That Dog Must Hunt
Tight labor markets, globalization, and increased performance expectations have combined to make the sales environment one where only the strong survive, and organizations themselves must have effective sales management processes to keep their people content and their business growing. Sales effectiveness consultancy Watson Wyatt Worldwide has identified the key similarities among top sellers and among top companies in "Driving Profitable Sales Growth," a survey report released Thursday. Among the top common factors were less time spent on administrative tasks and customer care, and better incentives for strategic behavior related to finding deals and closing opportunities.
Top performing companies, for purposes of the study, were those that respondents reported had outperformed its industry peers over the last two years. Top performing salespeople were those who outperformed their peers in quota attainment by 20 percent and were earning more than other salespeople in comparable roles.
"In the past we focused our surveys on the practices of how organizations motivate their people; this year we wanted to concentrate on the sellers themselves, and discover how their time at high and low performing companies was different," says Ted Briggs, national thought leader for sales management and rewards practices at Watson Wyatt. "We wanted to discover the specific behaviors of the most effective salespeople, and the specific programs and initiatives companies can implement to support them."
The key to getting peak performance is maximizing time management. According to Watson Wyatt, salespeople at top performing companies spend 40 percent more time each year with their best potential customers (qualified leads and known prospects) than do their colleagues at low performing companies, and 264 more hours per year on prospecting, presenting, and closing. Additionally, they spend nearly 25 percent less time on administrative tasks. This can amount to as much as three hours per week, according to the report.
Some of the best support comes from good communication, according to Briggs. Salespeople at high performing companies have a better understanding of their company's business goals (86 percent versus 62), the steps it is taking to achieve those goals (82 versus 57), and of sales' role in achieving them (86 versus 69). Not surprisingly, salespeople at top performers tend to believe strongly in the quality and innovativeness of their company's products and services, as well as their focus on customer satisfaction.
Money is also important, but not necessarily the raw figures. Sellers at top companies receive 40 percent more of their total compensation as variable pay (38 percent of total compensation, compared to 27 percent for salespeople at low performers), and are twice as likely to receive stock, stock options, or other equity pay. "High performing companies tend to have more variable pay available, and this attracts better talent," Briggs says.
With these factors in mind, Briggs advises adjusting sales processes to accommodate these winning behaviors and encourage strategic thinking in the sales department. "Effective sales management will help a company succeed in both the short and the long term," Briggs says. "Companies need to design jobs where salespeople are given time and freedom to pursue the best new prospects."
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