It’s About Time. It’s 2014. Time is precious. The passage of another year reminds us how quickly time flies. Perhaps the greatest asset you have as a sales leader is the cumulative time available to your sales force. That time is best spent by your salespeople preparing for and conducting customer meetings. As a sales leader you plan carefully to ensure your team has enough sales capacity, and enough selling time to make the number. Sales Operations works to help ensure your reps save time on necessary non-selling activities to give more time back for engaged selling. As long as the need for a sales person exists, there will be tremendous value placed on their time. And without enough time, your chances of success are bleak. What can you do in 2014 to give your sales force the time it needs?
The Problem. Time analysis has been around for decades. Yet only one in five sales leaders uses it to measure and improve the performance of their sales teams. Without proper measurement and analysis, issues and opportunities to improve sales time go overlooked. As a result, many companies perform well below best practice, impeding the sales leader’s ability to get optimal utilization from their sales force and meet or exceed their target.
An Illustration. Figure 1 below shows two charts. The chart on the left summarizes the Engaged Selling Time (EST) by role for a client sales force. EST refers to high-value motions performed by reps including opportunity qualification, needs assessment, solution presentation, persuasion, and closing. They are the core motions sales incumbents perform that drive topline results. The chart on the right summarizes time spent on non-selling activities including administrative tasks, customer service and support.
Figure 1: Time Analysis for a ~$1B Technology Company
The variance to benchmark may seem slight, but consider the following – improving EST from 20% to 25%, an increase of just 5 percentage points, can produce a 12.5% increase in productivity. This assumes only half of the time “gained back” is repurposed into EST (see figure 2 below).
The Solution. The Alexander Group has worked with hundreds of companies to improve sales performance, and we frequently use sales time analysis as one of several diagnostic tools. While not an exhaustive list, here is what we believe are the top seven factors impacting EST. Get them right and watch the sales capacity of your organization grow.
Figure 2: Impact from Increasing EST
Consider a sales rep whose EST = 20%. In other words, 20% of his or her time is spent on the high-value, account development and customer-facing activities that lead to closed deals. Assume the rep is also currently producing $2.0M per year in sales. Increasing EST from 20% to 25% can lead to an additional 12.5% in sales which equals $2.3M in sales.
Assumes 225 working days per year and 8 working hours per day
Now imagine if this increase in sales time is replicated for all front-line sales reps. The impact on the company’s topline would be significant! But, as always, sales management must balance the cost associated with increasing EST as it typically requires investment in job redesign, lower priced support resources and / or better technology and tools. There are always ways to increase EST in ways where marginal benefit exceeds marginal cost. You just have to find them!
Get Moving. While EST is not the “silver bullet” that always leads to growth, it is a crucial measuring stick that should be part of every sales leader’s dashboard. Cross-industry EST averages 25%, but best practice is northward of 30%. How does your sales organization stack up? Are your sales incumbents losing valuable selling time? How can your organization free up sales reps’ time to drive more sales without increasing headcount? AGI can help answer these questions.
To learn more, please visit our Sales Analytics Practice.