1 & 2 Levels 3, 4, & 5

<$10K 32% 17%
$10K-$100K 47% 54%
>$100K 21% 30%
Here we see that as firms arrive at higher levels of relationship with their
customers – moving from vendor status to consultant, advisor, or partner
– the average deal size increases noticeably.
Another factor that appears to influence deal size is sales reps’ collective
ability to cross-sell and up-sell effectively. As we will see on page 92,
many companies struggle with this aspect of selling. In the table below,
we show the results of comparing average deal sizes of firms whose
reps exceed expectations, to those who need Improvement.
Cross/Up-selling Cross/Up-selling
Needs Improvement Exceeds Expectations
<$10K 25% 15%
$10-100K 50% 53%
>$100K 25% 32%
Clearly, we see that ensuring that salespeople demonstrate the skills

and product knowledge necessary to optimize the value of each
opportunity can help increase the order size of each deal.
Notes:
©CSO Insights 47
How Would What is the average length of your sell cycle?
! More firms are For the past three years, sell cycles have taken longer and longer to
closing deals in complete. This year, the data reverses that trend: we discovered an
less time. actual reduction in the length of the average sell cycle. For example, last
year only 7.8% of the firms surveyed reported a sell cycle of less than a
! Deal size is month, compared to 14.4% this year.
directly linked to
decision-making With the average deal size increasing, as seen in the previous metric,
timeframe. one could expect the time required to get a deal approved to increase as
well. Fortunately, that did not occur, but the data still supports the notion
! Understand the that it takes longer to close bigger deals than smaller ones.
sell cycle/buy
cycle relationship, In the following table, we compare the average sell cycle times for deals
and time to close <$10K, $10K-100, and >$100K.
goes down.
Deal Size Deal Size Deal Size
<$10K $10K-$100K >$100K
Up to 3 months 82% 47% 16%
4-9 months 16% 43% 52%
10+ months 1% 8% 31%
Do not know 2% 1% 0%
So, are there ways to decrease the length of the sell cycle? Indeed, our
survey data surfaced some insights and best practices to which
companies can turn. The first, and very appropriately, is to understand
clearly your customer’s buy cycle.
©CSO Insights 48
In many sales training programs, the exclusive focus is on the “sell cycle”
– referring to actions that reps take in order to move the customer from
suspect, to prospect, to customer. While that is certainly part of the
training equation, there is another important process at play here. The
“buy cycle” refers to all of the actions a client takes to envision their
problem, evaluate alternatives, cost-justify the purchase, select the best
vendor fit, and then implement that solution.
To that end, we analyzed the responses for this metric based on firms’
ability to conduct buy/cycle/sell/cycle reviews. We compared firms that
exceeded expectations to the remainder of the survey population (see
table below).
Excel at Average or Poor at

Buy Cycle/Sell Buy Cycle/Sell
Cycle Analysis Cycle Analysis
Up to 3 months 64% 45%
4-9 months 22% 41%
10+ months 10% 13%
Do not know 4% 1%
Certainly, it takes time and money to analyze a customer’s buying

process, but our data suggests that there is a suitable reward for the
effort. Research clients interested in understanding some of the best
practices that firms are putting in action should contact their CSO
Insights analyst.
Notes:
©CSO Insights 49
How Would
On average, how many calls does it take to close a deal?
! Seeing a A key contributor to the reduction in sell cycle length may well be a
noticeable corresponding reduction in the number of calls needed to close each
reduction in the deal. In our 2007 report, we noted that 47% of the firms surveyed stated
number of calls that they were able to close deals by making five calls or fewer to a
needed to close prospect. As can be seen in the chart above, that percentage has risen
deals. to more than 56% this year.
! Adherence to a Aiming to surface best sales practices, we analyzed the data to see if
formal process there were certain strategies or tactics that could reduce the amount of
has a noteworthy time needed to close business. And in fact, one area research clients
impact on the had suggested for investigation was the relationship of sales process to
number of calls. selling effort required.
! However, the As we highlighted on page 152, our research has shown that companies
quality of those tend to have one of four different levels of sales process, ranging from
calls definitely ad hoc (every rep does their own thing) to dynamic (all reps adhere to
seems to be the same process, which is monitored continually and evolves based on
higher. changes in the marketplace (competitive announcements, changes in
the economy, new government regulations, etc.)).
For this analysis, we compared the survey responses of three separate

groups: firms who have informal processes (Levels 1 and 2); those who
have a formal process (Level 3); and those who have a dynamic process
(Level 4). As seen in the following table, there are some key differences
among these three groups.
©CSO Insights 50
Levels 1 & 2 Level 3 Level 4

1-2 calls 9% 11% 15%
3-5 calls 47% 44% 45%
6-9 calls 26% 25% 29%
10-15 calls 9% 10% 6%
>15 calls 5% 7% 4%
However, upon further investigation we realized that there is a second

important part of the story. Results illustrated in the table above focus on
the quantity of calls; so, we next considered the issue of quality.
In the table below, we compared the win rate of forecast deals for each
of the three groups. Note the very striking, undeniable difference.
Levels 1 & 2 Level 3 Level 4

Win rate % 47% 49% 58%
If you as CSO could see your win rate improve from 47% to 58%, the
impact on revenue attainment for the firm would be huge. The above
numbers suggest that reps should continue reducing effort wherever
possible; yet they should also be cognizant of the need to increase the
impact of the calls they do make.
Notes:
©CSO Insights 51
How Would How are your sales leads generated?
! Number of leads As we noted in detail in our 2007 Target Marketing Priorities report,
generated from marketing organizations are increasing the percentage of budget that
marketing they spend on lead generation activities, and investing those funds in
campaigns is still new and innovative ways.
rising, yet also
still low. Those investments seem to be paying off, as we see a relatively steady
climb in the percentage of leads coming from marketing programs,
! Modest versus those generated by sales reps or from other sources. The
improvement in number of marketing-originated leads has risen from 17.1% in both 2005
win rate from and 2006, to 24.4% in 2007, to a figure of 28.1% in this year’s study.
primarily
marketing- As we will see in the metrics presented on pages 202 and 204, this lead
generated leads. quantity is still not at the level that would meet sales’ expectations. But
meanwhile, what about the quality of leads?
! Marked
improvement in To answer this question, we segmented the database of responses
available selling according to how firms generated leads; that is, by relying on either
time when marketing or sales to do the majority of heavy lifting. We then looked at
marketing does the ultimate win rates of forecast opportunities experienced by the two
the heavily lifting groups. The comparison is seen in the following table.
for lead
generation. Marketing Lead Sales Rep Lead
Focus Focus
Win rate % 52% 49%
Here, we see that marketing should at least get a tip of the hat for
providing reps with leads that result in real business. But again, there are
©CSO Insights 52
other issues to consider – like time.

For several years now, we have been hyping on the fact that when we
take a look at how salespeople spend their time during the work week,
we find their schedules are consumed with a lot of activities that keep
them from doing the primary thing they were hired to do – selling!
Again, in comparing the performance of our two groups, we see a

profound difference in the reported numbers.
Marketing Lead Sales Rep Lead

Focus Focus
% Time spent selling 46% 39%
Clearly, when the burden of lead generation is taken off the shoulders of
sale reps, they are effective at reinvesting those saved hours in selling-
related activities. These numbers reinforce sales’ desire to have
marketing continue to improve the effectiveness of their lead generation
programs, so that reps do not have to invest so much of their time
making up for any lead shortfall.
To learn more about the payback from improving lead programs,

research clients may want to refer to the analysis contained in our
Monetizing Lead Generation Optimization white paper.
Notes:
©CSO Insights 53
Howpercentage
What Would of your leads progresses to an initial customer discussion?
! Seeing a It is one thing to generate a lead, but quite another to turn it into a
decrease in lead legitimate opportunity. Last year, we noted an improvement in turning
to initial contact leads into initial customer discussions (qualification calls or face-to-face
conversion rates. meetings), as we found that only 47% of the firms surveyed reported a
conversion rate of 50% or less. This year, we see that that number has
! Part of the issue climbed to 52%.
is the challenge
of connecting. Our benchmarking efforts uncovered several potential causes of the
decrease in this aspect of sales effectiveness, and we will explore two
! Another problem compelling ones here. The first is the challenge of simply connecting with
stems from the prospects. Some of our research clients have shared that today, when
inability to create reps sit down to make calls to prospects, they most often get voice mail
meaningful instead of a live person. The problem has gotten so bad that many
conversations. companies are reporting rates of less than one real prospect contact per
hour.
However, we did find sales teams overcoming this challenge via a

variety of innovative methods. For example, one technology firm now
outsources their “dialing” efforts to a third party. When a rep wants to
follow up on a lead, the outsourcing firm starts calling the prospect. As
soon as they connect with a live person, within two-tenths of a second
the appropriate client information pops up on the rep’s screen, and the
conversation begins. The firm is now achieving 3-4 times the connects
per hour over their previous efforts.
We also found a medical products firm that is dealing with the issue via
schedule optimization tactics. If a rep cannot get in touch with a prospect
©CSO Insights 54
over the phone, s/he sends an email. The email message invites the
prospect to pick a time for the rep to call back, and then provides access
to available times on the rep’s calendar. The system is dynamic, so that
as soon as a time slot is taken, it is removed from the available times list.
The firm has seen a significant increase in connects because their
prospects actually choose when they want to be contacted.
That said, connecting with a prospect represents only half of the

problem. A second factor we see impacting lead conversion rates is the
value of the initial conversation. As we noted in a number of our white
papers last year, the buy cycle is changing in that prospects now have
access to a wealth of product information via the Internet. Because of
this resource, potential clients are often knowledgeable about the
offerings before they talk to a rep.
When a first contact happens, prospects want to focus on how your

solution can help them – and that in turn puts more pressure on
salespeople to be just as knowledgeable about their issues. Yet, as we
see in the metric on page 72, the ability to thoroughly research clients
prior to contacting them is not a universal strength in sales today.
Is this really a concern that needs to be addressed? Let’s consider the

information in the following table, where we compare three groups of
firms that either exceed expectations, meet expectations, or need
improvement in regards to researching prospects.
51%-75% >75%
Conversion Rate Conversion Rate
Exceeds expectations 28% 30%
Meets expectations 20% 24%
Needs improvement 19% 18%
Clearly, the firms that conduct superior prospect research benefit from
their preparedness. Roughly 58% of firms that exceed researching
expectations are able to convert leads at a rate of 51% or greater.
Conversely, only 37% of firms that need improvement are able to convert
leads at that same rate.
Notes:
©CSO Insights 55
How Would
What percentage of your initial customer discussions progresses to a presentation?
! Overall, Getting in the door is one thing, but getting into the game is another, as
conversion rates many sales teams are finding. Above we see the conversion scores for
leveled off after a the percentage of initial discussions that progress on in the sell cycle to
three-year the stage at which a sales rep is given the opportunity to fully present
decline. how their product or service would be of use to the client.
! Best practices For the third year in a row this metric has declined, which raises a
lead to a question: Is this a good thing or a bad thing? When we shared the above
noticeable figures with one of our advisory board members, she reminded us of
increase for some what we have been saying for years: that the sin in sales is not to lose,
companies at the but rather to take a long time to lose. Couldn’t a lower conversion rate
high end of the here be a good thing, the result of reps doing a better job of walking
curve. away from low-win potential deals?
! Lead incubation The study data suggests no. As you will see in the metric on page 76,
is showing how it the ability to properly qualify and prioritize opportunities is still a
can help in cases challenge for many firms. Furthermore, when we compare firms’ sales
where prospects performance based on which of the above categories they fall into, we
have need and see again that these low conversion rates are not a good thing (see table
interest, but no below).
current time to
evaluate. % of Company % Reps Making
Plan Quota
Convert >75% 93% 69%
Convert 51%-75% 89% 62%
Convert 25%-50% 88% 59%
Convert <50% 86% 56%
©CSO Insights 56
One best practice we benchmarked for effectively addressing this

conversion problem is the use of references. A networking firm shared
with us that they now make very extensive use of references early in the
sell cycle. During the first call, they will let the prospect hear firsthand
what their existing clients think of their products, service, and people.
The firm does this by videotaping client interviews and then posting them
on the firm’s sales knowledge portal. While a rep is having an initial
conversation with a prospect, s/he can show the video clips during that
very meeting.
This firm has found that using references up-front helps them to
establish credibility and motivate more buyers to continue their product
evaluations. As a result of committing to this sales strategy, they have
seen a 5% increase in their overall win rate.
A second trend we are seeing involves higher investments in “lead

incubation.” We are finding many cases where an initial discussion
surfaces need and interest, but what is missing is time – the prospect
currently has too many other burning issues to deal with.
A semiconductor firm shared with us that in these cases, the prospects

are turned over to a team in marketing who continues a dialogue (via
telemarketing, direct mail, and email) to stay top-of-mind with the client.
Over a year’s time, the semiconductor firm saw a 20% increase in the
number of first discussions progressing to presentations.
Notes:
©CSO Insights 57
How Would
What percentage of your presentations results in a sale?
! Seeing Over the past several years, we have seen improvement in the ability of
performance salespeople to close a deal if they persuade the prospect to give them
improvements an opportunity to educate them on their offerings. According to our 2003
over the past five report data, only 27% of the firms surveyed reported a presentation to
years. sale conversion rate of greater than 25%. This year we see that number
is roughly 51%.
! Inability to
present benefits At the presentation stage in the sell cycle, there are two core objectives:
to all 1) get prospects to understand the benefits that your solution offers, and
stakeholders can 2) help them to understand why you are different than any of the
impact competitive alternatives they may be considering.
performance.
As we see in the following two tables, the inability to execute these skills
! Also, the ability to has a clear impact on the outcome of an opportunity. Let’s first look at
differentiate from effectively presenting benefits. For each of the four categories of
competitors is a conversion rates above (<10%, 10-25%, 26-50%, and >50%), we
deal maker/ focused on the percentage of companies that acknowledged they need
breaker. improvement.
Ability to Effectively Present

<10% 10%-25% 26%-50% >50%
Firms needing 40% 32% 23% 10%
improvement
An issue we continue to see here is that reps may have to deal with
several different stakeholders in order to close a deal. Therefore,
presentations need to take into account each of these individuals and
provide answers for the often unspoken question, “What’s in it for me or
©CSO Insights 58
my functional area of responsibility?”
Just as we have seen the emergence of proposal generation tools to

help reps create individualized business cases to help close deals, we
are seeing new tools come to the market to help reps customize and
deliver much more tailored presentations. One distribution firm we
benchmarked reported a 28% improvement in close rates resulting from
their presentation effectiveness initiative.
The second challenge in presenting effectively – creating competitive

differentiation – can also have a profound impact of selling success. In
the following table, we present the competitive loss rates reported by
each of the four categories of conversion rates for this metric:
Competitive Loss Rates

as Compared to Presentation Conversion Rates
<10% 10%-25% 26%-50% >50%
Competitive loss 42% 33% 28% 24%
rates experienced
The above figures should be a wakeup call to CSOs who have sales
teams that are poor at competitive differentiation. Moving your
performance from one category to the next can have a huge impact on
your selling year.
Notes:
©CSO Insights 59
How Would What percentage of your proposals results in a sale?
! Still having The above figure shows that over 55% of the firms surveyed report a
problems conversion rate of proposals to ultimate sales of 50% or less. This is the
punching the ball highest percentage reported in the five years we have been tracking this
over the goal line metric, a result which shows that firms are still experiencing problems in
often enough. closing late in the sell cycle.
! To improve here, By the time you get to the proposal stage in the game, you have invested
first learn what significant resources to generate the lead, qualify the prospect, educate
the “rules” are them on what you do, explain why you do it better than others, build a
from your buyer. business case to justify the purchase, etc. For the one in five firms above
who are experiencing a conversion rate of less than 25%, the return on
! As effectiveness investment is very poor.
of proposals goes
down, no Are there strategies and tactics that can help improve a company’s sales
decisions go up. effectiveness here? As we drilled deeper into the study data, we found
the answer is yes.
! Invest more in
training your One area for improvement lies in investing the time and effort to
sales teams on understand your prospects’ “buy cycles.” When we looked at the
how to justify the performance numbers of firms that excel at this tactic, we found that they
purchase, and had a much higher conversion rate at this stage of the sales process
proposal than other survey participants. Sell cycle length, which we profiled on
performance page 48, was also shorter for this group.
improves.
Another trend that we surfaced is that as your conversion rate of
proposals to sales goes down, your no decision rate goes up. In other
words, firms are not losing more deals to competitors because of their
©CSO Insights 60
inability to convert at this stage; it is simply that no one gets the order at
all. A number of factors could be in play here. We could have cases
where the opportunities were poorly qualified earlier in the sell cycle, and
so reps wasted energy chasing deals that were never real to begin with.
But we do see clearly another trend: firms who invest the most in
training their salespeople on how to build solid business cases for
justifying the purchase have much higher conversion rates than those
who do not.
As we move into 2008 and worries of an economic slowdown become

more real, history reminds us that purchases may well start to go through
more scrutiny than they did in 2007. Since your proposals may be seen
by stakeholders whom you have never met, ensuring they can stand
alone and tell a strong message will go a long way. Investing in tools and
training to help reps excel at this aspect of selling should generate
substantial ROIs for sales organizations.
Notes:
©CSO Insights 61
How Would
What percentage of your deals closes as originally forecast?
! Even when we Over the years, we have joked that within an organization, if the vice
win, we don’t do a president of manufacturing ever became the vice president of sales, s/he
good job of would effectively shut down the sales force within a week of his/her
predicting what taking the job. The chart above shows why. Even when we look just at
we will win. deals that are “won,” we see that the ability of the sales organization to
close deals as they were originally forecast (what, by when, for how
! Relationship much) is still very poor.
Level 4 firms
experience With this reality in mind, think about the challenges the sales
problems far less organization is causing other parts of their company. For someone
frequently than working in manufacturing, customer service, distribution, or finance at
other sales any of the 53.8% of the firms that report that 50% or less of the deals
organizations. they win come is as originally forecast, the ability to effectively plan the
allocation of people, resources, and budgets is limited.
! More companies
are turning to So can you do anything to address this problem? Indeed, during our
sales analytics to review of the data, we found a number of best practices that can
help deal with this positively impact accuracy. Perhaps not surprisingly, dynamic process
issue. appeared at the top of the list.
As we will discuss in the metric on page 152, we are seeing sales

organizations adopt one of four levels of sales process rigor. The
following table profiles the percentage of firms that showed a forecast
accuracy rating of 51% or more, relative to the level of sales process
adoption they have employed.
©CSO Insights 62
Firms with Forecast

Accuracy >50%
Dynamic process 61%
Formal process 38%
Informal process 33%
Random process 31%
These figures clearly demonstrate that as the sales process becomes

more formalized, the potential for achieving an improvement in forecast
accuracy is greater. In fact, firms can really turbo-charge their efforts by
moving to Level 4 – Dynamic Process.
As you may remember from our previous analyses on process adoption,

a dynamic process combines sales process and technology. In this case,
you not only have reps trained on a systematic way to sell, but you also
have the systems in place to track all forecast deals. Using these
systems, over time you are able to develop a fairly accurate selling
profile that includes how long a given opportunity should take to close,
how often you can really expect to win that deal, what the realistic
margins will be, and so on.
As you will see on page 180, the number of companies adding sales
analytics capabilities to their core CRM applications is increasing. We
have benchmarked over a dozen solutions in this emerging area of
CRM, and are finding that the developers of these systems are doing a
very good job of understanding what metrics are worth tracking. They
are also providing predefined reports that can help sales manager better
understand the quality of the pipeline and the forecast.
Notes:
©CSO Insights 63
How Would
What are your average win/loss/no decision rates for forecast deals?
! When firms did This is an area of continued frustration for sales organizations. All of the
develop sales incredible effort and hard work that goes into both guiding a prospect
opportunities to through a sell cycle while also supporting their buy cycle, and getting the
the point of deal to the point where it feels comfortable to forecast success,
forecast accuracy translates to actual success less than half the time.
confidence, they
won less than half It is worth taking a moment here to quantify the challenge/opportunity
the time. inherent within. As an example, assume that you are the CSO of a firm
with 100 reps. Each rep has a $1M quota, and sells deals that average
! Being the $50K. And let’s round off the numbers charted above to a 50% win rate,
dominant player 30% competitive loss rate, and a 20% no decision rate.
in your
marketplace has In this scenario, a rep would need to close 20 deals to make plan, and
significant since on average the firm wins only one in every two forecast
advantages. opportunities, the rep would need to pursue 40 legitimate deals each
year to hit his/her number.
! Level of
relationship you Now let’s see what happens if we increase the win rate to 55%. The rep
have with your would close 22 of the 40 deals, representing an additional $100K in
clients also plays revenue, which multiplied across the entire sales team translates to
a big role. $10M more in gross revenue for the company.
Any senior management team would likely get excited about these
numbers, but how do you make them happen? We drilled into the study
data to see what factors can move the win rate dial, and found several
interesting trends. We will explore two of them here.
©CSO Insights 64
First, we compared performance based on firms’ positions in their

respective markets. As previously profiled on page 22, companies fall
into one of four categories: the dominant player in the market, one of the
lead players, one of several established players, or a start-up. In the
following table, we represent the data according to the old adage, “If you
are not the lead dog pulling the sled, the view is always the same.”
Win Rate %
Dominant player 55%
One of the lead players 48%
One of several players 46%
New firm/start-up 47%
This much is true: if you get to the point where you are the perceived
leader in your industry, you will win more than the average share of
deals. While this is great news for a few firms, we did find something that
can be leveraged by all firms – relationship status.
As we discussed in the metric on page 24, there are five levels of

relationship that firms can establish with clients. In the following table, we
profile the reported win rates for firms in each of these five categories.
Win Rate %
Level 5 - Trusted partner 55%
Level 4 - Strategic contributor 52%
Level 3 - Solutions consultant 49%
Level 2 - Preferred supplier 49%
Level 1 - Approved vendor 45%
Again, the more you can bring to the table in terms of value–add to the
customer, the more the marketplace will reward you.
Notes:
©CSO Insights 65
©CSO Insights 66
Sales Strategy Development Assessment

