Benefits October 5, 2006

WWW: Trick to Effective Sales is Best Use of Time

October 5, 2006 (PLANSPONSOR.com) - Sales managers should not keep one eye on the clock to judge their salespeople by how long they work, but instead should evaluate how effectively they use those on-the-job hours, according to a new study.
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A Watson Wyatt Worldwide news release said its survey also found that rewarding salespeople with more incentive- and stock-based pay can make a big difference as well.

In its survey, Watson Wyatt found that salespeople at financially high-performing companies spend 40% more time each year with their best potential customers and an additional three to four hours each week in high-value sales activities than salespeople at low-performing companies.

Not only that, they spend 30% less time on administrative duties than their counterparts at low-performing companies.

“It may seem fundamental, but the way sales professionals allocate their time is critical – even a couple more hours per week on these key activities can make a real difference,” said John Bremen, director of Watson Wyatt’s sales force effectiveness consulting practice, in the news release.

High-performing companies also provide their sales forces with greater earnings potential through variable pay based on their sales performance, according to the survey.

Salespeople at high-performing companies receive approximately 40% more of their total cash compensation in the form of variable pay than sales professionals at low-performing companies (38% of total compensation versus 27%). Additionally, twice as many sales professionals at high-performing companies receive stock, stock options and other equity pay than sales professionals at low-performing companies (36% versus 18%), the survey found.

The survey also found that salespeople at high-performing companies tend to be believers in their companies and have more favorable views of their companies’ products and internal support. For example, 83% of sales professionals at high-performing companies believe their product and service lineup is among the best offered in the market versus 57% at low-performing employers.

High-performing companies experienced faster sales growth and superior financial performance compared to their industry peers. The results are based on a survey of 841 sales professionals at 500 companies with large sales forces.

The report can be purchased here .

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