This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

January 2014

No More Spaghetti against the Wall: How Best-in-Class Sellers Use Social Relationships to Build

a Better Pipeline Throughout the calendar year, and particularly near month-, quarter- and year-end, sales professionals everywhere keep an especially watchful eye on their end-of-cycle opportunity pipeline. In the business-to-business (B2B) space, the stakes are especially high, with commissioned accelerators, bonuses and President's Club qualification often on the line — not to mention job security for the “C” players in our sales organizations. The challenge that reps and managers alike face in these final sprints to the finish line, is that this pipeline is frequently lacking in both quality and quantity.

For front-line sellers, it is easy to stress out when their buyers “go dark” near the end of the selling period, and some of their high-probability deals start to look slippery. At the management level, understanding which opportunities have the best chance of closing is an essential ingredient in knowing where and how to apply executive pressure, price discounting and other last-ditch efforts to push deals over the goal line. This Research Brief examines the value of utilizing social relationships and user-generated content to improve the quality of B2B sales pipeline content, maximize deal closure rates, and avoid a quota-miss at the end of the selling period.

Best-in-Class Work Smarter…and Harder The title of this Research Brief refers to the classic, self-fulfilling prophecy that afflicts too many enterprise sales organizations: sales leaders take a look at the overall opportunity forecast; they harangue their team members to "put more in the pipeline;" so reps add half-baked deals to the customer relationship management (CRM) to shut up their bosses. However tempting it may be, the "If you throw enough spaghetti against the wall, enough of it will stick" approach is not an effective strategy for contemporary B2B sales success. The problem with this quantity-over-quality approach is that the politics of sales management get in the way of creating better, more valid opportunities that are substantiated by more in-depth personal interactions. This, in turn accelerates the eventual wins that, in fact, help everyone make their number by the end of the selling period.

In Aberdeen’s Sales Effectiveness research library, a substantial body of work speaks to the value of creating quality sales opportunities rather than a falsely optimistic, huge pipeline of deals that are not nearly as likely to close, when compared to prospecting relationships that have been more thoroughly developed between buyer and seller. Recent research published in Breaking the Laws of Physics: Shortening the Last Sales Mile through Workflow Automation (April 2013) clearly illustrates how the strongest-performing, Best-in-Class

Research Brief

Aberdeen’s Research Briefs provide a detailed exploration of key findings from a primary research study, including key performance indicators, Best-in-Class insight, and vendor insight.

Spaghetti against the Wall: How Best-in-Class Sellers Use Social Relationships to Build a Better Pipeline Page 2

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companies (sidebar) are able to report far more efficient pipeline management proficiencies — Figure 1.

Figure 1: Best-in-Class Sales Success Metrics

Source: Aberdeen Group, March 2013

Much like baseball — “the only endeavor where failing two-thirds of the time will get you into the Hall of Fame” — there are no B2B selling environments where a rep can bat 1.000, or win all of their deals. While there is certainly no way for research to prove that Best-in-Class sales organizations don’t work any less hard than under-performers, the efficiency metrics represented in Figure 1 clearly indicate that they are working smarter. With a 44% gap (52% vs. 36%) in the overall win rate, these strongest performers must be doing something very differently than Industry Average and Laggard firms in managing their pipeline. They are also far more realistic when it comes to tagging deals with a “sure thing” label that eventually fall out of the win column. Let's take a look at the best practices and technology enablers — the art and science of efficient pipeline management — that Best-in-Class companies utilize to achieve these superior results.

Social Selling: Here to Stay While it would be arrogant to assert that social media is an essential ingredient of every conceivable B2B sales environment, Aberdeen research published in Enterprise Social Collaboration: High-Power Teamwork for Better Sales Results (November 2013) presents a compelling argument that user-generated content is now a mainstream component of most successful enterprise sales initiatives. The relatively brief, but exciting history of business-oriented social media originally brought consumer-oriented posts, shares and tweets into enterprise marketing organizations, prior to the idea that professional salespeople could also benefit by using such tools. Initially, protecting a consumer or business brand, utilizing social media monitoring technologies,

52%

19%

35%

21%

37%

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10%

20%

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Percentage of quotesthat result in orders

