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      Future of B2B sales The big reframe

      Growth, Marketing & Sales Practice Future of B2B sales: The big reframe November 2022

      Customers nowadays expect more and companies need to shift to put them at the center of sales—by improving channels, technology, talent, incentives, and culture. This article is a collaborative effort by Guilherme Cruz, Boudewijn Driedonks, Ben Ellencweig, Maximilian Fischer, Fidel Hernandez, Josh Klemme, Molly Lewis, and Maria Valdivieso de Uster, representing views from McKinsey’s Growth, Marketing & Sales Practice. 2 Future of B2B sales: The big reframe

      Introduction n o i t c u d o r nt I Future of B2B sales: The big reframe 3

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      The world went online when the COVID-19 pandemic hit. Business, board and staff meetings, chats with friends, exercise sessions—anything that was previously done in person was forced into a virtual space. Sales was no exception. The new remote-sales environment presented challenges, yet it achieved a surprising degree of success. A couple of years later and the state of sales is evolving at a rapid rate—and will only continue to do so. Customers have become savvier and are demanding more, sales are increasingly becoming digital and operating models more hybrid, and the “great attrition” is having a detrimental effect on talent. The current recessionary environment only adds to the urgent need for change. The situation is challenging, yet exciting; some companies are using the macroeconomic environment to their advantage to leapfrog competitors. Leading companies are seizing the opportunity and taking action, with great success. To understand the new era of sales, we spoke to more than 50 heads of sales across a range of industries in numerous geographic markets. Their insights are enlightening and a wake-up call for those wary of change. Five themes emerge from the research: 1) Put the customer at the heart of growth Capture your customers and build their loyalty and trust by offering them value propositions and personalized experiences that suit their needs. This can be done with effective analytics and tailored content that emphasizes solutions and expertise. 2) Break the channel mindset Single channel no longer works. Hybrid is the new standard—it offers powerful opportunities to connect with customers in ways they want. 3) Create a scalable sales engine A successful sales organization is able to repeat its best practices again and again—leveraging data, technology and agile operating models. 4) Rethink the people strategy in the age of attrition A new world of selling requires new sales capabilities. Talent needs to be reassessed as businesses face both the attrition brought on by the pandemic and hyper-informed customers expecting more. 5) Make the change stick For transformation to truly happen, cultures, mindsets, and behaviors need to change. Leaders need to inspire the change and guide the process. We hope you find the examples of how outperforming companies have put these themes into practice helpful; that it kick-starts discussions in your leadership team around how to deliver growth in these uncertain times; and that it inspires you to achieve what is possible in this new world. 4 Future of B2B sales: The big reframe

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      t h r a t e w o m r o t f g s u t o e c r a h e t t e h u h P t 1 Future of B2B sales: The big reframe 5

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      Customers’ expectations of how their vendors success. In this new era, top performers are serve them have changed dramatically—they want obsessing less about an internal view of their simpler, on-demand, omnichannel engagement sales funnel (such as "introductions,", "proposals," that puts their needs first. They expect to have or"negotiations") and obsessing more about informed conversations with vendors who can guiding customers on a personalized buying demonstrate expertise on their industry, product, journey (for example, "awareness," "evaluation," or and market challenges. Otherwise, they have little "purchase"). They might consider three customer- compunction about moving elsewhere. More than centric practices here. First, find customers by 70 percent of businesses say they will happily harnessing comprehensive data on customer consider other vendors if their core “must haves” intent preferences, and deploying analytics that are not met during their buying journey or if the translate those insights into impact. Second, attract experience is poor (Exhibit 1). customers by offering B2C-grade, personalized content with tailored value propositions. Finally, Despite this, many B2B companies are struggling delight customers by keeping a pulse on readiness to embrace a truly customer centric mindset, and delivering consistent experiences across their starting with the language they use to define entire buying journeys. Web 2022 Emerging cautiously: Australian Consumers in 2022 Exhibit 1 Exhibit 2 of 10 Changing customer expectations puts pressure on companies to adapt. Experiences required for customer attention  o respon­en€s ‚ƒo ‚ill ac€iely loo„ or ano€ƒer supplier i €ƒese are lac„ing Top-tier Per ormance guaran† Pro­uc€ aailabili€y Abili€y €o purcƒase rom €ees offere­ ­uring sale sƒo‚n online: any cƒannel: cus€omers €en­ €o ‚an€ 78% 74% 72% all fie o €ƒese mus€† ­os in combination. ˆeal†€ime‰al‚ays†on Consis€en€ eŠperience cus€omer serice: across cƒannels: 72% 72% Source: McKinsey & Company Global B2B Pulse, Aug 2020, n= 602, eb 202 n = 62, o 202, n = 602 McKinsey & Company 6 Future of B2B sales: The big reframe

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      “Today’s buyers are more technically savvy. They're more digitally savvy. They're spending more time on their devices. And they want to engage on their time, not your time.” —Go-to-market executive, biotechnology company Find customers by turning 360-degree Companies are therefore turning to analytics to help insights into sales them predict more accurately who their potential While forward-thinking companies are using customers are, their pain points and their next analytical insights to find new customers, others moves, and then proactively engage with them as are struggling to adapt to the current digital- early as possible. Outperformers—here defined first engagement model, which has shifted the as companies that beat the average growth rate of power from seller to customer. Customers—are their sector—already use analytics extensively and doing their own research online and finding out successfully. Players with strong customer analytics about a company or product before the seller has are 1.5 times more likely to grow fast, and can drive an opportunity to pitch it, whether it concerns increases in earnings upwards of 15–25 percent 1 transactional items or complex systems. (Exhibit 2). 1 Jochen Böringer, Alexander Dierks, Isabel Huber, and Dennis Spillecke, “Insights to impact: Creating and sustaining data-driven commercial growth,” McKinsey, January 18, 2022. Future of B2B sales: The big reframe 7

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      Web 2022 Emerging cautiously: Australian Consumers in 2022 Exhibit 2 Exhibit 2 of 10 Outperformers are already using analytics extensively. Outperformers Slow growers Outperformers Slow growers 3 out of 4 2 out of 3 outperformers apply tables-stakes outperformers apply analytics use cases analytics such as sales planning to be more granular on deal and (vs half of slow growers) account-level opportunities (vs half of slow growers) McKinsey & Company An automotive original-equipment manufacturer we heard across leading companies. The company (OEM), for example, was about to launch a new successfully launched the new model, delivering model as its older models were declining in 10 percent higher conversion rates and a 5 percent popularity. When the head of sales found out sales uplift overall. that their current lead generation plan hinged on converting existing customers, he realized Top performers emphasize two customer analytics an expanded approach was needed to identify key factors that can unlock growth—data and potential customers as well. What type of buyer decision making. These outperformers use them in would want to buy this vehicle, and how could the the following ways: company approach them and finish the sale? Use unexpected sources of customer data at a The company used machine learning to combine five granular level. Leading B2B companies build rich different data sources that had not been connected signals that go beyond traditional customer data to before, including previous ownership data, offer a fully rounded view. For example, companies demographics, and service history. This highlighted are identifying customer buying opportunities by 30 specific characteristics that defined their ideal tracking their hiring patterns—if a manufacturing buyers and allowed the company to create 10,000 company starts heavily recruiting data scientists, lead profiles with which to calculate an individual then a tech infrastructure company might infer customer’s readiness to buy. that the manufacturer is in the market for data infrastructure and target it accordingly. Their experience of leveraging granular internal data to determine propensity to buy is a common theme 8 Future of B2B sales: The big reframe

