January 14, 2016
by Mark Donnolo, Managing Partner, SalesGlobe
I recently met with Paul, the sales leader of a large technology firm, to try and increase the productivity he was getting out of his sales team. He had good people, but Paul’s sense is that they weren’t spending enough time interacting with customers.
We asked Paul’s teams to catalog how they spent their time over the next few weeks and determined that Paul’s hunch was correct. They were spending less than 50 percent of their time selling and meeting with the customer; the rest was spent on administrative and other non-revenue generating (NRG) tasks.
Paul is not alone. Our studies have shown that, on average, sales resources spend 44 percent of their time focused on selling activities. In other words, over 50 percent of their time is spent on non-selling or non-revenue generating activities (such as travel, service, administration and internal meetings). In this 24/7 fully-accessible world, sales roles are continually asked to do more tasks, beyond the job description of selling. This work is important, but not as critical to the business as meeting with customers and selling the products or services.
Sales organizations live in zero overhead growth environments. Productivity is something that is continuously worked on. And if you want to grant your organization a three percent merit pay increase, you have to find it within the organization. So if you’re not getting three percent more productive, you’re underwater. More than ever, sales roles need to be decontaminated – stripped of the unnecessary meetings and administrative tasks. Often this means hiring sales support staff or handing activities to the sales operations team.
Decontaminating sales roles can have a significant impact on productivity. For example, for an organization with $2B of revenue and 500 quota bearing reps that spends only 50 percent of its time selling, adding 5 percent more selling time at only 20 percent of the current revenue per hour yields an additional $40M in sales capacity.
To increase the productivity of your sales organization by three percent next year, consider the following steps:
1. Determine where the sales team is using its time.
2. Statistically identify focus by account type, product type, sales strategy, activity type and stage of sales process.
3. Understand pure selling time and NRGs (non-revenue generating activities).
4. Decontaminate the sales team to shift or remove NRGs, increase selling time and increase sales capacity.
5. Follow trends of time allocation and productivity improvement.
6. Allow the sales team to understand their individual effectiveness for personal development.
By understanding where the sales organization is spending its time, sales people, sales leaders and sales operations can diagnosis the NRGs, understand any bottleneck activities in the sales pipeline process, determine the difficulty level or importance of an activity, compare time benchmarks across teams or products, and identify opportunities to free up their sales team to do what they are hired to do – sell.
What amount of time does your sales team spend on selling activities? What percent of time is focused on non-revenue generating (NRG) activities? What activities can be streamlined or improved to increase selling productivity in 2016?