Sales Effectiveness is better than Sales Productivity

Sales leaders are always trying to balance between sales effectiveness and sales productivity. If a poll was conducted what would a CEO prefer, a productive sales force or an effective sales force? In my experience the most successful sales leaders and people care little about sales productivity. Anyone with even a few years experience in sales management will know that real sales people move to a different beat. They are a different animal, and not just because some of them like fast cars, expensive shirts or the latest Smartphone, no, the reality is real successful sales professionals are more goal focused than the average sales person. In fact the most successful sales people will constantly work more than 40 hours a week to make a sale or win a new customer to beat their target.

The measure of productivity is “the output of a worker divided by the time is required to achieve the output “, while a nice metric in sales it is not that really applicable in most sales organisations. I argue that sales people or a sales force cannot be measured in the same way as a factory worker, software developer or accountant.

Let me explain further, if for example, the IT department bring in a new system that reduces software coding time by 20% it takes a developer to code then it is reasonable to expect that the developer will produce an extra 20% more lines of code and the software teams output might go up proportionately.

When it comes to sales, when a tool is introduced that should save a sales person a few hours a week or measured as % of their working week – then it could be reasonable to think that they should be able to increase their sales by ten or twenty percent. But that is just not the case as has been proven by the mass adoption of CRM systems as real sales productivity has not improved.

Freeing Up Sales Peoples Time Does Not Increase Sales

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You see, unlike the IT and coder example if a company introduces a solution to help sales professionals do the dreaded monthly expense reports faster, what do you reckon the typical sales person will do with the extra time the business has saved him or her?

A poll of ten senior sales leaders I know gave the following quotes in reply to the above scenario – they will takes longer lunches – play more golf – spend more time at home – relax a little more. None mentioned they believed the sales force would improve productivity.

The reality is that the successful goal focused sales person is already working as many hours as it takes to nail or over achieve their targets. Saving them time simply makes them more “productive” as in they achieve the same sales output but in fewer hours. In management speak, the sales professional’s time spent working is flexible, meaning it is adjusted by the very productivity measures or tool companies have introduced to increase productivity. A zero sum result.

Could Phone based or Inside Sales be an Exception?

The above observations are mostly to do with customer facing sales people. But let us discuss the inside sales people especially in light of the growth in SaaS models. The role of a typical phone based agent is to make 60 to 80 calls a day, so you would think that say a dialler that enabled them to increase their dials to 66 or 88 calls a day (10% sales productivity boost) would yield higher results, right?. Not always!

Let me explain why not in more detail. In a typical selling day, in making “the call quota” the inside sales person might have 6 or 7 good decision maker conversations and then generate one or two real opportunities for the sales pipeline from these conversations.

Next increase the above numbers by the 10% productivity boost and you get approx. 0.7 more sales conversations per sales person, and maybe 0.2 more qualified opportunities. Yes, I hear you say because if you spread this out over a large inside sales force, these numbers should average out to more opportunities, but often do not.  Another reality check! Inside sales productivity has not improved in over 20 years despite huge investments in technology and systems.

Why is this so? Much the same reason as for the customer facing roles, sales people are goal focused and as every good sales manager understands that four deals with a 25% probability do not equal one deal with a 100% probability in the eyes of a sale person.

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Sales Effectiveness, Not Sales Productivity Is the Answer

Introducing new systems and time saving technology that reduces non selling work is valuable for any sales force. At a minimum it will increase their job satisfaction and engagement levels plus over time it can impact an additional sale or two per sales person. However, I have firsthand experience of companies who time and time again fail to justify costly sales force automation tools because of the over reliance on increasing sales productivity as a KPI.

Sales people want to be more effective in sales situations. Their focus is not about working less or more, it is on winning more deals.

