Two more hours of sales activity per week can mean millions for companies

Shifting two hours a week from administrative duties to sales activities and carefully allocating activities between new business developers and account managers can mean a gain of millions in sales for companies, according to a study by Watson Wyatt, a leading global consulting firm.

The 2008 Report on Sales Effectiveness and Compensation found that just two hours more of sales activity a week could lead to as much as £11.5 million in additional revenue for a company with 180 new business developers.

Reallocating time and resources between new business developers and account managers can create more than £305 million in additional sales for a £10 billion company.

“Too often companies mis-allocate how their sales force time is used,” said Chantal Free, European head of sales effectiveness and compensation consulting at Watson Wyatt. “Pushing non-selling administrative duties to administrative sales support roles can create a substantial increase in company sales results. Employers can then guide salespeople to the right customers or activities. Top-performing salespeople should be devoting their time to developing relationships and closing sales.”

The survey found that a majority of top-performing salespeople responsible for developing new business prefer one-to-one communication rather than other methods of correspondence with prospects and customers, compared with 39 per cent of their lower-performing colleagues. In addition, top performers are less likely to spend time on administrative tasks.

The compensation structure for salespeople also remains a key differentiator between top performers and others.

Top-performing salespeople report incomes nearly one-quarter higher than their less productive counterparts (24 per cent higher for new business developers and 23 per cent higher for account managers).

Sales-related variable pay accounts for a vast majority of this difference. Top-performing new business developers and account managers respectively receive 46 per cent and 60 per cent more sales-related variable pay than their peers.

“Companies who establish the appropriate sales structure and design incentive plans to focus on the highest-value activities can expect to increase sales and profitability with minimal additional costs,” said Chantal Free.

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