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How Sales Managers Can Keep Profits Up and Headcount Down

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The topic of sales productivity was introduced to me early on in my career when I was a Senior Financial Analyst at EDS (now HP). I can remember putting together the quarterly Strategic Business Unit (SBU) scorecards and having to come up with the sales headcounts and revenue per salesperson. I was always impressed by one business unit in particular that was able to keep their sales headcount down while maintaining a higher profit margin than any other division. The division was headed by one of the younger SBU leaders, and one late evening after reviewing his numbers I asked him how it was he could keep headcount down and sales up. His answer was very revealing.

Companies like Instagram, which had only 13 employees in 2012 when it sold to Facebook for $1 billion understand how it’s possible to keep headcount down and profits up. However, Instagram is not alone in keeping headcount down and increasing productivity. In a recent Harvard Business Review article, several digitally-focused companies discussed how by keeping their headcounts low, they can maximize profits.

Maximizing Profit in Sales Organizations

While the model that many modern digital companies are using is not going to work for every sales organization, there is some value in looking at how sales organizations can simultaneously keep headcount low and maximize profits. This is much easier for newer companies that don’t have entrenched organizational structures and can be more nimble to embrace changes in technology.

The answer that this young leader at EDS gave me was that he provided laptops to every salesperson (this was 1996), had them attend the company’s sales training program, and encouraged each of them to spend only one day in the office—that was to complete sales orders and finalize contracts. The other sales teams in the company were using desktop computers and spending a fair amount of time in the office and not out selling. While this method of sales has surely changed to what this young leader envisioned of a mobile sales team, many sales managers today have not moved to embrace the next phase of how to increase sales productivity…. marketing automation and sales enablement tools.

Marketing Automation and Future of Sales

Marketing automation and software can not only provide your customers with a better sales experience but can also speed up the sales cycle and provide a sales process that’s much more rewarding for the entire sales team. Having a large sales team pounding the phones worked well in 1996, but in 2016 working smarter and enabling our sales teams with technology pays more dividends than sheer numbers.  

To some, the term “marketing automation” conjures up thoughts of a way to replace salespeople. This is far from the truth. Marketing automation software is meant to automate the parts of a salesperson’s job that the salesperson shouldn’t be doing anyway. It allows the salespeople to focus on what they are good at… selling solutions and closing sales. Marketing automation is great for lead scoring and sending automated follow up emails. And when incorporated into a comprehensive inbound marketing program, it can generate leads for the sales team as well.

The goal of any organization is to maximize profitability and margin by increasing sales and keeping expenses down. By utilizing some of the same techniques and technology that this new breed of digital company is using, sales organizations can make sure that their sales teams are using the latest sales enablement tools and technology and closing more business.  

20 Key Sales & Marketing Metrics Spreadsheet

Topics: Sales, marketing automation