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The $1,500 Selling Hour

Oct 5, 2018 | Daily Emails

Most sellers and managers are totally confused by the notion of productivity.

This, of course, drives them to make wrong decisions about how to improve it.

A seller’s productivity is NOT measured by the # of hours they spend selling each day.

It is NOT measured by the # of activities they accomplish each selling hour.

Let’s kill those myths right here and now.

Productivity is the rate of output per unit of input.

That’s how economists measure productivity the world over. Why do we think it is any different for sales?

In sales, the rate of output is revenue. The unit of input is a selling hour.

In short, sales productivity is a measure of the amount of revenue a salesperson produces per hour of actual sales time.

I’ve been in sales and sales management 40+ years. And yet, despite the revolutions in “productivity enhancing” technology, the number of hours sales reps spend actually selling each day has changed very little.

So, rather than waste time with “productivity hacks” and tools that encourage unproductive activities, managers and sellers must focus on increasing the revenue generated within their already available sales hours.

Every rep currently functions at a certain rate of productivity.

Let’s say Jennifer’s current rate of productivity is $1,000/actual sales hour.

Adding an hour or two per week of selling time for Jennifer doesn’t change her productivity rate.

For every hour she sells, her productivity is still $1,000/hour.

In order to increase her productivity to $1,500/hour and higher, the challenge for Jennifer, and for all sellers, is to educate themselves about how to maximize (and measure) the efficiency and effectiveness of each and every interaction they have with a buyer. Starting from the first call all the way to getting an order.

It’s tempting to think that technology is the answer. And, we’ve got all this incredibly cool technology flooding into sales.

Yet, you can’t accurately calculate the ROI on any of these new tools & technologies, or the reengineering of your sales process, if you aren’t measuring whether they actually increased your true sales productivity.