Report of a Survey Sponsored by TheCustomerCollective.com and Oracle Software
by
Dennis D. McDonald, Ph.D.
Web site: http://www.ddmcd.com
Draft March 1, 2009
To see the updated March 20 draft of this paper as well as all linked images click here.
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Table of Contents:
Purpose Webcast Approach Definitions Findings Discussion Conclusions
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This document reports findings of an online survey conducted during February 2009 to answer the following questions:
How satisfied are sales managers with the different processes involved in locating, managing, and closing sales?
Which steps in the sales process might be helped most through the use of “web 2.0” tools to improve how information content is created, how sales people communicate, and how sales people collaborate?
This survey was not designed as a study of technology but as a study of the processes and functions within an organization that can be supported by technology. We didn’t ask specific questions about blogs, wikis, social media, or social networking; instead, we focused on different aspects of the sales process itself.
The survey is part of a project that also includes development of a "white paper" that will be one of the topics discussed at the following webcast sponsored by Oracle Corporation:
The
survey was conducted online using the "SurveyMonkey" service. The web
address for the survey was released to the public and announced on
February 10, 2009 and publicized through a combination of web site
announcements (Social Media Today, The Customer Collective, Dennis McDonald's Web Site,
Twitter, postings on selected Linkedin groups related to sales and
marketing), and emails distributed by Social Media Today LLC to its own
distribution lists.
A total of 305 respondents answered at
least one question in the survey. The survey was closed on Feb. 20,
2009 after 233 completed responses were received to all questions
(actual response varied by question).
Since the survey was voluntary, responses may be skewed towards sales managers who are more experienced with using online tools. Readers of this report should take this potential source of bias into account when relating the findings to their own situations.
Email addresses were received as part of the survey from 160 respondents asking for further information about the survey's findings.
The survey presented definitions of both sales processes and "web 2.0" to survey respondents.
"Sales processes” were defined as follows:
PROSPECTING: Prospecting for customers.
QUALIFYING: Determining if prospects are qualified to be customers.
PRICING: Developing a price for the products or services being sold.
PROPOSING: Presenting an offer and pricing to the prospective customer.
NEGOTIATING: Negotiating terms of the offer.
CLOSING: Agreeing with the customer on final terms of the offer.
DELIVERING: Delivering the products or services to the customer.
SERVICING: Servicing the customer following the sale
"Web 2.0" was defined as the application of modern web based techniques to simplify content creation, collaboration, and communication by users such as sales people and sales managers.
Content is information created and transmitted via various media during the sales process. This includes letters, presentations, documentation, proposals, pricing sheets, sales collateral, advertisements, and all other media, published or private, that support the sales cycle from prospecting through the closing of a sales and its subsequent delivery and support.
Collaboration means that different people involved in the sales cycle work together to achieve a common purpose. This includes sales people, sales managers and executives, technical support personnel assigned to the sales process, as well as customers and customer decision makers.
Communication occurs when information is exchanged among the different participants in the sales process. Sometimes communication occurs on a one-way or broadcast fashion, as with advertising distributed via traditional media. Communication also occurs interactively and/or in real time via face to face meetings, emails, interactive web sites, voicemails, text messages, and telephone conversations.
Figure 1 shows that almost 80 percent (79.3%) of survey respondents [that completed the survey through question number 5 which asked about sales force size] reported their sales force to be made up between 1 and 10 sales people. A total of almost 15 percent reported a sales force of between 11 and 50, and six percent reported a sales force of over 100.
Figure 1. Size of Sales Force
Figure 2 shows that the top three specified industry categories in which sales forces spend most of their time were reported to be Consulting and Professional Services (23.2% of respondents), Media and Publishing (12.4%), and Software (10.7%). Together these three categories alone accounted for almost a half (46.4%) of all respondents.
Given the manner in which this survey was publicized (see “Methods” above) it is possible that (a) respondents in these categories are “over represented” in comparison with the general population of sales managers and (b) these particular industry respondents have a relatively higher rate of awareness concerning the topics covered by this survey.
Figure 2. Industry Focus
We asked respondents to rate their overall satisfaction with how well their sales force performs the processes of Prospecting, Qualifying, Pricing, Proposing, Negotiating, Closing, Delivering, and Servicing. We wanted to identify potential areas of opportunity for the application of “web 2.0” based tools that address content, collaboration, and communication.
The following rating scale was used, with the numeric values used for calculating average “satisfaction scores”:
Very Dissatisfied
Somewhat Dissatisfied
Neither Satisfied nor Dissatisfied
Somewhat Satisfied
Very Satisfied
As shown in Figure 3a, a total of 299 respondents answered this question. The average satisfaction rating, from a 1 (low) to 5 (high) scale, ranged from a low of 2.95 (for Prospecting) to a high of 3.78 (for Delivering).
Based on this we conclude that these respondents are, on average, more satisfied with how their sales force actually delivers products or services to customers than they are with how well the critical process of prospecting is being performed.
Figure 3a. Overall Satisfaction with Sales Processes (table)
Figure 3b shows clearly that the three sales processes that have the lowest average satisfaction rating are Prospecting, Qualifying, and Closing. The highest average ratings occur for Delivering and Servicing.
Figure 3b. Overall Satisfaction with Sales Processes (chart)
Figure 3c displays the average satisfaction ratings for sales processes overall subdivided into three sales force size categories: 1-10, 11-50, and over 50. These groups represent (see Figure 1) 79.3%, 12.7%%, and 6.0% of respondents, respectively.
Even though the relative number of respondents with larger sales forces than 10 is relatively small, based on an examination of Figure 3c’s data it does not appear that there is a consistent relationship between the size of a sales force and sales managers’ satisfaction with that sales forces performance of key sales processes.
