Aligning Sales and Marketing Investments to Maximize Sales Performance

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Information about Aligning Sales and Marketing Investments to Maximize Sales Performance
Business & Mgmt

Published on October 22, 2008

Author: TrueConnection

Source: slideshare.net

Description

presented by Jason Angelos of Accenture at the TrueConnection 2008 Sales Performance Management Conference, hosted by Callidus Software

Aligning Sales and Marketing Investments to Maximize Sales Performance October 13, 2008

Coming Out of a Recession Increasing Revenues is Top of Mind for Executives Source: CSO Insights, Sales Performance Optimization, 2006 70% 60% 50% 40% 30% 20% 10% 0% Other Decrease Discounting Reduce Administrative Burden Improve Communications Improve Team Selling Increase Channel Sales Effectiveness Improve Margins Reduce Sell Cycle Time Improve Customer Loyalty/Satisfaction Increase Market Share Increase Sales Effectiveness Increase Revenues Percentage of CEOs citing each objective as one of their company’s three most important.

Too Often Growth is Requiring a Full Enterprise Effort and Worse yet a Transformation Growth is coming with added complexity on multiple fronts New customer segments (i.e. SMB) Services Software Partnerships Geographic expansion Mergers & Acquisition* *Growth through acquisition destroys shareholder value in 80% of cases Source: Economist Intelligence Unit, Innovation and Profitable Growth, 2006; CSO Insights, Sales Performance Optimization, 2006; CMO RealityCheck, 2005.

Growth is coming with added complexity on multiple fronts

New customer segments (i.e. SMB)

Services

Software

Partnerships

Geographic expansion

Mergers & Acquisition*

Offerings are Increasingly Complex and the need for Value Oriented Selling is Placing New Demands on the Sales Force … 60% of organizations said the demands on building new skills in sales are increasing significantly. … 68% of organizations said the complexity of their product and solution bundles is increasing. Source: Gartner, Accenture research and CSO Insights … 40% of companies report taking 7-12 months to gain sales proficiency in new hires 10% 20% 30% 40% 50% 60% Service Focused % Gross Margin Product Focused Solution Focused Service margins become non-dilutive to overall earnings Time Product Business Margins Service Business Margins Total Margin How enterprises will compete 100% 50% 0% Percent Direct to Indirect Sales Focus Year 1990 2000 2010 Strategic IT Transactional Internal Departmental Operational Intraenterprise Collaborative Intra Extraenterprise Direct Sales Indirect Sales 15% 40% 65%

Sales Teams are Working More with Less to Show for It Source: CSO Insights, Sales Performance Optimization, 2006 2005 2006 Sales Team Productivity More than half of leads resulted in a meeting 0% 15% 20% 30% 32% 34% 36% 38% 40% 45% More than half of meetings progressed to a presentation More than half of presentations resulted in a sale Time spent selling has dwindled from nearly 48% to 36% in 2 years Reps are spending an average of 2-3 hours a day looking for information As much as 18% of time spent on contracting Lead to conversion ratio’s are less than 3% In excess of 30% of opportunities are stalled

Time spent selling has dwindled from nearly 48% to 36% in 2 years

Reps are spending an average of 2-3 hours a day looking for information

As much as 18% of time spent on contracting

Lead to conversion ratio’s are less than 3%

In excess of 30% of opportunities are stalled

… and Many Companies’ Sales Processes Fail to Align with Their Customers 45% of organizations have no sales process that aligns to customers buying process 64% of CSO believe that sales management is not positioned across the sales process Source: Aberdeen Group, CSO Insights 68% experience a disconnect between the various processes on the sell-side 80%+ of organizations feel they do an adequate job of understanding their customers. However… As much as 9% of revenue can be lost due to poor sales side process alignment

The stakes are big In 2007, $100B+ was spent on sales coverage and commissions for the Global 1000. However, only 61% of the sales force are making quota. Cost of Sales Analysis

The role of the Indirect Channel in driving sales, growth, and new market penetration will only increase Focus on Large customers Mainly direct sales approach Emphasis on product sales Transactional customer relationships Tomorrow... Emphasis on relationships and value-based selling Focus on optimizing channels and SG&A New hybrid coverage models & RTMs – Lower acquisition cost and expand coverage Support Volume business at speed In-source versus outsource Channel/retail business optimization Similar to B2C Uptake of Volume Business Strong channel contribution Medium Enterprises Today The Small and Medium Enterprise opportunity is larger than the Enterprise potential

Focus on Large customers

Mainly direct sales approach

Emphasis on product sales

Transactional customer relationships

Emphasis on relationships and value-based selling

Focus on optimizing channels and SG&A

New hybrid coverage models & RTMs – Lower acquisition cost and expand coverage

Support Volume business at speed

In-source versus outsource

Channel/retail business optimization

Similar to B2C

Uptake of Volume Business

Strong channel contribution

Copyright © 2008 Accenture All Rights Reserved. Fundamental Unit of Transformation Aligned and Consistent Customer Interaction Target Behaviors Leading to Performance Results = Business Result … Indirect Marketing Incentive programs for the Indirect Channel are growing at a torrid pace. Increased reliance on the Channel is moving enterprises to more of an influence selling model with diminished control and insight to POS. Sales through the Channel are moving toward more of an influence model.

Companies need to consider their full portfolio of investment levers to drive sales. Channel Partners Direct to Customer Mktg Sales (PAMs) CUSTOMER Purchase Decisions Customer Discounts Compensation & Sales Incentives Indirect Sales Comp & Marketing Incentives Routes to Market Investment Considerations Incentive Programs

Proof of Performance Highlight of our program… easy to miss Intel’s placement in the ad is significant; unfortunately not an Intel program

Highlight of our program… easy to miss

Intel’s placement in the ad is significant; unfortunately not an Intel program

Program Payments (in millions) FY05 Ptrs Enrolled: 146 FY06 Ptrs Enrolled: 219 FY07 Ptrs Enrolled: 303 $212M $837M $37M High Tech Case Study: Since its inception, marketing incentive program payments have increased by $800M (2,162%).

Revenue (in millions) Ptr Segment Client Revenue Payments as % of Client Sales At the same time, revenue has been growing 13-16% per year over the past 3 years.

Q4 FY06 Q1 FY07 Q2 FY07 Q3 FY07 Quarterly Payments (in millions) 2 Program administration has become complex, with partners receiving payments of 27% more than self-reported value of claims.

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