What is the Key Lever in Driving Sales Productivity?

By Michael Perla on Oct 14, 2013

Back in May of this year, Sirius Decisions, a Sales and Marketing effectiveness research firm did an instant poll at their annual Summit conference around the topic of sales productivity. They found that …

 

Only 1 percent of participants polled felt very confident that their reps are fully productive vs. 41 percent who are very confident that their reps are not fully productive.

 

At the same conference, Sirius also found that only 17 percent of respondents had conducted a time-and-motion study within the last 24 months.

 

So what does all this mean? Do time-and-motion studies correlate to sales productivity? Is there a cause-and-effect relationship?

 

Before answering these questions, I’m reminded of an equation that can help in developing an answer. The equation is:  A * E = R. In layman’s terms, Activity times Effectiveness equals Results. The key questions that can be asked around the formula are pretty straightforward:

 

  • Are sales reps conducting the right activities?
  • How effective are reps in conducting their activities?
  • What results are reps achieving?

So in terms of sales productivity, which can be defined by the basic equation of Output divided by Input, we can align on the results we want a rep to achieve (e.g., higher quota attainment, more selling time, etc.) and then determine what inputs are involved in achieving those results. Inputs could be at the field sales level, the activity level, face-to-face selling time, etc.

 

In a nutshell, the quantity of hours may not matter if one rep is more effective than another.

 

For example, I remember interviewing two sales reps at a large telecommunications firm. One of them had the highest quota attainment over the last three years – she was consistently the best performer out of the 100 or so reps in the mid-market segment that she covered. The other rep was an average performer.

 

The top performer didn’t make near as many calls as the average rep, nor was she in front of the customer as much. She spent a lot more time doing behind-the-scenes research on the companies she targeted, as well as identifying ways to gain access to key decision makers. She had high levels of business acumen and was looking to have in-depth value-oriented conversations with C-level decision makers. In spite of her overall performance, she was often getting pressured by her sales manager for not making enough sales calls or having higher activity metrics.

 

To return to the questions I wrote earlier, the rep that has more face-to-face selling time may not be more productive than the one who has less. In the aggregate, time-and-motion studies are often useful tools, but they need to be validated and enhanced by correlating with individual performance. Ride-along data (e.g., sales manager accompanies sales reps on customer calls) can also augment the self-report nature of most time-and-motion studies (e.g., the sales rep reports on how they spend their time).

 

Effectiveness is often what drives the numerator of the sales productivity equation. In sales, you don’t make quota by running a lot of “junk miles”[1] – you have to provide a compelling value proposition to the right people to win the business. Generally, in solution-oriented B2B sales, it’s not just a “numbers game” like it might be for a more transactional sales environment.

 

Higher productivity may be achieved via less sales calls and face-to-face selling activities, and more time spent on trying to access the right people to share a personalized and compelling value story.

 

I’ll delve more into sales productivity in future blog posts, but hopefully the ideas above give you some things to think about.


[1] This often refers to wasteful extra running that a runner may do in excess of what is needed to develop peak fitness

Michael Perla

Written by Michael Perla

Michael Perla is a strategic leader and co-author of Symmetrics Group’s book "7 Steps to Sales Force Transformation." Michael specializes in providing actionable insights to marketing and sales organizations to help them increase pipelines, win ratios and productivity. Having sold and led projects with the Global 50 to Fortune 1000 companies, Michael provides the analytical rigor of a financial analyst with the holistic skills of a strategist to help Symmetrics Group clients improve marketing or sales performance. He has worked as a sales overlay, head of sales operations, and head of strategic marketing planning, in addition to a sales effectiveness consultant. In his spare time, he enjoys working out, reading, and watching his kids play sports.

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