Sales performance management - how does benchmarking help me

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How a VP of Sales used sales performance management and benchmarking data to meet the board's demand to close the gap on sales growth compared to competitors. A presentation by Sales Benchmark Index.

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  • In this case study, the board had given the VP of Sales 18 months to close a revenue growth gap compared to industry peers. Sales Benchmark Index acted as a sales consultant. After reviewing three potential options, the sales benchmarks identified the best option to achieve the sales goals.
  • The client had lagged behind their competitors in revenue growth by 30%. Wall Street Analysts had cited this as a concern and reason for down grading the stock. The board wanted action but was unwilling to fund additional heads as the cost line had to be held at present levels. The VP of Sales was given 18 months to increase the effectiveness of the sales organization.
  • Sales performance could be improved by executing one of the following choices:Upgrade the sales force talentIncrease Lead GenerationSegment Accounts to focus on best opportunitiesActing as the sales consulting firm, we worked through the 3 alternatives using benchmarks to identify which choice provided the most impact.
  • The sales team was submitted to a thorough talent management assessment. The goal was to determine if a significant overhaul of the sales organization structure would contribute to achieving the sales goals set out by the board.The sales team was found to be heavily weighted towards A and B players. More importantly, the recruiting and ramp time would take at least nine months. This did not provide enough certainty that the sales goals could be achieved in the 18 month time frame. It seems counter-intuitive that so many A/B players could exist and yet sales growth trailed the competition. In a moment, we will disclose the root cause of the lagging sales growth.
  • Lead generation is always an option to consider when we want to increase sales growth. Data from the sales analysis and review of lead generation pipelinecontribution indicated the client was not performing at industry average benchmark levels. While improving lead generation would help the sales force achieve their sales goals, it would only contribute an increase of 4% in total number of closed deals. Sales performance management combined with benchmark data ruled this out as an answer to the problem.
  • Further sales analysis identified that only 10% of all closed deals where in the top quartile of the largest dollar size deals. Other sales performance management reports indicated that the customers in the top quartile of deal size where twice as likely to experience additional up-sell and cross-sells. Benchmark data also noted that the competitors averaged at least 35% of their closed deals in the top quartile of deal size. The analysis of the client’s customers in the top quartile of deal size identified common characteristics such as F1000, centralized decision making and inclusion in the following 3 verticals: Long distance carriers Wireless carriers Telco service aggregatorsAlthough the sales team contained a large number of A and B players, they were unknowingly selling to a large number of companies that didn’t fit the profile of their best revenue producing customers. This insight coupled with the sales performance management benchmarks provided the answer we had been seeking.
  • Focusing the sales force on the right accounts via account segmentation was the best option for this client.It offered the highest potential, required no additional headcount and allowed the lead generation team to focus their efforts exclusively on the desired segment.Sales performance management could now be directed at driving and reporting on progress towards this ideal segment.
  • A thorough sales analysis of historical sales identified the ideal segment by using existing revenue base and growth potential. Each region was analyzed for potential and the accounts within each region were selected for targeted sales efforts.
  • The client was able to align their sales performance management and sales strategy. It was driven into their CRM, Salesforce.com, for reinforcement and reporting.
  • Contact us if you would like to understand how you can align your sales performance management with your sales goals and sales strategy.Email - info@salesbenchmarkindex.comPhone - 1-888-556-7338Web: http://www.salesbenchmarkindex.com
  • Sales performance management - how does benchmarking help me

    1. 1. Sales Performance ManagementHow Does Benchmarking Help Me?<br />
    2. 2. Overview<br /><ul><li>Board wants revenue gap closed within 18 months
    3. 3. 3 options can address the challenge
    4. 4. Benchmarking identifies the best option </li></li></ul><li>The Challenge<br /><ul><li>Revenue growth has lagged versus competitors by 30%
    5. 5. The Board wants to close the gap
    6. 6. More headcount is not an option
    7. 7. 18 month window to show results</li></li></ul><li>Choices<br /><ul><li>Upgrade the sales force talent
    8. 8. Increase Lead Generation
    9. 9. Segment Accounts to focus on best opportunities</li></li></ul><li>Talent Review<br /><ul><li>50% A Players*
    10. 10. 20% B Players*
    11. 11. 30% C Players*
    12. 12. Ramp time to Quota for new hire = 9 months</li></ul>Assessment:<br />Recruiting and ramp time will take too long to achieve results in 18 months<br />C Player upgrade will not close the gap<br />* Benchmark based on 18 Competencies & 9 Accountabilities <br />
    13. 13. Lead Generation<br /><ul><li>Industry avg. performance is 30% pipeline contribution*
    14. 14. LG team contributes 20% to pipeline
    15. 15. Pipeline to close conversion is 40%</li></ul>Assessment:<br />Raising contribution to Industry average only provides 4% increase in closed deals<br />Talent upgrade and additional process improvements require at least 9 months to take hold<br />* Benchmark based on Industry Lead Generation Study 2011<br />
    16. 16. Account Segmentation<br /><ul><li>10% of closed deals are in top quartile of dollar size
    17. 17. Upsell/Cross-sell rate is 2x for top quartile of deal size
    18. 18. Competitors avg. 35% deals in top quartile of deal size</li></ul>Assessment:<br />Customers in top Quartile of deal size reflect specific characteristics (F1000, 3 Verticals, Centralized decision process)<br />Increasing # of deals in top quartile of deal size closes the gap<br />Upsell/Cross-sell rate amplifies the potential<br />* Benchmark based on win-loss analysis and competitor public statements (2010-2011)<br />
    19. 19. Best Option<br />Account Segmentation:<br /><ul><li>Offers highest potential impact
    20. 20. Requires no adjustment to head count
    21. 21. Sharpens the lead generation focus</li></li></ul><li>Segmentation Analysis (Sample)<br /><ul><li>Revenue Base Grade (A-D)
    22. 22. Growth Potential (1-4)</li></li></ul><li>Segmentation Recommendation<br /><ul><li>Prioritize pursuit of high revenue base accounts
    23. 23. Pursue 1’s first to realize the most sales potential
    24. 24. Account Segmentation drives activity in Salesforce.com</li></ul>#1 Priority via Growth Potential<br />#2 Priority<br />#3 Priority<br />
    25. 25. Learn More<br />Contact us to learn more about how Benchmarking can help you find the best solution to your sales challenge.<br />Email - info@salesbenchmarkindex.com<br />Phone - 1-888-556-7338<br />Web: http://www.salesbenchmarkindex.com<br />

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