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How to boost your sales effectiveness by choosing the right priorities

The recent major changes in the B2B markets – data availability, multiplication of the channels, remote work – have added several layers of complexity in the sales processes. At the same time, customers have become more sophisticated and are now demanding flawless commercial interactions and journeys.

While management of commercial activities has clearly become a growth imperative, analytical difficulties and resistance to change can be very dissuasive obstacles. It is not uncommon for some managers to fear that even minor changes to their sales process could affect the productivity of their sales representatives.

Faced with these challenges, managers must choose their sources of information and their fields of intervention, and more specifically focus on areas with high impact and strong contributions to the commercial process.

Our experience has shown us that 2 areas – client facing time and sales performance metrics – provide the best opportunities for improvement. Without excluding the others, these 2 areas deserve special attention and should be at the top of the leaders' agenda.

Maximizing client facing time

On average, sales representatives spend between 25% and 45% of their time on activities other than pure sales. If this statistic can sometimes be difficult to accept, it is nevertheless explained by the multitudes of activities – contact searches, error corrections, customer complaints, reporting and administrative tasks... – which absorb surreptitiously the precious client facing time.

The financial consequences of this imbalance are significant and, if ignored, can lead to very regrettable drifts. However, correcting such a situation opens opportunities for rapid improvement as one of our customers experienced by increasing the client facing time of its sales representatives by 11% (30 minutes per day) was able to expand its gross margin by 16%.

The sources of improvement are diverse and range from the automation of tasks with low added value to the outsourcing of activities requiring specific expertise through time management training of the sales representatives.

For the manager, client facing time is therefore a valuable lever that needs to be maximized. The sources of improvement are diverse and range from the automation of tasks with low added value to the outsourcing of activities requiring specific expertise or time management training of the sales representatives.

Selecting the right metrics

It is common for companies to rely solely on revenue and cost of acquisition indicators to measure their commercial performance. These metrics, while useful, have nevertheless limits to their scope: by only partially integrating the operating costs, they do not for instance allow the determination of the optimal levels of acquisition costs or the comparison of performances of different channels.

At GROW we use a much more efficient indicator - the gross margin adjusted payback period - which measures the time it takes for a company to cover all the expenses and investments attached to a client (acquisition costs and production or service costs). It is calculated by dividing acquisition costs by the gross margin after full production or service costs, and it is expressed in months.

It has the advantage of going well beyond traditional indicators and provides a very accurate – and sometimes counterintuitive – measure of commercial performance. By way of illustration, a client may have both high revenues and controlled acquisition costs – which would seem to be good news – and a gross margin adjusted payback period of more than 12 months which constitutes a risk to the company's financial balances.

Moreover, since this metric is normalized over time, it is particularly useful when it comes to making decisions at times or in contexts that appear to be difficult to compare. In particular, it makes it possible to monitor the effects of changes in acquisition expenses, to compare the real productivity of different channels, to assess the impact of pricing options and, when the data are available, to compare performance with competitors. It also makes it possible to conduct comprehensive forecast analyses and to plan expenditures and investments.

The intriguing thing about commercial productivity is that it is both elusive and difficult to analyze, but it is also immediately available as a lever for growth and its activation depends exclusively on a management decision.

If you are interested in delving deeper into this topic and learning more about our experiences, please do not hesitate to contact us.

Alexandre Giry-Deloison, founder & CEO of GROW


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