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Measuring the Sales Impact of Customer References

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Information about Measuring the Sales Impact of Customer References
Business & Mgmt

Published on September 20, 2008

Author: BoulderLogic

Source: slideshare.net

Description

This short session is about Measuring the Sales Impact of Customer References. Our aim is to help you create your own business justification for giving careful attention to this area of the sales and marketing process.
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Boulder Logic Customer Reference Webinar Series Measuring the Sales Impact of Customer References Send your questions to info@boulderlogic.com

About Boulder Logic Boulder Logic is a commercial software vendor specializing entirely in Customer Reference Management. We provide a web application for managing all areas of an enterprise customer reference program. # of 16

What we will cover in this session Impact on Sales Cycle Close Impact on Selling Time Impact on Opportunity Revenue Harder to Quantify Areas # of 16

Impact on Sales Cycle Close

Impact on Selling Time

Impact on Opportunity Revenue

Harder to Quantify Areas

Impact on Sales Cycle Close # of 16 If sales reps don’t have the best reference available their job is a lot more difficult. Not every sales cycle requires a reference. Look at all sales cycles and then reduce to be conservative. Factor Example Number Reference Situations per Rep 90 Poorly matched reference requests (50% x 90) 45 Estimated Impact on Close Rate 3% Average Deal Size $125,000 Margin impact per rep   (90 x 3% x 125K) $168,750 Margin across entire sales force (168K x 100 reps) $16M

Impact on Sales Cycle Close # of 16 Reduce total potential reference events by those less than ideal. Typically 50% If sales reps don’t have the best reference available their job is a lot more difficult. Factor Example Number Reference Situations per Rep 90 Poorly matched reference requests (50% x 90) 45 Estimated Impact on Close Rate 3% Average Deal Size $125,000 Margin impact per rep   (90 x 3% x 125K) $168,750 Margin across entire sales force (168K x 100 reps) $16M

Impact on Sales Cycle Close # of 16 Ranges from 2% to >40% Get a baseline figure by asking sales directly If sales reps don’t have the best reference available their job is a lot more difficult. Factor Example Number Reference Situations per Rep 90 Poorly matched reference requests (50% x 90) 45 Estimated Impact on Close Rate 3% Average Deal Size $125,000 Margin impact per rep   (45 x 3% x 125K) $168,750 Margin across entire sales force (168K x 100 reps) $16M

Impact on Sales Cycle Close # of 16 Ranges from 2% to >40% Get a baseline figure by asking sales directly If sales reps don’t have the best reference available their job is a lot more difficult. Factor Example Number Reference Situations per Rep 90 Poorly matched reference requests (50% x 90) 45 Estimated Impact on Close Rate 3% Average Deal Size $125,000 Margin impact per rep   (45 x 3% x 125K) $168,750 Margin across entire sales force (168K x 100 reps) $16M

Impact on Selling Time # of 16 Ranges. Get a baseline figure by asking sales directly If sales reps have no assistance securing their own references, everyone’s time is being wasted. Factor Example Hours to Obtain Reference 3 hrs Number Opportunities per Rep 45 Total Number of Reps 100 Headcount Equivalent (3x45x100 = 13,500 hrs) 6.75 HC Eqv Average Quota per Rep $1M Total impact on margin $6,750,000

Impact on Selling Time # of 16 See figure from our last formula. Sales cycles with inadequate references today If sales reps have no assistance securing their own references, everyone’s time is being wasted. Factor Example Hours to Obtain Reference 3 hrs Number Opportunities per Rep 45 Total Number of Reps 100 Headcount Equivalent (3x45x100 = 13,500 hrs) 6.75 HC Eqv Average Quota per Rep $1M Total impact on margin $6,750,000

Impact on Selling Time # of 16 13,500 / 2,000 hrs/yr If sales reps have no assistance securing their own references, everyone’s time is being wasted. Factor Example Hours to Obtain Reference 3 hrs Number Opportunities per Rep 45 Total Number of Reps 100 Headcount Equivalent (3x45x100 = 13,500 hrs) 6.75 HC Eqv Average Quota per Rep $1M Total impact on margin $6,750,000

Impact on Selling Time # of 16 Focus on what they could sell not what they cost If sales reps have no assistance securing their own references, everyone’s time is being wasted. Factor Example Hours to Obtain Reference 3 hrs Number Opportunities per Rep 45 Total Number of Reps 100 Headcount Equivalent (3x45x100 = 13,500 hrs) 6.75 HC Eqv Average Quota per Rep $1M Total impact on margin $6,750,000

Measuring Impact on Opportunity Revenue # of 16 If there isn’t visibility to how references are being used, nobody will understand the business impact. Opportunity via CRM Request for Reference via Reference DB Reference are not “responsible”, but “ Influence” revenue

Measuring Impact on Opportunity Revenue # of 16 If there isn’t visibility to how references are being used, nobody will understand the business impact. Example Report: Revenue Influence By Reference Account Amount Boston Beer Inc (3 records) Anheuser-Busch $20,000 Toyota Motor Company $120,000 Exxon-Mobile $45,000 Subtotal $185,000 Earth Tech (4 records) General Mills $30,000 Xerox $115,000 State of California $25,000 IBM $145,000 Subtotal $215,000 Total (7 records) $415,000

Measuring Impact on Opportunity Revenue # of 16 If there isn’t visibility to how references are being used, nobody will understand the business impact.

Important But Harder to Quantify Areas Client Gains Confidence Early Sales Reps Focus on Key Issues RFP Quality Responses Peer to Peer Unsolicited Influence # of 16 There are additional factors that aren’t easily measured, but play an important role in selling effectiveness.

Client Gains Confidence Early

Sales Reps Focus on Key Issues

RFP Quality Responses

Peer to Peer Unsolicited Influence

Conclusion How to get started today… Prepare survey to sales force Determine impact as discussed Present a plan for your organization # of 16 Summary of our topics today Improved close rate Improved efficiency of selling time Improved sales impact and increased revenue Let Boulder Logic help… [email_address]

How to get started today…

Prepare survey to sales force

Determine impact as discussed

Present a plan for your organization

Summary of our topics today

Improved close rate

Improved efficiency of selling time

Improved sales impact and increased revenue

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