Milind Katti

Milind Katti

April 27, 2021

Sales Effectiveness In Strategic Account Management

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Lego, the favorite toy brand for children and one of the most nostalgic ones for adults, had a bit of a downturn in the early 2000s. Back in the 1990s, Lego had begun innovating and expanding its product lines. What could go wrong with that?

The brand new, action figure-like toys stood apart from the original brickwork that Lego had always been associated with. This shift worked terribly with customers, i.e., kids, who just wanted good old Lego bricks back. Lego almost went bankrupt in the year 2003, as Wharton’s knowledge base reports.

Lego then had a change of systems. They first brought in a new CEO, Jorgen Vig Knudstorp, in 2004. His approach was to ask the kids what they want. Through extensive market research and efforts, he realized that they simply wanted to BUILD. They invested in a major, Cannes Lions-winning award campaign called ‘Imagine’ in 2006 and sustained it. They got back to the drawing board and recreated what they used to be best at. And they came back better.

Fortune shares that back in 2015, Lego became the second biggest toy company in the world.

Lego could have simply stopped the production of pre-built toys and gone back to what they were. But they decided to start things afresh by picking on each detail from product to sales to marketing and advertising. 

This is similar to how sales effectiveness works. It doesn’t allow you to concentrate on a categorical problem. It forces you to look at entire processes and overhaul what’s needed to not just fix things, but make them better and effective.

What is sales effectiveness?

Sales effectiveness doesn’t have a very rigid definition, as you’d gather from asking multiple sales professionals. Let us look at the most concrete and sensible understanding of the term, after weeding out misconceptions. 

Sales effectiveness (over some time) = Average output per salesperson (based on company strategy)


Output = profit/ revenue/ new product line sales.

Further variables in this formula include what sales effectiveness refers to. It could be any of the following:

  • Effectiveness at each stage of the process
  • Effectiveness per territory, product, etc.
  • Individual effectiveness against the average
  • Effectiveness based on tenure
  • Impact of investments on the effectiveness

Further, the company strategy element here is crucial. Imagine your company is planning to push a new product line to slowly replace an older one. If your reps are very effective at selling the older line but not the newer ones, this effectiveness is futile.

Key Elements of Sales Effectiveness in Strategic Account Management

There is a lot of ambiguity surrounding sales effectiveness. Many confuse it with sales productivity and sales efficiency. To put some structure to the definition, you should take note of the following elements of sales effectiveness.

  • Sales process: Firstly, you need to introspect and check if you have a real sales process. If not, you need to put one in place right away. If you do, you need to ensure that it exists not just for you and that everyone is aware of it. Next, ask yourself if it aligns with your target group’s purchase cycle. When you’ve ensured that all of these factors are aligned, check the effectiveness of your process.
  • Opportunity management: How you manage your sales opportunities has certainly got a lot to do with sales effectiveness. This is also where account managers come in for strengthening wins. You need to have a clear sales pipeline with defined stages for appropriate opportunity management. Check if there are objective criteria attached to each stage.

Not just this, but address the percentage of dormant deals in the pipeline. This is where effectiveness and efficiency both matter a lot. Another important factor is the accuracy of your sales forecasts.

  • Sales enablement: Sales enablement is enabling your sales team to close deals with the help of resources they need such as content, tools, knowledge, etc. Sales enablement strategy is a function of both marketing and sales departments. Essentially, marketing does the research and studying and provides enabling material, while sales pass on critical information required for customers to make purchase decisions.
  • Sales efficiency: Sales efficiency is largely a measure of the speed of sales operations. It is usually calculated for a quarter.

Sales efficiency = Gross revenue of a sales team/ Costs incurred by the team


Costs incurred = salaries, perks, office space, training expenses, etc.

Sales efficiency checks are used to uncover systemic issues in your sales processes. For example, is your sales cycle reasonable and feasible to the transaction size? How many meetings or calls does it take for a win? Introspect and nitpick within your sales process. Sales efficiency is all about taking a hard, critical look at your sales efforts and finding a starting point for improvements.

  • Sales performance: Sales performance is the measure of your sales team’s efforts for meeting strategic sales goals. It is a checker for your sales team’s track towards reaching sales goals. There are a lot of quantitative metrics involved in studying sales performance. For example, what percentage of your sales reps achieve their assigned targets? How productive are your top 20%? There are revenue-generated, pipeline-generated, and opportunity-led KPIs for measuring sales performance.

Your sales process, sales enablement efforts, and sales efficiency investments, all contribute to sales performance. For enhancing performance, keep highlighting areas of improvement, focus first on quality prospects, and make a tight yearly sales plan, among other measures.

  • Sales skills: There can be a very long list of customer-facing and non-customer-facing sales skills prescribed for improving sales effectiveness. Customer-facing skills include prospecting, communication, discovery, business acumen, storytelling, active listening, presentation, and negotiation. On the other hand, non-customer-facing skills include technology, buyer research, time management, planning, judgment, and collaboration.

Even though these are a lot of factors, focusing on each one can help you extract maximum effectiveness out of your sales reps!

How Sales Intelligence impacts Sales Effectiveness in Strategic Account Management

Sales intelligence is the need of the hour in a sector where a lot of professionals still rely only on their expertise and knowledge to drive sales and accounts. However, this approach is shifting for good now. This has largely been driven by the ‘experience’-driven market as well. Customers no longer make do with cajoling and hard selling. Market research and sales channels need to blend.

