5 ways Benchmarking Sales WILL Improve Performance
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The real juicy information on how and why sales performance will improve comes just after this section, but if you want a more detailed explanation of benchmarking and best practice take a quick look at my ‘What is benchmarking and why bother’ blog.
If you’re sticking around, let’s keep it short and sweet; Benchmarking is the process used to compare an organisations processes and competencies with others in a similar industry or business sector.
Essentially, Benchmarking Sales takes a ‘snap shot’ of your Current Performance, compares results with others and through the resulting gap analysis clearly highlights your future potential performance and where you need to improve.
1. Building an effective Sales team
Consider these statistics drawn from Sales Benchmarking (Greg Alexander and Aaron Bartels);
- Average shelf life of a Sales Manager is 15 months.
- Almost 40% of salespeople miss their numbers every year.
- Almost 4 out of 10 salespeople will lose their jobs this year.
- An average of 27% of salespeople do not produce enough to cover their costs.
Does any of this sound familiar? More importantly what is the true cost to your business of poor performance in the sales function?
Why is such a high rate of failure acceptable when it comes to sales…No other function within a company is allowed to underperform this way. Greg Alexander and Aaron Bartels hit the nail on the head;
‘This level of failure has thus far been tolerated because sales executives have not understood how to apply benchmarking to their businesses’
2. Identify Competitive Threats
So you think you know your business inside out and you could easily identify competitive threats through a bit of brainstorming activity. This may be the case, but how can benchmarking your sales to identify key competitive threats really improve performance?
Well, in order to remain competitive, you need not only to protect your interests, but also to expand them. You need to ‘out-innovate’ your competitors. And the only way to do that is to understand who your competitors are, how they perform and the strategies they adopt to deliver that performance. Adopting strategic benchmarking provides a systematic and frequent comparison with world-class performance levels , processes and core competencies of competitors in your sector.
In essence, identifying competitive threats through an effective strategic benchmark process will establish;
- Who the ‘Top Dogs’ are in your sector.
- How your performance compares to those ‘Top Dogs’.
- Best practice learnt from the ‘Top Dogs’.
- Which strategic path to take to avoid getting bitten by the ‘Top Dogs’
Note: For many markets sectors it can be a ‘Dog-eat-Dog world’ out there!
3.Highlight Improvement Priorities
So, once you’ve compared current performance with industry leaders, a gap-analysis is formed, clearly highlighting and prioritising improvement opportunities. But how is this really going to improve your sales performance?
Let’s say that after using a Strategic Sales Benchmarking Tool, you discover your lowest comparative performance was in ‘Sales Methods and Techniques’, ranking 30% below industry average and 60% below the industry leader. This aspect of your sales function is clearly a serious weakness and should therefore be considered a priority for improvement.By analysing industry best-practice and developing tailored strategies and support from a specialist, your sales performance will start to nibble at the paws of competitors or ‘Top Dogs’ in your business sector.
4. Ensure effective targeting of resources
With businesses continuously evolving and pushing the performance boundaries, competition is cut-throat. To ensure you stay one step ahead and reap the biggest sales-performance rewards, you need to prioritise the key areas to focus your valuable time on.
Take a look at these two quotes from Carolyn E.Adams and Ann L. Anthonys book on Resource Utilisation: ‘Benchmarking activities can provide a quantifiable profile of an organisation’s services to use for identifying areas where reallocation of resources can make the most difference.’
‘Benchmarking can also assist in increasing consumer satisfaction by focusing resources on areas that are most important to organisations clients.’
Clearly, once improvement priorities are established, your resources and time need to be injected as effectively and efficiently as possible. To ensure resource targeting is directed effectively, it is fundamental that the benchmarking process results are as reliable as possible. There are some crucial guidelines found here which, if followed, produce much more reliable and useful results.
5. Improve Productivity and Increase Profit
So, does all this really improve productivity?
Successful companies come in all shapes and sizes – all have benefited from performance benchmarking at one time or another. If companies and organisation such as Rolls Royce, Balfour Beatty and Ercol furniture have used these benchmarking tools to learn and improve, you can too.
The process of benchmarking, or identifying the best practices that exist in your particular business or industry, is a method that is rapidly gaining a reputation for helping businesses improve productivity. Benchmarking can effectively help identify how others have increased their productivity so why reinvent the wheel? These methods can be adapted to make your business become more competitive. Imagine if you had a car sales company that sells 50 cars/month and down the street a competitor sells 300/month. By truly understanding your performance vs. your competitors, a strategic plan can be put in place to improve your business and deliver results to the bottom line.
There we have it, I hope this has given you a taste of what is possible with benchmarking and shone some light on how benchmarking sales could improve performance in your company.
Remember, to stay one step ahead of the competition, benchmarking is an essential tool in your business improvement tool box – it is also a great way to either kick off or refresh continuous improvement projects across your organisation.
‘Benchmarking – a strategic process used to provide a systematic and frequent comparison with the world-class processes and core competencies of competitors in your sector ‘
Check out this short video where our Best Practice Club members speak about this – a prime example of benchmarking and best practice sharing in action.
To discover how your Sales Team can deliver more Profitable Sales, start your benchmarking journey right now with SalesBenchmark™
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