Companies that make headway in B2B sales use a three-way strategy to drive above-market growth
B2B sales are on the verge of a revolution, with increasing trends completely redefining what it will take to be a market leader over the next five years.
Advanced analytics and machine learning have provided sales executives with access to historically unprecedented volumes of data and computing power, enabling them to forecast with a high degree of accuracy sales opportunities that present the most value. The fastest-growing organizations are employing advanced analytics to completely improve their sales productivity and drive double-digit sales growth with marginal additions in their sales teams as well as their cost base.
Also, major changes in buyer preferences, with buyers being even more content-driven, having increased technical know-how, and comfortable engaging via digital channels, has brought forth the emergence of a new sort of sales leaders possessing technical expertise along with a strategic mindset. This is also changing the outlook of sales organizations, with a drastic decline in field sales and marketing, and a sharp increase in inside sales and analytics teams.
Ultimately, a major shift toward ‘subscription-based’ business models has now redefined how customer relations are managed. It is long gone where a sale was a one-time “won and done” deal. In an era of recurring revenues, sales need to be won continuously; every month, quarter, and year. Because of this, successful customer-relationship managers are becoming increasingly in demand, and high-level sales teams are aligning themselves intently to the long-term success of their customers.
The emergence of a new science of B2B sales
Due to these disruptive changes, B2B sales have progressed from an art form to a science. What this means is that sales is now data-driven, aided by digital tools, underpinned by advanced analytics, and focused on genuinely understanding the “what, why, and when” of the customer.
Organizations that have embraced what we call the “science of B2B sales” have already begun to pull ahead of their competitors in terms of revenue growth (recording 2.3 times industry average revenue growth), profitability (3% to 5% additional return on sales) and shareholder value (8% higher total return to shareholders than the industry average).
A rather prominent feature that separates market leaders from the rest of the pack is that the CEOs of the market leaders keenly lead the sales transformation, as opposed to leaving it to the head of sales.
These CEOs have come to realize that redefining their go-to-market mechanism is a cross-functional sport that demands their direct input and flawless execution from sales, marketing, HR, IT, down to finance. Market leaders have understood that to excel in B2B sales in the next five to ten years requires that they primarily transform their go-to-market mechanism around three defining principles:
1. Engaging customers how they want to be engaged
The times when sales executives contemplated between investing in a great sales force or great digital assets is now a thing of the past. To drive growth in the future will require combining the best of both worlds. From the research below, indications are that market leaders perceive digital investments as the bond that holds together a formidable multichannel sales strategy.
From a survey of more than 1,000 large organizations across industries and 4 continents to get a better understand their preferences in buying goods and services from B2B sellers. What the research showed was that the ideal channel to reach B2B customers depends a lot on if the said purchase is a first-time or repeat purchase.
About 76% of B2B buyers found it helpful to speak to a salesperson while researching a new product or service. That figure reduced to 52% for repeat purchases of products that had new or distinctive specifications, and only 15% of buyers showed a desire to speak with a salesperson when repurchasing the exact same product or service.
Winning customers in the future will necessitate a multichannel sales strategy fuelled by smart digital investments that cater to the various needs of first-time and repeat customers.
To target first-time customers who are looking for direct interaction with sales teams, the fastest-growing companies are utilizing digital tools to help their sales teams address customer needs at each stage of their purchase journey. For example, they are using interactive product demos driven through tablets or browsers to enable salespeople to engage customers while still in the research stage of their journey.
A significant proportion is using relatively simple customer-relationship-management software to monitor customers’ past questions, therefore allowing their salespeople to foresee future inquiries and proffer lightning-fast responses when customers compare their products with competitors’.
A handful of cutting-edge companies have similarly invested in customer analytics that empowers sales reps with price recommendations based on the deal analysis closed by other sales reps with the same customer in the recent past.
While serving repeat customers who are comfortable being online, the fastest-growing companies are utilizing digital tools and inside sales teams to keep them loyal, accelerate the sale process, and encourage them to spend more. For example, they are creating online comparison engines, which allow customers to seamlessly compare products and services with competitors’ offerings.
They then supplement that with inside sales teams to proffer solutions to customer enquiries via email, live chat, and video conferencing. In addition, they are using next-product-to-buy algorithms that send customers important recommendations of complementary products on the basis of their purchase history to increase customer share of wallet.
2. Employing advanced analytics as well as machine learning to make better decisions faster
Within the next five years, it is our belief that the fastest-growing companies will be making use of advanced analytics and machine learning to tackle basic strategic issues, issues like what sales opportunities to pursue, what resources to allocate to which accounts, what behaviours to prioritize to enhance sales productivity.
