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Moving from Sales Efficiency to Sales Effectiveness
Posted By Dr. Tom Sant | Nov 06, 2013
Sales systems have focused primarily on making the sales person and—more typically—sales management more efficient. That is, they have enabled people to handle larger volumes of data, keep track of more deals, communicate quicker, develop more accurate forecasts, and so on. These are the typical benefits promised by various kinds of workflow automation systems worldwide. They are the benefits of greater efficiency.
What they haven't done is help people sell better. That is, they haven't provided the tools the sales person needs to close deals.
Sales Efficiency vs. Sales Effectiveness
And that raises a question: is it smart to continue to focus on efficiency, or is it time to start focusing on effectiveness? Before we answer that question, perhaps we need to define our terms:
Sales Efficiency is a function of the volume of work we do correctly. By doing more work in the same amount of time, we increase our efficiency. Efficiency goes up when we implement tools and processes that increase speed—the throughput rate—or when we save time by eliminating steps that are unnecessary.
Sales Effectiveness is a function of the results we get. In a sales organization, sales effectiveness is most likely to come from improving the way the sales team (including the proposal operation and sales support group) works. By implementing best practices, by working in ways that generate measurable improvements in results, we increase the size of the deals we’re working on, we decrease the duration of the sales cycle, or we increase the percentage of deals we win.
Efficiency improvements are worthwhile. There’s no debating that fact. But the risk is that the improvements to work methods—the increased efficiency we achieve—accelerate the pace of activity but fail to produce the right results, which for a sales operation would be winning business. In a worst case scenario, we are efficiently moving ourselves toward failure.
Over the years, senior executives have expressed widespread dissatisfaction with the millions they have invested in software intended to make the sales process more efficient. These systems were bought (or licensed in the case of cloud-based tools) with the hope that they would automate and streamline major chunks of the sales organization’s work, making them more efficient.
They did that, all right. The problem is that the kinds of efficiencies they introduced had virtually no impact on effectiveness. With the most customer relationship management (CRM) systems we can now create a pretty picture of the pipeline or produce a management report must faster. But we’re not able to close deals any better than before.
In fact, independent research findings published by the Gartner Group, Aberdeen Group, and Yankee Group have all indicated that most senior executives do not believe the investment in CRM has produced better results. For example, Yankee Group found that 77% of the respondents said they would like to create more persuasive proposals, but only 34% thought their CRM system helped them do a good job of that. Similarly, 49% rated their sales team’s ability to find appropriate marketing materials for a specific customer situation as very bad or bad, even though 86% thought that doing so was highly desirable.
Moving Away from Just Sales Efficiency
For sales organizations the real breakthroughs come from improving sales effectiveness. For too long we have spent our time and resources in pursuit of the wrong goal. Merely automating an aspect of our work without also improving the results we get is at best a short-term gain. Applying the right methodologies to generate better results is the foundation for sustainable competitive advantage.
In a slow economy, senior sales executives want to help their sales people increase their closing or win rate, improve their ability to sell solutions, increase the value of contracts or the size of deals being sold, and shorten the length of the sales cycle. Those are measures of effectiveness, and if the typical sales manager can achieve even one of those, that manager won’t care a bit if efficiency is less than optimal. However, in the ideal world you should be able to get both: greater efficiency and improved sales effectiveness.
As you might imagine, we’re proud to say that with the Qvidian suite of tools you do get both--increased sales efficiency and dramatically improved effectiveness. And we have the research to prove it. Contact us today to find out more.