I spend all of my time with sales executives across different countries and sectors, helping them think through their sales strategies. While writing Sales Growth, one characteristic rose to the top that differentiated best-in-class sales leaders from the rest: their ability to find growth opportunities and sales trends before their competitors do.
A key to doing this is to spend time thinking about what’s coming in technology, regulations, demographics, and economics, and how this is affecting opportunities for sales now and in the future. We identified many ways in which the sales world is changing, but the following are the trends I found particularly eye-catching in the context of driving sales growth today.
- 1 Trend 1: Investing in future growth
- 2 Trend 2: Finding the growth in micromarkets
- 3 Trend 3: Capturing value from big data and advanced analytics
- 4 Trend 4: Outsourcing the sales function
- 5 Trend 5: Understanding social selling
- 6 Trend 6: Collaborating more closely with marketing
- 7 Trend 7: Adopting automation and artificial intelligence
Trend 1: Investing in future growth
Thinking three moves ahead is vital in any game, and is essential to sales growth. But this skill does not come automatically. The best sales leaders make trend analysis a formal part of the sales-planning process, and make forward planning part of someone’s job description. This means they are perfectly poised to capture the opportunities created by sudden changes in the environment.
Knowledge is only one part of the equation, though. Top-performing sales organizations have the will and the means to translate macro shifts into real top-line impact fast. The first-mover advantage created by forward-looking sales plans drives sales in areas where competitors have yet to arrive.
Many sales executives explicitly account for investment in new growth opportunities in their annual capacity-planning processes. More than half of the fast-growing companies we interviewed look at least one year out, and 10% look more than three years out. Thinking ahead is not just about resource planning: 45% of fast-growing companies invest more than 6% of their sales budget on activities supporting goals that are at least a year out.
Trend 2: Finding the growth in micromarkets
Averages lie. In the quest for sales growth, averages can mask where growth truly lies, and the hidden pockets of growth in your industry may be in your own backyard.
The most successful sales leaders I speak to are extremely proactive at mining the growth that lies beneath their feet in what can appear — on average — to be mature markets. They take a geological hammer to all their market and customer data; they break larger markets down into much smaller units, where the opportunities — prospects, new customer segments, or microsegments — can be assessed in detail. This disaggregation makes it apparent very quickly that a broad-brush approach leads to resources being wasted where growth is significantly below average.
Micromarket strategies are heavy on the analytics, so it’s important that sales teams on the ground don’t get bogged down by the details, and can use the information in the most effective way.
Trend 3: Capturing value from big data and advanced analytics
Sales forces have an incredible amount of data at their fingertips today compared with even four or five years ago, but getting insights from it and making those actionable is much harder. Sales leaders that get it right make better decisions, uncover insights into sales and deal opportunities, and refine sales growth strategies.
The big shift we see today is from the analysis of historical data to using data to be more predictive. Sales forces use sophisticated analytics to decide not only what the best opportunities are, but also which ones will help minimize risk. In fact, in these areas, three-quarters of fast-growing companies believe themselves to be above average, while 53%–61% of slow-growing companies hold the same view.
But even among fast-growing companies, only just over half of them — 53% — claim to be moderately or extremely effective in using analytics to make decisions. For slow-growing companies, it drops to a little over a third. This indicates that there remains significant untapped potential in sales analytics.
To start with, you need to have a lot of very smart data scientists to help you mine the data, and then you need people with the business expertise to translate that into something that salespeople can act upon. Then, the next time a rep goes to see a customer, he or she knows exactly who to see, when to see them, what to say, and precisely what to offer.
Trend 4: Outsourcing the sales function
One of the sales trends that we began to see while doing the research for Sales Growth is the outsourcing of parts of (and sometimes lots of) the sales value chain. What’s new today is that the automation we mentioned has enabled third-party vendors to run a company’s entire end-to-end sales process. I’m talking all the way from demand generation to customer acquisition and fulfillment.
These companies understand your target segments, they use big data to identify leads, they market to different segments with different offers and using different platforms, and then they match their own sales reps to individual customers based on the likelihood of converting that particular type of person. For the sales organization, it means moving to a model where your pay is based not on the service, but on the new customers being acquired.
Trend 6: Collaborating more closely with marketing
Marketing and sales may seem inextricably linked, but often when I’m working with commercial functions at large organizations, I find their relationship can be contentious and lopsided: Sales dominates in B2B sectors, while marketing dominates in B2C. Our own research for Sales Growth revealed a striking trend in sales and marketing: 61% of companies that have both functions deliver above-market revenue growth and enjoy high profitability.
It’s important to align sales with marketing so that both understand precisely whom they are targeting and the journey those buyers are making. This may sound obvious, but the two functions often work in a vacuum, each with different views of which customers to pursue.
Both functions also generate enormous volumes of valuable data on customer segments and preferences, but the flow of those insights tends to be one-way: from marketing to sales. At the outperforming companies I see, the front line reports back to help marketing refine its offerings, and datasets are integrated to create more accurate pictures of selling opportunities.
At the most basic level, chief marketing officers and heads of sales need to engage with each other on an equal footing. In my experience, failure to collaborate is outmoded at best, and dangerous to a company’s performance at worst.
Trend 7: Adopting automation and artificial intelligence
We did some research with the McKinsey Global Institute and found that 40% of tasks within the traditional sales function can now be automated. Already. With projected advancements in technology, especially in natural language processing, the research suggests this could top 50%.
Lead generation is a great example. Even with CRM systems in place, we see companies where 75% of leads aren’t followed up on. Those are leads that have already had time and money spent on them, but are then left to wither away. When some of the organizations we work with started to use artificial intelligence (AI) for their lead generation qualification, the results have been a 100% touch rate, and the AI can keep these leads warm for months, sometimes even making the first introduction. This is just one aspect of sales that AI can help with, and we see no reason why automation and AI can’t be used in more complex elements of the sales process.
We get asked a lot if this means we see the death of the salesperson. Our answer is a categorical no. The salesperson will continue to be critical within the sales organization. However, there are questions as to what role he or she will play and what skills he or she will need, given that we think the human touch will remain vital to customer interactions.