Sales Effectiveness and Sales Efficiency are not interchangeable. The differences are subtle, but they significantly impact sales strategy execution.
Peter Drucker, the father of modern management theory, sums it up nicely:
“Efficiency is doing things right; effectiveness is doing the right things.”
What is Sales Effectiveness and why it matters
Sales effectiveness measures your sales team’s success in achieving its goals. It’s about looking beyond what activities the team is completing and understanding the outcomes – both for the customer and the sales team.
Knowing your organization’s essential sales effectiveness metrics will show what’s working and what isn’t so you can make any adjustments needed to get more from your sales efforts.
Differences between Sales Productivity & Efficiency vs. Sales Effectiveness
Productivity and efficiency measure activities such as the number of customer meetings or how quickly a lead converts. Effectiveness looks at the quality of those interactions.
Let’s use the example of a salesperson engaging with a prospect five times during a week; if the salesperson fails to cultivate meaningful conversations or relationships, then effectiveness would be low even though productivity and efficiency numbers look good.
Effective selling requires numbers-driven actions with client-focused outcomes that build rapport, identify opportunities for improvement, and grow evolving relationships over time.
Unfortunately, many sales leaders over-index on making their reps more efficient so they can make more calls, have more meetings, and send more emails faster and with less effort.
Ways to Build Sales Effectiveness
1- Prioritize training and coaching to empower the sales team with the right skills for each sales cycle stage. Examples of needed skills might include:
Establishing credibility and trustworthiness
Asking the right questions at the right time
Maintaining rapport with buyers during negotiations and when closing deals.
Prioritizing prospects and activities
2- Identify and prioritize effectiveness measures. Measure behaviors that improve effectiveness. Examples include:
Salespeople blocking time on their calendars for research and pre-call planning
Dynamic and prioritized target prospect lists
Using multi-channel prospecting cadences
The number of buying influences engaged
Proposing multiple solutions
Average deal size and margin
3- Optimize the processes and behaviors
Identify which processes and activities are effective, then improve efficiency by optimizing those activities.
Consider metrics such as call rate, win rate, sales cycle length, pipeline conversion rates, and the average number of touches until conversion.