By Bob Thompson

CEO, CustomerThink Corp.

April 2008

Copyright © 2008 CustomerThink Corp. All Rights Reserved. Improving Sales Rep Productivity

Executive Summary...................................................................................1

Growing the Top Line................................................................................2

Strategies to Help Reps Sell More..............................................................4

Technology-Empowered Sales Processes...................................................7

SMART Practices for Increasing Sales Productivity.....................................11

About This White Paper.............................................................................12

This paper was made possible with the sponsorship of Microsoft Dynamics CRM and interviews with four of its customers: Equinox Fitness, Jones Lang LaSalle, Nortel and Sasfin Bank. We also sincerely thank these experts for sharing their insights: Barry Rhein, Barry Rhein & Associates; Jim Dickie and Barry Trailer, CSO Insights; Dick Lee, High-Yield Methods; Mike Ehrensberger, Sales Force Systems; Andrew Rudin, Outside Technologies; and Chris Stiehl, StiehlWorks. Last, but not least, we greatly appreciate the input of CustomerThink community members in an online survey about improving sales productivity, which provided much of the statistical information included in this paper.

This document has been independently written based on available industry research and interviews with selected customers of the sponsor. Although the information provided is obtained or compiled from sources we believe to be reliable, CustomerThink Corp. cannot and does not guarantee the accuracy, validity, timeliness or completeness of any information or data made available to you for any particular purpose. CustomerThink Corp. does not endorse the sponsor nor warrant the accuracy of the materials provided herein for any particular purpose and expressly disclaims any warranties of merchantability or fitness for a particular purpose.

Neither CustomerThink Corp.; nor any of its affiliates, directors, officers or employees; nor any third-party vendor will be liable or have any responsibility of any kind for any loss or damage that you incur resulting from the act or omission of any other party involved in making this document available to you or from any other cause relating to your access to, inability to access or use of the information in this document, whether or not the circumstances giving rise to such cause may have been within the control of CustomerThink Corp. or any vendor providing software or services support. In no event will CustomerThink Corp., its affiliates or any such parties be liable to you for any direct, special, indirect, consequential or incidental damages or any other damages of any kind even if CustomerThink Corp. or any other party has been advised of the possibility thereof.

In boom times or not, increasing sales revenue is nearly always a top business objective for enterprises large and small. The key question, of course, is how?

As you’ll learn in this white paper, increasing sales productivity is one popular way to improve the top line of any business. When all is said and done, however, productivity is based on the ability of individual sales professionals to achieve their objectives. While it is clearly important for reps to meet individual revenue targets (quotas), everything they do must be aligned with the revenue and business objectives of their enterprise.

So the main focus of this white paper is about revealing key factors in sales rep productivity, including what helps improve their efficiency (increasing selling time) and effectiveness (getting better results from the available selling time). Both are important and require strong leadership and teamwork between the sales and IT departments.

I’ll look at what sales executives, thought leaders and reps in the field say contribute the most to sales productivity, as well as the critical role technology can play. I’ll examine the key findings from a 2008 CustomerThink survey of sales professionals and business managers. Finally, I’ll review the practices that sales and IT leaders should follow for the best chance of success.

These are the major findings from our sales productivity study:

• Improving revenue growth was far and away the top business goal, ranking "extremely important" by nearly 90 percent of respondents. Improving customer loyalty and efficiency were also key business goals by top management.

• To increase revenue growth, the top three strategies were to enhance customer/prospect insight, to improve sales pipeline management and to increase the personal productivity of sales reps.

• The majority (56 percent) of respondents say that 40 percent or more of sales reps’ time is spent in non-selling activities. This is a good starting point to look for productivity improvements by eliminating or streamlining administrative tasks and freeing up selling time.

• For the majority of companies, however, it will probably be more effective to concentrate efforts on improving the productivity of selling activities, especially through developing better insight of customers and prospects and by streamlining the selling process.

