Sales productivity and effectiveness are two of the most common levers for driving growth in any company. But what do these terms really mean, and how do we optimize investments in these areas for maximum results?
Productivity vs. effectiveness – what’s the difference?
At first glance, this is an easy question, but it has complicated implications: “Do I want my reps selling more or selling better?” Inevitably, the answer is yes, better, and yes, more. Of course, given today’s selling environment, we want it all. Can we have both, though? Let’s take a minute to break down these terms and see what we can learn.
On the surface, productivity and effectiveness produce a similar result – good, impactful work. However, when weighing the benefit of one over the other, management needs to distinguish between when they’re striving for positive change on an operational level and when they’re looking for an increase in the volume – and velocity – of revenue won. The difference between productivity and effectiveness can be summed up in one example – no VP of Sales would ever want to close more deals year-over-year without increasing actual revenue.
I’ve worked in several high-growth companies where “speed is better than perfection” has been the de facto approach. The race is always on to claim first-mover market share, maximize a moment of competitive advantage, or to create the market. In these cases, the quicker reps could get our story out to more people, the better. We created buzz in the market and pipeline grew.
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But then, some interesting things started to happen:
- Product Marketing was bogged down with one-off requests for help
- Ten-legged sales calls were a standard and expensive approach for advancing deals
- Our CRM system tracked an increasing number of stalled opportunities
- Intensive negotiations were often required to get deals across the finish line
Ultimately, we lacked the ability and machinery to guide our reps through an effective, repeatable and scalable process that was known to drive the best chance of success.
The lesson learned here is that you can’t drive rapid revenue growth without the skills, processes and tools to drive effective, consistent outcomes – productivity without effectiveness won’t get you where you need to go.
Realistically, no sales leader would ever have to choose productivity over effectiveness, because one leads into the other and vice versa. Sales productivity is the end result of sales effectiveness, which is about selling smarter. When companies can implement strategies or technologies to increase sales effectiveness, they set themselves up to address and solve issues with sales productivity. The goal of every sales organization should be to sell more, and to sell smarter.
So how can you improve your effectiveness?
Successful companies begin optimizing effectiveness by identifying the most common selling scenarios their sales reps face, conceptualizing these scenarios from the buyer’s perspective, and aligning this perspective with the organization’s sales process.
This optimization is accomplished by identifying repeatable tasks, activities, engagement tactics and outcomes that have occurred at each stage across won deals. Once the sales motion is understood and documented, the approach can be modeled and coached to the field. Many companies may achieve this through a pre-fabricated process or methodology, or with the help of a training partner.
Once the process infrastructure is identified, the focus needs to shift to embedding this model of skills, tasks and knowledge into the daily workflow of the field, and enabling sales leaders to guide and coach these best practices.
So how can you improve productivity?
Productivity improvement emerges in the very notion of enabling the sales workflow. If you’re prescribing a best practice approach, you need to support it with tools and technology that enable reps to complete the related tasks and activities efficiently.
For example, you might implement marketing automation to capture and communicate lead nurture data, CRM for automated pipeline management and sales reporting, and a sales enablement platform to automate tasks such as team selling and collaboration, document customization, relationship and value mapping, account planning and proposal generation. Automating the necessary administrative and non-selling activities required of reps creates more time for advancing opportunities.
Which is more important?
At the end of the day, successful companies find a balance between productivity and effectiveness. If you have too much process, then productivity suffers. If you have too much productivity, chances are sales execution will suffer. You need to define productivity for your company, understand how reps spend their time working opportunities, determine what to solve and how.
If you’re investing in the development of process and skills, then you’d better equip your reps with the tools they need to execute those best practices – efficiently AND effectively. Reps require more than pure knowledge to execute effectively. They need context and coaching on how to apply their knowledge to drive value in sales opportunities.