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Once upon a time, B2B sales technology was limited to barely-tolerated CRM platforms. Then we started to appreciate the value and ease-of-use offered by cloud-based solutions designed to automate highly specific sales administration tasks. Today, Best-in-Class enterprises are connecting the dots by integrating multiple sales effectiveness tools that support end-to-end efficiencies for sellers, stronger overall business outcomes, and optimized customer experience for their buyers.
END-TO-END SALES AUTOMATION: TURNING DISCRETE TECHNOLOGIES INTO LASTING BUSINESS RESULTS
April 2016 Peter Ostrow, VP/Research Group Director,
Customer Management, Sales Effectiveness
Report Highlights
Best-in-Class firms are 38% more likely to use sales analytics to collect customer data that informs ongoing customer interactions.
Top performers are 98% stronger at replicating ‘A’ players by identifying and sharing their winning sales documentation.
The Best-in-Class lead under-performers by 50% and 63% in planned CLM and CPQ budget increases.
“Quote-to-cash” sales technology integrators improve on-time customer delivery rates 11% more effectively.
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Aberdeen has long treated configure / price / quote (CPQ) and contract lifecycle management (CLM) solutions as discrete technologies enabling faster, more efficient selling at the end of the traditional business-to-business (B2B) sales cycle. This Research Report is designed to help contemporary sales operations practitioners understand how to support a holistic, integrated, end-to-end sales automation ecosystem that leverages these and other technology enablers to deliver top-level business results and customer satisfaction.
The More You Know, The Better You Sell
Aberdeen’s recent study, Modern Sales Workflow: How Best-in-Class Enterprises Maximize the Buyer’s AND Seller’s Experience (February, 2016), takes a deep dive into the “last mile of the sales cycle” and reveals a wide variety of practices that top-performing, Best-in-Class companies (sidebar, page 3) adopt more aggressively than under-performing firms.
First, let’s examine some knowledge management practices, as seen in Figure 1 below, that serve as hallmarks of strong CPQ and CLM deployments and help drive more intuitive sales behavior and greater insight into sales operations:
Fewer than two-thirds of companies (62%) report a centralized repository for sales proposals and contracts. Plenty of B2B organizations still – surprisingly – let their sales reps dig through reply-all email chains and copy outdated templates before putting crucial documents in front of their buyers. The Best-in-Class recognize that quality control, time-savings, and win rates all improve by pre-positioning the documentation
How do Best-in-Class enterprises support a holistic, integrated, end-to-end sales automation ecosystem?
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that sellers need for various audiences and conversations. They also leverage CPQ and CLM to provide guided selling modules via wizard-driven applications that tee up on-message content, at key stages of the sales cycle, to which different buyers – based on persona, industry, or geography –are most likely to respond positively.
Figure I: Winning Enterprises Manage Their Knowledge Better
Common sense dictates that if a frequently repeated activity is taking place, finding a way to streamline it is of obvious benefit. And yet, a minority of survey respondents report a formal process to effectively customize quotes for prospects and customers. Considering the current buzz about how the “buyer’s journey” has replaced the traditional sales cycle, the market is virtually screaming for non-generic sales messaging. Best-in-Class companies more aggressively support their quota-carriers with a technology-enabled, systemized path to personalization of their market-facing content.
