New Miller Heiman Study Shows Changing Buyer Behavior Brings Greater Challenge to Sales Organizations

RENO, Nev.--March 23, 2006--According to new research by Miller Heiman, changes in buyer behavior are producing additional pressures for sales organizations. Study results show the emergence of many more players in an increasingly complex buying process, with decision-making responsibility moving higher in the organization. More than 70 percent say buying processes are more difficult, with more influencers to deal with in reaching a decision.

"As buying complexity increases, organizations need processes and tools to systematically identify all of the key players in the deal," said Dario Priolo, Miller Heiman's executive vice president of corporate development. "Failure to understand and address their individual concerns will result in longer sales cycles and greater frustration for sellers."

The study revealed a disconnect between performance and challenges. According to research results, approximately two-thirds of these organizations report increases in revenue. The survey respondents also report increases in account billing, deal size and new account acquisition. Yet, the same organizations are struggling to manage changes in buyer behavior and recurring problems of discounting, closing and making quota -- which present even greater hurdles than the previous year.

Study Findings

The Miller Heiman Sales Performance Study found that there is an almost 10 percent increase in the discount percentage. Respondents reported longer delays in purchasing decisions and aggressive demand for additional services for the same price.

Seventy-two percent feel greater pressure from existing customers to trim prices, and also a demand to provide additional services and support without increasing the price.

The Paradox

"These results are extremely paradoxical. Sales leader say they are doing well on hitting their numbers, yet at the same time losing more business, heavily discounting prices, reducing quota and significantly churning staff," said Sam Reese, president and CEO, Miller Heiman. "Business seems to be going well for sales organizations. However, in light of serious discounting and sales force challenges, sales leaders need to start addressing some of these persistent shortcomings while the economy is still good, rather than wait for a slowdown or a crisis to start taking action."

Key findings of the 2006 study show that talent management is especially challenging, with sales organizations struggling to make significant improvements in acquiring, placing and retaining talent. Approximately 25 percent of the respondents said their organizations experienced more turnover than the previous year. Almost two-thirds (63 percent) of sales organizations lack an effective hiring process for qualified sales professionals.

Responses to questions about sales force management were generally pessimistic. Lack of an effective hiring assessment process and a system for ensuring the right fit, as well as failure to leverage top performers to coach for success, led to a 4 percent decline in those making quota, and a significant increase in turnover. A majority of both sales leaders and representatives say they have most hard tools such as collateral and PowerPoint presentations, but do not have the soft tools such as coaching, mentoring and training. The study shows that prioritizing resources in the area of talent management will have significant impact on revenue outcomes.

About the Sales Performance Research Report

For the past three years, Miller Heiman has undertaken a comprehensive annual research study of sales practices, success metrics and Winning Sales Organizations. More than 7,000 sales professionals have participated in the study, making it the largest continuous research project dedicated to sales performance in the world.

There were approximately 2,200 survey respondents. The group included senior level sales leaders, sales managers and directors, CEOs and presidents, as well as sales forces that include mid-level managers and sales representatives. The data was gathered via a Web-based survey. The study is comprehensive of the sales industry and not limited to Miller Heiman customers.

This is a worldwide study with 72% of respondents from North America, 16% from Europe, 6% from Asia, 3% from Australia and 3% from South America, Africa and the Middle East.

About Miller Heiman

Miller Heiman has been a thought leader and innovator in the sales arena for almost 30 years, helping clients worldwide win high-value complex deals, grow key accounts, manage sales talent and build winning sales organizations.

With a prestigious client list including Marriott Corp., Dow Chemical, Schwab Institutional and Wells Fargo, Miller Heiman helps clients in virtually every major industry to build high-performance sales teams that deliver consistent sustainable results to drive revenue.

The company is headquartered in Reno, Nev., and has offices around the world. More information can be obtained by visiting the company's Web site at: www.millerheiman.com or by calling 877-552-1747.