Introduction
This section looks at metrics reflecting how sales forces get ready to sell. Specifically, we look at the
key tasks that reps need to go through to decide what accounts in their territories to pursue, and what
an initial strategy would be for dealing with those prospects. Since few organizations have detailed
numbers in all of these areas, survey participants were asked to assess whether they rated their
current level of performance as needing improvement, meeting expectations, or exceeding
expectations for each. In cases where respondents could not provide an accurate assessment of their
performance, or the metric did not apply to their sales performance, they were allowed to select
“Don’t Know or N/A” as a valid answer to the questions.
• Ability to Prioritize Accounts upon Which to Focus ................................................. 68
• Ability to Develop Strategic Plans for Key Accounts................................................ 70
• Ability to Thoroughly Research New Accounts before Calling Them ...................... 72
• Ability to Generate the Necessary Number of New Leads ........................................ 74
• Ability to Qualify and Prioritize Properly the Opportunities ..................................... 76
• Ability to Incubate Leads Who have Interest, but No Time for Action...................... 78
©CSO Insights 67
Rate your ability to prioritize the accounts on which to focus.
! New Metric: Everyone understands that all prospects are not created equal. In fact, in
Many firms report a mythical sales territory we might see a distribution that resembles the
problems in following picture.
prioritizing where
to best invest
selling time.
! Miss the mark

here and you may
well miss making
your revenue
target.
! Formalizing sales
process improves
the odds that you
will know which
accounts to
pursue.
With this distribution of prospects, logic says that we should focus on

calling the “likely” and/or “very likely” to buy accounts, before spending
any time with the “unlikely” ones. Yet, while we know this, nearly 1 in 2
firms surveyed reported needing improvement in identifying their highest
quality, most likely to buy prospects.
©CSO Insights 68
In order to understand more fully the impact here, we compared this

metric’s data to overall sales rep quota achievement. In doing so we
found that failing to identify and focus on the right accounts at the
beginning of the sell cycle can, and does in fact, influence your reps’
ability to hit their numbers.
Consider the following table which presents the percentage of reps that
attain quota based on their ability to prioritize leads.
Reps
Attaining Quota
Exceeds expectations 67%
Meets expectations 66%
Needs improvement 55%
Here we see that “exceeds expectations” gives firms a small

performance boost over “meets expectations”. But the real eye-opener
involves the penalty paid when a firm is poor at this sales strategy task.
So how does a firm improve? One of the characteristics of firms that

meet or exceed expectations in focusing sales team selling efforts is the
adherence to a formal sales process.
One software firm we benchmarked shared with us that as basis of their

sales process they identified the “perfect prospect profile” for the
applications they sold. They looked at account aspects such as industry,
types of stakeholders in the decision, problems that prospects were
looking to solve, comparisons to other competitive solutions, etc. – with
the objective of finding a combination of variables that produced an 80%
or higher win rate.
This firm discovered their “sweet spot”: CFOs of multinational

companies, looking to solve the issue of budget consolidation, in multiple
currencies, who had a weak IT organization…. Thus, you see how
specific it becomes. Understanding that the presence of these variables
would lead to a much higher chance of winning, they started focusing not
only their sales efforts, but their marketing efforts as well, on those types
of buyers. And they doubled their win rate within a year.
Notes:
©CSO Insights 69
Rate your ability to develop strategic plans for key accounts.
! New Metric: Based on a suggestion from one of our advisory board members, we
Many firms need started tracking how well companies rated their ability to develop
help at planning strategic plans for key accounts. As we see in the chart above, this is
for how to win. another area of selling where the majority of firms feel they need to
improve their performance.
! This ability
impacts the When we shared the above results with our advisor, we asked him why
extent to which he suggested that we begin to measure this. He replied with a personal
a company will experience. A few years prior, when he insisted his sales teams adopt a
make its revenue more rigorous approach to planning, he found that his ability to ensure
plan. the company made their plan actually increased.
! Frequently, firms We tested the idea against the 2008 study data, and found that his
rely on existing experience is not an isolated event. In the following table, we compare
relationships to the percentage of a company’s overall revenue plan that was achieved
close deals when based on how well the firm rated their ability to develop strategic account
solid plans aren’t plans.
in place.
Overall Company
Plan Achieved
Indeed, we do see that taking the time to develop strategic plans does
have a solid payback.
©CSO Insights 70
Many companies think that sales training can help with the strategic
account planning aspect of selling. And we did find that sales
organizations that have formal training programs performed better than
those who do not. But an even more interesting trend that our analysis
surfaced is related to the type of sales methodology the companies were
using.
In general, firms using a commercially licensed methodology perform

much better at strategic plan development than firms using an internally
developed methodology. And when we drilled deeper into the
commercial methodologies being used, we also found differences in
performance.
As you will see on page 160, while many sales methodology users are
very satisfied or satisfied, others seem to be rather neutral, and a few
are definitely unhappy. We would therefore encourage you to do a solid
round of reference checking before you make a final decision on any
solution provider.
Notes:
©CSO Insights 71
Rate your ability to thoroughly research new accounts before calling on them.
! New Metric: As we discussed in the metric on page 54, one trend in sales
Seeing problems performance that has continued to deteriorate over the past several
in reps’ ability to years is sales reps’ ability to convert leads into opportunities. In order to
research shed more light on that topic, and at the suggestion of several clients, we
prospects prior to added this new metric to the current survey. Indeed, here we find that
calling them. one factor contributing to low lead conversion rates may well be the
inability to research prior to calling on new accounts.
! When reps don’t
execute well The following table shows the percentage of firms that stated their
here, the conversion rate of leads to initial discussions was greater than 50%,
likelihood of relative to their ability to research prospects beforehand.
getting in the door
is clearly % Firms with > 50%
impacted. Lead Conversion Rates
! Companies that Meets expectations 44%
invest in sales Needs improvement 36%
knowledge
management are Here we see a noticeable improvement in salespeople’s’ ability to get
doing better in “more times at bat” when they do effective research of thoroughly
this area. researching prospects.
One might assume that the Internet would be the great equalizer here.
Just as prospects can get a lot of facts and figures on you and your
products, doesn’t the Internet offer a great way to get access to
information about them? Well, the answer is both yes and no.
©CSO Insights 72
Based on the input we present on page 190, we see that the Internet
does offer “a” way to get information on your clients, but it’s not always
an effective way. As one research client shared with us, “The Internet is
like the Library of Congress without the Dewey Decimal System. I know
the data I want is in there, but I don’t have an easy way to find it.”
We are seeing more sales operations and training groups realize that it
is their responsibility to find ways to help reps quickly pull the information
they need from the vastness of the Internet.
In the metric on page 194, we review how easy it is for reps to get
access to the information they need to sell effectively. In the following
table, we compare firms’ ability to research accounts, relative to their
ability to give reps easy access to two types of data: information on their
prospect’s marketplace and on the prospects they will be calling.
Firms with Easy Firms with Easy

Access to Access to
Marketplace Data Customer Data
Exceeds expectations 42% 47%
Meets expectations 36% 30%
Needs improvement 22% 24%
Clearly, there is a relationship between the investment firms are making

to optimize data access, and the rep’s ability to leverage that access in
effectively researching accounts.
Notes:
©CSO Insights 73
HowRate
Wouldyour ability to generate the necessary number of new leads.
! Seeing some In comparing this year to last year, we are continuing to see
improvement in improvement in companies’ ability to generate leads. That being said, as
this area, but still you will see above, there is still a lot of work to do. When asked to list the
have a long way top three sales effectiveness initiatives planned for 2008,
to go. “revising/enhancing our lead generation programs” came in at the top of
the list across all of the firms that we surveyed.
! This is clearly a
bone of As we noted in our most recent Target Marketing Priorities report,
contention marketing organizations are considering the task of generating leads for
between sales salespeople to be their key priority as well. We are seeing them become
and marketing. more effective at determining which types of marketing levers to pull –
telemarketing, direct mail, web-based marketing, advertising, etc. – and
! Get better at they are changing their programs based on areas where they see the
generating leads, best ROIs.
and your reps will
have more time to Solving the lead generation challenge can contribute greatly to another
sell. of the top priorities sales organizations have for 2008, which is more
closely aligning sales and marketing (see page 211).
When we compare the data in the chart above to how sales rates the
quantity and quality of leads generated by marketing (seen in the metric
on page 202), we see an interesting set of results. The following table
illustrates the undeniable advantage of firms who exceed expectations.
©CSO Insights 74
Firms Rating Marketing’s

Leads Adequate or Better
But improving sales and marketing alignment is not the most significant
factor to consider here. Over the years, in a number of previous
analyses, we have we have discovered and profiled several performance
differences between firms who excelled at lead generation versus those
who did not.
Using this year’s study data, we repeated a subset of that analysis, and
compared the no decision rates firms experienced (see the metric on
page 64) based on their ability to generate leads. The table below
summarizes the results.
Forecast Deals that

End in No Decision
Here we continue to see that investing in helping salespeople find the

right prospects to talk to can impact the ability to earn lower no decision
rates. For more information on this area, research clients may want to
review our analysis on Proactive Sales Intelligence.
Notes:
©CSO Insights 75
How Would
Rate your ability to qualify and prioritize properly the opportunities.
! Only modest In last year’s survey, 46% of the firms taking part reported that their
improvements ability to qualify/prioritize opportunities actually met or exceeded
from last year in expectations. This year we see that number rising a bit to include nearly
this area. 48% of sales organizations.
! Clear relationship Let’s review what we are asking salespeople to do here. After
between reps’ segmenting their territories to decide which accounts to focus on,
ability to prioritize researching those accounts and developing a plan of attack, then
and their ability to generating leads, we now want them to fully qualify each opportunity and
win. decide if they should continue to invest not only their time, but often the
resources of the company as well.
! Level of
relationships may Even if reps know the opportunity may not be a good fit for their products
give key insights or services, it is often hard for them to walk away from a deal. But they
into knowing who should. Consider the following win rates reported by the participants in
is and is not the this year’s study, based on how they rated their ability to qualify and
right fit. prioritize.
Win Rate of
Forecast Opportunities
For years our advice for selling has been, “If you are going to lose a
deal, lose it early in the process.” A manufacturing firm we benchmarked
a couple years ago implemented what they called the “tollgate process”
©CSO Insights 76
to force reps to take a hard look at the opportunities they were pursuing.
Reps had to convince not only themselves that they were going after a
high probability deal, but their managers as well.
The process was designed around a series of things that either the rep
or the prospect had to do in order to show the deal was on track towards
resulting in a win. For example, if the rep wanted to fly out to see a
prospect, they had to secure a meeting with a VP-level contact for the
trip to be approved. In order to have engineering do a demo, the rep
needed to get an “intent to purchase” letter signed by the prospect. If a
rep wanted to ship some sample parts, they had to get records from the
prospect showing how many of those types of parts they were currently
ordering from another supplier.
These exercises not only helped the reps initially qualify accounts, but
also aided them in continually re-qualifying opportunities over the seven
months it typically took to close a deal.
Another trend we discovered from this year’s data is that investing the
time to build closer relationships with clients will lend better insights for
distinguishing solid opportunities from poor ones. In the table below, we
profile firms based on their level of relationship with clients (see the
metric on page 24) and their ability to qualify/prioritize opportunities.
Levels of relationship are expressed as vendor focused (Levels 1 and 2),
or value-add focused (Levels 3, 4, and 5).
Meets Exceeds
Expectations Expectations
Firms with value-add
45% 35%
relationships
Firms with vendor
12% 4%
relationships
Clearly, there is a dramatic difference between the two groups. Nearly

80% of firms who attained a value-add relationship with their customers
either met or exceeded lead qualification expectations. Nearly 16% of
firms operating at vendor relationship levels were able to achieve similar
results.
Notes:
©CSO Insights 77
Howyour
Rate Wouldability to incubate leads who have interest, but no time for action.
! New Metric: You have qualified the leads you have generated. The solid opportunities
More companies have been passed on to a sales rep; and those that are clearly not a fit
are poor, rather have been dropped. Now comes the gray area of qualifying the
than good, at lead remainder: some prospects clearly have a need for what you offer, but
incubation. based on priorities they lack the necessary time to evaluate your
offerings. What do you do with these leads?
! Ability to incubate
leads can help For the more progressive firms we have benchmarked this past year,
increase your one answer we have found is the implementation of lead incubation
return on lead programs. These are formal initiatives taken on by sales, marketing or
generation both, to stay top-of-mind with prospects until they do have time to start
efforts. an evaluation – and then to be first back in the door when that occurs.
! CRM add-on What impact can this have on sales? Consider the following table where
technology we compare the lead conversion rates reviewed on page 54 to lead
appears to be incubation abilities (expressed as two groups that either meet/exceed
playing a role in expectations or need improvement).
companies’
execution of more Meet/Exceeds Needs
effective lead Expectations Improvement
management. <25% conversion rate 16% 25%
25%-50% 31% 30%
51%-75% 23% 17%
>75% 25% 18%
Don’t know 5% 10%
©CSO Insights 78
We clearly see a trend towards higher return on investments from lead

generation, when firms take the time to effectively incubate leads that
are good interest fits but have no time for current action.
A Japanese technology firm shared the results of their lead incubation

efforts with us. Top quality A leads were immediately sent to the field, C
leads were dropped, and the new class of B leads was handled by a
telemarketing team for a period of 120 days. During that time and on a
regular schedule, the marketers would send out case studies, new
product announcements, invitations to seminars and webinars, etc., to
keep in touch with the B leads.
By having people dedicated to nurturing these leads for a few months,

the company found that they were able to covert 17% to A leads, and
those new A leads converted to sales at essentially the same close rate
as the original A leads.
One last item to share came as a result of a question posed by a

research client. He wanted to know if CRM technology was playing a role
in helping companies incubate leads. Our review of the current study
data did not show any significant differences among the three groups
(those exceeding expectations, meeting expectations and needing
improvement) in regards to their adoption rates of core CRM systems.
However, with the emergence of add-on CRM applications designed

specifically to optimize lead management, we are seeing examples
where lead incubation efforts are technology enabled, and are
generating great results. We will be tracking this potential trend in more
depth in early 2008.
Notes:
©CSO Insights 79
©CSO Insights 80
Sales Cycle Execution Assessment

Introduction
This section looks at metrics reflecting how sales forces perform specific selling tasks during the sell
cycle to educate the prospect, align solutions to needs, and win the business. Again, since few
organizations have detailed numbers in all of these areas, survey participants were asked to assess
whether they need improvement, meet expectations, or exceed expectations for each. In cases where
respondents could not provide an accurate assessment of their performance, or the metric did not
apply to their sales performance, they were allowed to select “Don’t Know or N/A” as a valid answer
to the questions.
• Ability to Understand Clearly the Customer’s Buying Process................................ 82
• Ability to Effectively Present Your Offering’s Features and Benefits ...................... 84
• Ability to Differentiate among Competitive Products/Services ................................ 86
• Ability to Align Solution to Customer’s Needs.......................................................... 88
• Ability to Generate Accurate Bid/Configuration/Proposal ........................................ 90
• Ability to Cross-sell and Up-sell................................................................................. 92
• Ability to Sell Value/Avoid Excessive Discounting ................................................... 94
• Ability to Close Deals Accurately, in the Timeframe Originally Forecast ................ 96
• Top Three Reasons Why Companies Win Competitive Deals .................................. 98
• Top Three Reasons Why Companies Lose Competitive Deals .............................. 100
©CSO Insights 81
How
RateWould
your ability to clearly understand your customer’s buying process.
! Seeing some Year over year, comparisons of this metric show some improvement.
improvement in Last year, the percentage of firms that reported meeting or exceeding
sales reps’ ability expectations in understanding their customer’s buying cycle was 52%;
to understand this year the number has increased to just over 57%.
how a customer
will buy. A question several of our clients have posed to us is, “If I understand
how my customers buy, can I sell with less effort?” A review of the data
! Knowledge of the suggests that the answer to that question appears to be yes, but not
buying process overwhelmingly so.
does not mean
you will sell In the following table, we compare the number of calls required to close
significantly faster a deal (previously reviewed in the metric on page 50) for the three
or with less effort. groups of sales organizations – those who need improvement in
understanding their clients’ buy cycles, those who meet expectations and
! Know how your those who exceed expectations.
customers buy
and you can win Exceeds Meets Needs
more frequently. Expectations Expectations Improvement
1-2 calls to close 13% 11% 10%
3-5 calls 48% 46% 45%
6-9 calls 24% 28% 27%
10 calls or more 11% 13% 17%
Here we see some level of advantage attained in reducing the number of

calls to close a deal through a better understanding of buying trends.
(We noted a similar pattern when we compared the length of the sell
©CSO Insights 82
cycle as profiled on page 48.) The real advantage though, is seen in the
outcome of those calls. In the following table, we show the win rates
reported by companies who excel, are adequate, or need help in
understanding their customer’s buying process.
Exceeds Meets Needs

Expectations Expectations Improvement
Win rate of
forecast deals 57% 51% 45%
Taking the time to really understand how your customers will buy from
you or a competitor seems to be well worth the investment. We would
like to raise a yellow flag, though, for firms who rate themselves as
meeting or exceeding expectations. Our past research efforts have
shown that buying processes can morph dramatically based on changes
in the customer’s marketplace.
Take for example, the fact that some computer firms who generate a
noticeable percentage of their revenues from financial institutions are
warning that they may well see their sales to those clients decrease in
2008 because of the subprime loan problems.
Or consider the impact on pharmaceutical and health insurance firms if a

universal health care candidate becomes president in the upcoming
election. If clients’ businesses change dramatically, the firms selling to
them will see major changes in how they buy.
On page 126 we see that many firms feel they need improvement in their
ability to conduct regular win/loss reviews, an exercise we have long
recommended to help keep your fingers on the pulse of buying
processes. Based on the multiple levels of uncertainty we are seeing
today, we want to reemphasize that recommendation for 2008.
Notes:
©CSO Insights 83
Howyour
Rate Wouldability to effectively present your offering’s features and benefits.
! Modest Of the respondents taking part in this year’s survey, 61.5% rated
performance themselves as meeting or exceeding expectations. This result compares
change here from to 62.5% last year.
previous years.
Now, let us then add our own editorial on the ratings firms give
! See a disconnect themselves on this specific metric. While 61.5% may be satisfied with
when comparing their performance in presenting features and benefits, we bet not all of
numbers here to the corresponding CEOs are experiencing the same thing. Why are we
conversion rates making that claim? Consider the following.
of presentations
to sales. On page 58, we presented figures on the success rates companies were
experiencing in terms of converting presentations to sales. That data is
! Get great at summarized here:
presenting the
benefits of your Companies with
systems, and you this Presentation to Sale
may also enjoy Conversion Rate
higher margins. <25% 40%
25%-50% 31%
>50% 21%
Do not know 9%
If so many companies are such solid presenters, why do we see over

40% of them reporting conversion rates of presentations to sales of less
than 25%?
©CSO Insights 84
We think that more firms should be looking more closely at their

performance here, because help is available if they do actually need it.
We have found and benchmarked a number of sales messaging, sales
training, and CRM technologies that can significantly improve reps’
ability to communicate the full potential of their offerings.
We also may well have found a way to pay for those support services. In
the following table, we compare firms’ reported ratings for selling value
and avoiding discounting (profiled on page 94), to their presentation
ability ratings.
Excels at Adequate at Needs Help

Selling Value Selling at Selling
Value Value
Exceeds presenting
expectations 34% 39% 25%
Meets presenting
expectations 13% 47% 40%
Needs presenting
improvement 3% 28% 67%
Here we see that only 3% of the firms who feel they need improvement
in presenting features and benefits view themselves as excelling at
selling value and avoiding discounting. If this group of sales
organizations were to make the investments needed to improve their
ability to present, they could well recoup their expenses in the form of
higher margins resulting from less frequent reliance on discounting to
close deals.
Notes:
©CSO Insights 85
How Would
Rate your ability to differentiate your offerings from the competition.
! Performance in In meetings with individual research clients in 2007, we did not hear any
this area of executives say that they were closing lots of uncontested deals.
selling is still at a Competition is almost always in play in new accounts and is even being
four year low. seen more often in cases where a customer is renewing business or
submitting a follow-on order.
! Firms that need
improvement We noted a couple of interesting trends related to how well a company
or meet is, or is not, able to differentiate what they offer from alternative products
expectations fair or services from a competitor. In the following table, we see the loss
far worse that rates reported by survey respondents based on how they rated their
those who ability to differentiate.
exceed
expectations. Needs Meets Exceeds
Improvement Expectations Expectations
! If reps don’t know Competitive
why you are loss rate 32% 32% 26%
different, you can
expect more of We see here that firms who meet expectations essentially perform as
them to leave. poorly as sales organizations that need improvement. And we also see
that when firms get excel at differentiation, they can in fact win more of
the deals they forecast.
For many CSOs, these numbers may not be surprising; one might
expect competitive win rates to be in alignment with the ability to get the
prospect to see uniqueness. But how many of us have put pencil to
paper to calculate the cost of being poor at this aspect of selling?
If you are in the bottom two thirds of companies in performance here,
©CSO Insights 86
take a moment and add up what would happen to your firm’s revenues if
you dropped your competitive loss rate from 32% to 26%.
We’d like to share another trend regarding sales rep voluntary turnover.
As we discussed on page 34, voluntary turnover happens when a sales
person proactively chooses to leave your firm. The following table
outlines the turnover rates reported by survey participants, based on how
well they differentiate their offerings.
Voluntary
Annual Turnover
When reps clearly understand what their advantage is in the

marketplace, they are less tempted to leave their company than when
they do not have a clear appreciation. For more insights into how this
can be accomplished, research clients should review the findings in the
analysis entitled Optimizing Sales Messaging.
As we noted on page 38, ramp-up time for new salespeople continues to

be a problem, so anything that you can do to keep a higher percentage
of your performing salespeople is well worth your time and attention.
Notes:
©CSO Insights 87
How Would
Rate your ability to align your solution to meet the customer’s needs.
! Starting to see a In last year’s report, we noted that 31% of the firms we surveyed
reversal of a reported the need to improve their ability to tie what they sell to a specific
downward trend problem that they can solve for a prospect. This year, we see the
in solution number has decreased to 28%.
alignment.
We continue to hear from buyers that there is a lengthy and thorough
! If the problem/ review process for the purchases they want to make. One conglomerate
solution link is not firm we benchmarked now has a hard dollar justification that must be
made, you can completed for any purchase over $100K.
expect your no
decision rate to With this current level of scrutiny, which could increase if the economy
go up. goes south in 2008, sales teams need to ensure they are aligning
solutions to needs their customers actually care about. Failure to do so
! At the same time, can mean that deals will fall into the black hole of no decision. In the
you can expect following table, we compare the no decision rates of the firms who
margins to go perform well, adequately and poorly in regards to alignment.
down as you rely
on discounting to Forecast Deals
close deals. Ending in No Decision
Obviously, you can negatively impact the return on your sales and
marketing investments as you experience higher no decision rates. But
that is only part of the cost for poor performance here.
©CSO Insights 88
Let’s consider for a moment what else we might have to rely on to close
business if the buyer cannot easily connect our solution to their need.
One of our advisory board members made the hypothesis that the factor
firms would leverage next would be would be price. And, as you see in
the following table, he appears to be right.
On page 98 we profile the top three factors that firms attribute to winning
deals. Below we compare the frequency in which companies said “price,”
was a key factor in why they win, to how well they handled the alignment
task.
Firms Stating Price was a Key

Reason for Winning Business
Our concern with the results above is that pricing advantages can often
mean discounting. And if eroding margins is a price you pay for the
inability to deal with the selling task of solution alignment, then you need
to see what you can do to improve performance in that area.
Notes:
©CSO Insights 89
How Would
Rate your ability to generate an accurate bid/configuration/proposal.
! This continues to When salespeople get prospects to the stage in the sales process where
be one of the their needs have been identified and they have been educated on the
aspects of selling solution’s potential, most firms rate themselves as adequate or better at
companies creating some type of proposal for review.
handle well.
A trend we have been watching the past two years is the increasing
! Excelling at bid/ investments firms are making to help sales reps with this task. This help
proposal generally takes one of two forms. The first is software – CRM add-on
development tools that both guide sales reps through the solution configuration
increases process and also help them develop targeted proposals to address the
conversion rates issues of individual stakeholders.
to sales.
Another option we are seeing is “liveware” – bid response teams that are
! Firms can also dedicated to working with salespeople to do the heavy lifting in
improve cross- structuring an offer, and then building the formal response to the
selling and up- prospect.
selling success
based on Upon reviewing this aspect of selling in more detail, we see that these
comprehensive investments seem to generate a solid ROI. In the following table, we
proposals. compare the proposal to sale conversion rates for companies (profiled
on page 60) to how well they handle this selling task.
Proposals Converting
to Sales
©CSO Insights 90
The clear difference in performance among these three groups should

provide reassurance to CSOs. If you need improvement and want to
move to adequate, or are adequate and want to move to great, then the
revenue improvement potential should easily cover the cost of the sales
effectiveness initiative.
But higher conversion rates are only part of the picture. Going back to
the comment we made about firms increasingly using technology to help
with this task, we find another advantage that companies can gain. As
you will see on the next page, cross-selling and up-selling is a challenge
for many firms. But consider the performance differences for that task
based on how well they generate proposals (refer to the following table).
Meets Cross-sell/ Exceeds Cross-sell/