Percentage of sales-forecasted"wins" that are eventually lost

Perc

enta

ge

n = 159

Best-in-Class Industry Average Laggard

The Lead-to-Win Best-in-Class

From January through March 2013, Aberdeen surveyed 165 end-user sales organizations to understand how the top performers among them use bottom-of-funnel tools to support sales effectiveness. The performance metrics used to define the Best-in-Class (top 20%), Industry Average (middle 50%), and Laggard (bottom 30%) among these sales teams are: √ 91% team attainment of sales

quota, compared with 56% and 22% among Industry Average and Laggard firms.

√ 87% of sales reps achieving annual quota, compared with 48% and 20% among Industry Average and Laggard firms.

√ 6.5% year-over-year increase in team attainment of sales quota vs. 1.2% for Industry Average companies and an 8.8% decline among Laggards.

√ 2.3% year-over-year improvement in (reduction of) average sales cycle; Industry Average and Laggard companies reported a 1.2% improvement and a 3.5% worsening (lengthening), respectively.

Spaghetti against the Wall: How Best-in-Class Sellers Use Social Relationships to Build a Better Pipeline Page 3

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represented a mostly defensive approach that organizations took in order to avoid publicity disasters. They soon discovered the value of lead generation and nurturing via social channels, and before long the explosive growth of networks such as LinkedIn allowed enterprise salespeople to join the online conversation. As a result, organizations with strong alignment between their marketing and sales teams — see Sales Enablement: Fulfilling the Last Frontier of Marketing-Sales Alignment (September 2013) — have been able to both originate and influence B2B sales deals with a measurable contribution from social media activity, by building a better and more reliable sales pipeline. Indeed, Figure 2 reveals, from Aberdeen research published in Social Selling: Best-in-Class Targeting of the Right Message, at the Right Time, for the Right Person (July 2012), that Best-in-Class firms are significantly more likely to use social media to their advantage.

Figure 2: Sourcing and Influencing B2B Sales with Social Media, by Best-in-Class

Source: Aberdeen Group, May 2012

There are a number of ways to define the use of social media in professional selling, in support of these aggressive and successful selling results by Best-in-Class companies:

• Internal collaboration: like-minded employees of any organization, including external sales channel partners, can connect with one another, either through formal enterprise social collaboration platforms, or in a self-organizing fashion utilizing Facebook or LinkedIn groups. The common thread among all these approaches is that the wisdom of the many, gathered in a democratic and leaderless environment, will help all participants learn from one another. It is true that 20th century B2B salespeople were not exactly known for sharing, but millennial-aged sellers have grown up in a far more digital-native environment in which user-generated content is a more natural state.

• Making connections: all the metaphors about the world getting smaller truly apply to the modern selling experience, considering how

57%

38%

19%

36%32%

21%24% 23%

7%

0%

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Closed a dealoriginated through

social media

Social mediaheavily influenced

a closed deal

Social mediamoderately influenced

a closed deal

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ents

n = 182

Best-in-Class Industry Average Laggard

Aberdeen’s PACE Methodology

Aberdeen applies a methodology to benchmark research that evaluates the business Pressures, Actions, Capabilities, and Enablers (PACE) that indicate corporate behavior in specific business processes:

√ Pressures – external forces that impact an organization’s market position, competitiveness, or business operations.

√ Actions – the strategic approaches that an organization takes in response to industry pressures.

√ Capabilities – the business process competencies (process, organization, performance, and knowledge management) required to execute corporate strategy.

√ Enablers – the key functionality of technology solutions required to support the organization’s enabling business practices.

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easy it now is to uncover the professional history and personal attributes of the people with whom we hope to do business. Savvy sellers check out their prospects, companies and territories not only through the official content portrayed on corporate websites, but also by digging up self-published details about their targets. Buyers, in turn, will take advantage of the hidden sales cycle to evaluate a sales rep who has contacted them, prior to engaging.

