Idc sales productivity framework overview july 2009

Copyright 2009 IDC. Reproduction is forbidden unless authorized. All rights reserved.

The IDC Sales Productivity Framework

Lee LevittDirector, IDCSales Advisory PracticeJuly 16th, 2009

www.SalesAdvisoryPractice.com

July 8, 2009© 2009 IDC 2

AgendaAgenda

What is Sales Productivity?

Key Sales Productivity Metrics

The Five Levers

Discussion/Feedback

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Focus on Sales ProductivityFocus on Sales Productivity

Some Basic Precepts:

Success in complex B2B selling requires both “art” and “science”– The ability of the rep to build relationships is the “art of selling”– The processes that support the rep’s activities is the “science of selling”

Behavioral (activity-based) measures are useful, but provide only partial diagnostic view

Achievement (success-based) measures provide detailed, sequential view of performance

The “right” diagnostic measures support good prescriptive analysis – literally “telling the story” of what’s going on and what needs to be changed

The “best” diagnostic sales measures encompass both sales and marketing contributions

July 8, 2009© 2009 IDC 4

What is Sales Productivity?What is Sales Productivity?

Sales productivity is defined as the effectiveness and efficiency of the sales organization in moving

opportunities through the sales cycle

Source: IDC 2009IDC Proprietary

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The IDC Sales Productivity FrameworkThe IDC Sales Productivity Framework

Sales ProductivityAssessment

(sales performance)

Sales ProductivityAssessment

(sales performance)

Sales ProductivityLevers

(process improvement)

Sales ProductivityLevers

(process improvement)

+ =IncreasedRevenues

&Profitability

IncreasedRevenues

&Profitability

Sales Cycle by Stage

SalesProductivity

Levers


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Key Sales Productivity MetricsKey Sales Productivity Metrics

Components of Sales Productivity:• Sales Effectiveness – the ability of reps to move specific opportunities forward to the

mutual satisfaction of both parties. Effectiveness is measured by conversion rates for each stage of the sales cycle. Enhancements to this metric incorporate the qualifiers of deal "quality" and customer satisfaction scores

• Sales Efficiency – the rate at which a sales person or team moves individual opportunities from initiation to one of several defined conclusions (closed, lost, no decision, returned to marketing for additional nurturing, abandoned). Sometimes referred to as “Sales Velocity”

• Sales Volume – the number of open deals in a given period

• Sales Revenue – the revenue delivered by the sales person or team in a given period

• Sales Profitability – the profitability of the sales person or team in a given period. Measured as SBR (costs/revenue).

Sales Cycle by Stage


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Key Sales Productivity MetricsKey Sales Productivity Metrics

Stage 1

32 days

Stage 2

27 days

Stage 3

28 days

Stage 4

42 days

Stage 5

24 days35% 65% 45% 55% 75%

$

Effectiveness = Conversion Rate by Stage

Efficiency = Days in Stage

SalesVolume

SalesRevenueSales

ProfitabilitySource: IDC 2009IDC Proprietary

July 8, 2009© 2009 IDC 8

SalesProductivity

Levers SalesManagement

SalesEnablement

CustomerIntelligence

SalesMethodology

Talent Management

The Five Levers of Sales Productivity


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SalesProductivity

SalesManagement

SalesEnablement


SalesMethodology

Talent Management

Purchase & Relationship History

Share of Wallet Role-based Intelligence Company-based Intelligence Industry/Vertical Intelligence

ToolsMetrics & Reporting

The IDC Sales Productivity FrameworkSample Processes

Asset Creation, Management & Delivery

Governance Delivery Vehicle Selection &

Management Tribal Knowledge

Staff Planning & Recruiting Hiring & On-boarding Training & Development Retention, Repositioning &

Replacement Compensation

First Line Sales Manager & Coaching

Strategy & Planning Performance Management Quality & Change Management Forecasting/Quota Setting Pipeline Management Org Structure/Coverage

Model/Channel Strategy

Sales Cycle Stages & Motions Call Planning Account Planning Opportunity Management


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SalesProductivity

SalesManagement

SalesEnablement


SalesMethodology

Talent Management

Customer Satisfaction Customer Retention Share of Wallet Netpromoter Scores


The IDC Sales Productivity FrameworkSample Metrics

Rep Time Allocation Asset Delivery, Utilization &

Impact Asset Ratings Asset Time-to-Market

Hiring Pipeline Employee Satisfaction Employee Tenure & Retention Training Usage & Certifications Quota Attainment & MBO

performance

Revenue/Margin Attainment Pipeline Ratios – Size & Shape Manager Time Allocation Span & Control

Sales Velocity & Conversion by Stage Deal Quality – Size, Service Attach Rate, Growth/Erosion CRM Data Integrity Activity Mapping


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Assessment Data Suggests Specific Levers (a sampling)Assessment Data Suggests Specific Levers (a sampling)

Data Output Talent Management

Sales Management

Sales Methodology

Sales Enablement

Customer Intelligence

Stage 1 duration, conversion rates

Rep quality Coaching support

The “right” tools?

