I’ll have another: how to get 5-10% sales productivity gain each year

By: Alexander Group Chief Sales Executive Events, Sales Analytics, Sales Benchmarking, Sales Coverage, Sales Growth, Sales Leadership, Sales Productivity, Sales Talent, Sales Transformation

I’ll Have Another, the three-year-old colt with this namesake, did just that when it won the Preakness last Saturday after recently winning the Kentucky Derby. Not resting on its laurels, I’ll Have Another will next attempt a win at Belmont, a chance to earn the coveted Triple Crown. Every accomplished sales leader knows this drill. The minute they post a fantastic year, what does the CEO say?  “Thanks, I’ll have another!”  And the best sales leaders don’t rest on their laurels. They go directly about the business of finding another 5 to 10 percent (or more) in productivity gains every year. How do they do it?

When it comes to increasing sales productivity, it is easy to get lost in the noise of vendors hawking the latest sales productivity fads, books, tools, and training courses. But the key to continuous improvement is simple:  measure alignment – alignment between the customer, the business goals and the sales force. Measuring alignment reveals where the productivity gains can be found and where the sales leader should focus to find that 5-10%+ improvement every year.

There are three forms of alignment the sales leader must evaluate and achieve every year:

1. Align Strategy – First and foremost, an organization’s sales strategy must align with the market needs and business goals. Sales strategy answers the question: “are we going after the right customers with the right message?” Measuring alignment requires good market data on both existing and target customers. The more detailed the market data available, the richer the analysis you can do to identify micro-markets of opportunity. This may require primary research in the form of a customer survey and/or customer interviews, or purchasing data from Dun & Bradstreet, HMS, IMS or another data provider. Equipped with good customer analysis, the sales leader can evaluate how well the current sales strategy aligns to the needs and preferences of target customers. The Alexander Group recently helped a technology client shift from a product-focused sales strategy to a solution-based strategy by developing new sales messaging focused on the value of an integrated hardware, software and services solution.  The client’s investment in new value propositions and messaging yielded a 6% uplift in sales productivity.

2. Align Structure – The sales model structure – types of channels, sales force sizing and deployment of the various selling roles – also requires constant monitoring and adjusting. Sales structure answers the question “are we using the right number of the right resources, assigned to the right accounts (or territories)?” To measure alignment requires good data on sales pipeline, productivity, and sales costs by role and channel. One business services client had a legacy direct field sales model that had become too expensive. They needed to shift to a higher mix of online and inside sales resources to manage the growing amount of transactional sales while focusing a smaller number of field reps on the most strategic opportunities. This structural change created a 12% increase in sales productivity while keeping overall costs relatively neutral. We worked with another client in the medical products industry to deploy specialist resources and re-size territories, leading to an 8% increase in sales productivity.

3. Align Behavior – Assuming the strategy and structure are in good shape, the next component to bring into alignment is sales behavior. The question to answer is “are reps spending their time on the right customers, products, and activities, and can they get the job done?” This is measured by analyzing sales time, productivity, quota attainment, turnover, as well as good old fashioned “management by walking around”. Managing talent, quotas and compensation are the main levers for aligning behavior. The vast majority of sales organizations we work with make changes to quotas and compensation each year, and doing so correctly drives an average of 5% in productivity uplift.

Lots of horses have come in first place once.  But only eleven horses have won the coveted Triple Crown in more than 100 years of racing.  Can “I’ll Have Another” get it done? Time will tell. Similarly, many sales leaders have had a banner year.  But very few achieve the gains needed to win year after year. Great sales leaders measure alignment in order to improve sales productivity and win year after year. In some years, when the markets and products are not changing dramatically, the focus may be on managing and aligning sales behavior. In times of greater change, such as a new product launch, a new market pursuit, or a shifting competitive landscape, making gains in productivity requires aligning the sales strategy and structure.  In either case, when the head of sales makes the necessary alignment changes and accomplishes another banner year, they can enjoy hearing those cherished and hard earned words again from the CEO, the board, and all the shareholders … “thanks, I’ll have another!”

Visit the Alexander Group website to learn more.

Original author: Paul Vinogradov

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