Sales productivity remains a never ending and elusive goal for most organizations. The pressure to “sell more for less” is constant. The velocity of business is increasing. Revenue teams struggle to adapt to rapidly changing customers, competitors, and markets. Most organizations struggle tap into the full power of technology and advanced analytics as a force multiplier. Revenue opportunities still leak into air gaps in the customer cycle that exist between marketing, sales and customer success.
To rise to this challenge, sales managers need to build new skills and acumen in change leadership, data-driven selling and sales planning to get the most out of their revenue teams, according to Bob Kelly, the Chairman and Founder of the Sales Management Association.
By the numbers, the status quo of sales productivity does not look particularly good. For example, time spent with customers (34% of rep time) and quota attainment (42% of all reps) – have not moved materially over the last few decades.
But the challenge of improving sales productivity is more complex and nuanced than those numbers suggest, according to Bob Kelly. As Founder of the Sales Management Association, Kelly has had a front row seat on the unique challenges of managing seller performance for over a decade. This gives him a rich perspective on why sales performance improvement poses a unique set of challenges. Rather than a discrete problem to fix, he views sales productivity as a never ending balancing act.
“Why does it look like we are not getting better and more productive? – Well first of all, it’s not easy to manage sales productivity,” says Kelly. “Second, most executives tend to look at sales productivity as a simple math problem, and it’s not,” he continues. “Doing it right involves constantly balancing some fundamental tradeoffs. For example, you can invest in skills and talent to get your team smarter or spend that energy simplifying the seller workflow so more of your existing sellers can adopt a new selling approach without investing in special skills. You can invest in change management and commercial transformation, or in incremental process improvements that reduce the amount of behavior change required to adopt.
Kelly encourages business leaders to focus on six keys to driving sales productivity in a modern, ever changing, commercial model.
- Improve your ability to keep pace with the market;
- Make the focus of sales technology improving and simplifying the seller experience;
- Improve the timeliness and effectiveness of your sales planning;
- Focus on incremental process improvements;
- Develop management acumen in change leadership;
- Build a more professional sales management team.
1 – Improve your ability to keep pace with the market. Kelly emphasizes the need make agility, speed and adaptability core sales management competencies for speed and agility to be effective in today’s marketplace as revenue teams struggle to adapt to rapidly changing customer, competitor and markets. “Sellers need speed, adaptability and situational awareness to be effective in a modern selling system because the pace of that change has gotten much faster over the past 10 to 15 years,” says Kelly. “This has created instability in sales organizations as they struggle to find effective and scalable ways to respond to new dynamics in the marketplace. “Adaptability is a core skill because any conversation about sales productivity has to acknowledge that sales organizations have always been change intensive,” says Kelly. “Sellers have always had to become accustomed to adapting to new things. These can range from changing the channels they use to engage customer to changing the way they bill for our products to a subscription-based for example.”
2 – Push for higher levels of adoption of sales tools. Few organizations have been able to tap into the full power of technology and advanced analytics as a force multiplier. Most organizations have twenty or more tools in addition to CRM that are supposed to help their revenue teams to save time, sell value, and produce more. Unfortunately, this proliferation of tools has made most sales technology “stacks” so complex they are creating more friction and work for reps instead of eliminating work and simplifying their jobs. This makes for a bad seller experience, which hurts adoption. “The best tool in the world won’t make an impact if most of your sales organization isn’t using it,” says Kelly. He encourages leaders to change the way they buy, configure and deploy technology in sales. “The common denominator among the small percentage (20 to 30%) of companies that are using CRM and other enabling technology investments to outperform their peers is that the primary objective of their implementations is to create value for salespeople,” says Kelly. “If you ask a salesperson in these companies why are you using that sales tool? – their response will be biased towards this tool is really valuable to me rather than because my manager makes me use it. Instead of prioritizing total cost of ownership and best-of-breed features, we should be emphasizing user adoption and the user experience when we select and deploy tools.”
