“‘We want to improve sales effectiveness!” is often the starting point of many of my conversations with executives. “Terrific,” I respond, “What are you trying to achieve?”
There’s an awkward silence, “What do you mean—we want to improve sales effectiveness, how can you help me improve sales effectiveness?”
This is always a difficult start to a meeting, because the response is always the same, “It depends on what you are trying to achieve.” Unfortunately, too many people think there is a solution to sales effectiveness – possibly, because too many consultants say there is a solution to sales effectiveness (it’s usually their solution).
In reality, like many things in business, “improving sales effectiveness” can be achieved in a number of different ways, but some of these may be inappropriate for what you are trying to achieve. Some solutions may have a higher impact than another. Some may be a waste of time, resource, or money.
Improving sales effectiveness is really about defining, “what are you trying to achieve,” or “what problem are you trying to solve.”
Sales effectiveness can cover a very wide space:
- Do you have the right sales deployment and coverage models—are you reaching your targeted customers, are you supporting the way they want to buy—ecommerce, through partners/channels, telesales, direct, …….?
- Are you trying to acquire new customers? Are you trying to retain existing customers? Are you trying to grow your key accounts business?
- Do you have the right sales process in place? Is it current, is it competitive, are your people using it?
- Do you have the right sales people? Do you need hunters, farmers? What types of people are most effective in working with your customers?
- Do you have the right levels of activity? Are the people getting engaged in a sufficient number of opportunities?
- Do you have the right numbers of leads that support the activity levels you need?
- Are your win rates where they should be? Do you need to reduce sales cycle? Do you need to improve deal profitability?
- Are there things that are detracting sales people from engaging with customers—do they spend too much time on customer service calls, are they spending too much time in administrative work? Do they have the systems and tools necessary to support them in executing their jobs?
- Do they have the right skills? Do they have the right product, business, selling skills?
- Do they understand their jobs, do they understand the organization’s priorities, do they have a clear set of metrics that focus them on achieving the organization’s priorities? Do they have the incentives that reinforce the organization’s priorities?
- Do they……… The list of things that influence sales effectiveness can go on.
As I go through this explanation, sometimes a frustrated executive interrupts, “Well, how do I figure this out?” This is a great start—if we want to improve sales effectiveness, productivity, performance, or efficiency, we have to first understand what problem or problems we are trying to solve. Sometimes, the starting point is obvious—we have a customer retention problem, our win rates are much too low, our cost of selling is too high, our sales cycles are too long, our voluntary turnover is too high…..
These are great starting points, but we have to drill down. What is our current customer retention? Why are customer leaving or not buying again? Why…… Our goal is to drill down and understand what is causing the problem we are seeing. For example, putting in place a key account program, training sales people in relationship management, improving the frequency of targeted communications won’t improve customer retention if your product quality is terrible.
After you have identified the root problems, it’s important to prioritize the solutions—solving the most important problem first, then working on the next, and the next, and the….
For example, focusing on improving win rates may not give the boost you want, if sales activity levels are too low. Several years ago, I worked with an organization—they weren’t making their numbers, management thought win rates were too low. In part, they were correct, they could have been improved by about 10-15%–however, that would not have solved their problem of making the number — the gap would have just been smaller.
It turned out, after looking at their highest performers, comparing them to the rest of the organization, the highest performers did not have significantly higher win rates—their activity levels were a little more than twice that of the rest of the organization. They were simply finding and competing in many more opportunities.
In this case, the highest priority solution was to focus on activity levels. Without changing win rates at all, we focused on doubling activity—this provided a tremendous improvement in results. Once activity levels were at the rate needed, then we started looking at improving win rates to get a further increase in sales performance.
Every organization seeks to improve sales effectiveness, performance, productivity. Defining what you are trying to achieve, understanding the root problems, prioritizing the alternatives are critical to having an enduring impact.
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