High-tech sales problems remain a significant hurdle for growth
Selling in high-tech industries such as wireless is a serious problem. Companies are struggling with underperforming sales people, retaining top performers, hiring and compensating the right sales people, according to new survey research sponsored by Accenture.
The research finds:
· Salespeople spend nearly two-thirds (65%) of their time not selling.
· Most (57%) don’t make their sales quotas.
· The highest performers leave these companies more often than mid- and low-range performers.
· Three-fifths (60%) of companies don’t know how much they spend on sales compensation.
· Nearly half (44%) hire salespeople who don’t succeed.
· Approximately three-fourths (72%) plan to add people to their sales force yet nearly almost half (46%) struggle to do this well.
Shortcomings are expensive
All these shortcomings are expensive. High-tech companies spend up to $40 billion per year on sales processes. For these each company allocates between 8% and 20% of its annual revenue. Despite these outlays, they do not generate commensurate returns because sales processes, models, compensation and technologies are mostly outdated and inefficient.
Changes are needed
To solve these problems, these companies should consider several changes. Those include:
Make retention of high performers the highest priority
The research finds the top 20% of sales people bring in 62% of the revenues. To retain them, companies should invest more time and money making sure they pay well this high-performing group because the cost of them leaving is especially detrimental. When star salespeople leave, the company absorbs a disproportionately big blow.
In addition to losing their productivity companies create a gap from the time they leave until someone else can even attempt to duplicate their efforts.
Ramping a salesperson up to speed often takes up to a year. And only a small percentage of the new hires turn out to be top performers. When star sales people leave, the company absorbs a disproportionately big blow.
Disinvest in low performersTeach mid-range performers how to be high-performers
Companies should set aside more time teaching mid-range sales people how to emulate behaviors of high achievers. The majority of a company’s sales forces fall into this middle range. If companies lift many more of these mid-range achievers to the upper echelon, this will turn into much more productivity and higher revenues. The sheer numbers of mid-range performers who can be made into high performers makes them a key target for investment.
Use analytics to generate better insights
Sales people struggle to make sense of sales and customer data they receive. It is voluminous and disorganized. As a remedy, companies need to use analytics to synthesize data. Then sales people can develop insights about the data so they can make well-evaluated decisions that accelerate and increase sales.
Eliminate disaggregated silos
High-tech companies should build a sales operating model that eliminates disaggregated silos – which are too widespread – between marketing, services and sales. They should tap into broader and more dynamic sales networks outside their companies. Collaborating with intermediaries, channel partners and customers, they could extend their sales reach, corporate reputations and portfolio of well-targeted products and services.
Final thoughts
In the digital business arena what used to work well in selling doesn’t anymore. Digital is changing every aspect of high-tech businesses such as sales, marketing, strategy, investments, product development, manufacturing and after-sales support. In lockstep with businesses, all consumers are digital consumers. A new digital ecosystem is changing sales across the board.
Old play books for selling should be discarded. In this new sales arena, playing in innovative and non-traditional ways is the name of the game.
Sami Luukkonen is the Global Managing Director for Accenture’s Electronics and High-Tech business. He can be reached at [email protected].
Editor’s Note: The RCR Wireless News Reality Check section is where C-level executives and advisory firms from across the mobile industry share unique insights and experiences.
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