Sales productivity consists of two components; utilization and effectiveness. The utilization level of a sales person is reflective of how much time the seller devotes to sales activities as opposed to ‘non sales’ activities. Sales activities include face to face or phone time with prospects, proposal preparation time, and email follow-up with prospects. ‘Non sales’ activities include travel time, internal meeting time, automation tool updates, mandatory training time, and the like. In most sales organizations, the utilization level of a typical seller is no more than 60%.

The other side of the productivity coin is the effectiveness level of the seller. That is, when the seller is actively engaged in the sales process, what type of skill and effort does he or she display. Think of the skills possessed by seemingly naturally born sales people. They have a natural ability to ask good questions, not lead with product, and do a thorough job of understanding the prospect’s problems before offering a solution.  Naturally born sales people make prospects feel at ease and never pressured. Compare this to a low performing seller who leads with product, never asks questions of the prospect, and loves doing presentations about his or her company’s products.

If the effectiveness of the naturally born sales person is 80 or 90 percent, the effectiveness level of the low performer is probably in the 30 to 40 percent range.

Both seller utilization and seller effectiveness are controllable by sales management. Low utilization is reflective of bad habits in the sales organization. These bad habits include organizational dependence on unnecessary meetings, poor automation tools, lack of performance metrics, and poor territory layouts. Low seller effectiveness is the result of poor hiring practices and lack of investment is sales skills training.

In the typical sales organization, overall sales productivity is abysmally low. Even in the best managed sales organization, seller utilization and seller effectiveness rarely exceed 50%. Overall sales productivity languishes in the 25 to 30% range.  Even a modest increase in sales productivity can result in tremendous upticks in revenues and margins.