CSO Insights have been publishing sales performance data for technology companies for the past 16 years.
This year is the first time they have broken that data set down to include a survey of Start-up sales and marketing performance. In their 2010 Sales Performance Optimization Survey, a total of 182 startup sales leaders completed the comprehensive survey of all aspects of the sales and business development process.
As a consultancy we focus on solving marketing and sales problems in both start-ups and in established companies. Established firms trying to sell innovative technology to early adopters, have similar problems to startups, except for the cash-flow constraints.
This survey of 182 start-ups of which 60% were based in the USA highlights a number of issues of which we have first-hand experience. We believe the following data are interesting and worthy of discussion.
- Only 50% of start-up sales people made their quota last year (there is no difference in startup results vs rest, 2009 was the toughest year on record to be selling).
- Sales reps spent only 40% of their time selling on the phone or in person.
- 49% of leads were generated by sales reps themselves, only 25% by marketing, the remainder from partners, referrals, press etc.
- Nearly 70% of respondents felt that the quantity and quality of leads generated by marketing needed to improve.
- 66% of respondents believe their Website needs improvement to effectively engaging prospects.
- Only 42% of deals that were forecast closed, with 30% lost and 27% ending in no decision.
The top priority Sales Effectiveness Initiatives for Start-up Chief Sales Officers in 2010 are;-
- Revise lead generation
- Analyze Customer Buy Process
- More closely align sales and marketing
- Revise sales process
- Revise channel strategy
- Improve Rep access to information
The data is comprehensive and in this first article on the Startup results, I have chosen to comment on a couple of high pay off areas.
After reading Steve Blanks "The Four Steps to The Epiphany" and having joined the Lean Startup Circle in LinkedIn, I have to assume that many startups in the World are suffering because they have not implemented the Customer Development disciplines as prescribed in this methodology.
So assuming that you are running a startup, you have a sales team, your product is selling in the market and want to move the needle on sales and marketing performance, what are the highest payoff activities and what order should they be undertaken?
1. Go back a paragraph and order and read Steve Blank's book and join the Lean Startup Circle on LinkedIn.
2. Align Sales and Marketing Messaging: this rigorous process will create knowledge that will help with;-
- focusing your scant sales and marketing resources on target buyers with highest propensity to need your products,
- creating clarity in your Website message to drive Inbound Marketing activities to generate higher quality and quantity of leads,
- creating Buyer Relevant Messaging Templates for clarity in collateral, presentations and in sales conversations for direct and channels sales teams around how the products/services are used to create value (this will really help your channel sell your product)
4. Understand that selling novel technology to early adopters is a Value-created sales method and align your value-chain and selling process around the way early adopters buy.
5. Implement lightweight sales process to qualify in at each step in the customer buying process.
Finally, if you need an experienced guide to mentor you through this process, please contact us to help implement sales and marketing alignment, inbound marketing and behavioural changes.