Wave after Wave of 'Quality' Initiatives
Each decade appears to be the backdrop for one improvement effort or another. No matter how well intentioned and designed these programs were, the copycat effect eventually exerted itself, and the rest of the pack caught the early adopters. Examples include the 1980's focus on TQM (total quality management) that impacted manufacturing or distribution functions who were able to beat the competition with a higher quality product. The 1990's seemed to boast a focus on price with lower cost achieved through supply chain optimization, strategic sourcing, and off-shoring.

Sales as an Art Form
Yet, through all of these business initiatives, the Sales Force stood as resistant to such 'generic' efforts at improvement. This was based in the reality that many sales managers conceived of sales as more art than science. Sales leaders rely on relationship-building, quantity over quality, product knowledge and other techniques that produced results in the past but now fall short, especially in an age of rapid commoditization. For instance, prospects no longer rely on a sales person to learn about the feature and functionality of a product; instead they merely visit the supplier's web site and educate themselves. Furthermore, prospects are overwhelmed with offers from vendors, many of whom have overlapping, conflicting, or disconnected value propositions, making it hard for any one supplier to stand out and for all of them to differentiate.

CEOs - not from the Sales Ranks
A recent study showed that only 7% of Fortune 500 CEO's followed a path to the Board Room through the sales function. Most CEOs hail from Finance, Operations, or Development. CEOs often consider Sales as a "black box" department and aren't sure how to effectively to manage this critical business function. Still, they know that sales force execution is a critical element in their strategy and poor performance in that area can often overwhelm positive changes elsewhere. Yet, when these CEOs engage their sales leaders in dialogue about performance and data-driven decision making, they often are unable to communicate effectively, hampered by the Sales Leaders belief that sales is more art than science, Nevertheless, metric-oriented CEO's are demanding their sales leaders inject science into their management.

Case Study
Recently, one of our clients shared with us that they were not competing in enough transactions. Some analysis revealed that, for each opportunity they generated their competition generated two. When comparing them against these competitors, we identified that they were in the same market with roughly similar product, comparable pricing, and employing sales forces of about the same size. What they were not doing as well as the competition, though, was in creating enough quality leads. Consequently, revenue was suffering.

They turned to us to ask - what is the cause of our sub-par leads?

Benchmarking
We assisted the sales leader and her organization in benchmarking their lead generation. For each customer invoice, they traced back to its lead generation point of origination. Then, they looked at the effectiveness of all of the 10 lead generation programs they ran during the last year. The result was as clear as it was arresting:

They had over-funded low-producing programs and starved those which had demonstrable high yield.

Quite inadvertently, the company had been misapplying its marketing and sales support programs, having relied on past practice as a guide. The science of benchmarking had revealed these inadequacies and enabled them to move dollars towards the best lead producing programs and away from the poorer ones. The end result was equally stark -- a 300% increase in quality leads and a marked improvement in close rate (leads/deals).

Applying such metric-based methodologies to the sales department can produce dramatic results.

The Trend to Sales Benchmarking
Sales forces are increasingly adopting these scientific problem-solving techniques. Growth-oriented companies are analyzing the key drivers of sales force execution; one aspect of this is that Sales departments are learning to use best practices quality initiatives such as Six Sigma. Another aspect is the urge for sales leaders to go well beyond the reporting of data from a CRM system and more into the defined science of sales benchmarking. To accomplish this, Sales executives must re-think how the measure, manage, and assess their sales forces. Benchmarking is a key tool that puts the science into Sales Management! Early adopters are quickly realizing remarkable improvements. Establishing sales force execution through benchmarking will provide a new source of competitive advantage. Scientific sales management may eventually suffer the same fate as other corporate improvement strategies, but it is very early in this movement. Be first and be profitable.

Editor's Note: Greg Alexander was named Sales and Marketing Magazine's “Sales Manager of the Year” in 2004 and was featured as a case study in the New York Times bestseller Topgrading: How Leading Companies Win by Hiring, Coaching and Keeping the Best People. Mr. Alexander is now managing director of the Sales Benchmark Index, the research, training, and consulting company leading organizations turn to when in search of cost effective revenue growth through benchmarking sales performance. Prior to founding the Sales Benchmark Index, Mr. Alexander spent 15 years running and working within sales forces for top technology and business outsourcing companies. Throughout his career, he has a proven track record of turning around under performing sales forces and restoring them to market leadership positions.

Contact Greg or visit his site to find out how you can get a free consultation: Web: SalesBenchmarkIndex; Blog: SalesBenchmarkIndex; Phone: 404.886.5281; or Email: getHelp@SalesBenchmarkIndex.com.