Research Shows How to Achieve Best-in-Class Manufacturing Sales Growth

What does it mean to achieve Best-in-Class manufacturing sales growth? And what is the financial upside for an industrial company to achieve this level of performance?

Research performed for the Sales Excellence Report surfaced the data that answered these questions.

A survey was used to acquire industrial company performance results, including revenue growth, revenue plan attainment, customer share expansion, and the sale opportunity win rate. Based on these results, manufacturers were categorized into one of three performance archetypes:

  1. The top 15% were designated the Best-in-Class
  2. The next 50% were designated Medians
  3. The lower 35% were designated Laggards

The survey also captured data related to the strategies, processes and technologies used by respondents. This data was then correlated with revenue results and the three performance archetypes. This correlation allowed us to learn what methods most impacted revenue results, and what the Best in Class cohort did differently than their lower performing peers.

Measuring Best-in-Class Manufacturing Sales Growth

The following data findings show how each archetype scored in each sales performance category.

Annual Sales Growth

Based on a three-year average, the Best in Class archetype achieved an average 13.2 percent annual sales growth rate. That was an extraordinary 202 percent higher than the combined average of the Laggard and Median archetypes.

Best In Class Manufacturing Sales Growth

Annual Revenue Plan

Meeting expectations of management and shareholders begins with achieving the annual revenue target.

The below column chart shows the percentage of manufacturers that achieved their annual revenue plan. An impressive 93 percent of the top performers consistently met their revenue targets.

Manufacturing Revenue Plan

Customer Share Expansion

In contrast to other industries, manufacturers often realize the majority of company growth from existing customers.

That makes increasing customer share and lifetime value, and decreasing customer churn, mission critical imperatives. The below chart shows the annual amount of customer share expansion for each performance archetype.

Industrial and Manufacturing Customer Share

Opportunity Win Rate

The sale opportunity win rate reveals the percentage of opportunities won. It's an efficiency metric that measures sale closures relative to pursuits.

The top performers achieved an average 17 percent higher conversion rate than the average of the combined Medians and Laggards. That is a significant factor that delivers a near linear impact to revenue acceleration.

However, one factor to recognize is that most industrial company sales pipelines consist largely of opportunities to existing customers. That results in an increase to the overall win rate, as on average, existing customer conversions were 5.5 percent higher than win rates to new customers.

Industrial and Manufacturing Sales Win Rate

For most manufacturers, improving the salesforce win rate is the fastest path to significant and sustained revenue growth.

Manufacturing Sales Growth Best Practices

Now that you know what best-in-class sales performance looks like, the next question may be how to achieve these results for your industrial company.

The research answered that question by reviewing data that measured company strategies, operational processes and technology effectiveness. That review surfaced 9 business development programs that delivered the most significant revenue uplift and most separated the Best in Class cohort from the others.

These 9 growth programs are referred to as evidence-based best practices and shown below.


Predictable Sales Process

Most industrial companies have a defined selling process. However, the research found that most of those processes do not deliver predictable results.

But the research also found overwhelming evidence that sellers who use structured selling processes outperformed those who didn't.

Two selling process adoption performance results stood out.

Sellers who used formal and optimized processes achieved 9% higher sales win rates than those who did not.

Sales teams with formal and optimized processes were 47% more likely to achieve their quotas.


Selling Methodology

A selling methodology advances your sales strategy from what you sell to how you sell. It promotes your most powerful capabilities in producing customer value. That includes things like your competitive advantages, unique value proposition and core competencies.

Survey participants with optimized sale methodologies earned an average 11 percent higher sales win rate than peers with less formal selling methods. They were also 1.8 times more likely to achieve year over year revenue growth and 1.6 times more likely to achieve their annual revenue target.


Living Sales Plans

The sales plan defines the specific actions to achieve the annual revenue goal. For most manufacturers it's a roadmap that plots the fastest and most direct path to achieving the annual revenue target.

The data found that almost all industrial companies created annual sales plans. However, for most laggards and medians it was a one-and-done exercise. That was different than the Best in Class who advised they used the plan as an active operating tool throughout each period to measure progress, identify variances and implement timely course corrections when needed.


Strategic Account Plans

Strategic Account Management (SAM) is a planned approach to increase customer share and profits over extended periods. This selling method uses a strategic account plan as a blueprint for planned customer expansion and future sales.

The research found that only 22 percent of companies adopted formal or defined Strategic Account Management programs. However, those adopters achieved 26 percent higher revenue growth from existing customers than sellers without these programs.


Opportunity Win Plans

The average industrial company sale opportunity win rate was 52 percent. The average opportunity win rate for sellers that consistently used win plans was 57 percent.

The research found that only 19 percent of sellers consistently develop opportunity win plans. However, that minority achieved a 5 percent higher win rate and 12 percent higher quota attainment. These leaders consistently prepared win plans about 2.3 times more frequently than the Medians.


Customer Retention

Managing customer retention is an imperative to achieve a sustainable industrial business. In fact, for many companies, customer retention has become a top business strategy.

The research found that that the top performers achieved 96 percent customer retention. That was 4 points higher than Medians and 7 points higher than Laggards.

It also found that many companies reduced attrition by identifying customers at risk and injecting some type of save procedure. However, many of the top performers went a step further and identified the root causes of attrition. That permitted them to fix these causes at the source and thereby proactively eliminate much of that churn.


Price Optimization

While only 13 percent of manufacturers routinely calculated price elasticity for a majority of their products, 81 percent of that group were Best-in-Class leaders.

Active price optimization programs also increased revenue growth 3.5 percent on average. Respondents with active price optimization programs were 37 percent more likely to achieve year over year revenue growth.


Seller Coaching

The two goals of coaching are to develop each seller's potential and grow the total revenue impact of the team. Seller coaching was the single greatest contributing factor to increased staff productivity.

However, not all coaching programs were successful. Only 23 percent of participants with informal and irregular coaching reported a positive ROI. But that figure jumped to 78 percent for participants that brought structure and regular cadence to their programs.


Performance Analytics

Almost all survey participants used some form of performance analytics. But while most relied on static reporting created from historical data, the Best-in-Class more often applied data to shift their information from hindsight to foresight.

They were 1.9 times more likely to use interactive reporting, 2.5 times more likely to use predictive analytics, and 2.9 times more likely to integrate AI into their decision support.

Manufacturing Sales Growth Best Practices

Replicating any one of the above best practices will achieve an incremental financial uplift. That may be sufficient for some executives.

Others may seek more significant and sustained company growth. This requires a more holistic approach which can be accomplished by replicating a mix of the best practices.

The research was conclusive in showing the leaders excelled in at least five, and on average, 7.6 of the nine evidence-based best practices.

Manufacturing Best Practices

Manufacture a Better Future

Selling recommendations without supporting data are just opinions. The 9 evidence-based best practices above are sourced from field research and demonstrate what the top performing sellers do differently than their lower performing peers.

When you advance your journey with data-driven findings, learn from the leaders, and replicate their methods to repeat proven processes, you eliminate guesswork and pursue the straightest and shortest route to targeted outcomes.

One more thing to know.

Most survey respondents indicated they adopted all or most of the 9 best practices.

However, survey questions that analyzed their adoption suggested otherwise. The research found there was a big difference between casual adoption and disciplined execution.

The later requires focused programs with executive sponsorship, dedicated resources, supporting technology, performance analytics and continuous process improvements. Disciplined execution is needed to achieve best in class performance results.

In fact, when the criteria for disciplined execution were considered, only the Best in Class archetype engaged in 7 or more of the evidence-based best practices.