The sales secrets of high-growth companies
What distinguishes sales organizations at fast-growing companies from
their lagging peers? In a wide-ranging survey of more than 1,000 companies, we
unearthed five meaningful differences:
1. Commitment
to the future
That the world is changing ever more
quickly may be a cliché, but that makes it no less true: all sales leaders know
that they need to anticipate changes that could turn into opportunities or
threats. Yet the best leaders move beyond acknowledgement to commitment.
They make trend analysis a formal part of
the sales process through systematic investments of time, money, and people.
Building and sustaining the capability to take a forward-looking view of the
market is not easy. In discussions with more than 200 sales leaders while
researching our new book, Sales Growth, two common characteristics
emerged: the mind-set of sales leadership and resource commitment.
Sales leaders must consistently monitor
the macro-environment in search of sales opportunities, no easy task given the
relentless pressure to hit near-term targets. Forward planning must be part of
someone’s job description—not just part of top management’s lengthy to-do
list—with sufficient resources to take advantage of the best opportunities.
Companies have to be willing to take risks now to create sales capacity long
before the revenue will materialize. More than half of the fast-growing
companies1we
analyzed look at least one year out, and 10 percent look more than three years
out.
After planning, sales leaders aren’t
afraid to put their money where they think the growth will be: 45 percent of
fast-growing companies invest more than 6 percent of their sales budget on
activities supporting goals that are at least a year out—a significant
commitment in an environment where sales leaders fight for each dollar of
investment.
2.
Focus on key aspects of digital
Successful brands don’t just “do digital”;
they use their full arsenal of capabilities to massively increase the
effectiveness of their sales force and to transform the customer buying
experience to be “digital first.” It pays off: digital channels provided at
least a fifth of 2015 revenues for 41 percent of the fast-growing companies we
surveyed—both business-to- business and business-to-consumer—compared with just
31 percent at slow-growing companies.
This trend is only becoming more
important, as almost two-thirds of all US retail sales by 2017 will involve
some form of online research, consideration, or purchase.2
When it comes to customer experience,
leading organizations are building out digital routes to market or augmenting
traditional direct or indirect sales with digital. For traditional software
companies, the focus on SaaS-based products is driving a change toward a
digital sales experience where they discover, demo, and trial, all within a few
clicks online. Many industrial companies are seeing their products also sold in
external marketplaces, which is prompting them to build out their own
e-commerce platforms to directly shape the customer experience.
Sales leaders are especially strong at
harnessing digital tools and capacities to support the sales organization.
Fast-growing companies are more effective than slower-growing ones at using
digital tools and capabilities to support the sales organization (43 percent
versus 30 percent). They tend to focus on three fronts:
First, they arm sales teams with digital
tools that can quickly deliver relevant and usable insights. Second, they treat
partners as an extension of the sales force and invest in collaboration tools
to improve the flow of data between organizations. Third, they recognize the
potential for big micromarket or macrotrend analyses to improve planning and
capture opportunities most effectively. As the technology emerges, they are
making targeted investments in tools, technologies, and talent to make the most
of these opportunities. Success in digital comes from fanatical
optimization—not as a one-off project, but as a continuous process. It comes
from harnessing mobile technologies to drive growth, understanding how
customers use and switch between the mobile channel and other channels. And it
comes from integrating digital into a great omnichannel experience that spans
marketing to post-purchase.
3.
Harnessing of the full range of sales analytics
Only now is the promise of advanced
analytics catching up to the hype. Take customer analytics. Companies that use
it extensively see profit improvements 126 percent higher than competitors who
don’t. And when it comes to sales improvements through the extensive use of
advanced analytics, the difference is even larger: 131 percent.3
The value of advanced analytics is wide
ranging, but where sales leaders excel against their peers is in making better
decisions, managing accounts, uncovering insights into sales and deal
opportunities, and sales strategy. In particular, they are shifting from
analysis of historical data to being more predictive. They use sophisticated
analytics to decide not only what the best opportunities are but also which
ones will help minimize risk. In fact, in these areas three quarters of
fast-growing companies believe themselves to be above average, while between 53
and 61 percent of slow-growing companies hold the same view.
But even among fast-growing companies,
only just over half—53 percent—claim to be moderately or extremely effective in
using analytics to make decisions. For slow-growing companies, it drops to a
little over a third. This indicates that there remains significant untapped
potential in sales analytics.
4.
Investment in people
A rigorous focus on sales-force training
is a clear differentiator between the fast- and slow-growing companies we
surveyed. Just under half the fast growers spend significant time and money on
sales-force training, compared to 29 percent of slow growers. There’s room for
improvement, though. Among fast growers, just over half believe their
organization has the sales capabilities it will need in the future, while a
third of the slow growers feel similarly equipped. As few as 18 percent of fast
growers think they excel at pipeline management, and even in the most
successful area—understanding specific customer needs—only 29 percent claimed to
be outstanding.
What is notable from our research,
however, is that fast growers are committed to improving sales talent and
performance. The head of sales at a North American consumer-services company,
for example, tried a new approach to improving sales performance after years of
fruitless initiatives. Instead of focusing solely on what the sales force had
to do, the program also devoted significant attention to building the talents
and capabilities to enable them to do it, making a substantial investment in
teaching skills and enforcing their use with specific goals. The result? A 25
percent improvement in rep productivity across all regions within 18 months.
More impressive still, the gains stuck, and two years later performance was
still improving.
5.
Marriage of clear vision with leadership action
Two-thirds of fast-growing companies
undertook a major performance improvement over the previous three years, and 84
percent considered it successful or very successful.
Sales leaders at these organizations said
the two most important factors that contributed to that success were management
articulation of a clear and consistent vision and strategy, followed by
leadership commitment.
Articulating the vision should be simple.
The chief executive officer of an emerging-markets telecommunications firm, for
example, announced a “3 × 3 × 3” growth aspiration: three years to expand
beyond its home country, three years to expand beyond its region, and three
years to become a leading global brand. Besides being simple, the aspiration
was bold, specific, and easily measurable.
No sales transformation will work without
steadfast support from the very top. Only a committed leader can override
internal politics, see the big picture, and focus on the best solution regardless
of past practices. Sometimes, the commitment can be very personal. For example,
the head of sales at another telecom firm recognized how fundamental customer
experience was for success. At the same time that he controversially clamped
down on aggressive sales techniques that had a negative effect on customer
experience, he proposed to his CEO that customer satisfaction ratings should
determine 25 percent of his variable pay.
Sales leaders face a dizzying array of issues and
opportunities to manage, often at speeds that seemed unimaginable even a few
years ago. But by focusing on what really matters, sales leaders can break away
from their competitors.
By Mitra Mahdavian, Homayoun Hatami, Maria Valdivieso, and Lareina
Yee
http://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-sales-secrets-of-high-growth-companies?cid=other-eml-alt-mip-mck-oth-1605
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