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Why the Recession is Making it Imperative To Change the Way We Sell

13 February 2009

Every customer we talk to is trying to figure out how to make their numbers in the face of shrinking headcount, smaller budgets, and decreasing travel and entertainment approvals. Though the slow economy is having a negative impact on sales in many companies, Sales 2.0 can help companies avoid disastrous business results in the coming quarters.   Sales 2.0 reduces cost, increases productivity and improves sales effectiveness.
One important thing that distinguishes Sales 2.0 from other strategic business initiatives is that it produces measurable business results. One $25 million software division that is part of a $1 billion company increased its sales 12% while decreasing headcount 17% and increasing its sales team’s productivity 15% after reinventing its sales organization using Sales 2.0 practices. After embracing a Sales 2.0 philosophy, a $140 million medical device company increased its qualified lead volume by 20% and generated over $7 million in incremental revenue, while increasing its average sales price by 25%.
Sales 2.0 requires a change in mindset and then a rethinking of strategy, an assessment of sales people’s skills and the implementation of a measurable sales process, enabled by technology. A Sales 2.0 mindset includes recognizing that sales is not just an art – it can be a measurable, predictable “scientific” business function when the right processes are implemented that focus on what our customers need to achieve by buying our products.
Data from CSO Insights’ Sales Performance Optimization Report show that surveyed Chief Sales Officers in companies that practice Sales 2.0 are the best-performing companies in terms of percentage of company revenue achieved, percentage of reps making their sales quotas, and percentage of deals won.  Sales 2.0 practices include implementing consistent, dynamic sales processes, establishing long-term, trusted relationships with customers, and using the Internet in the sales process. Venture-backed companies with Sales 2.0 business plans are also having an easier time securing investments from venture capitalists. Gordon Ritter, founder and general partner at Emergence Capital, says, “Those companies employing Sales 2.0 practices give me the confidence I need to provide initial funding as well as continued investment.”
Furthermore, in many business-to-business companies, the cost of selling traditionally, using expensive field sales forces that travel, is no longer justified when many customers prefer to research and even buy products using the Web and phone.  One highly-effective Sales 2.0 strategy is partnering face-to-face salespeople with inside sales professionals that serve customers in the early parts of a sales cycle and build a pipeline of qualified leads.  This frees up the field sales professionals to work with only the largest, most profitable customers that are most likely to buy.  In this way, Sales 2.0 decreases costs and accelerates sales cycles, which improves revenue and profit.
IDC’s 2009 Sales Barometer and Top 10 Predictions report highlights the need for organizations to adopt Sales 2.0 best practices quickly. It states,  “savvy organizations will use the economic downturn as justification to replace direct sales “laggards” with well enabled inside sales. Customer (and employee) satisfaction and sales productivity will rise accordingly.”
How is your company using Sales 2.0 to improve business results in these slow economic times?