Up-sell Up-sell
Expectations Expectations
Exceeds proposal
expectations 46% 29%
Meets proposal
expectations 41% 7%
Needs proposal
improvement 20% 4%
Here we find that of the firms who exceed in their proposal generation
ability, over 75% also perform well at cross-selling and up-selling. A
medical products firm we benchmarked this past year exemplifies this
success.
The firm implemented a tablet-PC based application that reps use when
meeting with doctors or nurses. The system understands all of the co-
requisites and prerequisites associated with the various products they
sell, and prompts the rep to up-sell to another product if that might best
fit the client’s needs, or cross-sell other products based on certain
ordering patterns.
In addition to optimizing the original configuration process by eliminating

errors, the application also promoted more effective selling, which
significantly increased the average deal size for the sales teams.
Notes:
©CSO Insights 91
How Would Rate your ability to effectively cross-sell and up-sell.
! Overall, we are The inability of sales organizations to effectively cross-sell and up-sell
continuing to see continues to trend in the wrong direction. Last year an all-time high of
performance 45.6% of participating firms reported needing improvement in this area.
erode at cross- This year that number has actually been bested by nearly another 3%.
selling and up-
selling. We drilled into the data to see if we could uncover some of the
underlying causes contributing to poor performance in cross-selling and
! As the change in up-selling. In doing so we found that, as the classic comic strip character
complexity of Pogo once pointed out, “We have met the enemy and he is us!”
product lines
increases, the What do we mean by that? Let’s look at the issue of the impact of
ability to cross- change, which we will further explore on page 134. We analyzed how
sell/up-sell well companies can cross-sell and up-sell based on the rate of change
becomes more they are seeing in the complexity of the product lines they sell.
problematic.
In the following table, we profile the number of firms reporting that they
! Product training need improvement at cross-selling and up-selling based on the rate of
alone is not change in product complexity their reps are experiencing.
making much
difference here, Firms Needing Improvement in
but sales Cross-selling/Up-selling
knowledge Experiencing significant change 55%
management is Noticeable change 50%
helping here. Modest change 50%
No change 43%
©CSO Insights 92
If firms can eliminate changing the complexity of product lines altogether,

then they might expect their reps to have less difficulty cross-selling or
up-selling. But since that lack of change and innovation could well create
a significant competitive disadvantage in the marketplace, it is not a
rational choice to make.
So how about more training? We did a comparison based on the training

firms were doing with their salespeople on the products or services they
sold, and we saw only very modest differences. But through our
benchmarking efforts we have uncovered one factor that can help here –
sales knowledge management.
An example of this involves a technology firm that built a sales

knowledge portal. To initially populate the portal with useful information,
they began collecting best practices that sales reps were employing to
sell individual products. What they found when they started this project
was that any individual rep was typically only effective at selling a
fraction of their product line; but in aggregate, the knowledge from all
reps provided insights into how to more effectively sell all their offerings.
By making these sales insights available to the entire sales force, reps
who were ineffective or inexperienced at selling certain aspects of the
product line started to leverage the knowledge of their peers who were
good in that area – and cross-selling/up-selling, and new product
launches all improved.
In 2008, we will be doing case studies on sales knowledge management,

so you can expect more details on how these initiatives are generating
sales better performance.
Notes:
©CSO Insights 93
How Would
Rate your ability to sell value and avoid excessive discounting.
! No improvement Getting clients to recognize the full value of what you sell, so that you
in firms’ ability to don’t have to always turn to price cuts to close deals, is still a challenge
promote the full for a lot of companies. The numbers above reflect no meaningful
value of their improvement from last year.
offerings.
Referring back to comments from research clients who were transitioning
! Taking the time to from being product-focused to more customer-focused, we were
move up the interested in seeing whether the levels of relationship you can achieve
relationship curve with a customer, as defined on page 24, impact a firm’s ability to
has clear effectively present their value message.
paybacks here.
In the following table, we highlight the percentage of firms who reported
! Issues exist in needing improvement in selling value, relative to their place on the
developing value relationship ladder.
propositions that
link strategic % Firms Needing
value and issues Improvement in Selling Value
for stakeholders. Trusted advisor 29%
Strategic partner 32%
Solutions consultant 44%
Preferred supplier 52%
Approved vendor 55%
The trend evidenced above points to the conclusion that as we develop

deeper relationships with our customers we are able to convey, and they
are able to appreciate, everything we can bring to the problem we are
jointing trying to solve.
©CSO Insights 94
We next decided to look at the responses received from our most recent
Sales Effectiveness Best Practices study. Here we found a disconnect
that could be contributing to the problems sales teams are having in this
area.
As part of that study, we looked at 40 potential best practices from two

perspectives. The first was how sales executives rated the impact of a
given sales strategy or tactic. Here, when we asked the study participants
how they would assess the importance of developing value propositions
that are linked directly to the issues for stakeholders, 37% said “mission
critical” and 45% said “very important.”
As a follow-up question we then asked how well these firms were able to
consistently/effectively do that selling task; 38% said they needed
improvement and another 12% said they needed significant improvement.
Based on the fact that firms know “what” they need to do, but not “how,”
we are adding this to our list of cases study projects for 2008.
Notes:
©CSO Insights 95
RateHow Would
your ability to close deals accurately, in the timeframe originally forecast.
! Ability to This year, we saw a little improvement in the ability of sales

determine how organizations to successfully close deals in the timeframe they originally
long it will take to forecast. Roughly forty-six percent of the current study participants rated
close a deal is themselves as meeting or exceeding expectations compared to 42.2%
improving, but still last year.
poor.
Note that this metric is different from the overall forecast accuracy
! Deal size comes question of how much, what, and by when. Here we are looking at the
into play issue of whether companies have an understanding of how long it takes
regarding your to close business, and in this case, the answer would be not always.
ability to perform
effectively here. Last year, we received a suggestion to look at this issue based on the
size of the opportunity. In the following table, we compare the
! Taking the time to percentage of firms who rated their ability as meeting or exceeding
understand the expectations based on the size of deal they typically go after.
customer’s buy
cycle can make % Firms Meeting or
this task easier. Exceeding Ability to Close
within Timeframe
<$25K deal size 51%
$25K-$100K 42%
$101K-$500K 43%
>$500K 33%
We see that as deal sizes get larger, which often means more
stakeholders are involved in the final decision, the ability to forecast the
timing of a deal becomes more of an issue.
©CSO Insights 96
We did see one trend that supports the notion that firms can improve
their abilities in this area if they invest the time and effort to do one thing.
That is, understand why and how you win, and why and how you lose.
Consider the following table. Here we compare the percentage of firms

needing improvement in closing deals in the timeframe originally
forecast, based on their reported ability to conduct regular win/loss
reviews.
% Firms Needing Improvement in

Ability to Close Deals in Timeframe
Originally Forecast
Taking the time to look at your past successes and failures will help you
more clearly understand the real “gestation period” of a deal, which will
make your CFO’s job a lot easier.
Notes:
©CSO Insights 97
How Would
Rate your understanding of the top three reasons why you win deals.
! Relationships are As discussed on page 24, we can have a variety of relationships with our
still relied on most customers, and they do matter. For the second year in a row, we see
in order to win that higher levels of relationship can make up for a product feature
deals. shortcoming, a slightly higher price, or lack of availability. So what are
firms doing to enrich those relationships?
! Reputation may
get you in the One trend we have noticed over the past several years is that face-to-
door, but it does face selling time is becoming less frequent, giving way to more remote
not guarantee interactions with customers and prospects. In our Building Relationships:
you the win. Turning Cold Calls into Opportunities white paper, we profiled how
companies are effectively leveraging high tech sales collaboration tools
! Good to see to achieve high-touch with clients (see pages 180 and 190 for more
fewer firms details).
relying on price
to close the One of our advisory board members has a saying: “It is nearly
opportunity. impossible to get someone to do what their wallet tells them not to do.” If
raises, bonuses, and commissions are paid out based on how fast reps
! Fewer firms are can end their calls, that is what they will do; and that means a minimized
able to rely on chance to enrich relationships.
product
superiority in Another factor to consider is brand equity/reputation. Last year, we found
order to take that 42% of the firms surveyed included that factor as one of the top
home the prize. three reasons why they win. This year, that number has dropped
noticeably to just 35%.
In our marketing effectiveness surveys, we have seen that a good

reputation can definitely help get you in the door, but here we see that it
results in winning less and less frequently.
©CSO Insights 98
There are two other factors we want to point to here, and then cover in
more depth on the next page: price and product superiority. The fact that
fewer firms are relying on price to win business is a positive sign. The
22% figure charted on the previous page is a solid improvement from the
29% reported by participants in last year’s survey.
Value-add initiatives various firms we have benchmarked are showing

that companies have a great variety of assets they can leverage to win
deals, if they take the time to identify them. This practice can mitigate the
need to turn to price for the defining differentiator between you and your
competitors.
The other factor we find particularly interesting is product superiority,

which was also mentioned by fewer firms as the key reason for winning
business. This year, 35% of sales organizations sited this factor
compared to 41% last year. And as you will see on the next page, it is
also a lesser factor in why firms lose as well.
Notes:
©CSO Insights 99
How Would
Rate your understanding of the top three reasons why you lose deals.
! The fact that firms We find it interesting that as part of the previous metric we see price as
lose deals most being an advantage only 22% of the time, yet above we see that it is the
often because of number one reason why firms lose business. This raises the question: Is
price is a price a real issue, or is it something that is easy to fall back on when
concern. firms don’t know the real reason why they got beat?
! Relationship is a Let us share an interesting figure. When we look at the responses from
sword that cuts firms who exceed expectations at regularly conducting win/loss reviews,
both ways: a help and who therefore should have the best input on why they lose, we find
and a problem their figure of 64% is almost identical to the overall study average. So
depending on price may well be a key reason you are losing, but you also need to
who has them. realize that you let that be the case.
! Losing to a By that we mean, if it boils down to price, you messed up somewhere

competitor with along the sell cycle. Perhaps qualification was done poorly and there
low product wasn’t actually a good advantage to rely on to win. Perhaps there was a
superiority should good advantage, but a poor presentation to the prospect followed. Or
raise another perhaps the business case wasn’t solid enough. If you are losing to
yellow flag. price, you need to understand why and what to do about it.
We also see that if the competition has the relationships, the advantage
is theirs in terms of winning. This points to the critical need for getting
very good at identifying all stakeholders who could influence the decision
and ensuring you have face time with them.
It is very tempting to simply believe what your internal champion or

advocate says about how they are going to carry the banner for you and
©CSO Insights 100

get the deal done. But the old military adage, “trust but verify,” should
become the watchword for any sales person hearing those words.
Finally, we see that a competitor’s product superiority is something that

sways the deal only 11% of the time. This gets back to a point we have
been making the past couple years – it is not what you sell that is your
sustainable competitive edge, but rather, how.
The issue of collapsing product life cycles has meant that if you or your
competitor don’t have a feature or benefit today, you can both catch up
by tomorrow. So the days of relying on the product to move the ball over
the goal line are becoming non-existent.
Instead, it is what we do, how we build relationships, how we build

image, how we service accounts, etc. that will be the deciding factors in
the win/loss game of sales. That being said, what are you doing to
optimize the “how” of your selling efforts?
Notes:
©CSO Insights 101

©CSO Insights 102

Account Management Assessment

Introduction
This section contains sales cycle metrics related to the types of strategies and tactics companies
are utilizing to keep more, and generate additional business from, existing customers.
.
• Ability to Effectively Introduce New Products......................................................... 104
• Ability to Farm Additional Revenues from Existing Customers............................. 106
• Ability to Effectively Communicate with Customers .............................................. 108
• Ability to Generate Repeat or Renewal Business from Existing Customers ......... 110
• Ability to Create Customer Loyalty.......................................................................... 112
• Ability to Create/Maintain Case Studies/References............................................... 114
©CSO Insights 103

Howyour
Rate Wouldability to effectively introduce new products into the marketplace.
! Less than 1 in 13 Overall, firms are improving in this ability; however, fewer companies are
firms exceeds exceeding expectations than in the previous year. In fact, we are seeing
expectations in a shift toward the middle, as the number of companies that need
this increasingly improvement has decreased by 4%, and those exceeding expectations
vital ability. have reduced in numbers by roughly 2%.
! Number of firms When we look at performance, we see a resonant correlation with results
stating they need for this metric. Average quota attainment was 58% for the needs
improvement is improvement group, 64% for the meets expectations group, and 72% for
still the largest those that exceed expectations. While the ability to meet expectations in
class of this category is paying some premium, exceeding expectations seems to
responses. net much better results. It is also interesting to note that last year, the
firms meeting expectations averaged only 61% of targeted quota.
! The rate of new
product The distribution pattern illustrated in the chart above tells another story
introductions as well. As you can see, there is little difference between the first two
continues to go columns compared to the dramatic falloff between the middle two. And, it
up significantly for turns out that data for several other metrics reflect this same pattern. For
all groups. example, win/loss/no decision rates were similar between groups of firms
that need improvement and meet expectations – approximately
48%/30%/22%. Meanwhile, firms that exceed expectations have vastly
different rates – 58%/22%/20%.
Whether the ability to exceed expectations in introducing new products is

paying benefits in other areas, or that doing better here is a reflection of
better practices overall, the truth remains: there is a big difference when
firms exceed, rather than simply meet, expectations.
©CSO Insights 104

Interestingly, companies that have the lowest rated ability in this area
also introduce new products relatively infrequently; those exceeding
expectations constantly present new products (see table below).
Rate of New Product Introductions

- 0 + ++ +++
Needs improvement 4% 20% 48% 19% 7%
Meets expectations 1% 18% 47% 22% 9%
Exceeds expectations 0% 15% 33% 32% 17%
The table shows the percentages of respondents within each category

projecting how the rate of new product introductions will change:
Decreasing (-), No Change (0), Modestly Increasing (+), Noticeably
Increasing (++), and Significantly Increasing (+++). (Totals do not equal
100% due to Don’t Know and N/A.)
Note that even with the poorest rated companies, more than three-
quarters expect the rate of new product introductions to increase. It is
also worth noting that for any given group the rate of new product
introductions is up this year over last year.
Notes:
©CSO Insights 105

RateHow Would
your ability to farm additional revenues from your existing customer base.
! Majority of firms Despite the fact that CSOs continue to tell us how important this ability is
still need to their success, the dials have barely moved from last year. In other
improvement words, when all is said and done, a lot more has been said than done
here. about farming new business from existing accounts.
! Higher As seen in the metric on page 18, detailing percent of business from
percentage of existing and new customers, there is little evidence that share of wallet is
revenues from actually improving. So, is there reason to concentrate more effort on
existing accounts improving the ability to farm revenue from existing customer accounts?
does not translate
to higher quota As noted throughout this report, we are looking at execution of many
attainment. metrics against the SRP Matrix introduced in last year’s report. For this
metric, we compared how respondents at the preferred supplier level of
! Two-thirds of relationship and level 2 process implementation (R2/P2 firms) ranked
business from against companies that were at the strategic contributor level and level 4
existing accounts of process implementation (R4/P4 firms).
and one-third
from new We expected to see a higher percentage of business from existing
accounts is the accounts within R4/P4 firms, but actually, R2/P2 firms scored higher in
common balance. that regard. Our R2/P2 firms registered 70% of their revenues from
existing customers, versus 59% for R4/P4 firms. However, R4/P4 firms
had an average quota attainment of 74% versus R2/P2 firms’ 59%. Why
might this be the case?
It may be that companies that gain more of their overall revenue from
existing accounts are not only “farming” those accounts – which sounds
like a good thing – but “milking” those accounts at the expense of other
©CSO Insights 106

viable new business, which sounds not so good.
Another metric, forecast accuracy sheds more light on the subject. While
it’s true that, the R2/P2 firms leverage more revenue from existing
accounts, they’re also much less certain or, at least, less accurate in
predicting the outcome. The R2/P2 firms have win/loss/no decision
percentages of 46/33/21, versus 62/21/17 reported by the R4/P4 firms.
The R4/P4 firms have a 16% better win rate than the companies seeing
a higher percentage of business from existing customers. This comes
from both a lower loss rate to competitors (12% better) and a lower no
decision rate (4% lower).
It appears that the R4/P4 firms are more in control of their overall sales
funnel and are less reliant on their existing accounts. This practice is
somewhat counterintuitive to all the talk about total lifetime value of
customers and cost of new customer acquisition -- neither of which are
considered in this metric.
Our analysis does not necessarily mean you should strive for lower
repeat business, but does suggest that 60-65% of existing customer
business balanced with obtaining new customers is appropriate. The
unchanging numbers for this metric also suggest that many CSOs have
come to the same conclusion.
Notes:
©CSO Insights 107

HowRate
Wouldyour ability to effectively communicate with your customers.
! Effective and Nearly half of survey respondents report meeting expectations in

regular customer communicating with customers, and their results in several other metrics
communication reflect this average performance. Quota attainment, forecast accuracy,
pays off in and percentages of presentations and proposals resulting in a sale are
unexpected ways. all on par. At the same time, for every firm exceeding expectations in
communicating regularly/effectively with customers, there are two and
! Meeting one-half participants needing to improve in this ability.
expectations in
this metric seems Is it worth dedicating resources to improve? As with any question of
to indicate value, the two variables to consider are cost and return. With low enough
average costs and/or high enough returns, it is worth committing effort. It should
performance in come as no surprise that keeping customers in the loop is among your
other areas as high value efforts.
well.
Firms that meet expectations scored an average quota attainment of
! Firms needing to 61% which represents the overall survey population’s average as well.
improve in this Firms needing to improve their customer communications came up short
area outnumber at 58%, while those exceeding expectations reported an impressive 70%
those doing better in this important measure. So far so good.
than average by
2.5:1. Also good, though not great, is forecast accuracy. As seen in the
following table, there is a straight-line correlation between
communication ability and forecast accuracy.
©CSO Insights 108

Win Loss No Decision

Rate Rate Rate
Exceeds expectations 53% 27% 20%
Meets expectations 49% 30% 21%
Needs improvement 47% 31% 22%
There are two other metrics we like to look at simply because they’re
expensive to execute: presentations and proposals leading to a sale. In
these two areas, average performers (i.e., firms that meet expectations)
essentially mirror the results gained by firms needing improvement.
Twenty percent of each of these groups sees more than half their
presentations resulting in a sale. Firms that exceed expectations do
somewhat better, with 24% of presentations in the same bracket.
In terms of proposals, companies that exceed expectations outdistance

the others: 18% report successful proposals more than three-quarters of
the time. This compares favorably with the 11% average from the meets
and exceeds groups.
Since none of the numbers discussed above truly represent breakout

performance, it raises the question of how effective communications
really are. With respect to relationships, firms exceeding expectations
report 35% higher levels. They report operating at the partner level 11%
of the time, versus 8% for the others (refer to page 24). At the bottom of
the pyramid, described as the vendor or preferred supplier levels, are
50% of the firms needing to improve their communications, versus 44%
and 37% for the meets and exceeds groups, respectively.
This pattern suggests that paying attention to communicating with your

customers regularly and effectively will help to raise your company’s
level of relationship with customers. Still, with only one in nine firms
consistently reaching the partner level, it appears there is more work to
do in determining what buyers consider effective communication.
Notes:
©CSO Insights 109

How Would
Rate your ability to generate repeat or renewal business from your customer base.
! Business renewal As in the prior metrics related to this subject, firms doing better than
success and rep average at renewing are doing better than average in bookings—about
retention success 10% better. Exactly half of survey respondents meet expectations,
are directly reporting 66% of their business from existing customers and 34% from
related. new logos. Firms that need improvement report a 59%/41% split; and
those exceeding expectations lead in this metric with 70%/30%.
! Higher level
relationships also These numbers are in line with our earlier guideline of attaining two-
track consistently thirds existing/one-third new business. However, this metric seems to
with higher level reflect a more direct correlation between relationships and results.
renewal rates. Percentage of reps attaining quota tracked directly with this metric –
those needing improvement in renewing business averaged 59%, while
! More consistent those exceeding expectations averaged 68%.
sales process
implementation A question posed by an advisory board member was, “Does sales
supports more turnover impact your ability to renew business?” Referring to the chart
business renewal. above, we discovered rep turnover was 36% for the firms needing
improvement in renewals; 29% for firms meeting expectations; and 21%
for those exceeding expectations.
So, turning over reps is not only expensive from a replacement

standpoint – it’s costing you from a customer retention standpoint as
well. The level of relationship goes down as rep turnover goes up. Firms
that need improvement and meet expectations each report reaching
partner level roughly 7-8% of the time, versus 14% for those exceeding
in this metric.
©CSO Insights 110

At the other end of the relationship pyramid – the super competitive,

price sensitive vendor level – firms needing improvement or meeting
expectations report in at 24% and 29%, respectively. Conversely, only
12% of firms that exceed in this metric fall into the same relationship
category.
When we continue our thought process, it becomes somewhat circular in

nature. New reps have a tougher time gaining access to even your best
current accounts, and do not enjoy higher level relationships (i.e.,
understanding the customer’s business, ability to contribute and make
connections, etc.) until they earn credibility. Because of this uphill battle,
a few will succeed and more will leave, thus the cycle of challenge
repeats for the next newbie.
Once again, the pattern seen in the SRP Matrix is played out here with
the low performers implementing process at Level 4 roughly 10% of the
time, while a much greater 23% of the high performers report Level 4
process implementation. This becomes a vicious or virtuous cycle
depending on which side of the line you find yourself. Needless to say, if
process is left to be done on a random basis, a lower success rate is
almost certain, as our survey data reflects.
One surprise is that all three groups are focusing on the same three
areas for improvement in the coming year: developing strategic account
plans, sharing best practices, and providing competitive
analysis/information. Though the priority order varies among the three
groups, it’s interesting to note the convergence of thinking. We would
expect these efforts to vary more by industry and size, and will be
pinpointing those differences in our supplemental reports and analyses.
Notes:
©CSO Insights 111

How Would Rate your ability to create customer loyalty.
! Ability to generate Customer loyalty figures are essentially unchanged from one year ago
customer loyalty when we first introduced this metric. While companies identified
is not much increasing customer loyalty as one of their top five objectives each year,
different from one it appears that the emphasis overall continues to be on just the top three
year ago. (see Figure 6 on page 8). That said, the actual percentage of firms listing
customer loyalty as a top priority – 27.2% – increased 2.5% over last
! Firms’ ability to year.
create customer
loyalty and It’s interesting to look at differences in the “loyalty effect” between
satisfaction varies industries and within an industry. For example, if you are frustrated with
by and within your phone company and feel they don’t care about you, don’t expect
industries. that relationship to get better anytime soon. Telecommunications
companies are completely on par with the general population; 28%
! Customer loyalty indicate improvement in this area to be a top priority in 2008.
and level of Furthermore, roughly half of these firms (49%) feel they are already
relationship meeting expectations in their ability to create customer loyalty.
correlate with
quota Advertising/Media/PR firms are slightly lower than average (23%) in
achievement. rating this a top priority area for improvement; but this result may also
reflect the fact that they appear to be doing pretty well connecting with
their clients. Of all segments, they reflect the highest level relationships,
with 15% at the partner level and 31% at the next highest strategic
contributor level. Still, roughly one-third of A/M/PR firms feel the need to
improve in this area and have placed it somewhere on their list of
objectives for 2008.
©CSO Insights 112

At the other end of loyalty ratings, indicated by their relationship levels,

are insurance companies. Seven percent feel they are perceived as true
partners by their customers, and only another 10% operate at the
contributor level; 44% are perceived as simply one of many potential
suppliers competing largely on the basis of price. A whopping 58% of
these firms feel the need to improve in their ability to create customer
loyalty, and 36% have listed increasing customer loyalty/satisfaction as a
top priority for 2008.
Financial services as a whole seems to be struggling in the quest for

customer loyalty. Banking does better in relationships, with 40% in the
top relationship tiers; but they set the high water mark in terms of
including increasing customer loyalty in their top three objectives (38%).
Another area in which we did a deeper dive was Professional Services.