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      Data-collaboration technology takes this a step Move from predictive to prescriptive decision further by enabling businesses to share approved making. Predictive insights are only helpful if they data safely and securely with each other, driving are actually used to drive targeted actions. Hence, smarter go-to-market (GTM) and strategic one needs to not only predict customer behaviors partnerships. For instance, a retailer might share but also have the data-driven tools to prescribe what transaction data with a manufacturing company, to offer, how to message, and where to engage—in that could help the manufacturer predict its real time. This applies to preventing churn as much required inventory at stock-keeping unit (SKU) as to customer acquisition. It’s not enough to know level, adjust its sales initiatives, and adapt its that your customer is at risk of leaving; knowing marketing material. when they’re in the leaving window, why, and what to do about it equips companies to address customers’ These innovative sources of data can be turned concerns right away. into actionable recommendations for companies’ frontline sellers. For example, one mortgage lender As an example, one agricultural distributor was developed a tool to help its sales teams make facing mounting competitive pressure and decisions based on previously unavailable data. By disintermediation from large producers that were combining public, partner, and proprietary sources selling direct to growers. Faced with rising churn spanning geospatial, urban, financial, consumer, and declining win rates, sales leaders knew they and business data—including datapoints such as needed to drive mitigating actions that went beyond distance to highly rated restaurants—the lender traditional analytics to build a complete, prescriptive could accurately predict the rent of buildings. decisioning engine, aligning their engagements and touchpoints with observed customer opportunities and preferences.2 Predictive insights are of little help unless combined with data-driven prescriptive recommendations for where to engage, what to offer, and how to message. 2 Ibid. Future of B2B sales: The big reframe 9

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      Using internal data, external interviews, and focus this one-size-fits-all approach and taking a page groups, they systematically defined customer out of the B2C playbook. Only 8 percent of B2B segments, journeys, and buying preferences. They organizations are currently set up to deliver highly hosted design-thinking workshops where they personalized marketing—but of that 8 percent, translated these insights into a comprehensive list three-quarters report growing market share of sales initiatives and campaigns meant to drive (Exhibit 3). And fewer than half of companies specific business outcomes and articulate their surveyed grew their market share with little to no unique value proposition. Among these were a personalization.3 new e-commerce sales channel and a customer- experience hub that accounted for over 60 percent With a more personalized approach, companies of revenues within six months of launching. Field can reach out to the right executive with the right sellers, in turn, had greater focus and success message at the right time. In one case, a fast- driving strategic growth opportunities, enabled by growth software company built a business around new data and analytics flows. a new enterprise platform but recognized it had to up its game when pitching to the C-suite. It tested The company fed the results back into their analytics a content-personalization strategy that departed engine to measure the impact of these initiatives; from its standardized pitches. After aligning on a The result was $1 billion of revenue flowing through target list of industries, sub-industries, and specific new digital channels, with churn three times lower accounts, it developed highly personalized value than the traditional sales model. propositions based on a customer’s regulatory environment, technological sophistication, recent acquisitions, and publicly announced strategic Capture customers’ attention with initiatives. personalized content Of the companies that invest in analytics, many Developing these tailored pitches took the sales still bring their customers a “boring” laundry list of team weeks of training to understand their target products. Leading B2B companies are abandoning accounts’ personas and market dynamics. Some Exhibit 3 The more personalized the marketing, the better. Increased market share, by degree to which marketing is personalized % of respondents by market-share move 66 75 47 52 Somewhat Personalized Very Direct one-on-one McKinsey & Company 3 Auron Arora, Liz Harrison, Candace Lun Plotkin, Max Magni, and Jennifer Stanley, “The new B2B growth equation,” McKinsey, February 23, 2022. 10 Future of B2B sales: The big reframe

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      customers required hand-holding, while others In B2B, content outweighs both sales presentation were immediately ready to discuss detailed and timeliness as customer-buying factors. integration of the platform into their existing stack. However, 57 percent of sellers say they don’t And the approach paid off: customers specifically pay much attention to content produced by celebrated how well the company had “done its their marketing teams, feeling it is generic and homework,” earned trust, and demonstrated that unresponsive. Yet by combining analytics—using they had the expertise to deliver. With this content novel data drawn from innovative sources—with strategy, the company built a $50 million annual direct customer conversations and surveys, recurring-revenue business in 18 months from an B2B marketing teams can personalize content accelerated deal pipeline. that speaks to individual decision makers and influencers in specific accounts or industries. For The bar for B2B content is high. Ideally, it is visual example, the sales approach for a chief information and exciting, conveys complex ideas in a simple officer (CIO) and a data scientist at the same format, and meets rapidly evolving customer company may be very different while still reinforcing expectations. Products are usually more expensive, common messages (Exhibit 4). and sellers often may have only one vital pitch with their target customer account. Trust, too, is an Leading technology companies have recognized important issue: great content shows credibility and the need for greater customer personalization and deep expertise, convinces the customer that they’re deploy specific strategies to target their end users, getting an end-to-end partner, and anchors on the including data scientists, developers, and designers. end outcomes rather than individual features or capabilities. Web 2022 Emerging cautiously: Australian Consumers in 2022 Exhibit 4 Exhibit 2 of 10 Modern B2B GTM drives growth with digital and personalization end-to-end. wareness nderstanding urchase uccess  ­€ Receives video RetailCo testimonial from a friend about a Signs up for CloudCo’s ets personalized message CloudCo retail client eec event from sales rep post event ets uarterly trends & ‚ead of T€ insights email for current RetailCo Sees CloudCo display s directed to customers ad for retailers CloudCo white se personalized paper for retailers digital tool on ƒata CloudCo site to cientist€ build business Sees CloudCo sales RetailCo Reads industry report Finds CloudCo in case that they pitch and demo† mentioning CloudCo search results pitch to C negotiates contract and signs thereafter ‡efines content based on ­uilds personalized content initial customer conversation Jointly prioritize accounts … strategy for RetailCo verticals with intent & Sends ongoing Mar„eter behavior data €eploys self-serve tool to uantify nurture content to value-at-stake & builds demo current customers eperience with product team Form cross-functional pod ƒelivers pitch along with to pursue RetailCo & jointly Finds relevant messaging & content on customer success manager‚ track engagement end-to-end central M and sends note to C aligning on success metrics eller 5–10% 20–25% 5–10x BB revenue lift from increased higher sales productivity increase in testing content relevance & engagement & efficiency speed & throughput McKinsey & Company Future of B2B sales: The big reframe 11