• Participating in the Conversation: who is more likely to win a competitive enterprise sales deal: an often-quoted and re-tweeted thought leader, or a digitally invisible sales rep with no obvious subject matter expertise? Aberdeen strongly advises against using social media to blatantly trumpet product features, advantages and benefits — see the Social Selling research noted above. That said, the enormous opportunity to define oneself as more than a commissioned salesperson is no greater than in the realm of social conversation. Often-used metaphors for adding value to the customer experience – becoming a business partner, consultative selling, solution selling all are substantiated by savvy business developers who contribute to LinkedIn group conversations, curate the user-generated content of other thought leaders, and subtly show their potential buyers that they really do know their stuff. Simply put, people want to buy from trusted advisors, and social conversation makes it exceedingly easy to create more valuable pipelined deals, supported by robust online conversations that showcase the seller’s capabilities and eventual ability to service their customer effectively.

No More Generic Selling! It is not difficult to argue that a more knowledgeable account manager, interacting with their prospect or customer with an awareness of their specific likes, dislikes and needs, will build a better and more efficient sales pipeline. To this point, Aberdeen data published in Eliminating the Noise: Best Practices for the Five W’s of Sales Intelligence (August 2013) helps to showcase how Best-in-Class companies place an enormous premium on what Louis Pasteur referred to: "chance favors the prepared mind."

In Figure 3, we look at the top business goals reported by Best-in-Class companies. These focus on the need to strategically and more efficiently create product value and legitimate pipeline content with more likelihood of closing in an identifiable sales cycle. More than half of these top performers nominated “more meaningful sales conversations” as a top-three strategy focus on overall sales effectiveness, and nearly as many echoed the findings of Train, Coach, Reinforce: Best Practices in Maximizing Sales Productivity (October 2012) in supporting their front-line sellers with better skills and knowledge.

Sector Definition: Social Selling

For the purposes of Aberdeen research, “social selling” refers to explore Best-in-Class adoption of: (1) internal collaborative social tools used by sales professionals to benefit team-based selling; (2) how sales teams “listen” to external social content pertaining to their customers, accounts and target markets; and (3) active use of posts, tweets or wikis by sales reps who contribute to the online conversations, in order to more effectively impact eventual buying decisions.

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Figure 3: Top Sales Strategies Geared Toward Better Sales Engagement

Source: Aberdeen Group, October 2012

Indeed, Best-in-Class companies in this research data set formally promoted the use of external social media such as Facebook and LinkedIn by their team members at a 69% rate, compared with 58% and 47%, respectively, among Industry Average and Laggard firms. Eighty-six percent (86%) of these leaders also confirm that “There is significant value in ‘social learning,’ i.e. sales reps / managers sharing their best practices or tips / tricks on closing deals.” This phrase pertains both to internal collaboration activities, behind the firewall, and also to self-organized groups on LinkedIn and other professional networks.

Figure 4: Best-in-Class Enterprises More Effectively Share "Tribal Knowledge"

Source: Aberdeen Group, October 2013

53%47%

28%26%

23% 21%

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Create more meaningful sales

conversations that address

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Enhance salesprospecting,

nurturing,negotiating,closing and

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Increase dealsize and/or close

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Adopt betterunderstanding

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Standardizemessaging andsales process

Replicate “A Players” within

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Best-in-Class

7%

15%11%

52%

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29%

6%

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Nocollaboration

Passivecollaboration

Neutral Activecollaboration

Highly activecollaboration

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Best-in-Class All Others

Social Selling: Technology Best Practices

The technology enablers associated with Best-in-Class social selling performance include:

√ 100% Remote or mobile sales team members have full access to social media tools, vs. 60% among Industry Average companies and 0% of Laggards

√ 80% Social bookmarketing tool (record favorite user-curated content in browser); vs. 57% and 33% among Industry Average and Laggard companies

√ 57% Social business platforms (combines contacts, calendars, communications, social stream); 57% and 20% respectively of Average and Laggard companies do the same

√ 56% Social media sharing tools (e.g., allow site visitors to share content with social networks), compared with 50% and 17% respectively among the Industry Average and Laggard groups

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This concept of self-organization is effectively validated by the Enterprise Social Collaboration research referenced above. In Figure 4, we look at how Best-in-Class companies diverge from under-performing firms in the context of the degree to which these organizations promote and extrapolate value from social collaboration initiatives. The upside-down “V” shape of these results — contrasting a 67% somewhat / active Best-in-Class level of activity with only 35% of All Others — directly correlates measurable business results with the incredible amount of helpful sales knowledge associated with access to B2B user-generated content.