Figure 3c. Overall Satisfaction with Sales Processes, by Size of Sales Force (chart)
We asked respondents three questions:
“2. How satisfied are you with how well your sales force creates and manages INFORMATION CONTENT in support of each of these sales processes?”
“3. How satisfied are you with how well your sales force COLLABORATES in support of each of these sales processes?”
“4. How satisfied are you with how well your sales force COMMUNICATES in support of each of these sales processes?”
Responses are displayed in Figures 4a and 4b.
Note along the bottom of Figure 4a how similar the average satisfaction ratings are for Information Content (3.24), Collaboration (3.30), and Communication (3.29).
Keeping in mind that a score of 3 indicates “Neither Satisfied nor Dissatisfied” and 4 “Somewhat Satisfied,” it appears that, for this group of sales managers at least, these three functions are performing similarly within their sales forces.
Figure 4a. Satisfaction with Sales Force Information Content, Collaboration, and Communication (table)
Figure 4b shows how similar these satisfaction ratings are within each of the sales processes. Prospecting and Qualifying are the lowest rated of the eight sales processes; satisfaction scores for Information Content, Collaboration, and Communication are very similar for these twp sales processes.
Except for Negotiating and Closing, satisfaction scores for Information Content, Collaboration, and Communication are very similar. Information Content scores are somewhat lower than the other two functions for Negotiating and Closing.
Figure 4b shows an increase in satisfaction as we move from the left side of Figure 4b to the right side. Considering that the defined sales processes discussed in the survey follow a traditional “funnel” model, two interpretations of these data are the following:
Sales managers are more satisfied with “post-sales” processes than they are with “pre-sales” processes.
Sales managers don’t make satisfaction distinctions based on general “web 2.0” concepts and functions such as content creation, collaboration, and communication.
Figure 4b. Satisfaction with Sales Force Information Content, Collaboration, and Communication, by Sales Process (chart)
"Web 2.0" technologies and processes offer the following types of opportunities:
Content can be easily created, copied, distributed, modified, or changed.
Web 2.0 related technologies make it possible to retrieve and manipulate sales-relevant content from existing corporate and public databases without direct involvement of programmers and technical support staff.
Small groups can be formed, perform work collaboratively, and disbanded at will. Web 2.0 tools that support such "community building" are readily available, easy to use, and capable of supporting collaboration across existing geographic and organizational barriers.
Web 2.0 tools make it easy for salespeople and company staff to engage in extended conversations with sales prospects and customers.
Communication can take place in public or in a group situation where many different people have access to the same message.
One way to look at web 2.0 approaches to managing information is that they can shift more responsibility onto users for creating and communicating the information needed to get sales-related work done collaboratively. By giving system users more responsibility and freedom, those most directly in contact with customers and decision makers can manage the sale process more responsively and profitably.
When
salespeople can pick and choose what information they want to see and
subscribe to on a regular basis, whether it's from their parent
company's mainframe, from a local area network, or from the public
"cloud," they can use tools to select the information that makes the
most sense to them and the tasks at hand. Since salespeople are the
ones in direct contact with sales prospects, for example, they are also
in a position to specify what information they need to manage the sales
process.
In reality, salespeople can be a competitive,
feisty bunch. Despite the value of "collaborating" in order to better
understand and respond to a customer’s needs, for example, some
salespeople might be reluctant to share information about a sale with
their peers if they think they might lose competitive advantage -- or a
potential commission -- in the process. This reluctance to share and
collaborate is the opposite of what many see as a key advantage of web
2.0 technologies.
Sales management may also have concerns about "opening up" the sales
process since that may also expose -- they think -- information that
could provide competitive advantage to competitors. In public online
forums surrounding product support, for example, negative as well as
positive information can be spread easily about a product or service.
Such a “lack of control” over an important aspect of the sales process
may cause some company executives (and sales people) to resist applying
web 2.0 based systems and techniques.
We didn’t specifically ask about “control” issues. We did attempt to segment the responses by potential influencing factors such as size of sales force and industry.
These two factors did not seem to consistently influence either (a) satisfaction/dissatisfaction with parts of the sales process, or (b) how these factors might influence satisfaction with content creation, collaboration, or communication.
Does this mean that “web 2.0” based services are not relevant to improving the sales process?
No; this survey just “scratched the surface.” We didn’t address additional variables that influence sales force management. We didn’t ask, for example, questions about current systems used to support the sales process, nor did we address the size and/or complexity of the sales force and its relationships to the size or complexity of the product or service being sold. These should be investigated.
It would be speculative to suggest what such questions might reveal. It does appear that (a) sales managers’ satisfaction levels do vary somewhat by the process being considered and that (b) addressing “high level” functions such as content creation, collaboration, and communication, without addressing more specifics about individual sales situations and opportunities, does not provide specific guidance to those considering the implementation of specific web 2.0 products or services in support of a sales force.
A point about possible future research and analysis should be made. The model of sales processes used in this study was an intentionally traditional model patterned after “funnel” approaches to viewing the sales process. In other words, feed prospects in one end, qualify them, then “sales” emerge after various tools, techniques, and other resources are applied along the way.
From a purely “web 2.0” standpoint this view of sales may be obsolete. Relationships with potential customers form long before sales and marketing get involved. Social and professional relationships via online networking tools have the potential for bypassing the traditional distinctions that marketing and sales have made in the past.
In an era when virtually any company employee can influence the reputation of a product, service, brand, or company, focusing only on the sales process as a beneficiary of web 2.0 based services would be shortsighted. It may therefore make more practical sense to broaden the conceptualization and measurement of web 2.0 effects beyond sales to include all potential relationships between the organization and its customers.
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For more information contact Dennis D. McDonald
via email at ddmcd@yahoo.com