2018 State of B2B Sales Report

STATE OF
B2B SALES
S T U D Y R E S U L T S
2 0 1 8
P O W E R E D B Y

CONTENTS
02
06
12
18
25
introduction
commoditization
procurement
performance
leadership

It's tough out there. Market leading companies are seeing the perception
of their value erode.
Sales organizations are increasingly being perceived as vendors and one-
time, short-term problem solvers, but are finding it hard to break out of
the lens of their products/solutions. The number of organizations
perceived as a "business resource" or "strategic resource" has taken a hit.
More and more, value leaders are being pushed into the "vendor" box - in
fact, the number of people who self-reported being perceived as a vendor
increased 300% from 2015.
This increase may be caused in some part by the tough challenges sales
professionals are facing. The three most pressing issues discovered were
selling value in a price-focused market, accessing decision makers, and
the rise of procurement & vendor management.
Procurement organizations are winning, and the problem is likely to get
worse before it gets better. Procurement and vendor management
practices was identified as both a trend and sales challenge, and both
sales leaders and professionals expect customer usage to increase in the
next five years.
Sales professionals further acknowledge their compliance with
procurement strategies, despite knowing that doing so does not increase
their chances of success. 61% of sales professionals report responding
to RFPs "all or a majority of the time", and when they receive them, 68% of
respondents seek to follow the RFP's guidelines.
2018STATEOFB2BSALES|IMPAXCORPORATION
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EXECUTIVE
SUMMARY
I N T R O D U C T I O N
COMMODITIZATION
PROCUREMENT

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This begs the question - why would sales professionals make the choice
to participate in a trend designed to strip them of their value, when there
is a more effective path?
Implementation and utilization of a consistent sales process is more
important than ever. It is not enough to follow the customer's buying
process; thriving sales professionals in the future will demonstrate key
skills while executing a value-based sales process.
When sales professionals effectively control the sales process, develop
at least one coach or advocate in the customer's organization, and gain
access to the decision maker, they can achieve 73% to 74% expected
close rates.*
While the impact of utilizing a value-based sales process is recognized,
many seemed challenged with effectively executing key components of
the process. Leaders and professionals uniformly agree they face
challenges in skills like translating value, gaining access to senior-level
decision makers, creating competitive differentiation and developing a
network of coaches within the customer’s organization.
Of particular importance, a number of leaders reported their team needs
work on basic, intermediate, and advanced skills, such as developing
coaches, navigating gatekeeper situations and translating value into
quantified business outcomes. These skills are critical for value leaders to
position themselves. In 2019 and beyond, we believe the intermediate and
more advanced skills will become tablestakes.
The role of the sales manager is critical to future success. As it stands
right now, sales leadership may not have the coaching capability to
support their business development teams proactively and effectively.
47% of sales leaders self-reported they "need improvement" with
coaching effectiveness, and 43% of the sales professionals agreed.
PERFORMANCE
LEADERSHIP
*Averagecloseratesmayvarybyindustry

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Coaching ability is directly related to performance. Sales leaders whose
teams had experienced significant increases in performance the previous
year were 340% more likely to also self-report "exceeding expectations"
on coaching effectiveness. To combat the forces of commoditization and
meet the changing dynamics of the sales workforce, sales leaders need to
improve their performance.
In the end, we believe how you sell and manage customer relationships is a
critical element to provide a superior customer experience and might be
your best source of differentiation.
To realize growth in 2019 and beyond, value leaders need to proactively
chart their own course and effectively position their value.

