Sales Productivity

The go-to-market plan is complete, sales roles have been identified and the right talent is on board.  You feel good you have the right coverage to reach your prospects and customers. Now what?  What should your reps be doing every hour, every day and every month?  What is your expectation of them?  What are the underlying business plan assumptions that add up to revenue? 

Daily productivity is a team effort involving both reps and sales leadership.  My philosophy on this is the whole company needs to believe it's in sales.  That includes tech and finance not just the more obvious corporate functions such as marketing and customer service. How much output each rep will realize can be facilitated by sales optimization.  Tech can provide systems (telephony, CRM, automated reporting, etc.) to make workflow more efficient minimizing time to perform administrative tasks.  Finance can provide pricing and terms simplification making proposals simpler to prepare.  Finance also needs to work with sales leadership to put a compensation plan on the table that is simple to administer and simple to understand.  The comp plan must drive behavior that will yield productivity assumptions drawn up in the business plan.  The comp plan must incorporate assumed quotas, new business vs. renewals and maintain the cost of sales balance between acquisition of new customers and retention (renewals) of existing customers.  The comp plan goes a long way in what level of productivity you can expect from sales reps.

Organizationally, something as simple as too many meetings or too many email communications (can you imagine coming to work in the morning and seeing 15 emails from, ahem, someone in charge at your company who can't seem to sleep at 3 AM) can be keeping your reps off the phones.  Your reps should not be fodder for email barrages from well meaning folks around the company.  Remember, your reps are an expensive and highly valued resource.  Treat them as such. Most communications can be filtered and delivered at the appropriate time by sales leadership.  The key is to keep your reps focused on telling their story to as many prospects as possible and simplify the method of communicating with prospects on follow ups and sales process. 

Productivity is also influenced by the front line sales manager who must have the reporting capability to track relevant statistics related to productivity.  Sales reps must also have visibility into their own efforts on a daily basis.  Productivity metrics include many of the obvious stats but also lesser known activities.  Again, when it comes to productivity, visibility is paramount.  You must see your target and have a measure against where you are relative to your target.  Plans need to be developed to close the gap to your target.  These plans need to be shaped by the rep with help from the sales manager.  People need to OWN their plans and believe in them.  If you let your people take a "whatever will be will be" approach ("we'll do our best"), then you'll get a "where the dust settles" result which is usually not good enough.  You can't run a business like this.  You'll be average at best, you will not know how to win.  Your organization will flounder with questions surrounding how high quotas are and "how will we ever reach these goals?" Tracking data provides benchmarks that provide the basis for productivity assumptions.  In newer companies and where new revenue streams are being pursued pioneering efforts and entrepreneurial spirit must provide the faith to march on.  Your reps and leadership team should be willing to chart new ground in an effort to reach unprecedented goals.  The rewards for reaching those goals should be great and motivating.  This is where strong leadership comes in.  It's the ability to pull people up from the shirt collar and encourage them and elevate their self esteem and motivate them to go through brick walls for you and for themselves.  This is difference making leadership.

Examples of productivity metrics begin with call plans.  How many dials and how much talk time should reps expect to have made each day?  How many appointments and face calls need to be scheduled and held?  How many demos delivered?  Contrary to what many believe, field reps spend more time on the phone (upwards of 70%) then on actual face to face visits.  Appointments need to be made first.  Cold canvassing applies to markets where a "dropping in" approach can work such as when selling to store fronts and the owner is behind the counter or cash register.  For the most part, this topic is focusing on more traditional B2B sales efforts where "dropping in" unannounced is less effective.

Call plans take into consideration percentages. Example, make 65 dials per day, reach 18 decision makers, 10 will be interested enough to listen, 5 will request a follow up meeting, 2 will go to proposal stage 1 will buy.  As you track your stats, companywide trends will become evident and business plans will incorporate these trends into assumptions.  As you add sales "heads' you can then expect based on a reasonable ramp time of 4-6 months, your rep if she's making "X" calls per day at the typical average order size of "Y" will then likely produce "Z" in sales revenue.  The success formula is basic math: productivity times transactions times average order size.  If you want your output to increase you need to raise any one of those 3 levers, if not all 3.  Raising call volume may require sales optimization in workflow and tools.  Raising average order size may involve training but also pricing and packaging to migrate customers up to bigger packages.

