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The Return on Increased Sales Productivity
By David Micksch on 11/14/2010 3:22 PM
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Sales productivity has become a top priority for many companies as they look to streamline their sales force and drive greater revenues from the same or fewer resources.
Companies recognize that well-trained, highly-qualified salespeople are difficult (and expensive) to attract and retain, and the more they can focus their salespeople's efforts on the high-value, core-selling activities that generate sales, the more they will be rewarded with greater revenues and a lower cost of sales.
The Return on Increased Productivity
To illustrate the impact that even modest productivity gains can have on your company's sales performance, let's take a look at a straightforward example .
Suppose you're the VP of Sales for a growing mid-sized business with 50 sales reps. If your 50 reps work 40 hours per week, 50 weeks per year, and each rep is responsible for $750K in sales, then an 8% increase in productivity (a very realistic increase) would translate to the following:
The numbers may be slightly different for your organization, but it's clear that even modest productivity gains (in this case 38 minutes per day) can have a dramatic effect on the results your sales organization delivers.
Where do Productivity Gains Come From?
The key to improving sales productivity is to taking a hard look at where your salespeople are spending their time, and then shifting the amount of time they spend on non-selling activities over to the core-selling activities that actually drive sales.
The chart below is based on research by numerous organizations including CSO Insights, IDC, and Aberdeen Group that indicate salespeople only spend between 26% and 42% of their time on core sales activities that drive sales.
In the example above, assuming you're organization is above average at 34%, shifting 8% of your salespeople's time from administrative tasks over to core selling activities would mean that they are still spend less than half of their time on revenue generating activities - confirming the significant room for improvement that exists in most companies.
Proven Strategies for Increasing Productivity
The following are proven strategies for reducing the amount of time salespeople spend on administrative tasks so they can focus more of their time on core sales activities that drive revenue.
Streamline Data Entry
Logging activities and managing accounts, contacts, and opportunities in the company CRM system are all part of a salesperson's job, but it can also be a real time-sink.
Most modern CRM systems allow data entry to be handled in one or two clicks. If yours doesn't, it may be time to customize or upgrade it. See Evaluating CRM Systems for more information.
Providing sales people with easy access to proposals, presentations, contracts, quotes, marketing materials, and other content that has already been created eliminates duplicate work and improves the accuracy, messaging, and impact of external communications - saving time and improving Sales Effectiveness.
Significant productivity gains can be realized by automating even just a few business processes. Processes like receiving leads from marketing, entering orders into your ERP system, moving opportunities through different sales stages, or transitioning cases to customer service should all require little or no effort.
Provide Better Intelligence
In today's B2B sales environment, your reps need to be informed to be productive. They should have access to company and industry data, competitive intelligence, and all of the interactions that a prospect has had with your company (including marketing and web-activity) available to them from directly within your CRM system.
Improve Lead Quality
Poor lead quality affects productivity in two ways: 1) your reps waste their time trying to get in touch with prospects that aren't really interested and 2) your reps try to generate their own leads, usually with very little success. See Lead Generation for more information.
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