Diagnosing Sales Performance Problems: How Much Do You Really Spend?

Looking at statistics, you get the feeling that many companies treat sales performance management more as an art than as a science. Often throwing spaghetti at the wall to see what sticks: adding new tools that the sales force barely uses and changing processes without first looking at what the data says.

sales performance

The truth is that data matters. A lot. Companies that succeed in developing a systematic approach to sales performance management – making decisions that are supported by hard data and aligned with a cohesive strategy – get the upper hand on their peers.

Numbers prove it. According to Aberdeen Research, best-in-class companies are 187% better than all others at taking the guesswork out of selling by providing analytics or data to support proven best sales practices. Top performers are also 151% stronger at onboarding, training, and retaining salespeople, and 75% more focused on providing sales reps with marketing tools to develop, send, and track responses to outbound communications.

Which profile does your organization fit better? Does your organization miss sales opportunities because of sales performance problems? How much do you lose every year because of inefficiencies? Take a look at the following in order to start diagnosing factors that may be causing trouble inside your company and thinking about solutions.

1. The administrative burden. CSO Insights estimates that 60% of sales reps’ time is spent on activities unrelated to selling, such as shadow accounting. Sales reps often have to devote themselves to working on manual spreadsheets and reports, or waste hours with inquiries because they do not properly understand their compensation.

One of our manufacturing clients was getting more than 40 calls/week from the field, with reps asking for clarifications related to statements and payouts. Optymyze helped reduce the burden considerably by automating processes for the client, bringing the number of calls to only two/week.

2. Too many tools. When addressing specific needs, many companies get lost in the chaos of mixing in-house solutions with the occasional new tool. Don’t fall into that trap. Implementing an integrated platform might be costly up front, but it will provide a big return on investment over the following years. How? By automating slow and unreliable processes, for one.

Optymyze supported a pharma client in reducing their sales cycle from 12 to 4 weeks.

3. Turnover due to low morale or ineffective compensation strategy. According to a Giga TEI report, the average turnover rate for sales organizations is 5-10%, which is an expensive problem for any company, especially when top sales reps or people selling niche products leave. Eremedia estimates that replacing mid-level employees costs upwards of 150% of their annual salary. With the average sales rep receiving $3,400 in training per year, adding ten new reps can dramatically impact the budget.

4. Overpayments due to errors or bad quotas. An apparently small error in calculations, multiplied at sales force scale, can lead to significant costs.

Optymyze worked with a leading soft drinks bottler to design an appropriate sales compensation plan and automate related businesses processes. The improved accuracy in calculating quotas resulted in a saving of $18 mil/year for the organization.

5. Risk exposure of being non-compliant. This is a particularly big concern for companies in fields with constantly changing regulations, like telecom, pharma, and of course financial. Costs related to litigation and misconduct can amount to hundreds of billions of dollars.

Focusing on these key areas is essential. Just as essential is taking a broad, integrative approach to sales performance. A truly great solution should combine people management with your company’s underlying systems and processes.

What about your organization? What are the biggest sales performance challenges you face? Write and let me know.



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