Efficiency creates an output with smaller amount of effort or resource and is necessary condition for productivity but it's not enough on its own. Productivity itself is only improved if output increases too. It's an easy concept to illustrate in manufacturing. But what about other outputs like sales?

Few areas of business improvement have attracted more investment in the past decade than the quest for efficiency in sales. This has been expressed through a huge investment in customer relationship management systems. Around the world companies have spent £34.6 billion on the stuff and I’ve yet to meet a client who thinks they’re using it well or fully. So, what contribution is it making to sales productivity?

Improving sales productivity

Those of us who are charged with developing new business or with managing those people, especially if we are doing so with the help of a CRM system, ascribe a likelihood represented as a percentage to the chance of winning each opportunity. Each incremental rise in the likelihood of that sale towards an eventual 100% is an output, a product of the sales process. The tricky part is deciding when, whether and by how much to increase the percentage.

Setting clear objectives

That depends on having clear objectives and being clearly objective. Anyone can come back from a new business meeting where they’ve enjoyed the coffee, swapped opinions about the game at Twickenham on Saturday, chatted about the business environment and agreed to write a proposal, under the mistaken impression that this constitutes progress. And on the back of that illusory progress, they’ll update their CRM sales forecast probability.

But what, actually, has changed? Who has taken responsibility to do the next piece of work? Was it the seller exclusively or the buyer? What resources of time or money has the buyer committed to the process? How easy is it for the buyer to use deflection or misdirection to give the seller some homework which for the unscrupulous can take the form of free consultancy?

Effective sales objectives

The buyers input of resources, time or money is the the difference between an Advance or a Continuation. Our research shows that the failing to draw that distinction is one of the biggest barriers to sales productivity improvement. Achieving a pre-agreed milestone is a hard measure of productivity and gives the seller a quantifiable reason to increase in the likelihood of the sale.

An Advance could be the customer;

• Agreeing to co-fund a feasibility study
• organising a date to bring their manager to a site visit
• booking a meeting with the decision-makers for you to come back and talk to them
• writing an email to a colleague to help collect evidence of the need for your solution.

The important point is that they are making a commitment.

The size of that commitment will determine the degree of increase in the percentage probability that you have agreed beforehand. In addition, understanding where the customer is in their decision making process will help sellers to;

The ultimate Advance of course, is the signed contract. Do pass Go, do hit the won opportunity button.

Sales productivity measures flow from this more rigorous approach to the inputs and the outputs. Increased velocity through the customer’s Buying Cycle compared to historical trends; higher value of deal compared to the mean over a period; fewer hours consumed by the opportunity.

If those probabilities are rising in return for the same amount of effort, or ideally for less, then we have enhanced sales productivity. If they’re then repeated tens, or hundreds, or thousands of times across the organisation, then we have a sales productivity step-change.