      Understanding that end users are increasingly oriented on where customers might actually be. influential “option creators”, tech companies are This enables marketing to play a deeper role in the putting together tailored, purpose-driven events customer lifecycle, instead of pushing leads that where the chief technology officer—not sellers— might have little interest in buying. take center stage to talk about new initiatives and topics, such as AI and sustainability. One enterprise software company parted ways with the MQL concept entirely. Instead of artificially Companies are hosting everything from hackathons qualifying customers, it adopted a “conversation to interviews with engineering luminaries to appeal readiness” mindset by simply talking to customers at to this developer demographic. And it works: they events, in surveys, and via the website, asking them are turning these users into influential champions for if they wanted to engage a seller. Customers were their products and, by not inviting sellers, building not pushed to a seller unless they were ready—and trust with them as well. they loved it. From fewer leads overall, the company experienced four times more opportunities and a doubling of account engagement. Impress the customer with a seamless buying journey Make every seller a marketer … and vice versa. Five years ago, B2B customers had around five Nine out of ten B2B decision makers say that distinct marketing and sales touchpoints during marketing and sales need to work more closely their buying experience—now they can have as together to put an end to overlapping work. They many as ten. This journey can be cumbersome, and recognize it would be more effective for both ensuring consistency between touchpoints can be functions to work on the same go-to-market difficult for B2B sellers. strategy, from the same data, and with the same message so that customers don’t get frustrated by They could consider dismantling the barriers contradictory messaging or confusing handoffs. that have long separated marketing and sales, smoothing the experience as customers move from To address this, a leading enterprise cybersecurity one touchpoint to the next. This requires some bold company has marketing and sales collaborate moves, like fixing broken incentives by replacing in “pods” that report to a combined business-unit marketing-qualified leads (MQLs) with measures of leader. They work together to approach prioritized a customer’s readiness to have a conversation, and customers. Marketers lead personalized content combining marketing and sales forces to give the and self-serve digital tools, and train sellers to customer a frictionless experience. deliver these. They also educate sellers on their customers’ key buying factors and strategies to MQLs have long forced marketers into a demand- tailor content. generation trap, where they are incentivized to push customers through a funnel to sellers without Sellers then deliver the pitch and report back on knowing whether those customers are ready how the content resonated or not with customers. to advance. Customers can get annoyed, while Front line reps (field sellers, remote sellers, marketers become frustrated by artificial targets customer success managers, sales development that call on them to engage in low-value activities. reps, and channel partners) all provide critical Sellers can become dissatisfied because these inputs to marketing. Content-management systems MQLs are only marginally more likely to take a and digital-asset managers help access and meeting; often sellers ignore them and develop tag content, while other internal communication separate measures of the pipeline. channels—company intranet sites, townhalls, client- case videos, and employee pulse checks—ensure Smart companies are shifting from a “sales funnel” consistent delivery. This has all contributed to 30 mentality to a “customer buying journey” mindset, percent year-on-year growth. with sales and marketing working togethe and 12 Future of B2B sales: The big reframe

      The advantage of the self- serve journey is that it drives a sale without the seller being needed, even at the moment of purchase—making every marketer a seller. Marketers historically have focused on demand The advantage of the self-serve journey is that it generation, making customers aware of their drives a sale without the seller being needed, even products. Now, however, by creating and deploying at the moment of purchase—making every marketer self-serve tools, marketing can play a role in not just a seller. And by using the customer’s data from that generating demand, but converting and nurturing it. journey, sellers have a ready-made business case to pitch to leadership. For example, IBM’s hybrid cloud-value calculator, Amazon Web Service’s migration evaluator, Google A customer-centric journey involves finding Cloud’s pricing calculator, and Microsoft Azure’s the right customers through analytics-based total-cost-of-ownership calculator are all self- insights and ensuring a personalized, consistent service tools that offer personalization and empower customer experience. But to unlock value, it is potential customers. By answering a few questions essential to address the siloed channels that hinder about factors such as their company’s industry, transformation. annual revenue, IT spend, and current cloud maturity, prospects can get a customized, visual business case for adopting the cloud solution. Future of B2B sales: The big reframe 13

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      et s d n i e m h el k t n a n e a r B ch 2 14 Future of B2B sales: The big reframe

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      Traditional channel strategy has been upended. B2B Leading B2B sales organizations react to changing customers now often use more than nine channels buyer behavior in three specific ways. First, they on their buying journeys—from older channels adopt hybrid as the default approach. Second, like email and phone calls to mobile apps and web to make hybrid work for customers, companies chats.4 optimize the channel experience for each step They have become so comfortable with this mode that many are happy to close deals in excess of the customer-buying process. Finally, leaders of $500,000 without ever meeting the seller in find creative ways to complement traditional sales person. Customers no longer think of channels; channels, thereby unearthing new sources of they want intuitive, seamless, and personalized revenue. experiences that satisfy their buying needs (Exhibit 5). Adopt hybrid as the default approach The idea of allocating reps to accounts once a year It’s a reality: more than 65 percent of companies and then reevaluating for the next planning cycle now prefer remote and digital interactions, a is no longer effective. Companies that addressed trend accelerated by the COVID-19 pandemic. this change and sold through more channels grew Increasingly, they are investing more in hybrid market share at a faster rate in 2021.5 roles—reps are no longer seen as “field” or “inside” Exhibit 5 B2B buyers have settled into using an evenly divided mix of sales channels. Current way of interacting with suppliers’ sales reps, by stage of process • of respondents per sales-channel type¹ Traditional interactions² emote human interactions² igital self-serice² …ug 2† ‹e 21 ec 21 …ug 2† ‹e 21 ec 21 …ug 2† ‹e 21 ec 21 …ug 2† ‹e 21 ec 21 29 32 33 22 32 33 20 32 32 19 30 30 35 48 35 44 34 46 34 33 49 33 34 33 22 34 34 30 33 33 36 34 35 35 36 36 ’dentifying and Considering and ˜rdering eordering researching new suppliers ealuating new suppliers 2 out of 3 buyers in 2021 opted for remote human interactions or digital selfservice 1Q: Currently, how do you split your time with sales reps from your company's suppliers during the following stages of interactions? 2Traditional includes in-person meetings, direct mail, fax, etc emote includes phone calls, ideo conference calls, emails etc igital includes company we- sites, e-commerce, chatots, internet searches, moile apps, etc ource: c­insey € Company ‚loal ƒ2ƒ „ulse, …ug 2†2†, n ‡ ˆ,‰2‰Š ‹e 2†21, n‡ ˆ,ŒŽ‰Š ec 2†21, n ‡ ˆ,ˆ‰†, countries: ƒra‘il, Chile, China, ‹rance, ‚erma- ny, ’ndia, ’taly, “apan, outh ­orea, pain, ”­, ” McKinsey & Company 4 Arun Arora, Liz Harrison, Candace Lun Plotkin, Max Magni, and Jennifer Stanley, “Rebalancing works: Omnichannel is more effective than traditional sales models alone,” McKinsey, February 23. 2022. 5 Ibid. Future of B2B sales: The big reframe 15

