What's the #1 Sales Challenge for SMBs?
Small to mid-sized businesses (SMBs) live and die by the performance of their sales organizations. After all, when sales efforts are effective and efficient, revenue and profit tend to escalate. On the other end of the spectrum, however, when sales efforts falter, revenues can plummet, margins can be razor thin, and the downturn can threaten the survival of the entire company.
With so many potential problem areas, it can be incredibly difficult for companies to “go it alone” and zero in on solutions to their biggest challenges. The good news for struggling SMBs, however, is that an easy, yet robust sales assessment tool and data set of insights from thousands of similar businesses provides a launch pad for improvement.?
Just what DOES the data show? What critical area represents the #1 sales challenge impacting North American SMBs (with annual revenues of $1M to $100M)? And what can be done to implement solutions right away? Read on…
Drumroll, Please…
The number one sales performance challenge for SMBs is … Sales Methodology. Huh? Sounds kind of broad, right? Let’s start by defining this key problem area:
Sales Methodology is the?framework of principles, parameters, tools, and processes that empower your sales reps to close deals and convert prospects into customers.
For purposes of understanding the scope of the problem, we view Sales Methodology as encompassing these four essential components:
It should be easy to see that falling short in any of these areas could handicap a sales organization and threaten company success. Just how big is the problem? Well, if you ask SMBs themselves (which we did, of course), it’s an enormous challenge.
You see, at Sales Xceleration, we’ve analyzed data from SMB executives (one per company) who took our comprehensive Sales Agility Assessment (SAA) tool between 12/1/2018 and 12/31/2022. During that pre-engagement period, 3,686 clients self-reported their performance in key areas such as Sales Strategy, Sales Analysis, Sales Organization, and, of course, Sales Methodology.
Of these, Sales Methodology and its essential components continues to rank as the most challenging problem. Naturally, therefore, if you can fix Sales Methodology, you’re well on your way to better sales performance.
The Sales Methodology Challenge
Obviously, a company cannot sell – or even plan – effectively if they lack a strategic, well-documented methodology. This is even more problematic for companies with longer sales cycles because they must plan further in advance due to labor or supply chain challenges.?
And yet, poor Sales Methodology performance is persistent and widespread. When it comes to effectiveness of their territories, coverage, processes, and customer relationship management, 93% of reporting company leaders admit their companies struggle. In fact, a full 80% of company leaders rate their Sales Methodology efforts as Poor.
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This 5% jump from the prior year means that, now, four in five leaders give their company the lowest rating possible. Another 13% rate their organizations as below average, with only 7% stating their companies are average or excellent in Sales Methodology. (It is important to remember that these figures are?not?Sales Xceleration’s interpretations, but rather, they are the self-reported assessments of SMB leaders who deal with the challenges inside-out and day after day.)
The Sales Methodology Solution
Addressing critical deficiencies in this area starts with a more in-depth analysis of the problems. The SAA is administered during initial discussions with a Sales Xceleration Advisor to help determine what processes are in place, what tools are being used, and how team members are performing.?
In Sales Methodology, the key problem areas tend to be not having a CRM system, unclear sales processes, and lack of accountability for the sales team when carrying out sales processes.
In fact, our data shows that 84% of small to mid-size businesses don't document their company sales process. Understanding every stage in your sales cycle and the likelihood of closing a deal is essential for accurate forecasting. Your sales process should be documented and understood by the entire sales team. We recommend you evaluate your sales process every 6 months to a year.
A significant 87% of sales teams don't know what needs to occur in each step of the sales cycle to proceed to the next one. The solution is simple - invest in a CRM to build and track those steps. There are so many inexpensive or free CRMs, so just get started!
Eventual solutions, of course, address both big-picture and individual challenges in a way that recognizes the company’s unique economic landscape, marketplace, and internal culture.
For insights into how well your sales organization is performing, take our free?Sales Agility Assessment .?Looking for guidance on choosing a CRM or how to document your sales processes? Reach out to a Sales Xceleration?Advisor ?today, or contact us at?844.874.7253.
Maximize Your Sales Potential
Our 2023 State of Sales Report reveals most #SMBs are lacking the fundamentals in the four key sales areas - Sales Strategy, Sales Analysis, Sales Organization, and Sales Methodology.
If you are struggling to drive sales growth, use our report to gain tangible steps for your sales team to focus on.