Tafaro & Associates

The Problem of Sales Productivity

For small technology and service-related firms, sales growth is the number-one business initiative we focus on because it is a leading indicator of future performance, and we believe it represents the most important metric for value accretion. That being said, the sales and marketing practices employed today by many of these organizations are becoming too expensive, too unpredictable and generally inefficient; and while CEOs continue to rank improved sales performance as a top priority, many are dissatisfied with their sales results. In fact studies show the average number of individual sales people who miss their annual quota is over 46% and growing. So why are the traditional sales and marketing practices, that have yielded success in the past, no longer working? Research done by Tafaro & Associates, Inc. points to four interrelated factors which are having a major impact on sales force productivity:

Evolution in Communications and Information Access: The evolution in communications and information access has dramatically reduced the cost of creating, sending and storing information while vastly increasing its availability. Websites are packed with information about a company’s products, services, and testimonials. Through social networks prospects can tap into personal connections for references and product reviews. Every day buyers are using technology to empower their decision making as they become more educated about the companies from whom they buy. As the communication preferences and buying processes have evolved, sales and marketing organizations have been slow to adapt and respond accordingly.

Shifting Of Power from Sellers to Buyers:  While the Internet is often viewed by marketing departments as a selling medium, it has evolved into a buying medium – most B2B commerce on the Internet is initiated by the buyer. The ability of prospects to use the Internet to shop and make vendor comparisons has inadvertently stripped away what had formerly been a large part of a salesperson’s role as knowledge provider. So it’s no surprise that by the time a salesperson gets invited to the party, much of the buying process has already been done. The salesperson’s ability to engage with executives early in the selling process and influence results has become compromised, and the sales process commoditized.

Marketing Is Missing the Most Important Aspects of B2B Demand Generation: Generally, B2B marketing today focuses on selling solutions to prospects who know what they need and who are ready to buy. In their book, Selling to the C-Suite, authors Steve Bistritz and Nick Read state that: “marketing is trying to be seen where customers are looking, but it isn’t doing much to create demand where it didn’t exist before.” They go on to say, “the problem many salespeople encounter is that the majority of prospects aren’t actively searching. They have latent or chronic problems they’ve learned to live with and have to be awakened to the fact that they need to change before they can be pointed in the right direction – and that’s not something marketing departments are generally good at doing.”

The Need For Salespeople To Become Value Creators:  The old role of sales, to show prospects why their products and services are better than their competitors, is no longer viable. It has become too expensive and buyers have little time to spend with salespeople when they can find the same information on the Internet. For salespeople to succeed today, they must first understand the issues and concerns of the business executives they’re calling on, and then be highly skilled at creating value by presenting solutions to address these issues and concerns. Salespeople who cling to the traditional role are failing.

The evidence is clear – change is mandatory! For small and early stage companies these problems are magnified for two reasons: (1) they often lack the internal knowledge, experience and capabilities to initiate and implement change – especially in sales and marketing, and (2) the monthly revenue and operational pressures tend to take over, leaving management with little time to revamp ineffective selling and marketing practices. And so the vicious cycle continues.

For companies to grow and scale in today’s market they need their marketing strategies and sales processes to match the way their customers buy, while maintaining the flexibility to allow different customers to buy in different ways.  Marketing needs to focus less on presenting products and more on creating demand and solving problems. Companies capable of implementing problem-based marketing, place their sales organizations in a much more advantageous position by enabling them to enter the sales process early and create value. Salespeople must be able to shift from an internal focus on their products to an external focus on their customer’s business issues and concerns, and present viable options that will address these issues and concerns.