April 06, 2016
by Mark Donnolo, Managing Partner, SalesGlobe
Along with a collection of other well-intended resolutions for 2016, being more productive with your time is probably on the list somewhere. As a sales manager, ensuring the productivity of your sales team is probably on there as well.
Salesforce productivity is a challenge for almost every sales organization. Most sales teams are made up of great people, but they’re bogged down with administrative tasks – either as part of their job or procrastination techniques – which reduce the amount of time they spend interacting with customers.
Sales productivity boils down to time (how much time reps have to interact with customers) and effectiveness (workload, sales process duration, and close rates). If your goal is to increase sales productivity in 2016, focus on these two areas:
1. Time. Our studies have shown that, on average, sales resources spend 44% of their time focused on selling activities. In other words, over 50% 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, 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 leaders can increase the amount of time their sales people have by measuring how much time their sales people spend on various activities, specifically on selling versus non-selling activities. Then, dig a little deeper. Examine how much time reps are spending with clients by account type, product type, sales strategy (new vs. current customer), and the sales process stage.
Understanding the job role of each sales person is also critical. What is the optimal objective of that job? What are the revenue generating and non-revenue generating activities? How much time are reps spending in non-revenue generating activities? If you find you’re your team is spending too much time on administrative tasks, decontaminate the roles. Move those tasks to different people, perhaps a sales support or sales operations role (hiring these people if need be). Or, consider the type of sale. Shift transactional activities to lower cost roles, and allocate the more strategic activities to the more strategic sales roles. Sales organizations can then calculate the ROI from shifting administrative work to lower cost resources and allowing sales people to hunt.
This type of decontamination 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% of its time selling, adding 5% more selling time at only 20% of the current revenue per hour yields an additional $40M in sales capacity.
2. Effectiveness. The second part of sales capacity is how effective sales people are with the time they have. Sales leaders can improve the effectiveness of their sales people by measuring and managing workload (How much time does it takes a rep, in hours per week, to win a deal? What percent of his time each week does he spend on a specific deal?); duration. (What is the length of time it takes – in weeks or months — to close a deal? How quickly can a rep move a client through the sales process?); and finally close rates (How many deals in the pipeline does it takes to win one deal?).
Sales effectiveness can be improved by better qualifying deals according to more rigorous criteria. We all want a big pipeline because it feels safe. But it takes a lot of time to manage all those opportunities, and it is deceptive to yourself and the organization. Sales effectiveness can also be improved by getting deals out of the pipeline sooner. Flush out the opportunities that have a low chance of making it right away.
By understanding where the sales organization is spending its time and how effective they are with the time they have, sales people, sales leaders, and sales operations can diagnosis the non-revenue generating activities, 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.