JUL 12 BY HEATHER WEIR
Defining Sales Productivity for Modern Sales Teams
Many sales leaders believe that the definitions of ‘sales productivity’ and ‘sales performance’ are one and the same. But truth is that only by targeting and measuring the improvement of sales productivity, you will in turn drive better sales performance.
‘Don’t ask how, just how many.’
This statement typifies the way most companies measure their sales organization; Hire all of the great salespeople you can afford and count the revenue that comes in on the back end. If the team performs as we had hoped and its numbers are hit, we say it was productive; if not, it wasn’t.
What we believe, and detail further in this article, is that that mistaking measurements of sales (performance) with metrics of selling (productivity) leaves sales leaders with few options to improve their output, other than hiring and firing salespeople.
Defining sales productivity as something more than the metrics of expense and revenue, requires an understanding of what it takes to identify, execute and close an opportunity. The efficiency with which a salesperson can execute these tasks dictates how many opportunities they can manage at any one given time, although being able to quickly generate a proposal is meaningless if it isn’t relevant. Thus, the other component of productivity is the effectiveness of the tasks, which is determined by the response of a prospect and their agreement to progress to the next step.
Organizations can increase the productivity of individual reps by focusing on improvements in three areas.
The first area is sales competency, comprised of three components:
● Processes tell a salesperson what to do, reduce guesswork and standardizes around best practices. For every critical sales task there must be a process.
● Skills. It’s one thing to tell someone what to do; it’s an entirely different matter to teach them how to do it. Developing skills requires training, coaching and practice.
● Knowledge. Knowledge is more than experience; it is an in-depth understanding of the customer, the marketplace, competition, products and value they provide.
The second area of productivity is sales activity; it is comprised of six components that reps must demonstrate efficiency and effectiveness in relation to:
● Administration. Activities associated with the business management of selling.
● Education. Activities associated with the enrichment of sales competency.
● Prospecting/account research. Activities dedicated to the creation of opportunities.
● Telephone. Activities associated with scheduling and coordinating sales interactions.
● Call preparation. Activities associated with the preparation for a client interaction.
● Face-to-face calls. Meaningful interactions with client or prospects.
Opportunity management, the third area of productivity, is comprised of three components:
● Sales methodology or strategy for selling, is the set of organizational standards for managing territories, accounts, contacts and opportunities.
● Sales processes specify the sequential steps, common terminology and accepted metrics that define the opportunity life cycle.
● Interactions. Client interactions are the culmination of strategy and tactics; the true act of selling. The result of each interaction determines the next activity, whether it is a new tactic or a shift in strategy.
By now, we hope you share our belief that sales productivity is much more than expense and performance data divided by headcount; that’s sales profitability. Productivity is a reflection of the time and effort expended by your salespeople to create the high quality, customer relevant interactions required to advance and eventually close an opportunity.
Organizations that find ways to improve the competencies of their reps, the activities they perform and the opportunity management methodology that guides them, find that they have coincidentally improved performance – one rep at a time.
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