21st-Century Networking Defined Now that we have determined the measurable value of supporting more personalized and effective sales conversations — and pipeline building — through the collaborative and data-rich sources of user-generated content, let's take a look at some of the specific mechanisms that Best-in-Class sellers deployed.

Figure 5: Bringing Home the Bacon with Fewer Degrees of Separation

Source: Aberdeen Group, May 2012

In Figure 5, we see the dramatic differential in sales performance results, comparing users of social graphs with companies not leveraging this increasingly popular approach. Social graphs are essentially the modern-day equivalent of spending plenty of time at the water cooler, or in the company lunchroom. As a formally deployed technology enabler, they are generally included in both freemium and paid enterprise collaboration tools, providing participants with visual layouts of their degrees of separation and search results as they attempt to extend their business network, often in pursuit of a specific sale.

94%87%

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Teamattainmentof quota

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Users of social graphs Non-users

The Enterprise Social Collaboration Best-in-Class

In August through October 2013, Aberdeen surveyed 629 organizations to understand their collaboration best practices. Among the 133 respondents actively deploying ESC initiatives, the performance metrics used to define the Best-in-Class (top 20%), Industry Average (middle 50%), and Laggard (bottom 30%) among these sales teams are:

√ 94% time-to-information (access to business information within published internal expectations) for Best-in-Class, vs. 78% among Industry Average firms and 51% for Laggards.

√ 86% organizational operational efficiency (percentage of the organization’s maximum potential productivity that is actually achieved) for Best-in-Class, vs. 73% for the Industry Average and 56% among Laggard respondents

√ 16.8% year-over-year improvement (reduction) in response time to customer inquiries for Best-in-Class, vs. 8.7% and 4.8% improvements for Industry Average and Laggard respondents, respectively

Note: “All Others” refers to the combination of Industry Average and Laggard firms, e.g., all survey respondents outside of the Best-in-Class.

Spaghetti against the Wall: How Best-in-Class Sellers Use Social Relationships to Build a Better Pipeline Page 7

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For example, an enterprise software account manager, seeking to land and expand in one of her larger customers, will often turn to social networking tools in an attempt to learn as much as possible about the specific buyer(s) with whom she is interacting for a new or renewal sale. She recognizes, however, that there are probably additional influencers, decision-makers or champions within the account, who are not in her direct-connection universe, but sit two or three connections away. If the rep senses that these individuals’ professional backgrounds, areas of expertise or shared connections can positively contribute to her own chances of closing the deal, she certainly will want to connect directly with these additional contacts. Using the invitation tools baked into the networking solution, or an enterprise-grade iteration of the social connection tool, the rep may well have a better chance of creating demand for, and ultimately selling more of, her company’s solution.

Figure 6: Sales in a 24/7 World: Trigger Events Can Make the Difference

Source: Aberdeen Group, July 2013

An additional social selling tool is supported by the Sales Intelligence research referenced above: the use of trigger event data to better tune into and leverage the real-time activities of our prospects and customers. Figure 6 demonstrates, once again, how users of a specific sales effectiveness tool out-perform non-adopters, in this case, companies who formalize the flow of trigger event data to their front-line sellers. This kind of information represents a wide variety of actionable intelligence, and can arrive in multiple form factors. Major business stories such as mergers / acquisitions, senior executive changes, product releases, and even legislative developments can have an immediate impact – both positive and negative – on B2B sales deals that are in process. Similarly, events taking place out of the control of both buyer and seller can suddenly alter the landscape of established account relationships. Being in the know before the competition easily impacts how a professional enterprise seller fares in the hours and days after significant business news breaks. As a result, 63% of Best-in-Class companies from the

66%

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Customerretention

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Users of Trigger Events All Others

Enterprise Social Collaboration Defined

For the purposes of Aberdeen research, the phrase “enterprise social collaboration” refers to employees or partners working together to accomplish business-related tasks, via user-generated (social) content creation and sharing.