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      but a mix of the two, adjusting to customer need remote channels, while not losing the effectiveness at each stage of the sales process. And it seems of in-person meetings and demonstrations. this phenomenon is here to stay: research shows that hybrid has seen the fastest growth of all types The hybrid model also allows traditional in-person of roles over the last few years—making hybrid a sellers to use technology to optimize their sales channel of its own (Exhibit 6). activities, such as applying speech analytics to customers’ verbal cues or analyzing video footage to To succeed, salespeople need to become experts clarify customer questions. Adopting hybrid as the at both remote and in-person selling. There are default model enables a broad set of channels to be a number of ways to achieve this. First, learning used, depending on where the customers are in their how to judge the right form of interaction for buying journeys. different contexts and situations at every stage of the customer journey. Second, learning to read Many companies have significantly improved both physical and virtual settings and understand their sales performance using hybrid models. For what makes buyers tick in each. Third, mastering example, a leading financial-services company hybrid orchestration, where some customers might faced many challenges with its traditional channel be physically in the room while others are spread structure—it lacked focus on cross-selling, had across the world. an inconsistent sales performance-management structure, and placed limited emphasis on Although challenging, the benefits of the hybrid advanced-analytics capabilities. So sales leaders approach are clear: it enables a more consistent chose to increase the number of hybrid sales and customized level of engagement; sellers can professionals, who needed to be able to operate engage with customers more frequently; and they seamlessly between the field and inside, by can easily access information when using digital 50 percent. Exhibit 6 Hybrid and digital are the fastest-growing sales roles. Net change in sales roles, percent of respondents, „S only¹ 70% 64% 43% 33% Hybrid Digital Inside Field 1Q: over the past year, how has the size of your company's sales force in the following areas changed? Source: McKinsey  ompany loal  ulse, ­ov €1, n ‚ ƒ€ McKinsey & Company 16 Future of B2B sales: The big reframe

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      The company also made significant investments in customers launch into new channels in relative technology, which allowed employees to develop isolation and with no consistency. Leaders in this presentations and pitches that could work both space are meeting customers where they are to in-person and remotely—sometimes at the same ensure consistent messaging across channels, time, if the customer had people both in the room rather than making the customers come to them. and on videoconference. Its best field-sales expertise can now address lower cost-to-serve A global B2B software-as-a-service player now lets digital channels, making smaller customers the type of transaction—what is being sold to whom profitable. The shift has allowed sales leaders to and when—determine the GTM approach instead of introduce consistent messaging across the sales assigning larger accounts to field reps and smaller function (which customers reported as a major ones to inside sales. Simple transactions for all issue) and helped the company achieve around ten customers are handled by inside sales or digital percent top-line growth. channels, while field reps cover more complex purchases. Meet your customers where they wish Before this, if a customer posted a query on the to meet website, the digital-sales team referred it to the call With customers wanting personalized buying center; staff there had basic technical and selling journeys, approaches that are experience-led capabilities but lacked the expertise to land sales. (looking at customers’ previous buying journeys The company’s data showed, however, that inside and needs) and expertise-led (demonstrating sales can effectively follow up remotely by bringing expertise in aspects such as customers’ industry in experts for guidance from a centralized pool in or geography) could be the way to go. Too often, the commercial hub. The final negotiation and close Direct-to-consumer experiences in B2B With the increased use of omnichannels, some capabilities to deliver that. This includes investing in B2B organizations have found opportunities in analytics to predict customer needs and personalize unexpected places. Some have chosen to (re) their journeys. define their customer as the end consumer. This has led them to embrace direct-to-consumer Possible problems with a DTC model include the (DTC) business, without relying on intermediaries. risk of channel conflict, and antagonization of the Research shows that DTC margins are typically customer base. It is critical to gain stakeholder buy- 8–12 percent higher than other channels. in. Deft organizations achieve this by communicating upfront with retail partners, adjusting incentives, Companies can operate at various stages of the maintaining price parity, and being omnichannel. DTC journey, too: it doesn’t necessarily mean Most of the mature DTC companies McKinsey just adding an e-commerce function to the surveyed do not view channel conflict as a concern. website. Some companies focus on building brand loyalty, others on education around their unique Although the DTC model may not work for all sellers, value proposition, and others on direct top-line and creates the potential for cannibalization, it’s a growth. Whatever the entry point, it’s important for trend that many B2B companies are exploring and companies to be clear on the value they want to add adopting. for the customer and prioritize building the right Future of B2B sales: The big reframe 17

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      are then managed by field sales. This new GTM are aligned so that customers can move seamlessly approach speeds time to market, raises customer from one channel to another. This goes beyond just satisfaction, and lowers cost. sales and includes all roles that have any meaningful customer interaction, such as customer success, Getting this model to work is not straightforward. customer service, and implementation. In addition to developing systems and processes where information flows as effectively as possible, Customers also like self-service channels— some of the sales leaders we spoke to hold regular downloadable demos, virtual webinars, digital cross-channel meetings where managers are marketplaces, video libraries, and online allowed to rebalance budgets, adjust channel communities all help to equip B2B customers with strategies, allocate customers, and improve how the content they need when and where they want it. channels reinforce each other. They define when According to a recent McKinsey survey, B2B buyers and how to engage, and ensure internal resources now spend a third of their time engaging with self- serve content across all stages of the buying journey, Customer success: Focus on business outcomes, and sales will follow More companies are realizing the power of a team created dashboards based on usage data that customer-success team and that selling a product flowed back from installed products. These showed and offering support create a deeper customer customers how they were using the products, made relationship. For example, a leading technology- suggestions for improvements to support intended services company had a new set of products ready outcomes, and recommended additional products. to launch, though revenue was in structural decline. It invested heavily in building a customer-success This data also helped the company identify unit alongside its traditional sales channels—to customers at risk of churn and enabled it to act understand how consumers were using existing to mitigate this risk, by tweaking the service or products, assess whether they could use them more investing more time with customers to help them effectively, and ensure that the new product range understand how the product could be used better. was being deployed to deliver maximum value. This approach is not limited to tech companies: The company took hundreds of its transactional- financial-services companies, manufacturers, and service people and moved them into customer professional-services players can all benefit from success. These people undertook quarterly success the customer-success model. One large financial- reviews to understand how the products helped services company built a customer-success customers, which then had a meaningful impact on team as part of a much larger customer-focused both new sales and retention. In this way, customer- transformation by empowering people to drive success qualified leads became as important success outcomes such as usage, adoption, and as the more traditional qualified leads, as the retention—critical business objectives for the company realized the power that non-commercial organization. It created small, agile, cross-functional conversations could have in driving commercial teams to understand customers’ underlying needs, potential. answer their questions without many internal conversations, and ultimately ensure that the For smaller customers, where such intense financial products customers were buying enabled coverage was not practical, the customer-success them to hit their strategic goals. 6 McKinsey & Company Global B2B Pulse, Aug 2020, n=3,626; Feb 2021, n=3,496; Dec 2021, n=3,360. Countries: Brazil, Chile, China, France, Germany, India, Italy, Japan, South Korea, Spain, UK, US. 18 Future of B2B sales: The big reframe

