This new CSO Insights Research Brief provides sales professionals with a behind-the-scenes look at the impact of missed opportunities to up-sell, cross-sell and introduce new products and shares how to overcome some of the obstacles in realizing the full potential of an existing customer base.

1. Call Center/Telesales Effectiveness Insights – 2005 State of the Marketplace Review
Why Are We Leaving Money on
the Table? Part 1
Overcoming the Comfort
Zone Challenge
Jim Dickie Barry Trailer
Partner, CSO Insights Partner, CSO Insights
Boulder, Colorado Corte Madera, California

2. Copyright © 2008 CSO Insights
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3. Why Are We Leaving Money on the Table? Part 1
EXECUTIVE SUMMARY
Picture the following scenario. You are out in the hills of California circa early 1850. You
run into a miner who tells you that the previous year, while panning for gold in a river, he
came upon nuggets the size of quarters. He then spent weeks tracking the source of
those nuggets upstream to the point where he found the mother lode at the base of a
hillside, where he then staked a claim. You then ask him how much additional gold he
has taken out of his mine since then, and he says, “None, I haven’t started digging yet.”
What would your reaction be? We would think he was insane.
Yet that is the same behavior we see from all too many sales teams today. They work
hard to find new customers and get that initial order, and then never realize the full
potential of that relationship. Consider the following results from our 2008 Sales
Performance Optimization survey of over 1,500 companies worldwide. When we asked
participating firms to rate their effectiveness in areas related to “mining the gold” in their
customer bases, we received the following responses seen in Figure 1:
Figure 1
The fact that nearly one in two firms are underperforming in at least one (if not more) of
these key aspects of selling should raise red flags, especially as we continue to see the
economy soften. In this white paper we will explore why companies are experiencing
challenges maximizing the value of their existing customers, and what that is costing
them. Then, in Part 2, we will explore what firms can do to start to address these issues
to motivate and support reps in their quest to maximize their performance.
Questions or comments regarding the findings presented in this white paper should be
directed to Jim Dickie, (303) 530-6930, jim.dickie@csoinsights.com or Barry Trailer,
(415) 924-3500, barry.trailer@csoinsights.com.
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or by any means without the prior written permission of the authors.

