InSights - What you didn't know you didn't know

Selling Successfully In The 21st Century

Research on customer satisfaction indicates that 80% of all vendor deserters rated their previous vendor as “good” to “very good.” However, customers who rated their vendor as “very good to excellent” were 42% more likely to remain loyal².

 

Principle 1: Repeat sales from existing loyal customers offer significantly more volume and profit.

Raising customer retention rates by only 5% increases sales by 25-85%. The Harvard Business Review reported data from a variety of industries as early as 1990¹. The sales increase rates for several market segments include:

1. Software 35%
2. Industrial distribution 45%
3. Credit cards 75%
4. Advertising 95%

The message is clear—building customer loyalty is dramatically more critical than many other business priorities. Yet, customer satisfaction and the resulting customer loyalty are not the principal sales or marketing priorities for most businesses. Executives feel there are no precise or accurate metrics to track customer loyalty in real time. Instead, executives in the business-to-business market are more likely to focus on new products, acquisitions, and special advertising or incentives programs to build sales. These approaches are considerably easier to track, but they are more expensive.

Some innovative and aggressive companies, however, are currently using “customer audit” data to track precise changes at the individual customer and salesperson level … in real time. Chally interviews business-to-business decision-makers at all levels of responsibility and documents over 100,000 competitive ratings of US and international sales forces every year.

Principle 2: 95% of business buyers are not loyal to their present supplier.

Research on customer satisfaction indicates that 80% of all vendor deserters rated their previous vendor as “good” to “very good.” However, customers who rated their vendor as “very good to excellent” were 42% more likely to remain loyal². On most customer-driven rating evaluations, a “very good to excellent” rating would require a score of 90% or better, rarely accomplished in business-to-business sales.

Ongoing research conducted and first reported by Chally in an issue of Selling Power verifies that less than 5% of all major sales forces were rated as very good or better and viewed by customers as effective enough to maintain customer loyalty. Applying typical Total Quality Management (TQM) techniques to sales is likely to be the next major competitive challenge. Now that so many sellers face competitors who can offer essentially the same products, features, service packages, and even price, the point of competition will often become the added values the salesperson can bring to the table.

¹HBR / ²HBR 

Principle 3: World Class sales and service performance now depends on selecting and refocusing the 21st century salesperson.

The primary role of the business-to-business or high value added consumer salesperson has evolved. In the past, salespeople were usually responsible for day-to-day purchases, administrative management, technical support, and customer service. Today’s salesperson must also be a “customer business consultant.” In this new role as consultant, salespeople must learn and understand their customers’ businesses, elevate their relationship beyond the traditional purchasing, technical, and administrative function, and add value to the customers’ business results.

To support this broader consultant role, additional specialized sales support roles are emerging rapidly (i.e., technical support, logistics, project management). The goal is to focus the salesperson on the customers’ business needs and use other roles to support this relationship.

As price continues to diminish as the major criteria for selecting a vendor, it becomes increasingly more important to employ a sales force willing and able to meet the changing needs of customers and to provide the added value needed to sustain their loyalty.

Chally’s joint research with the Strategic Account Management Association (SAMA) has statistically validated the critical “consultive skills” that distinguish top performers from less effective salespeople. Our national/ strategic account profile is 85+% accurate in identifying high potential candidates throught our predictive assessments and talent audit.