• To maximize the impact of a sales automation solution, ensure that the technology supports a well-defined sales process, and above all else make sure that tools are easy to learn and use by sales reps.

• Workflow and integration are enabling technologies that can help make the sales process more efficient and effective by streamlining the sales process and providing relevant information to reps at appropriate steps in the sales process.

• The most important factors in selecting sales automation tools were their ease of use; their ability to record all interactions from marketing, sales and service; and the ease and speed of implementation.

In conclusion, the key to ramping up sales productivity in your organization is finding the points of leverage—where investments will yield the best return. Odds are you’ll find there are opportunities to not only increase the available selling time but also ensure that time is focused on working with the right customers using a sound sales process, enabled with easy-to-use technology.

It won’t surprise anyone that growing top-line revenue is a major priority. In our recent survey, nearly 90 percent of respondents said it was an "extremely important" objective of top management. The next most important objective was to increase customer loyalty (65 percent), followed by improving efficiency (57 percent).

Of course, knowing that revenue growth is important and doing something about it are completely different things!

It turns out that "knowing" is, in fact, a critical word, when our attention turns to exactly how to grow the top line. The top strategy that our survey respondents chose to grow revenue was to "enhance insight about our customers and prospects." To illustrate this point, consider the experience of executives at global real estate firm Jones Lang LaSalle. It wasn’t unusual to find 30 to 40 emails a week flying back and forth among people in the firm trying to find out more about prospects. This made the sales force less productive and irritated prospective clients. The source of problem was simple: lack of a central knowledge base on customers and prospects.

The next most important strategy: improving sales opportunity "pipeline" management. This is a classic application for sales force automation technologies, which, the conventional wisdom says, managers love and reps hate. Well, as expected, this strategy was popular with managers in our survey. But even sales reps in our survey recognized that effectively managing "deals" can help them make their numbers.

Don’t stop there, because No. 3 on our list of growth strategies gets to the heart of this paper: increasing the personal productivity of sales reps. Otherwise, there won’t be much of a pipeline to manage. I’ll discuss this in more depth later on.

It’s tempting to think of productivity as merely doing something more efficiently. It really means producing something of value. So, the first question you must answer is: What you are asking reps to produce?

Granted, everyone in a for-profit venture wants to produce revenue or, in most cases, accumulate revenue against a revenue quota. Our survey respondents certainly agreed that total sales revenue and making revenue quotas were critical factors in a sales rep’s success.

But sales reps are not just "coin operated" revenue machines. Andrew Rudin, managing principal of Vienna, Virginia, sales strategy firm Outside Technologies, argues that profit from revenues; the insight on customers and prospects that the rep provides to the enterprise; and the development of satisfied and loyal customer relationships are also important outputs of sales rep activities. These factors received significant weighting from our survey respondents, as rep success factors.

The key point is that any discussion of sales productivity should start by identifying all of the outputs you are expecting reps to produce. Making quota is obvious, but there’s probably more to consider.

When you sort it all out, productivity is not about efficiency or effectiveness. It’s about the two combined. The sales rep’s productivity depends on how well the available time is used to deliver the maximum benefits to the enterprise and—if the incentive and compensation systems are set up properly—to the rep.

This notion of "time for selling" is critical. No matter how talented a sales rep might be, spending hours each day in administrative activities is a productivity drain. Assuming that qualified opportunities are available to pursue, a reduction in non-selling time can translate into increased sales.

How much time are we talking about? In our survey, 9 percent of respondents estimated that reps spent 60 percent or more of their time in non-selling activities like paperwork, reports, training and sales meetings. Another 28 percent estimated non-selling time at 40 percent to 59 percent of the reps’ time. And 40 percent of the respondents said reps spent 20 percent to 39 percent of their time in non-selling activities.

Other studies have reported similar statistics. If reps at your company are spending the majority of their time on activities that don’t directly help them produce sales, happy customers and whatever else they should be producing, look for ways to streamline those activities. They may be necessary, but they are not value-adding, so do them as efficiently as possible.

