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Jumpstarting Stalled Sales Productivity
August 25, 2008
By Kevin Bandy
Imagine this: You're a sales manager for a communications or high-tech company. Yesterday, one of your reps sold a product to a customer. You'd assume he's already moved on to the next prospect, right?
Not necessarily. Today, that customer called your rep, raising multiple concerns with the language in the sales contract. Why? Because he's the direct and only contact the customer has with your company. As such, your rep will spend the next two days (16 working hours) doing nothing but addressing these complicated customer contract issues. He's a salesperson—not a contract lawyer—but nonetheless, you can rest assured no selling will take place during those tedious hours.
Stalling Out
This is an all too frequent scenario salespeople grapple with. According to one research finding, the percentage of time a rep has to actually engage in selling has fallen during the past two years, decreasing from 48% to less than 36%. That means almost two-thirds of a salesperson's week is spent doing something other than selling, such as managing e-mail and handling the administrative side of contract processing and negotiations. Salespeople often must coordinate the fulfillment of a sale because of IT-led restructuring initiatives done in search of short-term back office cost reductions.
This widespread decline in sales productivity amounts to, arguably, the biggest reason companies in the communications, electronics and high-tech markets fall short of revenue and profit goals. As such, reversing this sales productivity decline ranks as one of the biggest opportunities to ignite a turnaround in revenues and sales and drive high performance among these companies. If comprehensive changes aren’t made, this productivity loss trend will continue.
Other market dynamics are compounding this inefficiency problem. For example, sales channels are becoming increasingly complex and tougher to figure out and leverage. The rapid growth of emerging markets and economies further complicates the sales process. The learning curves are huge in countries such as Brazil, India and Russia. And the rampant merger and acquisition activity strains sales productivity because of logistical, administrative and cultural challenges encountered when blending two separate sales organizations under one new company umbrella.
Companies have frequently addressed sales productivity problems by spending money on training salespeople more. But such efforts have been far from adequate. The reason has usually been that sales training has not been tightly aligned with the company's strategic focus and core capabilities. Too often, reps go out and sell whatever they think they can sell that their company offers, so as to meet their sales targets. And often what they’re selling is not aligned with the company's core capabilities and strategy focus.
Beyond training issues, salespeople too often (though understandably) get frustrated when what they're being asked to sell becomes too hard to sell. Reasons for this too frequently tend to be that the salesperson:
• Doesn't understand the company’s offerings, capabilities or products;
• Doesn't understand the strategic alignment of the company’s core capabilities with the strategy and what they're selling;
• Doesn't believe the commission to sell certain products and offerings is worth the investment of time and effort to learn about them, especially those that are complex;
• Decides to sell products and offerings that are easier to sell, that he already understands and has sold before.
Achieving these sales targets are paramount in the minds of salespeople because they're how they get paid and keep their jobs. That's just human nature. Salespeople won't change unless enticing reasons to change exist. And the most popular reasons are usually financial. Too often they don't have these monetary incentives, so they don't change. Sales stall and decline.
Getting Productivity Back on Track
To reverse this downward trend, companies need to consider the following:
1. Conduct a detailed analysis of where money is being spent—and on what—in the operation organization. What capabilities are in place compared to a best-case scenario? Companies often have inadequate visibility into how much they spend on sales operations because the various related activities span across other functions, such as finance, IT and supply chain.
2. Consider "core" sales operations versus those more appropriately considered "context." A company should continue to do core operations, such as what they do best and what differentiates them the most. And they should consider a shared services model for "context" operations, defined as those outside the company’s core competencies.
3. Stop trying to change your reps. People don't naturally change unless there’s a good reason to. Companies should change the processes and align strategies and core competencies with sales objectives. Companies should make sure salespeople understand this alignment and are sold on it themselves. Only then are they likely to change.
Kevin Bandy is Accenture's global lead for sales and marketing transformation within electronics and high-tech industries. He can be reached via e-mail at kevin.f.bandy@accenture.com.
Sales & Marketing Management Magazine
This article is brought to you by Sales & Marketing Management, the leading authority for executives in the sales and marketing field.
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