Optimizing Inside - Telesales Effectiveness: Leveraging Web Conferencing

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This new white paper explores how Web conferencing enables inside sales and telesales reps to effectively conduct all aspects of the selling process - from full product presentations to deal …

This new white paper explores how Web conferencing enables inside sales and telesales reps to effectively conduct all aspects of the selling process - from full product presentations to deal negotiations - without a travel budget.

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  • 1. Call Center/Telesales Effectiveness Insights – 2005 State of the Marketplace Review Optimizing Inside/Telesales Effectiveness Leveraging Web Conferencing Jim Dickie Barry Trailer Partner, CSO Insights Partner, CSO Insights Boulder, Colorado Corte Madera, California
  • 2. Copyright © 2008 CSO Insights All Rights Reserved. Terms & Conditions Printed in the United States of America. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be produced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the authors. For additional information, contact CSO Insights, 4524 Northfield Court, Boulder, CO 80301, Phone: (303) 521 4410, email: jim.dickie@csoinsights.com. The reader understands that the information and data used in preparation of this report were as accurate as possible at the time of preparation by the publisher. The publisher assumes no responsibility to update the information or publication. The publisher assumes that the readers will use the information contained in this publication for the purpose of informing themselves on the matters that form the subject of this publication. It is sold with the understanding that neither the authors nor those individuals interviewed are engaged in rendering legal, accounting, or other professional service. If legal or other expert advice is required, the services of a competent professional should be sought. The publisher assumes no responsibility for any use to which the reader puts this information. All views expressed in this report are those of the individuals interviewed and do not necessarily reflect those of the companies or organizations they may be affiliated with, including CSO Insights, Insight Technology Group, or Sales Mastery. All trademarks are those of their respective companies.
  • 3. Optimizing Inside/Telesales Sales Effectiveness – Leveraging Web Conferencing EXECUTIVE SUMMARY As we continue weathering the current economic storm we are seeing companies, large and small, struggling with what to do now! CSO Insights recent Inside/Telesales Sales Performance Optimization study found that many firms are looking to develop an inside sales team or improve the effectiveness of their existing telesales reps in order to achieve their organization‟s revenue goals. In this white paper we will initially explore the fact that not all inside sales teams are executing the same. Our studies found that reps working for very large companies (>$1B in revenue) were outperforming their peers at small firms (<$10M). Deeper analysis of the study data and benchmarking a select group of inside sales teams found that the differences do not need to exist. The reps at larger firms are not inherently “better” than reps at smaller firms, but they are often working “smarter” via the use of technology and knowledge. We will show examples of how, through the use of web conferencing tools (the adoption of which is much higher in large companies than small), sales reps can more effectively execute many of the key aspects of selling, and thus outsell their peers who are relying totally on the phone and email to communicate with customers and prospects. Questions or comments regarding the findings presented in this white paper should be directed to Jim Dickie, (303) 521-4410, jim.dickie@csoinsights.com or Barry Trailer, (415) 924-3500, barry.trailer@csoinsights.com. © CSO Insights - 2008 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.
  • 4. Optimizing Inside/Telesales Sales Effectiveness – Leveraging Web Conferencing INTRODUCTION Today, as businesses look to maximize revenues, it is not a question of what channel to leverage, but every channel. Our annual sales performance studies show that direct field-based sales organizations continue to carry most of the revenue generation burden. But more and more companies are also turning to inside/telesales organizations to cost- effectively carry part of the load. In looking at the performance of companies with revenues of <$10M, we found that 38% of those companies reported generating at least part of their revenues via inside/telesales. Of that group, 49% reported that their inside/telesales organization accounted for at least 25% of their total revenues and one-third of that group reported the number was at least 50% or greater of total sales. To better understand the role of telesales, CSO Insights recently completed a survey of nearly 500 companies worldwide, focusing on how these firms were leveraging inside/telesales organizations, what challenges their people faced and how they were successfully dealing with those issues. The initial focus of the survey and our project benchmarking was to understand why companies, and especially small businesses, are turning more and more to telesales as a viable approach. There are several advantages to be gained by buying and selling over the phone. First, you have worldwide client access. We recently found an example of a software company in Australia selling to clients in China without ever sending a field rep out to see them. Second, you can also have a lower cost per sales call, because as you remove the element of travel from the selling equation, you can achieve more calls per day. The average inside/telesales person may be able to reach out and contact 8 to 15 clients per day while a field sale rep may only be able to manage 1 or 2 appointments. Third, we are also seeing a lot of advantages in team selling optimization, where the inside/telesales reps identify opportunities not just for themselves, but when they find a deal big enough, they pass it on to a field based rep. But there are challenges that exist, as well. How do you go about doing a comprehensive needs analysis, how do you fully present the potential of your solutions, how do you negotiate a deal in a timely fashion, etc., if you are just talking to someone over the phone? This whitepaper will explore techniques and technologies that larger companies are using to effectively close more business via their inside/telesales group and how these same approaches could be and should be used by smaller firms to optimize sales performance. INSIDE/TELESALES IS STILL SALES Selling is selling whether you are selling face-to-face or voice-to-voice. The sales process remains the same: you have to go through and surface the client‟s needs; you © CSO Insights - 2008 2 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.
