Helping Manufacturers And Distributors
Improve Sales Performance And Profitability
Published by the Industrial
Performance Group, Inc.
800-867-2778
Issue
No. 36

Achieve Double-Digit Growth

With Low Risk and No Additional Sales and Marketing Costs.

In the last issue of Channel Focus, we released the preliminary results from our online survey of over 700 salespeople from a variety of industries. The number of respondents is now well over 1,000.

We found that salespeople work long hours — an average of 49 hours per week. No surprise there. But we also discovered that a lot of their time is consumed by activities that have nothing to do with sales. In fact, on average,
salespeople spend less than half their time selling. They spend most of their time traveling or performing various administrative tasks.

How Should a Salesperson's Time Be Utilized?

Established benchmarks give us a good measure of the optimal utilization of a salesperson's time. Research shows that peak sales performers spend the majority of their time — 85 percent — engaged in a specific set of revenue-generating activities. They spend the remainder of their time on activities necessary for the day-to-day operation and management of a sales territory.

Our survey results indicate that the average salesperson only spends 41 percent of his or her time engaged in revenue-generating activities — well below optimal utilization.

The most troubling finding is that salespeople spend an average of 22 percent of their time — nearly one-fourth — dealing with problems and mistakes, looking for information and expediting orders.

Reducing the amount of time salespeople spend performing these non-revenue-generating activities would give
them more time to sell. As a result, manufacturers, reps and distributors can easily obtain double-digit growth with low risk and no additional sales and marketing costs.

Giving salespeopl
e more time to sell may seem like an amazingly obvious solution.

However, it's a solution that most sales managers haven't paid much attention to in the past, largely because of how they measure sales force performance.

Sales force performance is usually measured in terms of productivity. Measures of productivity define the relationship between how many dollars were brought in per salesperson compared to the cost of supporting that salesperson.

While measures of productivity are important, they do not tell the whole story. In fact, productivity numbers can create a false sense of security by masking ineffective sales force utilization. Your productivity numbers might look good, but you have no way of knowing if your salespeople be doing even better.

The results of our survey clearly indicate that most salespeople could be doing better — a lot better — if they had more time to sell.

But don't take our word for it, see for yourself.

How Much Could You Gain?

This simple calculator shows what you could gain by improving your sales force utilization, based on the results from our on-line survey.

Simply enter your yearly sales total into the calculator and the number of salespeople in your sales force. Then, click Calculate.
Gain in Yearly Sales Calculator
Gross yearly revenue
Number of salespeople in your sales force

do not use return to calculate
Revenue per salesperson per hour
Revenue at 65% sales force utilization
Revenue at 85% sales force utilization
These calculations are based on survey result averages: 40% sales force utilization, 49-hour work week and a 50-week work year.
The first calculation shows how much revenue each of your salespeople can generate for every hour they engage in revenue-generating activities. This calculation also indicates how much revenue you forgo for every hour your salespeople are engaged in non-revenue-generating activities.

Now take a look at what your yearly revenue could be if your sales force utilization was increased from 40 percent to 65 percent.

And finally, the calculator shows you what your yearly revenue could be if your sales force were operating at its full potential — 85 percent utilization.

If these sales numbers are appealing to you, give us a call and we'll explain how you can obtain them — 800.867.2778.

Return to Top

View previous Channel Focus Issues



Visit the Industrial Performance Group home page

©1996-2006 Industrial Performance Group