B2B sales people are closing less than half of the deals they forecast and firms are relying on renewals from existing accounts to make up average of 70 per cent of revenues, according to a survey from Miller Heiman Group.
The Chicago-based training firm’s CSO Insights team recently released its annual report, Selling in a World of Ceaseless Change, which showed an average win rate of 47 per cent. While revenue attainment overall is strong at 94 per cent, that’s largely based off of customers firms already have. A full 65 per cent, on the other hand, said major improvements would be needed in their organization to gain new customers, and more than half, or 56 per cent, said the same thing about cross-selling or up-selling their base.
“There were several practices that were positively linked to success,” the Miller Heiman Group report’s authors said. “(This includes) having a sales process which was very tightly aligned to the customer’s preferred methods of purchase, having a strong ability to prioritize which prospects to focus on and to allocate efforts and resources, and having a strong ability to build and to execute opportunity plans.”
Until revenue from existing accounts starts to hit a wall, chief sales officers or chief revenue officers may not be tempted to make major changes. The report suggested the impact sales activities have across an organization may lead CROs to take more incremental steps versus becoming more customer-centric. Improving the quality of the relationship with buyers, for instance, may be more important than simply dedicating reps to a particular account.
“It’s not about spending more time,” the report’s authors wrote. “While many bemoan the challenge of balancing new sales with existing account management, there was no correlation between time spent on postsale activities and customer churn, ability to renew or level of relationship.”
As might be expected given the services it offers, the Miller Heiman Group data makes a strong case for training. It’s worth noting, however, that 15 of 16 seller abilities included in the report show lower performance than they did five years ago. It’s possible that sales teams aren’t adapting successfully to the use of tools like CRM, analytics and social selling. The report’s authors recommend CROs or VPs of Sales adopt more of a continuous improvement approach to the way they lead their teams.
“A responsible sales leader probably can’t completely rebuild every component of a sales system at once. However, transformation doesn’t need to be linear,” the report says. “It is a ceaseless evolution designed to adapt to ceaseless change. It isn’t a project.”
The relationship with marketing and sales, meanwhile, remains an albatross for many B2B firms. Less than a third said the two groups can agree on how to define a lead.