Stop Wasting Your Sales Team's Time: 5 Productivity Killers

With so many tasks and expectations, sales reps have little time for actual selling. In fact, the average salesperson spends less than 45 percent of their time selling, according to research by Gartner. In some cases, reps devote 90 percent of the workweek to travel, preparation and administrative tasks, and only 10 percent on actual face time with customers and prospects. Download and discover 5 productivity killers that you can fix right now!

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STOP WASTING YOUR SALES TEAM’S TIME: 5 PRODUCTIVITY KILLERS E-BOOK Unlock Your Data • Unleash Your Sales 3CONTENTS Introduction: Providing Sales Reps With More Selling Time .................... Understanding Sales Productivity ............................................................. How To Measure Sales Productivity .......................................................... 5 Attributes Of Effective Sales Leaders .................................................... 5 Productivity Killers ................................................................................. Using Technology To Drive Productivity ................................................... Benefits Of Greater Sales Productivity ..................................................... 4 5 6 8 9 14 15 4When you consider the demands and expectations placed on salespeople today, it gives you a new appreciation for your top performers. A successful sales rep is more than just a product expert; the rep is an expert on their customers’ businesses, industry trends and the competition. For each of your customers, a rep calls on the organization and works to develop relationships both deep and wide, helping your company become a trusted partner instead of being merely a transactional supplier. Sales reps build business cases, help negotiate contracts, manage responses to opportunities, handle customer escalations, provide constant updates and reporting, and act as a conduit to customers for the marketing and executive teams. While juggling all of these tasks, your salespeople are also expected to increase volume numbers by product line and food category and deliver an increase over last year’s revenue and margin numbers. All of these tasks and expectations leave little time for actual selling. In fact, the average salesperson spends less than 45 percent of their time selling, according to research by Gartner. In some cases, reps devote 90 percent of the workweek to travel, preparation and administrative tasks, and only 10 percent on actual face time with customers and prospects. INTRODUCTION: PROVIDING SALES REPS WITH MORE SELLING TIME SUMMARY With so many tasks and expectations, sales reps have little time for actual selling. 5To clarify how you define and measure sales activity, you first need to distinguish between two terms that are often misconstrued: efficiency and effectiveness. If you tell a food manufacturer that their sales reps only spend 10 percent of their time selling the company’s products and services, it sounds like the reps aren’t doing their job. But statistics like these are often misleading in terms of what’s actually happening and could result in inappropriate investments attempting to increase productivity. That’s why it’s important to understand and define what constitutes selling activity. From one perspective, your sales reps spend most of their time on tasks that aren’t considered selling time. But the work involved in the administrative tasks, presentation creation, travel, meetings and email is critical to moving opportunities forward and making a single hour of “face time” truly successful. In the military, the relationship between support and combat is often called the “tooth-to-tail ratio.” During World War II, the United States armed forces had a ratio of four support soldiers to one infantry soldier, but that has evolved to a 7:1 ratio, according to military historian John McGrath. Similarly, today’s sales teams need to invest an increasing amount of preparation time (think “support soldiers”) in order to have a single hour of infantry time with a prospect or a customer. To clarify how you define and measure sales activity, you first need to distinguish between two terms that are often misconstrued: efficiency and effectiveness. 1 Efficiency: When you improve efficiency, you’re reducing the time and effort it takes to perform a task, making it easier and faster. It allows a person to complete more tasks in the same amount of time, improving output and productivity. Gartner defines efficiency as “the input-to-output ratio, with a focus on attaining maximum output with minimum resources.” 