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Sales Intelligence research data set formally provide alerts and feeds to their team, compared with 52% of Industry Average and 45% among Laggard firms. These top performers are better aware of the consequences of, for instance, unexpected job changes by decision-making personnel in a buying organization, and establish automated data feeds for their reps to stay on top of the ever-changing landscape in which they are selling.

Conclusion and Takeaways: Leveraging Social Intelligence for Better Business Connections and Sales Results Building a healthy enterprise sales pipeline requires a wide variety of skills, and a great deal of institutional support, as evidenced by the data presented in this Research Brief. Considering the many factors that need to fall into place in order to effectively source, nurture and close today’s B2B sales deals, following the lead of Best-in-Class sales teams around leveraging social content for better pipeline management is clearly essential. Even when all the stars align, no one wins every opportunity, however, but the top performers are far more adept at doing their homework to ensure closure, whether a win or a loss, for the deals in their forecast — Figure 7.

Figure 7: The Ultimate Results: Best-in-Class Sales Pipeline Management Defined

Source: Aberdeen Group, March 2013

Here, we see that fully 75% of the worst-performing sales organizations report neutral or worse skills in avoiding the dreaded “no decision” result of their sales endeavors, while 60% of Best-in-Class companies indicate a high degree of skill in achieving this kind of closure. When it comes to pipeline management excellence, it is easy to talk about the sales cycle, and recognize how important it is to control or shrink it, but thinking about time-to-lose and deal slippage friction is just as important. In utilizing the power of social networks to source more accurate B2B sales leads, learning about game-

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Best-in-Class Industry Average Laggard

Fast Facts: Best-in-Class Enterprise Social Collaboration Metrics

In addition to the metrics used to determine Best-in-Class companies (page 6), these top performers also reported average annualized achievements of:

√ 12.9% improvement (reduction) in on-time project delivery, vs. 7.3% and 5.4% respectively for Industry Average and Laggard firms.

√ 12.1% improvement (reduction) in time-to-information, vs. 9.5% and 4.5% respectively for Industry Average and Laggard firms.

√ 6.8% improvement in customer retention, vs. 3.6% and 1.8% respectively for Industry Average and Laggard firms.

Spaghetti against the Wall: How Best-in-Class Sellers Use Social Relationships to Build a Better Pipeline Page 9

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changing events in real-time, and collaborating with fellow sellers to close bigger deals faster, all organizations can benefit from these Best-in-Class sales techniques.

For more information on this or other research topics, please visit www.aberdeen.com.

Related Research Sales Enablement: Fulfilling the Last Frontier of Marketing-Sales Alignment; September 2013 Eliminating the Noise: Best Practices for the Five W’s of Sales Intelligence; August, 2013 Reducing Friction in the Sales Cycle: Best Practices in Sales Contract Management; October 2013 Breaking the Laws of Physics: Shortening the Last Sales Mile Through Workflow Automation; April 2013

Motivate, Incent, Compensate, Enable: Sales Performance Management Best Practices; January 2013 Collaborate, Listen, Contribute: How Best-in-Class Sales Teams Leverage Social Selling; November 2012 Social Selling: Best-in-Class Targeting of the Right Message, at the Right Time, for the Right Person; July 2012 Train, Coach, Reinforce: Best Practices in Maximizing Sales Productivity; October 2012 Sales Intelligence: What B2B Sellers Need To Know Before the Call; June 2012

Author: Peter Ostrow, Vice President and Research Group Director; Customer Management, Sales Effectiveness (peter.ostrow@aberdeen.com) LinkedIn Twitter

For more than two decades, Aberdeen's research has been helping corporations worldwide become Best-in-Class. Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide organizations with the facts that matter — the facts that enable companies to get ahead and drive results. That's why our research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of the Technology 500. As a Harte-Hanks Company, Aberdeen’s research provides insight and analysis to the Harte-Hanks community of local, regional, national and international marketing executives. Combined, we help our customers leverage the power of insight to deliver innovative multichannel marketing programs that drive business-changing results. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 854-5200, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com. This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc. (2013a)