As it is, the days when lead generation relied fully on local field knowledge are quickly eroding us. Future market leaders are utilizing advanced analytics to develop a personalized account, product, and geographic profile of each of their customers. These profiles are then augmented with related external data like public financial information, news reports, and social media to generate a truly holistic view of each customer.
Lead-scoring algorithms can then make use of these detailed customer profiles to forecast which customers to target, the best time to contact them, and what factors truly drive lead conversion rates. A few of the most cutting-edge companies are also exploring with AI-enabled agents that make use of extrapolative analytics and natural-language processing to automate prompt lead-generation activities, like handling basic customer questions and automating preliminary presales questions.
While these predictive lead-scoring algorithms are still somewhat promising, some companies deploying them are already experiencing 15% to 20% improvement in their lead-conversion rates.
Previously, sales leaders relied solely on gut instinct to identify behaviours that drive sales productivity and make account coverage decisions. Advanced analytics is revolutionizing our understanding of how to pair the right people to the right deals.
The most data-advanced sales organizations are matching sales, customer, and HR data to comprehend the fundamental attributes (examples; professional background, personality traits, education, cognitive ability) and behaviours (i.e., frequency/duration of customer interaction, time dedicated to sales planning, persistence, listening skills, risk-taking) that correlate statistically with unique sales performance.
Equipped with this knowledge, they can distinguish the best salespeople and then allocate them to their most strategically valuable accounts.
4. Continuous investment in identifying and developing world-class talent
Every day, buyers are becoming increasingly sophisticated and technically savvy, this has inspired the rise of a modern breed of sales leaders who adopt a strategic mind-set and in-depth technical skills. These leaders are upwardly mobile across multiple roles in their corporations and are built with a truly cross-functional and cross-geographic skill set. They see themselves as coaches whose key task is to turn rookies into winners.
“Getting the right individual in the right role” was one of the more common themes that sprung up in our survey spanning 1,000 sales executives. Notwithstanding the stated significance of hiring the right talent, only a number of organizations believe they are equipped with a suitable talent for the future
While every organization struggles with getting world-class talent, fast-growth companies seem to cope better than slow-growth companies: 51% of the former think that they have the right sales talent for the future as compared with merely 30% of slow-growth companies.
Engaging the right talent is only a part of the puzzle. From what was discovered, the fastest-growing companies also invested a substantial amount of time and resources in nurturing and growing their talent. In our survey, 48% of fast-growth companies showed that they invest significant time and resources in sales training as against 22% of slow-growth companies (Exhibit 3).
Behavioural economics and social psychology have publicized strong insights into how to cultivate high-performing individuals who thrive on independence and entrepreneurship. An insight of note has been that adult learners only remember 10% of what they heard and 32% of what they saw three months after the conclusion of the learning program.
In contrast, they recall 65% of what they learn by doing. This insight is driving a transformative difference in the nature of sales training. They are evolving from classroom models and digital modules to “on-the-job” experiential, immersive programs where sales reps are paired with experienced coaches and are able to learn from doing.
Generally, companies who embrace the science of B2B sales typically begin with a three-part journey:
First, they make a candid assessment of the status quo. This begins with an analysis of the customer. Customer preferences for buying should shape the investment made by the sales organization, yet many sales leaders fly blind. In our experience, the majority of companies typically underinvest in the sales capabilities that actually matter most to their customers. Ironic.
Secondly, they plan with the long term in view. Sales winners are moving past quarterly planning and adopting a long- term view. Of the fast growers we have studied, over 50% take a minimum 12-month view in their sales plans, and 10% look more than three years out. What this long-term view implies is that sales leaders can invest in the right skills based on a specific (though flexible roadmap.
Thirdly, they move quickly and get quick wins. Speed has never been more critical. Winning sales organizations are adopting test-and-learn strategies to become more agile. Some set up a sales ‘war-room’ model to launch new digital campaigns and messages. Others embrace an agile test-fail-learn-adapt operating model to speedily ideate and refine sales tactics.
Through these quick-win approaches, sales organizations are experiencing outstanding result, some with up to 300% growth in digital sales in the first 30 days of action, yes, you read right. In the coming years, we expect to see more of the winners relishing these results.
In conclusion, driving market leadership in B2B sales requires undivided focus from the CEO and the Orgs top team and a substantial investment of time and resources. However, companies that have achieved competency across the three dimensions of the science of B2B sales as touched on above are already leading their competitors and driving profitability, disproportionate growth, and shareholder value.