SUMMARY CONCLUSION

Market-leading companies are seeing the perception of their value
erode. More and more, value providers are being pushed towards
commoditization. This reality is problematic, and there has never been a
more critical time to differentiate.
The results of this study overwhelmingly indicate that customers'
perception of us has fallen. If we consider four general tiers in which the
customer can perceive us - "strategic resource" at the top, followed by
"business resource", "problem solver" and "vendor" at the bottom - sales
organizations are increasingly being perceived as vendors and short-
term problem solvers.
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THE GROWING
THREAT OF
COMMODITIZATION
C O M M O D I T I Z A T I O N
300%
THE NUMBER OF PEOPLE WHO REPORTED
THEMSELVES A "VENDOR" INCREASED
FROM 2015

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THE EROSION OF
CUSTOMERS' PERCEPTION
OF VALUE
Three years ago, only 4% of the survey respondents said they were
perceived as a vendor. In 2018, this number jumped to 15%. In addition,
the category of problem solver jumped from 20% in 2015 to 35% in
2018. The topmost categories - business and strategic resource - took
a hit.

To better understand the growing threat of commoditization, we wanted
to get a sense of the current business trends and challenges that are
affecting sales.
From a trend perspective, below is the breakdown of Sales Leaders'
responses.
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THE TRENDS & CHALLENGES
IMPACTING SALES
INNOVATION THE RISE OF
PROCUREMENT &
VENDOR MGMT.
CHANGING
WORKFORCE
DEMOGRAPHICS
While the spread was relatively broad, the three things at the top of the
list based on their capacity to impact sales' ability to deliver value to
customers included:

When it comes to challenges, the Sales Leaders' responses told a more
consistent story.
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THE TRENDS & CHALLENGES
IMPACTING SALES
This time, three clear front-runners emerged from the data, in terms of
their ability to impact sales' capacity to develop customer relationships
and opportunities:
SELLING VALUE
VS. PRICE
ACCESS TO
DECISION
MAKERS
THE RISE OF
PROCUREMENT &
VENDOR MGMT.
It is no coincidence the rise of Procurement and vendor management
practices arose as both a trend and challenge. This dynamic is closely
tied to commoditization. It is so important, it warrants a section of its
own.

The landscape of sales is rapidly changing.
The trend is clear. Procurement and vendor practices are on the rise.
Many procurement practices seek to "level the playing field", making
price the most important characteristic.
This is where value leaders – who possess and utilize resources to
create value – struggle. In fact, these two things are completely
juxtaposed. Value-leading companies want to be a partner and resource;
they want to help drive outcomes beyond just a transaction.
Procurement practices seek to strip those things away (or at least the
financial value associated with them). They still want the resources,
value, and outcome – they just don’t want to pay for it.
What do we as sales professionals need to do to counter this imposing
trend? At the most simple level, we have to get better at selling value,
which means we need to be more effective at:
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LOOKING AHEAD: WHAT
THIS MEANS FOR VALUE
LEADERS
The skills needed to counter these trends are in short supply, as
covered later in this report.
Understanding the outcomes our customers are trying to create
Identifying people that can make those types of decisions
Developing and presenting propositions that quantify the impact of
our value.

Procurement is gaining ground, and the situation will likely get worse
before it gets better. This challenge is by no means new - in our 2015
report, we shared the following:
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THE CONTINUED
RISE OF
PROCUREMENT
P R O C U R E M E N T
Responses suggest customers and
prospects are actively converting your sales
process into a more formalized buying
process. In fact, 75% of sales managers
reported their customers having significantly
formalized their buying process in the past
year. 64% indicated a significant increase in
the use of RFP's. [...] The study also found
that only a very small percentage of sales
organizations are successful in maintaining
higher close rates when Procurement
controls the process.

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Three years later, and the narrative has not changed. Value leaders are
increasingly interfacing with Procurement, and they see no end in sight.
In fact, looking toward the next five years, 70% of sales leaders expect
customers to increase focus and development on formalizing
procurement/vendor management.
Specific to Requests for Proposal (RFPs), a staggering 87% of leadership
believes usage will stay the same or increase in the next five years.
This number is shocking, considering their prevalence in 2018. Industries
like supply chain and logistics already face RFPs and Procurement
involvement in nearly every deal.