Firms that rated themselves as exceeding expectations in creating
customer satisfaction/loyalty averaged 97% of organizational quota
achievement and 71% of individual reps made quota. Professional
services firms needing to improve in their loyalty creation abilities
averaged 79% of organizational revenue targets, and only 55% of their
reps made quota.
Remember that customer satisfaction does not equal customer loyalty.

Check your records and ask whether your customers:
1) Buy on a consistent basis (based on product life cycle, budget, etc.)?
2) Buy a wide cross-section of your products/services?
3) Refer others to you?
4) Show immunity to the pull from your competitors?
If your answer is no to any of these questions, there is more work for you
to do, and more loyalty for you to gain.
Notes:
©CSO Insights 113

How Would
Rate your ability to create and maintain case studies and references.
! Modest This year, firms needing improvement in this ability dropped two points,
improvement the distribution of which landed equally in the meets expectations and
reported in this exceeds expectations categories. We noted last year that a number of
ability versus one items were contributing to the difficulty of creating/maintaining case
year ago. studies. Not least among these difficulties is the continuing requirement
for formal (i.e., legal) release/approval of the final case.
! Despite
improvement, In the past, companies have encountered some reluctance on the part of
obtaining formal clients to be showcased in a case study. Many companies do not want to
release/approval broadcast their success; or importantly, the underlying key or technology
is not getting that enabled it. This situation brings to mind the old gag line, “I could tell
easier. you, but then I’d have to kill you.”
! Controlling In other instances, companies may be willing to share their story with a
access to case third party but are not as willing to do so directly with their service
studies may be a provider. Whether these firms fear the solution provider will exaggerate
successful tactic their claims, or simply do not want to give the appearance of advertising
for increasing the provider, a useful approach can be to utilize an independent third
customer party. CSO Insights has written a number of formal case studies and will
participation. continue to do so in 2008. (Many of these are available as free
downloads and others will be added as part of our subscription service.)
Still, in our experience even when a company agreed to be a case

subject, we encountered resistance in obtaining final approval. One case
we prepared and sent for final sign-off ultimately had to be abandoned
because the firm could not gain agreement between legal and marketing
regarding who would approve (we are not making this up).
©CSO Insights 114

Different approaches are now becoming more common in dealing with

this resistance. Anonymous or intentionally vague descriptions of the
client – for example, “a global transportation and logistics company” –
are being used with greater frequency. However, this work-around does
not have the same impact as being able to say, “FedEx.”
Private portals that allow controlled access to the case via password
protection are another way firms are gaining approval to go forward with
certain showcase examples. This approach leverages a firm’s
willingness to share their own success and simultaneously addresses
their concern not to broadcast any advantages to their competitors.
Online audio and video taped references can also be password

protected, and have the added benefit of being organized to allow
listeners/viewers to jump to specific sections to hear what a satisfied
customer has to say.
Whether printed and distributed in hard or soft copy, or made available

as a podcast or other format, having studies available as ready
references and early proof cases is still seen as a valuable asset – and
for good reason. Firms that exceeded expectations in this ability
averaged 69% of reps achieving quota, while those needing to improve
averaged only 58%.
Notes:
©CSO Insights 115

©CSO Insights 116

Sales Management Assessment

Introduction
This is a new section added to the report this year. Some of the metrics are carryovers from prior
years but seem to fit better in this new category (e.g., the ability to accurately forecast business).
Other metrics are new this year and are identified as such (e.g., the ability to hire sales reps who
can succeed…). In all cases the respondents were asked whether they needed Improvement,
met expectations, exceeded expectations, or “Don’t Know or N/A.” The only exception to this was
rating the amount of change impacting their sales reps with answers ranging from decreasing to
significantly increasing. “Don’t know or N/A” were also a valid response.
.
• Ability to Hire Sales Reps Who can Succeed at Selling Offerings ......................... 118
• Ability to Provide Managers Access to Timely/Accurate Sales Metrics................. 120
• Ability to Accurately Forecast Business ................................................................. 122
• Ability to Easily and Accurately Calculate Sales Commissions............................. 124
• Ability to Regularly Conduct Win/Loss Reviews..................................................... 126
• Ability to Continually Adapt Sales Process to Market Changes............................. 128
• Ability to Proactively Identify Which Reps Need Coaching/Mentoring .................. 130
• Ability to Share Best Practices Across the Sales Force ......................................... 132
• Amount of Change Impacting Your Sales Reps ...................................................... 134
©CSO Insights 117

How
Rate Would
your ability to hire sales reps who can succeed at selling your offerings.
! Hiring right pays Building a successful sales team is a manager’s top responsibility, but
dividends in often it is a long-term goal pushed aside by more near-term priorities –
higher quota namely, making the number. And if coaching and consistent feedback
attainment and take a backseat to today’s urgencies, systematic recruiting and new rep
lower rep hiring is also trailing further behind. Yet developing bench strength is key
turnover. and hiring right is essential.
! Hiring right also The chart above shows that nearly half of all respondents feel the need to
requires improve in this vital area, while one in eighteen firms is doing better than
consistent effort expected. Overall, the data bears out that hiring right supports sales
and clear success. In the table below, we compare average quota attainment and
process. rep turnover for each group.
! Many companies Needs Meets Exceeds

are improving Improvement Expectations Expectations
their success by Overall plan attainment 85% 94% 98%
employing online Reps achieving quota 54% 69% 76%
tools to assist in Voluntary turnover 19% 14% 11%
their hiring Involuntary turnover 16% 12% 11%
process.
Clearly, the ability to identify, recruit, hire and retain individuals that will
be successful pays real dividends. Given the various turnover rates, it
seems that the firms that do this well would need to go through the hiring
exercise half as often as the firms that do it poorly. Or do they?
While it’s true that firms exceeding expectations have lower turnover,
their ability to recognize and recruit appropriate talent may stem from the
©CSO Insights 118
fact that they actually dedicate time to proper hiring on an ongoing basis.
We recently interviewed Kevin Obarski of TransPerfect, winner of the

2007 American Business Award’s “Stevie” for Best National Vice
President of Sales. Kevin has a very clear process and profile for hiring
new sales reps, most of which are recent college grads. His company
has found that they are more successful hiring talent as they define it,
rather than hiring sales talent as defined by their industry or competitors.
Kevin’s company has developed a multi-step interview process so that a

number of individuals have an opportunity to offer their assessment of
new candidates. The top attributes Kevin looks for are:
• high sense of urgency
• good problem solving skills
• ability to follow directions
The last step in the process is to have candidates take an online test,
which serves as a final check. The results are available within 24 hours
and usually affirm the overall assessment. The test itself has not caused
them not to hire someone they intended to, but in these cases has
pointed out specific areas of strength or concern to which the new rep’s
manager will want to pay attention. If they are wavering on a candidate
who then tests poorly, the online profile serves to confirm their inclination
to keep looking.
With their hiring process in place amidst rapid growth, the fallout (failure)
rate of this company’s first year reps is now 20%. For second year reps
the fallout rate is 8%. In addition to improving their hiring process, the
company has also focused increased resources on educating and
training first line sales managers to be current in today’s marketplace.
Notes:
©CSO Insights 119

How
Rate Would
your ability to provide managers access to timely/accurate sales metrics.
! Careful attention If you’re a big golf fan you may know that Zach Johnson was number
to performance eight on the 2007 PGA earnings list at just under $3 million, with an
metrics provides average score in tournament events of 70.0. Of course, everyone knows
a basis for number one: Tiger Woods, who tucked away $11 million in his golf
th
manager slacks last year with an average score of 69.1. All the way down at 100
coaching. place is Briny Baird with an average score of 70.7. So what’s the point
we’re making here?
! These metrics
must be available In a highly competitive, highly professional, high-payoff environment, it is
in a timely, not huge improvements that spell success; it’s focus on executing the
accurate and minor details in a consistent and excellent way.
consistent
manner. CSOs continue to rank their top objective as increasing revenues and
their second highest priority as increasing sales effectiveness. The
! While results are question is how to define effectiveness and then improve it. Many
important, they companies look to sales results to gauge effectiveness: average
are lagging quota/rep and average quota attainment; percentage of deals closed as
indicators. forecast; sales cycle length; number of calls to close; and many more.
While tracking results is useful in comparing performances (e.g., various

reps, regions, years, etc.), all of these results are, by definition, historic.
Results are lagging indicators. You don’t manage results, you monitor
them. In order to impact the outcome of performance, or the results,
coaches actually look at leading indicators. In the golf world, it is stance,
club speed, rotation, and dozens of other variables.
We define the sales equation as: A x Q = P, where A is activity, Q is

quality of the activity, and P is productivity (results). To define quality in
©CSO Insights 120

sales, we actually need to look at sales process execution – which is

what we report on each year in this survey analysis. In addition, we are
now further refining the data by industry and company size in our
supplemental reports.
The ability to get timely and accurate metrics into the hands of your sales
managers, so that they in turn can provide timely and useful feedback, is
how performance is identified for improvement. Below is just one metric
– Rate of Initial Discussions Converting to Presentations – for the three
groups charted above.
st
% 1 Discussions Needs Meets Exceeds
Converting to Improvement Expectations Expectations
Presentations
<25% 17% 13% 16%
26%-50% 36% 36% 33%
51%-75% 25% 32% 27%
>75% 13% 15% 17%
Don’t know 9% 5% 7%
The data is interesting, particularly the revelation that a relatively high

number of companies within each group do not know what their metrics
are. The percentage of reps attaining quota across these same three
groups (left to right) was 59%, 62% and 65%, respectively.
This metric alone does not tell you what needs to be done to improve
performance, but it is an indicator – a place to look more closely for
impacting results. The same is true for numerous metrics which, when
considered more carefully, can begin to suggest slight changes or
improvements to be made. The impact of these adjustments would then
be monitored, and on and on.
Once you begin to get a handle on operating in a Sales Management 2.0
way, you can add in the next variable T, which is Time. The sales
equation then becomes:
(A x Q)/T = P
And time is very important. Just ask Steve Hornish, who beat Marco
Andretti by .0635 seconds to win the 2006 Indy 500! Remember: In a
highly competitive, highly professional, high-payoff environment, success
comes from focusing on executing the minor details in a consistent and
excellent way.
Notes:
©CSO Insights 121

Sales Performance Optimization –– 2008
2008 Survey
Survey Results
Results and Analysis
and Analysis
Rate your ability to accurately forecast business.
! Sales forecast ox·y·mo·ron (noun) – a phrase in which two words of contradictory

accuracy remains meaning are used together for special effect. Examples include: “wise
an important but fool” or “legal murder” or “professional wrestling.” “Forecast accuracy”
elusive concept. might be considered a candidate as well. As seen in the chart above,
more than half of our respondents feel the need to improve their forecast
! Only one in accuracy. In analyzing the associated numbers, we feel that the
twenty firms remaining groups should be a bit more open to improvement as well.
exceeds
expectations in Just 5% of firms report exceeding expectations in the accuracy of their
this metric and all forecasts; and here the win rate of forecast opportunities averages 57%.
have room for These firms, although well ahead of the remaining population’s 48% and
improvement. therefore clearly distinguished, also show room for improvement.
! When process, Another component of accuracy is the eventual makeup of the deals
systems and won. Were the amount, close date and product/services mix in line with
management what was forecast? Again, firms exceeding in forecast accuracy fair
commitment are better but all three groups need help in this area (see table below).
provided, the
accuracy of Won Deals as Originally Forecast (what, how much, by when)
forecasts seems % Accuracy Needs Meets Exceeds
to improve Improvement Expectations Expectations
dramatically. <25% 29% 15% 12%
26-50% 34% 31% 30%
51-75% 20% 32% 28%
>75% 8% 16% 26%
Don’t know 9% 6% 4%
©CSO Insights 122

In previous years, we have discussed the competitive advantage that

firms earn with more accurate forecasting. More efficient resource
utilization leading to greater profitability derives from knowing what
business is coming and when. Greater predictability is also rewarded by
Wall Street and investment companies.
Invariably, sales executives will tell us there is too much uncertainty and
change in the marketplace to enable more accurate forecasts. While not
minimizing the challenges confronting these execs, through our
benchmarking we were pleased to find at least one example of true
forecast success. AON is a leading provider of several related services:
risk management, insurance and reinsurance brokerage, and human
capital consulting. The company is a world leader within their industry
with annual revenues of over $10B.
Two years ago, the company embarked on a program to implement a

standard sales process supported by a new CRM system. This
represented major changes for the people in sales and marketing. But
this new way of conducting business, with common language and
definitions, gave marketing greater visibility into the specific types of
leads sales was looking for. Based on these clearer insights, they
implemented a marketing automation system to optimize the quality and
quantity of leads they were generating. The benefit to sales in using the
system was seen in more pre-qualified opportunities that translate to
more commissions.
Aon now has a multi-dimensional view of their business which allows

them to slice and dice data by product, country, region, industry, etc. and
give operations people any view they want to see. However, the biggest
payoff has been consistently improving pipeline accuracy. Aon’s working
forecast accuracy in terms of what will close, for how much, and by
when, is now over 90%!
For more insights into how CSOs can get better insights into their
pipelines and forecasts, research clients should review the Sales
Management 2.0: Metrics not Hunches white paper.
Notes:
©CSO Insights 123

How
RateWould
your ability to easily and accurately calculate sales commissions.
! Ease/accuracy of While more than half of our survey respondents indicate they can easily
compensation and accurately calculate commissions, many questions about this crucial
calculations may function remain. Various sources report that 8-10 hours of selling time
need to be can be lost each pay period to shadow accounting; that is, time sales
surveyed reps spend double-checking the accuracy of the pay they receive against
separately from their own records. This represents one full day per month if you pay
accuracy of monthly and one-half day per week if you pay every two weeks.
calculations.
Other issues also attend compensation calculations. Since most of our
! As go-to-market survey respondents are sales executives, the likelihood is that someone
strategies else is actually calculating commissions paid to sales reps. As a result,
become more the responses above may reflect more about the accuracy part of this
complex, so do question than the ease portion. When we ask CSOs about the number of
the comp exceptions that arise in each pay period, the results are not as sunny as
calculations. above.
! The ability to Several aspects complicate matters and the pattern will only increase
model various over time. First, the de facto application for computing sales
programs and compensation is Microsoft Excel. This is an enormously flexible and
simulate changes powerful application, but it also can require huge amounts of time when
is limited for global changes between various workbooks must be made. Complex
many execs. macros that were developed for one year’s plan, or even for one aspect
of the plan, need to be modeled and checked when any changes are
considered.
Increasing complexity and numbers of individuals must be entered into

calculations when more than a single rep is involved in closing a deal. In
©CSO Insights 124

today’s multi-channel go-to-market strategies, a rep may maintain his or

her individual accounts, support several partners within the territory and
also involve overlay reps with special account and/or industry
knowledge. Inside sales reps frequently initiate opportunities that are
then passed on to the field for further pursuit, but remain in both the
sales process and sales compensation loops.
The task of computing/managing this critical function is further

complicated by the need to interface with, or duplicate, entries in other
systems. Computed compensation figures are paid through a
finance/payroll application. Tracking opportunities, the individuals
involved and registering deals take place via the company’s CRM and
PRM systems. Disputes and exceptions are most often raised and
resolved using email.
As if this were not complex enough, territories are often changed – either
merged or divided – and accounts reassigned at different times
throughout the year. Commission adjustments, the impact of SPIF
programs being considered, and modeling “what if” scenarios all
represent options that could be available to sales executives, but more
often are not.
With all these challenges and possibly because of them, one-third of this
year’s survey respondents feel their compensation plans have only
occasional or minimal impact in guiding how their reps sell (see the
metric on page 30).
Because this is both an enormously important and increasingly complex

challenge for today’s CSOs, we will be conducting a supplemental sales
compensation survey in Q1 2008.
Notes:
©CSO Insights 125

How WouldRate your ability to regularly conduct win/loss reviews.
! Majority of firms The overwhelming majority of firms need to improve the frequency of
fail to learn win/loss reviews, which they actually may not be doing at all, according
consistently from to other discussions we’ve had. Having paid the full tuition of pursuing an
reviewing opportunity to its conclusion, most firms don’t go the extra step to get the
completed sales full education they just paid for. That is, taking the time to truly
cycles. understand from the buyer’s point of view why they won or lost the deal.
! Differences often Too often, firms simply ask the rep to either complete a short form or
arise between the check a couple items from a drop down menu in the CRM system. While
rep’s and the this is a start, when we have conducted buy cycle reviews for clients and
buyer’s feedback interview both the buyer and the seller, we are always amazed at the
on why a deal differences in perception about the same deal. That is, why the seller
was won or lost. believes the deal was won or lost and what is reported by the buyer
regarding the same opportunity can be vastly different. For this reason,
! Competitive and utilizing a third-party resource at least on a periodic basis can be a real
market eye-opener.
intelligence can
be gained from a Still, there are improvements to be made and insights to be gained by
regular win/loss conducting these reviews internally on a consistent basis. As seen in the
review process. chart above, firms that need improvement outnumber firms that exceed
expectations by more than 10:1. Performance numbers reflect this
difference as well.
Percentage of reps achieving quota for the needs improvement majority

was 58%, while the meets and exceeds expectations groups both came
in at 65% – a 12% performance advantage. Forecast accuracy was also
12% better.
©CSO Insights 126

Outcome of Forecast Deals by Regularity of Win/Loss Reviews

Win Loss No Decision
Needs improvement 47% 31% 22%
Meets expectations 50% 28% 22%
Exceeds expectations 53% 29% 18%
Two things are interesting here. First, the extent to which firms regularly
conduct win/loss reviews seems to improve their win rate against
competitors. The second gain, looking at firms who meet and exceed
expectations, is seen in fewer sales cycles resulting in no decision.
Conducting win/loss reviews in a structured way is an obvious and

common sense approach to gathering market and competitive
intelligence. As opposed to more circuitous or oblique intelligence
gathering approaches, win/loss reviews allow you (or an independent
third party) to ask your own fairly direct questions and receive candid
answers from the source.
We say “fairly direct” because you cannot call and ask, “Why did you buy
from us?” But you can ask, “In your evaluation of options for this
purchase, what were your main considerations and in what order would
you rank them?” Even if you lost out to a competitor, buyers are often
willing to respond to questions about their decision making process
because your investment in pursuing their business (the tuition
mentioned above) has in effect, earned you the right to debrief them.
As with all other sales interactions, you want to be professional and

courteous and, whenever possible, approach more than one individual.
This way, you can triangulate responses and better ensure you’re getting
to the heart of the matter, rather than relying on one person’s
impressions or opinions to tell the whole story.
Notes:
©CSO Insights 127

Howyour
Rate Wouldability to continually adapt your sales process to market changes.
! Many firms are The only constant is change. With the possible exception of the weather,
not adapting to nowhere is this truer than in sales. The marketplace is in constant flux,
change as readily established competitors change tactics, and new ones spring from out of
as they would the blue. It has become an article of faith that customers have and will
like. become more demanding, more knowledgeable, more energetically
informed. Thus, marketing guru Regis McKenna coined the term, the
! Firms higher in Age of the Never Satisfied Customer.
the SRP Matrix
report better Amidst this backdrop, sales has the continual charter to deliver the
results, which number; but the “how” must flex with the times and circumstances. As
may reflect more seen in the chart above, one-tenth of our respondents feel they are
adaptive abilities. exceeding expectations in this regard, while nearly one-half feel the need
to improve. And it’s no wonder – product lines are expanding; the
! Implementing products themselves are becoming more complex; and companies
process rigor and regularly enter new markets with new applications. How do you keep up?
pursuing higher
level relations Once again, we turn to our SRP Matrix (see page 7) for comparative
may help in information. Performance differences in several areas are quite
facing future impressive, beginning with the percentage of reps making quota. Firms
changes in the in the upper right quadrant of the matrix (Level 3-4 process
marketplace. implementation and Contributor/partner level relationships averaged) see
66% of reps meeting or exceeding their number; those in the lower left
quadrant (Level 1-2 process and Vendor/supplier relationship) averaged
56%. Rep turnover was 28% versus 32%, respectively.
The point in question here is the ability to adapt to change. As noted in

our article in the Harvard Business Review and in other writings, simply
©CSO Insights 128

spewing product features is a short path out the door. Thirty-six percent
of firms with Level 3 or 4 sales process and contributor or higher level
relationships see leads result in initial discussions more than 75% of the
time; only 15% of Level 1 or 2 firms see the same result. At the opposite
end of the scale – qualified leads resulting in first discussions less than
25% of the time – 27% of firms with lower level relationships fall into this
low payoff category; while only 17% of higher level relationship/process
firms do.
All these numbers support the notion that being more rigorous in sales
process implementation allows firms to be more readily aware of change,
more able to assess it, and more appropriate in adapting to it. And firms
needing to improve in adapting to change are being significantly
outdistanced by those exceeding in this ability (see table below).
Needs Improvement Exceeds Expectations

st
1 Discussion to
23% 41%
presentation 51-75%
1st Discussion to
11% 19%
presentation >75%
Presentation to close
18% 27%
>50%
Proposal to close
24% 32%
51-75%
Proposal to close
8% 23%
>75%
Win/loss/no decision 46%/33%/21% 56%/33%/11%
The only question that remains before considering whether to emphasize

higher lever relationships and more rigorous process implementation is:
Do you think your sales team will be seeing more or less change in the
future?
Notes:
©CSO Insights 129

Howyour
Rate Would
ability to proactively identify which reps need coaching/mentoring.
! New Metric: The While half of our survey respondents indicate they’re meeting
ability to identify expectations in this capacity, more than a third sees the need to
reps needing improve. Several other metrics bear out these rankings as well.
coaching pays
dividends in many First, according to Kevin and Jackie Freiberg, authors of Nuts!
ways. Southwest Airlines’ Crazy Recipe for Business and Personal Success,
the number one reason for individuals leaving their jobs is their
! Lack of proactive relationship with their immediate supervisor. Considering the chart
coaching may above, we see that firms needing improvement report 34% total rep
translate to a turnover; those meeting expectations report 28%; and firms exceeding
need for more expectations report 25%. By hanging on to reps longer, the managers in
active recruiting. the third group have more time to focus their attention on improving rep
performance – not replacing it.
! Longer rep tenure
allows for greater Such performance improvements may involve staying on top of sales
skill development cycles. While all three groups report that 13-14% of their sales are
and higher overall completed in less than one month, differences occur beyond that. Firms
performance. needing improvement and meeting expectations both see only 30% of
their sales closing within 1-3 months, while firms exceeding expectations
! Proactive report 45% in this category. Shorter sales cycles can mean more time to
coaching pursue other opportunities or simply more time to balance other
establishes a priorities; but regardless, there will be less effort in shepherding deals to
virtuous versus a closure.
vicious work
cycle. The time that is freed up can go toward honing other skills, both for
managers and reps, and the data supports this notion. Our survey asks
respondents to assess their sales teams’ abilities in twenty different
©CSO Insights 130

areas. These include abilities to: prioritize accounts on which to focus

selling efforts; generate new leads; clearly understand the customer’s
buying process; cross-sell and up-sell; etc.
Firms that exceed expectations in terms of identifying appropriate reps

for coaching reported that the majority of their reps need improvement in
just four of these twenty areas. Firms that meet expectations highlighted
seven, while those needing improvement highlighted fifteen of the twenty
areas. This becomes a circular argument. Do reps need development in
so many areas because their managers don’t proactively identify which
reps need help? Or do managers not proactively identify reps needing
help because they are too busy recruiting, hiring and training new reps?
Either way, it is a lose/lose situation. Everyone is busy; but reacting to

situations rather than proactively identifying areas and reps for
improvement means lower overall performance. Reading from left to
right in the groups charted on the previous page, the percentage of reps
achieving quota was 58%, 63%, and 64%, respectively. When reps
experience less success, they make less money, and decide to leave for
greener pastures; and the manager begins the recruitment cycle all over
again, running on an unforgiving treadmill.
An interesting footnote for this metric is that the “needs improvement”

reps outdistanced the others in two of the twenty skills and abilities:
renewing business with existing customers and creating customer
loyalty. It would appear that in the absence of proactive sales
management, reps will actively reside in their comfort zones.
Notes:
©CSO Insights 131

