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Improving Sales Effectiveness

Kevin Buckley | Articles > From the section: CRM

October, 2014 |

Salesnet.com

Sales Efficiency versus Sales Effectiveness

In our current economy and with limited resources, one challenge facing many organizations is to help their sales people become not only more efficient, but also more effective with their activities. When choosing a Sales Automation (SA) tool, companies often confuse efficiencies with effectiveness.

A study by Proudfoot Consulting showed that reps spend 31% of their time on administrative tasks. The old CRM pitch has been,"If we could provide you a tool that would eliminate or cut down the amount of time your reps spend on administrative tasks, how much more do you think they could sell?" Or,"If your sales reps are spending 4 hours a month reporting, and we were able to cut that in half, or eliminate it all together, how much more do you think they could sell?" Sure, any SA tool can and should provide some lift in efficiencies to sales organizations by providing easier ways to create forecast reports, customer lists, call reports and to-do lists; but does that time now available equate to reps actually closing more sales?

Effectiveness in a Sales Organization

Effectiveness is making the most of that newly available time, and doing activities well. Companies need to find tools that allow their reps to make better calls and meetings, not just more calls and meetings. Activity does not necessarily translate into productivity. Just because a rep is able to make 10 more calls a day that does not necessarily equal more sales.

A sales organization can be broken down into 3 areas: The top performers (typically 20%); the middle performers (middle 60%) and the lower 20% (usually those on their way into your organization or on their way out).

The top 20% are those who are your consistent performers. They are the ones making quota month over month and quarter over quarter. This group needs little help in the area of improving sales effectiveness; however they are the ones that can benefit from a tool that will help improve their efficiencies, helping to cut down their administrative tasks. It is then that they will be greeted with more time to work on more opportunities and thereby generate more revenue for the company and commission for themselves. But that is only 20% of your sales organization!

The middle 60% and a portion of the lower 20%, (the newest sales employees) are the ones that need the most attention and have the greatest potential gains for improvement in the area of sales effectiveness.

The middle 60% have the will and desire to succeed in selling for your organization, but do not necessarily have the way. This group usually has product knowledge, but lacks the best practices that the top performers have in order to become more consistent in selling.

The newest sales employees are faced with all of the same challenges as the middle 60%, but also have to cope with the challenge of time; time to meet quota and time to gain the knowledge and experience selling for your organization.

Whose role is it to improve sales effectiveness? In an ideal scenario, these 2 groups of people would work with their manager being guided and coached on each and every opportunity – what to do next and how to do it. This includes how to gain interest from a suspect in wanting to have that first meeting, how to get from that first meeting to being able to present an effective solution, and so on throughout the sales cycle. While ideal, the reality is that sales managers do not have this time available to conduct this level of coaching, much of the time is spent trying to figure out a sales forecast, putting out"fires", providing strategy to close that one big deal that can help a rep make (or break) their quota, etc.

Tools for Sales Effectiveness

Understanding that managers do not realistically have the time to coach reps on each and every sales opportunity, organizations often turn to and rely on Sales Automation systems, only to be disappointed, or even more frustrated. The benefit of using these systems is that there is more visibility to each and every opportunity. There is great reporting, or dashboards, and there is less time spent on creating forecast reports. The challenge is that our revenues generated do not always go up simply by putting an SA in place.

The reason for this is that most SA tools are pitching the old CRM story about saving reps' time so that they have more time to sell. Even worse, many say they have"workflow". And workflow is meant to drive activity, when in fact when you peak under the hood the workflow is simply a list of tasks to do when at a certain milestone. They are limited to reminding a rep of things to do when they reach a stage. The main challenge with this is that the associated tasks are simply checkboxes; a rep can check a box and choose the next milestone. While that sounds easy, how does this help to improve effectiveness? Should that rep be able to bypass the best practices, without actually doing them, and able advance an opportunity to the next stage?

What is the true definition of workflow? Two sample definitions:

Workflow describes all of the elements needed to achieve each step in the business process. There can be many factors in such a step, including the personnel involved, the actual tasks at hand, the procedural steps to be taken and the input and output of information or data that is required.

A process is a description of how tasks are done, by whom, in what order and how quickly.

With that said workflow in a Sales Automation tool should include a list of recommended steps (best practices) to get from initial lead to signing of a contract. Who is involved in the advancing of the next stage? What data should be collected in order to advance to the next stage? And time frame to complete the step or activity at hand. This is NOT accomplished by prompting a rep to check off boxes.

Summary: Sales Automation Impact to Sales Effectiveness

What is the benefit of establishing a workflow? And what impact can it have to improving sales effectiveness?

A recent study by CSO Insights examined companies who had implemented workflow-based Sales Automation and those who did not.

CSO Insights found that companies that had a workflow-based SA were considered to be proactive organizations; these companies are never satisfied with status quo. These companies are constantly analyzing metrics to understand how they sell and how their customers buy.

In the area of sales effectiveness the results were outstanding for companies who implement a sales process/workflow and reinforced with technology saw uplift in the following categories, over those companies who do not:

Conversion of at least 50% of all
Leads Resulting to Initial Meetings = 65% Higher
Conversion of at least 50% of all
Initial Meetings to Full Presentations = 55.8% Higher
Conversion of at least 25% of all
Presentations to Closes = 25% Higher
Conversion of at least all
Proposals to Closes = 16% Higher
Reps ability to
Meet Quota = almost 10% Higher

Lastly companies with a formal sales process in place performance experience a close rate that is 11.2% higher than companies without a standard sales methodology.

http://www.proudfootconsulting.com/Default.aspx?id=196528

http://www.iseries365.com/Content/Pages/Glossary.aspx

http://www.theebusinesssite.com/IT%20Terms/Health%20Terms.htm

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