April 2012 --- A new survey of 2,311 business executives in 23 countries, conducted by global sales performance consultancy Mercuri International (www.mercuri.net) reveals that business conditions are now making it hard for companies to maintain sales income. 89% of those surveyed say that ‘sales are more challenging overall’, while 59% of all business executives questioned for the ‘Mercuri International Business Sales Survey’ say it is already ‘becoming more difficult to maintain [our] sales revenue’ – a figure that rises to 69% among healthcare executives.
This appears to be a growing problem says Mercuri, as all companies - including the four in ten who are maintaining sales revenue - are having to work harder to win sales. Customers have become more knowledgeable about competitors, pricing and other factors according to 82% of those questioned, while 88% say that it is now essential to differentiate their sales offering for every type of prospect. 62% say that customers have increased their decision making time (for automotive industry this figure rises to 67%, and for ICT/technology, 69%). Signoff is getting tougher for many, with more formal ROI requirements according to 55% of those surveyed, greater use of RFP/RFI (request for proposal/request for information - 53%) and buying decisions now requiring the involvement of more people than before, according to 63% of respondents (74% in ICT/technology). The sales situation is not helped by the fact that customers now have less time to meet face to face, say 56% of respondents (62% in healthcare).
Which countries have been most affected?
While all countries are experiencing sales problems according to the research, some have been more affected than others. Russia is the largest economy to have been less affected. The USA has felt the sales pinch slightly more strongly than some other countries, the UK slightly less: however, these differences are relative and the problem seems to be common across countries and companies, Mercuri says.
Will electronic overtake traditional, field sales?
In the area of the sales organisation the key change measured by the survey is a 4.3% growth in the contribution of electronic, e-commerce sales and a similar, 3.8% reduction in the revenue generated through ‘traditional’ field sales.
What types of company were surveyed?
79% of the companies surveyed said they were selling mostly business-to-business (B2B), 15% business-to-consumer (B2C) and 3% business-to-government (B2G). Industries encompassed by the survey included healthcare, banking and insurance, automotive, hotel and travel, media and marketing, ICT (technology) and logistics (amongst others).
Commenting on the results of the survey, which Mercuri plans to repeat, Mercuri International Group CEO Ola Strömberg says: “The research indicates that while some companies are maintaining sales revenue, the majority are not. Improvements in sales processes and people are essential if business is to maintain, let alone grow customer revenue. We call on senior management to keep sales at or near the top of its boardroom agenda, as this is an area that business literally can not afford to neglect”.
Mr. Strömberg highlights the importance of market information for sales revenue, given that differentiation is a problem for around nine in ten of those surveyed: “We would encourage companies to find out as much as they can about their competitors’ offerings and to differentiate their own sales proposition, in a way that is meaningful for buyers and that resonates in the marketplace”. (‘A good understanding of what is happening in the marketplace’ heads up Mercuri’s eight-point table ‘tuning the company sales engine: notes for management’ – see Note to Editors below).
Note to Editors
Tuning the company sales engine: notes for management
- Ensure that your organisation has a good understanding of what is happening in the marketplace: make competitor and buyer information gathering a companywide priority.
- Apply market research to sales development, product and service differentiation.
- Ensure that your company puts in place effective sales strategies, and communicates them clearly to the sales force. Leave nothing to chance.
- Managers to set sales targets early and clearly, supported by a reward system.
- Ensure that senior executives have access to good, up to date information about the quantity, direction and quality of company sales activity.
- Plan forward, future sales activity, as a process. Make the company’s sales pipeline a priority, keeping the balance between and resources for the sales channels (e-sales, field sales etc) under review.
- Invest in your sales organisation – and ensure that the company can measure its return on that investment.
- Make it company policy to invest in the development of sales team competence - centred on business goals and well implemented and measured.
Source: Mercuri International (www.mercuri.net)
Ola Strömberg President & CEO
Telephone: +46 87 05 29 29
Henrik Viftrup Hansen, senior consultant and analyst
Telephone: +45 40 85 89 26
Mercuri International Group
Mercuri International is the world’s largest sales performance consultancy. We have more than 50 years’ experience in helping companies implement strategies and achieve powerful sales results. http://www.mercuri.net