The Myth of Sales Productivity
One Thing Is Not Like The Others
Salespeople are from a different gene pool. We’re just different, and not just because we tend towards loud Hawaiian shirts. Sales professionals are much more goal oriented than the average person and the best ones are never afraid to put in more than 40 hours a week to make a sale, win a new customer or beat their quota.
When measuring productivity – that is the output of a worker divided by the time required to achieve this output – the salesperson cannot be measured in the same way as an accountant, lawyer or pastry chef.
For example, if we invent some wonderful new device, which can shave off 10% of the time it takes a pastry chef to make a croissant, it’s reasonable to expect that the chef would produce an extra 10% more croissants… and the bakery’s sales might go up proportionately.
However, if we invent some tool (like an awesome sales automation CRM) that would save a sales guy or girl two hours a week– 5% of their supposed workweek – then you might think that they should be able to increase their sales by 10%. But that’s just not the case.
Freeing Up a Salesperson’s Time Does Not Increase Sales
Going back to the pastry chef example, let’s say we’ve invented a great tool to help sales professionals do faster the thing they hate the most: expense reports. (By the way, I love Expensify’s slogan “Expense reports that don’t suck!”) What does the typical sales guy do with the extra hour we’ve now saved him?
In my experience, here’s what happens: he takes a longer lunch, watches a football game, spends time with his family, friends, kids or perhaps golfs.
You see, the salesperson is already typically working as many hours as it takes to get the sale. Saving him time simply makes him more “productive” in the sense that he achieves the same output in fewer hours. In economic terms, sales professionals’ amount of time worked is elastic, meaning it is impacted by the very productivity we’re trying to increase.
Is Inside Sales An Exception?
The discussion above is mostly true for field salespeople. For our colleagues in inside sales, whose job is perhaps to make 60 calls per day, a time saving device that enabled them to increase their dials to 66 calls could yield 10% higher results.
But not always.
In a typical day, making sixty calls, a telephone sales rep might have 6 or 7 good conversations and hopefully generate two opportunities from these conversations.
Now increase all these numbers by 10% and you get 0.7 more conversations per rep, and 0.2 more opportunities. Hopefully over a large inside sales team, these numbers should average out to create more opportunities, but often don’t.
Why? For the same reason that every good sales manager knows that 4 deals with a 25% probability don’t equal one deal with a 100% probability.
Sales Effectiveness, Not Productivity Is the Answer
I still think you should invest in time saving technology for your sales team. It will increase their job satisfaction and perhaps even occasionally bring in an additional sale or two. However, I’ve seen large companies over and over again fail to justify expensive Salesforce automation projects because of their over reliance on increasing sales productivity.
In the research that we’ve been doing recently for our sales automation CRM, Spiro, we’ve heard over and over again from sales guys who say they need to be more effective in sales situations. Their focus isn’t necessarily on working less – it’s on winning more deals.
How do we help them to be more effective in sales situations?
On our discussions with awesome sales guys and sales managers the same answers come up time and time again. Over the next few weeks I’ll be writing a series of blogs describing what we’ve learned.
