Sales executives typically have two levers to try to increase sales: They can increase the quantity of sales effort by adding sales people, or they can improve the quality of sales effort by investing in coaching and training.
There is a third approach that is often overlooked: Improving the allocation of sales effort. Sales people can work smarter, not harder, by dividing their time more appropriately among customers, products, and sales activities.
Sales effort allocation has a large impact on sales and profits, sometimes more than increasing the quantity and/or quality of effort.
Sales executives frequently talk about how sales forces misallocate effort. Sales people spend too much time with ‘friends and family’ (existing customers with whom they have rapport) instead of focusing on high-potential prospects.
Strategically important products don’t get sufficient sales support. Service or other non-sales activities creep into the sales job, and role-pollution prevents sales people from developing new business. Costly allocation errors such as these are difficult to diagnose and fix.
By asking six questions (in order from the simplest to the most complex), you can trace the probable cause of any sales effort misallocation back to the sales force decisions and programmes that can bring about improvement.
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1. Do sales people know what’s important?
If sales people aren’t clear about which markets and products are priorities, they’ll create their own rules about how to spend time. The remedy is clear, consistent communication:
‘Here’s how we want you to spend your time, and here are the results we expect.’ Coaching, performance management, and sales goals reinforce communication, while metrics track performance: ‘What gets measured gets done.’
When a business logistics company wanted sales people to spend more time selling three strategic product lines, it focused sales force attention on those lines by giving sales people a sales goal for each line, separate from their goal for the overall portfolio. Sales people could track up-to-the-minute achievement of all goals.
2. Do sales people have the information they need?
Sales people are more likely to spend time effectively when they have access to good information and tools.
A telecom company used predictive models (think Netflix and Amazon) to give sales people direction about how to improve sales with under-performing, high-potential customers.
By finding ‘data doubles’ for these customers – i.e. similar customers who were buying much more — the company provided sales people with insights about which under-performing customers had significant unrealised opportunity and which sales strategies had worked in comparable situations in the past.
The information helped sales people focus on product offerings that matched customer needs, thus increasing sales.
3. Do sales people have the competencies required?
When sales people neglect priorities due to insufficient skills and knowledge, the remedy is coaching and training.
A computer manufacturer selling through resellers discovered many of the resellers’ sales people weren’t sufficiently supporting the manufacturer’s new product, resulting in low sales and lost opportunity.
The manufacturer’s product training for the resellers’ sales people emphasised technology specifications. This worked for the best and most experienced sales people but left others overwhelmed and unprepared to approach customers.
When the manufacturer refocused the training around how to sell the product (e.g. how to find and qualify buyers, describe the product’s competitive advantages, and show customers why they should buy), the resellers’ sales people became more confident and sales increased.
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4. Are sales people motivated to succeed?
Sales people are motivated when they perceive value from their efforts: Career success, recognition, personal satisfaction, money, or all of the above. Remedies for sales force motivation issues include changing the incentive plan and/or modifying the criteria for recognition programmes, while acknowledging those who are successful.
When a medical instruments manufacturer wanted to build market share by displacing a specific competitor, it offered sales people a bonus for every competitive instrument displaced, and it set up a mobile app with a leaderboard of sales people with the most displacements. First-line sales managers also helped boost motivation by encouraging sales people and recognising their successes.
5. Do sales people have enough bandwidth?
When sales people spend time inappropriately because they have too many diverse responsibilities, a new sales force structure can ensure focus on company priorities. When new customer development lagged at a technology company, it reorganised the sales force into a hunter/farmer structure.
Hunters specialised in developing new accounts. Once a sale was made, a farmer took over to cultivate and grow the relationship and generate repeat business. Farmers provided existing customers with the ongoing support they needed, while new business development flourished because hunters were not distracted by time-consuming service activities.
6. Do sales people have the right innate characteristics?
Training can develop the competencies of sales people, but success can also require certain innate qualities. When sales effort misallocation occurs because sales people lack characteristics such as intellectual flexibility or tenacity, the remedy is better hiring and retaining the right people.
A construction supply distributor historically hired former construction workers for its sales force. Many of these sales people had technical expertise but lacked the personality, capability, and drive to sell in challenging situations.
When the economy slowed, selling became more difficult, and sales people started focusing almost exclusively on friendly, loyal customers. The distributor changed its hiring strategy: Instead of hiring industry experts, it began hiring ‘natural sellers’ who were willing to learn about the industry. The change, when reinforced by other changes to the sales culture, drove considerable revenue improvement.
Related: There’s Strength in Teams
These questions are sequenced so that those asked first can be addressed with easier-to-implement sales force changes. Changes to performance metrics and information (questions 1-2) typically require moderate effort and minimal disruption. Changes to sales force structure and hiring (questions 5-6) are disruptive and more difficult to implement and take longer to have an impact.
Changes to sales training and incentives (questions 3-4) are in the middle. Some effort allocation issues are remedied with only easy changes, but many will require a portfolio of changes to create lasting improvement.
© 2016 Harvard Business School Publishing Corp
