Necessary Condition #3 - The Right Day-to-Day Operational Focus
By Charles Fifield, Senior Lecturer and Baylor Sales Coach
The sales function has probably the greatest single operating impact on the financial results of business. What business needs is a salesforce driven by productivity, effectiveness, and efficiency. Time is the most precious of resources. To say "time is money" understates the issue for time can often produce money, but money cannot produce time. How well salespersons manage their time is a crucial determinant in productivity outcomes. In 2009, Alexander Proudfoot Consulting Group, a worldwide recognized specialist management consultant in operational performance improvement for over 60 years, published its most recent sales productivity report. Alexander Proudfoot employs a unique Co-Venture methodology, which necessitates both client and consulting team involvement to analyze and achieve performance improvement. Participating corporate respondents included over 800 executives in 19 countries from publicly- and privately-held enterprises and a wide array of industry groups. Alexander Proudfoot's analysis of company sales operations begins with a time management review: perceptions, desires and realities. In stage one, salespeople are asked to give a realistic estimate of the time spent in six activity categories:
- Active selling
- Problem solving
- Non-value adding (downtime)
Salespeople are then asked to assess how much time they would objectively like to spend in each category to become more productive or effective. Finally, Alexander Proudfoot makes observations to assess how much actual time is devoted to each activity. The study's conclusions included two key time-management observations: On average, salespeople spent only 11% of their time actively selling to customers and just 20% of their time was devoted to prospecting and closing sales. (See Figure 1) Salespeople think they spend twice as much time actively selling to customers than they actually spend. (See Figure 2) In every business process, productivity leakages are inevitable. The 2009 Alexander Proudfoot research concluded, "If there's one central message from this study it is this: most sales functions are capable of significantly higher (productivity) performance - certainly 25 to 30% and perhaps as much as 50%." With this in mind, every sales organization and agent must challenge their current operational business practices to discover positive productivity opportunities and new habits or focus. The most powerful operational solutions to overcoming the constraints to salesperson productivity are contained in the answers to three questions:
- Working smarter - What day-to-day activities are currently being executed that otherwise could be allocated to active selling time, i.e., more interactions with qualified prospects?
- Working faster - What present activities could be regularly performed in less time and then converted into active selling time?
- Removing waste - What day-to-day activities could be removed because they add no value to my business?
The responses to these questions must then be prioritized by their projected positive productivity impact. Initiate the change process by starting with the one action that is projected to have the greatest positive impact and then methodically work through each of the others in descending order. The goal should be to improve the productivity outcome by at least 25% and more likely 50%. Assuming a recommended 50% improvement objective, continue with this productivity improvement process via quarterly reviews (at a minimum) until the goal is achieved. The time it takes to achieve the desired 50% improvement then becomes what is termed the "productivity half-life." Hence, the operational goal should be to be continuously improving by working smarter, working faster and consistently removing waste with the objective of achieving a 50% productivity gain every half-life period of time. In summary, the sales productivity improvement opportunities via better day-to-day operational focus and resulting executions are significant. To accomplish the desired changes will require a systemic or team approach due to the interdependent nature of the sales process in most organizations.
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About The Author
Charles Fifield, MBA
Senior Lecturer and Baylor Sales Coach, Baylor University
Chuck Fifield is a Senior Lecturer for Baylor University's Hankamer School of Business, Marketing Department - Professional Sales and Communications and serves as the faculty consultant to Baylor's Sales Team and Uproar Music and Entertainment Group, a student managed business. He joined the faculty at Baylor University in 2001, where he has also taught in the Graduate Business School (Operations Management), the Management Department (Negotiations and Conflict Resolution) and the Economics Department (Principles of Macroeconomics). Chuck has taught or guest lectured at other Texas-based Universities in the fields of sales, international business, money and banking and finance/investments. Professor Fifield has conducted sales research and training for several organizations, including most recently State Farm Insurance. Prior to joining Baylor, Chuck was a financial consultant to businesses located throughout the U.S. for nearly thirty years. He owned and operated several financial service businesses in the fields of securities, real estate, oil and gas and insurance.