Each year, many sales leaders face the reality of an increasing target and static headcount. Some are blessed with new products or additional marketing to support the cause. Others are left with the challenge of doing more with less.
Sales is often one of the last functional areas to invest in process improvement. After all, sales isn’t about manufacturing widgets and what does having a karate belt have to do with efficiency? There are surprisingly simple concepts that can help get more out of your sales team.
The First Step is to Measure
Peter Drucker said, “If you can’t measure it, you can’t improve it.” Understanding how your team is spending their time is most important opportunity you have.
Before we get out the stop watch, let me introduce two concepts that will help:
- The first is a Time Categorization. In traditional lean frameworks, we look to eliminate waste and optimize value. Value is typically defined as adding form, fit or function. Another way to evaluate customer value is if the customer would be willing to pay for it. When measuring any process, we categorize the activity based on its value.
- The second concept is called Process Cycle Efficiency, or PCE. This is how Master Black Belts benchmark a process, but it’s actually really simple. PCE is simply the total amount of time spent on Value Added activities divided by the total amount of time.
This is all great if you are making a widget, but how does this apply to sales?
For sales, we redefine the definition of value add. We aren’t after all adding form, fit or function to anything. For a sales leader, we are looking to optimize our team selling time. We will call this Sales Value Add. We bucket our core sales activities from all the other development and administrative activities.
Measurement is typically done in two ways. One way is to shadow a rep the entire day, measuring time spent on each activity. These Day-in-the-life-of exercises are valuable and thorough, but are time consuming for the leader. The second method is taking constant snapshots of the entire team every hour for a week. Simply add a tick under the activity each rep is working on each hour.
Over time, the law of large numbers says you will get an accurate % of time on each activity. This method gives a broader view of activities and is less time consuming for the leader. Download our Time Tracking Tool to give the framework for measuring your team.
Step Two is Improve
You are now armed with all the information needed to improve sales efficiency. Where are your reps spending too much time? Work with the team to streamline Non-Sales Value Add tasks.
What is your Process Cycle Efficiency? A world class sales organization has a PCE of 40%. This means that even the best teams are only spending a quarter of their time selling to customers. 60% of their time is setting up meetings, internal meetings, administration, etc.
Download the Time Tracking Tool to start doing more with less.