2021 Buyer Preferences Study: Reconnecting with buyers
Buyers are becoming harder to please, and sellers are failing to prove their value. Discover how sales organizations can overcome this gap.
Forecasting sales is hard — and it’s also time-consuming.
Sales leaders spend countless hours discussing the criteria for evaluating opportunities before adding them to a forecast. And sales managers spend even more hours reviewing their forecasts with salespeople to ensure their deals meet those criteria.
Despite all the time spent; sales organizations don’t seem to be improving at forecasting. In our 2020–21 Sales Performance Study, win rates of forecasted opportunities remained consistent with 2018–2019 levels at 47%. No-decisions decreased a bit, from 20.7% to 20.2%, and lost opportunities increased slightly from 32% to 32.4%.
To better understand how to improve sales forecasts, the Korn Ferry Research 2020-21 Sales Performance Study looked at what successful companies did differently from their less successful peers. The answer is customer relationships.
Year after year, research shows that sales process and customer relationships are two primary contributors to sales success. So, to help our clients decide whether to prioritize work on processes or customer relationships, we looked at which contributed more to sales performance improvements.
When we compared win rates to sales process win rates, we saw a subtle relationship between process rigor and winning more deals. We found a much more profound impact on sales performance when we looked at the level of relationship a company has with its customers.
Let’s dig into the details for a better understanding.
In the Sales Relationship Process (SPR) Matrix, we break customer relationships into five levels, from weakest to strongest: Approved Vendor, Preferred Supplier, Solutions Consultant, Strategic Contributor and Trusted Partner.
More than a third of respondents said customers considered them a Solutions Consultant. The next highest level was Preferred Supplier, followed by Approved Vendor, then Strategic Contributor.
Only 7% of our respondents felt that customers considered them a Trusted Partner.
When we mapped win rates against customer relationship levels, the results were startling.
There was a spread of more than 20 percentage points as we moved up the hierarchy. When we compared sales process to win rates, the spread was only six points. So, when it comes to improving sales performance, sales process matters, but customer relationships matter more.
It takes trust to make a sale. The better salespeople are at building trust with their customers, the more likely buyers are to listen to and believe that a proposed solution will address their problem or challenge. It makes sense, then, that improving customer relationships would help salespeople close more deals. Intuitively, most sales professionals understand this.
But improving customer relationships requires more than just being professional and returning calls promptly.
Only 22% of respondents in the Korn Ferry Research 2021 Buyer Preferences Study told us that they would turn to salespeople when they must solve a business problem simply because they perceive sellers as product-pushing rather than problem-solving.
To be seen as problem solvers, salespeople need to get better at providing customers with insights and perspective that will help them see their problems and potential solutions differently so they can make better decisions.
In the Korn Ferry Research 2020–21 Sales Performance Study, only 12% of sales organizations agreed that their salespeople demonstrated perspective selling — providing thought leadership and creating value — in addition to solution selling. Those that did saw higher than average win rates.
Improving customer relationships can have a significant impact on sales performance, but it is not a task for your salespeople alone. It takes an orchestrated, cross-organizational effort that includes enablement, sales operations, marketing and more. It also takes top-down leadership to ensure that customer relationships remain the focal point of your sales transformation strategy.
If you want to learn how to strengthen your customer relationships and progress through the SRP Matrix, our consultants can help. Start by learning how a perspective-fueled approach puts you ahead of the competition. Then contact us to discuss how we can help you upskill your sellers to deliver insights that help you win more deals