Which is more Important, Sales Effectiveness or Sales Efficiency?

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Make no mistake about it, LinkedIn discussions often times provide some great insights and information. Take the discussion that Alex Gammelgard recently posted in the Sales Enablement Gurus group, around sales effectiveness versus sales efficiency. Her article is based around the Gartner Group article on “How to Analyze Your Sales Processes on Efficiency Versus Effectiveness, August 15, 2012.”

I would like to quote some excerpts from this report that I found very interesting and valuable: “Salespeople spend less than 45% of their time selling, and in some cases, actual client “face time” represents just 10% of the work week, with the remainder devoted to travel, administrative tasks and preparation.” ”Consequently, sales management focuses on sales call productivity to increase the time spent with customers or prospects. Based on productivity, efficiency metrics are relatively easy to establish compared with effectiveness metrics, which require more data analysis regarding the sales process.”

They go on to say: “Sales organizations are achieving tactical operational efficiency benefits from sales automation software.  Access the impact that each sales automation application has on the sales organization to improve the efficiency of your processes and the effectiveness of the sales organization overall. Use efficiency as a starting point to establish a business case or as the initial driver for sales automation.”

So, in order for us to understand the difference here is how Gartner defined both:

Effective – Adequate to accomplish a purpose; producing the intended or expected result

Efficient – Performing or functioning in the best possible manner with the least waste of time and effort.”

Efficiency refers to doing things in an appropriate manner, faster and cheaper. Effectiveness, on the other hand, always has the end goal in mind, and takes into consideration all the variables that could change or can be changed to make it better. Effectiveness refers to doing things better or doing right things. It measures whether the actual output meets the desired output.”

I believe that both of these are important especially with the business world downsizing and asking our people to do more with less. So the efficiency helps them do things faster and better. But that in itself doesn’t close business. One can be very efficient at doing things but at the same time be very ineffective in closing business.

My vote goes with making my people more effective, so they can close more business and contribute to top line growth. However, that being said, if I can have a Sales Automation tool that will improve both, then we can bring in more business in a shorter period of time and is a win/win situation for all of us.

What say you?

  1. Emily R. Coleman Says: November 20, 2012 at 4:44 pm

    I’ll take an effective but inefficient sales person over an efficient but ineffective one any day in the week. A mania for efficiency can hold down costs, perhaps. But effective sales bring in revenues. A company can’t exist without revenues. It’s just that simple.

    • Thanks Emily this is really a problem that faces a lot of organizations and they simply don’t think about the cost of it to the company, or how they should address it.

  2. Chuck: Interesting discussion. In reality don’t we really want to maximize individual and organizational performance? So we have to be thinking of both effectiveness and efficiency–and probably in that order. It’s senseless to be very efficient with an ineffective process, so we take the position that effectiveness precedes efficiency. Once the sales people have become very effective in executing a process–we then focus on making them as efficient as possible–reducing waste and non value added steps. Since nothing stays constant and you are always seeking continuous improvement, in reality you end up in a continued cycle which rathets performance on an ongoing basis.

  3. Chuck Carey Says: November 22, 2012 at 1:47 pm

    Dave you make an excellent point and one in which I agree with wholeheartedly. Thanks for your comment as we are all trying to strive to get better more efficiently.

  4. ChuckCarey Says: December 11, 2012 at 2:36 pm

    You are so right David. One thing that I would want for every effective sales person would be that they would be efficient as well so that they can capitalize on their effectiveness in all of the right places. Namely in front of a good prospect.