Sales effectiveness is a measurement of a company’s ability to succeed at each stage of the buying process, from the first interaction with the customer to the last. Most of the time, that interaction happens before a sales representative has even become involved, with the customer becoming engaged through marketing, or even the client’s own web search for a particular product or service.
The purpose of sales effectiveness strategies is to increase the company’s revenue through more involved processes that not only acquire new customers, but engage them, win their sales, and creates a relationship that encourages the sale of other products and services with that customer and others. Obviously, any company is going to want to increase its revenue, but sales effectiveness is crucial, and several companies have invested time and energy to boost the effectiveness of their sales processes with impressive results. With the training that Shapiro Negotiations offers, your company can achieve similar results.
Assessing Your Sales Effectiveness
Improving sales effectiveness is best done through several multi-stage and systematic processes. The first step is, of course, to assess your team’s current sales effectiveness. According to a survey conducted by Vantage Point Performance and Sales Management Association, 44% of sales executives believe that their organization is ineffective at managing its sales pipeline. This study included 62 B2B companies, a third of which had revenues over $1 billion. There is a direct relationship between sales effectiveness and revenue, and it comes from this relationship between the sales reps, the pipeline, and sales managers.
In order to properly assess this relationship, it is crucial to create metrics to measure how effective your sales tactics are. These are ratios that quantifiably relate different aspects of the sales process to the actual revenue generated from sales. These can be sales vs. conversion rate, sales vs. win rate, sales vs. pipeline accuracy, etc. The metrics are important, and will ultimately arise from each team’s skills and perceptions of the pipeline. In a 2010 study by MASB as part of their Common Language in Marketing Project, 54% of 200 senior marketing managers found these sales effectiveness metrics to be useful.
Defining the Process
After assessing your sales effectiveness, the next logical step is to improve the actual process itself. The best way to do this is to come up with a clearly defined sales process. The sales pipeline is, after all, just a representation of a team’s strategies, and the actual structure of the pipeline is what is most important when boosting sales effectiveness.
To do this, take the time to invest in a well-defined plan of action for the entire sales process. With the Corporate Sales Training and negotiation training that Shapiro Negotiations offers, companies won’t be forced to scrap the entire process and start from the beginning. Because each course is tailored to the individual client, SNI takes the client’s existing sales platforms and improves upon them, incorporating new tools, skills, behaviors, habits, and systematic processes.Because salespeople are able to keep using the processes with which they are familiar, the training and new tools don’t disrupt their work. Instead, the training incorporates those processes and improves upon them, enhancing the process’s ROI and improving sales effectiveness across the board.
As much as the sales process should remain a formal part of the company plan, however, it is important to pay attention to the team’s dynamics and to receive input from team members. Sales is an art, after all, and many sales reps are going to be more used to judging a situation for themselves. They should still be trusted with that, but by defining the flow of pipeline, you are strengthening it, cutting the fat away from the process to optimize it for all of your employees.
By viewing sales effectiveness as a systemic relationship between each part of the business, rather than a simple equation, it becomes clear that communication is paramount. Not only should managers be trained to communicate effectively with sales reps, but different departments, marketing in particular, must be involved in the communication as well. Marketing is most often the first encounter that a customer has with the company, and it is an integral part of sales generation. Therefore, it is helpful to promote sales objectives across departments, and to get each department invested in the success of the company as a whole.
Marketing generates sales for the sales teams, and the sales teams close on those opportunities and build connections with the customers, who will likely recommend the product or service to others. This is how the ideal sales pipeline functions, but as simple as it seems, it requires a well thought out plan of action, along with clear objectives and incentives to foster communication.
It is possible to over-engineer a process, but without any structure it will be impossible to make changes that actually improve things. Too often, while trying to increase revenue, a company will rely on software or departmental shifts that do not actually bring improvement and only serve as a symbol of progress.
By communicating with many departments, and by facilitating communication, the process will actually come to define itself. By formalizing the process further, sales reps are able to follow previously-set precedents for customer interactions of which they may be unsure, and sales leaders can follow along the pipeline, keeping up with every part of the sale. Not only that, but sales managers can build contingencies for problems when they arise and neutralize them quickly, sometimes by intervening, but ideally by training the sales reps to adequately deal with any issues that may arise.
Up-keeping and Revitalizing the Pipeline
This brings up another important aspect of sales effectiveness: management training. According to that same survey from Vantage Point, 61% of sales executives claim that their sales managers are not properly trained for the positions they occupy. Obviously, it is impossible for an employee to perform a job to the expectations they are given if little, or improper, training has been given.
Management training in sales effectiveness extends beyond simply projecting sales and using CRM tools, it means acquainting the managers with the pipeline as a process and having them make decisions on a daily basis, all while closely watching their team follow the pipeline. They need to understand which step is the most crucial, determine at what their team or even particular members are especially skilled, and then utilize those features to their full potential. Not only that, they need to understand the pipeline well enough to recognize when new technology needs to be implemented, perhaps to bolster a flagging step or streamline a step that takes too long for the rewards that it returns.
Along with training the management, it is recommended that at least a few hours each month should be used to manage sales effectiveness. This can take many forms, and will usually change from month to month. If meetings are held, they should consist of more than just sales projections—they should actually ask for input on the sales pipeline from participants, as well as suggestions for improvements. This time could also be well-spent reviewing the company’s sales effectiveness through your previously set metrics, or even proposing new metrics. Whether you are using the time for meetings, review, selection of employees who are well versed in the pipeline and giving them more training, or implementing new technology, actually spending the time is what’s most important.
The Results of Proper Sales Effectiveness
According to the Vantage Point study, companies that follow these basic guidelines, especially those who defined their process, saw an increase in their sales revenue of 28%. Further, those that spent at least 3 hours a month reviewing their pipeline and sales effectiveness saw an additional 11% increase in revenue over companies that did not.
Sales effectiveness is about more than revenue, though. By increasing the efficiency of your company’s communication, you trim away wasted work, wasted ideas, and wasted time while actually creating a better environment for all employees. A critical part of managing the pipeline is getting people invested, and when the pipeline conforms to skills that your team already has and has defined ways to foster those skills if they are lacking, then the value of everyone involved rises alongside the value of the company.