So to drive sales effectiveness for serious revenue gains, companies and sales leadership should

  1. Enhance Integration of Marketing, Sales and Service –Smarketing
  2. Improve the Customer Experience at All Touch Points
  3. Strengthen the Sales Methodologies and Sales Process
  4. Bring more Science to Hiring and Talent Acquisition
  5. Ensure Better Outcomes from Sales Technology
  6. Sharpen Focus on Goals and Customers through Agile Selling

In the new era of selling, sales leaders and management will be rewarded for taking a more holistic approach to sales effectiveness across the entire sales force including strategy, process, incentives, talent acquisition and growth, roles and sales training. At the crux of this focus to drive more revenue is delivering a consistent and excellent customer experience that blends sales, marketing and service to sell more dynamically while providing the brand promise to meet the customers ever more demanding expectations

Sales Management

Sales management or being a manager of a sales team could be described as leading people to higher levels of achievement to deliver company growth while implementing the sales process the company uses to target prospects and convert them to paying customers.

The starting point to managing a sales team is not with the sales team but with ourselves whether we are a sales manager or sales director. The reality is that to successfully manage and build a high performing sales team, the sales team needs a high performing sales manager.

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“People tend to follow those who will lead them somewhere”

To manage the sales team to high levels of performance, the sales manager needs at a minimum the following four competencies: (1) general business and market acumen, (2) ability to deliver effective coaching, (3) strong leadership skills and (4) evaluating and communicating individual salesperson performance. Sales managers who build on these core competencies are on the right track to managing the sales team.

In today’s highly competitive market with longer sales cycles and maybe smaller sales values, for a business to successfully sell their products or services, the sales leader needs to have these competencies to effectively manage and lead the sales team. The sales manager responsibilities also extends so that the sales team not only understands the sales objectives but the company’s overall strategic direction. It is about managing the sales team so they want to fully apply themselves to their roles and maximise their selling skills to sell solutions to customers.

Walk the job: As a sales manager, you need to allocate the time to work closely with your team so that you develop an understanding of each person’s motivation, strengths and weaknesses. This walking the job and communication will over time help a sales manager to put the right salesperson in the right sales role (hunter, miner, and farmer) that best suits the requirements of the sales process. A sales manager needs to organise the sales teams so that there is a range of different people bringing a range of different skills and experiences to the business.

Control: A sales manager can only control the outcome if they control what the sales people do! A balanced approach to managing sales people is about mixing activity based management with results based management. This is also known as Task V Individual in management schools. “Activity based management” is about giving the direction and coaching on the sales process and ensuring the associated activities get done. This could be coaching and educating sales people how many calls to make, how many appointments to set, what suspects to call, which products need to be pushed, etc.  The activities or tasks may be set by senior sales management or by the sales manager to assist the sales people to take ownership in managing their own sales business.

Remember that activity based management is not about trying to kill creativity or initiative in the sales process. It should be used to define the sales role expectations so that a sales person can take ownership of their role and clarifies the sales person question of “what do you want me to do?”

The “Results based management” aspect for a sales manager is to focus on the individual sales member’s goals, actions and target results.  It is about giving the sales team ownership and the ability to approach a sales process or task that suits their style. If a sales person likes to make a LinkedIn introduction prior to a sales call, then fine. This is about asking the sales person what their plan is to hit the sales target or what their personal goals are for a given sales period. Don’t be afraid to listen to the sales team’s views or insights on getting the desired results. It gives them freedom and shows you value their input.

If a sales manager gets the balance right between Activity and Results based management, sales teams realise their manager is leading them somewhere (bigger earnings, recognition, promotion, job enjoyment).

The Sales Managers “Playing Lines”.

Sales managers should set playing lines at an individual sales person level, they are at their widest when a sales person is delivering the agreed results, and the playing lines are at their tightest when the results are not there.

