Sales Productivity is a factor of two things: Available time and effective use of time.

To increase a Sales Rep’s productivity we can:
Decrease time spent on non-selling activities
Increase time spent on selling activities
Make better use of selling-time

Salespeople like other professionals, have a fixed amount of available hours during the year. Although you may put in far more hours, I’ll base this number on 40 hours per week with 52 weeks in a year, and arrive at 2,080 hours total for the year. Your utilization of those 2,080 hours will determine your sales productivity and whether or not you’ll hit your revenue targets.

Non-selling Activities

All Salespeople are burdened with activities that don’t have a direct impact on revenue.

Sales forecasts, weekly sales meetings, chasing commissions, assisting with account receivables collection, travel and a myriad of other activities all contribute to a reduction in selling time.

Business-performance improvement firm Proudfoot Consulting conducts an annual survey with consistently shocking results. In their 2005 Proudfoot Productivity Report a whopping 79% of a salesperson’s time was spent on non-selling activities. Using the 2,080 hour/year figure, only 437 hours remain to be spent on actively selling to or prospecting for customers.

If you’re a Sales Rep or a Sales Manager, you won’t find this surprising. If you’re in marketing, this will give you more insight as to why Salespeople guard their time so judiciously, and chafe at following-up on leads of unknown quality.

Companies should take an inventory of tasks which divert Salespeople from being in front of customers. Then systematically create processes that will return valuable hours to the pool of selling-time. More time to sell is a good thing. However, it’s not just the amount of selling time that’s important, it’s how the time is used.

Selling time

What types of activities would you consider to be selling activities? Of the 21% of selling time found to be available by the 2005 Proudfoot study, only 11% was spent actively-selling while a full 10% was spent prospecting.

Why wouldn’t Salespeople spend all of their selling time with qualified prospects rather than prospecting? Why do they spend 10% of their available selling time cold-calling and following up with leads of un-known quality (think trade-show leads)?

Because there aren’t enough prospects!

Stuffing the funnel with leads

In an attempt to bolster the amount of time spent actively-selling, we generate leads. Leads are the life-blood of sales. Leads keep our pipelines full. Leads are the source of all revenue. As Martha Stewart might say “leads are a good thing.”

But leads aren’t necessarily prospects and if they aren’t prospects, they won’t be buyers anytime soon. Too many non-qualified leads will kill your sales productivity, lower your revenue potential and limit your ability to exceed sales quota.

Leads: The Sales Productivity Killer?

The answer isn’t to provide more leads, it’s to provide more qualified prospects. Don’t stuff the sales funnel with leads. Stuff the marketing funnel with leads. The marketing funnel is where leads should be shaken and sifted, helping qualified prospects fall through to the sales funnel where they can be closed. The more unqualified leads that make their way through to Sales, the less productive salespeople will be.

Lessons from the Gold Rush

I live in one of the historic California towns where the 49er gold rush took place. You couldn’t find gold unless you had good techniques either panning for gold in rivers, or blasting through vast layers of earth. Gold seekers were of course, known as “prospectors”.

Prospectors couldn’t find gold without a laborious search. And like prospecting for gold, finding qualified prospects requires the right techniques. However, a division of labor for executing those techniques is crucial if prospectors are to maximize their return. If assayers were asked to haul and mill the ore as well as inspect for content and quality – investors would receive far fewer gold coins at the end of the day.

Copyright © 2007 Smart About Sales, Inc.

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We all know how important the concepts of “sales” and “productivity” are in the successful operations of any existing business in today’s corporate world. But when you combine these concepts, the result becomes a bit too hazy for comfort. Still, you have to familiarize yourself with the combined concept of sales productivity because this can actually fuel more profit and success for your company as a whole.

So, just what is sales productivity? And why should companies pay attention to the concept? To further understand this, you need to have a firm grasp on what productivity is all about. Simply put, productivity refers to the total amount of labor that is needed to accomplish a certain process or task in the operations of a company. Let us take a coffee shop, for example. It usually takes a barista 5 minutes to prepare an excellent cup of cappuccino. That is, on an ordinary day. But what happens when rush hour sets in? The barista would have not just cappuccino drinks to prepare. He might have to prepare cold drinks, such as blended coffee drinks and milkshakes. And the preparation time for each of these drinks would not necessarily amount to just 5 minutes. Thus, for your coffee shop to be more productive, the management staff and crew should come up with ways to maximize prep time for the drinks without sacrificing quality in the process.

The same concept rings true when it comes to sales. Let us say that you need to spend an amount of $30 just to garner a gross profit of $100. This means your net profit would amount to $70. But as your business grows, you would expect that sales cost of $30 to decrease because you become more experienced in your craft. This significant improvement in experience could then be manifested on the decrease in sales cost. But if your sales cost remains at $30, then you are not being productive at all. You have then become stagnant in this aspect.

Let us look at your target market at this point. If you see your target market as having a flat nature, or if your neck has become strained from constantly looking at your competitors at both sides, then you should familiarize yourself with sales productivity.

Going back to the scenario of the coffee shop, let us say that your workforce grabs around 25% of your gross profit. Strategically, you discover that you can decrease this percentage down to 23%. What then would you do with this extra 2%? You can actually treat it as savings, crediting it to your bank account. But if you use this extra 2% to make certain investments to improve operations for your coffee shop, then you can maximize sales productivity for your whole business. And this is not the only way that you can increase sales productivity! You can go over your financial records and statements in more depth, so that you can determine the many ways that you can increase this. It’s not that easy, and you just might need the help of your management staff and crew. Still, determining these is a step closer to more profit for your business as a whole.

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