Let’s begin this blog on a positive note. The time spent on non-revenue-generating activities by sales professionals has decreased over the past decade. More than 10 years ago, several studies indicated that salespeople were only able to dedicate between 35% and 40% of their time to actual selling. Fortunately, recent research shows that this figure has now increased to nearly 50%. However, does this improved sales efficiency – time to sell?
Between 2008 and 2016, various studies explored how sales representatives allocate their time. These reports must be interpreted cautiously, as there are differing opinions on what qualifies as “selling time.” Some studies exclude customer preparation from selling activities, while others include it. Similarly, activities such as preparing and submitting an order can be categorized differently. As a result, reported figures have ranged from as low as 22% to as high as 45%. Despite this, the fact remains: the majority of a salesperson’s available time is still not spent on selling.
On average, sales professionals spend less than 50% of their time actively selling.
Sales efficiency is often the “elephant in the room” for leadership teams. This is largely due to the traditional methods used to measure the effectiveness of sales professionals. Since sales is typically viewed as a numbers game, with targets set against revenue generation, the primary focus is often on the outcome, rather than the process. As long as the revenue targets are met, there is little concern for the approach taken to achieve them. However, this mindset may shift when considering that studies have shown that 64% of salespeople fail to meet their targets.
The fact that, on average, 64% of salespeople fail to meet their targets should prompt a serious re-evaluation of sales efficiency.
Non-revenue generating activities
Process efficiency and improvement initiatives can sometimes be perceived as a challenge within organizations. Smaller companies, in particular, often struggle with enhancing their processes. Employees may view these efforts as an additional burden rather than a solution. Unfortunately, this perception isn’t entirely unfounded. Instead of examining the underlying reasons why so much time is spent on non-revenue-generating activities, the focus tends to be on increasing the time spent in front of customers. This approach often overlooks the root cause of inefficiency.
A 2016 study of around 600 sales representatives revealed that 23% of their time was spent on administrative tasks. Another 13% on traveling, 10% on internal communications, and 4% on miscellaneous activities. Adding up to a staggering 50% of their available time.
23% of the available time is spend on administrative activities! Why?
The 23% allocated to administrative work is particularly noteworthy and warrants closer examination. In upcoming blogs, we will delve deeper into this area. We’ll also explore the time spent on traveling and internal communications, which together account for a significant portion of sales time. Stay tuned for more insights on how these factors affect efficiency.
Sales talent underutilized
Another topic to be addressed in the coming weeks is the underutilization of each salesperson’s unique talents. Like every role within a company, there are aspects of a job that may not align with an individual’s strengths, while other areas allow them to truly excel. Interestingly, in sales, we often attempt to consolidate all responsibilities into a single individual.
We expect a salesperson to generate leads, act as a product expert, close deals, and manage the entire order process within the organization. Not to mention the above discussed additional responsibilities of traveling, handling administrative tasks, and more.
In an upcoming blog, we will explore how to better leverage the particular skills of each salesperson. Maximizing their efficiency, ensuring that their capabilities are used to the fullest potential.
While: Sales Efficiency – time to sell!