Approximately 41% of companies identify low sales productivity as one of their top two business challenges. When sales professionals fall short of meeting their quotas, it hampers the ability of companies to reach growth objectives and allocate resources to essential areas like research and development, company culture, and other initiatives vital for overall success.
Enhancing the productivity of sales teams directly correlates with increased sales and revenue and creates more opportunities, fostering a positive work environment for employees.
Surprisingly, a substantial portion of salespeople’s time is devoted to non-sales tasks. Depending on the source:
- Insidesales.com reports 36%.
- Proudfoot Consulting Group indicates 11%.
- Pace Productivity estimates 22%.
It could impact your overall sales even if you waste only 11% of your time on non-sales tasks.
What Is Sales Productivity?
Sales productivity means amalgamating a salesperson’s efficiency (inputs) and effectiveness (outputs). Simply put, the aim is to optimize the results (sales) while minimizing the resources invested (time, effort, expenses) to attain those results.
Enhancing sales productivity demands a holistic strategy addressing inefficiencies in salespeople’s activities and overarching sales strategies. Adopting this dual-pronged approach provides your team with the most effective means of addressing issues and preventing obstacles that may hinder achieving your revenue goals.
How To Measure Sales Productivity
Measuring sales productivity may sound straightforward in theory, but in practice, it’s a topic that sparks considerable debate. There isn’t a one-size-fits-all formula for gauging sales productivity, yet these metrics are crucial. They often influence bonus structures, compensation plans, and decisions about layoffs during downturns. Moreover, a company’s value to investors is significantly impacted by its sales productivity.
As a sales manager, there are key metrics you can use to assess your sales force.
- Conversion Rates: Evaluate the number of leads your sales representatives bring in and how effectively they convert these prospects into loyal customers. A higher conversion rate, achieved promptly, indicates better productivity.
- Cost of the Sales Team: Consider the expenses associated with your sales team, which is usually the most significant cost for organizations. While a top-performing sales representative may be a quick closer, weighing the costs against the revenue generated is essential. If the profit isn’t substantial, the investment may not be worthwhile.
- Customer Acquisition Costs: Examine the expenses incurred to acquire a new customer. Specific customer segments may not be profitable, prompting a shift in focus to more lucrative markets for a higher return on investment.
Adapt your approach to sales productivity based on existing market conditions. A rapidly growing market with intense competition requires a different strategy than one where your company is an established leader. Adjustments might be needed to ensure profitability in a highly competitive market.
By closely monitoring these four key metrics, sales managers can gauge their team’s productivity. A reliable Customer Relationship Management (CRM) tool can aid in tracking metrics such as lead conversion. Collaborating with other departments, especially Finance, is crucial for understanding the revenue generated by the sales team versus its costs and determining the expenses associated with acquiring new customers in specific segments.
Staying informed about industry trends allows you to anticipate how market conditions may impact your bottom line. Careful tracking and collaboration are essential components of effective sales productivity measurement.
Boost Your Sales Productivity with these 8 Proven Research-Backed Strategies
The critical question for any business owner or manager is how to increase sales. Note that this question can also be altered to how to increase sales on Amazon or how to increase Etsy sales – this as the principles remain the same. Discover eight proven strategies backed by research to enhance your sales productivity:
Harness the Power of Your Marketing Team
In addressing the challenge of content search and utilization, an executive survey found that 84% of respondents identified this as a top productivity obstacle. High-quality content, recognized by 57% of salespeople as a critical sales driver, is crucial but often inaccessible.
Buyers today are more informed, demanding information about a company’s identity, differentiators, and customer testimonials. To facilitate this, sharing information on how the business operates, why customers choose it, and successful engagements through testimonials and case studies is imperative.
Three essential types of content:
- Email templates
- Marketing materials
- Conversation starters
These should always be readily available for sales teams to optimize their productivity.
Maintain an Updated CRM
Companies with well-implemented Customer Relationship Management (CRM) systems enjoy substantial benefits, including increased customer spending, retention, and conversion rates.
However, despite these advantages, a significant portion of collected information never enters the CRM. The accuracy and currency of CRM data are pivotal for effective sales tracking, reporting, and maintaining transparency.
