Sales Productivity
Every Managing Director in every business in every country in the world will have sales productivity on their must do lists. Why? Quite simply cost reduction is finite, but wealth creation is infinite. There are many definitions for sales productivity but the one we use is “Sell more, sell better and sell faster”.
Looking at this from a customer's perspective, to sell more one must have excellent relationships and a thorough understanding of their business; to sell better means that the customer is perceiving real value from your offering, and selling faster means that the time from the point of conception through to benefits realisation is reduced. A classic win win, and the seller creates distinct competitive advantage through the sales process. When challenged to improve sales productivity the response is often one or a combination of the following:
Sales training, incessant reviews, work harder, bring in a new sales process like Miller Heiman or SPIN, a new sales incentive scheme or pay plan, marketing initiatives and so on. While these will improve things they are not sustainable and over time any benefits gained generally ebb away. Sales productivity is a mixture of many things, but the key one is customer focus; below is a simple questionnaire that will allow you to benchmark your sales organization. Take a few minutes to look at it; there is a simple scoring mechanism that will give you an indication about the scope for improvement.
Sales Director's Sales Productivity Assessment
The key to extracting maximum value from this questionnaire is brutal self honesty.
Critical Questions |
0 – 30% |
31 – 60% |
61 – 90% |
Greater than 90% |
What is the retention rate of your key people over the last 2 years? |
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Of your people what percentage would you describe as role model performers |
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How much of your training investment would you describe as making a difference to your overall sales performance |
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How much of your sales training would you describe as being fully sustained (being continually practiced and adding profit) |
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How much of your sales people's time would you describe as fully productive i.e. involved in the sales process or learning/training |
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What percentage of your sales people would you describe as offering competitive advantage |
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What percentage of your sales managers achieved their revenue targets in the last full year (Treat yourself as a sales manager) |
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As above but for gross margin or profit targets |
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If you (and your team) achieved the targets above and did not exceed your sales cost budget, tick box # 1 If you achieved both the targets above, but overspent tick box # 2 If you achieved the margin/profit target within your cost budget tick box # 3 Otherwise tick box # 4 |
4 |
3 |
2 |
1 |
What percentage of your sales people (not managers) hit or exceeded their sales target |
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What percentage of your sales managers spend 40% of their time with customers |
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What percentage of your sales managers spend 40% of their time with their people |
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What percentage of your sales managers spend 20% or less on the numbers |
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Recruitment of sales people: All external tick box # 4 All internal tick box # 3 Majority external tick box # 2 50/50 tick box # 1 |
4 |
3 |
2 |
1 |
SCORING – For each tick in box 4 score zero: Score one for each in box three: Two for box two, and three for box one. Total your scores. |
Box 4
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Box 3 |
Box 2 |
Box 1 |
The maximum score is 45. If you have a score greater than 35 you are in pretty good shape, if not then there is plenty for you to think about. The current average score is 15. If you would like to know more about Koru's approach to improving sales productivity down load our “Maximising your return on sales Solution Paper” by clicking here.