Signed, Sealed, Delivered: Integrating e-Signature Into The B2B Sales Cycle

Does anyone in B2B sales still wait by the fax machine for a signed deal? Apparently so, considering the surprisingly low percentage of contracts that are signed electronically. Best-in-Class companies and eSignature adopters, however, are ahead of the curve, demonstrating measurable sales performance advantages directly associated with this developing technology enabler.

In advance of next week’s webinar – Following the KISS Rule: How Best-in-Class Companies Reduce Sales Friction – let’s take an advance look at the data.

In the steady march of automation that infiltrates our day-to-day business lives, there is no shortage of Sales Effectiveness technologies to choose from when contemporary Sales Operations leaders are looking for both long-term and quick-fix solutions to help control or shorten their team’s sales cycle. In four cycles of research data since 2010, though, never has Aberdeen’s research uncovered a majority of end-users deploying a relatively straightforward solution: electronic signatures.

The World Is Changing… Are We Adapting At The Same Pace?

In fact, new Aberdeen research shows that less than one in five sales deals (18%) are signed electronically today, implying one of two potential findings: either the technology is not beneficial, or adoption is still in its early days. According to the data, the latter answer is clearly true. Indeed, Best-in-Class companies lead under-performing firms by 49% (24.8% vs. 16.6%) in terms of the current rate of electronically signed deals, and by 63% (39% vs. 24%) in planning to increase their utilization of eSignatures over the next 12 months. What do these top performers know that the majority of sales leaders do not?

Figure 1: Business Trends Motivating e-Signature Adoption

Let’s begin by understanding the “why” behind electronic signatures, and then explore the “how” that drives smarter deployments. In Figure 1, we look at the top business trends that survey respondents indicated are motivating their consideration or use of eSignature solutions. In the clear lead is an appropriate call-to-action: customers expect sellers and providers to waste as little of their time as possible and, thanks to Steve Jobs and Google, they have grown accustomed to a virtually all-digital lifestyle. Aberdeen’s report on Would You Buy from a 20th-Century Sales Rep? addresses this point further; in the context of eSignature, it essentially translates into: “is a fax-sending or eSignature-requesting sales rep more likely to impress his or her prospect, and win the deal? The “desire to remain competitive” element in Figure 1 complements this concept: companies utilizing eSignature solutions report sending an average of 22.6 proposals, quotes or request for proposal (RFP) responses to customers / prospects, per sales rep, per month; this compares with fewer than half that number, 10.4, among non-adopters. Even the top 20% of performers, the Best-in-Class, average a 21.2 proposal rate, lower than that of eSignature users; it is not a frequent data finding in Aberdeen’s research that a specific technology user population beats the Best-in-Class in a performance metric.

The second most popular Figure 1 motivator, the reduction of institutionalized fears around legal and privacy eSignature issues, is frequently a hot business topic, particularly when large-scale corporate data breaches are publicized. In reality, where and how electronic or digital signatures are legally accepted is a bit of a moving target, and industry-specific – highly-regulated verticals such as pharmaceuticals and banking require more oversight than, say, enterprise software ‒but the overall trend is universally seen as less ink and more pixels, over time.

Connecting Technology Adoption With Performance Results

In Figure 2, we take a closer look at eSignature users’ performance, in addition to the proposal volume described above. Here, we look at annualized output changes that are contrasted between adopters and non-users, and find four significant key performance indicators (KPIs) that align with eSignature use: faster revenue growth, and stronger proposal error reduction, as well as positive (vs. negative) trends around customer retention, and lead conversion efficiencies.

Figure 2: Year-over-Year Performance Improvements Associated With eSignature Utilization

These findings tell a clear story: eSignature use is directly associated with long-term benefits that accrue to both customers and providers. Indeed, the lead conversion rate metric is complemented by a current KPI: companies deploying eSignature selling solutions close 17% more deals (34% vs. 29%) than non-adopters. Certainly any sales leader, and his or her C-suite superiors, can appreciate the efficiency of a stronger batting average. Moreover, eSignature users shorten their sales cycle by 0.7% on a year-to-year basis, while non-adopters see a 1.5% lengthening of the same window. This speaks directly to the explicit argument made by eSignature vendors: that closing deals faster because of the product’s inherent convenience and digital lifestyle-friendliness is an expected, and measurable, outcome of the deployment. Another Aberdeen research data point further supports this value proposition: eSignature users report a 7% lower rate (39% vs. 42%) of “outgoing proposals or contracts that are eventually negotiated, instead of a win/loss.” This fact supports a more implicit element of the eSignature providers’ sales pitch: that the easier it is for your prospects to give you the business, the faster and more streamlined their acceptance of the deal. In other words, a buyer may be less inclined to negotiate a proposed contract if the document is more polished ‒ see Aberdeen’s Reducing Friction in the Sales Cycle: Best Practices in Sales Contract Management ‒ and very convenient to sign. Aberdeen’s pending study on “Price Optimization 2014: How Best-in-Class Performers Add to Both the Top and Bottom Lines” will further explore the concept of price negotiations: when and how they should be avoided, managed, and communicated.

Want more details? Join our webinar next week.

Signed, Sealed, Delivered: Integrating e-Signature Into The B2B Sales Cycle