Measuring the ROI of sales enablement is truly the master discipline. This topic is the focus of the sixth and last part of my series for executives, and for good reason. Doing this correctly requires a lot of groundwork, as well as your executive involvement!
So far, we have covered a lot in this series for you as an executive. You learned about the three critical success factors of enablement, how to leverage sales enablement for digital transformation and how your leadership is required to lead through change. Additionally, I shared how you could support your enablement leaders on their path to enablement scalability and your role and enablement’s role in stopping bad sales practices.
Today, we are going to discuss the ROI enablement can generate and what the critical success factors are. Then, we’ll cover how different functional perspectives have different ROI expectations. And finally, we’ll look at enablement maturity levels and how they limit or allow for measuring different levels of ROI. A lot of stuff to cover — let’s get into it.
In general, return on investment (ROI) is calculated this way: We divide the return of an investment (benefit) through the investment we have made. The result is expressed as a percentage or a ratio.
For instance, sales enablement creates an ROI of up to 15.3% higher win rates for forecast deals
But your enablement leader has to get two things right in order to see these results.
One critical success factor is meeting your expectations as an executive stakeholder or sponsor. Only 28% of enablement teams get this right and achieve significantly better results, such as 14% higher quota attainment rates. The downside is even more significant, as the majority of organizations only achieves some of their stakeholders’ expectations and don’t move the needle at all. For details, click here.
Number two is setting up enablement in a strategic and formal, ideally charter-based, way. This is even more evident, as only 16% of enablement teams follow a formal, strategic and charter-based approach. The efforts pay off, as this small group achieves win rates for forecast deals of 55% on average versus enablement teams that follow a more tactical, project-based approach, who end up with win rates of, on average, 39%.
Enablement leaders need your executive leadership, support and sponsorship for both of these critical success factors.
To achieve overall enablement ROI, alignment of goals, strategies and metrics is crucial to success
It sounds simple, but it isn’t. Time and time again, I see ambitious enablement leaders who know about the importance of a charter or business plan and actually create one.
However, what’s missing more often than not is the specific connection between the business and sales strategies and the enablement strategy and the related metrics. There must be a close link. Otherwise, enablement will never have a strategic seat at the table. It’s as simple as that.
Enablement charters must link their goals and KPIs to those of the business strategy
So often, I see charters (business plans) that have a well-worded mission statement, followed by a list of tactical activities (programs) the enablement leader got approved by one executive, typically their direct leader. Maybe you.
The enablement strategy as such is either missing or not clearly derived from the specific business and sales strategy and related metrics.
You as an executive should make it a priority to change this. Your leadership role can ensure that your enablement leader is able to create a rock-solid charter that’s derived from the business strategy and shows a clear alignment of the metrics to be impacted by enablement and the metrics you have to achieve.
You can do so by inviting your peers who lead teams along the customer journey to provide their feedback and thoughts, based on a shared vision of future success. And that’s the key; a shared vision of future success along the customer journey must exist beforehand. If that’s not existing already, sales enablement will always be a departmental approach only. And that limits its ROI potential significantly.
Perspectives matter when it comes to measuring the ROI of enablement
Your executive role determines how you perceive enablement. If you are a marketing leader, the goals you want to achieve and the metrics you are measured on are different compared to those of a sales leader. Let’s make an example.
As a marketing leader, your focus may range from brand awareness to demand and lead generation effectiveness and the effectiveness of your content and messaging. In other words, you perceive enablement through the lens of your role.
If you are a sales leader, you will also perceive enablement through the lens of your role. That’s why you care more about your revenue numbers, market share, new account acquisition while reducing churn for existing customers, average deal sizes, win rates, available selling time, etc.
And the list goes on. Every executive and every peer has a bit of a different lens when it comes to their perspective of enablement. This overview chart captures how different functions have different ROI expectations (here as examples) when it comes to enablement:
Your enablement initiative’s maturity level also determines what you can measure as ROI of sales enablement
That’s the second dimension that’s often overlooked but equally important. Where your enablement team is currently on their maturity journey determines its ability to measure specific ROI metrics — or not. Let’s make an example:
Getting started with enablement drives ROI in terms of productivity
If your organization is in the early stages of its enablement initiative, let’s say, focused on sorting out content chaos, let’s see what can be measured at this stage.
