What Organizations Are Likely Sponsors of Sales Benchmarking Initiatives?

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Below is a list of the types of organizations that can provide assistance to those wishing to engage in sales benchmarking, even though they may not yet possess all of the necessary four assets. We will discuss each type in turn in the following sections.<br clear="none" /> <br clear="none" /> &#x2022; Survey firms <br clear="none" /> &#x2022; Benchmarking firms <br clear="none" /> &#x2022; Talent management firms <br clear="none" /> &#x2022; Associations Sales consultants<br clear="none" /> &#x2022; Dashboard software companies <br clear="none" /> &#x2022; Technical benchmarking firms <br clear="none" /> <br clear="none" /> <br clear="none" /> <b>Survey Firms: Lack Empirical Data</b> <br clear="none" /> <br clear="none" /> As mentioned earlier in this chapter, there is a significant difference between sales-related survey information and sales-related benchmarking data. In addition to the obvious difference&#x2014;surveys are little more than compilations of individual opinion&#x2014;the use of survey data as a substitute for benchmarking data can be problematic and even dangerous. As noted by Regis McKenna, "There are several reasons not to trust market research [surveys]": The environment in which the research is done is different from the actual decision-making environment. Trends and changes can be understood only historically. Research focuses on history, not the future. Predictions based on opinions (as opposed to leading indicators based on empirical fact) cannot even boast of being directionally correct. Communication is so instantaneous and information so prolific on any given event that attitudes and opinions change on a daily basis. In fact, there are even more reasons to distrust any conclusions based on a survey, even if survey results have held steady or shown year-over-year trends. These surveys rely on volunteer participation, which immediately excludes a statistically significant portion of the target population. No studies available in the benchmarking field suggest that the opinions of those who choose not to participate in surveys are statistically equivalent to those who do. On the contrary, there is good reason to believe that they are substantively different. Even worse, the survey techniques that are at least more comprehensive and accurate (via phone) are usually dropped in favor of those that are faster and cheaper (Internet-based methods). So, if surveys pose such a danger to accurate prognostication, why are they so popular? The clearest explanation is that the necessary assets to support sales benchmarking have only recently come into existence. Prior to that time, sales benchmarking could not be conducted with appropriate due diligence. Accordingly, some companies filled the benchmarking void with survey data, arguing that some information was better than no information. But this rationale no longer suffices as a justification for the use of survey data to inform strategic decision making. <br clear="none" /> <br clear="none" /> <br clear="none" /> <b>Benchmarking Firms: Don't Address Sales Comprehensively Yet </b><br clear="none" /> <br clear="none" /> As previously mentioned, benchmarking is a discipline with a long pedigree in other business functions. As the concept has matured and deepened in adoption in these other areas, an eco-structure of benchmarking firms has developed to support it. Thus far, these firms have not focused on the sales function; however, that gap in coverage is likely not to last. For instance, there are a number of benchmarking firms that support the call center industry, marketing, and customer service. While none of these functions is equivalent to sales, they all have a healthy overlap with it. It would not be surprising if some of these firms began the process of collecting data for sales-related metrics in order to extend their offering in the sales direction.<br clear="none" /> <br clear="none" /> <br clear="none" /> <b>Talent Management Firms: Limited to Human Resource Areas </b><br clear="none" /> <br clear="none" /> Probably the richest reservoir of firms claiming sales benchmarking as an offering can be found in the talent management industry. This industry has given birth to a whole host of companies that employ behavioral scientists, data analysts, sampling techniques, and other tools to amass repositories of human resources- oriented information. These firms then mine this information and combine it with the expertise of industrial psychologists to derive various personal indicators of performance on pay, environmental proclivities, and job satisfaction. This has been most helpful to the call center industry, whose members need to make numerous accurate hiring decisions on call center support staff. Talent management firms use terms like comparison data, taxonomy, and evaluation experts. This all smacks of benchmarking; however, these firms are focused on HR issues and typically do not delve into the operational, financial, or productivity sides of sales performance beyond the call center and customer service.