How does your sales team spend their time? Do they spend most of their day on the phone, sending out prospecting emails to prospects and setting up demos? Or do they waste most of their time on non-sales tasks?
If you are like most sales teams, the last scenario will probably ring a bell. Don't worry, you're not alone. The vast majority of sales teams spend more time than they need to on non-sales activities.
Solving this problem is not easy, you have to train your team to perform better. It's like becoming a top athlete, you have to train regularly to improve your performance. Performance never goes without training.
Improving sales productivity may seem difficult, but we're here to help. This article will show you how to define sales productivity, measure it and maximize it. Let's get to work!
Sales productivity can be difficult to define. It can mean different things to different sales teams if you get into the details.
But basically, sales productivity is about making more sales with the same amount of resources - like time and money.
This means that sales productivity measures the efficiency and effectiveness of your sales leaders. If we analyze this in more detail:
You can think of business efficiency as the input variable for your team. It's the number of resources they use to accomplish their tasks.
Example: You can measure the efficiency of your salespeople by the number of calls they make in a day. Assuming they don't spend more time at work, salespeople who make more calls are more efficient.
Of course, making more calls doesn't necessarily mean they're making faster sales or generating more revenue. That's why it's also necessary to look at their efficiency.
You can think of sales effectiveness as the result of your team. Basically, it's what they do with the resources they have.
Using the example above, measuring the number of appointments booked versus the number of "cold calls" is a measure of your team's effectiveness. They become more efficient if they book more appointments with the same number of calls.
To maximize productivity, your team must be both effective and efficient. This means increasing output while decreasing input.
In a very basic way: sales productivity will increase if your team makes more prospecting calls in less time (increasing efficiency) while booking more appointments (increasing effectiveness).
Unlike other sales-related metrics (LTV, conversion rate, and sales cycle time), there is no specific way to calculate your team's sales productivity.
Instead, you need to use the relationship between sales efficiency and effectiveness that I described above.
This relationship can be translated into a formula as follows:
Salesproductivity= sales efficiency (output) / sales efficiency (input)
Let's continue with the productivity example above (booking appointments from prospecting calls) to turn this formula into a specific calculation. We would get this:
Sales productivity = number of appointments booked (the output) / number of calls made (the input)
So if your sales team made 2,000 calls in one week and booked 20 appointments, they would have a sales productivity ratio score of 0.01. In other words, they would have a call-to-appointment conversion rate of 1%.
They can improve their sales productivity by booking more appointments, thus increasing the output. If they book 40 appointments, their score increases to 0.02 (2% of calls result in appointments).
They can also improve productivity by booking the same number of appointments with fewer calls. If they book 20 appointments from just 1,000 calls, their score also increases to 0.02.
But what if your sales team increases the number of appointments booked while reducing the number of calls? If they book 40 appointments with only 1000 calls, their score increases to 0.04 (or 4% of calls ending in appointments).
You can also use the calculation to quantify the productivity of your sales team in terms of revenue:
Productivity = total revenue / number of salespeople
So if you generate $100,000 over a quarter with a team of ten people, you have a sales productivity calculation of $10,000 per salesperson.
Now that you know what business productivity is and how to calculate it, let's see how to increase your team's productivity without making them work longer... I tried, they don't want to...!
As we've shown above, you can measure your salespeople's productivity in several ways. To start improving their productivity, you need to define what it means to you.
If you don't yet have an idea of what you want to measure, consider these common indicators:
Once you have defined the type of business productivity you want to improve, you need to determine the best way to improve it. That means improving your team's effectiveness (increasing performance) or making them more efficient (reducing effort). Ideally, you will do both.
The lead and lag KPIs are a great way to see which of your sales steps need to be improved.
Depending on the definition of productivity chosen in step one, you may consider tracking the following indicators:
Be careful not to overemphasize activity indicators such as calls made or emails sent. Using only these to measure a salesperson's performance can lead them to artificially inflate these numbers (we know the smart ones). This serves no purpose. Instead, be sure to use them in conjunction with high-impact metrics such as demos completed or opportunities converted.
By tracking these KPIs, you will undoubtedly realize that your team is making fundamental mistakes, such as not making enough calls or not spending enough time selling. You can also identify salespeople with a longer sales cycle than others, which hinders their productivity.
The best way to improve almost all of the above metrics is to create a consistent sales methodology. Define a list of steps your team must take to convert a prospect into a buyer.
Defining a clear sales method is essential. The only difference between a productive and a non-productive salesperson is what they do with their time.
One way to create a consistent sales method is to identify the steps taken by your top performers and encourage everyone to adopt them.
Another is to take inspiration from this sales playbook to master your sales cycle that we created from our own playbook at Modjo.
Your salespeople spend more time on non-sales activities than on sales. It's a fact!
Tasks such as updating CRMs, entering activities, and planning the day waste your teams' time and make them unproductive.
Fortunately, you can solve this problem by automating manual tasks. Many administrative tasks can be automated by connecting your CRM and business productivity tools.
Alternatively, you can use Livenotes by Modjo so that your salespeople can fill in clean and accurate data with notes that automatically sync with the CRM so that it is always up to date.
For example, during a demo, sales people can select a template and get a summary of the major steps not to be missed. With the functionality of adding CRM fields directly in the application and the template, they can modify the CRM in 1 click and not have to come back to it after the meeting. Simple and basic but devilishly effective.
The sooner you can get new hires up to speed, the sooner they will be able to contribute to the pipeline and meet your sales goals.
Quality onboarding is critical to improving sales productivity, especially if you measure it in terms of revenue per salesperson.
But rushing the training is not the answer. Onboarding should be more than a one-week crash course on selling in your company. That's why we've created The Sales Onboarding Guide broken down as follows:
Even though this guide was created for newcomers, all of your salespeople need regular reminders and coaching sessions to keep improving, especially if you want them to stick to your sales method.
Save time by using a tool like Modjo to identify your reps' problems and solve them quickly. For example, you can use Modjo to:
Adding additional resources to your sales process may seem counterproductive at first. After all, you'll be increasing resources and reducing their efficiency. However, the power of certain tools to automate parts of the sales process, dramatically improve engagement and shorten sales cycles means they can increase your team's productivity.
Unfortunately, today, most teams lack the tools they need to succeed. And we're talking about salespeople, but managers are not left out. Only half of sales managers feel equipped with the tools they need to succeed.
Start by evaluating your stack of tools to see which ones improve the sales process, how effective they are, and how well they are being used by salespeople. Remove tools that don't improve productivity, but also look to adopt tools that make you more efficient.
In particular, adopt the following types of tools if you have not already done so:
The sales tech market is rapidly evolving, so be sure to regularly evaluate your tool stack and look for productivity improvements.
If you want to improve the productivity of your sales team, you need to start by defining it. Only then can you decide on the best performance indicators to track your improvement and start implementing some of the above strategies.
Whatever your approach, don't underestimate the power of sales tools. If you think that introducing another tool into the process will waste more time for you and your salespeople, the opposite is often true.
A tool like Modjo can give you and your team insights to accelerate new rep set-up, improve customer conversations and ultimately make more sales.
If you want more information on how Modjo can help revolutionize your sales process, feel free to request a demo.