Let’s say your team started out assessing, structuring and organizing content, implementing an enablement content management solution and driving the change on the consumer end (sales) and the producer end (all content creators, not just marketing).
After the first steps of the implementation, your team should be able to achieve shorter search times for content, a KPIs that indirectly leads to more available selling time (if no other function increases their admin tasks at the same time). Additionally, your team should be able to improve its content management efficiency.
If your enablement initiative started with the training domain, the principle is the same — to focus on productivity metrics first. Let’s assume the team orchestrates the entire training landscape and sets up a new consolidated onboarding initiative. In that case, productivity KPIs such as reduced ramp-up time and a faster period to full quota for new hires are the most important KPIs.
In a nutshell, if enablement gets started and is focused on one domain, such as the content or the training/onboarding domain, these ROI categories can be impacted (Source: Forrester Consulting Total Economic ImpactTM Study Commissioned by Showpad, and CSO Insights Fifth Annual Sales Enablement Study):
- Marketing productivity up to 25%:
- Cost reduction for content creation
- More focused time allocation
- Brand awareness and consistency
- Training and onboarding efficiency up to 25%:
- Reduced onboarding time
- Sales training efficiency
- Seller productivity up to 10%:
- Reduced search time for content
- More available selling time
- Less content creation time
- Increased conversation rates
- Reduced time to quota
A few months after enablement goes live, you can analyze the first content data. This data will help your team better understand, for instance, what content types work better than others, and in what situations. These insights lead, step by step, to more content efficiency, as your team can now focus on the content assets that are used and can stop wasting time on others that aren’t leveraged at all.
In parallel, your team can begin to define content effectiveness goals and start to improve those, assuming that the enablement solution is integrated into the CRM to be able to leverage all available data points.
More mature enablement initiatives also drive effectiveness metrics
If your enablement teams mature step by step, they are able to impact performance (sales effectiveness) KPIs as well. So, your overall ROI dimensions increase.
A more mature enablement initiative should show a few characteristics:
One criterion is that enablement leaders integrate content and training services and make sure they are consistent. That requires a solid cross-functional collaboration concept where all involved teams are on the same page, work on one vision of future success and know their roles and responsibilities.
Another criterion is involving sales managers and helping them become better sales coaches. For two reasons: One, to drive a leadership skill that’s proven to be highly effective; and two, to leverage their coaching practice to drive adoption and reinforcement of the initial investments in content, messaging and training.
In a nutshell, if enablement is formal and mature, it connects the dots across content and training services and is also leveraging sales coaching, these ROI categories can be positively impacted, depending on the focus areas of your enablement initiative and in addition to the productivity metrics discussed above:
- Best-in-class sales coaching:
- Win rates for forecast deals, up to 18% improvement
- Quota attainment, up to 21% improvement
- Best-in/class content strategy:
- Win rates for forecast deals, up to 27% improvement
- Quota attainment, up to 18% improvement
- Integration of enablement technology into CRM:
- Win rates for forecast deals, up to 4% improvement
- Quota attainment, up to 7% improvement
- Adoption rates (>76%-90%):
- Win rates for forecast deals, up to 17% improvement
- Quota attainment, up to 7% improvement
- Revenue plan attainment, up to 4% improvement
Focus on leading indicators with your enablement leader to ensure that the route to ROI is the right one
Most metrics we discussed above, such as win rates, revenue plan attainment or quota attainment can only be measured after the fact, which means after a deal has been won or lost. The longer your sales cycles are, the more challenging it is, because you want to know much earlier whether your enablement team is on the right path.
The solution is to focus on leading indicators and to align your executive peers on that concept. Conversion rates regarding value, volume and velocity are great examples for leading indicators. Ideally, you can measure them at each stage of your sales process and customer journey. The first meeting and follow-up meeting ratio is also an example for a leading indicator. The longer the sales cycles are, the more important it is for enablement leaders to focus on leading indicators to recognize early on if they are on the right track to be able to achieve the lagging indicator goals.
Encourage your enablement leader to work with pilots, define leading indicators aligned with all stakeholders and focus on impacting those with integrated enablement initiatives that tackle content, messaging and the related training and coaching services.
Measure leading indicators right away, and decide together if, where and how the services have to be adjusted. This way, the entire executive stakeholder group is on the same page and the quarterly advisory boards can be used to discuss progress and decision needs.