Selling and Sales Management in the Complex Selling Environment
Executive Summary of the 2008 Miller Heiman Sales Best Practices Study
Every year for the past five years, Miller Heiman has surveyed sales professionals—executives, leaders and representatives—to better understand what differentiates the most effective sales organizations. This global study contains the input of more than 17,000 participants to date and is considered the world's largest ongoing study of complex, business-to-business selling and sales management practices.
The results of the study have proven to be a valuable benchmark for companies to measure themselves against the best practices of the industry. The study uncovers the core processes and management concepts that contribute to their success. Dubbed "Winning Sales Organizations (WSOs)," these companies typically generate more than a 20 percent increase in revenue, new customers and average account billing when compared to the previous year.
A Formalized, Customer-Focused Value Proposition
Among the key findings of the study is the fact that many WSOs actively foster a culture of customer-focused behavior.
While 62 percent of WSOs report having a "formalized value proposition that is very compelling to our prospects," only 34 percent of all other organizations say they have such a value proposition. According to Miller Heiman's vice president of client engagement, Bethany Schultz, the key words here are formalized and compelling. "You may have a proposition," she says, "but is it based on what you know is compelling and relevant to your customers?"
"WSOs have a better understanding of customer issues and needs," says Damon Jones, Miller Heiman's president and managing director of international. He says that instead of having a generic value proposition, WSOs are closer to their customers and can tailor a value proposition to each customer's needs. "This is about differentiation. If you can't differentiate, the only way a buyer can decide is price. So show your expertise that is specifically relevant to the prospect."
Sam Reese, Miller Heiman's president and CEO, notes that WSOs are always refining themselves based on their customers' environments. "Winning Sales Organizations know that everything they do pivots around the customer. They're systematized in terms of how they manage their customers," he says. "And they've figured out how to gain a sustainable advantage."
Sales Cycles Involve More People
Respondents from WSOs also noted that they typically persuade four to five people in the average sale while more than a third report six or more people for each opportunity they pursue. Overall, the number of decision makers involved with each sale shifted up by 16 percent compared to last year's study.
Jones cites two reasons for the increase in decision makers. First, he says, the buying process is becoming more complex, more technical; procurement departments often consult IT or other areas of the business when they make buying decisions. This brings more people into the process. Second, in today's economy, buying decisions are being escalated from, say, directors to VPs and from VPs to CEOs. "C-level people don't rubberstamp these days," says Jones. "They jump into the buying process."
Companies are getting more sophisticated about how they make decisions. According to Bill Golder, Miller Heiman's executive vice president of sales, "They're getting better at internal collaboration in decision making." That not only means more people involved, but more knowledgeable people. With this understanding, he says, salespeople need to invest time researching the stakeholders before they make a sales call.
Executive to Executive Selling
The study noted a significant perception gap over agreement with the statement, "Our executive leadership is actively engaged in our sales process." Sixty-eight percent of C-suite respondents agreed, while only 39 percent of sales representative respondents agreed.
Says Schultz, "The fantastic news is that WSO C-level executives know the customer, and they know the sales process and the tools the sales force are using to get in front of the customer." She says executives need to learn which customers are important. "Then there has to be a plan that resonates with the customers." She points out that executive-to-executive selling is not about closing the deal. "It's about alignment, about knowing what's going on in this customer's business." Part of this, she says, is identifying which customers are important enough to warrant this level of involvement.
To find more results from this study, read the entire Executive Summary of the 2008 Miller Heiman Sales Best Practice Study here.
About Miller Heiman: The Sales Performance Company
For 30 years, Miller Heiman has brought precision to the art of selling through simple, yet powerful processes and tools to help drive performance, especially in complex selling environments. Miller Heiman publishes the award-winning Sales Performance Journal and conducts the world's largest annual research project on sales effectiveness, the Miller Heiman Sales Best Practices Study. This study reveals best practices, trends, issues, and opportunities in today’s selling environment. As the thought leader in sales performance, Miller Heiman provides organizational sales process implementations that result in revenue predictability, clearer sales management communication, and best practice selling activities that can be replicated. Headquartered in Reno, Nevada, Miller Heiman has offices around the world and partners in over 20 countries. For more information, please call 877.552.1747.
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