2 minutes read
Many people (even sales leaders) have difficulty explaining sales effectiveness in selling. And many of them mix it with sales efficiency. You can find many articles explaining the difference between efficiency and effectiveness so I will keep it simple. In one sentence…being effective is about doing the right things while being efficient is about doing things right. For example, you can have very high conversion rates of your leads to order (efficiency), however, if you are selling primarily low-profit products, your contribution to the bottom line (effectiveness) will be minimal.
Sales effectiveness can simply be described as the average output per salesperson. This output is mainly considered as revenue. From my point of view, it is not enough. We need to see the impact of a salesperson on the bottom line. Yet, it is not easy to measure it. That is why many companies use revenues as output instead of profit.
It depends on the commercial and marketing strategy of each company but selling a lot is not enough to keep a business alive. In the long run, what keeps a business running is selling profitably.
So, how to make sure that you are selling profitable? Here are some questions to answer:
1. To whom are you selling?
Are you selling to the type of customers who value your solutions the most? Or you are simply responding to incoming leads regardless?
2. Which solutions (products/services) are you selling?
Most of the time, the most profitable products are the ones that are relatively more difficult to sell. And best selling products are most of the time considered as “bread and butter” due to their lower profitability. You need to define the right mix.
3. How cost-effective are you selling?
As a salesperson, you are the most critical cost of selling. Therefore, it is very critical to decide how you spend your time. Referring to the first two points, it is crucial to spend time with the customers who value your solutions the most and whose problems can be solved ideally with your most profitable solutions.
Responding to all types of customers requesting only the price of your solutions is not necessarily the most effective way of selling. Even if you operate with high conversion ratios, you will perform with low sales effectiveness. So, each time you look for profit growth, you will need to increase your pipeline and quickly reach your physical limits in terms of working hours, which is very likely to cause burnout. The only option will be recruiting new salespeople which is the expensive way to look for additional growth.
To sum up, calculating the profitability of a sales transaction beyond the margin requires some questioning. And the answers will show how effectively you are selling.
To make it even simpler, I like to ask salespeople one question…
Who are your best customers? And why?
Learning for Performance 
powerful. These groups were not valued and that they were outsiders in a system designed for white Americans.
My passion for curating collections of books that included minority protagonists (without the typical stereotypes found in many books that included minority characters) became the central focus of the company’s work. We developed a reputation for producing great collections of texts that were representative of the diverses ethnicities and cultures in districts we served.
We received many requests for these collections and our found that our time to be working with schools to create the unique solutions we set out to do was being dominated by curating the perfect collection for our customers. This happened to be a significant drain on our most valuable asset, TIME.
Part II
To compound the problem, this work was the lowest revenue producer for the company. As mentioned in the post, “the majority of our work was focused on the lowest profit category in our portfolio of offerings”. In addition, we were working long hours that were not intellectually stimulating and were feeling burned out. In essence, we were burned out and struggling to pay the bills.
Though I complained about it, I never really took the time and attention to think about another course of action. We were caught up in the performance momentum of the work routine that we found ourselves in.
I had the good fortune to find myself in a Zoom workshop with Emre entitled, “The Inner-Game of Life”. The workshop was run by Tim Gallwey, the father of Sports Psychology and and the author of “The Inner Game” in 1974. The workshop was run by Tim Gallwey, the author of the Inner Game series of books. The focus of the workshop was to recognize the inner dialog that exists inside our minds and how to train ourselves to quiet the critical voice that limits our true potential.
Part III
Everyone in the group formed a special connection during the three days we were together. Emre shared a link to his blog that related to a topic we were discussing and saw this post. It spoke to me in a personal way as I was struggling with this particular issue. Over the past three months, I have refocused the company’s time and resources in a way that it will produce more revenue and also free up time to spend with my family and friends.
This is a long post and I hope that you have read down this far for me to sum up the important point I want to make. “In both work and life, we all need to make an investment in the things that produce the maximum return for a fulfilling life.” ~ Enre, thank you for sharing your valuable insights. Also, thanks to everyone that made it this far reading my post!
Jim Burnette
Chicago, USA