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      including the moment of purchase and for high- leadership and colleagues. Companies can harness 6 this power by offering clear incentives to referrers, complexity products. and by designing marketing events, microsites, and other experiences to intrigue industry influencers. Driving sales through unexpected channels For instance, a leading cloud-software company has Selling is not always driven by sales: for example, adopted an influencer marketing-style strategy that customer service has long been part of most uses powerful customer testimonials to turn buyers companies’ selling playbook. However, some into “ambassadors”. Top ambassadors are rewarded leading companies. Leading companies are building with direct monetary incentives or other benefits innovative channels to capture revenue from such as free products. The company includes unexpected places. One frequently used model case studies on product-specific webpages with is influencer marketing—which asks end-users information about how these products have helped to help sell a product by recommending it to their customers—including return-on-investment details, “It's very easy in people's personal lives to have access to information and to get what you want when you need it. People are bringing that same expectation into the business world.” —Chief commercial officer, consumer goods company Future of B2B sales: The big reframe 19

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      video testimonials, and quotes. The testimonials One large technology company launched span industries and functions, and help prospective communities where customers can find answers or buyers comprehend how products will suit their ask for help, accessing relevant data and content. businesses. The communities include self-service portals that provide support and feedback (for example, FAQs Some companies go further and create buyer and discussions with other customers). They provide communities: platforms where buyers engage multiple benefits to the technology company, without intermediation by the seller. They are allowing it to share relevant information easily while successful only if they are seen as independent reducing sales and customer-service costs. They channels, with communities expressing their create better customer experiences, increase genuine opinions of a company’s products or customer engagement, grow customer retention, services. However, they can act as a core part of the and drive product innovation. channel journey and are a powerful tool to collect direct feedback from customers. Understanding how to integrate these non-sales functions into their channel strategy is a hallmark of successful sales organizations. 20 Future of B2B sales: The big reframe

      e l b a l a ne c i s g e a n t e a s e e r l a s C 3 Future of B2B sales: The big reframe 21

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      In sales, what separates average performers from ebbed, and daily sales fell. To revitalize the business, distinctive ones is not just landing the perfect deal the company set up a win room to shift the team’s but being able to do it again and again. Leading mindset from reactive to proactive. Sales leaders sales organizations deploy three tactics. First, they established a small cross-functional team with clear use cross-functional “win rooms” (agile hubs where task owners, meeting structures, and dedicated deals get solutioned and continuously refined to resources that were guided by working principles fit customer needs) and constantly refine their (for example, that all decisions were to be made solutions to fit customer needs. Second, they invest in win-room sessions). They also introduced an in a narrow set of tools and technologies they accelerated approval process. The team focused actually need, but double down to ensure thorough on increasing the rate of experimentation around front- and back-end adoption, focusing on driving new campaigns and optimizing the conversion rate. customer outcomes instead of solving technology It set up dashboards to track both campaign and problems. Finally, they elevate the commercial sales-rep performance and incorporated frontline operations function into a clear strategic role feedback into campaign design. In just four weeks, and make it a true sales leader role in the overall the company had launched seven high-impact business. campaigns that led to a 30 percent increase in daily sales. Create cross-functional win rooms as the new standard Ensure the correct tech-stack intensity A win room brings together a cross-functional Many leading sales organizations find themselves team comprising people from sales and from a in a difficult situation—they subscribe to multi- combination of marketing, product, delivery, finance, million-dollar technology solutions designed to and technology (and other functions as needed), all make reps’ lives easier and to help management working together at a structured cadence to focus track performance. But they then realize that few on closing deals. Our research suggests that the salespeople are using them. Many are streamlining top-performing sales functions have embraced and their tech stack and adopting a more outcome- implemented this concept, bringing focus and rigor based approach to the problem to the sales process. “Sales tech” is booming—what was once a niche Although win rooms can be used for both large category dominated by a few customer relationship and small deals, the approach is slightly different management (CRM) players has proliferated into for each. For large deals, the focus is on creating dozens of subcategories, with private investment a perfectly tailored solution for a particular key in the sector soaring ~70% between 2020 and customer—the right design at the right price, with 2021. It’s also top of mind for sales leaders: around the right support level. For smaller deals, the focus is 80 percent of chief sales officers say that having on designing and testing different experiments and an effective sales tech stack is critical to hitting 7 scaling the ones that work well. Whichever approach revenue targets. is appropriate, it is essential that win rooms have clearly defined timelines, meeting cadence, roles, However, it can be complicated. Companies race to and agility. purchase technology solutions, only to see marginal productivity gains. Most sales organizations As an example, a financial institution launched a spend $500 to $1,000 per rep on sales tech, but new business unit and saw soaring sales for the barely more than half boast good technology adoption.8 first couple of months. But as the launch excitement For example, a Saas company invested faded, the sales team’s focus lapsed, momentum significantly in cutting-edge tools to enable the 7 “Taming the sales tech mayhem,” Gartner, 2021. 8 How to boost adoption rate of new technology,” Bigtincan, November 29, 2019. 22 Future of B2B sales: The big reframe

      sales organization. Yet, even after significant seller 2. Start with the outcome, not the technology: training, ultimately only two out of the nine tools There seems to be an automated tool for every implemented were used consistently by the entire step of the sales value chain. But rather than be sales force. distracted by the latest technology, successful sales organizations start with the specific Those who get the sales-tech strategy right can outcome they want before exploring what tools achieve transformational outcomes—yet a good are available. A sales leader told us, “The trick was tech strategy is not just “more tech”. User adoption, going back to basics. First, reminding ourselves change management, and data should underpin that the end purpose of tools is to support sales every decision to add another tool. There are four reps, and second, to ensure that we see strong imperatives common to companies that have results before investing in the next set of tools. genuinely transformed their sales productivity: We don’t focus on the technology, we focus on what we want our sales reps to do, and then see if 1. Emphasize quality over quantity: The the technology fits.” fragmentation of solutions is a challenge—single- source providers that can expand through the 3. Invest in the data: While many companies stack can help avoid proliferation. Reps are familiar spend a lot of time launching new tools and with jumping from one tool to another, but this is looking for business insights, few make the inefficient and halts adoption. A sales executive necessary investments in the data foundations at a large technology company commented, “I was that let these tools perform best—leading to sitting behind the inside sellers to learn how they poorer outputs and a frustrated frontline. As one worked, and was amazed to see they had dozens sales leader put it, “There’s no point having all of tabs open. I said, ‘Can you walk me through each the best-in-class tools if we can’t drive the right of these tabs?’ Of course they couldn’t remember insights because the data is poor.” the tabs or how to use them. To me it’s about having fewer tools but having them easily integrated, and 4. Prioritize change management: Companies then focus on the best use cases.” need to consider why a new tool is valuable to the “It's more about having fewer tools, but thoughtfully integrating them—and focusing on the outcomes instead of the technology.” —Chief commercial officer, consumer goods company Future of B2B sales: The big reframe 23