How Would
Rate your ability to share best practices across the sales force.
! Improvement in This has been one of the lowest rated abilities for the past five years. In
this metric has fact, in 2005 this was second only to forecast accuracy as the least
been steady over developed ability. This year, results are reportedly better; the number of
the past three firms needing improvement is down almost six points, and those meeting
years. and exceeding expectations are both up.
! Payoff for sharing If teams are effectively sharing best practices, we would expect to see
best practices the results show up in other places: higher percentages of winning
shows up in proposals; more effective presentations (i.e., presentations leading to a
several areas, sale); more consistent/accurate forecasting. The table below illustrates
including shorter how the results above are born out in the data overall.
rep ramp up
times. Needs Meets Exceeds
! Overall there is
still a relatively Reps achieving 58% 63% 68%
low percentage of quota
firms leveraging Presentations 17% 21% 30%
internal sales leading to sale >50%
knowledge. Proposals leading to 8% 12% 23%
sale >75%
Deals closing as 9% 14% 19%
forecast >75%
Forecast outcome:
45%/32%/23% 51%/29%/20% 57/%23%/20%
win/loss/no decision
As you can see, the results are both linearly and impressively improving
from left to right.
©CSO Insights 132
In addition to the significant results shown above, in our view, another

key benefit that should accrue from shared best practices are shorter
ramp up times to full rep productivity. In fact, this is exactly what we see
in the table below.
Rep Ramp Up Time by Ability to Share Best Practices

Needs Meets Exceeds
<3 months 4% 5% 8%
3-6 months 24% 27% 31%
7-9 months 25% 19% 25%
>10 months 50% 43% 38%
It is clear there is a cumulative positive impact on overall performance

when proven best practices are readily available to reps.
So the question becomes how best to accomplish this task. In true

consultant terms the answer is, “It depends.” In this case, it depends on
the size and geographic dispersion of your sales team. If you’re a small
company and your reps work out of a single location, all that may be
needed is a regularly scheduled meeting to: a) discuss the most
challenging and currently pressing competitive tactics and/or buyer
objections; and b) share and catalog what some reps have found
successful in addressing those challenges.
For larger firms with less direct physical connection among members of
the team, various technologies are now available to capture and provide
ready access to collective knowledge.
For more on the topic of sales best practices, research clients should
refer to our report entitled, Demystifying the Sales Effectiveness
Challenge.
Notes:
©CSO Insights 133

Howthe
Rate Would
amount of change impacting your sales reps in the following areas.
! Rates of change Change continues to stalk the marketplace – or lead it. The best that can
are somewhat be said is that significant and noticeable change has moderated
lower in 2008, but somewhat. Ever changing customer expectations once again leads all
are still change, though the rate of change is down 5% from 2007.
significant.
Competitive activity remains solidly in second place, holding steady from
! The biggest a year ago. But the 41% combined total for the past two years
single shift is the represents a cooling in the rate of change from 2004 (72%) through 2006
rise in change in (53%). Given the superheated increases in competitive activity rising up
the customer’s from the ashes of the tech bubble implosion, it is not surprising that the
marketplace. rate of increase has slowed – but it is still huge! We also see the nature
of competitive activity changing as marketing budgets are realigned and
! Sales training reassigned.
priorities seem
out of synch with The biggest movement comes from change in the customer’s
market demands marketplace, moving up to third place from the number five spot last
and CSO stated year. The actual total of significant and noticeable change (33%) is
goals. steady from last year but represents a major shift, as reported change in
the other areas has decreased. It also would not be a huge leap of logic
to suggest that the continuing change, or uncertainty, in the
customer’s/buyer’s marketplace is telegraphing upstream to less
certainty and, therefore, more change in their expectations of sellers.
It is interesting to contrast the significant increase in customer’s

marketplace change with investments in training reps to recognize and
discuss these changes (see the following chart).
©CSO Insights 134

Rate of Change
Customer
Marketplace Training Change in Customer
Marketplace
Decreasing No Change Increasing Significantly

Increasing
This graphic represents the disconnect in recognizing the sea of

changes felt in the customer’s marketplace without the attendant
increase in training to speak to these changes. (Note: the line for training
on justifying purchase decisions is identical to marketplace training.)
In many cases, it is hardly possible to keep up with the rate of change in

product complexity, increases in new products, and/or entry into new
markets. At the same time, becoming better versed in market changes
and their business implications is becoming ever more useful. This is
supported by the fact that both CSOs and buyers continue to say they
want reps to speak to business issues and not simply spout product
features and functions.
To address these new realities, we recommend that CSOs sit down with
their training and development personnel, perhaps along with
representation from marketing, and review which types of training
investments they will be making and the rationale for doing so.
Notes:
©CSO Insights 135

©CSO Insights 136

Sales Process Assessment

Introduction
This section focuses on how much companies are investing in training their sales reps, how many
companies have adopted a formalized process for selling, how the sales process was developed, and
what impact that approach is having on the performance of salespeople.
• Annual Investment in Training Per Sales Rep......................................................... 138
• Change in Amount of Sales Skills Training ............................................................. 140
• Change in Amount of Product Training ................................................................... 142
• Change in Amount of Customer’s Marketplace Training ........................................ 144
• Change in Amount of Purchase Justification Training ........................................... 146
• Change in Amount of Sales Management Training................................................. 148
• Change in Amount of CRM System Usage Training ............................................... 150
• Adherence to Use of Sales Methodology ................................................................ 152
• Impact of Sales Methodology on Performance ....................................................... 154
• Type of Sales Methodology Used in Sales Process................................................ 156
• Sales Methodology Adherence Rate........................................................................ 158
• Attitudes Toward Recommending Sales Methodology Vendor.............................. 160
©CSO Insights 137

How Would
How much do you invest annually in training per sales rep?
! Seeing a steady Last year we noted that investment in sales training had continued to
increase in increase, and data for 2008 follows this trend. Specifically, at the low end
training of the scale of less than $500 per rep annually, there was a decline from
investments since 16% in 2006 to 13% in 2007. This year that segment is up to 18% and it
2005. appears the increase comes from the segment immediately adjacent,
from firms that do no training at all.
! Performance
improvement Indeed, there were only minor changes in most of the other areas, but
correlates with the percentage of companies conducting no training decreased from 5%
increased training last year to 2% this year. At the opposite extreme, where firms are
investment. investing more than $7,500 per rep per year, there was an increase of
6% from last year.
! Even greater
performance Clearly, CSOs feel the need to invest in their sales teams’ development.
gains are seen However, investment doesn’t necessarily equal commitment;
with consistent involvement equals commitment.
use of skills and
process. Early in a new year it is appropriate to use the analogy of health club
memberships. Just because you’ve paid for a membership does not
mean the individuals will actually use it, and therefore derive the benefits
of improved fitness. Similarly, just because you’ve paid for sales training
doesn’t mean reps will embrace and use that learning to improve their
sales performance results. Health clubs are packed in January with
people committed to their New Year’s resolutions, just as sales kickoff
meetings are loaded with training programs. Do the dollars equate to
improved results? Do reps use the programs past the initial flourish
following the training session?
©CSO Insights 138

The answer to the first question: On average, investing more appears to

buy better results. The table below shows essentially linear improvement
of a set of key metrics as the dollar level of training investment
increases.
Training $ Reps Achieving Rep Turnover: Forecast:

per rep Quota Voluntary Win/Loss/
per year Involuntary No Decision
21%
<$500 56% 46%/33%/22%
15%
$500- 15%
60% 47%/31%/22%
$1,500 14%
$1,501- 16%
61% 50%/28%/22%
$2,500 13%
$2,501- 13%
63% 50%/28%/21%
$5,000 14%
$5,000- 14%
66% 50%/29%/21%
$7,500 13%
16%
>$7,500 72% 51%/31%/18%
10%
Since involvement equals commitment, it is better for sales management

to be exemplars of process fitness than to simply insist on its adherence
by their reps. As discussed in the Introduction, firms in the upper right
quadrant of the SRP Matrix enjoy much better times than those in the
lower left quadrant (refer to page 7).
Reinforcing and committing to higher levels of process implementation

on a consistent and ongoing basis, and investing real dollars to then
introduce additional training, provides a one-two punch that is truly
winning.
For more insights into the topic of sales process, research clients can
review the Sales Process Primer white paper and our Sample Sales
Process Template.
Notes:
©CSO Insights 139

How Would
How is your current level of sales skills training changing?
! Sales skills Sales skills training is second only to product training in the increased
training remains investment expected in 2008. The chart above shows half of firms will be
one of the increasing the amount of sales skills training they’ll be doing. And, the
favored areas for amount of training may be even greater than this chart suggests.
training
investment. A firm doing a lot of training, say $5,000/rep/year, and continuing at this
rate would report “no change,” while a company that has historically
! Sporadic use of done little training and is now jumping to the $1,500-$2,500/rep/year
methodologies level would record “Increasing significantly.” Still, these differences tend
after training is to sort themselves out over several hundred responses.
the norm.
In the prior metric, we looked at how the amount companies invest in
! Consistent use of training relates to various results, and how consistent use of the training
methodologies can also impact results. With respect to sales skills training, we looked at
provides dramatic the 40% of companies that are standing pat on their current level of
performance sales skills training; that is, the second group from the left in the chart
benefits. above, that reports no change in the amount of sales skills training they’ll
be doing.
Within this “no change” group we’ll compare firms whose reps
consistently use their company’s sales process/methodology less than
75% of the time versus those using it more than 75% of the time. In each
category in the following table the more consistent user group’s
performance is noticeably better.
©CSO Insights 140

Sales Reps Achieving Forecast: Conversion Rate:

Process Quota Win/Loss/ Presentations to
Adoption No Decision Sale <25%
<75% 61% 47%/31%/22% 44%
>75% 70% 54%/24%/22% 25%
As you can see, the percentage of reps achieving quota is nine full
percentage points higher. Of forecast deals, the same percentage winds
up in no decision outcomes; but increased win rates come directly from
the competitive loss column. Low probability presentations that
eventually result in a sale (<25%) are nearly half that of occasional
process users.
The short story is that some processes work better than others, but even
modestly successful processes that are used consistently work better
than spectacular processes that are used rarely. And face it, there are
very few “spectacular” processes to begin with; there are no magic
words or actions that if used guarantee the buyer will say yes. As Aesop
suggested 2600 years ago: Slow and steady wins the race.
Notes:
©CSO Insights 141

How WouldHow is your current level of product training changing?
! Product training After three straight years of steady increases in product training, things
investments have cooled but only just slightly. Over one-half of all respondents plan
continue to lead once again to increase the amount spent on product training. However,
all training at first there appeared to be a disconnect reflected in this year’s
categories. responses.
! Yet, the rate of Sales organizations highly rated their performance in several areas
product training including the abilities to: 1) consistently/effectively present features and
investment is benefits; 2) differentiate from the competition; and 3) generate an
slower than the accurate configuration/bid/proposal. Approximately 50% or better said
rate of change in they met expectations in each of these abilities, and another 20% said
complexity and they exceeded expectations.
other product
changes. And yet of all the areas polled about specific training investments,
product training continues to see the largest planned increases. This,
! Web collaboration despite the fact that sales reps appear to have product-related sales
may help CSOs issues well handled in roughly 70% of cases. No doubt, these high skill
balance the levels reflect the consistent and considerable investments that have
steadily been and continue to be made in product training. But the combination of
increasing need continued increases in this area – especially as CSOs increasingly talk
for product of focusing less on product features and benefits and more on business
knowledge and issues and solutions – seems inconsistent. Why?
expertise.
It turns out that while significant compared to all other forms of training,
product training investments are progressing at a slower rate than
product challenges are increasing. (See the following illustration.)
©CSO Insights 142

Rate of Product Related Changes & Product Training
Product Line
Breadth
Product
Product Complexity
Training New
Products
Significantly
Decreasing No Change Increasing Increasing
This finding came as a bit of a surprise, but points out the continuing
pressure CSOs are working with; on the one hand keeping reps in the
field and selling and, on the other, staying current on an ever expanding
product/solution set.
Perhaps most noticeable is that product complexity is the area in which

we’re seeing the very highest number of significant increases, as
reported by 21% of companies. In light of this, the 6.2% of respondents
significantly increasing their product training seems fairly restrained and
may reflect the extent to which CSOs feel constrained.
We believe that using web-touch selling and other strategies to involve

product and technical experts at the time and place needed, but in a
relatively low-cost manner, will increasingly play a key part in supporting
the CSO’s balancing act.
Notes:
©CSO Insights 143

How
HowWould
is your current level of customer marketplace training changing?
! Investment in The columns in this chart have taken a half-step to the left this year. The
customer two columns representing increasing investments in customer
marketplace marketplace training are both down; those representing no change and
training has decreased investment in this category are both up.
slowed in the past
year. Since one-half of all respondents anticipate no change in the amount of
training in this area, we decided to do a deeper dive into this group’s
! More than half of data. We subdivided the several hundred companies reporting no
firms report a change into three categories according to how they rated their
need to improve organizations’ abilities to both differentiate from the competition and
in adapting to create a solution aligned with the customer’s problem(s). The grouped
marketplace ratings for these abilities are Needs Improvement, Meets Expectations,
changes. or Exceeds Expectations.
! Firms exceeding Let’s first consider these three groups with respect to levels of
at differentiating relationship, as shown in the table below.
and aligning with
customer Levels of Relationship by Ability to Differentiate from Competition
problems report and Align Solutions w/ Customer’s Problems
20% better Needs Meets Exceeds
results overall. Improvement Expectations Expectations
Trusted partner 6% 9% 11%
Strategic contributor 11% 22% 35%
Solutions consultant 20% 27% 29%
Preferred supplier 25% 18% 14%
Approved vendor 38% 24% 11%
©CSO Insights 144

Remember these figures are all derived from the “no change” group of
respondents for this metric. Marketplace understanding figures
prominently into solution discussions when firms are at the consultant
level or higher, as illustrated in the graphic below.
The table below shows how several performance numbers (e.g., quota
attainment, rep turnover, levels of relationship, etc.) vary among the
groups in the same two rated abilities, differentiating from the
competition and creating a solution aligned with the customer’s
problem(s).
Other Ratings by Ability to Differentiate and Align

Needs Meets Exceeds
Reps achieving
quota 57% 62% 68%
Forecast outcome: 45%/33%/22% 49%/31%/20%
58%/23%/19%
win/loss/no decision
Total rep turnover 32% 30% 25%
We looked at one final metric that varies across these three groups and
is relevant to this form of training: the ability to continually adapt sales
process to market changes.
More than ever, there is real payoff in acquiring marketplace knowledge

about the customer upon whom you’re calling. And yet with the climbing
rate of entry into new markets, this task becomes even more
challenging. One way to address the challenge is to increase your
team’s ability to share best practices and sales knowledge (see the
metric on page 194).
Notes:
©CSO Insights 145

How
HowWould
is your current level of purchase justification training changing?
! Cost justification As with the prior metric, the amount of training on justifying the purchase
of deals was not has moved down fractionally from last year. At the same time, the
highly ranked as percentage of reps achieving quota across the entire survey population
a reason for came in at 61%. Viewing their performance across the above metric,
winning by 80+% from “decreasing” to “increasing significantly,” we see the average
of firms. percentage of reps making quota are 57%, 62%, 60%, and 64%
respectively.
! In 2008 we
predict much As you probably have not already read the In Closing section of this
higher levels of report (page 209), here’s a sneak peek of something that relates directly
financial scrutiny to this metric. Many of the metrics we track on sales effectiveness held
on larger deals. steady or declined somewhat from last year. Sellers may have become
well-versed at presenting ROI business cases, but another possibility is
! Firms citing ROI that in 2007’s upbeat, growing and favorable economic climate, cost
business case justification of deals was relaxed.
abilities among
top three reasons Lending support to this more critical view is that “ROI business case”
they won deals ranked ninth among the reasons responding firms won against their
outperformed all competition and came in eleventh place for why they lose.
other firms in
quota attainment. Here is our cautionary note: It is just as easy, even easier, for buyers to
write smaller checks as larger ones. Based on the volatile start to 2008
and the dour economic projections from people who look at the “big
picture,” we predict an increased financial scrutiny of deals throughout
the year. We expect a return of the CFO’s favorite question from not so
long ago: “Can you live six months without it?”
©CSO Insights 146

When customers delay, the result can be to deny your offering. Having
your deal put off due to lack of appropriate cost justification could
jeopardize the entire opportunity if the funds are redirected elsewhere.
Clearly, not every deal needs rigorous economic justification. But it is
reasonable to assume that as the total price goes up, so does potential
risk, and therefore, closer scrutiny.
Can the ability to cost justify pay dividends? In the table below, we
compare the numbers for deals over $50,000 between companies that
either included ROI business case as one of the Top 3 reasons why they
win against competitors, or did not include it.
Deals >$50,000 ROI Bus. Case ROI Bus. Case not

in Top 3 Reasons in Top 3 Reasons
for Winning for Winning
Overall company plan
achieved 95% 88%
Reps achieving quota 63% 59%
Forecast outcome:
win/loss/no decision 51%/27%/22% 46%/32%/22%
While the percentage of deals lost to no decision was the same, the 5%
better outcome of forecast deals came directly from fewer competitive
losses. Percentage of reps making quota and percentage of overall
company revenue plan achieved was also better for the ROI business
case firms.
If you have any questions about your reps’ capabilities in this area, and if
you consistently have deals over $50,000, we recommend you
reconsider your investment in cost justification training.
Notes:
©CSO Insights 147

HowHow
Wouldis your current level of sales management training changing?
! Investment in this This is the largest number of firms reporting no change in the amount of
area is critical to sales management training since we introduced this metric two years
your firm’s ago. However, maintaining current levels of investment from prior years
success. is not necessarily a retreat since the increasing categories the past two
years were even larger than this year’s 34.9%.
! A cadre of
dedicated sales In our view, this is among the highest leverage areas for companies to
managers is key spend training dollars. Earlier we suggested that what sales managers
to developing a do to coach reps is provide a mirror for them to view their individual
disciplined and performances (refer to page 130). Another key contribution managers
talented sales make is in providing and reinforcing discipline. As a U.S. Army drill
force. sergeant once said, “I can’t make you do anything. I can only make you
wish you had.” The simplest definition of discipline is doing something
! Sales teams even when you don’t feel like doing it.
meeting the
outlined criteria The rewards of discipline in a sales force? Below are results for three
dramatically sales groups. The first group is comprised of firms that do not
outdistance all consistently operate at relationship levels of strategic contributor or
others in trusted partner and have not implemented sales process at a formal
performance. level. The second group is made up of firms that do consistently operate
at either the strategic contributor or trusted partner level and have a
formally implemented sales process. (These groups represent the lower
left and upper right quadrants of the SRP Matrix.)
Finally, the third group is the same as the second, except that their reps
also consistently use the sales process/methodology more than three-
quarters of the time.
©CSO Insights 148

It is our suggestion that to join this third group of higher level

relationships – formal process implementation and consistent high levels
of methodology usage – requires a cadre of dedicated sales managers
creating a sales culture of discipline. The comparative results for a
number of key metrics are shown in the table below.
Above
Below Above
Consultant
Contributor Consultant
Relationship &
Relationship & Relationship &
Level 3-4
Level 1-2 Level 3-4
Process &
Process Process
>75% Use of
Methodology
Overall company
86% 94% 100%
plan achieved
Reps achieving
quota 59% 71% 73%
Forecast outcome:
win/loss/no decision 45%/34%/21% 55%/25%/20% 59%/22%/19%
Total rep turnover 31% 24% 17%

Have CRM 65% 82% 86%
Use CRM >75% 47% 70% 89%
These statistics are breathtaking and support our contention that having
a disciplined sales force – one that consistently utilizes the tools and
processes made available – is its own reward. And key to having such a
sales force is employing the right sales managers to create it.
There were other equally dramatic differences reported between the

three groups in various abilities across more than a dozen metrics. Okay,
great managers make great reps that produce great results; everyone
knows this or at least can probably agree with it. Our question, and your
challenge as CSO, is to see that your firm is among the one in fifteen
that comprise the right hand column above.
Notes:
©CSO Insights 149

HowHow
Wouldis your current level of CRM system usage training changing?
! Numbers for Seventy percent of responding firms have implemented a CRM system
CRM training, and 26% report significant improvement in sales performance as a
use, and resulting result. These numbers are identical to 2007. Thirty-eight percent of this
performance year’s firms report their sales reps’ usage to be consistently above 90%,
improvement a number that has also remained fixed since we started asking this
remain question two years ago. So, what is the payoff from using CRM, and
unchanged over what obstacles remain, preventing more reps from realizing this payoff?
the past three
years. There does not appear to be any significant singular benefit from reps
simply using CRM alone. In fact, percentage of reps making quota for
! High levels of firms that had CRM system adoption rates of more than 75% of the time
user adoption for was 59%; for inconsistent/infrequent users clocking in at less than 25%
CRM alone do of the time, the percentage of reps making quota was 61%. These
not assure better numbers are hardly a ringing endorsement to get with the program.
sales results.
The numbers continue to support what has been repeated over and over
! Technology- about CRM: first get your process straight, then automate. That is,
enabled sales technology in and of itself is not the silver bullet once hoped for; and
process simply bringing technology into your organization is unlikely to make a
implementation major difference – even with high levels of compliance and use.
pays off at better
than 2:1. We went back into the data and looked at two separate groups according
to their level of process; all firms in both groups had had their CRM
technology implemented for two years or longer. The nearly identical
sample sizes consisted of companies that had either implemented formal
processes (Levels 3 and 4) into their day-to-day selling, or had not
(Levels 1 and 2). Performance results for each group are shown in the
©CSO Insights 150

table below.
CRM 2+ years & CRM 2+ years &

Level 1-2 Process Level 3-4 Process
Overall company 91% 92%
plan achieved
Significant
22% 45%
improvement from
CRM
Minor improvement 41% 38%
from CRM
No measurable
24% 14%
improvement from
CRM
We then decided to work the model backwards, starting with only firms
that reported significant improvement in sales performance as a result of
implementing CRM for two years or longer. Of these firms, 4% operated
in an ad hoc manner (Level 1); 30% in a semi-formal process manner
(Level 2); 32% in a formal manner (Level 3); and 34% in a formal and
dynamic process manner (Level 4). (Levels of process are covered in
more depth in the following metric.)
The results support our stated premise about process and technology.
Technology alone will yield minor to no measurable performance
improvements, even if you are able to achieve significant adoption rates.
But employing CRM technology to power the sales process you have
formally implemented pays off at a rate of better than 2:1.
This is where CRM training can really contribute. When you have
process implementation and are looking for a technology boost, you
want to make certain your folks are doing more than just using the
system – you want to see them fully exploit its potential. Although we do
not ask the question in our survey, other experience indicates that reps
use about 10% of the functionality available in their CRM (similar to what
you find with Word, Excel or other applications). With a process culture
in place and technology at hand, upping your team’s abilities with better
training is an appropriate next step.
Notes:
©CSO Insights 151