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False
28%
N/A
11%
True
61%
False
19%
N/A
13%
True
68%
True/False: When you receive an RFP,
you respond all or a majority of the
time.
SALES PROFESSIONALS
ACKNOWLEDGE COMPLIANCE WITH
PROCUREMENT EVEN THOUGH THEY
KNOW DOING SO DOES NOT
INCREASE THEIR RATES OF SUCCESS.
Why would sales professionals willingly choose to participate in a
process designed to commoditize their value, when knowing there is a
more effective path?
True/False: When you receive an RFP,
you seek to follow its guidelines all
or a majority of the time.

Sales professionals and sales leaders largely agree - there are
specific factors that impact sales success and performance. Both
groups analyzed losses in the past year, and identified actions that
would have been helpful in winning more business. Those items include:
However in our survey, sales professionals missed the one that leaders
identified as the most important: "Developing a deeper understanding of
the customer's business (beyond their solution requirements)." This
aspect appeared to be well off sales professionals' radar.
Developing more coaches/advocates
Involving decision makers
Demonstrating business impact
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CRITICAL FACTORS FOR
BUSINESS DEVELOPMENT
SUCCESS

Market leaders cannot afford procurement's efforts to "level the
playing field".
While you still need to work effectively with procurement, value-rich
organizations must also engage the functional executives who care
deeply about the results your organization is trying to create.
It's not enough to follow the customer's buying process; you must
proactively chart your own course, get to decision makers and
effectively position value to create preference for your
company/solution.
One final thought, when you do get to these decision makers, keep in
mind that their expectations of sales professionals have never been
higher. Successful sales professionals will need to be effective at more
than "sales" - the best will demonstrate their capability as a business
person.
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LOOKING AHEAD: WHAT
THIS MEANS FOR VALUE
LEADERS

Implementation and utilization of a consistent sales process is more
important than ever. While the forces of commoditization and
procurement have taken a toll on many, there are value-rich organizations
that continue to drive growth and strong performance.
Respondents agree - the key to success lies in determining one's own
destiny. Instead of simply following the customer's buying process, the
organizations and individuals winning business credit effective use of a
value-based sales process.
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FACTORS, SKILLS, &
PROCESSES THAT
DRIVE PERFORMANCE
P E R F O R M A N C E
23%-25%
WHEN SALES LEADERS & PROFESSIONALS
CONTROL THE SALES PROCESS AND
DEVELOP AT LEAST ONE COACH IN THE
CUSTOMER'S ORGANIZATION, THEY
EXPERIENCED A
INCREASE IN CLOSE RATES
According to our findings, the skill of developing a network of coaches and
advocates within the customer's organization is of particular importance.
Results show that your odds of earning the business increase dramatically
when coaches are developed as part of working a sales process.
In our survey, sales leaders and sales professionals said that they
experience a 23% to 25% increase in close rates as a result of developing
at least one advocate within the customer's organization.

But, to go from good to great, one additional factor is key: gaining
access to senior management and the decision maker. In addition to
controlling the sales process and having at least one coach or advocate in
the customer's organization, sales professionals and sales leaders agree
that if they gain access to the decision maker, they can achieve 73% to
74% expected close rates.*
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While close rates may fluctuate based person-to-person, or industry-to-
industry, this data tells a story regardless of where one starts. When
sales professionals are successful in:
win rates improve as a result.
*Average close rates may vary by industry
Driving their sales process
1
Developing a network of advocates
2
Gaining access to the decision maker
3

From a skills perspective, mastering the basics is absolutely
necessary - this includes things like understanding the customer's
business, industry, trends and drivers/financials.
Advanced skills, like translation of business value, are what push the
customer's perception of you higher toward the categories of "business
resource" and "strategic resource".
We believe that within the next few years, the intermediate and more
advanced skills will become tablestakes.
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SALES SKILLS
Understanding the customer's business objectives,
strategies and issues
Understanding industry trends
Understanding the customer's basic financial
measures**
BEGINNER SKILLS:
Developing coaches/advocates
Accessing decision makers
Dealing with gatekeepers
INTERMEDIATE SKILLS:
Translation (the ability to conceptualize, quantify,
and articulate the business impact of your
relationship with the customer)
ADVANCED SKILL:
** Sales leaders view this as basic; sales professionals see it as more advanced.

