B2B Tech companies are constantly seeking ways to improve their sales effectiveness and drive revenue growth. Two critical concepts that have emerged in recent years are sales enablement and sales-readiness. While these terms are sometimes used interchangeably, understanding the distinction between the two is crucial for creating a successful sales strategy.
On a recent podcast episode, Matt Green & Alex Mislan dove deep into the differences between revenue enablement and revenue readiness, explore the various components of sales readiness, and provide practical tips on how to enhance your organization’s overall sales capabilities. We’ve compiled their best insights here. By the end, you will have a deeper understanding of these key concepts and actionable steps to implement them effectively, fostering a culture of learning and development in your sales team.
The Current State of Revenue Readiness
Revenue Teams aren’t ready and aren’t equipped for growth today. Recent data reveals that:
- Only 43% of B2B Sellers are hitting their quotas (Sales Enablement Collective)
- 55% report lacking the basic skills necessary to perform their jobs effectively (Forbes)
- 82% of decision-makers feel that the sales reps they interact with are unprepared for sales calls. (SiriusDecisions)
These statistics highlight the current state of revenue readiness, suggesting that most revenue team members are not equipped to meet the demands of their roles.
This lack of readiness has several negative implications for organizations, including the inability to achieve goals, high turnover rates, and difficulty adapting to changing market conditions. For instance, the average tenure for a sales rep is currently just 18 months, leading to a significant loss of intellectual capital. Additionally, the lack of necessary skills hinders organizations’ ability to pivot and explore new markets or verticals.
So, why are revenue teams unprepared? One major factor is the inadequate focus on long-term skill development. Only 24% of reps say they receive coaching on long-term skills, while others only receive in-deal coaching (MindTickle). Although in-deal coaching is essential, it’s not the multiplying event that skill development can be. By focusing on skills, organizations can help reps become more productive and self-sufficient, allowing managers to focus on larger deals or those that require more attention.
Enablement plays a significant role in addressing this issue, with three out of four companies reporting a 6% to 20% increase in revenue after hiring enablement professionals (LXA). By prioritizing skill development and growth, enablement can help reps evolve in their roles and adapt to the changing needs of their customers.
It’s crucial to recognize the value of a coaching culture that prioritizes long-term skill development alongside in-deal coaching. While any coaching is better than none, addressing issues before they become problems can lead to better outcomes. Companies with enablement have a 7.5% increase in overall win rates compared to those without, emphasizing the importance of a well-rounded coaching approach in achieving revenue readiness (LXA).
Skill Development’s Impact on Revenue
Skill development is proven to increase revenue, with companies that invest in enablement seeing a 7.5% increase in win rates compared to those that don’t. This percentage may seem small, but when you consider deal sizes in B2B ranging from $60K to $100K and an average rep working 50 to 100 deals a year, the increase could translate to a potential $1-2M difference between teams with and without enablement. Here’s the breakdown.
- Average Current Situation (No Proactive Skill Development)
- 5 average reps
- Each rep works 60 Deals a year
- Each rep closing at 42%
- Average Contract Value of $60K
- 126 deals a year = $7.56M
- Reps engaged in Skills Development
- 5 average reps
- Each rep works 60 Deals a year
- Each rep closing at 49.5%
- Average Contract Value of $60K
- 149 deals a year = $8.94M
The difference of 7.5% again doesn’t seem like a massive difference. But when looking at a very average situation of 5 reps, each working 60 deals a year, and an ACV of $60K, it’s the difference of $1.38M.
This figure illustrates the importance of the enablement function in driving desired outcomes within a revenue organization.
The lack of skill development, on the other hand, can prevent organizations from achieving their goals. The analogy of preventative medicine is fitting here: focusing on skill development is like taking steps to mitigate risks in advance, rather than dealing with issues after they arise. Unfortunately, the enablement function has been hit hard by layoffs, even though it is a multiplying factor within an organization.
