What do sales analytics, sales utilization and Legos have in common? (Part 1 of 3)

By: Alexander Group Sales Analytics
legos

Photo Credit Peter Dutton Flickr.com

Sales analytics.  The need for sales analytics has never been greater. The typical B2B company spends roughly 20 cents per dollar of revenue on the sales force. That equates to over half a million per year per quota carrying rep. It’s no wonder that companies place great importance on understanding the return on sales investments. To this end, companies are increasing their investment in sales analytics. A recent leadership poll by the Alexander Group revealed 91 percent of those surveyed rate sales analytics as important (24 percent) or very important (67 percent). Four out of five said they have a sales analytics initiative underway now. Yet exactly zero leaders surveyed rated themselves as “very effective” at sales analytics. In fact, 39 percent rated their current level of effectiveness as either low or very low.

Sales asset utilization.  Why is there such strong interest in sales analytics and such poor levels of effectiveness? Certainly IT prowess, legacy systems, lack of data, company culture and any of the other typical IT project inhibitors could apply. But it also has to do with understanding sales utilization. Sales utilization, or the rate of utility you are achieving from your sales assets, is a fairly simple concept. But in practice, it can be quite complex. A holistic and actionable view of sales asset utilization needs to consider five key utilization drivers:

1.    Investment:  Are you making the right investments in your sales assets?
2.    Alignment:  Are sales reps focused on the right priorities?
3.    Execution:  Is the sales team delivering what’s been asked of them?
4.    Perception:  Do sales reps believe they have the skills and tools to be successful?
5.    Results:  Is the organization meeting and exceeding its objectives?

LEGO® Bricks and Master Builders.  For the uninitiated, Legos are a toy that has been around since the 1950s where “builders” use a wide range of shapes, sizes and colored pieces to create different objects. Depending on how the user (builder) puts the various pieces together, you can end up with very different creations/outcomes. Similarly, sales organizations are comprised of various roles, programs, tools, processes and individuals; the combination of which creates the underpinnings of sales utilization. Legos have only increased in popularity since the recent release of “The LEGO® Movie,” where an ordinary, everyday Lego construction worker – Emmet – is able to help save the Lego world. In the course of his journey, Emmet meets the Master Builders, popular Lego characters who possess extraordinary Lego building skills. Emmet is able to save the Lego world in part because he convinces the Master Builders to focus their unique skills using a “set of instructions” and work together, to prevent “President Business” from using “K-r-a-G-l-e” (i.e., Krazy® Glue) to end the world.

Sales Master Builders.  If only building a sales force was as easy as following a set of Lego instructions. Even if a set of sales building instructions was available, it would need to be unique to the company’s situation and needs. Like the Lego Millennium Falcon and X1 Ninja Charger kits, a different combination of pieces and processes is needed to achieve each builder’s desired results. While a step-by-step multi-colored booklet with pictures might not be realistic, there are certainly frameworks and guidelines to help Sales Master Builders in their quest. And that brings us back to the concept of sales asset utilization. Part of being an effective Sales Master Builder is being able to identify and correct under-utilization.

Under-utilization.  Many sales organizations are faced with the under-utilization of their sales assets. Legacy processes, shifting customer and market needs, new products and personnel changes are among the possible culprits. The impact of sales under-utilization can be significant and can manifest itself through a number of symptoms, including:

  • Low engaged selling time
  • High sales rep turnover
  • Slow new hire ramp times
  • Over- / under-deployed pre-sales and technical sales resources
  • Long sales cycles, unclear process
  • Insufficient focus on new products/solutions or new customers

Consider a 100-person sales force, with each seller having a $2MM quota ($200MM total revenue). The metrics in Figure 1 are from Alexander Group’s sales benchmarking database. The data suggest that taken together, these four factors alone can negatively impact productivity as much as 5 – 25 percent.

orig figure1-clean

Sales Master Builders and Improved Utilization.  The need to improve sales utilization typically starts with a sales leader asking himself three key questions:

  • Do I have the right strategy and plan?
  • How well am I executing against my plan?
  • How do we stay ahead of the competition?

And that’s where applying the right sales analytics can make a significant difference. It might not be as simple as a set of Lego instructions, but having the right approach, right data and right context, coupled with the right experience, can help Sales Master Builders assess their current “build” and determine whether configuration changes (e.g., swapping out pieces, putting them together in different ways) will drive improvements in sales utilization.

In parts two and three of this blog post series, we’ll look at the metrics behind the utilization framework. We’ll also introduce the Sales Effectiveness Index as a way to baseline your sales force and benchmark other organizations. To learn more about Sales Analytics or to share your own Lego story, please contact us.

Read Part 2 or Part 3 of this blog series.

Original author: Paul Vinogradov

TAGS: , ,

Alexander Group

In conjunction with our consulting work and research, Alexander Group produces a specialized portfolio of leadership events that help the world’s leading organizations drive revenue growth.


Attendees gain access to expert thought leadership and unprecedented networking opportunities. 80% of Alexander Group’s leadership series attendees are in C-level through VP roles in Revenue, Sales & Marketing, Operations and Customer Success.


Learn more about our Leadership Series.



HAVE A QUESTION ABOUT THIS POST OR WANT TO REACH OUT TO THE AUTHOR?  CONTACT US »