Tracking actual productivity will alert the sales manager that reduced productivity will likely lead to missing the sales goal.  Simple right?  Not quite!  Making the wrong types of calls doesn't help anyone.  It doesn't help to make 100 calls a day and leave 1 minute messages all day long.  It also doesn't help to spend 3 hours of talk time to only a few verbiose prospects.  There needs to be a balance between sufficient reach and quality talk time.  One important metric which gets overlooked but I think is very tale-telling is percent of customers and assigned prospects reached within a window of time (example 90 days).  If a rep is only reaching 20% of the assigned customer base over 90 days what can be done to get that number up?  I guarantee you the more customers reached the higher your retention rates will be and average order size will creep up and sales revenue will increase not to mention improved customer satisfaction scores.  The same is true with new business efforts to reach a prospect base.  Again, visibility into these metrics and action plans to drive the numbers allows your sales leadership more leverage to take action before it's too late.  Partnering with your reps where data is helping reps succeed and earn more commissions is the win win you are seeking.  Data is not meant to be punitive but meant to be used to gain clarity into opportunities.

In addition to the metrics mentioned above, a list of productivity data to track and capture can include a variety of pipeline metrics by revenue stream, lead conversion and product mix (for companies with multiple lines).

Productivity is about day to day execution and visibility into the details.  These are the business drivers that get your fingers into the dirt and are at the true heart of what will make your reps and your business succeed.   The 4th of the 4 keys, Field Readiness is next...Happy Thanksgiving everyone!

Availability - Market Coverage

Where do you leak sales revenue?  The answer is almost always found in how well you're covering your sales markets.  Let's break down sales market...are we boiling the ocean or are we targeting a sweet spot?  Both can work well depending on the value proposition.  If you don't have product with universal needs (most companies fit this) then we go for the sweet spot.  I've been in both scenareos and can tell you boiling the ocean is extremely challenging and requires significant segmentation but is also lots of fun especially when sizing up the opportunity.  Sweet spot keeps you focused and resources and cost of sales are easier to predict.  Either way, lack of visibility into specific revenue streams will cripple your revenue generation efforts. 

A go-to-market model should empower the company to reach specific customer segments.  Strategy will also be shaped by budget.  You'll find capacity planning the number of sales reps needed can be calculated by setting your sights on about 60% of your potential customer base.  This 60% is likely to yield 80-90% of the revenue potential in the market.  There is a law of diminishing returns applied to capacity planning for a higher percentage of the customer base.  Where that top 60% customer base resides can be determined by geo or by industry vertical depending on your value proposition.  Another important consideration is where you can demonstrate product strength is where you will likely win more often.  These considerations then begin to point us in the right direction how many reps we need, what type of sales territories we create and what the overall sales org will look like. 

Will there be segments of customer demographics by customer size? Will there be specialized industry verticals such as Healthcare and Government sales?  How many revenue streams within each segment can you identify?  Revenue streams can take many forms.  Examples of revenue streams: renewals, upsells, new business, winning back lost accounts, product mix when your company offers multiple lines, etc.  Once these are in place, reaching the customer base and building plans to maximize each revenue stream becomes one of the sales leaders main concerns. 

Visibility through key reporting mechanisms and productivity metrics will identify opportunity.  Example, sales rep turnover will undoubtedly impact sales in the respective territory.  How long does it take to get a replacement rep?  Process to facilitate hiring, onboarding and training will minimize open selling days and boost sales.  Sick days and vacations add to open selling days.  Managing this process will reduce revenue leakage.  Open selling days needs to be part of forecasting methodology and front line sales managers need to be trained on minimizing open selling days.

Visibility into customer and prospect calls covering the assigned territory over a window of time (example, 90 days) will give you percent of customers contacted.  Managing to these numbers and comparing data at the rep level, as well as, other regions and across the board will set benchmarks and provide areas of opportunity to squeeze out more revenue.  Other less obvious revenue thieves include keeping reps away from the phone by requiring too many meetings, training sessions, administrative work and inefficient workflow.

Rep role segmentation to align reps with the right customers enhances conversion ratios.  Depending on the size and complexity of your organization you may need telemarketing reps, an inbound team, hunters (acquisition) and farmers (retention), associate reps for smaller accounts and key account reps for the largest accounts.  Keep your best reps with your best customers.  Minimize customer re-assignments.  The probability of losing customer loyalty increases significantly when reps are reassigned. Customer segmentation by opportunity will also provide better rep alignment and market coverage.  Rank your customers "A" "B" "C".  Plan call frequency, messaging, account plans, rep quota expectations and compensation targets around these rankings to get lazer focus on each segment and maximize sales for each stream. 

Lastly, create a strategic account migration plan to move the acquired prospect from lead generation to sales, then evolve the customer from acquistion to retention and subsequently upsell. Sales and financial data will provide much of the intelligence necessary to make tough management decisions on migration strategy. Collaboration with your front line sales team and Finance and Marketing Depts. will also provide valuable insights and feedback to make these decisions with.  This disciplined approach to covering your market based on visibility and metrics will lead to jumps in sales revenue unlike any you imagined.

I'll cover the 3rd of the 4 keys next...Productivity....