2 Effectiveness: In laypersons’ terms, effectiveness describes your ability to achieve a desired result. It starts with an end goal, and considers “all the variables that could change or can be changed to make it better,” according to Gartner. For sales effectiveness, the end goal would be to generate revenue, using the right skills, strategy and tools to win at each stage in the sales cycle columns, total cells, and line/subline hierarchies. UNDERSTANDING SALES PRODUCTIVITY 6Both efficiency and effectiveness are important for a successful sales organization, but they’re not the same. A sales team could be highly efficient yet ineffective, and vice versa. Many sales organizations are effective despite having the odds against them in terms of inefficient processes. As author and management specialist Peter Drucker said, “There’s nothing so useless as doing efficiently that which should not be done at all.” That’s a great reminder to keep effectiveness in mind when you’re working on making your sales organization more productive. To improve your sales productivity, you need to understand it (distinguishing between effectiveness and efficiency) and measure sales activity. That means choosing appropriate metrics and collecting the right data to report on sales productivity. There are essentially seven different areas to consider in assessing your sales productivity: 1 Income Statement: Revenue and margin are top- level, basic measures of sales productivity. For more refinement, divide your gross margin dollars by your field selling costs to see what it is costing for the sales team to deliver each margin dollar. The percentage that indicates good sales productivity varies depending on your industry and sales coverage model (direct, indirect, e-commerce). If you use partners, consider sales-out revenue in addition to sales in. Combine it with weeks of inventory at partners to get general health metrics on your indirect channel. Note that it can be a challenge to get timely sales-out information from partners. Start with the top few partners to develop a cost-effective method for acquiring this data. 2 Sales Load: Sales load measures your revenue per rep. This metric tells you how well your quota is deployed and how well your reps are doing. 3 Sales Force Cost: Here, you’re looking at the cost of your sales force (including sales managers) as a percent of revenue. The goal with this metric is to understand your cost to deliver the revenue that’s coming in. 4 Compensation Plans: The total number of sales compensation plans is often a good indicator of efficiency. Having many different plans means you’re trying to fit the comp plans to specific situations, rather than optimizing your sales environment, and that’s a problem. When sales reps have to spend lots of time making sure reporting and their compensation is accurate, that’s time they’re not spending on selling. 5 Pipeline Management: Here, you’re combining five different measurements to understand sales trends and momentum: pipeline size, shape and velocity, plus win rates and close rates. Together, these give you a sense of how the sales organization is moving opportunities along, providing early indicators as to whether or not the team is going to meet quota now and in the future. HOW TO MEASURE SALES PRODUCTIVITY SUMMARY When measuring sales productivity, there are seven different levels to consider. 76 Sales Performance: The goal with this metric is to identify your high and low performers. You could define the low threshold at 50 to 60 percent of quota, for example, and define high threshold at 95 to 100 percent of quota. Depending on the point in the quota period, this metric provides a quick indicator of who may need help and who may be poised to blow through their target. 7 Sales Training: Here, take the number of salespeople who have received training and divide it by the number targeted for training. Since it’s possible to deliver poor training to everyone, you want to be sure to hold the instruction and teaching organization accountable as well by including quality metrics such as rating by the trainees. Collecting the data for these metrics requires involvement from several groups to ensure a sustainable and accurate reporting method. It is easy to underestimate the amount of energy needed to define these metrics so they accurately reflect your business and then find an efficient way to deliver the data in time to be useful. Here’s where your sales operations team is extremely valuable. Their expertise can be leveraged to work across the functional areas to define the metrics, develop the reporting and deliver the information. It is easy to underestimate the amount of energy needed to define these metrics so they accurately reflect your business and then find an efficient way to deliver the data in time to be useful. It is easy to underestimate the amount of energy needed to define these metrics so they accurately reflect your business and then find an efficient way to deliver the data in time to be useful. 8Often, excellent sales reps are promoted to sales management. Although the new role happens overnight, the training and required sales management skills do not. In a function that is continuously in the spotlight, sales managers need training and support to develop management and leadership skills. And, management and leadership skills are different. To start building those leadership skills, here are five attributes typical of effective sales leaders that should be cultivated: 1 Clarity: If you want people to do a good job, give them a good job to do. Being clear is the most important way to motivate reps and drive productivity. Sales reps do best when you provide a clear, actionable goal with clear responsibilities and target lists. Give them an account list, explain what customers they should call and list the sales activities you expect them to complete. 2 Consistency: When the market landscape is changing, sales reps may become uncertain and unfocused as to what they’re doing. That’s why it’s important to be consistent in how you provide clarity. To keep reps focused, make sure you provide consistency in terms of their territory, compensation, goals, responsibilities and training for specific skills and product knowledge. 