You’d think we were all still in the “Me Generation” of the 1970s when it comes to sales acceleration. Quite understandably, sales vice presidents and sales managers (and CROs and CFOs and CEOs, too) see it as a tool for improving outcomes for their businesses. Sales people are more productive, they can work more deals, they can generate more quotes, and they end up on the right side of the numbers game.
In this case, though, the truth is better than the perception. Sales productivity is not a linear equation – you can read how this pertains to lead volumes in our report “The Lead Quantity Myth.” The report explains how simply delivering more leads will not lead to a corresponding increase in closed deals – in fact, it can result in exactly the opposite.
A different phenomenon is at work with sales acceleration. Yes, with greater sales velocity comes an increase in closed deals – but again, it’s not a straight line. Accelerating sales – and, by definition, eliminating much of the friction of buying – results in your sales team reaching more potential customers, but also in closing more deals than they would have otherwise.
Accelerating sales is not just about you. It’s also about your customer, and your customer’s experience in buying from you. They want to buy at their own speed. Yes, they want to do their due diligence and make the best decision for their company, but they also want to get results, too. That means they want to buy from companies that move at their pace. Delays because of an awkward quoting system or sales enablement practices that prevent customers from being able to make a decision cause doubt in the customers’ minds and cause you to fall behind the pace that they want to move, and that costs you in deals closed.
Promptness is a major influencer for buyers. According to a recent study by Zogby Analytics, 57 percent of buyers say they are influenced in their decisions to buy by the seller’s speed to respond. We most often hear about the importance of responsiveness in relation to the speed of sales responding to leads, but this desire for responsiveness really becomes critical during the sales process as sales has invested time and effort in reaching out to prospects and working with them toward a decision. If responsiveness is critical even before a buyer has contact with a seller, it has even greater weight after a relationship is in place between buyer and seller.
So faster and more responsive behaviors make buyers feel better. But do they lead to better results? According to the Aberdeen Group’s Peter Ostrow, yes. His report on CPQ revealed that the use of CPQ by a sales organization led to 58 percent of reps making their sales quotas, versus 46 percent of non-users. Aberdeen also found that best-in-class companies had a much higher rate of having streamlined quotes, proposals, contract management and sales content (74 percent) than other companies (59 percent).
Other Aberdeen numbers further bear out the value of CPQ in accelerating the sales cycle and at the same time getting more out of it. Companies using CPQ have a sales cycle length 28.8 percent shorter than companies without CPQ, and at the same time the average deal size for CPQ users is 105 percent greater than for non-CPQ users. On top of that, CPQ users are 23 percent better at margin protection than their counterparts. In other words, by using CPQ to increase sales productivity, companies are selling faster, closing bigger deals, and making more margin off those deals.
There’s a hidden benefit to businesses of accelerating sales through better processes and technologies: a happier sales force. According to CSO Insights and Accenture, when companies have tightly-integrated selling, marketing, pricing, service and fulfillment workflows and systems, annual sales force turnover drops from 27 percent to 19 percent. That reduction in sales turnover has a profound effect on the bottom line: a study by DePaul University found that the acquisition cost of a new sales employee was $29,159 and the training costs were $36,290. Even without including the opportunity loss of having an undermanned territory as a business hires a new salesperson to cover it, that’s a total of $65,449 to replace a lost sales rep. That means, in a sales organization with 100 reps, having an integrated set of tools to accelerate sales could lead to a savings of $523,592 each year – and it can lead to a longer-tenured and more effective sales force.
Faster, more frictionless sales make everyone happier – but they don’t happen without a smart investment in technology to reduce that friction.
To learn more about the value of faster proposal generation, read “CPQ: the ROI Argument.” To learn more about best practices for sales enablement, read “Getting a Handle on Your Sales Enablement Crisis.”