Increase Your Sales Productivity: How to Find & Eliminate Drains
“We need more sales people!” How many times have you heard that rallying cry? And still, we have yet to work in or meet a company that has an open checkbook when it comes to hiring more sales reps. And, if they can’t increase in manpower, businesses need to find other ways to increase productivity. Here’s how to do it.
The Reality: Every Business Would Benefit from Greater Productivity
Think this is trivial? Far from it. Even incremental increases in productivity can have a serious effect on your company’s bottom line.
Salesforce reports that a sales person spends only 36% of their time actually selling. I’ve been involved in evaluating sales team productivity at two Fortune 500 companies, and can confirm this is true. So, imagine the impact if each person upped their productivity, even just a bit.
Take a team of 10 sales reps, for example. Every 10% of productivity you can add to your sales team is the equivalent of adding one new rep.
Reducing or eliminating the “administrivia” that saps sales time increases productivity, materially impacts cost to serve, saves precious working capital, and exponentially improves employee, customer, and partner satisfaction.
What are Common Productivity Drains?
There are so many silos in an organization that it can, at times, feel as if you are competing with each other instead of aligning to beat your true competitors in the market.
Whether sales vs. marketing, product groups vs. the field, or direct vs. indirect, we’ve seen a lot of friction in organizations. The conflicts that arise out of these competitive relationships can become a significant drain on productivity.
Need some examples?
Think about when headquarters introduces a new forecasting process. Typically, the local and regional processes don’t go away, so the sales team is required to add a third weekly call to review their forecast.
Or, think about when the finance team introduces a new Travel and Expense self-service tool. True, the travel team just saved the company money since they no longer needed headcount to book travel. But that expense just shifted to the sales team.
This is exacerbated even further when you consider a travel expert spends all day on the system and can rapidly learn the tips and tricks to become an expert. Contrast that with a sales rep who only occasionally uses the system, never masters the intricacies, and usually gets their first few submissions rejected.
What about when HR moves to self service? Again, the company celebrates the fact that they saved HR headcount, but neglects to measure the productivity impact they’ve shifted to the sales team. In addition to the strain on the sales team, the company also moved the burden from a mid-range salaried employee to a high cost commissioned employee.
Wouldn’t the sales team’s time be better spent... selling?
These shifts of responsibility can also come when companies lay off people in tough economic times. Most businesses will protect their sales team, and target their layoffs at employees who aren’t quota-carrying. This has the same impact as above: someone still has to do these functions, but now it’s a highly compensated sales person.
Poor Enablement Strategies
To be sure, there are plenty of other productivity drains on a sales team. One notable factor is poor enablement.
When enablement is not done well, the sales team loses valuable selling time in creating their own narratives, collateral, playbooks, and messages. Another consequence could be the sales team recommending the wrong product or failing to properly qualify an opportunity, wasting valuable company resources in righting the situation.
Another common productivity challenge is geographical. This occurs when members of the sales team live so far away from their assigned account or territory, they need to take a plane to see them.
This has a triple impact. First, the rep loses time simply during travel. Second, there is the cost of an airplane ride, ground transportation, hotel, and food every time they visit their account. And finally, because they are not able to be physically at their account on a regular basis, the relationship with the customer or partner is sub-optimized.
Find Out What’s Impacting Your Sales Team’s Productivity
We faced productivity hurdles at two companies I’ve worked with in the past. Both times, we had a lot of hypotheses about the factors keeping our reps in the office instead of meeting with partners and customers, but we knew hard data would be required in order to take action.
Each time, we took two-fact based approaches to measuring productivity:
Ask the team to log their time spent on various tasks.
Shadow reps for a few days.
Both approaches enabled us to graphically see where the biggest pain points were.
Discovery Method #1: Survey the Team
At the first company, the sales team was underperforming and we had to figure out why.
We started by asking the team how they spent their time in broad categories: facetime with partners or customers, requesting and managing demo units, attending forecasting calls, attending training sessions, securing special pricing, managing contracts, dealing with miscellaneous administrative tasks, etc. We did this via a simple survey.
We then categorized the findings into three buckets:
Time spent with a partner or customer.
Time spent doing anything that needs to happen on behalf of a partner or customer - for example securing a demo unit, requesting an SE, special pricing, contracts, forecast calls, etc. While these aren’t customer or partner facing, these actions are required to get to a sale.
Time spent on non-value added activity, like internal reports, expense reimbursements, etc.
We were surprised to find the most time was being spent on demo units and travel and expense.
So, we immediately put together a tiger team for each of these, with members from operations, the product group, and sales. The first thing these teams did was dive in to get more detail.
We found two specific pain points for the demo units: one on the process, and one on the status.
The various product teams all used a different process and systems because each device had its own legacy procedures and warehouses that were never consolidated. Additionally, reps weren’t informed if a model was out of stock or if the customer ever got the unit they requested.
The tiger team also monetized the impact, which enabled them to make stronger recommendations. They added up all of the time spent by the sales team and multiplied that by the average hourly wage.
