Sales effectiveness

Textbox Section
As an entrepreneur or a senior manager, you need to be developing your operations on an ongoing basis. So it is essential to have a well-thought-out strategy in place to guide you and your staff as you carry out your day-to-day activities. A common shortcoming we have observed is that many managers miss the opportunity to use information acquired through informed sales management to develop their operations
Textbox Section

It is not unusual for strategic operations development decisions to be connected with investments and risk-taking. Nor are the anticipated favorable effects always immediate or do they impact day-to-day cash flow. We believe the strategy of “developing the operations by increasing sales effectiveness” is underestimated and often overlooked, given that the sales function is frequently separate from operations and marketing.

Assuming that a sales organization is available and that production and delivery capacity are not limiting factors, sales effectiveness and sales management are some of the fastest and most cost-effective concrete tools for operations development. Why? They require essentially no investment, can be implemented immediately, and the pay-off is immediate. If we analyze the concept of “sales effectiveness,” we find it is based on two parameters – productivity and value generation.

Productivity reflects the structure, content, and pace of the sales process. Improved productivity helps lower transaction costs, increase competitiveness and, in the long run, raise the value of an operation. In practice, this means that salespeople who carry out many person-to-person interactions probably contribute to high sales productivity – as do sales channels that involve low order-processing costs.

Value generation essentially means making the most of every business opportunity so that the value of every relationship eventually becomes as high and as profitable as possible. Salespeople who succeed in generating higher order value and higher margins contribute to this.

To achieve greater sales effectiveness, you need to take a more informed approach to sales management than what many companies currently do. If you then bring your sales organization closer to your marketing activities, you will soon begin to see favorable effects.

At the end of the day, a better understanding of how to develop productivity and value generation is key to success in achieving an effective sales organization.