<br clear="none" /> <br clear="none" /> <br clear="none" /> <b>Associations: Too Immature </b><br clear="none" /> <br clear="none" /> At first blush, one would think that associations, whether profit or nonprofit, might be the best means of providing the critical mass necessary to engage in sales benchmarking. There are many sales-related associations, forums, groups, and the like but, so far, none have adopted sales benchmarking as a feature of their memberships. To fill this gap, some emerging benchmarking-related associations are attempting to serve as one-stop shopping for collateral, advice, events, and ideas. Examples include the Sales Force Effectiveness Benchmarking Association (<a href="http://www.sfeba.com" target="_blank">www.sfeba.com</a>) and the Sales Forecasting Benchmarking Forum (<a href="http://www.sfbf.com" target="_blank">www.sfbf.com</a>). These organizations focus more on the sharing of best practices though, a technique discussed in greater depth in Chapter 11. Once the number of organizations that have gone through a successful cycle of sales benchmarking has increased to a tipping point, these associations may be able to serve as repositories of information and expertise, possibly even as holders of a common taxonomy. For now, though, they are providing primarily a means for networking among like-minded professionals.<br clear="none" /> <br clear="none" /> <br clear="none" /> <b>Sales Consultants: Deliver Expertise, Not Data </b><br clear="none" /> <br clear="none" /> The number of sales-related trainers, consultants, speakers, and advisers is almost too large to count. One can find sales experts in large consultancies, in regional or specialized firms, and in solo practices. They cover the gamut, from providing training on how to use SFA or CRM software to implementing any number of proprietary sales methodologies. Sales consultants specialize in areas such as lead management, territory planning, sales management, talent management, and so on. Their skills range from serving as a tactical staff augmentation to delivering strategic advice to the boardroom. One thing they all share is that none of them, as of yet, are performing sales benchmarking as we describe it in this book. Part of this may be the conflict in business models; consulting requires a thick stream of projects for personnel to perform while sales benchmarking is based on collecting data, then delivering comparative analyses at various points&#x2014;not a labor-intensive activity. <br clear="none" /> <br clear="none" /> <br clear="none" /> <b>What Sales Benchmarking Is Not 91 Dashboard Software Companies: Provide Internal, not External, Data </b><br clear="none" /> <br clear="none" /> Many software firms in the sales market space have created some form of a dashboard report based on the data collected by CRM and/or SFA systems. These reports use color to show areas of weakness or urgency. They are based on empirical data drawn directly from corporate systems and so do not suffer from any of the defects of survey data. What such reports typically lack, however, is any external data against which to compare the internal results. That may be an acceptable trade-off for data reported on a daily or even weekly basis. However, the reality check provided by external comparison (sometimes known as baselining) is an invaluable and necessary ingredient to calculating where the gaps are between median practice (shown by the relevant peer group) and best practice (shown by top quartile results). Some of the dashboard software firms have been working to incorporate streams of external sales-benchmarking data into their offerings. When and if this occurs, these firms will have a compelling offering for their clients. <br clear="none" /> <br clear="none" /> <br clear="none" /> <b>Technical Benchmarking: Not Applicable to a Business Function</b><br clear="none" /> <br clear="none" /> Probably the largest number of firms or organizations that engage in benchmarking are actually test beds for the comparison of one technology against another. They create a lab-like set of conditions where various technologies (hardware, software, firmware, or some combination) are literally clocked against one another. The benchmark they publish then becomes a standard that future configurations must meet or exceed. This is an entirely technical exercise and has no relevance to a business function like sales.<br clear="none" /> <br clear="none" /> <i>Reprinted from "Making the Number: How to Use Sales Benchmarking to Drive Performance" by Greg Alexander by arrangement with Portfolio, a member of Penguin Group (USA) Inc., Copyright 2008.</i>