So, how effectively are sales professionals demonstrating these key
skills (and others)? There appears to be a gap.
Somewhat consistent with what sales professionals reported, less than
20% of leaders say their team always follows a consistent sales
process to develop new opportunities.
Also problematic, many sales leaders don't believe sales professionals
are spending their time on the right opportunities - about 50% reported
their team met expectations, but 50% needed improvement.
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SALES CONSISTENCY AND
ABILITY

When it comes to sales skills and abilities, leaders and professionals
homogeneously agree they face challenges in:
Sales executives see urgency in developing these critical sales skills.
By the numbers:
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need improvement
understanding
customer's basic
financial
measurement
and drivers
54%
need improvement
developing a
network of coaches
within customer
organizations
70%
Translating value
Gaining access to senior-level decision makers
Creating competitive differentiation
Developing a network of coaches within the customer’s organization
need improvement
addressing
gatekeepers
66%need improvement
conceptualizing,
quantifying, and
articulating the
business impact of
their relationship
w/ the customer
66% need improvement
accessing senior-
level decision
makers
66%
need improvement
understanding
customer's
business objectives,
strategies, and
issues
53%need improvement
presenting and
delivering a
customer-focused
message to senior-level
decision
makers
50%

However, sales professionals and sales leaders don't fully agree to what
extent sales professionals lack certain abilities. This disparity is what we
refer to as "The Ability Gap"
In the following table, we compare the percentage of professionals that
admit they need improvement versus the percentage of managers and
leaders that said their teams need improvement.
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By far, the widest gap is "understanding the customer's business
objectives, strategies, and issues beyond simply product/solution needs."
This particular gap is worrisome, as this skill is considered "basic" (and
one that is absolutely necessary for success in the future).
The sales professionals and organizations thriving in 2019 and beyond are
those that leverage a consultative approach. A truly consultative
approach requires broader understanding of the customer's organization,
coach development in different areas of the business, access to higher-
level decision makers, value translation capability, and the ability to
deliver a customer-focused message to higher-level decision makers.
If sales professionals are going to perform well in the future, this
particular skill gap needs to be recognized and addressed.

The role of the sales manager is critical to future success. Results
indicate that sales managers and leadership need to improve their
performance in order to combat the forces of commoditization and meet
the changing dynamics of the sales workplace.
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THE ROLE OF
SALES LEADERSHIP
L E A D E R S H I P
THERE IS A DISCONNECT
As sales leaders, we may be misleading ourselves. At various points in
this study, sales leaders shared contradictory information that causes us
to question how well-positioned these organizations may truly be for the
future.
For example, consider the results below. When asked how well-equipped
they feel their teams are to be successful in the next five years, 57% of
leaders said "well-equipped".
However, 70% of leaders also indicated their team "needs improvement"
in critical-yet-basic skills such as coach development, positioning value,
and understanding customers. If sales professionals today are losing the
battle with procurement and struggling to demonstrate fundamental
skills, it raises questions as to how well-prepared they truly are for the
future.
Well-equipped
57%
Poorly equipped
21%
Unsure
22%

But only two-thirds of them actively hire to a profile that reflects those
skills.
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ANOTHER DISCONNECT:
EFFECTIVE SALES TALENT
& HIRING
Be collaborative
Be insightful
Have business and financial acumen
True
95%
False
5%
True/False: You understand the competencies
demonstrated by your company's highest-
performing sales representatives.
True
33%
False
67%
True/False: Your company hires to a profile of
competencies reflecting those demonstrated by
your highest-performing sales representatives..
Sales leaders recognize the profile of the most successful sales
representatives, and yet many fail to actually hire to that profile.
Sales leaders and sales professionals perfectly agree that to be
successful in the future, sales representatives need to:
Nearly all respondents report understanding the competencies
demonstrated by their highest-performing sales representatives:
This gap represents a lost opportunity to develop the capability of the
sales organization and shift performance up the curve.