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      seller. A company executive noted that, “You need clear benefits, fewer than one in ten companies to communicate clearly why you are using certain has seized the opportunity to expand the role of tools and new governance methods. The best way commercial operations. is a top-down culture, where the CEO or head of sales clearly communicates the added value—and A software provider’s senior vice-president (SVP) champions it by role-modelling its use.” of sales operations described how his role has morphed in recent years. He used to be responsible only for day-to-day management and overseeing Expand commercial operations: functions that reported to him. However, as his Traditionally, commercial operations was a sales- organization recognized the increasing importance execution function to set sales quotas, manage of a sales-operations voice, his role has been sales technology, and make reps more productive. In elevated. “Now, I play a key role in bringing together today’s world, that’s not enough. If companies want stakeholders in the organization’s go-to-market to operate at scale, they need to broaden the role strategy. I have a seat at the table in discussing of commercial operations so it’s seen as a source of corporate strategy and working with the CFO, and analytical and strategic value. Our research shows essentially act as a right hand to the chief revenue that companies that do this perform significantly officer to the CRO by working with marketing, HR, better than those that maintain a simplified sales- and product to integrate channel strategies.” operations function (Exhibit 7). Yet, despite the Web 2022 Emerging cautiously: Australian Consumers in 2022 Exhibit 7 Exhibit 2 of 10 How an evolved commercial operations lifts performance. View of company’s performance vs peers by maturity of commercial operations ate of company s revenue growth compared to peers in market­industry, % €‚% aove 0ƒ‚% aove „n-line with 0ƒ‚% elow €‚% elow market market market market market 100%† 1‡ 1ˆ 36 0 43 3 14 7 13 Companies with Companies with full-suite only sales ops consolidated commercial ops¹ 1Companies whose commercial-operations organization includes sales ops, professional services operations, customer-care operations, and marketing operations. Figures may not sum to 100%, ecause of rounding. ource 00 Commercial ps survey cinsey  Comany 24 Future of B2B sales: The big reframe

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      Commercial operations is an ideal partner for sales, because it has the power to observe and analyze markets, generate insights through data, and use these insights to steer the salesforce. But companies need to invest in it continually to ensure its success. Some organizations have transformed it into a trifecta of sales operations, marketing operations, and customer-success operations—to great effect. This critical change requires reconfiguring the team and organizational structure, but with it comes effective collaboration, the better dissemination of information, and all functions traveling in the same direction. Many interviewees told us that expanding their commercial operations helped significantly to streamline their processes. A SVP of global sales said, And another SVP of “When we consolidated commercial operations our operations functions, told us, “After creating a we unearthed a lot of commercial ops team, we inconsistencies and saw a 30 percent increase redundancies that we in productivity and a 5 were able to standardize percent increase in market through adopting share over four years.” best practices.” Future of B2B sales: The big reframe 25

      y g e t y a t r t n i e s a l t p r o e e c n e p f u h e o k t g n i n a h t e n a R i 4 26 Future of B2B sales: The big reframe

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      As much as technology underpins the ability to Our research shows, however, that if equipped execute at scale, sales remains a people-driven with the right talent strategy, B2B organizations function. With the global resignation trend, how can can revamp their salesforce skills to address sales leaders ensure that they hire, train, and retain today's needs. Three key levers stand out: leading the best talent? companies are rethinking which sales skills are most relevant, using analytics to craft unique training More than 57 million people in the US quit their jobs programs, and breaking away from traditional sales from 2021 through early 2022. As companies look incentive structures. for new skills and capabilities in their commercial function, and focus sharpens on meeting customer needs, the need to attract and retain people has New sales reps for a new era: become more important than ever. Rethinking talent Today’s reps are no longer just agents who sell Effective talent-development strategies tradition- a product. They need analytical, strategic, and ally include competitive compensation, an excellent technical skills; they must be able to work with data incentive structure, learning and development and derive insights, stay ahead of the customer, opportunities, and a strong culture. A growing strategize on next steps, provide the best solution, number of organizations are now also incorporating and keep an eye on the customer’s business “purpose” into their talent messaging, as employees objectives and profit and loss. As one sales leader value working for purpose-driven organizations. said, “If you can’t tell a customer what you’re going Despite these efforts, hiring, retaining, and to do to enhance his profit and loss, then you have replenishing talent remains difficult, particularly no reason to exist as a salesman.” Good sales reps within sales: HubSpot reports that average sales can also manage senior executives across different turnover is 35 percent, nearly three times that of any areas of a buyer’s organization, from technical other function.9 manager to chief financial officer. “If a seller cannot talk to a customer's P&L and tell them what is going to be done to enhance it, then they won’t be successful as modern sales reps.” —President, technology company 9 “Sales turnover statistics you need to know,” Xactly, August 24, 2021. Future of B2B sales: The big reframe 27

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      At some B2B companies, especially in the access fresh pools of talent, enable global growth technology sector, these skills are becoming strategies, and even tactically improve their reach standard (Exhibit 8). An executive at a large through such basic measures as being in the technology firm explained, “Our salespeople need same time zone as potential customers. One B2B to be able to understand data. They need to be able company is experimenting with offshoring its sales- to look at situations or customers intuitively and development reps, starting with a small team of see patterns. If I had more traditional salespeople fewer than ten. If successful, it plans to expand the who thought the job was only about building concept to relieve the competitive hiring pressure in relationships and closing a deal on the golf course… the US market. well, those people won't make it in this market.” Companies don’t have to go offshore to expand Since reps need to have an in-depth understanding their talent pools. Many are taking advantage of of their customers, it’s understandable that many the growing popularity of remote work and its B2B organizations target their own customers for role in accessing new domestic markets. A legacy recruitment. One technology-sector sales leader industrial supplier, which had traditionally centered is bringing former healthcare professionals into its commercial team in one region of the US, sales roles, for example. Organizations are finding expanded to diversify its team; with new commercial it’s more effective to train industry experts in sales and sales leads in non-traditional regions, they than to bring in fresh faces who need both sales and were able to bring in deep sales experience, cross- industry training. industry perspectives, and a stronger talent pool that could deliver the next-generation skills needed. While some companies look to their customers for talent, others are taking a different approach. Offshoring is well established for functions such Use analytics to train the team as technology and customer service, but less A US health payor’s revenue growth lagged as it tested in sales. The potential benefits go beyond struggled to sell ancillary products. The regional traditional cost-reduction measures—by expanding sales teams rarely shared best practices, and sales the geographic scope of hiring, companies can was broadly reactive. As part of a shift to a more Web 2022 Emerging cautiously: Australian Consumers in 2022 Exhibit 8 Exhibit 2 of 10 There is increasing demand for new sales skills. of sales leaders surveyed believe solution selling will ranked analytical and 85% be a core sales capability, 80% quantitative skills among requiring strong product the top capabilities to knowledge and solution develop. design as well as account-planning skills. Analytical and quantitative skills Solution selling McKinsey & Company 28 Future of B2B sales: The big reframe