  • 5. Optimizing Inside/Telesales Sales Effectiveness – Leveraging Web Conferencing then have to effectively match your product offerings to those requirements. Realizing that you are going to encounter competition, you‟ve got to be able to explain how you are unique from any of other offerings out in the marketplace. You also have to create a sense of urgency to get them to act now, and of course you need to sell value so you can avoid excessive discounting somewhere down the road. All of these things are challenging enough when we are sitting across the desk from someone. We can read their body language; we can try to interact with them. But how do we do those things effectively over the phone? Going back to our recent study we found that all firms (big or small) selling via the phone go through the same steps of moving a prospect all the way through the sales cycle. However, in taking a close look at how large companies and small companies handle these tasks we found a major difference in their effectiveness. For example, consider Figure 1. Here we compare the percentage of times an inside sales rep is able to convert a presentation to a sale for companies with sales of <$10M and >$1B. Inside Sales Conversion Rates: Presentations to Sales 60% 53.1% 50% 40% 40.6% 35.9% 33.3% Firms >$1B 30% 30.8% Firms <$10M 20% 10% 6.3% 0% <10% 10% - 25% >25% Figure 1 There is a stark different in sales performance. But what is causing it? Are the sales reps at the bigger firms better? Are they luckier? Are they just working harder? Doing a comparison between these two groups the data shows there is no significant difference in the types of reps that are hired. What we are seeing is that most companies © CSO Insights - 2008 3 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.
  • 6. Optimizing Inside/Telesales Sales Effectiveness – Leveraging Web Conferencing are trying today to go out and hire people who not only have experience in sales, but have industry experience, as well. We also don‟t see a big difference between large and small firms in sales process adoption. An increasing number of both large and small companies are investing in sales training to make sure that all their sales reps have the skills to go out and execute. But the data does show a difference in the tools that are used to sell. So let‟s explore that in more depth. OPTIMIZING YOUR TIME ON THE PHONE A key difference between these two groups is the fact that companies >$1B are not just using the phone to sell, they are also using web conferencing capabilities to enhance the way they guide a client through the sales process. In our recent survey, we found that 65% of >$1B companies are leveraging web conferencing, which is 55% higher then the figure reported by firms with revenues of <$10M. Going back and looking at the >$1B group, we asked those firms who track their selling success to assess the impact that web conferencing was having on their inside sales teams‟ ability to conduct remote presentations and demos. We received the following responses as shown in Figure 2. Web-based Presentations/Demos Impact on Inside Sales Performance No Impact 7.0% Some Impact 20.6% Significant Impact 72.4% Figure 2 So how does web conferencing improve and/or enhance the ability of inside sales reps to engage prospects and customers? Let‟s take a look at some specific examples of what a sales rep might encounter during the sales cycle. © CSO Insights - 2008 4 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.
  • 7. Optimizing Inside/Telesales Sales Effectiveness – Leveraging Web Conferencing Comprehensive Needs Analysis One of the first things that every sales rep has to do when beginning a sales cycle is conduct a thorough needs analysis of a prospect. For an inside sales rep this starts with setting up a phone call and asking questions. But are they really engaging with the customer? Is the prospect really with the sales rep? Are they tracking and understanding the questions being asked? CSO Insights recently benchmarked a networking services provider. One of the sales tools that they developed was an automated needs analysis system that would guide the rep through a series of up to 42 questions to ask the customer. By capturing the answers to each question, the sales rep would be in a great position to come back with a comprehensive proposal about the types of networking services to propose, how the systems would integrate with existing solutions, how much the costs would be, etc. As opposed to asking all 42 questions on the phone and expecting the customer to track along with them, these reps use web conferencing tools to open up an online meeting with the prospect. With web conferencing, the prospect is actually able to see the sales reps‟ desktop. The sales rep brings up the needs analysis survey tool and goes through it question by question with the customer. So now the customer is not only hearing the words, but seeing the questions in front of them and viewing the various options that they have. The needs analysis becomes in interactive dialog with the rep. Based on the fact that the system is collecting the responses, it becomes much easier to change customer input. For example, if we go down a couple more questions and the customer says, “You know the network demand I gave you wasn‟t right. We probably have a network demand of 35% versus 30%, how would that impact response time?” The sales person can easily go back to that specific question, change the answer, recalculate the respond time figures for the prospect and then proceed through the needs analysis. The company found that by doing an interactive needs analysis they solved three problems. First, they were able to get accurate information up front. When using solely the phone approach, reps sometimes asked a question that was unclear or misconstrued an answer, resulting in having to go back one or two more times to the customer to clarify information. When the prospect was seeing the data entered into the system in real time, they corrected any errors upfront. Second, they were able to surface objections and questions more effectively. As the rep and the prospect watched the network literally being built before their eyes, the dialogue during the call became more engaging, as the client would see something change in the model and ask, “Why did that happen?” Third, they saw a much faster turnaround in getting the proposal out to the client. By virtue of the fact they were able to do the needs analysis directly with the prospect, at the end of most web conferencing calls the sales reps were able to immediately email out the proposal package to the client, which increased their close rate by 5%. © CSO Insights - 2008 5 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.
