IDC sales productivity framework overview july 2009

3. July 8, 2009© 2009 IDC 3 Focus on Sales Productivity Some Basic Precepts:  Success in complex B2B selling requires both “art” and “science” – The ability of the rep to build relationships is the “art of selling” – The processes that support the rep’s activities is the “science of selling”  Behavioral (activity-based) measures are useful, but provide only partial diagnostic view  Achievement (success-based) measures provide detailed, sequential view of performance  The “right” diagnostic measures support good prescriptive analysis – literally “telling the story” of what’s going on and what needs to be changed  The “best” diagnostic sales measures encompass both sales and marketing contributions

4. July 8, 2009© 2009 IDC 4 What is Sales Productivity? Sales productivity is defined as the effectiveness and efficiency of the sales organization in moving opportunities through the sales cycle Source: IDC 2009 IDC Proprietary

5. July 8, 2009© 2009 IDC 5 The IDC Sales Productivity Framework Sales Productivity Assessment (sales performance) Sales Productivity Levers (process improvement) + = Increased Revenues & Profitability Sales Cycle by Stage Sales Productivity Levers Source: IDC 2009 IDC Proprietary

6. July 8, 2009© 2009 IDC 6 Key Sales Productivity Metrics Components of Sales Productivity: • Sales Effectiveness – the ability of reps to move specific opportunities forward to the mutual satisfaction of both parties. Effectiveness is measured by conversion rates for each stage of the sales cycle. Enhancements to this metric incorporate the qualifiers of deal "quality" and customer satisfaction scores • Sales Efficiency – the rate at which a sales person or team moves individual opportunities from initiation to one of several defined conclusions (closed, lost, no decision, returned to marketing for additional nurturing, abandoned). Sometimes referred to as “Sales Velocity” • Sales Volume – the number of open deals in a given period • Sales Revenue – the revenue delivered by the sales person or team in a given period • Sales Profitability – the profitability of the sales person or team in a given period. Measured as SBR (costs/revenue). Sales Cycle by Stage Source: IDC 2009 IDC Proprietary

7. July 8, 2009© 2009 IDC 7 Key Sales Productivity Metrics Stage 1 32 days Stage 2 27 days Stage 3 28 days Stage 4 42 days Stage 5 24 days 35% 65% 45% 55% 75% $ Effectiveness = Conversion Rate by Stage Efficiency = Days in Stage Sales Volume Sales RevenueSales ProfitabilitySource: IDC 2009 IDC Proprietary

8. July 8, 2009© 2009 IDC 8 Sales Productivity Levers Sales Management Sales Enablement Customer Intelligence Sales Methodology Talent Management The Five Levers of Sales Productivity Source: IDC 2009 IDC Proprietary

9. July 8, 2009© 2009 IDC 9 Sales Productivity Sales Management Sales Enablement Customer Intelligence Sales Methodology Talent Management  Purchase & Relationship History  Share of Wallet  Role-based Intelligence  Company-based Intelligence  Industry/Vertical Intelligence ToolsMetrics & Reporting The IDC Sales Productivity Framework Sample Processes  Asset Creation, Management & Delivery  Governance  Delivery Vehicle Selection & Management  Tribal Knowledge  Staff Planning & Recruiting  Hiring & On-boarding  Training & Development  Retention, Repositioning & Replacement  Compensation  First Line Sales Manager & Coaching  Strategy & Planning  Performance Management  Quality & Change Management  Forecasting/Quota Setting  Pipeline Management  Org Structure/Coverage Model/Channel Strategy  Sales Cycle Stages & Motions  Call Planning  Account Planning  Opportunity Management Source: IDC 2009 IDC Proprietary

10. July 8, 2009© 2009 IDC 10 Sales Productivity Sales Management Sales Enablement Customer Intelligence Sales Methodology Talent Management  Customer Satisfaction  Customer Retention  Share of Wallet  Netpromoter Scores ToolsMetrics & Reporting The IDC Sales Productivity Framework Sample Metrics  Rep Time Allocation  Asset Delivery, Utilization & Impact  Asset Ratings  Asset Time-to-Market  Hiring Pipeline  Employee Satisfaction  Employee Tenure & Retention  Training Usage & Certifications  Quota Attainment & MBO performance  Revenue/Margin Attainment  Pipeline Ratios – Size & Shape  Manager Time Allocation  Span & Control  Sales Velocity & Conversion by Stage  Deal Quality – Size, Service Attach Rate, Growth/Erosion  CRM Data Integrity  Activity Mapping Source: IDC 2009 IDC Proprietary

