In a market where buyers call the shots, sales executives everywhere are increasingly struggling to meet their revenue and profitability goals.
“CEO’s are investing more than ever in their salesforces, but results aren’t improving” reports Lynette Ryals, professor of strategic sales and account management at the U.K’s Cranfield School of Management and Iain Davies, a lecturer at the University of Bath.
A Ryals and Davies study of 800 business development managers, account managers, and telesales people from a cross section of U.K. blue chip companies’ published in a 2010, Harvard Business Review paints a bleak picture of selling in a choice saturated, Googledriven world:
Only 9.1% of sales meetings result in a sale.
Just 1 out of 250 salespeople exceed their targets.
$1,760 of profit per sale is needed just to cover the cost of failed sales meetings,
assuming that the meeting cost, on average, $16019.
Salesforces with these levels of productivity are unsustainable.
“An entirely new approach to sales is needed”
Global consulting firm Accenture’s 2014 global review of sales performance, Powering Profitable Sales Growth declared: “sales productivity is falling”. The survey conducted in collaboration with CSO insights a leading research and benchmarking organization found reps achieving quota dropped 9 percent in 2014. And that came after sales quotas had been lowered in the previous year.
The fall in productivity came after Gartner Group reported sales organizations had invested over $30 billion in the previous 3 years on CRM and related technologies. It is little wonder Accenture found that investments in new technologies were “not producing the results many Chief Sales Officers (CSOs) expected.”
Accenture’s analysts found “sales processes and systems are at breaking point”. Their conclusion: “an entirely new approach to sales is needed”. 20