I’ll be offering a series of recommendations from their research over the coming weeks, but I wanted to start by focusing on a new metric that CSO Insights introduced to the study this year: how effectively B2B sales organisations are tracking the real progress of their prospect’s buying decision process.
Fewer than 20% of sales organisations continually track buying behaviour
I found the answer very disturbing, and I think you will too: Fewer than 20% of the 600+ companies surveyed had the discipline to continually track specific buying behaviours in order to assess the true state of their sales pipelines. More than half never bothered to track buying behaviour, or only did so in an ad-hoc fashion.
The majority of the sales organisations surveyed - a representative cross section of businesses across multiple verticals and geographies - appear to be relying primarily on self-reported sales activity, rather than insisting on provable evidence of buying behaviour when it comes to managing their sales pipelines.
Sales forecast accuracy remains a critical challenge
So perhaps it’s no wonder that sales forecast accuracy continues to bedevil most sales organisations, with on average less than half of forecasted deals actually closing at the time or for the value predicted by the sales person. But the sales organisations that had implemented buying cycle tracking did far better.
If you want a simple justification for why it’s worth insisting that your sales people provide evidence of their prospect’s buying behaviour, consider this: the sales organisations that did so won nearly 40% more of their forecasted deals than the organisations that paid no attention to it - and had far fewer losses and “no decisions”.
You must focus on the buying process
If you’re amongst the 80% of sales organisations that could and should be doing better, you must start by aligning your pipeline stages with the key phases in your prospect’s buying decision process. At each stage, you must anticipate your prospect’s likely intentions, concerns and motivations, and align your sales activities accordingly.
But most important, you must establish clear gates or milestones between each stage of the pipeline that can only be navigated if your sales person can provide reliable evidence that the prospect has made a significant, observable and clearly defined step forward in their buying process.
Document the results of your sales conversation
CSO Insights make one particular recommendation that I believe every sales organisation needs to implement as a basic discipline: after every significant interaction with the prospect, and most particularly when needs are identified, requirements established or the decision process or criteria agreed, the sales person must record their understanding in an email to the prospect and have the prospect correct or agree their assumptions - and attach the correspondence to the opportunity record in the CRM system.
Be prepared for a reality check
If you implement this process - and given the dramatically better performance shown by organisations that have embraced this, I can’t imagine why you would not - you need to be prepared for a reality check.
Inevitably, applying a rigorous, evidence-based approach to accurately placing your prospects in your pipeline based on the true state of their buying decision process will mean that a number of opportunities will slip backwards or fall out of the pipeline altogether.
This may make it appear that your pipeline has shrunk. But these deals were never real - or as well advanced as you thought - in the first place. And you will be far better off flushing them out rather than continuing to fool yourself.
Start transforming your sales forecast accuracy today
If you’re one of the 4 in 5 sales organisations that could and should be doing better, I’d encourage you to start today by:
Redefining your pipeline stages to reflect the buying process
Establishing clearly defined gates or milestones between each stage based on observable evidence of buying behaviour
Insisting that your sales people requalify every opportunity and review their conclusions with you - backed by the evidence
Insisting that your sales people document their agreements and assumptions and validate them with the prospect
Your prospects will appreciate it - your organisation will come across as highly professional. But most important of all, you could end up winning as much as 40% more of your forecasted opportunities. We've helped a number of clients implement these disciplines, and I'd be happy to share what we've learned - just drop me a line.