What is Sales Productivity?
Sales productivity measures the efficiency of a sales organization. It compares the number or dollar value of positive outcomes against the resources required to drive them. Maximizing output while driving down resource requirements is the goal of organizations seeking to improve their sales productivity.
Strategies for Improving Sales Productivity
Here, we look at seven ways sales organizations can find their 40 percent productivity increase through reinvestment in human capital.
1. Make Long-term Sales Productivity Investments
Researchers at PwC examined what drives productivity in US businesses. They learned that “planning for productivity means doing long-range planning, not indulging in short-term thinking.” This finding came from interviews with leadership at the executive level. This view is shared by sales professionals in the field. Our research shows that successful selling organizations choose long-term sales training programs.
The tendency to favor short-term solutions is understandable for three reasons. First, research from McKinsey shows that 65 percent of leaders feel pressured to deliver short-term results. Second, long-term solutions often appear unfavorable because the “payoff” cannot be expected any time soon. As a result, leaders will need more patience to verify outcomes. Third, leaders are often uncertain about how an investment based on today’s data will pay off in the ever-changing future.
However, the same research found that fundamentals are stronger at firms with a long-term focus. These firms generate cumulative revenue growth that is 47 percent higher than other firms. Those with a long-term focus also experience less volatility.
2. Ensure That Sales Productivity Efforts Include a Focus on People, Not Just Tech
Selling organizations often embrace technological advancements. Digital tools offer more ways for sales professionals to source leads. The problem: the technology rarely helps sales professionals when they get in front of those leads. This outcome is like a flight around the world that never lands.
Additionally, more technology means more administrative responsibilities. As digital tools pile up, sales professionals are burdened with learning about the features, not the customer. As one leader summarized, “The technology changes rapidly, but the [workers] find their places around that technology more slowly.”
It’s not surprising to learn that for many sales professionals, time spent selling has dropped to just 36 percent of their workweek.
In fact, the problem is so pervasive that it has extended to the manager’s role. Additional research from Bain shows that “managers have fewer than seven hours per week of uninterrupted time to do deep versus shallow work. They spend the rest of their time attending meetings, sending e-communications, or working in time increments of less than 20 minutes.”
Technology has an important role to play in sales productivity. However, over-investment in technology and under-investment in people delivers a message that the power to sell resides in the tech, not the talent. This message reduces morale. It also erodes the sales professional’s locus of control — their sense of agency and belief that outcomes are within their control.
3. Focus on Meeting the Full Range of Customer Needs
Businesses sometimes pursue productivity by prioritizing quantity over quality. In a selling organization, this problem is represented by winning more deals that are too small.
This outcome is a problem because chasing many small wins exhausts efforts. Doing so also ignores valuable cross-selling opportunities within existing relationships. Moreover, jumping from sale to sale drives the two above problems. Leaders make investments suited to short-term performance, and they resort to the digital tools to increase the volume of leads. Success comes from capitalizing on front-loaded efforts by accessing the customer’s white space in an expanded sale.
Investments designed to drive output without regard for quality leave true sales productivity lacking. The reason: the output increases but so do inputs. This strategy leads to a lot of peddling and few miles gained.
4. Define How Sales Productivity Will Be Measured
While it is important to choose the right measurements, it is equally important to communicate what those measurements are and why they will be used. This approach works best when leaders communicate the “what” and the “why” at the early stage of the onboarding process.
Sales professionals need to know what numbers the leaders will be reviewing so that they can focus their efforts in the right places. They also need to know the “why” behind the numbers. Understanding the leadership’s reasons for selecting specific measurements is critical for earning the sales professional’s support.
Answering the “what” and the “why” must occur regularly. It is not enough to answer these questions once. Sales meetings are great opportunities to address these two topics. Leaders can go one step further by calculating and sharing the organization’s total productivity measurements in these meetings. This approach brings visibility to the leadership’s commitment to consistency in sales productivity best practices.
5. Overlay a Framework onto Preparation Activities
Many leaders promote the importance of preparation. Unfortunately, this message often falls flat because it is not paired with a framework. Leaders must provide not only the direction, but also the tools for executing preparation.
For most organizations, a framework exists in the form of a planner that operates like a checklist. This approach is effective because it aligns everyone to the same process and ensures that no important steps are missed leading up to a call or an in-person meeting with the customer.
However, a checklist alone is not enough to drive meaningful change. A study published in the Journal of Empirical Legal Studies found that a checklist delivers results when combined with other practices. The researchers learned that factors like “training, teamwork, evidence on failures, and reorientation on core tasks” determine how well a checklist works. Their findings also revealed that the efficacy of a checklist depends greatly on the organization’s ability to determine which steps are critical. Stacking the list with endless steps as a “catch-all” effort only leads to high abandonment rates.
6. Align Marketing and Enablement to the Sales Strategy
Productivity emerges not only from consistent practices, but also from cooperative practices. Selling demands more tools and capabilities than ever before because the sales professional’s solution is often designed to address sophisticated challenges. Therefore, leveraging a multitude of capabilities requires a team effort.
To drive this team effort, leaders must create and maintain a connection between marketing, enablement, and sales. Doing so ensures consistency of messaging. This approach also ensures that the technology, tools, and content provided by sales enablement resonates with the customer’s core needs. Without all of these parts working in cohesion, the customer receives a discordant message that only further complicates already confusing challenges.
Fostering this connection means holding regular meetings to ensure that all team members are headed in the same direction. Leaders should also ensure that coaching efforts are aligned. Cooperative efforts also have the added benefit of instilling a sense of unity across the team. In short: clarity of purpose is what enables teams to work together.
7. Structure Training around an Academy Format
Productivity is a continuous pursuit. As the sales professional’s career unfolds, they face increasing challenges in improving their productivity. For this reason, a sales academy is an excellent tool for boosting long-term productivity.
A sales academy is a structured system for training and developing a sales team. It consists of numerous programs, which together form a single competency framework for driving the sales professional’s performance throughout their career. A sales academy includes a collection of learning tools like written materials, instructor-led classroom training, digital learning tools, and coaching.
The academy structure allows training to grow in tandem with the sales professional. As the professional’s capabilities grow, the sales academy can deliver new content and skills to help the learner reach the next rung. This approach to continuous learning not only helps the sales professional, but it also drives productivity for the selling organization. The reason: the training becomes focused on delivering the right skills at the right time via the most effective modality (e.g., instructor-led training, adaptive learning platforms, reinforcement tools).
Driving Sales Productivity in the New Era
Productivity is a key economic problem of the 21st century. For many sales organizations, the solution is within the workforce. By investing in the right thing — improved selling behaviors — leaders can achieve more with existing resources.
As McKinsey found in their review of successful businesses, “Just under half the fast growers spend significant time and money on sales-force training, compared to 29 percent of slow growers.” Focus investments on the long term, people, and value over volume.