Poor CI, poor leads

Sales Volume Rep skills Coaching support

Tools too complex?

Enough leads from marketing?

Sales Profitability Compensation driving behaviors

Too many resources

The “right” customers?

Customer Satisfaction Comp, skills issue?

Coaching support

Conducting discovery?

Portfolio selling, service attach rates

Rep quality, Training

Coaching support

Portfolio selling tools

Customer requirements

Deal close rates Training Coaching support


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Lee Levitt Program Director Sales Advisory [email protected]: 508-988-7974

www.SalesAdvisoryPractice.com

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Appendix A:

Related Sales Advisory Research

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Recent Sales Advisory ResearchRecent Sales Advisory Research

Sales Operations Best Practice Series

Best Practices in Sales Performance Improvement: The Role of the First Line Sales Manager (IDC #218087, April 2009)

Best Practices in Sales Performance Improvement: Global Inside Sales Strategies (IDC #216773, February 2009)

Best Practices in Sales Performance Improvement: Sales Productivity Metrics and Key Performance Indicators (IDC #213031, July 2008)

Best Practices in Sales Performance Improvement: The Changing Nature of Inside Sales (IDC #210353, February 2008)

Best Practices in Sales Performance Improvement: Outsourcing Delivers High-Intensity Leads (IDC #213848, August 2008)

Foundation Studies

The IDC Sales Productivity Framework: A Structured Approach to Evaluating and Managing a Complex Sales Organization (forthcoming)

The State of the Art in Sales Enablement: An Intensive Study of Current Practices (IDC #219182, July 2009)

Sales Enablement 203: A Framework for Driving Business Growth (IDC #TB20080619, June 2008)

IDC’s Worldwide Sales and Marketing Taxonomy, 2008: A Blueprint for Cost Control (IDC #211900, Apr. 2008)

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Recent Sales Advisory ResearchRecent Sales Advisory Research

End User Research

Vertical Leadership Survey: Making the Grade (IDC #212817, July 2008)

An Inconvenient Truth: The Role and Value of Information in the IT Buying Process (IDC #209985, January 2008)

Winning the Midmarket: Cost-Effective Strategies to Improve Sales Performance (IDC #212165, May 2008)

Tech Sales Insights and End User Research

Knock Knock – It's the Fourth Quarter (IDC #219180 , July 2009)

Don’t Understand Sales Enablement? You’re Not Alone (IDC #TB20090127, Jan, 2009)

Sales and Marketing Organizational Transformation (IDC #213915, August 2008)

Account Planning for the 3.0 Customer (IDC #212166, May 2008)

Sales Enablement – Empowering the Sales Rep (IDC #209669, Dec. 2007)

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Upcoming Sales Advisory ResearchUpcoming Sales Advisory Research

Best Practices

Sales Culture Change (in the field now)

Account Planning (fall)

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Appendix B:

Detail on the Sales Productivity Framework

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SalesProductivity

SalesManagement

SalesEnablement


SalesMethodology

Talent Management

Sales Operations Sales Marketing


The IDC Sales Productivity FrameworkOrganizational Engagement

Sales Operations Marketing Information Technology

Sales Operations Sales Training Human Resources

Sales Operations Sales Executive Committee

Sales Operations Training


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SalesProductivity

SalesManagement

SalesEnablement


SalesMethodology

Talent Management

Databases & BI Tools Balanced Scorecard Satmetrix LucidEra Lattice Engines


The IDC Sales Productivity FrameworkTools

Savo Group Kadient Ribbit Stratascope Google

Job Boards – monster.com, Career Builder, etc.

Human Resource Software Compensation Management &

Planning Software

Salesforce.com Oracle SAP Microsoft CRM LucidEra Xactly Balanced Scorecard SPIN Selling

Customer Centric Selling Miller Heiman

The TAS Group