3 – Improve the timeliness and effectiveness of your sales planning. When it comes to sales productivity, it pays off to measure twice and cut once. Sales planning is closely tied to sales productivity,” says Kelly. “One reason is a lot of what salespeople do every day, including the clients and opportunities they pursue, is not really adding value. The trick is to plan better and figure out what actions and opportunities create value and allocate time and effort and training to those things. The timing and amount of planning can improve sales productivity significantly according to recent research by the SMA. “Speed matters,” says Kelly. “Late planning is a drag on sales effectiveness. Conversely early planners are twice as likely to be effective. Effective organizations do more planning too.” According to the research, spending extra effort on goal setting, sales force design, and the allocation of resources, budgets and efforts against opportunity have the biggest impact on seller performance. Unfortunately, ‘too little too late is the norm’ in planning. Most organizations cannot get the plan deployed in time for the start of the next sales period. That’s because only about a third (36%) of sales executives and performance professionals say they are effective at territory design and most (79%) of them feel they have inadequate off-cycle and mid-year territory evaluation practices. This means there is real room for improvement.
4 – Focus on incremental process improvement to minimize change management. “When it comes to investing in sales technology, managers tend to bias towards investing in “best in class” sophisticated tools that required change management,” says Chris Hummel, co-author of the book Revenue Operations. “Leaders tend to go all in on commercial transformation. Or else they kick the can down the road and do nothing – hoping to squeeze out another sales quarter using spreadsheet based planning, ‘gut feel’ targeting, and manual processes. “In practice, the notion of making incremental process improvements makes practical sense because there is no 80/20 rule for sales productivity,” says Kelly. “Rather, most salespeople are being ‘nibbled to death by ducks’ when it comes to how they deploy their time. Prioritizing leads, logging calls in CRM, conducting competitive and customer research, and call planning and content prep are all activities that individually take less than ten percent of a salespersons time. But collectively these activities add up to the majority of the day-to-day selling workflow.”
5 – Develop management acumen in change leadership. “In our research we asked companies how much change they anticipated and the magnitude of that change looking out over the next three years,” reports Kelly. “Around 90% of companies expected substantial change in their organizations. That was remarkable in my experience. What’s also significant to me is these changes are becoming much more strategic. You might even call this degree of change existential. What this means is that sales leaders now need to focus on what I call change leadership versus change management. The change going on goes beyond simply implementing a program and having people understand and adopt it. Now it’s about changing hearts and minds of the revenue team. A change leader has to help people understand why they have to adapt their behaviors, even their belief systems about what it means to be a salesperson in this organization. Establishing a common purpose is important because it gives people in disparate sales, development, specialist, and customer success role the incentives to work together to grow revenue and customer lifetime value.
6 – Build a strong sales management team. Another area that impacts sales productivity is the skills and acumen of sales managers is lacking. Sales managers are the backbone of the commercial model. But the majority of growth initiatives focus either on “top down” go-to-market strategy and “bottom up” field enablement, engagement and development investments. Often, this leaves sales managers as the “weakest link” in the commercial model that impedes the execution of commercial strategies aimed at generating consistent and scalable growth, according to Michael Smith of Blue Ridge Partners. Bob Kelly reinforces this perspective. “Part of the problem is there are very few academic or professional programs to develop a strong cadre of sales managers,” says Kelly. “There are thousands of schools that teach marketing or finance as disciplines. But there are very few with a focused sales management curriculum. We’ve left sales management to fend for themselves, or rely on their own firms’ weak in-house training, or on the commercial offerings of training companies We’ve basically learned sales management on the street. It’s up to sales organizations to build out playbooks, skill development, and manager training to make that management layer effective because they are essential to executing any commercial strategy with front line sellers.”
“That’s why we’re excited to be hosting Sales Force Productivity Conference at the University of Houston. Their Sales Excellence Institute (at UH’s C.T. Bauer College of Business) is among the largest academic sales centers in the US. Like most of these centers they are teaching professional selling skills, mostly to undergraduate business students. This is creating a ton of value for students who want to start their careers in sales, and for the companies who are hiring students from these programs. But Houston’s program stands alone in its focus on educating managers, not just sellers. They have a new Master of Science degree in sales management, and this is a real innovation. And they confer PhDs to a few marketing academics each year who concentrate in sales. This is huge, since there are only a few dozen academics in the world doing consequential work in sales. This puts University of Houston at the headwaters of a new way to think about sales management – one that rationalizes the sales management layer and gives it the same rigorous academic footing as marketing or operations.