The Better Solution To Centralise Vs Decentralise Is Support
To centralise or decentralise, that is the question. Or is it? When it comes to improving the productivity and efficiency of your sales team, experts and thought leaders have long investigated, discussed, and argued one way or the other.
On the one hand, centralising means having a team with the scale and efficiencies to perform high volume tasks such as targeting new markets on mass, nurturing leads until they are ready to close, and contacting entire markets to defend from competitors. Another great benefit of a centralised team is the ease and consistency of training and coaching.
In contrast, decentralising means having the reach and penetration in local markets which expands your business presence. The freedom of decentralisation also inevitably translates to better management systems and processes. Of course, employee morale is expected to be higher as well.
Clearly both camps tout desirable benefits, but perhaps the better solution to this dilemma in this new era of selling is to get sales support right. Why? Simple, whether you are centralising or decentralising, by providing your sales teams the support they need, you are setting them up to drive growth and move your business’ bottom line.
With that being said, the only question left to answer is how do you get sales support just right?
Aim for the right mix of sales and sales support
The optimal mix, according to a research conducted by McKinsey, is a 50-50 ratio of sales to support employees. Going beyond this sweet spot by increasing your sales-support mix between 60% to 80% however adversely impacts sales return-on-investment (ROI) as the increase in cost do not translate to increase in sales.
Similarly, businesses that devote less than 30% of their sales employees to support functions reported a low sales ROI.
When it comes to the ratio of managers to non-managers, having six to eight direct reports per manager is the sweet spot. Having a manager oversee a team greater than 10 people reduces the manager’s capability to effectively supervise the team, while a team of five or less people results in high costs.
Know what support your sales team needs
Having the right amount of people supporting your sales team means nothing if they are not providing the right type of support. As such, the composition of the support team is just as crucial as its quantity.
In this regard, McKinsey found that sales efficiency benefits from having customer-facing, operational, and administrative support. Their research also reveals that top-performing businesses fill their sales support team with 30% customer-facing support and 27% operations and administrative support.
This discovery is in line with the results of a research conducted by InsideSales that revealed that nearly two-thirds of a sales rep’s time is spent on activities that do not generate revenue.
Of that two-thirds, 14.8% of effectiveness drain is attributed to administrative tasks such as composing emails and preparing spreadsheets, while time spent on sales technology tools that gather sales intelligence amount to only 0.4% of a sales rep’s time.
In order to compete and come out on top in the future, businesses need to leverage on the technologies of the future. Artificial Intelligence (AI) has changed the game for businesses and is here to stay. Venture Harbour predicts that by 2020 30% of businesses worldwide will be using AI in at least one of their sales processes. And why shouldn’t it? The benefits of adopting AI speaks for itself.
According to Harvard Business Review, businesses using AI for sales were able to increase their leads by more than 50%, reduce call time by up to 70%, and realise cost reductions between 40% to 60%.
When you consider the fact that 62% of businesses rely on prospect data that’s only between 20% to 40% accurate and that 40% of business objectives fail due to inaccurate data, you really start to appreciate how technologies such as AI-salesbots can help you collect customer’s information with greater speed, efficiency, and accuracy.
Now armed with more accurate data, your sales reps are in a better position to formulate personalised sales strategies which ultimately leads to greater lead conversion and share of wallet.
With these benefits in mind, it’s clear then that there’s merit in shifting the focus from centralising or decentralising your sales team to focusing on providing sales support. After all, centralise or decentralise, the benefits are moot if your sales reps are not in a position to connect and build relationships with customers, and focusing on what matters: sales and growth.