When used correctly, CRMs can highlight high-potential opportunities, facilitate tracking the next steps for each prospect, keep the pipeline organized, and enable more accurate forecasting. To overcome the challenge of maintaining updated CRMs, outsourcing data entry to a sales assistant may be a strategic solution.
Batch Sales Activities
The American Psychological Association emphasizes that multitasking reduces productivity by up to 40%, as it takes 26 minutes to entirely focus on an activity after switching tasks. Sales activities should be batched to optimize focus, allowing sales professionals to work on similar tasks for 1-2 hours.
This approach enhances productivity by completing tasks more efficiently and effectively than randomly working on daily activities. Batching processes can include adding call notes and setting aside dedicated time daily to review and update records. It ensures accurate information capture, including action items and next steps, ultimately streamlining the sales process.
Become an Expert in Your Offering and Prospect Pain Points
A Value Selling Associates and Training Industry study revealed that less than a third of B2B buyers believe salespeople can effectively communicate how their offerings solve specific buyer pain points. Understanding prospects’ pain points is foundational, requiring sales professionals to understand what prospects aim to accomplish comprehensively.
This involves clarifying questions and providing specific examples of how the offering supports similar clients. False claims are detrimental; hence, being an expert in the pain points your product addresses accelerates deal closures. By addressing buyer questions comprehensively, sales professionals reduce the time prospects spend searching for answers independently.
Proactively Seek Referrals
Referrals, being four times more likely to close than web leads, are a potent strategy for enhancing sales productivity. Trust in referrals is high, with 84% of buyers preferring recommendations from others. Maintaining close contact with the customer success team, which is tuned to the happiest and most engaged clients, facilitates obtaining valuable referral recommendations.
As the referral pipeline grows, demonstrating appreciation to clients becomes vital. Personalized rewards, such as discounts, experiences, or upgrades, reinforce the value of the business relationship, motivating clients to continue providing referrals.
Follow Up Promptly
The time taken to follow up on a sales lead significantly impacts conversions. Customers tend to buy from the first business that responds to an inquiry, with conversions being 391% higher in the first minute after a request. However, after five minutes, conversion rates drop by 80%. Despite this, many companies take five or more days to respond.
Quick and persistent follow-up efforts are crucial, as engaging a lead takes seven to eight touches. Making quick follow-ups a priority enhances the likelihood of making it to the customer’s shortlist and ultimately closing the deal.
Sharpen Your Prospecting
Prospecting remains a significant challenge for over 40% of salespeople, with unproductive methods resulting in only 50% of contacts in the target market. Improving prospecting involves leveraging insights from understanding customers’ needs and pain points.
Analyzing the characteristics of the best customers, including industry engagement, company size, decision-maker titles, and specific pain points, provides a foundation for refining prospecting criteria. Tools like ZoomInfo or LinkedIn Sales Navigator can be utilized to search for contacts sharing these characteristics. Sales professionals can significantly enhance their prospecting efficiency by avoiding unqualified leads and focusing on genuine buyers.
Hire a Virtual Sales Assistant
Salespeople spend a limited portion of their time selling, allocating substantial hours to administrative tasks, email management, and CRM activities. According to Pace Productivity’s report, a typical salesperson’s time allocation includes 7.3 hours on admin and paperwork, 8.2 hours on email management, 6.6 hours on internal communication, and 2.2 hours on CRM management.
Virtual sales assistants emerge as a solution to address these non-sales tasks, allowing sales professionals to focus on strategic responsibilities. These assistants can support tasks such as:
- Keeping sales and marketing aligned
- Managing CRM updates
- Scheduling time batches
- Sending targeted materials to prospects
- Reaching out for referrals
- Conducting immediate and ongoing sales follow-ups.
The efficiency gained by outsourcing repeatable tasks leads to a substantial increase in overall sales productivity.
The Bottom Line to Increase Sales
Elevating sales productivity is achievable by strategically implementing the researched-backed methods discussed. By capitalizing on the synergy between sales and marketing, maintaining an updated CRM system, adopting batched sales activities, becoming an expert in both offerings and prospect pain points, proactively seeking referrals, promptly following up with leads, sharpening prospecting methods, and leveraging virtual sales assistants, businesses can create a comprehensive approach for success.
Embracing these strategies collectively empowers sales teams to navigate challenges effectively, enhance customer engagement, and drive increased revenue, ensuring sustained growth and success in the competitive marketplace.