Publication Date: March 14, 1997

Related article: Implementing Sales Force Automation: Keep the Focus on People

Measuring Sales Force Automation Results:
Using the Right Yardsticks

By Sue Mellen

Consider this statement by sales force automation consultant Tom Peterson, partner in Sales Science and Technologies of Green Lane, Pa.: "There is no other investment that outperforms improving sales force productivity. But you have to really improve sales force productivity."

Tom Peterson's 'Yellow Brick Road' to Becoming a Top-Performing Organization

That, of course, is the trick: Approaching sales force automation, or SFA, with a plan to measurably improve sales force productivity, then computing the results to determine if the program has yielded a significant return on investment. The vast array of approaches to the sales process makes it impossible to establish a single standard to measure automation's effectiveness, says Peterson. But there are certain signposts and mile markers that can help an individual company map progress along what he calls the "Yellow Brick Road" to SFA.

As preparation for SFA, it's important to distinguish productive from non-productive activities, Peterson says. SFA, he says, should be used to help salespeople move precious minutes from the non-productive column to the income-producing side of the ledger sheet.

"Everyone has things that keep them up in the middle of the night. For salespeople, the things that go bump in the night are the lists of activities that don't lead directly to income. Sales force automation should be used to free salespeople from non-productive activities and reinforce those things they do well in the same way a manager would if he could be with his sales force 100 percent of the time," Peterson says.

As a means of quantifying the value of freeing salespeople from non-productive tasks, Peterson points out that experienced salespeople generate profit at a rate of $4 per minute.

"Generally speaking, an SFA program will cost between $200 and 500 per month, per sales rep -- basically the price of providing a car. Assuming that a good salesperson earns at the rate of $4 a minute, you need to move just 200 minutes a month (or 10 minutes a day) into the productive column for a very good ROI," Peterson says. By transforming non-productive minutes into income-producing time, you have increased a sales representative's per-minute earnings by a measurable amount.

That leads to an important Peterson SFA tenet: Automation should be viewed as a path to revenue enhancement, not cost reduction. Top-performing organizations understand that salespeople are any company's front line and, as such, need to be properly equipped to conquer new territory.

"Smart administrators -- even CEOs -- know that they are part of a company's overhead. It's the sales force that really produces revenue. Automation should be directed toward helping salespeople do just that," he says.

Barry Trailer's Route to SFA: Step-by-Step Assessment

Like Peterson, Barry Trailer, of Trailer Vavricka, Inc. of San Jose, Calif., works with companies to document and improve sales performance. He also places major emphasis on initial assessment, saying that the companies that have been satisfied with SFA results began the process with "a specific list of problems they wanted to solve. Then they went about using automation to solve those problems." This approach, he says, provides a ready-made checklist from the start. As each problem is solved, you know that the automated solution has proven successful.

Trailer suggests that managers answer the following simple questions about goals for their sales forces:

• What are your salespeople doing that you would like them to do more of?
• What do you want them to stop doing?
• What do you want them to start doing?

With answers to those questions in hand, managers can use automation to support only those activities that are really productive, rather than just throwing technology at the sales process in the hope it will magically improve figures, Trailer says.

"The landscape is littered with high-tech tools like CDs and tapes that salespeople have sent out (to prospects) without the proper follow-up. That's like having a bicycle but no destination in mind. If you don't know where you want to go, what's the point in getting there faster?" he asks.

Trailer says that the best way to institute automation and measure ROI is to carefully outline your own organization's sales process, then to insert the appropriate technology at specific problem points. After the technology has been applied, results can be compared to the baseline performance.

"For example, you may determine that you follow a seven-step sales process in your organization and that deals are falling apart most often at steps two and three. You can apply technology to those steps, then keep track of whether or not you are making it through those points at a better rate," he suggests.

SFA, says Trailer, should also be a component of an overall management system designed to help individual sales organizations understand and improve the quality of their sales processes.

"Quality is woven into the very fabric of selling -- not just quantity. If a sales rep is making 10 calls a week and doing something wrong on each one of them, automating administrative tasks to free him to make 30 calls a week does not eliminate the fatal flaw of each call. What is the quality of the effort?" Trailer asks.

Sue Mellen writes from Tyngsboro, Mass.

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Tom Peterson and Barry Trailer are featured speakers at DCI's Sales Force Automation Conference. Please see our online brochure for program, registration and exposition details.

For more on this topic, please see the proceedings from Justify and Prioritize Using Return on Investment, a seminar presented by Peterson at DCI's Sales Force Automation Conference. (Updated files available for downloading!)

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