What is the secret to being productive in selling activities? Mike Ehrensberger of Florida- and Ohio-based consultancy Sales Force Systems believes the key is effectiveness, meaning "doing the right thing." You can’t be effective unless you get in front of the right people and unless you can offer those people real value.

These days, says sales trainer Barry Rhein of Los Gatos, California-based Barry Rhein & Associates, reps are making more sales calls, handling more objections and managing increasingly bigger deals. To address those challenges, they have to be better at information gathering, creating customized value and growing relationships.

Top-performing reps may instinctively know how to make the best use of their time and follow a sales process, but experts agree that most reps need an assist. Properly implemented sales automation systems not only can reduce the amount of time required for non-selling activities but also can guide reps in using a sales process.

Dick Lee, principal of High-Yield Methods, argues that businesses lose valuable time and money in the gaps in workflow handoff. By coordinating your organization’s departments, improving communication and the flow of information and work from department to department and person to person, you eliminate waste and can better serve your customer.

Like most things in business, selling is an activity that requires a combination of effectiveness and efficiency. What’s the difference?

Famed management consultant Peter Drucker offers a useful distinction in his book, Managing for Business Effectiveness. He agrees with Ehrensberger that effectiveness means "doing the right things" but adds that efficiency is about "doing things right." Another analogy is that effectiveness is about putting the ladder against the right wall, and efficiency means climbing as fast as possible.

Effectiveness is more a factor of the leadership of the organization because it’s concerned with developing strategy, setting goals and defining the right processes. Efficiency is, by and large, a management activity—executing the strategies and performing processes while minimizing the time and resources required. At the risk of oversimplifying, I believe that selling can be improved through:

• Effectiveness—focus the sales organization on the right opportunities with the right sales process

• Efficiency—executing against the sales process as quickly as possible, using minimal resources

The majority of our survey takers and experts think there is more leverage in improving sales effectiveness—making better use of the time spent in selling process activities such as prospecting, qualifying, presenting and so on—so that the rep can close more business.

Yet for too many companies, reps spend precious little time in direct selling activities. CSO Insights’ most recent benchmark report states that "more selling time with prospects and customers is inherent goodness, but only 37 percent of reps’ time is devoted to in-person or phone-based sales calls."

Sales experts interviewed for this paper generally agreed that effectiveness is "based on insight and understanding" of prospects. Investments, therefore, should be made in process improvements and tools that help the rep understand the "best sales practices" of the organization, industry pain points and, of course, a profile of the prospect’s company, including its preferred buying process.

These insights are essential to making good decisions about where to invest sales time, the most precious commodity of all. Qualifying prospects is critical.

identification. Sales experts said much the same thing: Focus on getting more of the right prospects into the funnel to begin with, then ensure that you invest sales time on those properly qualified. Once sales reps are actively engaged, asking the right questions to identify needs is also very important.

Keep in mind that this chart highlights the best opportunities for improvement; it is not necessarily a reflection of the importance of an individual step in the sales process. The fact that presenting to prospects, closing deals and creating sales orders were ranked lower could simply mean that these are not considered problem areas that need attention now.

A key element of sales effectiveness, according to sales strategist Rudin, is recognizing that the interaction between the sales rep and the prospect cum customer is not just about selling, but it also about the customer buying something. And customers are not just buying a product or service, but also they are buying into a relationship. That’s a big leap for people who are used to thinking in terms of numbers: pipelines and closings. The best salespeople, says Chris Stiehl, principal of San Diego, California-based StiehlWorks, are those who develop a trusted advisor relationship with a customer.

Stiehl tells the story of how one of his clients manufactured products that "mated" with another company’s products. By talking to customers around the world, sales reps discovered that the other company was going to be moving to larger-size products. They shared the information with the marketing department, which was able to quickly adapt its own product to keep up.

