The Sales Effectiveness Effect

1. The Sales Effectiveness Effect 2004 State of the Marketplace Review Jim Dickie Barry Trailer

2. Sales Excellence Reviews • 4,000 small, medium, large firms • Initial project goals • Evaluation methods • Justification approaches • Implementation plans • Hands-on experiences

3. Selling In Turbulent Times • 2004 sales excellence challenge • Surveyed over 1,337 companies worldwide • Interviewed 200+ CEOs, CSOs, CMOs, • Results: • Understanding of the challenges • Defining of the causes • Surfacing best practices

4. The Report Card is NOT Good

5. Top Three Business Objectives For Sales Increase revenues Increase sales effectiveness Increase market share Increase customer loyalty Increase margins Reduce sell cycle Increase channel effectiveness Improve communications Decrease sales costs Support team selling Reduce sales admin burden Other 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

6. Generating leads New rep ramp-up Up-sell/cross-sell Avoiding discounting Optimizing channels Communications: sales teams/ enterprise No decisions rates Forecast accuracy New product rollouts Sharing best practices Building customer loyalty Sales rep retention Sales Effectiveness Issues

7. At Your Company, is the Sales Effectiveness Challenge: A) Increasing B) Holding steady C) Decreasing

8. Rate of Change in the Marketplace –Challenges Competitive activity in the marketplace Breadth of product offerings Complexity of product offerings Rate of new product introductions Admin burden placed on sales force Difficulty accessing information Amount of sales rep turnover Complexity of order entry process 1 2 3 4 5

9. Sales Effectiveness Hall of Fame • StorageTek • 300% increase in revenues/rep over 4 years • McKesson • 200%+ increase in new product selling effectiveness • Global eXchange Services • 350% increase in lead generation effectiveness • Pitney Bowes • Order error rate reduction from 23% to 1% • Xerox • Doubled services conversion rate of warranty customers

10. What impact is CRM having for you? A) Significant improvements in sales effectiveness B) Minor improvements C) No measurable improvement D) Do not know

11. Sales Effectiveness - The Dark Side • Success is not a given • Significant improvements – 25.7% • Minor improvements – 44.9% • No measurable results – 17.8% • Don’t know – 11.6%

12. Impacting the Customer Life Cycle CLOSE RETAIN ATTRACT SELECT EXTEND Reduce the number of “no” decisions General more/ better leads Shorten sell cycle and increase win rates Avoid customer losses, maximize renewals Generate greater incremental business

13. Sales Effectiveness in Action Case Study – Global eXchange Services • E-commerce vendor; 100,000 trading partners and 1 billion transactions annually in 58 countries • Very complex sale, hard to attract right leads • Before project started: • Revenue potential leads generated per 100 Web visitors = <1, per call center rep = 1.5/day

14. Global eXchange System Walkthrough

15. Global eXchange Success Statistics • Increased call center leads from 1.5/day to 7+ • New leads close 30% faster than traditionally gathered leads • Up-sell/cross-sell ratio improved by 25% • 48% of conversations advanced to the phone • Reach a higher-level decision maker

16. Sales Effectiveness in Action • General medical, $2B+ division of McKesson. • Represent 300 manufacturers, 30,000 products. • Project challenge: Represent every product as well as the product manager! • Technical requirements: Link field sales, marketing, distribution, finance, suppliers seamlessly into sales process.

17. General Medical System Walkthrough

18. General Medical Results • 30% increase in revenues per rep • 400% increase in new product hit rates • 1.4% improvements in margin • Higher rep retention rates

19. Sales Effectiveness Levers People Process Technology

20. What is the biggest single challenge negatively impacting CRM success? A) People B) Process C) Technology D) None of the Above

21. Sales Effectiveness Levers People Knowledge Process Technology

22. Toughest Challenges Encountered During CRM Initiative Populating/Maintaining Data Gaining User Acceptance Measuring Project ROI Matching Technology to Process Problems Customizing CRM Tools Identifying Process Problems Effectively Rolling Out System Getting Users Productive Supporting Remote Users Getting Executive Support Getting Adequate Funding 0% 10% 20% 30% 40% 50%

23. AMM Customer Message Management (CMM) Initiative • More effectively aligning sales & marketing • Focus on the how of sales versus the what • Creation, delivery and management of marketing messaging • Optimizing performance throughout the entire sales process

24. CMM Case Studies • Cisco • American Express • EDS • FedEx • IBM Canada

25. Percentage of Presentations Resulting in a Sale 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% <10% 10 - 25% 26 - 50% >50%

26. Percentage of Presentations Resulting in a Sale 40.0% 35.0% 30.0% 25.0% All Responses 20.0% World-class CMM 15.0% 10.0% 5.0% 0.0% <10% 10 - 25% 26 - 50% >50%

27. Common CMM CRM Components • Static & dynamic content support • Prospect specific focus • In-context sales process • Effectiveness analysis support • Link in with existing CRM applications www.CMMForum.org

28. Formula for Successful Change P x C x V x F > R • Four factors must be present for change to occur: • P - • C - • V - • F - The product of which must be greater than R - Resistance to change

29. Questions & Answers • White Papers at www.csoinsights.com • Sales Effectiveness Insights 2004 Top Ten Trends • Optimizing Sales Performance with CMM • Sales Knowledge Management Study Results (July)