The Sales Workflow Best-in-Class Defined In October and November 2015, Aberdeen surveyed 175 end-user organizations to understand their sales best practices. The performance metrics used to define the Best-in-Class (top 20%), Industry Average (middle 50%), and Laggard (bottom 30%) among these sales teams are: • 88% customer retention rate, vs. 75% among Industry Average and 34% for Laggard firms • 8.5% average year-over-year increase in total team attainment of sales quota – 0.8% for the Industry Average and a 4.2% decrease among Laggard respondents • 4.3% average year-over-year increase in average deal size, vs. 3.1% and 0.4% increases for Industry Average and Laggard respondents, respectively
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For years, marketers have increased their insight into how their messages are or are not being consumed by their target audiences. Isn’t it time that sellers enjoyed the same capabilities? Top CPQ and CLM solutions allow sellers to know when proposals are opened and viewed, providing invaluable intelligence concerning how engaged their buyers really are with content placed in front of them. No wonder Best-in-Class firms are 2.6 times more likely than under-performers (34% vs. 13%) to become early-adopters of this enabler. These firms use this data, coupled with buyer interaction-informed analytics, to better understand how content, price, product, and contract suggestions play with individual buyers. Then, as the tribal knowledge accrues in the customer relationship management (CRM) platform around which tactics win or lose deals, the predictive capabilities of these solutions help future sellers navigate buyer trends with greater, data-driven confidence.
The More We See, The Better We Manage
A second set of core capabilities adopted more aggressively by Best-in-Class companies involve organizational excellence and help answer the question, “How do top performers structure their people, processes, and technologies to sell more effectively?”
Plenty of B2B organizations still – surprisingly – let their sales reps dig through reply-all email chains and copy outdated templates before putting crucial documents in front of their buyers.
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Figure 2: Organizational Structures Are Worthwhile Investments
In the context of end-to-end sales automation, it’s important to remember that the advanced commercial solutions produce more than better-looking proposals and contracts; they both engender and leverage better business processes that speed the sale.
In Figure 2, we find a series of capabilities that many top performers currently deploy in support of their front-line sellers. The common theme among these capabilities can be summarized this way: companies that adopt data- and visibility-driven sales management practices are more effective at nurturing winning sales behavior. In the context of weaving CPQ and CLM solutions into the daily sales technology workflow, Figure 2 and recent Aberdeen research teach us that:
• Developing strong B2B sellers is easier when the enterprise archives winning (and losing) documentation. Every successive generation of new reps or channel
Top performers leverage CPQ and CLM to provide guided selling
modules via wizard-driven applications that tee up on-
message content, at key stages of the sales cycle, to which different
buyers – based on persona, industry, or geography – are most
likely to respond positively.
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partners benefits from stronger visibility into “here is what works” tribal knowledge.
• Collaborative selling is real. It has replaced old-style selfish habits, and it’s effective. If your CPQ or CLM instance can be integrated not only with your CRM platform, but also with any enterprise social collaboration tool within it, the opportunity to promote team-based selling blossoms.
• As referenced above, today’s sales technology tools provide marketing automation-like options to help understand how customers interact with both the people and the content that enterprises put in front of them. When the selling organization’s leadership has a clear line of sight into what is said, shown, presented, and quoted to outside parties, they can better plan for sales-supporting resources and determine optimal price-discounting windows.
• Aberdeen’s research proves that B2B sales success today involves a greater focus on profits than ever before. Smart companies use their CPQ solution to define “how low can you go” scenarios for sellers, thus reducing the need to “check with my manager,” and thus slow down deal-closing activities or offer margin-killing discounts. If the data that helps determine such windows is maintained in the end-to-end automation information stream, everyone ends up winning.
What Does GREAT Look Like?
Any professional seller has at some time dealt with the scourge of internal bureaucratic red tape or colleagues best identified as “Director of Sales Prevention.” You know the type: well-meaning, legal or procurement folks who inadvertently (we hope) throw
Considering the current buzz about how the “buyer’s journey” has replaced the traditional sales cycle, the market is virtually screaming for non-generic sales messaging.
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barriers in the way of closing sales deals in the course of legitimately trying to protect their employer’s interests and mitigate risk. Best-in-Class companies recognize such internal challenges and deal with it proactively. They deploy more processes, and end-to-end sales automation solution sets, to ameliorate the reality of deal-closing friction.
As a result (Figure 3), these companies are far more successful when it comes to removing sales obstacles by having fewer people involved in the process, fewer document iterations, and fewer data repositories. These numbers demonstrate how sales operations practitioners can increase efficiency during the pre-sale cycle; below, we will return to this topic in the context of order management technologies and how they can be used to create value after the contract has been signed and delivery of a customer’s goods or services gets underway.