So you must create a holistic view of the customer—the prospective one and the one you already have. The best salespeople are those who work on qualified leads; who work with marketing, rather than against it; and who focus on improving relationships with customers. The most productive salespeople are those who quickly learn essential facts about prospective customers and continue to keep up with existing customers. As I’ll discuss in more detail later, these are golden opportunities to put technology to work, using workflow, information sharing and integration.

"Holistic" is a word that regularly pops up when I talk to CIOs about CRM projects. For example, Sasfin Bank, an independent banking and financial services group in South Africa, needed technology to help the company comply with new government regulations. It turned to Microsoft Dynamics and realized a happy byproduct: improvements in the workflow. The bank was now able to integrate assets and loans across divisions for a holistic view of the client, so salespeople could get information to the credit department for analysis and quick approval.

At Jones Lang LaSalle, productivity meant connecting offices throughout the world and helping people in all departments see customers and prospects in the same way.

"People were saying, ‘Why do we keep getting all these emails?’" related Jones Lang LaSalle CIO David Johnson. "The reason was because we had really no internal knowledge of what people were doing with clients and who was working with what clients." Not only was that not productive, but also it was counter-productive. Clients didn’t appreciate getting contacted by different people with different levels of information about their organizations. "We were getting feedback from the clients that ‘I just talked to this guy about this yesterday; why are you calling me about it today?’" Johnson said.

According to Johnson, Jones Lang LaSalle has two strengths that were threatened by the organization’s increasing entanglements: great opportunities for clients and great relationships. "We’re a relationship-oriented company, but we had a hard time putting those opportunities with the relationships, and so we needed a tool that helped us do that."

It all came to a head when the capital budget contained requests for seven different CRM systems where a single system hadn’t previously been on the horizon. One way or another, Jones Lang LaSalle departments all were reacting to increased competition and the awareness that they had to do a better job

of sharing their knowledge to meet that competition. Ultimately, the company settled on Microsoft Dynamics CRM because it was the one system that the company believed everyone would use, given that they were all using Outlook and other Microsoft Office applications.

As I noted earlier, you don’t have to choose between effectiveness and efficiency. Odds are, you need to work on both fronts to achieve the maximum gains in sales productivity.

For luxury fitness operator Equinox Fitness, there was a pressing need not only to know the customer but also to help the sales team execute more smoothly. Having an integrated CRM system that every employee would use was crucial when the company kicked off its implementation project in June 2006, said CIO Jeff Grayson. When sales managers met with their sales reps, known as membership advisers, the advisers would each bring with them their box of index cards, and the managers and advisers would pull cards as they discussed the customers. "The mantra, or the tagline, of our project when we kicked it off became, ‘Kill the cards,’" Grayson said.

Executives were yearning for a way to "engage" members. "If you hang out in any of our executive meetings, we talk all the time about member experience," Grayson said. "We run a business, so ultimately, that's the driver for revenue." The longer members stay with Equinox, the better it is for the company, and executives feel, the better it is for the members—who are improving their health. "We want our members to be engaged," Grayson says. "We want them to be working out. And if they're not, it's in our interest and their interest to talk and see if they can come back in."

Integrating its systems and ridding advisers of the cards meant the company could use the system to see whether a person was still coming in to work out and, if not, give the member a call with an invitation to return.

For Equinox Fitness, sales productivity meant the ability of membership advisers to go beyond simply up-selling members. The fitness operator prides itself on offering top-of-the-line luxury facilities, and the company found it important to apply metrics tailored to the organization’s goals, including day-closing percentages and, very importantly, the "objections" people noted when they declined membership.

"We prefer to not get dragged into the dollars-and-cents conversations. We prefer our membership advisers have conversations about the value," Grayson said. "If you look at a membership adviser and all their objections and they’re not closing people and the objections are price, that’s a conversation to have."

In this section, I’ll take a closer look at how technology can help boost sales productivity by improving sales rep effectiveness, efficiency or both.