Playing lines represents how much scope (weekly rather than daily reports, less drill down on the pipeline or forecasting, reduced focus on the activity etc.) a sales person has earned from the sales manager when they are hitting their targets or results. If the results are there then the sales person enjoys the wider space in which to perform and be successful. The only things outside the playing lines are items such as company policies, human resources issues, unethical behaviour or actions that could affect the sales team. The sales person understands they have a level of autonomy earned from the sales manager due to past performance and can only be retained by continuing to perform.

The flip-side is if the sales results start to suffer or the numbers are not coming in, then the playing lines start to narrow. When the lines narrow, activity based management or task dominates. Now the sales manager needs to work the basics with the sales person bye spending more time challenging approaches or activities. Ask more questions. Deeper drill down into the metrics and status updates. The sales person still has the space to determine their own plan, just not as much. If over time, results are still not achieved and progress is not made then the playing lines will get even tighter to the point of performance management.

The playing lines concept is a great method to have a consistent approach to all sales team members with the ultimate goal of having all your sales team members operating within the widest lines of responsibility.

Quick sales management tip: Want to boost your sales team performance? It may sound simple but get the sales team spending more time selling. Managing a successful sales team requires the ability to get the sales team to spin the plates that matter.

A few more tips for managing a successful sales team.

Become a great sales coach

Create the space to let them do what they do best. Sell!

Give them recognition and constant feedback.

Always remember, in sales management it is not just about the final sales numbers. As any high performing sales manage will testify, you need the business acumen to know that the sales pipeline needs to be constantly filled and kept filling via sales activities, and this requires the competencies of a proper sales manager. In order to maximise the revenue of the sales teams pipeline, the sales manager needs to be able to analyse what actions and activities are working, and what is not then prioritise tasks. A high performing sales manager will always focus on the realities in the sales process of what works for the company and the sales team.

As written about earlier, managing a sales team is a balancing act. Clear guidelines on the “playing lines”, sales role definition and time spent on sales analysis can help sort the “what’s wrong from the “what’s working”. Strive to create the space to let the sales team do what they do best– sell the product. By working on the sales manager’s competencies and focusing on the sales process, a sales manager can enjoy watching the sales team thrive as a result of having earned a widening of the playing lines which will drive bigger revenue streams to contribute to company growth (not to mention your career).

Get the Sales Team Selling

To win more customers and grow, every business needs to focus on getting the sales team selling, they need to get sold on sales actions and sales time not just the company’s sales process. One question any salesperson needs clarification on is “what do you want me to do”. Seems like a easy question for a sales leader to answer,”Go sell”. So what does selling actually mean in your business?, is it revenue, margin, revenue by product line, number of new deals?. Once upon a time selling was easily quantified. In the day of the door to door sales, all a sales person needed was the product to demo and enough streets with enough door bells to ring. Simple numbers game, keep knocking until someone opens, give the sales pitch and close.

Today in the digital era, sales has moved inside, online, blended, push,pull, hunter,miner, gatherer and the systems supporting the sales process have gotten more complicated. First we had contact management with software programs like Goldmine, then came CRM and now Sales Force Automation.Which makes me wonder, has actual selling time got second billing to the sales process?, are sales people more engaged in the sales process and systems than the actual selling itself?. Maybe its time to spend longer fighting for more sales!

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Sales models for many companies have become more complex and less efficient in the quest for data, putting pressure on the rate they can acquire customers, productivity and even shifting the focus point from selling time to process time.

The guiding principle of all sales and marketing teams is to maximise selling time, lead generation and relationship building. That may sound obvious to any sales leader, but it is important to remember that the drive for data and sales insights can collide with the forces of rising complexity in the sales process. In fact, sales teams can over time slip comfortable into being sales processors against being sales winners. Companies must understand and clarify the scope of their sales teams while promoting efficiency throughout the sales process.

There are thousands of ways to kill a sale but only a few ways to win them. Some ways to kill a sale are obvious like not showing up to a meeting prepared, not following up, not listening, not establishing a realtionship, going to proposal too early, not speaking to decision makers… the list goes on. These can be easy to identify and with some training and practice can be overcome.

