I’ve been with McKinsey for 20 years, and sales excellence is a huge topic for our clients. If you think about it, a lot of companies spend somewhere between 5% to 15% of revenue on sales. The way you deploy and use that investment makes a huge difference on both top-line growth and bottom-line performance. Getting it right is super important.

Based on the work we’ve done with clients, plus our own internal research over the past five years, we’ve really tried to get to the heart of how organizations can successfully drive sales excellence.

What we’ve found is that there are five core components to accomplishing this:

It all begins with understanding how to skate to where the puck is going, to use a hockey analogy. What we find with clients a lot of times is that they’re very focused on where the business is today — what segments and what customers are producing the revenue.

The key is to go where the opportunity is going to be next year and the year after. Companies that are able to identify and map out opportunities — and then align their go-to-market accordingly —  are much more successful.

A great example of skating to where the puck is going is Google. It monitors about 140 million businesses on a real-time basis. It’s also done the analytics to figure out what variables are associated with a propensity to buy digital advertising.

Google then monitors those variables, and when it sees an increased probability of purchase by a customer or by a potential customer, it targets them specifically. This method has led to massive sales productivity for the company over the last few years.

In order to get the right people and the right partners in the right spot, there are three things you need to keep in mind. One is the go-to-market architecture (the mix of routes to market you use). The second is the sales planning process to then allocate people to those routes. The third is to do the skills assessment to make sure that those folks are equipped to win the deals when they have the opportunity.

A great example of getting the right skills in the right people at the right time is an insurance call center client we had. We identified a 3.4x difference between the lowest- and highest-performing sales reps. We then dug into what was driving that performance — things like call cancellation handling. We used that information to build sales capability and hiring plans. That resulted in a 30% increase in sales against baseline in the pilot locations where we applied it.

Once you have identified opportunities and you have the right people and partners aligned to those opportunities, you want to make sure that those sales folks or partners deliver the right pitch. And you shouldn’t leave that to chance. You should apply science and process to it.

There’s a few ways that you can do this. The first is to segment the customer base so that you know the different needs of different segments. The second is to equip your sales force with the listening skills to be able to identify what we call the fingerprint of an opportunity, so they can match the customer to value proposition.

The third is to provide support to the sales force in the form of predictive analytics, next product to buy, or segment typing tools that help the sales force understand what to pitch, especially in companies that have complex portfolios.

Then you need to have marketing and sales be best friends. Marketing needs to be able to help sales in the form of either the right collateral at the proposal stage, or lead generation and demand generation. But matching that marketing investment to the right spots in the sales funnel is critical.

And then finally, rigorous account planning. So at the end of the day, nothing beats having a very deliberate plan of what we’re going to sell to whom, within an organization, and doing that pre-planning to be ready for action in the field.

As you think over how to create the right pitch, there’s a great example from a high-tech client of mine who was very much a product feature/function-selling sales force. The company has since evolved into more of a business outcome/solution-oriented sales force.

It went through a full revamp of its marketing umbrella in terms of what value propositions the company was going to lead with. The company then trained its sales force to have inquiry skills to be able to uncover customer needs, and supported the sales force with a number of tools to be able to enable the matching, such as big video libraries.

And then the company had very rigorous account planning. And all of this resulted in the company being repositioned in the eyes of customers and even the investor community.

If you think about sales forces, they’re by definition dispersed across geographies, product lines, and routes to market. At the same time, if you’re going to drive sales excellence, especially in large, complex companies, you have to have a degree of centrally driven initiatives and change.

The way companies that are good at this go about it is to invest in sales operations to build a set of capabilities that allow them to drive the different elements of sales excellence consistently throughout dispersed geographies.

What we find often is that companies will actually underinvest in that infrastructure, because it’s seen as non-quota carrying, and therefore every time there’s a downturn, those are the folks who get cut.

Yet our research actually shows that the best-performing companies invest heavily in sales operations. What we’ve also found is the best performers typically have about one sales ops person for every one person in the field. So, it’s a significant investment in that back-end infrastructure.

What all is included in sales operations? There’s all of the customer insight and opportunity mapping piece of it. There’s the sales strategy and planning component. There is sales capability building, compensation design and delivery, and then sales technology. Those are all key components.

In order to drive sales excellence in a company — especially large, complex companies that are operating globally — you need to be able to get in front of the right opportunities at the right time, with the right people, deliver the right pitch, and be able to execute the sales operations so that you are consistent and effective.

But wrapped around all of the above is an operating model that allows you to be able to execute and make the decisions you need to make on an ongoing basis. And some of the decisions that you need to make under the commercial operating model are the degree of centralization versus decentralization.

We think the best model is one where you have a central organization that develops strategy and guidelines, orchestrates the planning process, and then leads the performance management; with regions then doing the deep operational planning, and countries executing.

The second big decision area is around roles and responsibilities across geographies, products, and segments. This is to make sure that once you’ve actually planned, you can make decisions in quarter.

The last big decision is around sales forecasting. There are a lot of companies that fall into situations where they have multiple groups forecasting, and it can get extremely burdensome and confusing. Having clarity around who is going to forecast is another seemingly simple but actually very important issue in terms of an operating model.

Companies that are able to identify and map out opportunities — and then align their go-to-market accordingly — are much more successful.”

Bertil Chappuis | Senior Partner, McKinsey & Company
The 7 Biggest Trends Upending Sales Today By Maria Valdivieso de Uster,
Director of Knowledge, McKinsey & Company’s Marketing and Sales Practice
 

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