Productivity Study - Sales force effectiveness
Productivity Study - Sales force effectiveness
Sales force effectiveness
This report covers an analysis of sales force productivity and effectiveness, reported by ten industry sectors. A two-stage methodology is used. In Phase1, salespeople were asked to give a realistic estimate of the time they devoted to five categories of activity (see Figure 1 – Observed Sales Activity chart). They were then asked to indicate how much time they would ideally like to spend in each category. Finally, the study observed how much time they actually devoted to each. In Phase2, it was observed how effective the salespeople were, scoring them in eight key areas of competency (see Figure 6 – Phase2 Sales effectiveness - 8 competencies). The diagrams and charts in blue show the results of Gallup’s global opinion poll of 925 business executives.
Use of time
The most surprising finding was the small amount of recorded time salespeople spent actively selling and prospecting for customers. Another was the very high figure recorded for time spent on administration. Observations showed that salespeople UNDERestimated how much time was spent on administration, while, in interviews they revealed a desire to do significantly less. When questioned, salespeople thought just 3% of their time, was downtime. Through observation, it was recorded that a significantly higher figure of 17% was found. However, despite some variances in how time is spent, one overall fact has barely changed: sales people are spending 80% of available time doing things other than actually selling. Tellingly, people believed they spent almost 50% MORE TIME selling than they actually did! This is despite acknowledging that almost half of all available time should be spent on this activity.
Comparing these findings with those of the Gallup opinion poll (see Figure 2) it is evident that there is a gap between executive perceptions of sales force effectiveness and reality. For example, on average, 24% of executives don’t know how much time sales people spend selling and one third (33%) think they spend more than half their time on this activity. However, this study showed that the average time spent actively selling is actually 10%. Even if ‘prospecting’ was included, the amount of time still only reaches 20%! Knowing these figures would allow processes to be put in place to release sale resources to do what they are hired to do – Prospect, Qualify and Close. Do you have a plan to increase sale productivity by 30%?!
Two thirds (66%) rate their sales teams as ‘good’ or ‘very good’ (See Figure 3). This study indicates that this perception of ability does not match actual competence levels within sales teams. Slightly alarming is the fact that 21% don’t know, or will not say, by how much sales force productivity in their firms could be increased. Much more executive effort is expended on the logistical nature (margins, acquiring, stocking levels etc.) of revenue generation rather than understanding these ‘actual’ times which are expended in the sales effort.
A further 12% believe it cannot be increased at all! Most sales managers understand that there is always room for improvement. But where to place the effort for the best return?
All Industry Average
A time and motion study would give you a good measurement on how your team compares with these Industry Averages.
Turning lastly to industry sector findings – found in Figure 5. Salespeople in four sectors: telecommunications; engineering; insurance and retail spend well above the All Industry Average (Figure 4) time recorded on active selling (Dark Green). Each spends around a third of available time in this way. Conversely, those in chemicals, electronics, paper and wholesale sectors fail to break into double figures. This is partly explained by the fact that each sector spends around twice the average time solving problems.
Effectiveness
Having shown that only 20% of time available is spent actively selling or prospecting, how effectively that time is used is clearly all the more important. In order to gauge this, the study used a simple scale ranking system for those observed (see Figure 6 – Phase2 Sales effectiveness - 8 competencies), rating them in eight key sales skills before, during and after each call. It was observed, that the greatest deficiencies lay in presenting, concluding and debriefing, with more than half rated as poor, less than one quarter were considered competent. More than 60% were also rated poorly or needed improvement in “building” and “securing” skills, two of the most important competencies required in an effective sales force. During this Phase2 it was repeatedly encountered that ineffective behaviour or processes was evident. These varied from poor sales call quality and in adequate monitoring, to weak or cumbersome sales reporting systems.
Figure 6 – Phase2 Sales effectiveness - 8 competencies
Often, where good sales information systems were in place, they were not used to full advantage. Training was seldom reinforced or properly coached in the field. Some customers received an unwarranted level of attention while others with potential but who were harder to deal with were ignored. In many instances it was found that managers were not providing feedback or help to their sales teams.
The findings of the Gallup executive poll (See Figure 7) on sales effectiveness show a significant gap between their perception of competency and the recorded observations. For example, two-thirds (66%) rate their sales teams as ‘good’ or ‘very good’. Hardly any executives ranked their sales colleagues poorly in any key skill area, whereas over 30% of people that were observed were considered poor in the eight competencies measured (see Assessment Criteria in Figure 8 - Observed Competencies).
Productivity Study Sales force effectiveness - To learn more about this author, visit Peter French's Website.