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      Diversity and inclusion: An imperative for sales The sales function—at least in the US—has been our objectives and key results, into the way that our slow when it comes to increasing gender and racial executives talk about the business, into our core diversity. In 2019, 76 percent of salespeople in operating principles, and into our reviews. How are the United States were white, and the number has you serving the customer and the user? Part of that barely changed in the last decade. Women account has to be that I’m serving everyone, not just the for less than one-third of all B2B sales roles, falling people that look like me.” to just a quarter in the technology sector. The higher up the organization, the fewer women there Some companies have been successful here. are: only 12 percent of the top sales jobs are held A leading business-information services firm, by women. Yet research suggests that women in where more than 40 percent of the salesforce B2B sales outperform men—86 percent of women are women (a proportion that carries through to regularly achieved quota compared to 78 percent of higher management roles), has taken steps to make men, according to a 2020 Harvard Business Review the organization more diverse by encouraging 10 report. employee referrals for hires. And the head of sales at a professional-services company told us that its The sales leaders we spoke to believe that diversity leadership walks the talk: all six of the senior-level is needed and is desirable, though admit that it is appointments made over the last 12 months are very much a work in progress. The head of strategy from diverse backgrounds. The company has also at a leading technology firm expressed the view of created diverse interviewer panels to overcome many: “Having a diverse salesforce is necessary if biases in interviews—and has included diversity as a we are serving diverse customers … [The value of metric in its quarterly reviews. diversity] has been embedded into the culture, into consultative sales model, the company needed to training on these skills, improved its coaching develop a training program for reps. Using data program, and set up a long-term training structure analytics, it discovered three crucial issues. that made capability building a key enabler of sales growth. First, reps spent too much time on non-selling activities. Second, there was a large disconnect Our research shows that companies can boost the between how effectively sales managers thought lifetime value of sellers by 10 percent by making they were coaching reps, and how the reps the right hires, optimizing onboarding, building perceived the coaching. Third, sales reps and capabilities, and retaining the right people. The managers believed that relationship and network analytics underpin this: using psychometrics, building were key skills for customer growth, behavioral data, performance, and team or when in fact sales analytics showed that pipeline relational analytics, organizations can build targeted management, prospecting, and product knowledge interventions at every stage of a salesperson’s were more important. The company focused its tenure. 10 Andris A. Zoltners et al., “Why women are the future of B2B sales,” Harvard Business Review, May 28, 2020. Future of B2B sales: The big reframe 29

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      Companies with the best sales talent demonstrate An agribusiness company is introducing a tool that four to five times higher market growth. For most integrates sales training into Salesforce. This allows established organizations, the fastest way to build sales reps to access training simply by switching to the best sales talent is through strong learning the landing page in their Salesforce window. When and development programs. This means reskilling they need support in managing opportunities, roughly half their salesforce and plugging gaps in Salesforce provides refreshers and micro-training core commercial roles to drive success (Exhibit 9). sessions that take just a few minutes and are tailored to what reps need, when they need it. Leading sales organizations make learning personalized, serve it in small bites, and reinforce Data and analytics are at the heart of personalized it regularly. And it works—our analysis finds that training. A digital-solutions provider grew its companies that tailor learning programs to the business by double-digit percentages every quarter observed needs of sales reps are 1.3 times more predominantly by hiring more sales staff. But when 11 growth slowed, the company turned to analytics likely to be outperformers. to understand its reps’ skills. It discovered large Integrating micro-learning—what one sales leader variations between reps—the consequence of referred to as “snackable content”—in the sales investing less time in training after onboarding while curriculum overcomes the challenges of lengthy it scaled at pace, and not assessing performance (virtual or in-person) training sessions. Reps are management often enough. By comparing reps’ more engaged and retain knowledge, and it takes skills proficiency with outcomes, the company found less time. Training can be delivered through virtual it could achieve better results by refreshing reps’ platforms and integrated into reps’ customer product knowledge, equipping them with proven relationship management so that it’s delivered when tactics for negotiating prices, and improving their needed. handling of customers’ concerns. By personalizing Exhibit 9 B2B sales organizations need to reskill frontline reps and add leadership roles. Sales leaders see reskilling as their … as less than half of sales leaders immediate priority… believe most of their reps have the right capabilities to succeed. Which best describes how your company What percentage of your company’s sales force thinks about upskilling your sales force? currently has the right capabilities to be successful? % of respondents % of respondents¹  1 1 <1% % „op priority 97  %  ­€% ‚ƒ%  Low /not a priority  1…igures may not sum to 1%† because of rounding‡ ˆource‰ Šc‹insey insights McKinsey & Company 11 Boudewijn Driedonks, Sinem Hosletter, and Ryan Paulowsky, “By the numbers: What drives sales-growth outperformance,” McKinsey, April 13, 2022. 30 Future of B2B sales: The big reframe

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      its training to sellers’ individual needs, it saw a that is not the perfect fit for a customer, damaging 4 percent rise in revenue. longer-term prospects for that relationship. Meeting targets is challenging—especially in times of Sales leaders can use data in this way to identify economic uncertainty—and, as reps strive to meet gaps in sellers’ knowledge and skills, understand them from one quarter to the next, they might have how reps can apply their learning to active sales little interest in long-term account management. opportunities, and replicate the best practices Or they might move off if they get a better deal of top performers. By using commercial-activity elsewhere. However, as the skills and mindsets of analytics to assess how reps spend their time, reps evolve, more personal motivations to drive measuring digital interactions (such as emails retention and focus on longer-term objectives could and appointments) and linking them with existing be a solution. organizational data, business contexts can be assessed. This too can inform which training should Go beyond financial incentives. The most recent be aimed at which individuals. recruits to the workforce, Generation Z, care about the principles and culture of their place of work: 42 percent care more about their company’s 12 Rethink incentives to drive motivation values and purpose than salary levels. Young and retention professionals today seek mentorship, career Organizations typically motivate sales reps by using opportunities, and flexibility. The desire to decide monthly or quarterly financial incentives to ensure when, where, and how they work has been revenue targets are met and to retain staff. Over reinforced by the pandemic, and available options time, however, companies have seen downsides to have increased. Younger recruits also care deeply this approach, exacerbated by changing customer about a culture of diversity and free thinking. behavior and redefined sales-rep skills. Analysis shows that a lack of career path is a major Short-term incentives can even lead to decisions driver of voluntary attrition. Most companies have that hurt long-term opportunities. To meet monthly a two-year plan for a sales career path, often targets, for example, a sales rep might sell a product causing reps to leave after that amount of time. A Young professionals today seek mentorship, career opportunities, and flexibility. Younger recruits also care deeply about a culture of diversity and free thinking. 12 Hillary Hoffower, “Money isn’t everything for the 20 percent of people who regret quitting their jobs during the Great Resignation,” Business Insider, April 19, 2022. Future of B2B sales: The big reframe 31

