I`m working on the correlations between organizational culture and sales productivity, so it would be great to have different views about "sales productivity".
Is it just sales / vendor?, or EBITDA / vendor? are there any differences among industries?
According to business directory , productivity is a measure of the efficiency of a person, machine, factory, or system, etc., in converting inputs into useful outputs. Productivity is computed by dividing average output per period by the total costs incurred or resources (capital, energy, material, personnel) consumed in that period. Productivity is a critical determinant of cost efficiency. Sales productivity is a measure of the amount of money that you make from the efforts of each salesperson. It is the rate at which a salesperson acquires revenue for the organization. High sales productivity means greater sales volume, lower payroll expenses and more effective time management. Rather than pushing salespeople to work harder, an increase insales productivity is primarily concerned with salespeople using their time more effectively.
Hello I believe Dhani and Leonidas above have done some justice to the definition of sales productivity. It basically concerns improving sales efficiency: the rate of increase of sales volume is greater than the rate at which associated sales cost grows.
Conversion ratio of actual sales to total calls. Its simple but accurate.
Sakes productivity is also addressed on page 14 of the APO Productivity Measurement Handbook below
when I was with Avis we measured sales productivity by the number of selling time hours that a salesperson spends face-to-face with a customer. If you work 2000 hours per year then deduct hours for driving, waiting, preparation/fact finding, training, sick leave you are left with no more than 300 hours. Take the cost of the salesperson (salary, bonus, car, plus keeping a sales manager and secretary then divide the cost by the actual hours spent face-to-face for an hourly rate. It is alarmingly high but that is the reality and one reason firms have implemented tele-marketing to service small customers so that more time is spent on 20% of customers who generate 80% of business (for most firms). If a sales person is allocated a block of customers the revenue (and profit) from such customers is also an indicator of productivity.
@Randall. Tanks for sharing that very practical example/definition.
you mean you looking for the operational definition of sales productivity in other words how to measure it.
Actually there are several trends on sale productivity such as; total revenue, cost per acquisition, and lifetime value.
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