A Guide on Improving Sales Productivity in 2021
Your sales team is the engine within your organization. A successful sales team provides you breathing room to enact change, make improvements, and ultimately succeed as a company. We understand the need to hire top-performing talent, as they pay for themselves many times over; however, we must also pay attention to the efficiency of the sales team as a whole.
We look at sales productivity as a way to systematically increase your sales team's overall efficiency, through closing more deals and spending fewer resources to do so.
Here is a guide on increasing sales productivity in 2021, and how to ramp it up to increase your revenue.
What Is Sales Productivity?
Some reports find sales reps spending barely over one-third of their time actually selling. That is what sales productivity does not look like. Reps who are preoccupied with inefficient tasks are not making as many sales as they could be.
Sales productivity is “closing more deals” per hour. It is quantified by “the ratio of effectiveness (outputs) versus efficiency (inputs).” In other words, maximizing sales results and minimizing resources expended, such as cost, time, and effort.
How to Improve Sales Productivity: What the Science Says
Productivity screeches to a halt when salespeople spend inordinate amounts of time on duties that do not contribute to increased sales. Many companies suffer from huge talent and productivity disparities within the sales team and too many obstacles between sales reps and their time spent with customers.
The secret to improving sales productivity lies in viewing the sales force as its own resource and enabling reps to expand their selling potential, without exclusively relying on top performers to carry the weight of the whole team. These recommendations to increase sales productivity and effectiveness engage the productivity of your whole team, from top to bottom. In some instances, “systematic sales force effectiveness” schemes drastically “narrow the gap between top performers and everyone else.” They can even yield sales increases of 6% among the top quartile of sales reps, 59% for the second quartile, 77% for the third quartile, and “an astonishing 149%” for the least productive salespeople.
Scientific strategies to improve sales productivity should equip four levers:
1. “Systematically Target” Offerings
Find ways to categorize customers into segments. Think beyond geographic regions and instead start with a potential account value, share of wallet, vertical market, product type, and sale type.
“Define roles and align incentives” for sales reps, and section the sales force into distinct teams that specialize in their own customer segments. Members of these dedicated teams should have substantial and ever-growing knowledge about the relevant characteristics of their customers.
For example, Citigroup’s private banking operation started targeting customers based on net worth and personalized their sales team accordingly. This forced them to reassess their offerings, deprioritizing run-of-the-mill investment products and focusing on comprehensive management services. Eventually, Citigroup’s U.S. private bankers were able to generate “an average of $5.5 million per rep in revenue,” roughly $1.5 million above the average industry competitors.
2. Optimize Automation, Tools, and Procedures
Automating certain functions using IT can be a time-saving way to improve sales productivity. But remember that often, “less is more in sales-force automation.” Trying to implement a daunting digital overhaul over a whole year is expensive and can waste more time. A tool that is likely to increase sales productivity should simply and quickly (two- to three-week implementation) gather market intelligence, manage performance, and/or phase out spreadsheet reporting.
A large industrial company in India was struggling to get a new product line off the ground. Developing and testing a new, wall-to-wall sales-force app would have taken months without even guaranteeing results. So instead, in under four weeks, they adopted a simple, smartphone-accessible digital tool that works offline to automate weekly and monthly planning, manage their lead funnel, and monitor sales performance in real-time. In six months, they increased sales productivity by 300%.
Results from technological tools are most significant, predictable, and manageable when those tools function to enhance management processes such as regulating stages along the lead pipeline and methodically routing leads to appropriate sales reps.
Our friends at Mckinsey provide a great chart on how to quickly create a paradigm shift within your sales organization:
3. Performance Management
Performance management is one of the most foundational components of sales productivity strategy. Merely assessing whether or not each rep is meeting quotas is not nearly enough. Effective strategies to improve sales productivity depend on “deeper levels of performance analysis.”
Managing segment territory plans and retaining salespeople necessitates data-driven methods. Be in contact with data about sales reps’ inputs and outputs, from the calls they make to the deals they close and the behaviors underlying their overall productivity.
It is also vital to reward the most productive sales reps with professional development, structured compensation tiers, and other pathways toward further growth.
PerceptionPredict’s Performance Fingerprints are the perfect tool for investigating those intricate metrics that comprise salespeople’s productivity. This people-centered decision support system meticulously examines the ‘sales DNA’ reps need to perform at the highest level in a given sales role. You can understand how much better reps on your team might be with further development, and importantly who might already be performing at the highest level they are statistically capable of performing. This lets you know how to best deploy your training and development resources. After participants complete a 20-minute questionnaire, their sales aptitude and productivity is readily available to you. Our AI projects individuals’ future sales productivity by specifying KPIs like how many units they will sell and how much revenue they will generate. Performance Fingerprints are key to steadily elevating sales teams’ productivity as you hire reps that are naturally capable of performing at the highest level of sales performance. As your company grows using the best predictive technology you will find that even your average performers are performing better than what your top performers use to deliver. Your standards will be much higher when you think about what constitutes top-level sales performance.
4. Ongoing Sales Coaching
Continuous sales rep training goes hand-in-hand with performance management and systematic targeting. Appraising salespeople’s strengths and weaknesses shows you not just what responsibilities they are qualified for but where the gaps are in your team’s skillsets. A lot of sales managers are missing out on operative sales coaching that “can increase sales productivity by 88%” and launch revenue and close rates way up with just a couple hours of training every month.
Some companies have seen capability score improvements of “three percentage points per week” after constructing a ‘microlearning’ system consisting of gamified, “personalized, relevant, and engaging learning” in bite-sized modules for only 60 minutes per week. You can know what each member of your team needs to learn by using PerceptionPredict to decipher why some excel at their specific tasks and behaviors while others struggle to adapt to new selling models.
5. Sales Approach Deployment
In addition to matching customer segments with the right sales reps, map out the demands of customers using data to synchronize salespeople and sales approaches, including support, marketing, and delivery resources. Diligently gather data on customer segments to analyze their profitability and behavior. Then consider what mechanisms you use to interface with customers. Know the opportune sales channels to use, whether “enterprise or other direct sales, inside sales, the Internet, dealers or value-added resellers.”
Improve Sales Productivity with PerceptionPredict
Which strategies to improve sales productivity are the most immediate needs for your company? Wherever you are in the process of maximizing sales productivity, PerceptionPredict is here to ease each step along the way. Whether you are building or supplementing a sales team with new hires, figuring out how to best channel leads and assign customer segments to current sales reps, managing their performance, or supplying them with new learning tools, our predictive analytics supports your efforts. Take a simple but effective step, and trust our people intelligence and machine learning with streamlining your organization's ascent to peak productivity.
Book a demo to learn more about how PerceptionPredict can help bring your sales team to the top of their game.