Lead Generation: Avoid The One Mistake That Will Kill Your Sales Productivity

Sales Productivity is a factor of two things: Available time and effective use of time.

To increase a Sales Rep's productivity we can:
Decrease time spent on non-selling activities
Increase time spent on selling activities
Make better use of selling-time

Salespeople like other professionals, have a fixed amount of available hours during the year. Although you may put in far more hours, I'll base this number on 40 hours per week with 52 weeks in a year, and arrive at 2,080 hours total for the year. Your utilization of those 2,080 hours will determine your sales productivity and whether or not you'll hit your revenue targets.

Non-selling Activities

All Salespeople are burdened with activities that don't have a direct impact on revenue.

Sales forecasts, weekly sales meetings, chasing commissions, assisting with account receivables collection, travel and a myriad of other activities all contribute to a reduction in selling time.

Business-performance improvement firm Proudfoot Consulting conducts an annual survey with consistently shocking results. In their 2005 Proudfoot Productivity Report a whopping 79% of a salesperson's time was spent on non-selling activities. Using the 2,080 hour/year figure, only 437 hours remain to be spent on actively selling to or prospecting for customers.

If you're a Sales Rep or a Sales Manager, you won't find this surprising. If you're in marketing, this will give you more insight as to why Salespeople guard their time so judiciously, and chafe at following-up on leads of unknown quality.

Companies should take an inventory of tasks which divert Salespeople from being in front of customers. Then systematically create processes that will return valuable hours to the pool of selling-time. More time to sell is a good thing. However, it's not just the amount of selling time that's important, it's how the time is used.

Selling time

What types of activities would you consider to be selling activities? Of the 21% of selling time found to be available by the 2005 Proudfoot study, only 11% was spent actively-selling while a full 10% was spent prospecting.

Why wouldn't Salespeople spend all of their selling time with qualified prospects rather than prospecting? Why do they spend 10% of their available selling time cold-calling and following up with leads of un-known quality (think trade-show leads)?

Because there aren't enough prospects!

Stuffing the funnel with leads

In an attempt to bolster the amount of time spent actively-selling, we generate leads. Leads are the life-blood of sales. Leads keep our pipelines full. Leads are the source of all revenue. As Martha Stewart might say "leads are a good thing."

But leads aren't necessarily prospects and if they aren't prospects, they won't be buyers anytime soon. Too many non-qualified leads will kill your sales productivity, lower your revenue potential and limit your ability to exceed sales quota.

Leads: The Sales Productivity Killer?

The answer isn't to provide more leads, it's to provide more qualified prospects. Don't stuff the sales funnel with leads. Stuff the marketing funnel with leads. The marketing funnel is where leads should be shaken and sifted, helping qualified prospects fall through to the sales funnel where they can be closed. The more unqualified leads that make their way through to Sales, the less productive salespeople will be.

Lessons from the Gold Rush

I live in one of the historic California towns where the 49er gold rush took place. You couldn't find gold unless you had good techniques either panning for gold in rivers, or blasting through vast layers of earth. Gold seekers were of course, known as "prospectors".

Prospectors couldn't find gold without a laborious search. And like prospecting for gold, finding qualified prospects requires the right techniques. However, a division of labor for executing those techniques is crucial if prospectors are to maximize their return. If assayers were asked to haul and mill the ore as well as inspect for content and quality - investors would receive far fewer gold coins at the end of the day.

Copyright © 2007 Smart About Sales, Inc.

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