Sales Success vs. Sales Productivity: Are They the Same?
Sales Success vs. Sales Productivity: Are They the Same?
Here’s what we didn’t tell you about the first anecdote. That busy sales force? They’re working 90 hour weeks, taking lots of sick time, and creating more headaches for management. Worse, they sign up customers who disappear after six months. That sales superstar? She treats co-workers and support staff so badly they won’t work with her if they can avoid it, but she just can’t do enough for her customers. By now, the customers love her but distrust your company and will probably follow her to the competition if she leaves. Worse yet, these customers’ deals are not as profitable as they could be.
When the only metrics are deals and dollars, then “success” can obscure things. We forgive the rogue superstar, or avoid disciplining her. We overlook the low conversion ratios, missed work days, and overtime hours of the high producing team. Why? We’re afraid to disrupt the flow of income. But what about profit, retention, efficiency?
Success and productivity are not the same. PRODUCTIVE sales teams bring in lots of profitable business and maintain long-term high-value relationships with customers at less cost and with better teamwork in-house. A sales team can be successful without being productive, if you’re only measuring dollars.
Productivity doesn’t just happen. It requires serious attention to the way you manage and deploy the sales effort in your company. Use the following checklist to assess your team’s sales productivity:
Tip #1: Customer Retention is High. The sales force concentrates on its best customers. Customer defection is measured and kept at a low. The team works hard to optimize these customers and keep them on the “A” list.
Productivity Insight: It costs more to bring in new customers than it does to keep old ones. If you must constantly replace your customer base, productivity is low.
Tip #2: New Accounts Resemble the Ideal Customer Profile. The sales force chooses new accounts based on the profile of past successful customers. Most new-account acquisition time is devoted to prospects that resemble your best customers. The team has a documented method of comparing new prospects to the Ideal Customer.
Productivity Insight: Your best customers produce maximum repeat business, profit, testimonials, and sources of referral, at the lowest cost to you. Why seek accounts that don’t?
Tip #3: New-Account Acquisition is Consistent. The sales force is tasked to bring in new accounts and does so consistently. Sales management encourages predictability and consistency over the big hit.
Productivity Insight: Gaps in the new-account pipeline today mean a funding crisis tomorrow. Productive sales organizations balance their effort between new-account acquisition and current customer retention.
Tip #4: Cost of Sales is Controlled or Reduced Year After Year. You regularly assess both the hard and soft costs of sales, and one of your objectives is to lower costs while increasing income. Sales people avoid time-wasting activities.
Productivity Insight: More business at MORE cost hurts your business and reputation. More business at the SAME OR LOWER cost means a better ability to compete and a more nimble opportunity to adapt to changing market conditions.
Tip #5: Sales People Understand Opportunity Cost. Your team is careful to invest their time and energy on better qualified candidates and productive activities. They know the value of their time, and constantly seek better Return on Effort. They want to earn more and work less, not the other way around.
Productivity Insight: Sales time is the single most costly, precious and irreplaceable asset you have. Get the most out of it.
Tip #6: Results Matter More Than Activity. Performance metrics are based on results and outcomes, not activity. Performance metrics include leading as well as trailing indicators. Managers guide the sales team to improve their performance ratios, not simply work more hours and send out more quotes.
Productivity Insight: Because what you manage is what you get, it’s easy to produce lots of sales activity. But results - profit, revenue, new accounts, and long-term relationships – are more valuable than activity. Be aware of the difference.
Tip #7: Sales Meetings Focus on Best Practices and Efficiency. Sales teams analyze ways to improve productivity, share best practices, identify obstacles to performance, and consider the potential impact of market conditions. They don’t spend all their time recounting anecdotes.
Productivity Insight: Save the war stories for after hours. Sales meetings are a great place to figure out how to improve productivity and get more value out of less time.
How Do YOU Rate?
Measure the level of productivity of your sales organization with our on-line productivity assessment tool, the BSG “Leaky Bucket” Productivity Assessment.
Sales Success vs Sales Productivity Are They the Same - To learn more about this author, visit Ellen Bristol's Website.
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The sales force is super busy, they’re meeting their numbers, and the company reaches a ten-year high. Is this a successful sales force? Maybe yes – but maybe no. Here’s another one: the sales person gets the biggest commission check every month, and has more deals on her record than anyone else in the team. Is she a successful sales person? Maybe yes – but maybe no.
Here’s what we didn’t tell you about the first anecdote. That busy sales force? They’re working 90 hour weeks, taking lots of sick time, and creating more headaches for management. Worse, they sign up customers who disappear after six months. That sales superstar? She treats co-workers and support staff so badly they won’t work with her if they can avoid it, but she just can’t do enough for her customers. By now, the customers love her but distrust your company and will probably follow her to the competition if she leaves. Worse yet, these customers’ deals are not as profitable as they could be.