4. Why Are We Leaving Money on the Table? Part 1
INTRODUCTION
Before we dive into why we are leaving money on the table, let’s take a moment to
consider how much money we are potentially talking about. Is getting great at effectively
cross-selling/up-selling or rolling out new products into our customer base really a big
deal? Well, let’s do a little comparison and number crunching.
We segmented the 1,500+ companies who took part in our recent 2008 sales
performance study into two groups: those who excelled at “mining the gold” in their
customer bases and those who were average or poor at the task. Figure 2 reflects the
percentage of the overall revenue target that firms in each of these two groups achieved
in 2007.
Figure 2
If you could move from underperforming to excelling at “gold mining,” it would be worth a
9% revenue boost. Clearly this is something worth exploring.
OVERCOMING THE “COMFORT ZONE” CHALLENGE
So why does this disparity in performance exist? As CSO Insights has been
benchmarking the performance of thousands of sales teams over the years, we have
continually encountered a phenomenon that we call the “comfort zone ,” which almost
always dictates how effectively even the best sales rep will sell.
The comfort zone effect results from the fact that successful salespeople will inevitably
figure out the right way to sell something, and as they do so they will get more and more
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5. Why Are We Leaving Money on the Table? Part 1
comfortable selling that product or service. As that comfort level increases, they will
dedicate more and more of their time to those portions of the product line that they excel
at selling. And that leads to a problem, because it also means they will tend to spend
less and less time trying to sell things outside of that zone.
A case in point was the situation we found at an insurance firm we benchmarked. The
firm was the result of a roll-up of several insurance companies: selling policies for
property and casualty insurance, employee benefits, director and officer liability, etc.
One of the key justifications for the roll-up concept was that salespeople would become
“universal reps,” selling all parts of their product line to all customers, significantly
increasing the revenue from each business account. Great theory, but it didn’t happen!
Why not? The comfort zone got in the way. The reps that were great at selling property
and casualty insurance, which was a CFO-sale, showed little interest in selling employee
benefits insurance, which was a VP of human resources sale. And the employee
benefits super reps had little interest in selling director and officer liability coverage, as
that was a sale to the board of directors. And so on.
We ended up conducting a number of interviews of the sales team to understand why
cross-selling was virtually nil. One of their best reps boiled down the issue to its base
form when he told us, “Management told me what they want me to do, but they
neglected to tell me why or how I should want to do it.”
We need to realize that when we ask sales professionals to get out of their comfort zone,
we are asking them to change, and change is not always a desirable thing to them. But
we have found companies that have made significant advances in getting reps to sell
broader and deeper into accounts. And they do so by ensuring that salespeople know
three things:
• Why they should change,
• What that change entails, and
• How to effectively sell something new.
In our recent report titled Closing the Pay/Performance Gap, we covered the “why” in
detail, discussing the issues that need to be considered in developing effective
compensation plans in order to get reps motivated to try new things. In this white paper
we will focus on the “what” and “how” aspects of this equation. Then, in Part 2, we will
present examples of how companies are leveraging process, technology and knowledge
to accomplish this sales transformation.
DEALING WITH THE “WHAT” FACTOR
Assuming a sales person understands what is in it for them to get out of their comfort
zone, the next hurdle they need to get over is getting their arms around what it takes to
be successful selling these other products or services. Here they need clear guidance
into what types of prospects they should go after, and then what strategies and tactics
they should utilize to get the client all the way from interested, to educated, to convinced,
to closed.
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6. Why Are We Leaving Money on the Table? Part 1
Let’s start with the issue of what prospects to go after. In any given territory we see that
all prospects are not created equal. In fact, in a mythical sales territory we might see a
distribution that resembles Figure 3.
Figure 3
With this distribution of prospects, logic says that a sales rep should focus on calling the
“likely” and/or “very likely to buy” accounts before spending any time with the “unlikely”
ones. This is something they clearly know for the products in their comfort zone, but it is
often an unknown for things they have not sold.
To help point reps in the right direction, many companies can turn to software. For
example, a medical products firm we benchmarked started generating reports based on
data from their CRM and ERP systems that showed their salespeople that certain
classes of customers, who were already purchasing certain types of products, were also
very likely to need other types of complementary products they manufactured. By having
their business intelligence system surface these opportunities for the reps, they saw
almost a 90% increase in attempted cross-sell activity.
The next thing reps may well ask is, “What do I do with the prospects once I identify
them?” Again, when in their comfort zone they know what they need to do: “What I need
to do is get an appointment with the CXO. Then I need to create a sense of urgency to
make this project a priority for them to deal with. I also need to anticipate that Acme will
be the main competitor, and that price will be an issue unless I get them to think ‘lease’
from the beginning....”
But for offerings outside of the comfort zone, the “what” of selling can be a mystery, and
salespeople hate walking into the unknown. Here is where we need to turn to “liveware”
for help. What is that? It’s your people. If one rep knows how to effectively sell products
A, B and C, and another sales person is great at selling X, Y and Z, why can’t they
become mentors for each other and help expand their comfort zones by leveraging each
other’s insights?
In Part 2 of this white paper series we will overview innovative and cost-effective ways to
accomplish this, but for now let us share why it is a critical thing to do. Our research has
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7. Why Are We Leaving Money on the Table? Part 1
shown that firms that excel at prioritizing which accounts to focus their selling time on,
and have a formal process for doing so, enjoy a 12.5% higher close rate than other less
focused/organized sales organizations. And there is nothing like success to get a rep to
start to sell something new again and again.
DEALING WITH THE “HOW” FACTOR
So your people understand “why” and they know “what;” now you have to deal with
“how” if you are going to see real improvement in sales performance. How does a rep
get an appointment with a CXO? How do they then surface the real customer needs?
How do they demonstrate competitive differentiation? How do they create a sense of
urgency? How do they sell value?
This is where the rubber meets the road; now the issue is all about execution. Again,
inside their comfort zone, reps already know the “how” because they have debugged the
right process for selling over multiple opportunities. However, outside the zone is a
totally different matter.
In a world where expense was not an issue, an approach for having reps learn the “how”
of selling would be to have the experts with them on each call, so they could leverage
those people’s knowledge of how to effectively engage the customers.
• The marketing expert would know the right features and benefits to present to
the various stakeholders involved in the decision.
• The product expert would know what technical product questions to anticipate
and how to effectively answer them.
• The finance expert would know how to handle the negotiation of terms and
conditions and deal with pricing models.
• The support rep would know what it would take to get the solution fully
implemented, and so on.
But the practicality today of making four-, six-, or eight-legged sales calls is not a viable
alternative for ensuring that reps have access to the sales knowledge they need to
effectively sell. Again, we will overview alternative methods for accomplishing this type of
sales collaboration in Part 2 of this paper, but let’s make sure we see the value of why
we need to ensure that we do so.
In 2006, CSO Insights did an analysis of the impact of sales-knowledge management
(SKM) on sales performance. In Figure 4 we present one of the key findings of that
study: what the ultimate win rates were for companies who excelled at SKM versus
those companies who were average or poor at managing that task.
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8. Why Are We Leaving Money on the Table? Part 1
Figure 4
Clearly, there is a great payback for investing in new methods of making the right
information and insights available for reps to use when selling products or services
outside of their comfort zone.
CONCLUSION
As 2008 progresses and feelings of uncertainty about the economy persist, it is
becoming evident that companies need to start maximizing the value of every deal if
they are going to meet their revenue targets for the year. So far we have presented a
business case for why we need to mine more from the accounts we already have, and
we have reviewed the roadblocks that stand in our way.
In Part 2 of this white paper series, we will focus on how to support your salespeople
through the smooth transition of getting out of their comfort zones. Using case study
examples of what your peers in sales are doing, we will overview how to get reps to sell
more of the product line to more buyers within your customer base, and in doing so,
maximize the value of your customer base.
Jim Dickie Barry Trailer
(303) 530 6930 (415) 924 3500
jim.dickie@csoinsights.com barry.trailer@csoinsights.com
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