Sales Success vs Sales Productivity - Are They the Same?

The sales force is super busy, they're meeting their numbers, and the company reaches a ten-year high. Is this a successful sales force? Maybe yes - but maybe no. Here's another one: the sales person gets the biggest commission check every month, and has more deals on her record than anyone else in the team. Is she a successful sales person? Maybe yes - but maybe no.

Here's what we didn't tell you about the first anecdote. That busy sales force? They're working 90 hour weeks, taking lots of sick time, and creating more headaches for management. Worse, they sign up customers who disappear after six months. That sales superstar? She treats co-workers and support staff so badly they won't work with her if they can avoid it, but she just can't do enough for her customers. By now, the customers love her but distrust your company and will probably follow her to the competition if she leaves. Worse yet, these customers' deals are not as profitable as they could be.

When the only metrics are deals and dollars, then "success" can obscure things. We forgive the rogue superstar, or avoid disciplining her. We overlook the low conversion ratios, missed work days, and overtime hours of the high producing team. Why? We're afraid to disrupt the flow of income. But what about profit, retention, efficiency?

Success and productivity are not the same. PRODUCTIVE sales teams bring in lots of profitable business and maintain long-term high-value relationships with customers at less cost and with better teamwork in-house. A sales team can be successful without being productive, if you're only measuring dollars.

Productivity doesn't just happen. It requires serious attention to the way you manage and deploy the sales effort in your company. Use the following checklist to assess your team's sales productivity:

Tip #1: Customer Retention is High. The sales force concentrates on its best customers. Customer defection is measured and kept at a low. The team works hard to optimize these customers and keep them on the "A" list.

Productivity Insight: It costs more to bring in new customers than it does to keep old ones. If you must constantly replace your customer base, productivity is low.

Tip #2: New Accounts Resemble the Ideal Customer Profile. The sales force chooses new accounts based on the profile of past successful customers. Most new-account acquisition time is devoted to prospects that resemble your best customers. The team has a documented method of comparing new prospects to the Ideal Customer.

Productivity Insight: Your best customers produce maximum repeat business, profit, testimonials, and sources of referral, at the lowest cost to you. Why seek accounts that don't?

Tip #3: New-Account Acquisition is Consistent. The sales force is tasked to bring in new accounts and does so consistently. Sales management encourages predictability and consistency over the big hit.

Productivity Insight: Gaps in the new-account pipeline today mean a funding crisis tomorrow. Productive sales organizations balance their effort between new-account acquisition and current customer retention.

Tip #4: Cost of Sales is Controlled or Reduced Year After Year. You regularly assess both the hard and soft costs of sales, and one of your objectives is to lower costs while increasing income. Sales people avoid time-wasting activities.

Productivity Insight: More business at MORE cost hurts your business and reputation. More business at the SAME OR LOWER cost means a better ability to compete and a more nimble opportunity to adapt to changing market conditions.

Tip #5: Sales People Understand Opportunity Cost. Your team is careful to invest their time and energy on better qualified candidates and productive activities. They know the value of their time, and constantly seek better Return on Effort. They want to earn more and work less, not the other way around.

Productivity Insight: Sales time is the single most costly, precious and irreplaceable asset you have. Get the most out of it.

Tip #6: Results Matter More Than Activity. Performance metrics are based on results and outcomes, not activity. Performance metrics include leading as well as trailing indicators. Managers guide the sales team to improve their performance ratios, not simply work more hours and send out more quotes.

Productivity Insight: Because what you manage is what you get, it's easy to produce lots of sales activity. But results - profit, revenue, new accounts, and long-term relationships - are more valuable than activity. Be aware of the difference.

Tip #7: Sales Meetings Focus on Best Practices and Efficiency. Sales teams analyze ways to improve productivity, share best practices, identify obstacles to performance, and consider the potential impact of market conditions. They don't spend all their time recounting anecdotes.

Productivity Insight: Save the war stories for after hours. Sales meetings are a great place to figure out how to improve productivity and get more value out of less time.

Measure the level of productivity of your sales organization with our on-line productivity assessment tool, the BSG "Leaky Bucket" Productivity Assessment. Visit http://www.bristolstrategygroup.com/assessment to see how your team rates.

Ellen Bristol is the founder and driving force behind Bristol Strategy Group, the Miami-based sales-force productivity company, and developer of Selling the SMART Way®, BSG's flagship solution for productive sales teams. BSG's latest offering is the SMART Way® Alert System, web-hosted toolkit for managing sales-force productivity. Visit the BSG website http://www.bristolstrategygroup.com