In addition to the hard dollars spent on the convoluted processes, there was also the opportunity cost - every hour spent chasing down a demo product is an hour not spent selling.
They recommended a short-term fix of having one of the demo product managers be the interface for the sales team until a longer term system fix could be put in place. He placed the orders, and recommended comparable products if the requested one was out of stock.
This way, the sales team only had to work with one person who completely took the burden off of sales. This resulted in significant time savings for the sales reps, customers got their demo units faster, and satisfaction improved since everyone was kept informed.
A second tiger team dove into the Travel and Expense (T&E) policy and system. The process to request travel and to get reimbursed for travel expenses was not intuitive to use, and most requests had to be submitted multiple times before they were finally approved.
So instead of simply complaining, the tiger team dove in and analyzed the situation. They started by monetizing the time spent requesting travel and submitting expenses, and time spent re-submitting since the majority were rejected the first time.
Just as with the demo process, the tiger team added up all of the time spent by the sales team and multiplied that by the average hourly wage to calculate the hard costs as well as lost opportunity costs with the existing system and process. They put together a business case to able to present to the finance team to request a better alternative.
What made this particular case even more compelling was the fact we were only one sales team out of many. When they took this data and multiplied it by the larger sales force, the figures were even more significant.
Discovery Method #2: Shadow the Team
We used a different tactic at the second company, and gained insight into how the sales team spent their time by shadowing them.
We got great results. In fact, after we did this in the U.S. and shared our findings, the company adopted our strategy in other regions. They also expanded the concept from sales rep productivity and used it to measure partner productivity around a specific process.
We selected a cross section of reps and let them know we would be shadowing them for three days. Why so long? While any person can most likely create a single jam-packed day full of customer or partner meetings, it’s pretty hard to do that for three days in a row.
We used the same three categories of face-to-face selling time, non-partner or customer facing time but still necessary to move a deal forward, and non value-added time to do our analysis.
After three days, we found three main drains on productivity:
Contracts were an especially challenging issue in that it was also a productivity issue for our partners.
Our Operations leader tackled this issue. She worked with the legal team to assess the areas in the contract that were commonly redlined. They modified the language and created a menu of a few options that reflected what the partners were asking for. After simplifying the contract, they also made the decision to not allow any redlines for deals under a certain dollar amount.
The special pricing issue was especially frustrating in that there was no guaranteed turnaround time for pricing requests. The process was inconsistent, and some requests required multiple levels of approval, which meant that it could take weeks if approving managers were on the road. There was no proactive communication, so a rep would have to call around daily for an update on the status of their request.
The delay and lack of a published process was not only costing time and opportunity costs, it was also frustrating the sales reps, their partners, and their customers. And if response time was too long, deals were lost to competitors.
We put together a task force that recommended a new, one-page request form and suggested various levels of approval based on deal size, along with guaranteed turnaround times.
Pipeline management was another time sink. The reps were in at least three pipeline calls each week. Each call was run by a different leader, and each used a different system which meant not only did the rep have to repeat the same information three times, they also had to enter it into three different systems.
As soon as we heard this, we moved to a single call per week, and only accepted and reviewed data that was in the CRM system. If it wasn’t in the system, it wasn’t real. This forced a simple and single process and strong discipline.
Anyone at headquarters or in the product teams who wanted to get the forecast who wasn’t invited to the call or who couldn’t make that week’s call could go into the CRM system and access whatever information they wanted.
Building a Business Case For Change
The most effective way to drive change in an organization is by presenting a business case. This is the same philosophy when trying to change an existing process.
Start by describing the process and its impact, then you strengthen your narrative by monetizing the impact. In both of the scenarios described earlier, we gained executive support by tracking hours that could be saved in each of these processes and translating them into both real costs and opportunity costs.
In the hypothetical example below, the tiger team looked at a process that used to take on average 5 hours per quarter, per rep. The new process they recommended would only take a sales rep 1 hour, saving 4 hours per rep per quarter.
While that might not sound like a lot, it adds up when you multiply that by the number of reps and consider opportunity costs.
It’s powerful to demonstrate the potential productivity gain by improving the internal processes that need to be fixed. The entire discussion changes from “The sales reps don’t like this process.” to “Not only will we address a customer and employee pain point, but we will save $120K and sell $4M more if we change this process as follows.”
Start by identifying your sales team’s biggest pain points. You’ll most likely have a laundry list of areas that need to be fixed. Pick a few you have the ability to change that will make a significant impact. A fast win will increase enthusiasm and engender confidence that you’re serious about change.
Then, engage stakeholders in creating the solution. You’ll get real-life information and validation on the “before” process and the “after” solution. They’ll also get a chance to be a part of a visible project, and will be thrilled to be a change agent in developing new processes and solutions that will benefit their peers.
As you tackle productivity strains one by one, your sales productivity will improve and the team’s employee satisfaction will skyrocket. When you improve processes that also touch your partners and customers, their satisfaction scores will also soar.
The key is to monetize the costs of the productivity leakages in order to get executive support to drive the change.