One of the most important roles of a sales manager is that of a
coach. Unfortunately, it is broadly recognized that sales leaders are
providing inadequate coaching to their sales representatives.
Responses from sales professionals and leaders are aligned in that
leadership dos not show confidence in coaching their teams to advance
opportunities.
47% of sales leaders self-reported they needed to get better at this
critical skill, and 43% of sales professionals agreed.
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CANDID LEADERSHIP
ACKNOWLEDGES
INEFFECTIVE COACHING

This discovery is problematic, as effective sales management/coaching
directly impacts the success and performance of a sales team. When it
comes to spending time on the right opportunities that represent the best
fit and achieving good results, the role coaching plays is essential.
We validated this hypothesis by cross-referencing the data on coaching
effectiveness with top-line sales performance, and in turn uncovered
some startling results.
One finding is, for under-performing teams, they feel the coaching they
receive is inadequate. But, for teams that are experiencing success, those
sales leaders were 340% more likely to get a grade of “exceeding
expectations” on the effectiveness of their coaching.
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THE OUTCOME:
STRONG SALES MANAGEMENT
COACHING = TEAM SUCCESS
340%
more likely
SALES LEADERS WHOSE TEAMS HAD
EXPERIENCED SIGNIFICANT INCREASES IN
PERFORMANCE THE PREVIOUS YEAR WERE
TO ALSO "EXCEED EXPECTATIONS" ON THE
EFFECTIVENESS OF THEIR COACHING
To combat the forces of commoditization and meet the changing dynamics
of the sales workforce, enhanced skills are not enough. Sales leaders need
to improve their performance.

The 2018 State of B2B Sales Study was sponsored by IMPAX Corporation
with the objective of better understanding the current and future B2B
sales environments.
This study surveyed sales leaders and professionals across a wide range
of companies and industries. Responses for this study represent a
"convenience sample". They were collected via a web survey between
March and May of 2018.
The survey included two versions - one for sales leadership and the other
for sales professionals (each survey contained questions addressing the
same areas of sales). These surveys were publicly available online to
anyone able to access them. Employees and affiliates of the
company promoted these surveys via social media (primarily Linkedin),
and email blasts to the IMPAX database comprised of clients, prospects,
contacts and alumni.
This method is the same used in the 2015 version of this survey.
To obtain a comprehensive list of all questions and answers, please reach
out directly to info@impaxcorp.com.
For any other questions about this study or its findings, please contact:
Brittany Shonka Tony Ennis
bshonka@impaxcorp.com tennis@impaxcorp.com
+1 (952) 212-3341 +1 (952) 242-8316
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ABOUT THIS
SURVEY
M E T H O D O L O G Y

We help B2B organizations accelerate growth through sales excellence.
IMPAX is a global sales performance improvement and growth enablement
company focused on helping value-oriented, market-leading B2B sales
organizations accelerate success and drive growth by transforming the way
they sell and manage customer relationships.
After more than 30 years enhancing customer success, IMPAX has become
a recognized leader in our space. What makes us different? Our intuitive
process, focus on execution, global expertise and measurable client
success.
Through a robust offering of sales, account management, training, and
enablement solutions, we help clients develop a deeper understanding of
their customers’ businesses to position ideas and solutions that enable
both to grow, elevating them from competition and driving higher levels of
customer partnership.
To discuss the topics in this survey or to start a conversation on how we
might work together, contact us at http://www.impaxcorp.com/contact-us
Or reach out directly:
+1 (203) 222-1900
info@impaxcorp.com
3 1 / 3 1
ABOUT IMPAX
CORPORATION
M E T H O D O L O G Y

2018 State of B2B Sales Report

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