Ben Ellencweig, Partner at McKinsey & Company, explains how successful sales organisations are prioritising insight, agility, automation and re-skilling.
Sales has always been a “sensing” organisation, attuned to changes in customer sentiment, shifts in demand, and the requirements of different buying stages. But those senses are being flooded as customers shift to digital engagement, leaving sellers with more channels to cover and more interactions to manage.
The pandemic has intensified these challenges, exposing weaknesses in existing sales models and gaps in digital readiness. As yet, only a handful of companies have readied their sales organisations to respond to the next normal.
Mastering analytics and embracing dexterity have emerged as important differentiators, but the best organisations are those that have been able to build up connections across the function to drive a multiplier effect that can increase sales ROI by more than 20 percent.
Specifically, they prioritise four steps:
1. Centralise commercial ops and generate actionable insights
Many sales organisations face significant challenges in guiding teams dispersed across large territories. This limits the ability of sales reps to share best practices, access valuable customer insights, and expedite sales processes that can make a meaningful difference to their bookings. To make the most of the abundance of data and draw the right insights, forward-thinking sales leaders have centralised commercial operations functions and created “commercial hubs” that distribute better and more targeted insights as well as drive more agility in the organisation.
Commercial hubs bring together three elements: the right talent with deep experience in sales, analytics and data science, and product; an operating model capable of interacting seamlessly with the reps (including the ability to tailor those interactions); and access to a data and analytics infrastructure optimised to the hub’s needs. This kind of hub can develop and scale the delivery of tailored insights and sales plays to reps, track and manage performance, provide coaching based on what’s working in the field, and enable day-to-day efficiencies that eliminate waste and drive bookings.
2. Enable an agile go-to-market model
With the insights generated by the hub, sales leaders can use advanced intelligence to better align sales reps to the right sales opportunities, pulling the right people in at the right stage of a deal, assembling teams with the necessary skills to innovate and design products and services that customers want, and providing insights that help close opportunities.
For example, instead of simply assigning larger accounts to field reps and smaller ones to inside sales, a global telecommunications company now lets the type of transaction—what is being sold to whom and when—determine the go-to-market approach. Simple transactions are handled by inside sales or digital channels, while field reps (after an initial lead-nurturing stage by the inside sales team) cover more complex purchasing. In the past, when a prospective customer initiated a query on the company’s website, the digital-sales team referred it to an inbound call centre that had basic technical and selling capabilities but was unable to convert complex transactions. Data has shown, however, that inside sales can effectively follow up remotely by bringing in experts from a centralised pool in the commercial hub for guidance. The final negotiation and close are then managed by field sales. This new go-to-market approach speeds time to market, raises customer satisfaction, and lowers cost.
Better analytics can also help sales organisations create a more flexible and agile operating model. One software provider used analytics to identify which products and services customers were most likely to want to buy. It then used that information to move from fixed teams in pre-defined roles to “hunting pods” made up of a mix of the most relevant experts from across the commercial hub. These hunting pods evaluated potential deals, designed solutions, developed the best pitch for each customer, and brought together the right expertise to the most important sales meetings.
Our experience shows that sales organisations that embrace this more agile, data-driven go-to-market approach can improve conversion rates and lower the cost to serve by 5 to 15 percent.
3. Design smarter, automated sales processes
With a centralised commercial hub generating insights and an agile operating model redefining how sellers work, sales organisations can trigger the next level of value by redesigning their core sales processes to make them more “intelligent.”
In the average company, for example, reps spend only about 16 percent of their day in front of the customer, virtually or in person. By contrast, reps in the best-performing sales organisations spend 40 to 50 percent of their time in front of the customer. The difference? The top organisations redesign their sales processes and thoughtfully automate whatever they can. McKinsey’s research shows that up to 30 percent of sales activities can be automated.
Automation can be applied across sales processes. Analytics embedded into lead-generation, for example, can identify leads with the best conversion potential. Chatbots reach out to them over text or email, using artificial intelligence to understand the contact’s response and assess the conversion potential. This solution allows sales reps to contact only those leads where there is clear buying interest, saving time, reducing cost, and improving conversion rates.
Other common applications leverage AI and robotic process automation to streamline the bid process, reducing the time it takes to analyse and respond to proposals. Instead of completing proposal questions manually, it uses predesigned proposals that are automatically populated with internal data.
Early adopters of sales automation consistently report increases in customer satisfaction, efficiency improvements of 10 to 15 percent, and meaningful sales uplifts.
4. Empower and re-skill the front line
In many organisations, capability building and sales training are undifferentiated. Centralised commercial hubs, smart processes, and responsive go-to-market structures can help sales reps significantly improve both their performance and job satisfaction, as long as they understand how best to adapt to the new operating model and leverage the insights to which they have access. To deliver on that opportunity, organisations need to update not just what they teach their sales reps but also how, by establishing tailored learning journeys.
For example, a software-solutions company was troubled by high churn rates in its inside sales force, which consisted largely of younger reps with little experience. After the centralised commercial hub closely examined performance and retention data, they discovered that these sellers’ transition moments, such as when they mastered a role or began looking for a new challenge, were different from those of more established reps. Four months into their job, for instance, young sellers typically plateaued. By intervening earlier with fresh training, leaders were able to change their performance trajectory, sharpening their skills in ways that made them more productive and helping them feel more successful. These changes improved performance and retention significantly.
The use of analytics to support reps is particularly important because the shift to virtualised sales models has increased the importance of thoughtful, timely, and relevant coaching and change management. A tech company that moved from a static account model to a more flexible and collaborative method knew it needed more intensive performance management and training to help reps use available tools and insights. The sales organization created personalized digital dashboards that made it easy for reps to access key customer data and pipeline analysis as well as recommended actions. The dashboard’s back-end reporting allowed managers to track activity against goals to identify top-performing reps and those who needed more support.
Success in the next normal will require sales organisations to analyse virtual interactions, derive insights in near-real time, embrace digital channels, and adapt their sales reps. By focusing on building and scaling proven capabilities, sales leaders can trigger the domino effect they need to drive the next level of growth and performance.
Ben Ellencweig is a Partner at McKinsey & Company. He would like to thank Bertil Chappuis, Gui Cruz, Maria Valdivieso, Michael Viertler for their contribution to this article.
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