Three reasons why your B2B sales team productivity is low

This article is part of our B2B sales and marketing strategy series. Find other relevant articles below.

Why B2B Sales are complex and time-consuming?

Unlike other categories, B2B sales cycle are comparatively longer. Gaining a B2B lead is only a small start in the sales journey, your sales team must spent time to nurture and educate the many stakeholders in a B2B sales before they can convert. Therefore, your sales team is the both the primary asset and cost in B2B sales. In this article, we will explore 3 challenges B2B practitioner faces when trying to improve their sales team productivity:

  • Do they have enough opportunities to be productive?
  • Do they have enough time to focus on selling?
  • Are they chasing the right opportunities?

1. Do they have enough opportunities to be productive?

B2B sales are complex, you’ll need sales professional who can consult, educate and nurture relationship. They are your asset.  At the same time, their payroll also exert operational cost pressure. Management and investors alike demand a healthy Return on Assets. You must provide your sales team with a steady flow of opportunities, otherwise they won’t be able to earn commission and you won’t be able to justify your payroll cost. Ed Catmull of Pixar term it perfectly as “Feeding the Hungry Beast”. 

One way is to measure your team’s utilization rate, do they hit your daily call or messaging target to create sufficient opportunities? Most B2B companies understand this well, not only their team must have sufficient volume of leads, but the volume must also be consistent. If I have 3 members in my sales team, and each of them can go through 40 leads per day – then we will need to generate at least 120 leads per day. But utilization is not productivity, that’s why the next 2 factors is equally if not more crucial.

2. Do they have enough time to focus on selling?

We have established earlier that your sales team are your asset. They are sales professional with in-depth knowledge of their respective domain, expansive network in the industry and experience in the buyer’s procurement process. A medical equipment sales professional cannot be uprooted to sell construction machinery in a heart beat. So it wouldn’t make sense to hire these professionals and ask them to perform menial task, right? 

Yet, would it surprise you that sales professional spent only 32% of their time on key selling activities? How your sales team utilize their time is far more important than utilization rate. Due to increased complexity in the buyer’s journey, sales professional are required to mind more channels (e-mail, social, messaging, phone), perform more data and SOP-compliance task (CRM, activity report). All these overhead cost distract them from selling. 

Source here

3. Are they chasing the right opportunities?

When managers obsess over utilization rate while neglecting conversion rate, your sales team is busy but not necessarily productive. Lead volume does not necessarily translate to sales volume. Every lead will entail overhead cost (activities such as reporting, data organization) and low-value menial task (activities such as lead filtering, quote generating). Bad lead usually have an even higher overhead cost. 

Once, I had the unenviable pleasure to explain to public-listed company CMO the benefit of generating online leads VS buying leads database from dodgy supplier. Let’s do a simple comparison.

  • Operational cost. Suppose you’re paying RM 3,000 a month to your sales exec. So your operational cost is RM 0.31 a minute.
  • Lead generation cost. Property leads on Facebook ranges from RM8 to RM 12 per lead, and he claims he purchase database for RM 0.50 per lead. So, 1,000 leads from Facebook will cost RM 10,000 (median of 8-12) but only RM 500 from the database.
  • Conversion rate. Leads generated from Facebook are automatically Marketing Qualified Lead (MQL), prospect who explicitly express an interest on your product and want to be contacted. So naturally, the conversion rate is higher. Let’s assume a 2%-5% conversion rate. But the database leads are cold leads, conversion will be tougher, let’s assume 0.5% conversion rate.
  • Effort. Let say on average, your sales exec will need 32 man hours to convert a MQL. Facebook leads are automatically MQL, but the database are cold leads. Your sales team will need to invest extra time calling, filtering and nurturing cold leads to become MQL. Let’s assume there’s an extra 30 minutes effort penalty per cold lead.
  Facebook MQL Database cold leads
Total leads  1,000  1,000
Conversion rate  3.5% (median of 2%-5%)  0.5%
Total sales 35 5
Total Effort (man-hours) (35 X 32 hours) = 1,120 hours (5 X 32 hours) + (1,000 X 0.5 hours to filter cold leads) = 660 hours
Required number of sales person (assuming 8 hours per day, 20 days per month) 1,120 / 160 = 7 person 660 / 160 = 4.12 or 5 person (since you can’t hire part-time)
Total Operational Cost 7 X RM 3,000 = RM 21,000 5 X RM 3,000 = RM 15,000
Total Lead Generation Cost RM 10,000 RM 500
Total Cost RM 31,000 RM 15,500
Customer Acquisition Cost  RM 31,000 / 32 = RM 968.7 per sale RM 15,500 / 5 = RM 3,100 per sale

As evident in the calculation above, bad leads increase customer acquisition by more than 300%! Giving your sales team high-quality leads is the fastest and easiest method to reduce your customer acquisition cost.

Predicting and prioritizing opportunities

Nurturing B2B leads requires time and attention, any seasoned B2B sales professional will tell you it’s all about relationship and follow-up. When your team pursue an opportunity, often that means giving up on another opportunity. Prioritizing the right opportunity is crucial. Since B2B sales cycle is long, losing a deal after investing countless hours and effort can be painful. Therefore, B2B sales practitioner have to be mindful of 2 opportunity cost:

  • Activity opportunity cost. How much time does your sales team spent on submitting report, performing repetitive and menial task – when can they focus on selling? How can you remove the pebbles in their shoes?
  • Prioritization opportunity cost. If 2 or more deals are simultaneously competing for your team’s attention – which opportunity should you prioritize? How can you discern and measure an opportunity value and probability?

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