Ask most B2B sales reps why they won their last deal, and they’ll undoubtedly take sole credit for the win. Query as to the story behind their most recent loss, and the culpability suddenly shifts toward…well, anyone but themselves. And it’s probably due to pricing, right? Let’s look at the data to decide. My newest research, scheduled for publication soon in “Got Friction? Workflow Fixes that Shorten the B2B Sales Cycle,” includes a simple question for executive respondents: what are the most frequent reasons why your team loses deals? Interestingly, the most popular results were a dead heat between the standard—yes, price—and the unexpected: “failure to diagnose or control internal politics in our buyer’s organization.” In other words, pricing disconnects between buyer and seller do, in fact, deserve half the blame for sales losses, but the sales rep is equally as responsible for misreading their target account.
OK, enough with the bad news. Even the Best-in-Class companies in the research only convert 42% of their leads (compared with 31% and 20% respectively among Industry Average and Laggard firms), and see 48% of formal contracts result in orders (vs. 38% and 34%), so you can’t win ‘em all. I know this to be true: I’m a Red Sox fan. In B2B selling, however, given the enormous expense of human and technical resources dedicated to meeting quota, it’s imperative that we stack the deck in favor of the strongest possible batting average, because those losses not only hurt, they cost serious money. Perhaps not CC Sabathia-level losses, but you get my drift.
Figure 1: Smarter Selling, Better Results
Source: Aberdeen Group, July 2014
So now we turn to configure / price / quote solutions, the subject of this blog series, and the extent to which Best-in-Class companies use these platforms to run their sales operations as responsible, 21st century businesses, more effectively than under-performing companies. This is where pricing as well as reading the customer’s tea leaves comes into focus, because regardless of which of the following scenarios most mirrors your business, the data suggests that CPQ will streamline your sales workflow processes:
Figure 1 links performance to behavior, which is the essential focus of Aberdeen’s objective, non-sponsored research model. In addition to defining the Best-in-Class practices above, one more slice-and-dice of the same survey data provides a compelling coda to the story: CPQ users are 23%, 11%, and 89% more adept than non-adopters at these same core competencies. Take special note of that last one: companies using CPQ to streamline their sales funnel are 89% less likely to waste precious sales resources on unlikely wins, because they are able to connect properly archived content – pricing, quotes, proposals, contracts, even marketing collateral and CRM-collected customer intelligence – to the ultimate dispensation of their successes and failures alike. Knowing when to hold ‘em, and when to fold ‘em? Kenny Rogers may just well have been a President’s Club sales ace.
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