Business as a highly competitive arena has the primary focus of increasing revenue. International companies are urged to gain any competitive advantage resulting in bigger market share and greater profit. The issue of increasing sales productivity has been extensively discussed in various forums. All helpful ideas –presented in list format in most cases,-numbers and statistics boil down to some main points to adapt in view of growing sales effectiveness and increasing profit.
Shelly Cellner`s helpful hints include developing the right skills and competencies and training sales representatives, automating sales work flow with, e.g. automated follow-up letters, aligning marketing and sales activities within a company, or networking and using social media to engage with present and prospective partners. She also emphasizes the importance of metrics in evaluating sales performance. Call rate, win rate, sales cycle length, pipeline conversion rates can all be converted to numbers and percentage rates.
The Fortune Group, a business development group, whose primary expertise is to grow sales leadership efectiveness, describes the main measurements based on which any sales job should be measured:
- Quantity – sales volume, dollar revenue generated, accounts acquired, etc
- Quality – customer relationship satisfaction, margin achieved
- Timeliness – results, reports, etc. on time
- Cost effectiveness – performance within agreed expense budgets
Firsly, performance measurement is an essential tool in a company’s effective operation, since it helps to define precisley the skills and competencies employees should have for specific jobs. Secondly, employees execute their tasks with more efficiency and precision, if they know they are going to be evaluated based on their performance. According the Fortune Group: „People do not respect what you expect, they respect what you inspect.”
It is really important to emphasize that performance measurment is not a tool of punishment for not effective performance, but it should be more of a tool for defining and communicating what is exactly expected of the sales employee in that position. Performance analysis includes not only the evaluation of one’s work, but also the clear definition of one’s responsibilities, tasks and activity performances which will be subject to evaluation.
However, cultural dynamics always play a significant role in managing people and organizations. Differences can be observed among different regional, national and multinational companies in implementing compensation and measuring strategies. Sales representatives from countries with different views on collectivism/individualism require different motivation. Sales representatives, coming from a cultures with a strong value of collectivism (e.g. japan), are less accepting of individual performance evaluation, they prefer measurements linked to the company. On the other hand, sales representatives from cultures with stronger sense of individal rights (USA, Germany) are more likely to accept sales metrics of team or individual performance.
It is vital to include sales effectiveness measurement in a business strategy as part of a quality assurance approach. Performance measurements not only help defining the expectations, the competencies and the particular tasks sales professionals should have and execute, but also provide the tools for employees to do their job as effectively as required. However, the right and effective tools of sales strategies, including incentive plans, performance measurement and evaluations, should be defined based on cultural dynamics, as well.
References Cernell, Shelly. How to improve sales productivity: 7 helpful hints. Accessed July 10, 2016. https://www.knowledgetree.com/blog/2015/05/how-to-improve-sales-productivity/ DiMisa, Joseph. Culture and Sales Compensation: The intersection. http://www.hr.com/en/topleaders/all_articles/culture-and-sales-compensation-the-intersection_i56jwc7m.html Kurlan, Dave. The 5 Ways You Should Be Measuring Sales Performance. 2014. Accessed July 11, 2016. https://www.salesforce.com/blog/2014/04/measuring-sales-performance-gp.html The Fortune Group. Managing and measuring sales performance to grow results. http://www.fortunegroup.com.au/sales-performance-measurement Phillipson, Cobhan. 6 Vital Sales Effectiveness Metrics To Drive Improvements In Your Company. 2016. http://www.docurated.com/all-things-productivity/6-vital-sales-effectiveness-metrics