  • 8. Optimizing Inside/Telesales Sales Effectiveness – Leveraging Web Conferencing Virtual Interactive Presentation/Demo Let‟s take a look at another example. In many cases during the sales cycle we need to do a presentation to a client. As opposed to emailing out the slide deck and then walking the prospect through each slide, a sales rep can use a web conferencing tool to open up a session with a prospect and again have the client actually see their desk top. This allows the sales rep to walk through the PowerPoint presentation with the client interactively. This also provides a number of advantages. For example, if a client asks a question that might be addressed in material from another PowerPoint presentation, it is quick and easy for the sales rep to bring up that presentation. With this approach, there is not a delay in emailing the PowerPoint presentation to the prospect. Plus, other supporting collateral pieces such as case studies can easily be shared with the client. Additionally, by turning this into a much more dynamic and interactive session, the client can guide the sales rep through just the steps they need to complete to move forward in their “buy cycle,” instead of having to sift through the entire presentation one slide at a time. Contract Negotiations What about at the end of the sales cycle? We‟re down to the last day of the quarter, we‟re trying to close a deal and we still have several other conversations that have to happen before the deal is done. One of the things we observed when benchmarking the sales process of a laser manufacturer was that the majority of their contract negotiations between their lawyers, the customer‟s lawyers, the economic buyer on the customer„s side and their sales management, etc., take place via web conferencing. The appropriate players from both firms were able to conduct on an online meeting during which they could display the current version of the contract, go through it section by section, and item by item. By using web conferencing, everybody could see the changes being made dynamically as they negotiated. At the end of the meeting they had the completed agreement which could be executed by the customer and sent to the vendor immediately. SO WHAT’S THE ROI? So how does this impact the overall sales performance? In looking again at companies that are leveraging web conferencing, we see a number of advantages. First, they have lower no decision rates; they are able to do a much better job of engaging and educating their clients all the way through the sales cycle by having web-based meetings versus just phone calls. They also experience shorter sales cycles by ensuring that multiple things can get done in one or two virtual meeting conversations versus emailing documents back and forth. It is also a good way to get new reps up to speed faster because they can invite other people to be a part of those conferences. For example, they can invite a system © CSO Insights - 2008 6 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.
  • 9. Optimizing Inside/Telesales Sales Effectiveness – Leveraging Web Conferencing engineer to deliver part of the presentation, they can have their sales manager online to handle objections, they can bring in the CFO to negotiate terms and conditions; all of which can be done virtually with the sales reps located in New York, the client based in San Francisco, and the other persons helping in Dallas. CONCLUSION So let‟s take a look at where we are today. We are in very tight economic times, we‟re seeing a lot more competition than we‟ve ever seen, and we‟re seeing higher demands from customers and increasing expectations. So, we‟ve got to be able to execute our sales strategies very effectively and very consistently. In looking forward to how we are going to cost-effectively maximize all of the revenue potential within a territory, for most firms inside/telesales will be playing an increasingly important role in sales as they try to enter new markets, cost-effectively sell mature parts of the product lines, go after smaller accounts and smaller deal sizes which would be cost prohibitive to call on directly, etc. For companies looking to optimize the efficiency of this channel, web conferencing offers a cost-effective, easy-to-implement way of maximizing how we sell. What we see today is that web conferencing is not becoming an option, it is becoming a requirement of doing business if you are expecting to compete effectively in today‟s markets. The next question: Will you make this first move or will it be done by one of your competitors? Based on the analysis of the data, we think the business case is compelling enough to say that if you are the first to move, you are going to enjoy a better 2009 than your peers. If you want to know more about this topic, feel free to give us a call. Jim Dickie Barry Trailer (303) 521-4410 (415) 924 3500 jim.dickie@csoinsights.com barry.trailer@csoinsights.com © CSO Insights - 2008 7 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.