3 Data-Driven: When it comes to coaching and guidance, stay away from subjective personal measures. Using quantifiable goals and data-driven coaching is more useful and motivating for sales reps. 4 Timeliness: Make sure you constantly provide feedback to sales reps in a timely manner. When the feedback is close to real-time, reps are better able to relate it to the action that they took. 5 Team-Focused: Create an environment where the whole sales team is in it together. Sales managers don’t need to be best buddies with the reps; they need to create a positive team environment while remaining tough yet fair. If you’ve demonstrated that you have their backs, they won’t interpret a tough call you make as throwing them under the bus. You’re removing obstacles and clearing the way for them to be successful. 5 ATTRIBUTES OF EFFECTIVE SALES LEADERS 9When your sales team consistently delivers the target revenue and margins, your entire organization benefits — from the individual reps to the shareholders. Strong sales productivity metrics, as discussed above, keep everyone focused on the target and ensure data is being used to drive decision making resulting in better decisions that fuel an upward spiral of business success. And since competitive salespeople want to work for successful companies, a reputation for productivity and success gives your sales organization access to the best talent. Those benefits are beyond the reach of many organizations, however, due to major productivity killers hidden in their midst. Could one of these five problems be holding your company back? 1 Making The Sales Team Hunt Their Own Food: When the sales team has to drum up their own demand in addition to capturing it, reps waste time preparing for and calling on unqualified leads, which is inefficient and ineffective. Salespeople won’t be successful, resulting in high turnover and unmet revenue and margin commitments. This massive productivity killer arises when the marketing team isn’t effective at creating demand. Instead of taking a lead that’s been nurtured by the marketing team, the sales reps have to do all the legwork of finding information, creating materials and then making calls to try to engage prospects. This problem often goes undiagnosed and emerges in different ways, depending on the sales organization. Danger signs include an incoming call volume that’s below targets and an increasing outbound call volume with declining or negligible close rates. Also watch for salespeople sending their own email campaigns (that should be marketing’s job) and field sales CRM entries with many opportunities stagnating while only a few move slowly through the pipeline. Solutions: Solving this problem requires coordination and accountability between marketing, sales and sales operations (especially if sales operations is involved in measuring or distributing leads). All of these departments should be part of the conversation, with a common definition of what constitutes a qualified lead and clear metrics intertwined between sales and marketing. Often, the marketing department isn’t effective at creating demand because the metrics it is held accountable for miss the target. Hold marketing responsible for developing and deploying demand generation programs that deliver relevant, screened leads that use the sales team’s energy efficiently. 5 PRODUCTIVITY KILLERS SUMMARY A reputation for productivity gives your sales organization access to the best talent. 10 The key is bringing these departments together in a proactive way. If you’re reactionary, your support organizations don’t have time to prepare, which hurts your sales productivity. Have a marketing calendar to avoid surprises and hold sales responsible for acting on those leads, with SLA metrics that measure responsiveness to leads and sales pipeline velocity. Marketing and sales also need the ability to hold each other accountable for providing each with specific items. For example, marketing should commit to delivering a certain number of calls each day or qualified, profiled leads each month. This enables the sales organization to hire the right number of reps (the number varies by industry, but a starting point is looking for approximately 30 calls per day per sales rep). In turn, marketing holds sales accountable for the call drop rate, lead close rate and average order size for each sale. 2 Inadequate Tools For Managing A Complex Portfolio: For your salespeople to cover a complex product offering, such as a large product portfolio segmented by different product categories and multiple quality tiers within each category, their sales productivity depends in par on having the right tools to manage this complexity in an efficient, effective manner. Otherwise, the cost to your organization could be catastrophic, with the inability to quickly provide product and pricing information to customers, resulting in lost sales. There are lots of potential problems with managing a vast product portfolio. When it takes your reps a long time to create quotes, they can’t respond fast enough and may be losing many opportunities. And when the process is difficult due to complexity, you’re likely to see a high order error rate on the back end. In other words, whatever’s actually coming through is often wrong. One indication of this problem is when a sales organization is using specialized reps that only cover a portion of the portfolio (like National Chain Accounts or Distributor Buying Groups). This leads to high field selling costs relative