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Sales force productivity: Eight Practices to Ensure Your Sales Success

Written by: Ellen Bristol

Article Overview: We have never needed to improve sales productivity more than we do in this dreadful economy. For decades, businesses have embraced productivity and cost controls in operational functions like manufacturing and distribution; programs like Total Quality Management (TQM), Six Sigma and LEAN are thriving all over the map. Except in the sales department. We suggest that sales organizations can benefit dramatically from adopting some basic principles of productivity management, simple business techniques that lower costs, improve customer profitability and retention, and reduce sales-person turnover. This article explores the eight key practices that contribute to productivity. If the practice is in place in your usiness, it will contribute to productivity. But if it is not, it will actually inhibit productivity and drive up costs.

Sales force productivity: Eight Practices to Ensure Your Sales Success

We have never needed to improve sales productivity more than we do in this dreadful economy. For decades, businesses have embraced productivity and cost controls in operational functions like manufacturing and distribution; programs like Total Quality Management (TQM), Six Sigma and LEAN are thriving all over the map. Except in the sales department. We suggest that sales organizations can benefit dramatically from adopting some basic principles of productivity management, simple business techniques that lower costs, improve customer profitability and retention, and reduce sales-person turnover. This article explores the eight key practices that contribute to productivity. Each practice can be either a contributor if it’s in place, or an inhibitor if it isn’t.

Practice #1: The Prospect Profile
If you don’t have a documented prospect profile then you may be lengthening the sales cycle and driving your team to pursue under-qualified or unprofitable deals.

Sales people probably spend more time prospecting and qualifying than they do anything else. Sales people who have a documented prospect profile can qualify opportunities more quickly and with greater accuracy than those that have no such guidelines. The basic prospect profile includes standard factual data, such as industry sector, number of employees, annual revenue, and so on. The most effective profiles go beyond these facts and include more qualitative characteristics that describe buyer motivation, trigger events, corporate values and other psychographic elements.

Practice #2: Clear targets and incentives for acquiring new customers
New-customer acquisition is clearly an element of sales success. In fact, it’s the reason your sales people spend so much time prospecting and qualifying. Contribute to productivity by setting clear goals for acquiring new business, and provide incentives. When setting new-customer targets, establish goals for revenue from new customers, and also establish separate goals for numbers of new customers.

Practice #3: Clear targets and incentives for retaining current customers
No matter how important it is to acquire new customers, it costs a lot more than retaining current ones. If you are not giving your sales people specific targets for retaining current customers, your productivity is in jeopardy. This practice ensures that sales people will invest effort in keeping the customer happy, and encouraging them to buy again. You need to know if your team is losing loyal customers, and figure out a way to win them back.

Practice #4: Clear targets and incentives for developing current customers through up-selling and cross-selling
If your team has a goal of retaining a specific number of current customers, give them an additional goal of cross-selling and up-selling those customers. Maintaining the current contract is great, increasing the size of the current contract is better, and adding additional products or services is best. But unless you assign those targets specifically, sales people may not perform at maximum productivity.

Practice #5: Available sales support resources to handle labor-intensive low-return activities (database cleanup, proposal generation, collections, dispute resolution).
Sales people have many demands on their time, which means that one hour of opportunity revenue carries a value ranging from a low of $1,100 to a high of $18,750, based on calculations we have conducted with our clients. Tasks like database cleanup, email marketing campaigns and past-due collections cost sales people many hours but contribute very little to their sales success. Forcing them to manage these tasks is a false economy. It is far more productive to delegate, outsource or automate these tasks as much as possible, even if it seems like it’s stretching your budget to do so.

Practice #6: Require sales people to take Adequate Downtime
Stressed, tired or burned-out people take twice as long to do the same tasks. And they tend to use poor judgment. So contrary to conventional wisdom, if you encourage your team to work extra hours, you are inhibiting their productivity. Don’t simply tell them to work smart and take vacations. Demand it.

Practice #7: Create performance metrics that cover the sales process from beginning to end.
The classic way to measure sales performance is that of revenue produced or performance against quota. This is a weak indicator of effectiveness of efficiency. It comes too late in the process to correct the situation. Figure out ways to measure the sales process from the very start, and at critical milestones along the way. Define the stages of the sales process, and give your people specific targets for each stage in a given period of time. For example, consider adding number of prospects qualified, number of prospects who request a proposal, number of prospects who negotiate the terms and scope of the proposal. When sales people reach each of these key milestones the probability of a win increases. You can also figure out where the process stalls. The use of end-to-end metrics is a major contributor to productivity.

Practice #8: Useful methods for Managing Nonproductive Sales People
Figuring out who is productive and who is nonproductive is more difficult than it looks at first. Since selling is truly a team sport, it pays to find out if the sales team is under-performing because of their personal failings, or because they had inadequate performance targets, poor leadership or coaching, or other operational obstacles to performance. Popular methods of dealing with the nonproductive sales person include firing, sales skills training and product training. These practices tend to be relatively high cost and provide relatively low returns. Methods that are relatively lower in cost, and produce higher returns include clarifying performance expectations, providing more qualified leads through improved marketing and demand generation, and improving the management and leadership skills of sales managers.

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Article Tags: business techniques, contributor, corporate values, customer acquisition, customer profitability, customer targets, distribution programs, factual data, industry sector, operational functions, productivity management, prospect profile, qualitative characteristics, quality management, sales organizations, sales person, sales productivity, sales success, sector number, six sigma



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