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Productivity Study
Sales force effectiveness
This report covers an analysis of sales force productivity and effectiveness, reported by ten industry sectors. A two-stage methodology is used. In Phase1, salespeople were asked to give a realistic estimate of the time they devoted to five categories of activity (see Figure 1 – Observed Sales Activity chart). They were then asked to indicate how much time they would ideally like to spend in each category. Finally, the study observed how much time they actually devoted to each. In Phase2, it was observed how effective the salespeople were, scoring them in eight key areas of competency (see Figure 6 – Phase2 Sales effectiveness - 8 competencies). The diagrams and charts in blue show the results of Gallup’s global opinion poll of 925 business executives.
Use of time
The most surprising finding was the small amount of recorded time salespeople spent actively selling and prospecting for customers. Another was the very high figure recorded for time spent on administration. Observations showed that salespeople UNDERestimated how much time was spent on administration, while, in interviews they revealed a desire to do significantly less. When questioned, salespeople thought just 3% of their time, was downtime. Through observation, it was recorded that a significantly higher figure of 17% was found. However, despite some variances in how time is spent, one overall fact has barely changed: sales people are spending 80% of available time doing things other than actually selling. Tellingly, people believed they spent almost 50% MORE TIME selling than they actually did! This is despite acknowledging that almost half of all available time should be spent on this activity.
Comparing these findings with those of the Gallup opinion poll (see Figure 2) it is evident that there is a gap between executive perceptions of sales force effectiveness and reality. For example, on average, 24% of executives don’t know how much time sales people spend selling and one third (33%) think they spend more than half their time on this activity. However, this study showed that the average time spent actively selling is actually 10%. Even if ‘prospecting’ was included, the amount of time still only reaches 20%! Knowing these figures would allow processes to be put in place to release sale resources to do what they are hired to do – Prospect, Qualify and Close. Do you have a plan to increase sale productivity by 30%?!
Two thirds (66%) rate their sales teams as ‘good’ or ‘very good’ (See Figure 3). This study indicates that this perception of ability does not match actual competence levels within sales teams. Slightly alarming is the fact that 21% don’t know, or will not say, by how much sales force productivity in their firms could be increased. Much more executive effort is expended on the logistical nature (margins, acquiring, stocking levels etc.) of revenue generation rather than understanding these ‘actual’ times which are expended in the sales effort.
A further 12% believe it cannot be increased at all! Most sales managers understand that there is always room for improvement. But where to place the effort for the best return?
All Industry Average
A time and motion study would give you a good measurement on how your team compares with these Industry Averages.
Turning lastly to industry sector findings – found in Figure 5. Salespeople in four sectors: telecommunications; engineering; insurance and retail spend well above the All Industry Average (Figure 4) time recorded on active selling (Dark Green). Each spends around a third of available time in this way. Conversely, those in chemicals, electronics, paper and wholesale sectors fail to break into double figures. This is partly explained by the fact that each sector spends around twice the average time solving problems.
Effectiveness
Having shown that only 20% of time available is spent actively selling or prospecting, how effectively that time is used is clearly all the more important. In order to gauge this, the study used a simple scale ranking system for those observed (see Figure 6 – Phase2 Sales effectiveness - 8 competencies), rating them in eight key sales skills before, during and after each call. It was observed, that the greatest deficiencies lay in presenting, concluding and debriefing, with more than half rated as poor, less than one quarter were considered competent. More than 60% were also rated poorly or needed improvement in “building” and “securing” skills, two of the most important competencies required in an effective sales force. During this Phase2 it was repeatedly encountered that ineffective behaviour or processes was evident. These varied from poor sales call quality and in adequate monitoring, to weak or cumbersome sales reporting systems.
Figure 6 – Phase2 Sales effectiveness - 8 competencies
Often, where good sales information systems were in place, they were not used to full advantage. Training was seldom reinforced or properly coached in the field. Some customers received an unwarranted level of attention while others with potential but who were harder to deal with were ignored. In many instances it was found that managers were not providing feedback or help to their sales teams.
The findings of the Gallup executive poll (See Figure 7) on sales effectiveness show a significant gap between their perception of competency and the recorded observations. For example, two-thirds (66%) rate their sales teams as ‘good’ or ‘very good’. Hardly any executives ranked their sales colleagues poorly in any key skill area, whereas over 30% of people that were observed were considered poor in the eight competencies measured (see Assessment Criteria in Figure 8 - Observed Competencies).
Productivity Study Sales force effectiveness - To learn more about this author, visit Peter French'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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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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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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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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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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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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