measuring the sales impact of customer references
DESCRIPTION
This short session is about Measuring the Sales Impact of Customer References. Our aim is to help you create your own business justification for giving careful attention to this area of the sales and marketing process.TRANSCRIPT
Boulder Logic Customer Reference Webinar Series
Measuring the Sales Impact of Customer ReferencesSend your questions to [email protected]
Boulder Logic is a commercial software vendor specializing entirely in Customer Reference Management.
We provide a web application for managing all areas of an enterprise customer reference program.
About Boulder Logic
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What we will cover in this session
1. Impact on Sales Cycle Close
2. Impact on Selling Time
3. Impact on Opportunity Revenue
4. Harder to Quantify Areas
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Impact on Sales Cycle Close
Factor Example
Number Reference Situations per Rep
90
Poorly matched reference requests (50% x 90)
45
Estimated Impact on Close Rate 3%
Average Deal Size $125,000
Margin impact per rep (90 x 3% x 125K)
$168,750
Margin across entire sales force(168K x 100 reps)
$16M
If sales reps don’t have the best reference available their job is a lot more difficult.
Not every sales cycle requires a
reference. Look at all sales cycles
and then reduce to be conservative.
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Impact on Sales Cycle Close
Factor Example
Number Reference Situations per Rep
90
Poorly matched reference requests (50% x 90)
45
Estimated Impact on Close Rate 3%
Average Deal Size $125,000
Margin impact per rep (90 x 3% x 125K)
$168,750
Margin across entire sales force(168K x 100 reps)
$16M
Reduce total potential reference
events by those less than ideal.
Typically 50%
If sales reps don’t have the best reference available their job is a lot more difficult.
#6 of 16
Impact on Sales Cycle Close
Factor Example
Number Reference Situations per Rep
90
Poorly matched reference requests (50% x 90)
45
Estimated Impact on Close Rate 3%
Average Deal Size $125,000
Margin impact per rep (45 x 3% x 125K)
$168,750
Margin across entire sales force(168K x 100 reps)
$16M
Ranges from2% to >40%
Get a baseline figure by asking
sales directly
If sales reps don’t have the best reference available their job is a lot more difficult.
#7 of 16
Impact on Sales Cycle Close
Factor Example
Number Reference Situations per Rep
90
Poorly matched reference requests (50% x 90)
45
Estimated Impact on Close Rate 3%
Average Deal Size $125,000
Margin impact per rep (45 x 3% x 125K)
$168,750
Margin across entire sales force(168K x 100 reps)
$16M
Ranges from2% to >40%
Get a baseline figure by asking
sales directly
If sales reps don’t have the best reference available their job is a lot more difficult.
#8 of 16
Impact on Selling Time
Factor Example
Hours to Obtain Reference 3 hrs
Number Opportunities per Rep 45
Total Number of Reps 100
Headcount Equivalent(3x45x100 = 13,500 hrs)
6.75 HC Eqv
Average Quota per Rep $1M
Total impact on margin $6,750,000
Ranges. Get a baseline figure by
asking sales directly
If sales reps have no assistance securing their own references, everyone’s time is being wasted.
#9 of 16
Impact on Selling Time
Factor Example
Hours to Obtain Reference 3 hrs
Number Opportunities per Rep 45
Total Number of Reps 100
Headcount Equivalent(3x45x100 = 13,500 hrs)
6.75 HC Eqv
Average Quota per Rep $1M
Total impact on margin $6,750,000
See figure from our last formula. Sales cycles with
inadequate references today
If sales reps have no assistance securing their own references, everyone’s time is being wasted.
#10 of 16
Impact on Selling Time
Factor Example
Hours to Obtain Reference 3 hrs
Number Opportunities per Rep 45
Total Number of Reps 100
Headcount Equivalent(3x45x100 = 13,500 hrs)
6.75 HC Eqv
Average Quota per Rep $1M
Total impact on margin $6,750,000
13,500 / 2,000 hrs/yr
If sales reps have no assistance securing their own references, everyone’s time is being wasted.
#11 of 16
Impact on Selling Time
Factor Example
Hours to Obtain Reference 3 hrs
Number Opportunities per Rep 45
Total Number of Reps 100
Headcount Equivalent(3x45x100 = 13,500 hrs)
6.75 HC Eqv
Average Quota per Rep $1M
Total impact on margin $6,750,000
Focus on what they could sell not
what they cost
If sales reps have no assistance securing their own references, everyone’s time is being wasted.
#12 of 16
Measuring Impact on Opportunity Revenue
If there isn’t visibility to how references are being used, nobody will understand the business impact.
Opportunity via CRM
Request for Reference via Reference DB
Reference are not “responsible”, but
“Influence” revenue
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Measuring Impact on Opportunity Revenue
Account Amount
Boston Beer Inc (3 records)
Anheuser-Busch $20,000
Toyota Motor Company $120,000
Exxon-Mobile $45,000
Subtotal $185,000
Earth Tech (4 records)
General Mills $30,000
Xerox $115,000
State of California $25,000
IBM $145,000
Subtotal $215,000
Total (7 records) $415,000
If there isn’t visibility to how references are being used, nobody will understand the business impact.
Example Report: Revenue Influence By Reference
#14 of 16
Measuring Impact on Opportunity Revenue
If there isn’t visibility to how references are being used, nobody will understand the business impact.
Audio Interviews,
450,000, 10%
Live Q&A, 275,000, 6%
Case Study, 940,000, 22%
Onsite Visits,
456,000, 11%
Phone Calls, 2,200,000,
51%
0
1020
3040
50
6070
8090
100
OnsiteVisit
CaseStudy
PhoneCalls
Live Q&A AudioInterview
Sales Cycle Length
#15 of 16
Important But Harder to Quantify Areas
1. Client Gains Confidence Early
2. Sales Reps Focus on Key Issues
3. RFP Quality Responses
4. Peer to Peer Unsolicited Influence
There are additional factors that aren’t easily measured, but play an important role in selling effectiveness.
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Conclusion
How to get started today…– Prepare survey to sales force– Determine impact as discussed– Present a plan for your organization
Summary of our topics todayImproved close rateImproved efficiency of selling timeImproved sales impact and increased revenue
Let Boulder Logic help… [email protected]