But first, a word of caution. Numerous studies over the years have shown that implementing technology alone is not the key to improving business results, whether in sales or another functional area. CustomerThink’s research has found that CRM success arises from the right combination of strategy, measurement systems, people management, process implementation and enabling technology.

CSO Insights’ benchmark research found nearly 90 percent of respondents reporting improvement based on sales process implementation. Industry experts agree with CSO Insights’ perspective: "First get your process straight and then automate."

Packaged sales automation systems have been available for nearly two decades now. You can get a faster start on the road to sales productivity success by avoiding some of the mistakes that others have made in the past.

First, don’t look at systems simply as a way for bosses to check up on sales reps. We all know those types of systems don’t work, if for no other reason than the reps don’t see a reason to use them. Why enter information—sometimes two and three times—if it’s just going to take up more of your time and won’t give you anything in return? SFA implementations can miss the mark by mainly managing sales statistics, as opposed to actually enabling and empowering the everyday sales representative. The focus of your sales technology should be on the individuals on the front line with customers.

Second, don’t implement a system that’s hard to use. Regardless of the value a system could theoretically provide, if a system is perceived to be hard to use by reps, low adoption will limit the value to the organization. And if your people are not going to use the system, you might as well pull the plug right now and save the money. One of the best ways to improve usability is to have seamless integration to the daily tools they already use and trust.

Finally, don’t ignore the core problems of the sales rep. Sometimes it’s easy to define problems in terms of what the technology can easily do. That could mean automating low-value processes. To help your team be more productive, a system has to provide ways for your reps to gain insight into prospects, stay on track with sales processes, make more compelling sales presentations and close more deals.

Technology can be a crucial enabler to provide a repository for insight about your customers and prospects—and to streamline selling activities. To work effectively, it must deliver value to the reps, the organization and customers.

Workflow simply means the flow of work, usually including the information necessary to get the work done. Sales workflows include all the resources, tasks and triggers for action that are associated with each step of the sales process, starting with generating a prospect and continuing all the way through to handing off a closed contract to be fulfilled.

If you want to improve these processes, you have to change the workflow to generate more of the outputs you want, consume less resources or complete in less time—or some combination. Workflow technology helps automate processes by enabling users—ideally business users—to define and edit the rules associated with processes to perform such functions as authorization, scheduling, monitoring, event processing and prioritization. And in sales organizations, workflow can be a key element of success. It

allows organizations to enforce consistent qualification processes, embrace proven opportunity management processes and enable other processes for RFPs, customer references, etc.

Modern workflow tools should be graphical or wizard-driven, allowing the sales organization to easily create, track and re-use workflows and rules. For example, a good system can tie proposals and sales orders, allowing your sales force to collaborate with the rest of the company.

Executives at Jones Lang LaSalle, Nortel, Sasfin Bank and Equinox Fitness all knew they needed information to flow across divisions—often across geographic regions. They ultimately went with Microsoft Dynamics CRM because it could present a consistent view of the customer across the organization and because their people would use it.

CIOs I spoke with credit high usage to the fact that Microsoft could build on its existing family of products. Users were already familiar with Outlook for email, and their native Outlook client provided CRM functionality within the Outlook interface. "It integrated very well with what they were doing day to day already in Outlook and Excel," said Sean Flack, Global Account Services sales leader for Nortel. "It just basically was a layer sitting on top of that. They didn’t even realize they were using another tool."

When you’re looking for technology to help make your sales force—and your entire organization—more productive, the key, as Equinox’s Grayson says, is making sure the technology is in service to the business processes. "These tools wield a lot of power because you're structuring and also incenting the way people are supposed to do their jobs."

Enhancing insight "about our prospects and customers" was the No. 1 strategy respondents to CustomerThink’s survey on sales productivity gave for increasing revenue growth. "Knowledge is power," says Ehrensberger, "and technology can be used to facilitate knowledge availability and transfer—about the prospect, about your products and solutions, about your customer successes and about your best sales practices and processes."