Figure 3: Reducing Sales Friction Is All in The Numbers
Companies that adopt data- and visibility-
driven sales management are more
effective at nurturing winning sales behavior.
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Why the Consumerization of Business Apps Matters to You
Now that we’ve determined that paying attention to process, organization, and efficiency pays off for enterprise sales leaders, let’s take a look at their buyer interactions from the other side of the relationship: that of the customer. In Figures 4 and 5, we see some of the high-level priorities that top-performing sales operations teams emphasize in developing scalable success. We also see the tangible pay-offs they realize when focused on the customer experience. Figure 4 details three approaches to business that one would more likely associate with, for example, buying something on Amazon.com or configuring one’s class ring on a consumer jewelry site.
Figure 4: Learning B2B Lessons from B2C Markets
For example, if we consider the option to provide B2B buyers with an experience such as “others purchasing this product also bought…” - there is little downside to leveraging this kind of familiarity at an enterprise scale (can you say, “easy up-sell”?). Aberdeen’s research also reveals a growing trend toward offering even complex B2B product configuration options that follow a self-service path for buyers, at least for the initial stages of discovery. This does not imply, as some industry
Any professional seller has at some time dealt with the scourge of internal bureaucratic red tape or colleagues best identified as “Director of Sales Prevention.”
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prognosticators have suggested, that professional sellers are going the way of the dodo bird. It does reflect, however, the very real indicators that both consumer and business buyers prefer self-service for at least part of their journey, in lieu of dealing with salespeople in the early stages of product discovery. Figure 4 also confirms the value of predictive analytics – identifying the right offer, for the right buyer, at the right time – as well as the long-standing sales technology trend away from IT-driven initiatives.
Figure 5 shows how a number of big-picture B2B sales capabilities are supported by the more granular approaches defined above. These capabilities may initially appear to be little more than common sense, but there is significance to the fact that Best-in-Class companies, on average, lead All Others by 70% in reporting strong or extremely strong abilities here.
Figure 5: Smart End-of-Cycle Competencies that Speed the Sale
The Best-in-Class are 63% more likely (52% vs. 32%) to indicate an annual increase in CPQ budgeting, and 50% more likely (48%
Both consumer and business buyers prefer self-service for at least
part of their journey, in lieu of dealing with
salespeople in the early stages of product
discovery.
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vs. 32%) with CLM. Whether the strengths indicated in Figure 5 are the result of this ongoing behavior, or an indication of smarter sales technology management, the two trends are clearly related. This assertion is bolstered by even greater differentials when it comes to future plans around integrating these solutions more aggressively with the CRM platform: 59% for CPQ (43% vs. 27%), and 153% for CLM (43% vs. 17%). The lesson here: As B2B enterprises scale their sales operations, the need for friction-reducing automation grows, as does the eventual return-on-investment for well-deployed iterations of these tools. When we take a look at actual year-over-year performance results associated with deploying these tools (Figure 6), we see a highly consistent series of advantages enjoyed by organizations deploying these solutions:
Figure 6: Agile Leaders Bring CPQ and CLM Together
Why is it important to minimize sales contracting errors? Because every time a formal, customer-facing document has to be revised, it slows down deal velocity and frustrates both external buyers and internal sellers. Indeed, Best-in-Class sales organizations are 34% more likely than All Others (43% vs. 32%) to indicate that “our
As B2B enterprises scale their sales operations, the need for friction-reducing automation grows, as does the eventual return-on-investment for well-deployed iterations of these tools.
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final contracts are nearly perfect, and rarely require any post-sale adjudication or amendment.”
The need to maximize customer retention is a fairly obvious key performance indicator (KPI). Aberdeen’s Customer Experience Management research continuously points out the relative costs of replacing versus retaining logos, and it is interesting to note that deploying technology enablers that seem to favor the seller – CPQ and CLM are generally thought of as providing sales with advantages – result in stronger buyer loyalty as well.