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      fast-growing B2B2C company that needed to drive for incentives every quarter has changed sales grow its sales team quickly in a competitive market reps’ mindsets, fostering an attitude of collective focused on career opportunities as a pitch to both partnership to drive the business forward, while candidates and its existing salesforce—reps were removing much internal politics. not just joining a sales team, but had a definitive path with significant career options, both within and Simplicity is another hallmark of successful beyond sales. This helped the company not only incentive structures. Leading companies tie hire strong people, but also keep many of its top financial incentives to only one or two core metrics performers. that they want to drive and that are aligned across the entire commercial organization. Promote long-term strategic incentives. Financial incentives are unlikely to disappear completely, but For example, one company’s inside sales center some companies, especially in industries with long needed to address attrition; the problem wasn’t lead times, are starting to restructure incentives the rate of attrition, it was who was leaving. On to get away from quarterly or annual targets. More average, attrition was less than 20 percent, but customer-centric attitudes can be achieved by that masked dramatic variations across business offering sales reps multi-year quotas and incentives units: some were losing more than 40 percent to develop an ownership mindset. of sales staff. Attrition correlated with quota attainment, but while quotas were uniform across Some fast-growing companies have even removed territories, the territories themselves differed quotas. A leading technology company now pays greatly in their potential. The company switched the no variable compensation to its B2B salesforce. major performance metric from quotas to growth, Instead, it has introduced a long-term compensation allowing strong sellers to benefit from upselling model where top-performing talent gets ranked while not being under threat from canceled deals. higher, promoted earlier, and receives more stock. This retention effort alone was responsible for Since the stock takes several years to vest, sales preserving $20 million in revenues. reps tend to stay with the company. Not having to 32 Future of B2B sales: The big reframe

      ck i e t h s e e t g k n a a M ch 5 Future of B2B sales: The big reframe 33

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      Best-in-class companies are innovating their GTM large salesforce transformation. It adopted a simple practices to drive meaningful, sustainable growth. narrative of “mobile first, cloud first,” departing But it's not easy. In the words of a senior sales leader, from the traditional “Windows first” strategy. Later, “If I’m struggling to get my reps to update their CRM, targeting new areas of opportunity, the company how will I get them to use analytics insights in their shifted toward an “AI/cloud first” strategy. sales process?” This type of messaging is ideal. Simple and concise, Other pertinent questions arise: How do you change it can be understood by everyone in the organization, the way of working of a sales team that has seen and captures the essence and the magnitude of the major attrition over the last 12 months? How do you change. It became a key pillar of Microsoft’s hugely embed technology in every action of a sales rep who successful transition to the cloud, which contributed 13 has relied, and thrived, on intuition for decades? to its stock multiplying more than fivefold. How do you balance independence and relationship building with a rollout of best practices? How do you make the changes scale past a few proofs of Role-model change from the top concept? No implementation will work without steadfast support from the top. And role modeling is even There are no easy answers. Change is hard. more effective than executive support. When However, a few practices could accelerate reps see their leaders embracing new concepts change— and make it stick. First, define a simple, that they’ve been preaching to the frontline, they compelling vision that the whole sales organization model that behavior in their own sales pods and it can understand. Second, role-model change from cascades through the organization. As a sales leader the top. Third, embrace the “two-pizza” rule: adopt told us, “Nothing is more important than seeing nimble cross-functional teams (small enough to be senior sales leaders doing exactly what they’re fed with just two large pizzas!). And finally, create a asking the broad organization to do—especially culture of autonomy—but measure everything that when it’s hard!” This level of collaboration requires matters. overriding internal politics, seeing the big picture, and focusing on the best solution. Create a compelling but simple change story Embrace the two-pizza rule A clear vision allows everyone, from sellers to “Change might be designed in the board room, but it customers to channel partners, to understand what happens on the ground,” said a former executive of the change is and why it’s necessary. The sales a global technology company. And it happens faster VP at a leading company put it this way: “The ‘aha’ with small, agile teams. moment for our team was when we asked reps for their thoughts on the transformation and it became A leading biotech company had an issue where clear they didn’t really understand why we were patients with serious, life-threatening illnesses making it. So, we spent time making the change could not afford the drugs they needed. It typically story clear and transparent and this allowed us to took the company up to three months to process gain whole-hearted buy-in from employees.” patients’ information so they could receive free medication. To fix this, the company developed a When Microsoft, for example, pivoted its core sales cross-functional team of eight frontline members efforts from selling Windows-based software to who were given free rein to redesign the system in focusing on the Azure cloud platform, it undertook a two weeks. They devised a new system that could 13 Doug J. Chung, “Commercial Sales Transformation at Microsoft,” Harvard Business Review, October 15, 2019. 34 Future of B2B sales: The big reframe

      process patients’ data in just three days, thanks to a Balance autonomy with measurement deep understanding of customer and seller Teams require autonomy if they are to act fast. pain points. And this goes hand in hand with trust. A culture of trust drives ownership, boosts confidence in the Grouping the right cross-functional people and transformation, and makes employees feel involved. empowering them to take decisions and drive As one sales manager explains, “Salespeople change is a fundamentally different way to run a typically don’t like to be micromanaged, so we really business. Executives at best-in-class organizations need to make sure they have autonomy to shape are moving away from “command and control” and the change.” Autonomy does not, however, equate relinquishing authority to smaller, independent to lack of oversight. Change needs to be clearly teams, which can move faster without bureaucratic measured and tracked. This drives results better challenges. transparency and enables leaders to correct course where necessary. Executives at best-in-class organizations are moving away from “command and control” and relinquishing authority to smaller, independent teams, which can move faster without bureaucratic challenges. Future of B2B sales: The big reframe 35

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      Sales has changed more in the past two years than • Which topics do you want to prioritize? Where in the previous decade—and is unlikely to slow are you already ahead, and which issues will down. Customers expect a tailored rather than a affect your business the most? generic answer, channel silos are moving to hybrid, analytics is at the heart of all GTM discussions, and • How quickly do you want to embrace change? companies have to rethink how to obtain and retain Are you confident with going all-in with a skilled salespeople. full-scale transformation, or would a series of change waves make more sense in your The full menu of actions that best-in-class players context? are taking may seem daunting, but in reality all these concepts reinforce one other. As we spoke to sales • What capabilities are most critical for your leaders, it became obvious that the trends outlined organization? And how do you know? in this report are no longer “ifs” but “whens”. There are three questions sales leaders are now urged to To continue successful growth in this new era of address: sales, change is no longer optional. There is no better time to start than today. Guilherme Cruz is a partner in McKinsey’s New York office, where Molly Lewis is an associate partner. Boudewijn Driedonks is a partner in the London office, Ben Ellencweig is a senior partner in the Stamford office, and Maximilian Fischer is an associate partner in the Denver office. Fidel Hernandez is an associate partner in the Miami office, where Maria Valdivieso de Uster is a partner; Josh Klemme is an associate partner in the Boston office. The authors wish to thank Katherine Chan, Jan-Christoph Köstring, Ayushi Ladha, Bret Lineberry, Steve Reis, Jennifer Stanley, and Michael Viertler for their contributions to this article. 36 Future of B2B sales: The big reframe

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