According to Harvard Business Review, companies spent $800B on sales force compensation and another $15B on sales training in 2015. If you add in another $15B investment in CRM according to Gartner, companies spent $830B on people, people development and enabling technologies, which is roughly 5% of total US Gross Domestic Product. This is a staggering amount of money invested to deliver revenue growth.
Contrast this figure to the investment we make annually in optimizing the return on that investment. Once a year, typically during the budget process, we sit down and think through how many sales people we need in the organization. We may base our sizing assumptions on how we performed this year, our revenue targets for the upcoming year, or a financial analysis of the costs (e.g., recruiting, on-boarding) versus the benefits (revenue ramp-up time).
More often than not, we devote too little time prioritizing our customers, determining our coverage model, and sizing our sales teams. Our need to reassess our go-to-market strategy is magnified when there have been major market or competitive shifts or if our company has grown through acquisition.
We all know the value of rebalancing our 401K to drive greater returns on our investment portfolio. Yet, as collective stewards of nearly $1 trillion in sales investment, the question remains – why do we place so little time and effort in driving a greater return on our investment in sales?
To answer that question, we developed an in-depth guide around the components of Sales Resource Optimization (SRO), including the 4 C’s of customers, coverage, capacity and capabilities. More and more of our clients are annually re-assessing how they organize and deploy sales resources to ensure they are keeping up with market/customer changes, which are happening at an accelerated pace today.
The questions you should ask around the 4 C’s of Sales Resource Optimization include:
- Customer: What are our highest potential markets and customers and how are our sales resources aligned against them?
- Coverage: How do we optimize account coverage against prioritized markets and customers?
- Capacity: How many resources do we need, by market segment, and across the customer lifecycle?
- Capability: Does our team have the right mix of skills and capabilities to sell and deliver on our value proposition?
Based on our research and from others, top-line revenues can be increased from 2-15% after sales resource optimization, and the opportunity can be far greater for organizations that are significantly mis-sized or mis-deployed. The impact is significant, and with potential "cost of sales" efficiencies as well, SRO can improve top and bottom lines.
Download your Guide to Sales Resource Optimization here to learn practical frameworks to align, size, and enable your sales organization.