How
How Would
would you describe your adherence to the use of a sales process?
! Level 2, informal, Although the largest segment by far, Level 2, or informal process
remains the implementation, receded more than four full percentage points in the past
favored mode of year. That’s the good news. The bad news is that nearly half of this
implementing a amount went to the increase in Level 1 ad hoc manner of operating – a
process. step backward for process implementation to be sure.
! Though the The biggest gainer is Level 3, formal process implementation, up three
second largest and one-half points year over year. This category is a bit of a “no man’s
segment, Level 3, land.” For all the energy and focus required to get there, working to
is a “no man’s enforce and reinforce the sales process, the incremental returns are
land.” modest.
! Level 3 firms For this reason, we submit that Level 3 firms must double down to get to
should be actively the next level and reap the rewards of dynamic process implementation.
working to reach Otherwise, hanging out too long at Level 3 may mean either slipping back
Level 4. to Level 2 or becoming hidebound in the current level of process
implementation. This slippage or narrow thinking can be especially
dangerous in a volatile market, which is what we expect throughout 2008.
The table below shows the step increases accompanying Level 4.
Level 1 Level 2 Level 3 Level 4

Reps achieving quota 56% 61% 61% 68%
Total rep turnover 33% 28% 32% 26%
Forecast accuracy >75% 6% 11% 11% 26%
Win/loss/no decision 43%/35% 48%/31% 49%/29% 58%/24%
/22% /21% /22% /18%
©CSO Insights 152

Nobody said the path to ongoing process implementation and

improvement was going to be easy. But surely, the results seen by Level
4 firms are attractive enough for even the most process-resistant
individuals to consider. We are not suggesting grinding out creativity by
imposing crushing process requirements; we are saying that a working
dynamic process provides a clear path through the dark, uncertain woods
of change. This will be even more important in the years ahead.
Enable the highest level of process implementation and innovation with

the technology that is now readily available, affordable and accessible,
and you’ll give a nitro boost to your sales team’s performance.
What are you waiting for?
Notes:
©CSO Insights 153

IfHow
youWould
are using a sales process, what impact is it having on performance?
! Seeing an The segment reporting that sales process significantly improves

increase in firms performance has been slowly but steadily growing, up four percentage
that have points over the past two years. And the group reporting modest
significantly improvements continues to hover right near the one-half mark. So,
improved, and a nearly nine out of ten respondents are reporting improvement as a result
decrease in firms of their sales process implementation.
that have
witnessed no Performances of the three largest working segments (i.e., those rating
impact. their process’ impact) are seen in the table below.
! One half of firms Sales Process Sales Process Sales Process

report modest Significantly Modestly Has
improvement, but Improves Improves No Impact
their stats say
something else. Reps achieving
67% 61% 52%
quota
st
! The static nature Lead to 1 meeting
>75% 26% 21% 10%
of this metric st
raises other 1 Meeting to
presentation >75% 18% 15% 10%
challenging
questions. Presentation to
sale >50% 27% 18% 6%
Forecast accuracy
>75% 18% 12% 2%
Win/loss/no
decision 53%/26%/21% 48%/31%/21% 45%/34%/21%
©CSO Insights 154

In looking across twenty different sales skills and abilities, we see that
firms significantly improving due to their sales process implementation
rated 10-25% higher in virtually all categories, compared to firms
modestly improving; and at least 25-50% higher than firms witnessing no
impact.
It’s interesting to note, too, that in identifying the top reasons for winning
against competitors, firms “significantly improving” rank their sales
process execution third out of twelve categories; those “modestly
improving” rank their process execution seventh out of twelve; and firms
witnessing “no impact” rank it number ten of twelve. Good call!
If you’re going to invest in developing a sales process for your sales reps
and train them in using it, make certain your managers, senior
management and culture support and reinforce that process. Otherwise,
don’t bother going through the exercise.
To understand how to cost justify these investments, we encourage

research clients to review the analysis entitled, The Impact of CRM and
Sales Process on Sales Effectiveness.
Notes:
©CSO Insights 155

How What
Would type of methodology do you use within your sales process?
! Internally In 2004, firms offering commercial methodologies racked up 58% of all

developed training employed by survey respondents. The majority share has been
programs seesawing every year since, though this is the second year in a row that
maintain their internally developed offerings dominate. And this is the second lowest
solid majority level for commercial programs since we began tracking.
position.
If your question is which is better, internally or commercially developed
! Process thinking methodologies, you may be asking the wrong question. It appears the
may be replacing results are very much a tie. Average organizational plan attainment for
program thinking. each group is 90%, percentage of reps making quota is 61%, and
average total rep turnover is 29%.
! Web-based
programs can be Size of firm may have some bearing on whether to look inside or outside
more attractive your own company for training. Smaller companies, those with less than
for many types of $10M annual revenue, favor internally developed programs over
trainings. commercial offerings by a ratio of 1.5:1.
A better basis for opting between commercial and internal may be

relevance, convenience, and/or sustainability. With respect to relevance
or special expertise, there may be certain areas in which internal
programs are favored – for example, transitioning new customers from
their sales rep to an assigned service team member. Other types of
sales skills, for example, sales messaging, may be better left to firms
with deep and varied experience within the niche specialty.
We continue to see that web-based training is become increasingly

popular, and firms with internally developed programs often find it to be
©CSO Insights 156

very attractive and effective., If only a handful of students show up for an

internal Web session, it can still be held and the session recorded and
archived on the company’s intranet. Each of the attendees essentially
has a private 1:1 experience, and other future reps can avail themselves
of nearly the same experience online later.
One global real estate company we interviewed has over 6,600

independently owned and operated franchise brokerage offices in more
than 40 different countries. Though specific figures are difficult to track, it
is estimated by the National Association of Realtors (NAR), that up to
85% of new agents leave the industry within their first two years.
In such an environment, skills training is never-ending. Through the end

of 1999, the franchisor addressed this challenge in the United States
with five full-time trainers and a cadre of 125+ certified facilitators. The
trainers constantly traveled around the country and, for the most part,
focused on major cities and new sales agent training.
Scheduling was difficult in less densely populated regions due to the cost
issues of holding classes for small numbers of registrants and/or classes
with last minute dropouts. Classes held in major cities often meant
attendees from out of town had travel expenses, as well as time away
from their offices and homes. In addition to attendee expenses were the
travel and lodging costs of the traveling trainers.
Today, this company’s online training system has become a service-

marked program running over 120 offerings per month, most of which
are free to franchisees. More and more frequently, sales agents turn to
the internal online system for both new hire and skills development
training.
This latter point is especially significant insofar as the earlier structure of

flying a handful of trainers around the country primarily covered only new
agent education. Now, veteran associates are participating in advanced
programs that are shorter, more focused, and move at a quicker pace.
Finally, as noted in earlier metrics, the ability to reinforce and enforce

training is the biggest single factor for increasing your training investment
ROI. Stand-alone training events have little staying power and
companies increasingly are interested in coordinated campaigns that
include initial training, individual and group coaching sessions, online
refresher elements and more. You’ll want to consider all of these in your
own training programs, whether they’re to be internally or commercially
developed.
Notes:
©CSO Insights 157

How
What Would
percentage of your sales force consistently uses your sales methodology?
! Number of As you may recall from the metric on page 154, 90% of respondents
consistent users reported some performance contribution, be it significant or modest, from
is up from last their company’s sales process. And yet 40% of reps barely bother with
year but still their company’s sales process, and another 29% do so just better than
relatively modest. half the time.
! 1 in 8 reps is There’s some good news in the pie chart above. In the past year, the 25-
barely even using 50% and 51-75% adoption segments have decreased, and the 76-90%
their firm’s sales and 90+% segments have increased. Further, as was the case last year,
methodology. reps adhering to their firm’s adopted sales methodology less than 25% of
the time – that is, NOT adhering to it at all – remained fixed at 12%.
! 1 in 4 use it
infrequently or Let’s look at the very high end users (90+% adherence) and the very low
irregularly, even end users (<25% adherence), since these segments are essentially the
though same size. Whether you’ve read all the discussion thus far in this report
consistency or just now turned to this page, you can still guess there will be a
correlates with performance difference and which side it will favor. Okay, guess. Which
significantly better group always or never posted better numbers, and by how much?
performance. (Answers on the next page.)
Which group achieved a higher percentage of overall company plan?

Which had a greater percentage of reps achieving quota? Which could
predict with greater accuracy which deals would be won and what the
make-up of those deals would be when they were booked? Which group
had higher turnover, both voluntary and involuntary, despite the fact that
reps can say, “That’s not my style,” and get away with it?
©CSO Insights 158

Sales Process Sales Process

Adherence Adherence
<25% >90%
Overall company plan achieved 88% 97%
Total rep turnover 33% 17%
Forecast accuracy >75% 3% 25%
Win/loss/no decision 43%/35%/22% 56%/22%/22%
All right, so this was not hard to figure out even if you’re not a disciple of
process. The two groups represented in the table above are at the
extreme ends of using and not using a process. But the pattern is so
very clear that you have to ask yourself, what of the 74.2% of all firms in
between? After all, the chances are 3 in 4 that you are one of these
“tweeners.”
If the writing on the wall is as compelling as this metric and prior ones
suggest, there really should be only one more question in this quiz: What
is required to get your team into the >90% group?
Notes:
©CSO Insights 159

How a
If using Would
commercial methodology, would you recommend the vendor to others?
! A much higher Thirty-seven percent of firms would absolutely recommend their sales
percentage would methodology vendor and presumably, their sales methodology, to others.
absolutely Roughly the same percentage of firms feel their sales process
recommend their significantly improves their sales performance (39%).
vendor than
absolutely use Both of these numbers are higher than the percentage of firms whose
their vendor’s reps use the methodology essentially all the time (12%) or at least three-
program. quarters of the time (14%). This evidence suggests a certain “guilt”
component making up the 11-13% difference; that is, respondents know
! A “guilt” factor they’d achieve better performance if they more consistently used the
seems to sales process, so they’re still willing to absolutely recommend their
increase the provider. And they’re right.
percentage of
companies that In every category across all groups, firms whose reps consistently
feel favorably adhere to the sales process more than three-quarters of the time
about their outperform firms whose reps who use it sporadically (one-quarter to
vendors. three-quarters of the time). This is true, whether the process/
methodology was commercially or internally developed.
! The data
supports the As you will see in the following table, the numbers are absolutely skewed
feeling that “if we in favor of process adherents. In fact, there was not one sales ability not
used it won by the consistent users. Across all twenty sales abilities, sporadic
consistently, it users rated themselves as needing improvement a significantly higher
would work percentage of the time – up to double the rate of other users.
better.”
We should also note that sporadic users outnumber consistent users 2:1.
But there’s also good news: consistent users outnumber rare users also
©CSO Insights 160

by 2:1. Simply stated, if your reps are not using the tools in which your
company has invested, they’ll be left in the dust. That is already
happening; as seen below, the turnover rate for rare users is one-third
higher than that of consistent users.
Usage Usage Usage

> 75% 25-75% >75%
Overall company
94% 88% 88%
plan achieved
Reps achieving
68% 60% 57%
quota
Total rep
24% 31% 33%
turnover
Forecast
25% 10% 3%
accuracy >75%
Win/loss/
55%/25%/20% 48%/30%/22% 43%/35%/22%
no decision
There is an old adage: “Anticipate nothing, be ready for anything.” This is

our mindset as we prepare each year’s report, and is as true for this
section as any. More than any year in our memory, the data support
consistent use of sales tools: process, methodology, CRM, and more. If
you just opened and turned to this specific metric, we urge you now to go
back and read the others that make up this section’s even dozen. The
results are not only consistent, but can serve to affirm your decision to
introduce process to your sales organization – and to stay the course.
As we saw in the analysis of the SRP Matrix results in the Introduction

(see page 7), it is clear beyond measure that tools available today can
help firms move up and to the right on the Matrix, and that doing so is
good for business – and for a good night’s sleep.
Notes:
©CSO Insights 161

©CSO Insights 162

Customer Relationship Management (CRM) Utilization

Introduction
This section examines the number of companies utilizing core CRM systems as part of their sales
effectiveness initiatives. It focuses on how they implement those applications, their attitudes toward
the CRM vendor community, the types of results they are achieving through leveraging technology,
and the additional CRM capabilities they are considering.
• Organizations that Have Formally Implemented a CRM System ............................ 164
• Organizations Planning to Formally Implement a CRM System in 2008 ................ 166
• Type of CRM System(s) Implemented...................................................................... 168
• Length of Time CRM System Installed..................................................................... 170
• CRM System Implementation Time.......................................................................... 172
• CRM Application Adoption Rate .............................................................................. 174
• CRM Project Costs: Actual vs. Budget .................................................................... 176
• Benefits Resulting from CRM Usage ....................................................................... 178
• Additional CRM Applications Installed .................................................................... 180
• Satisfaction Rating of Primary CRM Vendor ........................................................... 182
• Buy From Again/Recommend Primary CRM Vendor .............................................. 184
• Plans to Replace Existing CRM Solution in 2008 .................................................... 186
Performance Op
©CSO Insights 163
2008 Survey
Survey Results
and Analysis
Have you formally implemented a core CRM system within your sales organization?
! Percentage of CRM has many meanings today, depending on who you talk to. Looking
firms that are at our list of vendors who claim to offer a CRM-related application, we
implementing have over 1,000 different product names, and we are sure we do not
core CRM have them all.
continues to rise.
For purposes of the following several metrics, we are restricting the term
! The larger the CRM to applications that provide reps with traditional core functionality to
firm, the more support selling: territory management, opportunity management, pipeline
likely they are to management and forecasting, contact management, etc.
have installed a
CRM application. In 2003, as we came out of the last economic downturn, our annual
study found that CRM had been formally implemented by 59% of the
! Adoption of firms we surveyed. As you can see in the chart above, that number has
technology varies increased by nearly 20%, and now includes 70% of all sales
widely by organizations today.
industry.
Looking at the adoption of CRM by company size in the following table,
! Technology alone we see that the larger the firm, the more likely they are to have installed
does not a CRM system in their sales organization.
guarantee sales
effectiveness Size of Company % Using CRM
improvements. >$1B 81%
$251M-$1B 74%
$50M-$250M 68%
<$50M 67%
Implementation rates vary even more widely by industry, as seen in the

next table. Here we look at CRM implementation rates across the major
©CSO Insights 164
vertical industry segments we surveyed – from a high of over 91% in

technology firms, to a low of 43% in advertising/media related
companies.
% of Firms
Industry Using CRM
Technology 92%
Medical 88%
Professional services 72%
TeleCom 71%
Financial services 60%
Manufacturing (non-tech) 51%
Advertising/media 43%
Drilling down into some of these industry verticals, we see even more
differences in rates of CRM usage. For example, further segmenting
technology into hardware and software firms reveals rates of 84% and
93%, respectively. In professional services, companies with a high tech
focus are leveraging CRM 86% of the time, compared to 68% of firms
who have a business services orientation.
A point worth noting is that simply implementing technology does not

automatically mean that sales performance will improve. When we
compared the percentage of reps making quota in firms that have and
have not implemented CRM systems, we find that the results are a
statistical tie.
CRM needs to be paired with process so that the combination of the two
can help salespeople do specific aspects of their jobs more efficiently,
effectively, or both.
Notes:
©CSO Insights 165

How Would
If not using a core CRM system, are you planning to install one in 2008?
! New Metric: Based on research client feedback, we added this new question to begin
Seeing a high tracking CRM system implementation rates in firms that have not yet
level of interest in done so. In the pie chart above, we see that roughly 41% of sales
CRM from organizations that do not have CRM applications installed now are
companies that intending to implement one in 2008.
have not yet
installed a A couple of trends seem to be driving this relatively high level of interest
system. in jumping onto the CRM bandwagon. First, the Software as a Service
(SaaS) model for CRM is opening up the use of technology to a greater
! Significant number of firms. SaaS or On Demand systems such as Salesforce.com,
challenges in Oracle CRM On Demand, NetSuite, etc., are much easier to install and
sales get up and running than On Premise applications. SaaS applications do
management are not require a high level of IT involvement (which is often unavailable in
present in firms smaller firms).
looking to
implement CRM In addition, the subscription-based model makes the economics of CRM
in 2008. more attractive. Companies can now choose to trial a group of users first
and see if and how the sales force will use CRM. Then, if the company
! We also find very does move ahead with a full rollout, they pay a monthly per user fee
low formal sales rather than writing one large check for an On Premise software license.
process adoption
among these A second issue that seems to be driving continued interest in CRM is
firms. centered upon sales management. When we look at performance ratings
of firms that do not have CRM tools in place, we see a high percentage
of them are reporting challenges related to effective sales management
compared to the rest of the survey population
©CSO Insights 166

Areas cited include providing sales managers with access to

timely/accurate sales metrics, proactively identifying which reps need
extra coaching/mentoring, continually adapting the sales process based
on changes in the marketplace, and sharing best practices across the
sales force.
If you are among the firms looking to formally implement CRM for the
first time in 2008, we have a couple words of caution.
First, we have seen that when technology is thrown at informal or ad hoc

processes, little if any improvement occurs. So, we highly recommend
that in addition to evaluating technology, you simultaneously ensure that
you are formalizing how you sell. CSO Insights research clients may
want to review the Sales Process Premier we updated in 2007 for more
insights into process development and implementation.
Second, understand that when you begin evaluating CRM not all
systems are created equal. Can you get by with an out-of-the-box
system, or is your sales process complex enough that you need to
customize the application for it to be useful? Is simple opportunity
management enough, or do your reps need more robust CRM with
analytic capabilities? Will your CRM be a standalone application, or does
it need to integrate with other systems in your company to be truly
useful?
Various vendors have adopted certain attitudes toward selling and those
biases, if you will, are reflected in their solutions. If you want to talk about
the CRM landscape, or have us run a report on what users are saying
about the vendors they chose, please contact your CSO Insights partner.
Notes:
©CSO Insights 167

How Would
Was your core CRM system(s) purchased, internally developed, or both?
! Number of firms Reviewing information from the late 1990s, we found that approximately
relying on 23% of firms with CRM systems installed had implemented an internally
internally developed program. That number has continued to decrease to today’s
developed level of 18%. We see three factors contributing to this trend. First, the
systems cost of ownership for maintaining these one-off applications is very high
continues to compared to the pricing models of current commercial CRM offerings.
decrease.
Second, development of in-house applications was often driven by the
! A wide variety of desire to have functionality for the needs of a specific industry. Now, with
commercial CRM more CRM vendors responding with vertically-focused solutions for
options continue finance, pharmaceuticals, telecommunications, semiconductor, etc., the
to exist. need to “build” to get what you want is nearly eliminated.
! SaaS/On Finally, there are lots of new CRM platform enhancements coming to
Demand options market for optimizing specific tasks such as marketing campaign
are continuing to management, incentive management, sales knowledge management,
gain market and so on. As the CRM vendor community works to form more alliances
acceptance. and integrates their applications, they are creating yet another reason to
move away from proprietary systems.
Looking in more depth at the 82% of firms who have implemented a

CRM application (either standalone or integrated with internal programs),
we see that while some vendor consolidation in the marketplace has
occurred, buyers of CRM systems still have a lot of options.
We asked the firms taking part in this year’s survey to share with us the
name of the core CRM vendor they selected. As a result, 64 unique
©CSO Insights 168

vendors were identified – up from 57 last year. So while the mergers and
acquisitions may have captured headlines in the past couple years, new
players continue to enter the marketplace.
In terms of market share gains, we continue to see a significant jump in

the number of sales organizations that are opting for an On Demand
system if they are implementing CRM for the first time (see prior metric).
Additionally, we are seeing that when some firms decide to replace their
existing On Premise CRM system, they often opt for an On Demand
alternative, especially in the small/medium business (SMB) universe.
For more information on these two types of commercial applications,

research clients should review the findings in our analysis, On Demand
versus On Premise CRM: Are There Any Differences?
Notes:
©CSO Insights 169

How WouldHow long has your current CRM system been installed?
! Continue to see Revisiting our 2005 survey, we found that 37% of the firms who had
an increasing implemented a CRM system had had the application in place for more
number of CRM than two years. Today, we see that number has increased to nearly
systems “stick” 46%. This is a positive trend away from the “shelf-ware” problems we
once they are saw in the mid 90’s--when some firms bought CRM systems, rolled them
installed. out to their sales forces, and then watched the systems fall into disuse.
! As the length of This year’s study surfaced another interesting trend. While most firms do
usage increases, see an improvement in sales performance that they can attribute to the
so does the level usage of CRM, the benefits achieved are not instantaneous. The
of benefits following table summarizes the data gathered from firms that have
achieved. implemented a core CRM system, showing the level of sales
performance improvement they are seeing as a direct result of their
! In looking at technology investments.
issues that impact
the success of a Minor Significant
CRM project, the Improvements in Improvements in
problem is not Sales Performance Sales Performance
always the tools. 12 months or less 42% 22%
1-3 years 51% 23%
More than 3 years 40% 36%
We will drill deeper into the specific benefits companies are reporting on
page 178, but for now let’s focus on this global question: is CRM
delivering on its promise or not? An optimist might look at the above
numbers and conclude that ultimately three-quarters of CRM projects will
be “successful.” A pessimist could make the case that the real “success”
©CSO Insights 170
number is closer to one-third, as one would doubt that any sales

organization actually elected to implement CRM with the goal of
achieving “minor” improvements in performance.
Having thoroughly reviewed applications available in the marketplace

today, our conclusion is that in most cases CRM is doing just fine. The
systems are more robust, more stable, more responsive, more
customizable, and more usable than ever before. In many cases, it is the
implementation of the systems that is keeping all companies from
achieving significant improvements in performance.
What kind of implementation issues? It’s clear that beyond the CRM
system, the combination of optimized business processes and
management commitment will have a significant impact on the sales
performance results your company achieves.
A third factor is education. When firms invest more in training reps on

how to integrate the systems into their daily workflow, they can expect to
experience a higher level of sales performance improvements. If the
results you are achieving are lower than the success rates you
anticipated, do a full audit of all of the aspects of your CRM project. If
you are not seeing significant improvements don’t assume the problem is
the application or the technology.
Notes:
©CSO Insights 171

How Would
How long did it take to fully implement your CRM system?
! Seeing a marked In the 2006 survey, we found that over 55% of the companies took more
decrease in the than seven months to fully deploy their CRM applications. That number
time required to has dropped to less than 45% this year. Conversely, at the other end of
get a CRM the spectrum, nearly 31% of the firms currently are reporting their
system up and implementations have taken less than three months to complete, versus
running. a figure of 23% in 2006.
! But, this However, further analysis shows that these averages can be misleading.
improvement is For example, comparing the implementation periods for companies
not universal based on the class of CRM applications surfaced marked differences.
across all The following table compares the responses of firms that implemented
applications. On Premise CRM systems, versus On Demand systems.
! Simplify the On Premise On Demand

scope of Phase CRM CRM
One rollout and 3 months or less 24% 45%
you will reduce 4-6 months 23% 28%
implementation 7-9 months 16% 10%
time. More than 9 months 37% 10%
Even within the On Demand and On Premise classes of applications, we

see a disparity between how long the systems take to get up and
running.
Also worth noting is that the complexity and scope of the initial CRM
system rollout has a big impact on the project implementation time.
Simply put, the more modest the initial project scope, the faster the
system gets into production.
©CSO Insights 172
We have seen some project teams delay the implementation of their

solutions because they try to do too many things all at once. We need to
remember that CRM is not a single entity; it is many. It includes territory
management, opportunity management, contact management,
forecasting; and more often now, incentive management, sales
knowledge management, order processing, marketing campaign
management, customer service, etc.
There is no rule that says you have to turn on all of these capabilities at
one time. In fact, many of the most successful projects we have seen
over the past 15 years have been phased implementations: turning on
parts of the functionality, increasing sales rep familiarity with those
capabilities, and then turning on more features 90 days later. We
seriously encourage project teams to consider this approach.
Notes:
©CSO Insights 173

