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Study: Underinvesting in Sales Force Effectiveness Leaves Money on the Table

Sales and marketing firm ZS proves how sales force effectiveness initiatives boost performance and help companies hit growth targets —

EVANSTON, Ill. – June 22, 2015 – The sales force is a key engine of growth for companies across industries – but requires appropriate support to maximize its impact. Investments in sales force effectiveness (SFE) initiatives are a critical driver of revenue growth. However, with data often scarce on the efficacy of these important initiatives, sales leaders struggle to project the impact or make a business case for needed SFE investments.

To address this lack of evidence, global sales and marketing firm ZS conducted a year-long study to measure the impact of SFE initiatives on company-wide growth.

The ZS team tapped into qualitative and quantitative data from three key sources: sales professionals from the Sales Management Association, a robust literature search of academic and professional papers, and ZS case studies and interviews with sales leaders. In the aggregate, the research led to more than 800 specific data points, from 171 companies, on the impact of various SFE initiatives.

The Explorer Study found that investing programmatically across multiple SFE initiatives can improve performance metrics substantially – such as revenue, profitability and sales force activity – by 9 to 23 percent.  Even if a company only invests in a single SFE initiative, it can realize a performance boost of 4 to 8 percent.

For instance, if a $1.5 billion company allocates $3 million to engage in a comprehensive SFE improvement program and achieves an 8 percent boost in sales, it can see a return of more than 14 times the investment. Even a smaller increase of only 1 percent can add up to a return of 1.75 times the investment. In the context of an average company’s annual growth of 5 to 10 percent, investments in SFE have the ability to potentially double growth.

“Historically, it has been difficult to project the impact of SFE initiatives,” said Namita Kalyan, associate principal for ZS and global leader of the firm’s sales force effectiveness practice. “Armed with nothing more than anecdotal evidence, sales leaders have struggled to make a convincing argument for these investments. With the Explorer Study, they can finally see the full picture, present credible benchmarks, and lay out a roadmap to enable sales force-driven growth.”

The Promise of SFE Across Industries

When they invest in SFE initiatives, companies across industries – including pharmaceuticals, medical devices, high-tech, financial services, and industrial goods and services -- seek to ensure the right customer coverage plan, increase the impact of customer interactions, create a performance-focused sales team and enable efficient and effective sales operations.

“Companies have a wide range of options when it comes to SFE initiatives.  We’ve identified 30 different elements that may warrant investment to improve sales performance.” said ZS Principal Marshall Solem. “For example, at one end of the spectrum, to ensure the sales force is adapting to customers’ new buying patterns, companies may need to consider re-vamping their sales process.  As a result, they may need to adapt their hiring profiles and performance management systems. At another extreme, to help sales reps be more knowledgeable about what’s going on with their customers, companies can leverage social listening tools or special apps that consolidate all company interactions with the customer in a single view.”

“Our findings make a strong case that those who make strategic investments in their sales force will reap the rewards – and those who do not could leave money on the table.”

As companies move beyond the theoretical and seek to realize real gains from SFE initiatives, execution is vital, according to the study. Factors outside a company’s control -- such as market conditions and a company’s competitive position – may affect SFE impact potential. But the quality of implementation, internal buy-in, leadership alignment, change management and champions within the sales force can help companies turn those potential gains into real growth.

“It’s important that companies bring the same rigor to SFE as they do with other disciplines, such as Total Quality Management and Lean Six Sigma,” Kalyan said. “Our study, comprehensive in its scope and thorough in its methodology, is a step in this direction.”

For more information about the new Explorer Study, download a copy of the study’s findings here: http://bit.ly/1TB8EAE

About ZS

ZS is the world’s largest firm focused exclusively on improving business performance through sales and marketing solutions, from customer insights and strategy to analytics, operations and technology. More than 3,500 ZS professionals in 21 offices worldwide draw on deep industry and domain expertise to deliver impact where it matters for clients across multiple industries. To learn more, visit www.zs.com or follow us on Twitter (@ZSAssociates) and LinkedIn.

Greg Austin
Director, Marketing & Communication, ZS
Greg.Austin@zs.com 

Anahita Wadia Khan / Kyle Adams
Sikich Marketing & Public Relations
akhan@sikich.com  
kadams@sikich.com