to the sales revenue. Another symptom of this productivity killer is that your reps are selling a fairly narrow selection of the available products, with low bundling rates of multiple categories and or products. Even when your company is making good products, your sales team won’t be able to sell them if they don’t know about them. You end up scrambling to dump these products on the market somewhere, resulting in unnecessary resource strain, inventory obsolescence and disposal costs for your products. Solutions: The product management team is key to solving this problem, since they’re likely to play a large role in creating and managing a centralized product catalog. This team should also develop proactive training programs and “sweet spot” bundle opportunities for the sales organization that align with product management and product marketing. Your sales partners or channel organizations should also be involved, since they also need the right processes, Marketing and sales need the ability to hold each other accountable for providing each with specific items. 11 capabilities and tools to effectively sell your solutions. Of course, your supply chain needs to support this distribution method, coordinating across operations, manufacturing and logistics teams. If you want to extend to new channels such as e-commerce, you’ll also want IT involved to ensure the right infrastructure for performance, scalability, security and support. In addition, support the tools and capabilities with a hands-on, interactive style for product training to help salespeople quickly internalize information or access it for future reference. Skip the PowerPoint in favor of hands-on activities. Use Configure, Price, Quote (CPQ) technology with guided selling and crossselling capabilities to make it easier for the sales team to create an offer that is aligned with the specific requirements of each customer. Creating this type of platform proved helpful for a global company that has an ongoing acquisition strategy. In order to efficiently sell more product types and bundled, programs, as well as up-sell and cross-sell, the company wanted to enable a single sales rep to sell across a broader — and constantly expanding — product portfolio. Having a centralized product catalog with guided selling — along with effective hands-on training — allows the company to arm their individual reps with the tools and information 3 Manual Processes That Slow Quote Approval: Inefficient, manual quoting and approval processes are major productivity killers, making it difficult for your sales team to turn quotes around quickly and close the sale. Signs of this problem include quote approvals that take several days or even weeks, especially with unique deals or bid/no bid requests. When these approvals aren’t happening at the speed of the marketplace, you lose sales opportunities to faster, more agile competitors. Solutions: Improving sales productivity in this situation requires definition of clear business rules driven into tools that enable automation of the processes. Using CPQ (configure, price quote) along with price optimization and guidance enables automated workflow approvals. Using business rules based on the pricing guidance, sales reps can make decisions that follow established business rules allowing for automated approvals. Decisions not within business rule thresholds require management review and approval. This approach means reps get the guidance and speed they need and management gets the peace of mind that business rules are being met. These tools have a powerful impact when used correctly. Food manufacturing giant BRF - Brasil Foods used pricing optimization to reduce its price execution cycle by 70% and increased their gross margin by 2%. Use Configure, Price, Quote (CPQ) technology with guided selling and crossselling capabilities to make it easier for the sales team to create an offer that is aligned with the specific requirements of each customer. 12 4 Generic Annual Performance Reviews: At many organizations, sales reps only receive performance feedback as part of the company’s standard review process. This approach to sales performance wastes a lot of time. Without timely, relevant, fact-based coaching that helps them boost their skills, it takes far longer to identify and address ways that sales reps could improve. In fact, it can enable less- than-optimal tactics and practices to persist if there isn’t a culture of constant improvement that quickly identifies and implements coaching actions. Sales reps tend to be competitive and prefer working in a winning environment. Sales management wants and needs to build a world-class sales team. Taking a generic approach to reviews and feedback with the sales team can perpetuate an environment that limits the speed of productivity improvements. Solutions: There are several ways to use performance management to improve your sales productivity. Even if your reps have annual performance reviews based on the standard HR process, consider augmenting them with regular, real-time guidance and coaching that draws on sales analytics data. For example, you could use data to compare each rep to their peers in terms of adherence to pricing guidance, product penetration and product mix. Alternately, you could build a coaching session around comparing the pricing and product mix the rep sold to a customer against other customers in the same market segment, identifying opportunities and strategies for improvement. For