How Would What is the adoption rate for your CRM system?
! Adoption ratings Comparing this year’s study data to last year’s, we see no statistically
for CRM systems relevant change in the adoption rate of salespeople who use CRM
by sales reps systems (defined as actively using the systems regularly as part of their
have flattened daily work flow).
out.
However, we want to point out that “averages” can hide insights. In
! Data shows that drilling down into the study data, we see the factors that impact CRM
CRM adoption is adoption. One is time. As we noted in last year’s study, typically, the
linked with longer a system has been installed, the higher the adoption rate. A
process adoption. second factor we surfaced this year is process.
! Increase your On page 152, we reviewed the four levels of process we’ve defined in
investment in sales force implementations. Level 1 utilizes a random approach to sales
application process; Level 2 firms have an informal process; Level 3 firms have a
training, and formal sales process; and Level 4 firms have a dynamic process (a
CRM adoption formal process that is continuously adapting to changes in the
will increase. marketplace). The following table reviews CRM adoption rates of
companies in these four categories.
Level 1 Level 2 Level 3 Level 4

>90% 32% 33% 36% 64%
76%-90% 16% 22% 21% 17%
51%-75% 24% 22% 21% 22%
50% or less 28% 33% 20% 16%
If you inculcate the use of a formal sales process in your sales

organization, you will see an increase in the adoption rate of your CRM
©CSO Insights 174
applications across your sales force. This will result from salespeople
discovering that the technology becomes intertwined with their daily
workflow, a combination that increases both their efficiency and
effectiveness.
Considering sales and CRM, there is another interesting dynamic on

which to reflect. Over the years, we have noted that you can force some
business professionals to use systems. For example, if a bank teller
does not use the deposit/withdrawal systems their bank has installed,
they are out of a job.
In the world of sales we have a different relationship. If a sales rep is

nailing their number, and they are doing it with post-it notes instead of
technology, they may well get a “pass” on being forced to use their
company’s CRM system.
Because of this, the first sale you need to make with your CRM system is
an internal sale. You need to sell the sales force on how they personally
benefit from having and using these applications. In looking at the CRM
adoption rates for firms that invest heavily in CRM training, we see that
usage of the systems increases as well.
Notes:
©CSO Insights 175

How How
Would did your CRM project costs compare to the original budget?
! In general, One of the challenges for CRM project teams in the 90’s was trying to
budgetary scope the cost of the initiative. Hardware and software costs were
surprises something that could be fairly accurately determined, but the services
associated with (customization of the applications) component was a mystery to many
CRM projects are involved. We heard companies using services figures ranging from 1.5X
becoming rarer. the software cost to 5X, but these were often just guesses.
! But once again, As applications have matured over the last few years, the accuracy of
not all CRM budgeting has also improved. Today, nearly two-thirds of projects are
implementations coming in at or below the anticipated costs, versus two-thirds being over
are created budget in the late 90’s.
equal.
However, we still see one-third of all projects coming in over budget.
! Populating and Let’s look at factors that can contribute to these overruns. One dynamic
maintaining valid the survey data surfaced was the complexity of the project. The following
data is often table summarizes the budgetary feedback we received from firms that
underestimated. implemented an internally developed system, a commercial application,
or a combination of the two.
Internally Commercial Internal and

Developed Application Commercial
Below budget 9% 8% 13%
On budget 59% 59% 43%
Slightly over 22% 25% 27%
Significantly over 9% 8% 18%
©CSO Insights 176

Here we see very similar numbers for internally developed and

commercial applications, but a noticeably higher number of projects
going significantly over budget when a company combines the two.
Project teams looking to implement more complex CRM platforms need
to ensure they have thoroughly scoped out the effort involved.
We also noted major differences between the types of commercial CRM

systems implemented, ranging from a low of 21% of projects going over
budget for one vendor to a high of 57% for another.
Finally, project teams should be aware that the issue of populating and
maintaining accurate data within your CRM application is still the top
challenge most firms encounter. Ensuring you understand what is
involved in doing the initial data cleansing, and then continually updating
CRM data can be time consuming, but the effort is worth it if it helps
avoid a major project expense overrun.
Notes:
©CSO Insights 177

Howmeasurable
What Would improvements have resulted from your CRM system usage?
! A wide variety of Here we look more closely at the specific benefits that are experiencing
benefits can be through leveraging CRM solutions. We see a number of improvements
achieved as a that can result from CRM usage; but improvements don’t always
result of using translate into solid performance increases.
CRM
applications. For example, in the chart above we see that nearly 53% of the firms who
have implemented CRM are reporting improvements in their forecast
! “Improved” accuracy. While any steps forward in this area are welcomed by any
forecasting does CSO (not to mention the rest of the senior management team), the
not mean “great” above numbers should not be a cause for declaring victory.
forecasting.
In looking at the performance ratings for the firms that cited improved
! Significant forecast accuracy as one of their key CRM project accomplishments
improvement in today, we found that 50% still feel they need to improve in this area. And
best practices with good reason; even in firms that count improved forecast accuracy
sharing should as one of their top three CRM benefits, only 51% of forecast deals are
serve as an actually won. So while progress is being made, the battle goes on.
insight for all
project teams. Another impactful trend is the noticeable jump in the percentage of firms
that are using CRM to share best practices within their sales
! The highest level organizations (40% this year, vs. 25% last year). As you will see on page
goal remains 194, improving rep access to the information they need to sell effectively
increased is still an issue; it is the second most highly ranked sales performance
revenues – and improvement initiative for 2008.
that is still the
exception versus We encourage all project teams to explore the full range of ways they
the rule. can leverage CRM to increase sales insights between reps. In projects
we have benchmarked in the financial services, high tech, medical
©CSO Insights 178

devices, and professional services industries this past year, we found

numerous examples where best practices sharing is contributing to
higher win rates, shorter ramp-up times for new reps, lower sales
turnover, etc.
The last item we want to discuss is really what we wish was the number
one most cited benefit resulting from using CRM. While the current
winner, improved sales communications is important, most CSOs would
trade that in a heartbeat for item number seven on the list – increased
revenues.
This year we find that 30% of the firms surveyed are seeing revenue
improvements that they can attribute to the use of CRM, up from 21%
last year. While the trend is moving in the right direction, it is still the
unrealized promise for many companies who have sought to leverage
CRM to improve sales performance.
Notes:
©CSO Insights 179

In How Would to your core CRM system, what other applications do you utilize?
addition
! Appetite for Last year we started tracking other complementary CRM capabilities that
additional, companies were adding to enhance their core CRM platforms. In 2008,
complementary we expect to see more firms making additional investments in these
CRM solutions is technologies to help solve specific problems that may be impacting their
increasing. sales performances.
! Sales At the top of the list are sales collaboration systems, such as WebEx and
collaboration is GoToMeeting from Citrix, which are becoming established tools in the
becoming a sales arsenal. For the past several years, we have seen marketing’s
mainstay in sales adoption of these tools increase Now we see sales’ adoption of these
as well as systems increasing as well.
marketing.
From sales managers using these collaboration tools to host weekly
! Adoption of sales sales meetings with remote teams; to product and sales training
analytics tools managers hosting virtual classes for salespeople; to sales reps
has increased themselves conducting ad hoc meetings with customers and prospects –
significantly. the Web is showing that even when you are remote, you can have rich
interactions with others.
! Sales knowledge
management is For more insights into uses of sales collaboration tools, research clients
poised for a can refer to our analysis entitled, Improving Inside Sales Effectiveness
growth year in Using Technology.
2008.
Tools specifically for sales managers’ use are also gaining a lot of
traction. For years we have been asking/requiring sales reps to put
information into CRM systems. Now a new breed of sales analytics
applications are helping sales managers mine the insight “gold”
©CSO Insights 180

contained in their systems.
These applications are not general purpose business intelligence (BI).

Rather, they are rich applications designed specifically to help managers
optimize pipeline management: track which forecast deals are at risk and
determine why; better mentor/coach their sales teams, identifying which
reps are having problems with what aspect of selling; surface sales best
practices, determining which sales strategies and tactics help reps win
more deals and which do not, etc.
A final area we think will grow significantly in 2008 is sales knowledge

management. As you will see on page 196, there are still a host of needs
that salespeople have regarding access to the information they need to
sell more effectively.
We have had briefings over the past six months with more than a dozen
solution providers bringing new applications to the market, and we have
been impressed by many of these. CRM project teams should have a
number of solid options available in tackling the sales knowledge gap in
2008.
Notes:
©CSO Insights 181

How
How Would you rate your level of satisfaction with your primary CRM vendor?
would
! Uplift in the Our annual assessment of customer satisfaction ratings that CRM users
number of give their vendors shows a reversal of the downward slide we had seen
satisfied CRM the previous two years. The CRM solution community has made a
users continues. number of major enhancements to their core applications, and many
vendors have shared with us their plans to continue to focus on
! But, still seeing increasing the value of the user experience. Those efforts appear to be
that 39% of firms paying off.
are not raving
fans of their CRM But, while the number or firms satisfied/very satisfied increased from
systems. 52% last year to 61% this year, there is room to grow. In the chart above,
we see that nearly four in ten companies that have implemented a core
! Satisfaction levels CRM system tell us that they are less than thrilled with their primary
vary based on the CRM application provider.
type of system
implemented. A more detailed analysis of the data shows that the On Demand CRM
vendors are, by and large, doing a better job of meeting customer
expectations than the On Premise solution providers. The following table
contrasts responses received from these two classes of CRM users.
On Demand On Premise
System Users System Users
Very satisfied 25% 19%
Satisfied 53% 43%
Neutral 18% 28%
Dissatisfied 4% 11%
Again, there is evidence that some of the issues related to the CRM
user-vendor attitude may actually not be product related as much as
©CSO Insights 182
project related. We have seen a number of cases where the product was
working just fine, but the manner in which it was rolled out was
problematic.
If your satisfaction levels are low, we encourage you to talk to other CRM
project teams. We have benchmarked hundreds of projects where
companies are achieving major improvements in sales performance as a
result of their CRM applications, and those business successes are
translating into higher customer satisfaction ratings for their CRM
vendors.
If your vendor has a formal user group, check and see which firms are
presenting and inquire about auditing their projects. We have seen a
great deal of best practices sharing within the customer community that
can help you get the most out of your CRM investments.
Notes:
©CSO Insights 183

How Would
Would you buy from again / recommend your primary CRM vendor to others?
! Seeing an End user attitudes towards their vendors are improving. Last year, 43%
increase in the of the firms surveyed reported that they would absolutely or very likely
percentage of recommend their CRM vendor to others. In the chart above, we see that
firms that would the number has increased nearly five full points to 48%, approaching the
recommend their recommendation level reported in 2005.
vendor to others.
This is still a chart that CRM vendors should pay serious attention to
! However, these (and in fact, research clients may want to share this with the vendor they
numbers are are working with), as the left-hand side of the chart tells a potentially
lower than the worrisome story. Here we see that more than half of all the firms
satisfaction surveyed who have implemented a CRM system are not going to be
ratings again this great references for the solutions they are using.
year.
To us, this question is a better barometer for indicating what the user
! On Demand base is really thinking. And again we see a noted difference between On
users are more Demand and On Premise user sentiment. In the following table, we
likely to compare response summaries from these two groups regarding their
recommend than attitudes towards recommending their vendor.
On Premise
users. On Demand On Premise
System Users System Users
Absolutely 24% 19%
Very likely 36% 30%
Somewhat likely 35% 36%
Unlikely/never 5% 16%
©CSO Insights 184

Our contention over the past several years has been that “somewhat
likely” is as good as a no. When we have surveyed CSOs, asking them
to list the main influencers that prompt them to buy any sales
effectiveness solution (CRM, sales training, consulting services, etc.),
the number one criteria is personal experience with the solution. This is
followed closely by a peer’s personal experience with the solution.
Existing customers can have a huge influence on new client buying

decisions. And, the previous table indicates that vendors have some
issues they need to explore.
Now, consider once again the numbers we presented on page 182. The
combined satisfied and very satisfied scores for both the On Demand
and On Premise users were 78% and 62%, respectively. Above we see
the combined recommendation attitude scores for “absolutely” and “very
likely” are 60% and 49%. These scores represent a 20%+ overall drop in
positive attitude on the part of users.
Solution providers would be well advised to continue increasing their

efforts to attain raving fans. The chart on the next page represents an
early warning sign for what can happen if they fail to do so.
Notes:
©CSO Insights 185

How Would
Are you looking to replace your existing CRM solution in 2008?
! New Metric: Several clients have asked us what we expect to see happen in the core
Starting to track CRM space going forward. Specifically, as they look to decide on a
the churn rate solution provider to work with – or are reevaluating the relationship with
within the CRM their existing vendor – people want to know who will be long-term
space. players in the market and who may not.
! Not all installed We added the above survey question to discover users’ attitudes in this
CRM systems are area. Not knowing what to expect, we were somewhat surprised that just
going to remain over 13% of the firms who had implemented a CRM system were
installed. thinking about switching that application out next year.
! Impact of In the metric on page 170 we pointed out that we are seeing more
switching is much systems remaining installed for longer periods of time. Taking a more
less painful than selective look into the data here, we found that does not hold true for all
in the past for end implementations; the desire to replace the incumbent CRM application
users and more increases as the company’s usage time increases with no meaningful
worrisome for improvements in sales performance. The following table shows the
vendors. percentage of firms surveyed who said they were planning to replace
their CRM system in 2008, segmented by length of time their current
solution has been deployed.
Will Replace Their Existing

CRM System in 2008
<1 year 10%
1-3 years 13%
>3 years 18%
©CSO Insights 186

Opting to replace an existing CRM application in the 90’s was a major

strategic decision. The architecture of the systems was often unique; the
user interfaces varied widely, meaning that reps would have to go
through a new learning curve to become proficient with the new
programs; the customizations made in previous systems had to be done
all over again in the new application, running up significant programmer
costs; etc.
Today, the impact of switching is less complex and, therefore, less

costly. Data can more easily be moved from one application to the next;
most programs have a similar look and feel from a user perspective, and
customization costs have gone down dramatically. Furthermore, the
purchase price for both On Demand and On Premise applications is
often less than before. So, a noticeable level of system migrations could
actually take place in 2008. The questions are: Will they switch? and,
What will cause firms to do so or to stay put?
When we consider that one in six firms that have had their existing CRM
system installed for more than three years may switch all of their data to
a new solution, it does give us reason to pause. Who will this help and
who will it hurt? We will be following this trend through 2008 to see if the
intention to migrate manifests into reality.
Notes:
©CSO Insights 187

©CSO Insights 188

Internet and Sales Knowledge Management Utilization

Introduction
This section examines how sales organizations are leveraging the Internet to support their sales and
marketing efforts, how easy it is for salespeople to get access to the sales knowledge management
elements, and where improvements in that area will be focused during the coming year.
• Uses of the Internet to Support Sales and Marketing Efforts ................................ 190
• Impact of Internet Usage on Sales and Marketing Performance ............................ 192
• Ease of Access to Sales Knowledge Management Components ........................... 194
• Sales Knowledge Management Improvement Priorities ......................................... 196
©CSO Insights 189

Howare
How Would
you using the Internet to support your sales and marketing efforts?
! Research The top four Internet uses are a replay of 2007’s rankings. Conducting
maintains its account research still trumps all other Internet uses for sales and
considerable lead marketing, adding four percentage points to last year’s leading figure.
over all other Conducting webinars remains in second place for a second year, and is
Internet uses. joined by the next two uses in the 40+% level. Those uses are
conducting online demos and processing seminar/webinar registrations,
! All but two of the which both landed in the mid-30% level in 2007’s report. In fact, with the
uses outlined exception of processing lead collateral fulfillment which is down two
have noticeably points, all other uses are up, many dramatically.
increased in the
past year. The use of individual sales portals, which now offer many firms a better
option for connecting with and providing information to leads, prospects
! Top performing and customers, is up by the same two point figure that lead fulfillment is
firms are using down. It appears that both buyers and sellers are becoming more
the Internet to an comfortable and skilled in leveraging these relatively new methods of
even greater communicating. Along the same lines, web-based meetings and
extent than the interactive chat sessions with clients are each up two full percentage
general survey points.
population.
Just two years ago, webinars were in fifth place then moved up last year
to lock in second place. While the percentage of firms reporting the use
of webinars is down fractionally, the use of webinars continues to
proliferate. This assertion is supported by the impressive increase in
Internet processing of seminar/webinar registrations which is up five full
points.
Still, we wondered whether firms were using the Internet to win deals;
and if so, which firms. We looked at companies that were blowing away
©CSO Insights 190

their numbers with an average organizational quota attainment of over

100% and an average percentage of reps making quota of rep quota
attainment at least ten points better than this year’s 61%. What we found
were the Top 10% of the survey population: 145 firms with an average
organizational quota attainment of 119%, and average percentage of
reps making quota of 89%!
Reps employed by these firms spent 17% of their time researching

accounts and generating leads; and 40% of their time selling face-to-face
or on the phone. Even though their win rates are much higher than
average and rep turnover rates lower than average, 42% still feel they
need to improve in thoroughly researching accounts; 49% still indicate
they need to improve in lead generation. [Note: the Top 10% firms report
28% of leads are marketing generated, 50% are self-generated.]
All of the Top 10% are utilizing the Internet at higher levels than the
already high levels of this year’s general population (see table below).
General Firms in
Population: Top 10%
90%
Conduct account research 77% 72%
Conduct webinars 33% 48%
Conduct online demo 44% 42%
Process webinar/seminar registration 40% 47%
Provide customer self-service 36% 41%
Conduct web-based client meetings 37% 42%
Conduct customer training 25% 38%
Process collateral fulfillment 30% 36%
Provide individual sales portals 17% 23%
Conduct interactive chat sessions 12% 28%
This table suggests a question you should be constantly asking yourself:

Is there some way we can automate or at least better utilize the Internet
to handle each current selling task?
To explore new ways you can leverage the Web for doing analysis on
your accounts, research clients should review the findings in the
Dynamic Sales Intelligence white paper.
Notes:
©CSO Insights 191

How Would
What impact are the following uses of the Internet having on performance?
! Significant impact Let’s look at the chart above, where the responses are listed by order of
from sales’ and significant impact (refer to the blue colored bars). The data yields one
marketing’s use use in the 50% range, three in the 30%’s, four in the 20%’s, and the
of the Internet is remaining two in the sub-20% range. As with last year’s figures which
up from 2007. are very similar, research leads the field. This finding is not surprising
since for most individuals, it was the first, and remains the primary, use
! Uses near the of the Internet: to look things up.
bottom of this
year’s list grew Though still at the bottom of the chart, the significant impact of individual
proportionately sales portals and interactive chat sessions is each up more than 10%.
with shrinkage of These two uses may suffer from lack of familiarity in the same way
more traditional research benefits from it. Many prospects and reps alike are uncertain of
uses. what is entailed in being set up with an individual sales portal, or why
they would want one in the first place. Chatting is fine when you’re
! More “customer instant messaging a friend or relative, but what does it mean when
intimate” uses you’re chatting within corporate sites? Can they trace your movements?
may lead to more (Yes.) Will this tell them what you’re interested in or trying to find out?
innovative sales (Yes.) Is this a bad thing? (Not necessarily.)
use.
The other advantage that research has over all the other uses, and
perhaps the real reason it scores so highly, is that it’s the only one you
can do by yourself. You don’t need the other half of the buy-sell equation
– whichever side you’re on – to conduct research. Live chat sessions are
the other end of the scale not only in terms of impact (as seen above), or
use (as seen in the prior metric), but also in terms of customer intimacy
(in the reverse way, meaning a higher intimacy). The immediacy of live
interactive chats coupled with lack of personal familiarity may be what is
©CSO Insights 192

limiting its use. However, following is one example to demonstrate the

power of this capability.
One very large manufacturer we studied implemented a live chat

capability when visitors to their corporate website (i.e., a detailed product
catalog) matched a certain pre-defined profile. Because the company
had web tracking software, the application could identify when a visitor
bounced among certain complicated, technically complex, and/or high-
value products, and notify the call center.
The call center agent would then send to the visitor a chat invitation that
would pop-up in a window on the visitor’s browser. It would include a
picture of the agent and pre-scripted text saying: “Hi, I’m Nancy at Acme
Corp. Thanks for visiting our site today. Are you finding everything you’re
looking for or can I assist you in any way?”
While you might think this would freak people out, 60% of these
invitations were responded to affirmatively, and the rep guided them
through their product investigation. Leads generated increased from one
per call center rep per day to seven. In addition, those leads ended up
closing 30% faster than any other lead source.
Overcoming the resistance – the buyer’s and your own as sellers – in

this unfamiliar form of Internet use paid the company huge dividends.
We believe that while uses in the upper half of the chart (within the 30-
th
50 percentiles) will continue to provide significant impact, the lower half
th
(within the 10-20 percentiles) may be where the real innovation and
impact gains are to be found next.
Notes:
©CSO Insights 193

How Would
How easily can your sales reps access the following sales knowledge components?
! High value For starters, this is not a chart where you want high scores, or to be at
information and the top of the list. The higher the aggregate amount for each SKM
knowledge still component, the more effort to get your hands on it. Second, the smaller
requires the percentage of red and green in each case, the better. With these two
considerable points in mind, know that the overall shape of this chart has barely
levels of effort to changed from last year; but the percentage make-up of each component
access. has improved – some dramatically.
! Progress has The two leaders in ease of access are customer/prospect information
been made in and details of past customer purchases. This, of course, is critical
keeping track of information, and across both categories the percentage of reps who can
customers and rarely find it has reduced this year. That’s good news, but should it really
their purchases. be so tough to keep track of contact information that one in eight firms
reports significant effort or can’t find it at all?
! Most valuable
SKM components A big gainer this year is the ability to keep track of the details of past
continue to lag in customer purchases. Although still effortful at some level for 55% of
improved and/or firms, we do see a ten percent reduction overall. But while useful,
easier access. important and necessary, is this knowledge component valuable in
selling the next piece of business?
The answer is sure, but is it as valuable as having ready responses to

both key buyer objections and competitive knock offs, and sharing best
practices? Further, other than being limited by time and resources (in IT
or elsewhere) it’s worth noting that none of these components are
mutually exclusive. In fact, in the best case, these components would all
be tied together; for example, a strategic account plan could show past
©CSO Insights 194

selling and marketing efforts, and if and where these fit into the overall
strategy.
Speaking of strategic account plans, it joined three other components in

requiring more overall effort in the past year: best practices used by the
sales force, customer references and case studies, and proposal
templates/business case samples.
Competitive analyses, past/current marketing and selling efforts,

information on past purchases and executive profile information all
improved, and moved down the list.
The categories improving, with the possible exception of competitive

analyses, are largely data oriented. The categories becoming tougher to
access are higher levels of information and knowledge. This distinction
may be key to both understanding what is happening and using the
findings as a basis for deciding what you want to address in the coming
year (also see the next metric).
In our analysis entitled, Sales Knowledge Management: Is Progress

Being Made, we overview some of the advances in the field of SKM,
which research clients may find useful.
Notes:
©CSO Insights 195

