The core problem with Sales Enablement

Why is it so difficult to enable a sales force to become an effective selling machine?  I believe that there are multiple facets to this problem that companies must address.  Assuming that you have developed or selected a sales process and methodology that are appropriate to your offerings, let’s look at what is necessary to enable the sales force (Sorry, but if you have been reading my blog for a while, you know that I love lists!).

1. Sales Training – The entire sales and marketing organizations must understand the methodology and process being followed.
2. Marketing Alignment – Based on the methodology and process chosen, the marketing organization needs to produce assets and deliver campaigns that fit appropriately into the methodology.
3. Sales Intelligence – Organizations need access to their own history of transactional records, support records, project status reports, customer surveys, close ratios, deal sizes, cycle times, and their overall effectiveness.
4. Market Intelligence – You need to be aware of your prospects world and point of view, their current market outlook, their industry, their performance, issues, and initiatives.  You need to know who is in charge and how decisions get funded.
5. Competitive Intelligence – Your sales teams need to know what they are up against.  It is difficult during this age of accelerated technological development to keep this information fresh but it is critical in order to be able to differentiate your offerings.

I think it is difficult for a sales executive with a solid offering to be successful and efficient without following a proven methodology, without timely access to supporting resources, without any historical background, without knowing their prospects industry or organization, or without knowing what the competition brings to the table.  When I talk about sales enablement, these are the components that I believe have to be brought together.  The core problem is that a deficiency in any facet can derail the entire process.

The problem is compounded by the fact that minor deficiencies might just slow you down or cause a deal to be smaller than it could have been or to lose an occasional deal that should have been secured.  Couple that with an unstable economy and you have a recipe for disaster.

Let’s look at an example.  Our sample company does $10 million in annual revenue with a 40% close ratio and an average deal size of $100k on a 90 day sales cycle.  That means that the 5 sales reps are each closing 20 deals per year while working 50.  They are focused on 12-15 deals at a time.  If our sales enablement capabilities cause a 3% drop in our overall effectiveness, our sales people will only be working on 48 deals and closing only 18 of them for an average price of just $97k.  The result is a revenue picture of $8.7 million or a drop of about 13%.  Assuming you have fixed costs in the 25% range and an operating profit of 15%, profits would drop by a whopping 47%.  The compounding effect can be devastating.  A 3% drop in sales effectiveness can easily result in the loss of half of your profits.

You could re-coup your lost revenues by hiring another sales rep at a cost of $150k and be faced with the same problem next year when your efficiencies drop further or you could address the core of the problem and shore up each part of your sales enablement platform for similar monies while building a solid foundation for future growth.

Next week, I’ll continue this discussion with some details about each facet of sales enablement.

-Bruce A. Brien, CEO, Stratascope Inc.