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Looking for a New Year’s Resolution? Two More Hours of Sales Activity Per Week Can Mean Millions

Release Date: January 17, 2008

Contact: Janice Andrews

Watson Wyatt Study Outlines Key Differentiators of Sales Success

WASHINGTON, D.C., January 17, 2008 – Shifting two hours a week from administrative duties to selling and carefully allocating activities between new-business developers and account managers can mean millions of dollars in incremental sales for companies, according to a study by Watson Wyatt Worldwide, a leading global consulting firm. In addition, appropriately structuring variable pay can help improve expected sales results.

Watson Wyatt's 2008 Report on Sales Effectiveness and Compensation found that just two hours more of sales activity a week can lead to as much as $225 million in additional expected revenue for a company with 1,800 new-business developers. Reallocating time and resources between new-business developers and account managers can create as much as $600 million in additional expected sales for a FORTUNE 100 company with $20 billion in sales.

"Too many salespeople spend time demonstrating products and talking on the phone," said John Bremen, global practice director for sales effectiveness and compensation at Watson Wyatt. "Top-performing salespeople devote their time to developing relationships and closing sales. Employers can help guide their sales forces by encouraging salespeople to focus on the right contacts and activities instead of on filing paperwork."

The study found the majority of top-performing salespeople responsible for developing new business (52 percent) prefer in-person communication to other methods of contact with prospects and customers, compared with 39 percent of their lower-performing colleagues. In addition, top performers typically spend less time on administrative tasks.

According to the study, each minute a new-business developer with a $2.5 million quota spends on administration instead of with a qualified lead or prospect costs a company $15 to $20 in lost expected sales. For a sales professional, shifting two hours per week from administrative tasks to time with customers can be worth between $90,000 and $120,000 in additional expected sales.

The compensation structure for salespersons also remains a key differentiator between top performers and others. Top-performing salespeople report incomes nearly one-quarter higher than their less productive counterparts (24 percent higher for new-business developers and 23 percent higher for account managers). Sales-related variable pay accounts for a vast majority of this difference. Top-performing new-business developers and account managers respectively typically receive 46 percent and 60 percent more sales-related variable pay than their peers.

"While financial incentives are an important part of driving sales growth, the key to long-term success is freeing up salespeople to develop and build customer relationships," said Craig Ulrich, North America East Division practice leader for sales effectiveness and compensation at Watson Wyatt. "Companies that take steps to implement the right sales structure and design compensation plan incentives to focus on the highest-value activities can expect to increase sales and profitability. Those that don't manage their sales roles and activities smartly risk leaving hundreds of millions of dollars of potential sales revenue on the table."

The report is based on responses of more than 800 salespeople from approximately 500 companies. More information on the report is available at www.watsonwyatt.com/saleseffectiveness.

About Watson Wyatt Worldwide
Watson Wyatt (NYSE, NASDAQ: WW) is the trusted business partner to the world's leading organizations on people and financial issues. The firm's global services include: managing the cost and effectiveness of employee benefit programs; developing attraction, retention and reward strategies; advising pension plan sponsors and other institutions on optimal investment strategies; providing strategic and financial advice to insurance and financial services companies; and delivering related technology, outsourcing and data services. Watson Wyatt has 7,000 associates in 32 countries and is located on the Web at www.watsonwyatt.com.
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