How
WhatWould
would you rate as your top three priorities for SKM improvement?
! Sharing best Here’s what Charlie Babb, CMO of Avnet had to say: “The answer to
practices again every single sales challenge we face already exists somewhere in our
tops the list of company. How do we go get it? How do we synthesize it? How do we
SKM priorities. improve it? How to we get it out to the field? How do we update it?”
! “How to” nuggets When it comes to Sales Knowledge Management (SKM) improvements,
of sales there is both good and bad news. The good news: the information you
knowledge need is within your own organization. The bad news: the information you
continue to be need is within your own organization. This is a source of almost limitless
high priority. potential and frustration. But in just about every case, your firm only
need identify, properly reward, and sufficiently ease the burden of getting
! But little gain what someone knows, into a place and form that everyone can use.
appears to have
been made in the For the second straight year, sharing best practices is the top rated
past year overall. priority for improving SKM. Little wonder. This means everyone having
access to the “secret sauce,” the “good stuff,” the “golden tactics” –
whatever you call specialized knowledge that helps resolve customer
concerns/objections, dissolve competitive FUD (fear, uncertainty, doubt),
and/or absolve product and technical experts from needing to be ever
ready at the instant a sales rep has a question. Whatever and how ever,
let’s make it easy for reps to get their hands on it!
In fact, all the components on this list are important at one point or
another in the sales cycle; the question is about priority. And, in fact, little
progress has been made in reducing this list or the level of priority of the
listed items over the past year. In light of this, here’s a quick lesson.
There are three bases upon which to establish priority:
©CSO Insights 196

1) urgency, 2) seriousness, and 3) potential for growth.
By far and away, the most common way folks set (or react to) priorities is
urgency. Responding to email is urgent but rarely meets the other two
tests. In fact, a time management maxim is: Urgent matters are seldom
important; and important matters are seldom urgent. Consider sharing
best practices and the other components in the upper half of the chart to
be important – very important.
The second priority test is seriousness. If you don’t deal with a certain
issue, how big a deal is it really? One manager early in our career
wouldn’t deal with things that landed on his desk for over a week. When
he did take them up, many had already resolved themselves; they simply
weren’t that serious or didn’t really need management attention.
Those that did remain, however, were often bigger issues for having sat
and festered for over a week. These met the third test of potential for
growth. “An ounce of prevention is worth a pound of cure” speaks to the
issue of potential for growth. If you don’t deal with this issue now, can it
become a bigger issue/problem/challenge later?
There is a second perspective on this issue of growth potential: what is

the potential for you and/or your team to grow in addressing this issue?
Sharing best practices and more generally, sharing knowledge, answers
this question nicely. And unlike so many other things of value, sharing
knowledge does not lessen the amount of knowledge you possess.
Consider the list of priorities for this metric in light of all three priority
tests and determine for yourself – and your sales organization – which is
highest priority. Having done so, ask what has to change for this SKM
component to be addressed. What first steps need to take place to get
things moving? What action do you need to take to begin? Then do it.
Notes:
©CSO Insights 197

©CSO Insights 198

Sales and Marketing Alignment

Introduction
This section examines sales’ view of how well marketing is working to support their selling efforts – to
what extent marketing is providing sales with the right support materials and the proper level of leads
required to achieve their revenue targets.
• Assessment of Marketing-Generated Sales Collateral............................................ 200
• Assessment of Marketing-Generated Lead Quality and Quantity .......................... 202
• Marketing’s Self-Assessment of Lead Quality and Quantity .................................. 204
• Timeframe for Marketing Programs to Start Generating Sales............................... 206
©CSO Insights 199

How would you rate the quality/effectiveness of your sales collateral?
! Sales’ rating of This year we saw a marked improvement of sales’ ratings of the
marketing- marketing-generated sales collateral they are receiving. In the 2007 SPO
generated report we noted that over 36% of the firms surveyed stated that their
collateral is collateral needed improvement. Here we see that that number has
improving. dropped to under 29%.
! But, SKM gaps However, drilling into the study data and looking at sales reps’ ability to
still show that a effectively cross-sell/up-sell, sell value/avoid discounting, and effectively
broader range of introduce new products, (previously reviewed on pages 92, 94, and 104
information is respectively), what we frequently see is a need for improvement. This
needed by reps. finding would suggest in part, that while the quality of sales materials is
improving, the breadth of materials they need has not.
! Case studies and
competitive This assumption is further validated when you refer back to the Sales
differentiation Knowledge Management (SKM) section of this report. In that analysis,
materials are high we see a number of areas in which reps are finding it hard to access the
on the list of information they need.
support tools reps
need. A key need for most sales organizations is more case studies and
references. In a study we did on buying trends, we asked executives to
rate the key influencers that put a solution on their short list. Their top
three answers were: 1) past personal experience with the vendor, 2) a
peer’s personal experience with the vendor, and 3) an analyst profiling
someone who has had personal experience with the vendor.
Word-of-mouth is key for gaining credibility, especially if you are a start-

up trying to break into the market, or an established firm trying to
©CSO Insights 200
introduce something new. Prospects always want to know who has been
successful in working with you. Yet according to the data represented on
page 194, we see that this information is often not available to sales
reps.
Today, customers can access a wealth of product information via the

Internet that used to be gained through talking with sales reps. Now,
when a rep talks to a prospect, the prospect is often already briefed on
product-related information such as functionality, cost, future plans, etc.
The dialogue they want to have is at a much deeper level; what they
want to know are the details of how they could apply that solution to their
specific needs.
We see this trend continuing, so reps will need access to a whole

different level of sales collateral than ever before if they are going to
have meaningful discussions with prospective clients.
Notes:
©CSO Insights 201

How would you rate the quality/quantity of the leads generated by marketing?
! The issue of In our 2007 Target Marketing Priorities study, we found that marketing
providing reps organizations are continuing to dedicate a larger percentage of their total
with the right budget to lead generating programs. However, this increased focus on
number of high helping reps acquire new opportunities/accounts is not yet translating
quality leads is into sales agreeing that they are seeing enough leads.
still an issue for
sales. In the above chart, we see that 51% of sales organizations still feel that
marketing needs to improve the quality and/or quantity of the leads they
! Reps will fill the are providing to reps. This percentage marks an improvement from the
gap if marketing 52.9% rating last year, but still leaves room for more progress.
doesn’t (but do
we want them Recognizing that they need more prospects, sales reps are stepping up
to?) to the challenge and generating more of their own leads, as we
discussed on page 52. But this comes at a price, as the time required for
! The issue of lead self-generating leads means less time available for actual selling.
quality and
quantity exists for We received requests from research clients to see if this situation was a
big and small common problem across all companies; or if sales reps at smaller
firms alike. companies have a bigger challenge than others. The data suggests it’s a
common problem across all size firms. When we segmented the data
! Leads are based on revenues of the firm, >$1B, $151M-$1B, and <$150M, we
certainly one found no significant differences in the ratings that marketing received.
issue, but so is
lead conversion. Our previously published analysis, Optimizing Lead Generation, revealed
the significant financial impact that optimizing lead quality and quantity
can have on increased revenue attainment in terms of reducing no
decisions, getting new reps up to speed faster, helping salespeople
©CSO Insights 202

introduce new products more effectively, etc.. But that is only part of the
story.
Sales is facing another challenge: converting the leads they do get into
first discussions (see page 54). If a rep receives a lead, calls the
prospect, yet is unable to get an appointment to discuss their needs in
detail, will they typically say the problem is the quality of the lead or their
own inability to motivate the prospect to take the next step in the sell
cycle?
Our benchmarking activities this past year suggest that the latter is just
as big of a challenge as the former. Referring to our analysis on page
134, we see that customer expectations continue to increase, and this is
evidenced with the first contact they have with a rep. We suggest that
sales organizations take a serious look at how prepared their sales reps
are to follow up on a lead, before they blame marketing for inadequate
lead generation.
Notes:
©CSO Insights 203

What is marketing’s self-assessment of the quality/quantity of their leads for sales?
! Marketing and As part of the current SPO and the 2007 Target Marketing Priorities
sales generally (TMP) studies, we asked the respective sales and marketing executives
agree on the to tell us what percentage of closed deals are the result of marketing’s
quality and lead generation programs. As we noted on page 52, sales pegs the
quantity levels of figure at 28.1%.
leads that
marketing is Looking at the TMP study data, the number from representatives of the
generating. marketing side of the house is somewhat higher, coming in at 33.1%. So,
the two groups are not very far off in their views of how many leads
! Marketing and marketing is generating for sales.
sales are not in
agreement that However, there is some noticeable misalignment regarding what grade
there is a problem marketing should get for that level of support. As we saw on page 74, the
to be solved. majority of sales organizations believe that lead generation efforts need
to be improved.
! Seeing an
increased level Yet, looking at the chart above, we see that marketing does not have the
on investment in same sense of urgency about dealing with the matter, as only 27% of the
marketing firms we surveyed reported that the quality of the leads they were
optimization providing was “very poor” or “poor,” compared to a 51% “needs
services and improvement” rating from sales. Our past studies show that “average”
analytics tools. ratings are all too often considered “good enough,” and so less than
optimal improvement is made.
As you will see from the analysis on page 211, sales organizations are
not sitting back and waiting for marketing to turbo-charge the lead
generation engine. When we asked the SPO survey participants to share
©CSO Insights 204

with us the three main sales effectiveness initiatives they will be pursuing
in 2008, revising/enhancing lead generation programs is now at the top
of the list.
When you drill down into the lead generation challenge, you see it is not
one thing, but several:
• You need to be able to segment your markets better so that you
can identify which prospects are more likely to buy from you and
which are not.
• Once that is done, you need to decide which target marketing
approach will be the best to reach those individual prospects
(web, direct mail, telemarketing, advertising, etc.).
• Next, you need to develop the right messaging to motivate
clients to start their buying process.
• For those who have interest, but no time to act, you need to find
a way to incubate those leads until their priorities allow them to
seriously consider your offering.
• Finally, you want to track the disposition of those leads so you
can determine which prospect classes are responding most
often, and which programs are generating the best leads – and
then start the process all over again.
We see two trends that should help both sales and marketing address
the challenge of generating more/better leads. The first is the emergence
of a new class of solution providers focusing on demand generation.
Through our project benchmarking efforts, we have compiled a list of

over 55 companies offering a combination of technology and services to
help sales and marketing teams develop and execute more effective
lead generation programs. A number of these firms have solutions
targeted toward individual reps so that they can execute their own
campaigns.
In addition, the emergence of sophisticated sales analytics systems can

help sales and marketing demystify what happens to a lead after it goes
to a rep. These applications can provide the metrics needed to evaluate
the quality of leads and also identify characteristics of “perfect prospects”
so that future campaigns can be more effective.
Notes:
©CSO Insights 205

2008 Survey
Survey Results
and Analysis
How long does it take for marketing programs to begin generating sales?
! The fact that We have been tracking this metric in our marketing studies for the past
nearly 1 in 5 firms few years, and added it to the SPO study last year. We were hoping we
can’t answer this would be able to report an improvement in the speed at which marketing
question remains programs result in revenues. Unfortunately, that has not been
a concern. happening.
! Size of the prize Looking at the chart above, we see a continuing problem. Nearly one in
is linked to how five firms still report that they have no clear idea of the speed at which
fast marketing business results from the leads they generate. With the continuing rise in
programs can money spent on lead generation, by both sales and marketing, the lack
result in of visibility into the life cycle of a lead will result in suboptimal return on
revenues. investments.
! Dominant firms We conducted a detailed analysis to see if the issue of revenue

can turn up the generation speed was influenced by any particular factors, and a couple
revenue engine trends surfaced that are worth noting. The first is the size of the deal. In
faster based on the following table, we see the responses to this metric based on the
increased average deal size.
marketing efforts.
Deal Size Deal Size Deal Size
<$10K $10-$100K >$100K
<1 month 20% 11% 5%
1-2 months 30% 25% 14%
2-5 months 26% 30% 26%
>5 months 7% 17% 32%
Don’t know 17% 18% 23%
These figures tie into our past research on the length of a sell cycle. As
©CSO Insights 206
the dollar size of the deal increases, the ability of a single person to
approve the purchase decreases. So, while marketing programs may
help reps get into the game more often, sales and marketing both still
need to invest substantial effort to win the game.
Another trend of interest surfaced when we looked at the position

companies have in the marketplace. In the following table, we compared
the response we received for this metric from firms who had achieved
the “dominant player” position in their industry, compared to firms who
were “lead players,” “one of several established players,” or a “start-up.”
Market Position: Market Position:

Dominant Player Other Players
<1 month 19% 10%
1-2 months 24% 23%
2-5 months 25% 28%
>5 months 17% 19%
Don’t know 15% 20%
Here we see additional examples of why it is “good to be king.” A

dominant player’s established reputation can help move prospects
through the sales cycle faster.
Notes:
©CSO Insights 207

©CSO Insights 208

In Closing:
Where Do We Go From Here?
The preceding 200+ pages observed and commented on what transpired last year in the world of
sales. The data show that optimizing sales effectiveness is still a daunting task, but one that pays
huge dividends for those who meet and exceed it. The right mix of people, process, technology
and knowledge can give a company a significant edge over competitors. So how do we take what
we have learned from the past, apply it to succeed now, and set the stage for future success?
2008 lies before us. As much as any year before and perhaps more than ever before, stepping up
to this year’s sales challenges will require more of you and your team. Economic concerns fill the
news; competitive activity is up along with customer expectations; mergers and acquisitions are
reshaping many marketplaces; new competitors are emerging after a few relatively quiet years in
the venture capital community; and globalization continues to change how the game is played.
In the midst of all of these circumstances, you have a new number to bring in. Study participants
were asked to share what their new revenue target is for 2008. For 92.6% of sales organizations
the number will be bigger than last year, as seen below in Figure 1.
Figure 1
Considering this chart and reflecting back on this report’s commentary on the state of sales, we
get an uneasy feeling. Can these numbers be achieved? What about how we sell will be different
in the coming year that will enable/empower sales organizations to go out and outperform what
they achieved in 2007?
We are not alone in being nervous about what to expect for the coming year. As a follow-up
question to the one above, study participants were asked to predict their ability to meet or exceed
their revenue goal for the coming year. As seen in Figure 2, only 21% of the firms surveyed
anticipate no problems in meeting their target.
©CSO Insights 209

Figure 2
Having thoroughly reviewed all of the study data and commentary from this year’s participants,
we asked ourselves the following questions. Do we think that 79% of firms are being unduly
pessimistic? Will we see a major jump in the number of reps making their new quotas? Will there
be an even higher percentage attainment of overall company goals as well? We will be more
than pleased to eat crow next year, but our prediction standing here today is: No.
We are not meaning to be unnecessarily negative and we are the last to say nay when it comes
to what feats sales is capable of accomplishing. But the simple truth is, too many effectiveness
measures reported by too many companies have not improved. That’s the reality we’ve reported
throughout the pages of this report. And we find it hard to see how reps are going to hit higher
numbers in 2008 unless things fundamentally change in the world of sales.
However, here is a brighter reality for you as the sales executive for your organization. You don’t
have to improve things at all of the 79% of companies with concerns – just one. Like the old joke
about two campers being chased by a bear, you don’t have to outrun the bear – just your nearest
competitors.
In the introduction and overview we talked about the Sales Relationship Process (SRP) Matrix
(see page 5). There the various levels of relationship and of process implementation were defined
and compared. The volatile and unpredictable nature of the Sleepless Nights area (lower
relationships, low process implementation) was contrasted with the more predictable area of
Successful Years (higher relationships, high process implementation).
However, while this introduction may have interested you, hopefully one or more of the metrics
between that introduction and this conclusion will have convinced you of the merits of elevating
your team’s position over and up in the Matrix. The next logical question is how to get started.
What initiative(s) will move your team to the right (i.e., higher levels of process implementation)
and/or up (i.e., higher levels of relationships with customers) on the Matrix?
©CSO Insights 210

With this question in mind, it is interesting to look at the sales initiative priorities this year’s survey
participants reported (seen below in Figure 3).
Figure 3
First priority: more leads! Sure we need to elevate the context of our conversations with
customers and yes, we’re going to get serious about process around here once and for all. But
first things first, and the first thing is getting more leads.
This is fine if the revisions and enhancements to lead generation include introducing more
process into the programs, elevating the sales messaging issues, improving the content of our
lead generation efforts – and the quality of leads generated. Without obtaining agreement
between sales and marketing about what constitutes a qualified lead and what your Perfect
Prospect Profile is, then simply generating more of the same means working harder/faster/longer
within the same Matrix position.
Without this alignment/agreement you end up with a major problem. Here’s the bet we’ve been
making with CSOs for years: “We’ll bet you our house that right now you’ve got good people
working hard trying to get business you don’t want.” So far, we’ve been able to keep the house.
Recently a workshop attendee asked for clarification, then said, “Okay, I don’t think we do that”
(while holding out his hand for the house key). This is absolutely the first time this has ever come
up but fortunately we had a saving reply: “That’s great to hear. Are you willing to bet me your
house that you’re not doing this?” To which he quickly replied, “No way!” And so it goes.
Closer alignment between sales and marketing is key to addressing the lead generation issue,
and yet other even more pressing initiatives have shoved it from second place last year to fourth
place this year. Improving access to sales knowledge has moved up to second place and revising
the sales process has remained fixed in third place.
©CSO Insights 211

But the burning question is how are these initiatives going to be launched? How do we avoid
looking at the same list next year and bemoaning the fact that these good intentions and priorities
are not only fixed in place but have become fixtures in place while the headlong, break neck, hell
bent for leather pursuit of more continues? What will be different such that next year we will be
showcasing your team’s performance as one of the breakaway winners?
We introduced the SRP Matrix last year based on the historic data; this year we tested numerous
metrics against this framework and the model held up. So, okay, you get it. Moving over to the
right and up is a good thing. And in reviewing your own answers to this year’s survey questions
you’ve verified that the number one initiative you’ve identified will have HUGE payoff. It won’t be
easy, it won’t be cheap and it’s not an option – you’re going for it! Now what?
This report has begun the year’s dialogue by charting what needs improvement, what’s in the
way, and what others have successfully done to move up and over. Throughout 2008 we will be
continuing the dialogue with our research clients recognizing that it’s not “one size fits all.” What a
Fortune 100 firm does to improve lead generation may simply not be possible (i.e., affordable) for
a small-to-medium sized business. So we will continue by cataloging initiatives, reviewing their
varied approaches, assessing their performance impacts, and sizing their financial requirements.
Through mini-studies, and supplemental analyses by industry and company size, we will be
summarizing the stories we uncover and the insights we discover. And we will be organizing and
presenting these to our research clients in a brand new format (see Figure 4.)
Introducing: The Sales Effectiveness/Effort Grid©
Figure 4
This grid is designed to show visually the level of effort and overall impact on sales effectiveness
of various initiatives. The upper right hand quadrant represents high impact on sales
effectiveness with relatively low effort to implement (desirable). The lower left quadrant
©CSO Insights 212

represents initiatives that demonstrate low sales effectiveness but high levels of effort to
implement (undesirable). The size of each circle represents the average financial commitment to
implement the initiative in question.
Of course, there are many other initiative categories to be mapped and contenders within each
category to be evaluated. CSO Insights will be gathering data on dozens of solutions including
satisfaction ratings on vendors, impact on sales performance and other key criteria. We will be
updating and enhancing the Sales Effectiveness/Effort grid throughout the year for our research
clients.
We are excited about the challenges and opportunities that 2008 presents. We are confident that
a great many CSOs will step up to the next level of achievement, and in doing so, will lead their
organizations to do the same. And we look forward to mapping the progress on their journey to
optimizing sales performance.
Again, we wish to thank all the sales executives who shared their time and experiences, and
contributed to this extensive look into the continuing sales effectiveness challenge. In return, we
hope to have contributed to your own insights, and to have the opportunity of connecting with
each of you personally, so that we may delve even deeper into the issues raised (subscription
services are outlined on the next page).
Until then, we wish you every success in 2008!
Sell well,

(303) 530-6930 (415) 924-3500
©CSO Insights 213

CSO Insights Research Client Subscription Levels

Throughout this report we have cross-referenced various other data-based, field-validated
reports, analyses, white papers and case studies that CSO Insights produces each year. While
these are available individually on our website, www.csoinsights.com, for greater savings and
convenience they are also available to CSO Insights research clients via three levels of
subscription services.
Each level – Premium, Pro and Basic – offers extraordinary value. Please contact us (phone and
email on the previous page) if you have questions about the various publications and/or services
offered; we’ll be happy to work with you to choose the subscription level that is right for you.
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Sales Performance Optimization – 2008 Survey Results and Analysis

Sales Performance Optimization

2008 Survey Results and Analysis

Jim Dickie ♦ Barry Trailer

Other Current Research Studies by CSO Insights

Target Marketing Priorities –

Demystifying the Sales Effectiveness Challenge –

Transition in the Call Center: Sales & Service –

Available via the Research Client Portal or the website www.csoinsights.com

Other Current Insights White Papers by CSO Insights

Sales Strategy Insights

• Sales 2.0 Part 2. - Think, Think Differently, Think Again

Sales Management Insights

• Optimizing Hiring Effectiveness: Getting the Right Team on the Field

Demand Generation Insights

• Building Relationships: Turning Cold Calls into Opportunities

• Optimizing Sales Messaging

Sales Knowledge Management Insights

• Dynamic Sales Knowledge

• Sales Knowledge Management: Is Progress Being Made?

Sales Process Insights

• Sales Process Primer

• Sample Sales Process Template

Customer Relationship Management (CRM) Insights

• Improving Inside Sales Effectiveness Using Technology : Putting Web

• The Impact of CRM and Sales Process on Sales Effectiveness

Available via the Research Client Portal or our website, www.csoinsights.com

Sales Performance Optimization

2008 Survey Results and Analysis

Jim Dickie ♦ Barry Trailer

Sales Mastery Press

Copyright © 2008 CSO Insights

Terms & Conditions

Sales Force Demographics..................................................................................................... 11

• Percentage of Sales Force Achieving Quota............................................................. 12

• Percentage of Overall 2007 Revenue Target Achieved ............................................ 14

• Percentage of Company Revenues by Sales Channel Type..................................... 16

• Percentage of Company Revenues by Customer Type ............................................ 18

• Primary Sales Focus................................................................................................... 20

• Position in the Marketplace........................................................................................ 22

• Level of Relationship with Customers....................................................................... 24

• Size of Average Annual Quota ................................................................................... 26

• Sales Rep Variable Compensation Package Breakdown .......................................... 28

• Impact of Incentive Plans on Sales Rep Behavior..................................................... 30

• Planned Sales Force Size Changes Over the Next 12 Months.................................. 32

• Current Annual Sales Rep Turnover Rates................................................................ 34

• Experience Profile of New Sales Rep Hires............................................................... 36

• Average New Sales Rep Ramp-up Time .................................................................... 38

• Percentage of Revenues of Generated by Top Reps ................................................ 40

• Sales Rep Time Allocation ......................................................................................... 42

Sell Cycle Analysis.................................................................................................................. 45

• Average Deal Size....................................................................................................... 46

• Length of Average Sell Cycle..................................................................................... 48

• Number of Calls Required to Close a Deal ................................................................ 50

• Lead Generation Analysis .......................................................................................... 52

• Percentage of Leads that Progress to an Initial Customer Discussion.................... 54

• Percentage of Initial Discussions that Progress to a Presentation.......................... 56

• Percentage of Presentations Resulting in a Sale ...................................................... 58

• Percentage of Proposals Resulting in a Sale ............................................................ 60

• Percentage of Deals that Close as Forecast.............................................................. 62

• Outcome of Forecast Deals........................................................................................ 64

Sales Strategy Development Assessment ............................................................................. 67