the best results, use a mix of public and private performance feedback. Setting competitive metrics that are public and quantifiable provides transparency, allows everyone to participate and creates a foundation for realtime feedback. Private conversations are an opportunity to coach individual reps on specific fact- based actions that would improve their performance in pricing negotiations and presenting new opportunities to customers. It’s also a good idea to ensure regular joint calls with reps to see how they behave in front of customers, get examples and insights on soft skills, and ensure they are making overall progress based on the coaching. A good example of this solution comes from a distribution company that specializes in the food service market. The company had been using a manual pricing system that, over time, had become cumbersome and unworkable for the distributor, its sales force and its customers. In addition, competitive market forces in the midst of a reccession were creating pressure to lower margins. To achieve these goals, the company needed a way to unify and simplify its sales process and use real-time feedback to improve sales rep performance. This company simplified its sales process by deploying an automated pricing strategy solution that would be much easier to understand and would help improve margins and customer relationship at the same time. At the time of deployment the food distribution company worked with its sales reps to help them with change management and supporting the new solution-oriented sales model. As a result, the sales team has a process that’s aligned across sales channels, reducing proposal creation time Computing giant Hewlett- Packard used pricing guidance to reduce its quote turnaround time by 25 percent, with automated approvals for 80 percent of its quotes. 13 and improving time to market for new products. It also provides them full visibility into each customer’s “buying patterns,” cross-sell opportunities, as well as insights during the negotiation process to manage discounts and improve margins. The ongoing, proactive coaching uses feedback to drive new levels of sales performance. If you’re ready to overhaul your sales team’s performance, it takes a village. Of course, sales leadership needs to drive the change but then quickly enlist the participation of HR, learning and development, and sales ops to drive implementation. Having a coordinated, sustained approach to sales performance management will help ensure it becomes a core competence of your business, or at least the sales team, and removes this potential productivity killer. 5 Sales Reps Not Holding Themselves Accountable: While the previous four productivity killers have focused on the sales organization as a whole, this level is different. Often, the sales reps are also responsible for their own poor productivity. Sales is a skill set that needs to be developed. Building a world-class sales team starts with a group that brings a varying set of experience levels and techniques. Some of those experiences and techniques may require retooling and refinement. To ensure long-term success, all sales reps need to develop a disciplined approach to managing their selling time and consistently follow the team’s sales methodology for calls, opportunity management, and all activities for each stage of the sales and customer buying cycles. If your company doesn’t have a clear sales methodology, you can’t hold salespeople accountable. Indications that you’re not holding each rep accountable include low customer satisfaction scores and high turnover in the sales organization. When you leave the sales team to its own devices, reps tends to sell the products they know, using tactics that they find most comfortable. As a result, many salespeople don’t hit their plan or activity level targets, and fail to deliver on their revenues, margin and volume commitments. Alternately, you may have sales reps that deliver the numbers, but do it in a way that has a negative impact on productivity across other areas of your product portfolio and organization. Solutions: Your sales methodology needs to be supported by appropriate onboarding, training and coaching. To hold individual reps accountable, make sure that you establish clear expectations and train them on exactly what you need them to do. Next, give reps tools and support that reinforce desired behaviors over time, and provide a mechanism for starting a conversation when they don’t understand something or are struggling with the sales process. Your sales management also needs training to provide effective oversight and have those one-on-one conversations. Too often, sales managers aren’t prepared to help sales reps with inefficient and unproductive work habits. Reps that don’t find their own solutions get shown the door, which is often a waste of good talent. Sales managers need the ability to engage at the right level and help a sales rep change their behavior and get back on course, or guide that person toward a role better suited to their talents. Setting competitive metrics that are public and quantifiable provides transparency, allows everyone to participate and creates a foundation for real-time feedback. 