Efficiency and productivity are two metrics by which most sales departments measure their success. However, it's important to keep these in perspective to scalability, especially with companies experiencing massive growth. Companies need to be able to encourage the development of sales teams and departments and not grow complacent with simply becoming bigger.
For example, if a company spends $5 in sales costs to drive $10 in revenue, that is a profitable sales department. If that number grows to $500 and $1,000, the sales department is still radically successful. However, that doesn't mark improvement, merely growth. Mind you, that's not a bad thing, but the lack of development may hinder a company during times of stagnation or even regression.
Sales productivity may or may not be a priority at your company if your market is growing rapidly, you're happy with your gross margin or competitive pressure is low. On the other end, if the market is flat, margins or shrinking or competition is on the upswing, it's time to seriously consider improving sales departments to make them more productive.
Sales departments need to figure how to improve productivity and make their practices even better in the long run. How can they go about doing that? According to the Sales 2.0 Conference, that means "improving sales productivity to free up cash that you can use in a number of critical places."
It's best to think about productivity in terms of percentages, rather than straight dollar amounts. For example, if sales teams account for 25 percent of expenses, improvements that reduce those operational costs to 24 percent mean that 1 percent can be devoted to other mission-critical tasks. Businesses could build a better buffer to safeguard themselves against market conditions, or they could reinvest that 1 percent into product development – there are any number of issues that could be addressed with a bit more budget.
So how can companies improve their sales departments? One strategy that can be deployed is sales coaching. Whether businesses use a third party or develop their own regimen, additional training can help salespeople improve their skills and product knowledge, enabling them to be more efficient at their jobs.