Does your firm have the attributes of a world class sales organization?
The Heiman Research Institute conducts an annual survey of worldwide organizations to determine what differentiates those that are the best in sales from all the others. While all types of companies were included in the survey, the report breaks out professional service firms from the rest. Relative to other types of businesses, professional service firms, a category which of course includes law firms, trail behind their counterparts in most of the behaviors that are associated with “world class.”
The research found that there are three behaviors most often associated with world class sales organizations:
1. Customer core
2. Collaborative culture
3. Calibrated success
In this behavior, companies were asked to measure themselves on two characteristics. The first was “We know why our customers buy from us.” The responses were interesting:
- 94% of world class organizations said yes
- 68% of all those surveyed said yes
- 65% of professional service firms said yes.
This likey is due to formal and effective means of continuously seeking client input and feedback and debriefing after sales meetings. Most law firms are not good at this yet.
The second component of customer core is called the customer’s concept, that customers define their own customized solutions and that each customer had unique processes and dynamics in how they made decisions. Again, world class organizations enable this unique, one-to-one decision making much more consistently and effectively than other organizations.
We have written several previous blog posts (Collaboration: The Next Frontier. Are Law Firms Up to it? and Is Your C-Suite Siloed or Collaborative?) on the importance of a collaborative culture but this seems to be a particularly strong trait of world class sales organizations. When asked to respond to the following statement: “Our organization collaborates across all departments to pursue large deals,” here are the results:
|2012||2013||Type of Organization|
|49%||39%||Professional service firms|
This indicates two interesting patterns. First, at a time when companies are still struggling with a challenging economy, world class organizations seem to work harder at collaborating to bring in new business, whereas all others declined. In professional service firms, that decline was dramatic, from 49% to 39%. What explains this? As far as law firms go, as profit margins have tightened and revenue has flattened, they tend to promote hording of contacts for more origination credit, hording of projects for billable hour credit and other selfish sales behaviors, likely to the detriment of the firm’s overall sales results. Also many law firms often still lack well-coordinated client teams and relationship management plans, as well as integrated systems for internal intelligence, client communications and value messaging. These all hinder effective selling and cross-selling.
This characteristic speaks to how effectively companies manage their sales performance relative to their strategic goals. Specifically, when asked to rate themselves on how well they measure, predict and influence things like the cost of sales, pipeline development, market penetration, customer demographics, etc., again world class organizations scored roughly double what others did:
|2012||2013||Type of Organization|
|53%||38%||Professional service firms|
Again, it appears that as things continue to stress our law firms, the firms become even less committed to strategic selling. They are more likely to engage in marketing tactics without a focused and disciplined strategy that is monitored and measured. Most law firms still do not have a well-defined strategic plan which also makes it difficult for practice groups to tie their sales targeting to objectives, other than the obvious one of “land any and all new business.”
One other stark difference between world class organizations and others is this one: “Our sales compensation policies are aligned with our business objectives.”
- World class: 93%
- All: 38%
- Professional service firms: 37%
There were a number of other areas the survey asked companies to rate themselves on to ascertain what differentiated world class from all others. How would your firm rate itself on the following best practices?
- We have a formalized value proposition that is very compelling to our prospects.
- Sales and marketing are aligned in what our clients want and need.
- Our organization is highly effective in allocating the right resources to pursue large deals.
- We understand prospect needs and issues and what to sell.
- Specific criteria has been established to define a strategic account in our company.
- We always know the results of our service solution with key clients.
- We leverage the best practices of our top producers to improve/train others.
- In an average week, our sales force spends enough time with clients.
Click on the link here to participate in the 2014 Miller Heiman Sales Best Practice study and receive the reports directly.
Doug Johnson, Founder and Managing Director of Catapult Growth Partners, has developed an assessment tool to gauge your firm’s marketing and business development effectiveness in eight core areas. This also serves as a roadmap for how to improve your approaches, sales structure and outcomes.
- Business Development and Sales Culture
- Networking/Lead Generation
- Closing New Business
- Client Relationship Management
- Business Development/Sales Management
While it is unlikely that law firms will catch up with world class sales organizations, they can and should be looking at the kinds of traits and best practices that those organizations excel at to improve their own results.