14 If your organization faces one of these five productivity killers, the solution is likely to require investment in technology. Lots of companies are developing solutions for improving sales productivity, but organizations need to be mindful of the end-state they want before investing in technology. You don’t have to take on a two-year project to get this done, but you need an end target so you know exactly what you’re trying to accomplish. Piecemeal solutions aren’t useful to sales organizations anymore — you have to take a holistic, platform perspective to drive sales effectiveness and efficiency. Many companies are starting with CRM. It is a great technology to get the sales team organized and better managing opportunities. Yet, research is showing the vast majority of companies are not getting revenue or win rate increases from CRM. And almost no one is even talking about margin improvement. Don’t stop at CRM. Extend your investment in CRM with the addition of CPQ that includes pricing optimization and guidance. Now, the sales team has a complete set of tools and capabilities that will help them identify and successfully pursue and deliver incremental revenue and margin. In addition, mobile technology isn’t new, but it’s increasingly important for sales organizations. When you provide sales reps with tools that enable them to accomplish more at the point of the actual sales conversation, they’re going to be more productive and effective. In a retail environment like car sales, for example, salesmen know that their chances of selling a car drop dramatically if you leave the lot. They want to help you make a decision on the lot, because their chance of closing the deal is much higher. That concept also applies in the food manufacturing space. When you’re working with busy procurement departments, R&D professionals or sales & marketing professionals, make it easier for them to make quick decisions, using mobile technology and sales automation. Sales organizations should definitely consider and evaluate mobile technologies that help reps be more responsive and productive. Finally, some new training technologies also show great potential for increasing sales productivity. “Gamification” of training tools makes it easier and more fun to internalize information, and is certainly relevant to the generation entering the workforce now. Automated coaching system also show promise as a way to improve reps’ business acumen, behavior, competence and specific deal and opportunity management. USING TECHNOLOGY TO DRIVE PRODUCTIVITY SUMMARY CRM alone isn’t enough to drive sales effectiveness and efficiency. Be sure to also use CPQ that includes pricing optimization and guidance. 15 STOP WASTING YOUR SALES TEAM’S TIME: 5 PRODUCTIVITY KILLERS BENEFITS OF GREATER SALES PRODUCTIVITY When you overcome these five sales productivity killers, you unlock significant benefits for your organization. Some of these benefits are quantifiable, when you see how your sales productivity metrics drive increased revenue and margins while also creating a winning environment and upward spiral of business success. A more efficient, effective sales process means lowered costs and increased incremental profitability. That business success fuels investment, supporting continued success and business growth. That success spiral is intoxicating, however, and management needs to maintain focus and motivation. To stay ahead, you must continue to innovate and not become complacent with current success. Sales productivity also offers benefits that are more difficult to quantify. These include a positive brand value and reputation within your industry and among the public. People want to work for a successful company with a positive brand image; having that tends to lower employee turnover and gives your sales organization access to the best talent available. Ready to learn more about using CPQ and pricing guidance to improve your sales process? Visit the PROS Food Industries page http://www.pros.com/industries/ manufacturing/food-service/ Piecemeal solutions aren’t useful to sales organizations anymore — you have to take a holistic, platform perspective to drive sales effectiveness and efficiency. About PROS PROS.com Copyright © 2014, PROS Inc. All rights reserved. This document is provided for information purposes only and the contents hereof are subject to change without notice. This document is not warranted to be error -free, nor subject to any other warranties or conditions, whether expressed orally or implied in law, including implied warranties and conditions of merchantability or fitness for a particular purpose. We specifically disclaim any liability with respect to this document and no contractual obligations are formed either directly or indirectly by this document. This document may not be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without our prior written permission. PROS Holdings, Inc. (NYSE: PRO) is a big data software company that helps customers outperform in their markets by using big data to sell more effectively. We apply years of data science experience to unlock buying patterns and preferences within transaction data to reveal which opportunities are most likely to close, which offers are most likely to sell and which prices are most likely to win. PROS offers cloud solutions to optimize sales, pricing, quoting, rebates and revenue management across more than 40 industries. PROS has completed over 800 implementations of its solutions in more than 55 countries. The PROS has completed over 800 implementations of its solutions in more than 55 countries. The PROS team comprises approximately 1,000 professionals around the world. To learn more, visit pros.com.
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