“Give me six hours to chop down a tree and I will spend the first four sharpening the ax.” 

– Abraham Lincoln

Sales intelligence is deriving real-time data from prospects. It also encompasses analyzing this data, deriving insights, determining intent. This helps in lead generation, lead nurturing, up-selling, and cross-selling- all crucial parts of sales effectiveness and strategic account management.

Sales intelligence can help you:

  • Track key changes and information bytes of existing accounts
  • Map key stakeholders in prospective organizations
  • Understand the needs and wants of prospects
  • Collate and index real-time company information

It would be safe to say that sales intelligence, along with the broad concept of sales effectiveness, are the umbrella under which sales and strategic account management should ideally work together for acquiring and nurturing prospects, leads, and clients.

How to leverage Sales Effectiveness in Strategic Account Management?

Sales effectiveness is, as we’ve understood, a vast scope of efforts to be taken for your sales team to be more productive, more efficient, and for them to bring better strategy-oriented results. Sales effectiveness has no room for mindless sales or account management work. It focuses on using targeted, specific content to customers as per the sales situation.

Here are some ways to leverage sales effectiveness to boost the company’s strategic goals and to assist account management in being strategic and effective.

  • Identify sales processes: You can’t keep doing the same things over and over and expect different results each time. You need to dig into your existent or non-existent sales processes to identify the cogs and bends minutely. You need to question things, approve and disapprove of them, and overhaul them wherever needed.
  • Give reps the right training: A lot of companies don’t have a formalized sales training process. However, continuous training can increase net sales per rep by up to 50%, as reported by Seismic. Tools such as sales playbooks, literature, and just-in-time coaching are more powerful than you might realize. Your reps could always do with more talk tracks, kill sheets, and persona-based selling tips that are quickly accessible for all kinds of sales situations.
  • Optimize processes with sales analytics: KPIs and metrics play a huge role in making sales more effective. They help you in determining what works and what doesn’t, the scope for improving speed, efficiency, accuracy, and quality. These metrics include call rate, win rate, sales cycle length, and pipeline conversion rate. You can further use dashboards to visualize real-time progress and get valuable sales activity insights.
  • Tools and technology: A modern sales effectiveness strategy requires modern tools. These help you in aligning sales and marketing, goals, and processes. You need to empower your sales teams with the right tools and content to drive execution and revenue. Sales enablement tools facilitate sales efficiency, helping sales effectiveness in turn.
  • Facilitating buyer decision making: Facilitation of buyer decision making is key in the era of experience marketing. Content that helps buyers in their purchase process must first be understood well by sales reps and account managers themselves. The three broad types of content are education, solution, and selection. This content needs to flow in three phases- pre-engagement, engagement, and post-engagement.

Treating reps as customers, the McKinsey way

According to McKinsey, the best companies focus on sales rep experience as much as they focus on customer experience. Their research shows that sales experience impacts customers’ purchasing decisions to a great extent. There are many challenges on the road to creating a good sales rep experience.

  1. The sales landscape has become much more complex with multiple channels, influencers, and buying options.
  2. Digitization is leading to transformations in buyer behavior.
  3. Guiding decision-makers correctly requires sales reps to have immense subject matter expertise.
  4. Reps now need to be able to instantly customize messages for segments and individual customers.

All of this calls for a new set of training tools and skills. Companies are having a tough time identifying the specific skill sets needed and how to impart these. Hiring choices of companies are often as per gut feelings, as a result. Ages-old methods used by most companies have no scope for addressing these challenges.

McKinsey prescribes a revolutionary approach to sales rep polishing for this issue: treating your reps as customers. Sales leaders who execute this idea well show three important characteristics. 

  1. Focus on the intrinsic: They zero in on the intrinsic behaviors and traits associated with the performance metrics needed by the company and look for these attributes while hiring reps.
  2. Focus on skills that matter: The best companies customize their sales strategies for customers, right to the individual decision-maker level. They also do it with their sales reps by focusing on strengthening their key skills which should be leveraged for the company’s goals.
  3. Focus on simplification: Just as you need to simplify the purchase cycle for customers, you also need to simplify your sales reps’ jobs. Focus on minimizing paperwork, introducing automation, and delegating administrative tasks.
  4. Focus on understanding: Understand the typical day of a sales rep and make design, tool, and content choices keeping their personalized contexts in mind.
  5. Focus on digitization: Just as you do with your customers, make life easier for your reps as well with the great 21st Century power of digitization. Solve bottlenecks, concentrate on opportunities, and refine performance with gamification, leadership boards, virtual deal clinics, and much more.

Selling effectively is selling successfully

Sales effectiveness is a very comprehensive concept that encompasses a lot of sales basics. These are aspects that go on to become strategic account management concerns and account managers’ work as well. So it might be time to bring in radical changes such as dedicating an entire resource to sales effectiveness, as some companies have already done. After all, core selling is the only goal of business.

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Milind Katti
About the Author

Milind Katti

CEO & Co-Founder, DemandFarm

Milind is CEO & Co-Founder of DemandFarm. Having practiced and evolved the ‘account farming’ principle for over a decade he established DemandFarm and is passionate about delivering the best B2B key account management tool to serve the needs of key account managers. Milind also serves on the Board of LeadEnrich & is a Strategic Adviser.

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