When you have a complex product offer supported by complex processes, it’s difficult for a sales rep to access and internalize all of the information necessary to be effective in the sales process.
Trying to be an expert on 10,000 SKUs is nearly impossible for anyone. Add in the ability to configure those products so the permutations and combinations reach well into seven figures and it becomes completely impossible for anyone to be an expert on all of it. If reps don’t have tools that help them with product details, pricing data and customer insights, they tend to focus on only the products that they’re most comfortable and successful in selling, rather than providing a comprehensive solution for the customer.
As a result of this unmanageable complexity, sales reps miss out on incremental revenue opportunities and the customer experience may also degrade. Salespeople are logical and motivated people; self-limiting their earning potential is not what’s happening. They are working around the complexity by focusing on what they know. To capture incremental revenue, companies need ways to increase sales reps’ product competency and ability to work with the complex product portfolio so that they are able to successfully sell all products.
To understand how to create that competence, it’s helpful to review the “Four Stages of Learning” model, first developed in the 1970s by Gordon Training International.
This model states that a person goes through the following four stages when learning any new skill:
1) Unconscious incompetence: At this stage, you’re inept, but unaware of it. You don’t know what you don’t know, and don’t know that you don’t know it.
2) Conscious incompetence: You’re still incompetent, but least you know what skills you don’t know.
3) Conscious competence: You know how to use a skill or perform a task. While it’s difficult, at least you’re competent.
4) Unconscious competence: At this stage, your skill is so natural, you don’t even have to think about it. If you’re an experienced driver, for example, you’ve probably reached the stage of unconscious competence.
Using analytics insights and sales effectiveness tools such as pricing guidance and configure, price, quote (CPQ) tools helps move your sales reps through the learning process. CPQ, for example, brings different product catalogs together into a single tool with guided selling and upsell and cross-selling capabilities, the mechanisms that help increase the rep’s product competence in the sales process.
Now, when reps go through the quote creation process, they’re not limited to the handful of products in their comfort zone. CPQ makes it simple for them to acquire and use the broader information. Additional sales effectiveness comes from guiding reps through the configuration process so they can quickly tailor solutions for each customer.
This learning model also applies to organizations. When a sales organization doesn’t know it’s missing out on incremental revenue, that’s the unconscious incompetence stage. You may have massive price variability across customers, for example, because you haven’t looked at a comprehensive picture of your pricing across your customers.
When you know that you’re missing these opportunities, the pricing variability represents a great opportunity to change your margin results. Using segmentation and analyzing buying behavior, you’re able to identify customers that have been paying too little and take action to get them in line. This new approach may feel uncomfortable and there may be some stumbling along the journey. That’s OK at this conscious incompetence stage.
When an organization uses sales effectiveness tools to identify and realize incremental revenue opportunities, it has both short-term and long-term effects. In the short term, using data-driven coaching helps reps become consciously competent. You use analytics to teach salespeople how to manage accounts, then give data-driven feedback that helps them take positive action to improve and learn the right habits. This process eventually creates a feedback loop that helps the entire sales team.
When you move sales reps through the learning process to unconscious competence, there’s a meaningful benefit for both reps and the larger sales organization. When you have successful reps, you increase retention rates. And when you have better retention, it increases your reps’ “time in territory” expertise, which is a strong indicator of performance, resulting in an upward spiral of success.
The long-term effects of this approach are increased revenue and margin growth and happier customers. Unconsciously competent reps are able to maximize the engagement with each customer, improving revenue and margin and helping you move from a transactional supplier to a strategic, trusted partner.