Looking to improve your sales performance? We share competitive insights into how to improve sales in B2B.
Do you know as much about your sales organization as you do your manufacturing, supply chain, or purchasing departments?
This article will help you review your sales capability to unlock your full sales potential. We discuss how to create sales functions centered around the customer through an understanding of their wants, needs, and value drivers. We look at the right infrastructure to boost sales productivity, align incentives, and unlock better sales growth.
Interested in the right KPIs to steer sales using best-in-class systems, tools, and training programs? This article has got you covered.
How to measure sales performance
Selecting the appropriate metrics for evaluating sales performance is a fundamental aspect of a successful sales organization, and it's an area where numerous businesses falter.
Regardless of industry or size, sales performance is vital for your profits. Establishing and evaluating performance metrics ensures the appropriate allocation of resources, identifies overlooked opportunities and areas for enhancement, and boosts sales representative retention and satisfaction.
The process of setting appropriate goals and effectively measuring them is an intricate one. To increase sales performance, you need a structured and systematic approach.
Activity metric – What actions are you taking?
Begin by breaking down your sales funnel and considering the various tasks performed by your sales team, such as the number of cold calls, conversations, and meetings. What are the possible results of these sales activities? These are crucial indicators for your sales pipeline. If a key metric declines, the subsequent opportunities will likely decrease as well.
For instance, when a sales representative sends an email, the significant outcomes could be “unread”, “interested”, “prospective lead”, and so on. In the case of door-to-door sales, the outcome that affects your success rate is whether someone answers the door or not.
By recognizing these different potential outcomes, you can derive insights on how to enhance performance. For example, a high percentage of phone calls labeled as “uninterested” suggests that your sales pitch needs improvement.
Revenue Metric – how are you tracking revenue growth?
Most companies monitor and evaluate revenue. It not only offers performance data, but also allows you to make informed business decisions, such as where to invest and which activities to discontinue. By tracking revenue growth, you can spot missed sales, forecast future trends, and plan staffing requirements. A consistent annual revenue increase instills confidence in your strategy, while a declining trend indicates that immediate major changes are necessary.
The revenue metric also discloses vital information about your products. If a product with specific features generated high revenues, you know to highlight those features more in other products, and downplay less popular features.
Revenue tracking is also useful for identifying cross-selling opportunities. For instance, a company selling coffee machines has high revenues for the machine, but not for the accompanying pods. This suggests customers are purchasing their pods from another source. Why is this? Are the pods overpriced? Are customers unaware that they sell the product? Or do customers initially buy some pods, but then switch to a different supplier?
Revenue tracking is essential. But interpreting what this means for your business strategy and how to modify your sales process for success is even more crucial.
Profit margin metric – What is your ideal pricing and how do you sustain it?
While revenue is a critical factor in measuring business performance, generating profits is equally important. Ideal pricing is a key element to your product’s success. And profit margin tracking often shows that this is where many businesses falter.
They invest in successful products and a top-notch sales team but overlook the importance of pricing. Even with robust customer relationships, optimal lead generation, high quota achievement, and excellent employee performance, you won’t reach your full profit potential unless your pricing is correct.
Are your activity and revenue metrics performing well, but profits are trailing? Then it’s likely that your prices are not optimal and it’s time to reassess your pricing strategy.
By assessing these indicators, you gain insight into your current performance and your future objectives. This allows you to choose the appropriate tools that aid in guiding your sales team towards profit targets, while effectively monitoring and evaluating performance throughout the process.
Sales groups now have unparalleled access to data and resources that support them in their daily tasks and enable them to be more efficient in their outreach than ever before.
Crucially, these resources not only provide salespeople with valuable customer insights. They assist them in automating their workflow and can monitor sales performance in real-time. Equipped with the right resources, sales teams can concentrate more on their primary task: selling.
Sales performance playbook
Sales reps perform significantly better when they are equipped with a sales playbook. Sales playbooks give sales teams the ability to communicate the value of the product, efficiently convert prospects into customers, and prepare for difficult negotiations. Here’s what playbook for sales performance improvement should include:
Customer segmentation
Sales is about understanding your customers’ needs. That's why best-in-class companies often have actionable, needs-based customer segmentation that goes beyond demographics. This assists sales in assessing the needs and purchasing power of customers, which can then be utilized to customize communication based on the customer they are interacting with. This enhances the perceived value of the product for the prospect and boosts the likelihood of securing the deal.
Customer objections
Top-tier companies usually compile frequent customer objections and develop example responses to enable sales to confidently address objections that emerge in their daily conversations. Preparing these not only aids in converting a prospect but also proves beneficial when introducing price hikes for current customers.
Competitive advantages
Sales teams ought to understand their product's worth in comparison to competitors, focusing on value rather than just cost. This involves recognizing the product’s strengths and shortcomings. Top-tier companies have prepared resources on this. Their sales teams are aware of their value and can confidently justify their pricing strategy. Moreover, they can address any weaknesses in a manner that doesn't jeopardize a potential sale. As a result, this usually boosts conversion rates and minimizes price reductions.
Asking insightful questions about pain points
Regular engagement with potential clients enables sales teams to engage in more substantial sales dialogues. Top performing companies have a set of pre-prepared questions that guide prospects toward the appropriate solutions for their issues.
Sharing knowledge and effective strategies
Sales playbooks are most effective when they are treated as an "evolving document". Creating a platform for accumulating insights and effective strategies from sales (and encouraging this practice) enables management to collect crucial feedback for product development, pricing, and enhancement of sales procedures. Top-tier companies accumulate insights and effective strategies from both successful and unsuccessful deals.