Most enterprises support sales aggressively with marketing-generated opportunities to fill their pipeline, so any chance to improve lead conversion inevitably adds value to the relationship between the two functions. We know from Aberdeen’s sales enablement research that when these teams are tightly integrated, overall corporate performance improves. The best CPQ and sales contracting deployments include pre-positioned documentation. This not only facilitates the development of complex quotes and error-free contracts, but such documentations also look good – and this is where the marketing team steps in. Considering how important this buyer-facing documentation is to the selling organization, shouldn’t its appearance be maximized in order to motivate a closed deal?
Much as CRM provides the foundation of a hub-and-spoke sales effectiveness technology
ecosystem, this body of research looks at ERP as the
center of integrated technologies that are designed
to actually deliver to customers what they have purchased
from the sales organization.
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Conclusion and Recommendations: Closing the Quote-to-Cash Loop
This Research Report has focused primarily on the technology enablers that the sales operations team traditionally deploy to reduce friction near the end of the traditional B2B sales cycle. CPQ and CLM solutions cannot, on their own, instantly transform an enterprise into a Best-in-Class performer. Key capabilities around process and knowledge management must be in place in order for these solutions to thrive.
When we discuss the concept of end-to-end automation allowing the sales function to truly add value to the overall business, we can learn a valuable lesson from Aberdeen’s Business Planning and Execution practice. Much as CRM provides the foundation of a hub-and-spoke sales effectiveness technology ecosystem, this body of research looks at enterprise resource planning (ERP) as the center of integrated technologies that are designed to actually deliver to customers what they have purchased from the sales organization. “Order management” is the common term used to define this all-important follow-through, and certainly the customer retention metrics provided in this report are deeply rooted in an enterprise’s ability to follow-through on the sale, as well as eventually receive payment for the goods and services they have provided to their buyers.
Top-performing B2B enterprises more aggressively integrate line-of-business sales tools to enterprise-wide systems in order to achieve maximum value from the pursuit, care, and feeding of the customer.
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Figure 7: Agile Businesses Bring All Enterprise Technologies Together
In Figure 7, we rely on the BP&E research to define a clear “quote-to-cash” ecosystem, defined as the annualized performance improvements of companies deploying both CPQ solutions and order management / billing technologies, all integrated with their ERP platform.
Improving sales performance results are important; improving overall corporate results are even better. Much as Aberdeen’s research has shown the value of building the sales technology environment on top of CRM, top-performing B2B enterprises more aggressively integrate line-of-business sales tools to enterprise-wide systems in order to achieve maximum value from the pursuit, care, and feeding of the customer.
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For more information on this or other research topics, please visit www.aberdeen.com.
Related Research Modern Sales Workflow: How Best-in-Class Enterprises Maximize the Buyer’s AND Seller’s Experience; February 2016 Building Toward a Sales Enablement Win: Where Should I Start?; January 2016 Sales Productivity in Financial Services: What We Can Learn from the Best-in-Class; January 2016
Maximizing the Sales Technology Ecosystem with Best-in-Class CPQ Deployments; January 2016Best-in-Class Paths to Shorten the Sales Cycle; December 2015 Tired of Stressing on the Monday Sales Meeting? There's a Better Way to Win!; October 2015
Author: Peter Ostrow, VP/Research Group Director; Customer Management, Sales Effectiveness; ([email protected])
About Aberdeen Group
Since 1988, Aberdeen Group has published research that helps businesses worldwide improve their performance. Our analysts derive fact-based, vendor-agnostic insights from a proprietary analytical framework, which identifies Best-in-Class organizations from primary research conducted with industry practitioners. The resulting research content is used by hundreds of thousands of business professionals to drive smarter decision-making and improve business strategy. Aberdeen Group is headquartered in Boston, MA.
This document is the result of primary research performed by Aberdeen Group and represents the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group.
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