Then there are the sales killers that hide beneath the surface that many companies and sales managers do not even know exist. These are the sales weaknesses in the sales process (over reporting anyone?) which when combined with a salesperson’s own make-up can act like weights pulling down the sales efforts and results.

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Aligning your selling efforts with sales process takes work. Sometimes companies can be cautious about meddling with the sales force—directors and even owners need to overcome the common fear that disrupting it will hamper revenue or market intelligence. Then, other stake holders from not only sales, marketing and sales support but also other functions, such as finance, must work together to identify and prioritise the expected outputs from the sales engine. Next, successful sales teams transformations require support from the very top: someone has to take the lead, get the senior people from across the company to sit down, share data, and be willing to talk about what’s not working. This leader must override internal concerns, see the big picture, and focus on the best solutions to boost the time spent selling regardless of past practices.
Changing the sales focus and sales teams activities may mean changing the sales talent as successful sales teams refocusing may change how people carry out their roles and the ways other stakeholders interact, from customers to marketing and back offices.

Finally, winning back and protecting selling time for sales people to sell requires vigilance. The growth of multi channels marketing and sales channels in the  B2B and B2C markets can demand non-selling activities into the sales teams day. In addition, old habits chip away at selling time: a salespersons ingrained response when a customer needs a quick answer to something is to drop everything and dive in, even when a well mapped out sales support or customer support mechanism is in place to handle any issue faster and better. The new mantra has to be “A sales teams time is better used to sell.”

An example of refocusing the sales team selling time, was an Internet company who set aggressive targets for sales metrics such as the number of new customer interactions per week. Giving the sales people goals they could not meet without changing their behavior forced them to adopt to the change in sales focus. Success became self-reinforcing: the more they stayed in the business of selling the better they performed.

 In larger companies, viewing sales operations across departments may not be easy, nor is implementing changes that affect the entire sales process. Yet the more sales operations can be streamlined and admin reduced, the more likely customer satisfaction will improve as deals close quickly and sales pipeline grows faster. At these companies, the result can often be millions of Euros in higher revenues and lower sales costs.

Get the right sales people and channel in front of the customer at the right time.

It may not be enough to transform the sales teams by hiring people with the skills and capabilities to sell solutions to target sectors. Companies might have to restructure their sales coverage model, which means defining the sales roles differently. The questions to ask, include how much hunting versus gathering capacity to employ; what the role of sales specialists should be; whether to use one or multiple sales people to serve a segment or customers across different geographies.

When to hunt for new customers and when to mine deeper within current customers is one of the answers that needs to be made explicit to any sales team. Too many sales people often get comfortable serving their current customers, so an obvious initial step is to charge them with becoming more aggressive about mining the largest customers to their full potential. At the same time, however, the life blood of any business is acquiring new customers.

That’s why an effective coverage model needs to be deliberate about who should be hunting and where. Sales managers should meet regularly with hunting sales people to understand and actively refine their target prospects and beach-head plans. Given the degree of sales difficulty and the strategic value of acquiring new customers, sellers should receive a compensation recognition for breaking into new accounts.

Whether hunting,farming or mining, it’s critical to get the mix and sequence of sales skills, sales training and specialists right. Do not ignore a sales stream because there’s no sales expert in-house to cover the area with the skills the target customers considers crucial.

Sales people need to learn and be taught how to orchestrate effective teaming. Like musicians who seamlessly improvise back and forth after they have played together several times, salespeople who get to know and trust one another tend to sell together more effectively.

Sales people need to get sold on selling again,

They need to understand that new customer conversations are a priority, building and expanding relationships is more important that a spreadsheet and get the answer to “what do you want me to do?.

Sales Strategy – Marketing Services – Sales Consultant – Social Selling – Inbound Marketing – Lead Generation

I'm always available to have a chat on your business plans and any challenges in lead generation, social selling, marketing or sales.