It’s challenging to directly link selling success to a single training initiative, but enablement practitioners are getting better at it every day. However, only 40% of businesses with sales teams of 25 sellers or less have enablement, whereas 80% of organizations with 500 sellers or more recognize the necessity of enablement teams. This discrepancy suggests that smaller to mid-size teams may view enablement as a luxury, rather than an essential factor for success.
Emphasizing the impact of skill development on revenue, a 7.5% increase in deals and win rates can significantly improve an organization’s bottom line. As such, it’s crucial for businesses of all sizes to prioritize enablement and long-term skill development to ensure revenue growth and achieve their goals.
Understanding Revenue Enablement vs. Revenue Readiness
When discussing the differences between revenue enablement and revenue readiness, it’s essential to understand the various components of each term. Enablement is the overall function that focuses on providing content, tools, and support for revenue-generating employees, from pre-sales to renewal. This involves collaboration among product marketing, enablement practitioners, and revenue leaders to drive revenue effectiveness and productivity.
On the other hand, revenue readiness is a more focused approach that falls within the enablement function. Readiness involves taking the content and tools provided by enablement and applying them to real-world situations. This approach includes assessments, training, coaching, and skill development to ensure that sales representatives are prepared, efficient, and maintaining a standard of excellence.
To foster a culture of learning and coaching within an organization, it’s crucial to identify the different components of sales-readiness. Three key components can be broken down into product knowledge, process knowledge, and skills development (with a possible fourth component being industry knowledge).
In many organizations, a significant focus is placed on product and process knowledge, which often leaves skills development deprioritized. However, skills development should be viewed as an essential aspect of a company’s growth and success. To promote a culture of learning and coaching, organizations should prioritize dedicating time and resources to skills development.
To get started in fostering a culture of learning, companies can take the following steps:
- Identify areas of improvement: Determine which aspects of product knowledge, process knowledge, and skills development require the most attention within the organization.
- Allocate resources: Dedicate time and resources to each area of improvement, ensuring that skills development receives equal consideration alongside product and process knowledge.
- Create a coaching culture: Encourage a coaching culture within the organization that emphasizes both learning and skill development. This approach will involve providing support, guidance, and feedback to sales representatives to help them excel in their roles.
By understanding the differences between revenue enablement and revenue readiness, as well as the various components of each, companies can better prioritize their efforts in fostering a culture of learning and coaching that drives success and growth.
Practical Steps for Improving Revenue Readiness
If you see the importance of developing this culture of learning to improve your teams overall Revenue Readiness, here are some practical ways to start improving overall Revenue Readiness:
- Secure top-down investment: It’s crucial to have buy-in from the revenue organization’s leadership that they genuinely care about the development of their people. Without this commitment from the top, any grassroots efforts will face limitations.
- Meet people where they’re at: Assess your team members and determine their current skill levels. This approach will make employees feel seen, understood, and supported in their professional growth. By focusing on individual development, organizations can create a thriving culture of learning.
- Establish dedicated time for learning: Create a consistent schedule for learning, such as setting aside 30 minutes every Friday for team development. This time can be used for workshops, presentations from other departments, or group discussions on challenges faced by the team. This dedicated time helps build a learning culture within the organization.
- Measure progress: Just like any other business function, it’s essential to measure the outcomes of your learning initiatives. Tracking progress helps keep learning top of mind and enables organizations to correlate improvements in revenue with the investment made in learning and development.
By incorporating these practical steps into your organization’s approach, you can start fostering a culture of learning and coaching that ultimately enhances your overall Revenue Readiness. Remember, equipping your team with the right tools and skills to perform at their best not only drives business success but also increases employee satisfaction and engagement.
Get Started Today
When approaching the challenges of sales enablement and sales readiness, it is essential to understand the differences between the two and implement a strategy that addresses both aspects effectively. By leveraging technology, fostering a culture of learning, and focusing on practical approaches, organizations can optimize their sales enablement efforts and enhance overall sales-readiness. This holistic approach will result in a more efficient, effective, and successful sales team that is better equipped to drive revenue growth and meet the ever-evolving demands of today’s competitive business landscape. If you need support with highly effective skill development content, check out how Sales Assembly can help you with an interactive platform walkthrough.