11. July 8, 2009© 2009 IDC 11 Assessment Data Suggests Specific Levers (a sampling) Data Output Talent Management Sales Management Sales Methodology Sales Enablement Customer Intelligence Stage 1 duration, conversion rates Rep quality Coaching support The “right” tools? Poor CI, poor leads Sales Volume Rep skills Coaching support Tools too complex? Enough leads from marketing? Sales Profitability Compensation driving behaviors Too many resources The “right” customers? Customer Satisfaction Comp, skills issue? Coaching support Conducting discovery? Portfolio selling, service attach rates Rep quality, Training Coaching support Portfolio selling tools Customer requirements Deal close rates Training Coaching support Source: IDC 2009 IDC Proprietary

14. July 8, 2009© 2009 IDC 14 Recent Sales Advisory Research Sales Operations Best Practice Series  Best Practices in Sales Performance Improvement: The Role of the First Line Sales Manager (IDC #218087, April 2009)  Best Practices in Sales Performance Improvement: Global Inside Sales Strategies (IDC #216773, February 2009)  Best Practices in Sales Performance Improvement: Sales Productivity Metrics and Key Performance Indicators (IDC #213031, July 2008)  Best Practices in Sales Performance Improvement: The Changing Nature of Inside Sales (IDC #210353, February 2008)  Best Practices in Sales Performance Improvement: Outsourcing Delivers High-Intensity Leads (IDC #213848, August 2008) Foundation Studies  The IDC Sales Productivity Framework: A Structured Approach to Evaluating and Managing a Complex Sales Organization (forthcoming)  The State of the Art in Sales Enablement: An Intensive Study of Current Practices (IDC #219182, July 2009)  Sales Enablement 203: A Framework for Driving Business Growth (IDC #TB20080619, June 2008)  IDC’s Worldwide Sales and Marketing Taxonomy, 2008: A Blueprint for Cost Control (IDC #211900, Apr. 2008)

15. July 8, 2009© 2009 IDC 15 Recent Sales Advisory Research End User Research  Vertical Leadership Survey: Making the Grade (IDC #212817, July 2008)  An Inconvenient Truth: The Role and Value of Information in the IT Buying Process (IDC #209985, January 2008)  Winning the Midmarket: Cost-Effective Strategies to Improve Sales Performance (IDC #212165, May 2008) Tech Sales Insights and End User Research  Knock Knock – It's the Fourth Quarter (IDC #219180 , July 2009)  Don’t Understand Sales Enablement? You’re Not Alone (IDC #TB20090127, Jan, 2009)  Sales and Marketing Organizational Transformation (IDC #213915, August 2008)  Account Planning for the 3.0 Customer (IDC #212166, May 2008)  Sales Enablement – Empowering the Sales Rep (IDC #209669, Dec. 2007)

18. July 8, 2009© 2009 IDC 18 Sales Productivity Sales Management Sales Enablement Customer Intelligence Sales Methodology Talent Management  Sales Operations  Sales  Marketing ToolsMetrics & Reporting The IDC Sales Productivity Framework Organizational Engagement  Sales Operations  Marketing  Information Technology  Sales Operations  Sales  Training  Human Resources  Sales Operations  Sales  Executive Committee  Sales Operations  Training Source: IDC 2009 IDC Proprietary

19. July 8, 2009© 2009 IDC 19 Sales Productivity Sales Management Sales Enablement Customer Intelligence Sales Methodology Talent Management  Databases & BI Tools  Balanced Scorecard  Satmetrix  LucidEra  Lattice Engines ToolsMetrics & Reporting The IDC Sales Productivity Framework Tools  Savo Group  Kadient  Ribbit  Stratascope  Google  Job Boards – monster.com, Career Builder, etc.  Human Resource Software  Compensation Management & Planning Software  Salesforce.com  Oracle  SAP  Microsoft CRM  LucidEra  Xactly  Balanced Scorecard  SPIN Selling  Customer Centric Selling  Miller Heiman  The TAS Group Source: IDC 2009 IDC Proprietary

IDC sales productivity framework overview july 2009

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