Seize opportunities for up-selling and reduce the risk of churn
Do you have a dedicated customer success team in place? Customer success teams can be used for farming opportunities with existing customers. The idea is that you grow your revenue with the customer.
Customer base management tools enable customer success teams to improve performance by better prioritizing customers, estimating the upsell potential of customers, and estimating churn.
Instruments for enhanced prioritization
Time is perpetually limited, even for customer success teams. Typically, most customer success teams unknowingly distribute their time based on the volume of customer requests or account category (e.g., Enterprise vs. SMB). Top-tier companies employ tools to assist their customer success teams in determining how much time they should devote to a customer. Possible justifications for investing more time in a customer could be revenue, growth potential, or risk of customer loss. Utilizing intelligent tools enables customer success to focus their time where it is most beneficial.
Tooling for upsell prediction
There are specific moments in a customer's journey where it's appropriate to initiate an upsell discussion. For example, if the count of active users has consistently grown over the previous year, and they are frequently utilizing many of your product's primary features. By vigilantly tracking and assessing the upsell potential for each customer regarding other offerings in your product suite, you can proactively engage the customer with recommendations. Besides enhancing the customer relationship, this monitoring of upsell potential also boosts the likelihood of successful upselling.
Tools for churn prediction
Through the use of churn prediction tools, customer success teams can proactively tackle and reduce churn before it happens. The crucial aspect is to establish alerts that notify these teams when to initiate retention strategies and customer re-engagement efforts. We generally advise to recognize, rank, and distinguish retention activities by measuring the significance of the account and the risk of churn. For substantial strategic accounts with a high risk of churn, customer success teams should be motivated to take more substantial measures than for minor accounts where actions might not yield profitable results.
How other companies drive sales performance
Top-level firms excel in sales improvement and consistently improve sales performance. What are the key things they do differently?
- Companies with the best growth outcomes invest the most in their sales function
- The best sales reps nurture more personal customer relationships
- Top companies continually adapt
Strategies to improve sales performance
Pay close attention to customers
Always look for methods to enhance your sales performance. Don't be a spectator! Monitor your markets closely so that you can identify changes in the markets. How can you engage better with your customers? A closer and more personal relationship will help you to adapt to changing market dynamics, and this will improve your sales performance. Top sales organizations incorporate Voice of the Customer (VOC) research and are becoming more customer centric.
Invest in your sales team
Don't underestimate the value of a high-performing sales team. You can't just keep cutting sales costs to drive higher operating profit. If you want your sales teams to bring in new business, you have to invest in headcount, tools, and sales training.
Review your sales strategy to address the current challenges
Make sure you are dedicating enough focus to your key commercial growth levers. If you are committed to improving your sales performance, regularly look at the setup of your sales organization, channel strategy, and how you segment target customers to achieve this.
Nurture personal and direct one-to-one interactions
A lot of sales went remote during the pandemic, but now in-person sales are back - and can have a significant impact on improving sales performance. Focus on fostering personal connections with customers over digital sales channels.
What are the top initiatives to improve sales performance?
Many sales teams struggle to outline a clear path for the future. Others focus on too many initiatives, which reduces their capacity for improving sales performance. Focus on the most effective growth initiatives rather than using valuable capacity for unimportant task that harm your sales performance.
Your top initiatives for the future should include reorganizing the sales structure and reprioritizing target markets. Solely focusing on new customer acquisition may negatively impact your overall sales performance. Instead, customer retention and development are often much more effective for enhancing sales performance. Other initiatives that will be essential for the future include data-driven sales steering and reprioritizing sales markets.
Listen to your customers so that you can better align with their needs. Carry out regular internal analysis to make sure your sales focus and investments are in line with your sales strategy.
Stage-specific recommendations for the value chain
Here are some industry-specific recommendations from our Global B2B Sales Survey.
Producers of B2B Industrial Products
- Tackle the strategic obstacles facing your company. Top-tier producers outperform their less successful rivals by focusing on their strategic strengths in crucial market sectors, innovative products, and ideal pricing, all while maintaining their investment in strategy.
- Evaluate the sales structure based on segment, region, and channel for profitable expansion. The time is ripe to adjust the sales structure to the shifting market dynamics and guarantee that coverage is appropriately scaled.
Distributors of B2B Industrial Products
- Achieve growth through a combination of new business, upselling, and customer retention. Top-tier companies have managed to stimulate growth in both favorable and unfavorable conditions by implementing a dynamic reward system that aligns with the specialist's role. On the other hand, less successful companies remain defensive, merely aiming to preserve their existing market share.
- Prioritize a unique strategy. Make informed risks based on customer insights. Companies should reassess their strategy and prepare their sales team for success by adjusting the channel mix to match customer buying processes and modifying sales roles to ensure consistent growth on various fronts.
Providers of Industrial Services
- Focus on innovation. Leading companies have placed utmost importance on developing and introducing new products or services, propelling their business through innovation, unlike their less successful counterparts who have not shown the same level of commitment towards innovation investment.
- It's the perfect moment to engage revenue operations to back ambitious growth. With the aid of data-guided sales, businesses persist in fostering growth through new sales personnel, unified processes, and increasingly involved customers.
Sales effectiveness comes naturally to us.
At Simon-Kucher, we know how to navigate your challenges and do so successfully.
Typical sales excellence projects with us deliver 10-20% revenue growth.
Start your improvement journey today by contacting a Simon-Kucher expert.
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