Start Optimizing Sales Effectiveness in Your Organization by Investigating These 4 Primary Functions

November 2, 2016 - 5 minutes read
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 You have done your homework and decided that despite rapid changes in your market, your salespeople are still the your most critical and successful sales channel to captivate customers. Equipped with the knowledge that your salesforce is probably one of the more costly marketing channels, and, there is a heightened awareness that sales effectiveness is imperative to corporate success.

But how do you know measure the effectiveness of your sales force? And how do you separate any gaps or developmental opportunities in the sales force processes against your company’s overall capabilities?

First, let’s look at sales force measurement systems. Relying solely on revenue generation is a short term perspective and not suitable for sustainable results because revenue measurement is a lagging factor, and never predicts future success. To fully understand sales effectiveness, company leaders should also be measuring whether the company objectives vis a vis profit margins, product mix, cash flow, and other factors are met; should gage whether processes are effectual and ensure any gaps are closed; should consider individual sales reps’ call effectiveness and closing metrics; and should evaluate system improvements and their impact on sales effectiveness.  These are the high priority “should dos” that must be effectively in place before going to the next tier of actions.

Evaluate objectives systemically

Corporate strategy provides the map detailing target revenue, margins, budget items, product mix expectations and even the offerings, and other key goals.  Are key objectives well defined and communicated clearly at all levels? What processes enable success?  Are sales activities aligned to support objectives?  Are incentive plans, pricing, and commercial excellence initiatives all united toward the same objective?   Routinely reviewing the overall architecture of systems, processes and people assures the foundation for sales effectiveness is solidly in place.

Given the constantly shifting marketplace, sales organizations must evaluate the coverage and segmentation models, assess if the offerings are suitable to meet corporate objectives, are the selected channels working according to plan, have we identified high value activities and weeded out those with low value. Specifically, have sales activities been measured for results or are team members working on instincts.

Use both quantitative and qualitative measurements

Looking towards individual sales effectiveness relies on both quantitative and qualitative factors. The sales metrics may include close rates, % to quota, pipeline movement, new customer acquisition, time productivity analysis, total cycle time and so forth. Profiling a salesperson’s success by differentiating offerings and aligning them with customers compelling needs, while delivering unparalleled customer service, are measurable and desirable skill sets. Also critical to success is evaluating reps ability to identify and qualify stakeholders, and engagement methods to provide overall success. On the qualitative side, one way to determine the strength of the relationship is to conduct a customer verification/feedback exercise. This helps identify whether your firm is considered a valued partners (vs. commodity), and determine areas to build a stronger relationship, rank customer loyalty and satisfaction, and ensure current and future activities are aligned with desired outcomes.

Align all departments

Yet another critical category for sales effectiveness lies in having the right processes in place to support the sales team. Are marketing and sales aligned?  Is sales allowed (by training and authority) to become the business partner that today’s customers are demanding? Are all sales materials, samples, technical support staff available when needed and is customer service in sync? Is communication among all departments’ transparent and flow well? Do your company’s management routines support all of the above and more?  If any of these answers are no, then your sales force effectiveness is likely limited.

Measure capital expense impact

Lastly, market segments, sales channels, individual sales methodology will vary, but all influence capital investment (which typically involve significant costs). Measuring the impacts from your investments can be difficult, since you need to isolate out factors, but is truly the only way to determine the sales effectiveness per investment and help chart future efforts.

For any additional questions or to learn more about how Tefen approaches optimizing sales effectiveness please comment below or contact me at apelleg@tefen.com.

-By Adrienne Trangle-Pelleg, Managing Director Tefen USA

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