First things first – sales effectiveness or efficiency?

Sales_effectiveness-efficiencyAs a consultant, I’ve seen an unintentional decision playing out among large  service contractors (those with dedicated sales resources) and smaller firms as well. Most of these firms are committed to improving sales, but they’re focused almost exclusively on improving efficiency, not effectiveness.

Sales effectiveness and efficiency can sound like vague generalities, but deciding which to improve first greatly affects the size of results and when they’ll be seen.

Yet most service contractors say they’re working on both at the same time – they’re multitasking to improve sales effectiveness and efficiency.

Multitasking is a myth

Multitasking, whether in computers (single core processors) or humans, is in reality a swapping of attention/activity.  It’s one thing, then another, then back to the first, giving the appearance of two things being done simultaneously.

Unfortunately, human multitasking doesn’t produce the expected results. The brain shows severe interference when even very simple tasks are performed at the same time.

And that’s the case with service contractors.  The efforts to improve sales are not really getting done as successfully as they could if addressed one at a time, in order.

Definitions first

Before making a case for placing either sales effectiveness or efficiency first, let’s define them.

Effectiveness is the capability of producing the desired sales result, i.e. winning the bid, getting an appointment or a return call, etc.

Efficiency is making good use of sales resources, not wasting them, which translates to producing lots of sales activities, i.e. lots of bids, cold calls, direct mailings, etc.

Simply put, effectiveness is about winning each attempt regardless of what it takes, and efficiency is about producing a lot of attempts with minimal effort or waste.

The point is…

The purpose of both sales effectiveness and efficiency is to raise revenue – more is better, and earlier is better than later.

But because resources are always limited, a choice has to be made of which aspect to work on first: effectiveness or efficiency.

Effectiveness first

Logic wins out.

By improving effectiveness first, more of the early opportunities that present themselves will be won. Efficiency should be improved too, but only after effectiveness has been raised to optimal levels.

By making the intentional choice to first improve effectiveness, contractors will:

  • See larger revenue faster
  • Fund later improvements for the efficiency of sales activities
  • Increase results (revenue) exponentially as a higher win ratio is more efficiently generated (when efficiency is optimized after effectiveness)

How to improve Effectiveness

  • Uncover the voice of your customer via qualitative research (this is what your ideal customer is seeking & values)
  • Acquire feedback from lost bids, closed customer  accounts, departing employees
  • Upgrade proposal content, templates & appearance (from informational to persuasive proposals)
  • Invest in sales training

How to improve Efficiency

  • Automate proposal production, such as with SalesProposals.com (this is an affiliate partner)
  • Manage prospect / customer data in CRM (Customer Relationship Management) solutions via online services or company applications
  • Automate tracking & reporting of sales activities
  • Measure throughput, activity & effectiveness

Early, fast wins through intentional decisions

Get intentional about which aspect of your sales efforts you improve first. You’ll be positioned for the larger, earlier, and easier wins. That equates to record revenue increases.

~~~~~~~~~~~~~~
Chris Arlen
President, Revenue-IQ

* Acquire feedback from lost bids, closed customer  accounts, departing employees
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