The Concept Of Sales Productivity Defined
December 10, 2009scfm 18 Comments »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.
Question about sales product
What is a fair commission rate for web design/marketing for a product sales site?i have a product that is very promising and my web designer offered to do a website to sell it online. he offered to do it very cheap in exchange for a commission on sales from the site. seemed fair given the right rate. but he wants 15 percent and not that i know a lot about these things but that seems really high to me. if anyone could give me ANY guidence at all i'd really appreciate it!
thanks!!
Tags: increase productivity, measure productivity, sales productivity, salesforce.com, twitter
Posted on December 10th, 2009 at 5:42 am
I bought several things from the 1 sale has anyone that ordered received their stuff yet I’m getting worried plus they have their money already.
Posted on December 10th, 2009 at 6:04 am
thank u!!! u r so gorgeous
Posted on December 10th, 2009 at 6:46 am
Right now, pre-launch…15% seems like a lot – but its worth it to you, if this product gets the exposure you desire, along with the sales income. You can put a cap on it by setting up a royalty agreement form stating that the commission is only effective for the first 100 unit sales (figure a dollar limit on your web designers creative efforts) You can also drop the commission to 10% for the next 100 units or whatever your conscious allows. It works like this – 100 units sell for 30.00 each and 15% is 4.50 dollars – x 100 equals 450.00 – and the next group equals less commission till you get to 1000 or more units.
Now you are not married to this web designer forever, and the cow doesn't die. All good things must come to an end, and include an exit clause.
Posted on December 10th, 2009 at 6:51 am
The numbers you are looking for are random depending on the area and customer base. If your in Arizona you will sell more cold drinks than in Colorado and if your next to a University you will sell more quick snacks than if you are in a mall. I hope this helps.
Posted on December 10th, 2009 at 9:16 pm
thank you for letting us know
Posted on December 11th, 2009 at 3:28 am
Hello…no, sorry I cannot help you but heyyyy, why not look at working for yourself? With your experience as a Sales Manager, I would love to discuss with you what I do if your options are open to working for yourself. My email is rpelley5@yahoo.com. Thank you.
Posted on December 11th, 2009 at 4:22 am
A sales manager usually does some selling but they manage a sales force. Part of the job requires recruitment and training. Sales managers usually spend a few years in a sales position before moving into sales management.
Posted on December 11th, 2009 at 8:56 am
never heard of that coupon site! thats crazy thanks so much you are too kind!
Posted on December 11th, 2009 at 4:24 pm
If you already have a good career, why would you take a chance during such a dangerous economic time? A new CRM could be great but you don't know what kind of "bugs" new systems have and if they have the support to back up those issues. In addition, what are the benefits to this CRM over Sales Force? If it's 'just another' CRM why would anyone want to change? You need to be asking your "prospective" employer about their target market and ask more about their sales plan. They would need to sell me before I would ever consider leaving a secure job during a recession.
Posted on December 12th, 2009 at 3:41 am
Hey prescriptives is having a 30% off sale. They are going out of business. I purchased a bronzer brush for $22.00
Posted on December 12th, 2009 at 4:15 am
All the governments give some kind of endorsement to all the product sold in the economy. All food and medicines have permissions given by government that not only assures those products does not make you a damage, else it has enough quality to be bought with out risk…Most of respectable and coveted certifications in Europe are given by government…to have some of this certifications give to companies safe sales to many companies…
In some countries, government grant all the financial products for the case of break of the bank…this create confidence in public and it have not problem in demand the financial products those want…
Posted on December 12th, 2009 at 7:28 am
Thank You!
Posted on December 12th, 2009 at 8:26 am
wow i did not see the cafe latte
Posted on December 12th, 2009 at 10:19 am
If you are referring to sales tax: just carry a calculator with you. Find out the sales tax in your area, then multiply the item cost by the applicable sales tax.
Follow the link below to find your state sales tax rate. Then you can call your local city hall to see if there are any local sales taxes, and add them (if any) to the state rate. That will give your the sales tax percentage that you would use to calculate sales tax on your purchases.
Posted on December 12th, 2009 at 2:27 pm
quick answer….net sales is typically $$$
net volume is the number of units of widgets that you ship
Posted on December 12th, 2009 at 4:06 pm
They are similar in that with sales you are trying to solve a problem for your customer, and through product development you are also trying to find and solve your customer's problems.
Posted on December 13th, 2009 at 3:23 am
yea girl, they get you with that shipping.
i got 14 items and my shipping was 14 bucks. but yeah, still a good deal!
Posted on December 13th, 2009 at 8:46 am
Thank you for the shoutout!!!!!!!!!!!!!!!