When the only metrics are deals and dollars, then “success” can obscure things. We forgive the rogue superstar, or avoid disciplining her. We overlook the low conversion ratios, missed work days, and overtime hours of the high producing team. Why? We’re afraid to disrupt the flow of income. But what about profit, retention, efficiency?
Success and productivity are not the same. PRODUCTIVE sales teams bring in lots of profitable business and maintain long-term high-value relationships with customers at less cost and with better teamwork in-house. A sales team can be successful without being productive, if you’re only measuring dollars.
Productivity doesn’t just happen. It requires serious attention to the way you manage and deploy the sales effort in your company. Use the following checklist to assess your team’s sales productivity:
Tip #1: Customer Retention is High. The sales force concentrates on its best customers. Customer defection is measured and kept at a low. The team works hard to optimize these customers and keep them on the “A” list.
Productivity Insight: It costs more to bring in new customers than it does to keep old ones. If you must constantly replace your customer base, productivity is low.
Tip #2: New Accounts Resemble the Ideal Customer Profile. The sales force chooses new accounts based on the profile of past successful customers. Most new-account acquisition time is devoted to prospects that resemble your best customers. The team has a documented method of comparing new prospects to the Ideal Customer.
Productivity Insight: Your best customers produce maximum repeat business, profit, testimonials, and sources of referral, at the lowest cost to you. Why seek accounts that don’t?
Tip #3: New-Account Acquisition is Consistent. The sales force is tasked to bring in new accounts and does so consistently. Sales management encourages predictability and consistency over the big hit.
Productivity Insight: Gaps in the new-account pipeline today mean a funding crisis tomorrow. Productive sales organizations balance their effort between new-account acquisition and current customer retention.
Tip #4: Cost of Sales is Controlled or Reduced Year After Year. You regularly assess both the hard and soft costs of sales, and one of your objectives is to lower costs while increasing income. Sales people avoid time-wasting activities.
Productivity Insight: More business at MORE cost hurts your business and reputation. More business at the SAME OR LOWER cost means a better ability to compete and a more nimble opportunity to adapt to changing market conditions.
Tip #5: Sales People Understand Opportunity Cost. Your team is careful to invest their time and energy on better qualified candidates and productive activities. They know the value of their time, and constantly seek better Return on Effort. They want to earn more and work less, not the other way around.
Productivity Insight: Sales time is the single most costly, precious and irreplaceable asset you have. Get the most out of it.
Tip #6: Results Matter More Than Activity. Performance metrics are based on results and outcomes, not activity. Performance metrics include leading as well as trailing indicators. Managers guide the sales team to improve their performance ratios, not simply work more hours and send out more quotes.
Productivity Insight: Because what you manage is what you get, it’s easy to produce lots of sales activity. But results - profit, revenue, new accounts, and long-term relationships – are more valuable than activity. Be aware of the difference.
Tip #7: Sales Meetings Focus on Best Practices and Efficiency. Sales teams analyze ways to improve productivity, share best practices, identify obstacles to performance, and consider the potential impact of market conditions. They don’t spend all their time recounting anecdotes.
Productivity Insight: Save the war stories for after hours. Sales meetings are a great place to figure out how to improve productivity and get more value out of less time.
How Do YOU Rate?
Measure the level of productivity of your sales organization with our on-line productivity assessment tool, the BSG “Leaky Bucket” Productivity Assessment.
Sales Success vs Sales Productivity Are They the Same - To learn more about this author, visit Ellen Bristol's Website.
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Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
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Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
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George LudwigGeorge Ludwig is a recognized authority on sales strategy and peak performance psychology. An international speaker, trainer, and corporate consultant, he helps clients like Johnson & Johnson, Abbott Laboratories, Northwestern Mutual, CIGNA, and numerous others improve sales force effectiveness and performance. Though it's George's strategies and processes that help corporations increase productivity and performance, it's his tremendous energy and dynamism that spark the transformation. Again and again, clients remark on his amazing ability to unleash human capacity and inspire men and women to break out of their comfort zones. The result is a whole new type of salesperson. His customized presentations teach achievers to make stunning advances in their lives. From helping salespeople realize cherished dreams to helping corporations exponentially accelerate revenue streams, George Ludwig leaves audiences and individuals empowered, emboldened, and clamoring for more. George is the best-selling author of Power Selling: Seven Strategies for Cracking the Sales Code and Wise Moves: 60 Quick Tips to Improve Your Position in Life & Business. - Visit George Ludwig's Website |
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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Dianne CramptonDianne Crampton is an executive leadership coach, team consultant, author and president of TIGERS Success Series, Inc. Dianne has been helping CEO's and Executives connect their employees to their core values and goals for over 20 years using the trademarked TIGERS team culture process, which stands for trust, interdependence, genuineness, empathy, risk and success. To download a free white paper on behaviors that build strong teams and behaviors that will predictably tear them down go here. - Visit Dianne Crampton's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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