But too often, sales reps can’t access that knowledge. "I think that’s the major gap I’ve heard from talking with salespeople," Stiehl says. "They don’t have tools to tell them what’s going on in the world and to enhance their sales experience. They need the tools in their hand when they show up at the customer’s door or talk to them on the phone. They need to be able to call it up in their computer quickly."

Much as Jones Lang LaSalle clients were getting irritated by "too many cooks," communications giant Nortel was hearing from customers around the world that they were being asked for the same information over and over again, according to Nortel’s Flack. "So keeping that focus on the customer and moving forward and gathering all of that stuff and being proactive in how we’re dealing with them and moving from phase to phase in a sales process was difficult."

Those index cards weren’t helping the membership advisors at Equinox Fitness. They didn’t give managers insight into their membership advisers’ performance, and they didn’t give membership advisers insight into the members, themselves. The company had no visibility or transparency to see how the organization was doing or what the trends were. "In a nutshell, it was difficult to manage and drive the business, and we muscled through it," Grayson said.

For Equinox Fitness, membership sales were the "beating heart" of the organization, according to Grayson, who said the organization needed a system that would certainly help rid advisers of their stacks of cards but would, more importantly, give them a way to view the customer as more than just a name and statistics. "Membership sales is the single most important business process in the company," Grayson said. "We have the lowest attrition rates in the industry. We want them to get involved with more services, but it only starts when you have members to start with."

When we asked people to rate the important factors in determining whether a sales automation solution was right for their organizations, "easy to learn and use for end users" was the top choice, scoring an average of 4.5 on a scale of 1 to 5, with 62 percent of respondents rating it as "extremely important." In unprompted write-in comments, 26 percent of respondents said the single most important factor in their selection of a sales automation vendor was "ease of use."

In the case of sales automation software, the perception of sales reps is critical. Spend some time with reps to learn what they like, or don’t, about the tools they use. You’ll probably find that:

• Reps don’t have much patience for entering data. Especially if it already exists in another system. Users will welcome systems that pre-populate fields automatically through integration with other systems—or that provide quick ways to get data into a system with auto-complete fields, pick lists and the like.

• Similarity to other tools they like—or, at least, are accustomed to using—is another factor in perceived ease of use. If reps have spent years learning how to use an email program, a sales tool that works in a similar way will most likely be considered easier to use than something completely different.

• Role- and context-relevant designs can also help. Users will find it easier to navigate a system that shows input fields and information that are relevant to their current role, rather than making them wade through all of the possible functions. Furthermore, information should be requested or presented only when it’s relevant in the user’s current workflow.

At Equinox Fitness, Grayson’s team knew that the system had to be intuitive or people wouldn’t use it. The layers of complexity within sales force automation and CRM systems can be off-putting to users, he said. The system has to be able to resolve that complexity seamlessly, behind the scenes, so the user could concentrate on business.

"Going into this [implementation], we recognized a risk and a not uncommon outcome for CRM projects is having a tool that management forces salespeople to use and salespeople curse and use grudgingly," Grayson said. "We’ve ended up in a state where we have a tool that salespeople like to use and want to use because it makes their lives easier." Equinox had its first pilot club up and running on Microsoft Dynamics CRM in September 2006, with nationwide rollout in November and December and 100 percent adoption by the first quarter of 2007.

The "top-level headline" about the success of the project in Grayson’s mind is that the company now has the ability to manage the most important part of its business. But there is a subtle but important subtext. People do not talk about the tool as a piece of technology. They just use it. And it, in turn, gives the whole company a shared way of communicating. People talk about "Day Zero" closing percentages or "Day 7" closing percentages or "what my pipeline looks like," Grayson said. "That’s huge, and it means that a sales process exists."

Increasing the productivity of sales rep takes a team effort. There is no one "silver bullet" that will boost revenue production, but with strong leadership from the heads of the sales and IT organizations, you can be successful.