Just about everyone agrees that 2009 is going to be a tough year for business, but it could be particularly difficult...
By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.
for those in sales, judging from the results of an annual sales performance survey.
Despite the difficult times, a majority of companies (86%) said they were raising quotas for their sales force in 2009, according to the 2009 Sales Performance Optimization Survey from CSO Insights, a sales consultancy based in both Boulder, Colo., and San Francisco. Making that quota should prove a challenge, considering that only 58% of organizations made their overall sales quota in 2008, down from 61% in 2007.
"That's like the coach of a high-jump team who sees that 58% make a jump at 6 feet and 42% can't, and then moves the bar to 6 feet, 3 inches," said Jim Dickie, a partner with the firm. "What do you think is going to happen, all things being equal?"
All things in 2009, of course, will not be equal. The survey of more than 1,800 sales managers showed that many are cutting expenses in sales, including travel, training and technology. Now in its 15th year, the results from the 2008 survey echo another time, according to Dickie.
"Everybody remembers 2002 was a down year -- because the stock market went down, sales performance went down," he said. In fact, that was the worst year for sales performance in the survey's history. Only 48% of salespeople made their number. "2009 looks like it's going to be rougher to us."
Organizations are reducing sales expenses -- CRM, training, headcount -- and that is likely to mean reducing profits and margins as well, Dickie said.
"I think you need to invest your way to success," he said. "We just think that people are going to have to invest in a lot of technology if they're really going to help salespeople sell."
That may not necessarily mean a core CRM suite, however. CRM implementations continue to rise, with 71% of respondents reporting that they have formally implemented CRM sales software. Of those who have yet to implement CRM, 40% say they plan to do so in 2009. Yet the top benefits that respondents cite from CRM are efficiency focused -- improved communications, improved forecast accuracy, and a reduced burden on sales. The benefit of "increased margins" was cited by only 6% of respondents.
"If we think that technology is going to bail us out, core CRM doesn't look like it's doing it," Dickie said. "Analytics, knowledge management -- we think those can impact things."
Satisfaction with CRM vendors is on the increase as well, with 48% of respondents saying they were satisfied with their vendor and another 20% saying they were very satisfied. Those numbers tend to rise with the length of time a CRM system is in place. For example, of those who had CRM for less than a year, 13% said they were very satisfied, compared with 19% who had a system one to three years, and 27% for more than three years.
Some survey respondents (13%) are also more willing to replace their CRM system. While that might seem an expensive prospect during a recession, Software as a Service (SaaS) applications are making switching easier, according to the report.
"Ten years ago, we said projects are failing because the tools don't work," Dickie said. "Now it's not because of the technology, it's because of adoption. A combination of the technology and process is the best payback. If you have great technology with lousy process, you're just doing bad things even faster than before."
Most importantly, sales needs to focus on effectiveness in 2009. If budgets can't be increased, then reallocate wisely. For example, money spent on hiring additional people or to replace people who have left could be used elsewhere. The ramp-up time to get to full productivity is 10 months or longer for 46% of organizations.
"You'd better hire them six months ago," Dickie said. "Instead, let's add marketing automation and have salespeople do their own lead-gen campaigns. You have to deal with effectiveness."
Other interesting benchmarking data from the Sales Performance Optimization 2009 Survey
- Less than 37% of firms are leveraging mobile device access to CRM data, although those that do are more satisfied with their CRM vendor.
- SaaS CRM customers are more loyal. 72% of SaaS application users say they are loyal advocates for the CRM provider, compared with just 38% of sales organizations that have on-premise CRM.
- 15% of respondents said they are currently using sales analytics, and another 13% plan to use it in 2009, which apparently has a significant impact on win rates. Those using sales analytics report win rates of 51%, compared with 47% for those who are not. Similarly, loss rates are 27% for those who use analytics and 31% for those who do not.
- 61% of reps with CRM tools installed make their quota, versus 58% that do not.