Sales Management e-newsletter

Sales Ineffectiveness?
Heather Baldwin
Sales, more than any other operational function in a company, has the ability to make the difference between a ho-hum financial result and a great one. So you’d think most organizations would bend over backward to ensure their sales team was operating at peak efficiency. Unfortunately, that’s not the case. According to Proudfoot Consulting’s "2005 Productivity Report," an annual international study of company-level productivity, salespeople spend almost 80%of their time not selling – and they are unaware of it. Proudfoot used a two-stage methodology in their evaluation of sales effectiveness. In Stage One it asked salespeople to give a realistic estimate of the time spent in six activity categories. It then asked salespeople to declare how much time they would like to spend in each category. Finally, researchers observed how much time salespeople actually devoted to each category. In Stage Two researchers observed firsthand how effective reps were, scoring them in eight key areas of competency. Here’s what they found.

Stage One: Use of Time. The salespeople spent the following percentages of their time in each activity:
  • Active selling – 11%
  • Prospecting – 10%
  • Traveling – 21%
  • Administration – 27%
  • Problem solving – 14%
  • Nonvalue added time –17%
As in previous years, the standout figure continues to be the small amount of time salespeople spend actively selling to or prospecting for customers. Last year it was 20%; this year it was 21%, a paltry 1% improvement. Another notable figure is the amount of time salespeople spend on administrative tasks – almost one-third of their day! When interviewed, reps said the ideal level would be around half of that. Finally, the amount of unproductive time – 17% for nonvalue added time – remained the same in 2005 as in 2004. Also as in the last year’s study, reps were unaware that so much of their time was unproductive. Their perception, said the researchers, was that just 4% of their time was unproductive.

"Despite some minor variances in the division of work, one overall fact has barely changed: salespeople are spending four-fifths of available time doing something other than seeking sales," the report concludes. "Significantly, people believed they spent almost 50% more time selling than we recorded. Salespeople acknowledge that almost half of all available time ought to be devoted to the active pursuit of orders."

Stage Two: Personal Effectiveness. With only 21% of available time spent actively selling or prospecting, Proudfoot researchers wondered how effectively that time was being used. The answer is not very effectively at all. In making this determination researchers used a simple scale ranking system as they observed the sales reps, rating them in eight key sales skills before, during and after each face-to-face or telephone call. Here are the eight observed competencies and the percentage of reps who rated poor, improvement needed and good:
  • Preparing –28% (poor), 25% (improvement needed), 47% (good)
  • Positioning – 33% (poor), 33% (improvement needed), 34% (good)
  • Discovering – 15% (poor), 34% (improvement needed), 51% (good)
  • Building – 33% (poor), 33% (improvement needed), 34% (good)
  • Presenting – 48% (poor), 26% (improvement needed), 26% (good)
  • Securing – 37% (poor); 38% (improvement needed); 25% (good)
  • Concluding – 46% (poor), 29% (improvement needed), 25% (good)
  • Debriefing – 60% (poor), 25% (improvement needed), 15% (good)
The greatest deficiency – debriefing – has considerable impact, say the researchers. They define debriefing as ensuring all commitments are met, issues are identified, reviewed and resolved and output is recorded for the next meeting. Poor performance in this area means commitments made to customers are broken, issues discussed are unresolved and order details are poorly communicated internally, resulting in errors.

So what’s the lesson for sales managers? Proudfoot Consulting says those responsible for sales teams need to review the administrative tasks demanded of their people and the processes used to manage them. Any extra time freed up, they point out, "would be wisely invested in key skills training and reinforced with active, on-the-job coaching."

The "2005 Productivity Report" is based on nearly 11,000 hours of observation and analysis of 2,614 detailed studies from 100 client projects in medium to large firms in 12 countries. The findings then were compared to the results of an opinion poll of 816 business executives in 11 countries. For a copy of the report, visit www.proudfootconsulting.com.
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