- Efficiency and effectiveness: what is the difference between being efficient and being effective?
- What is sales efficiency?
- What is sales effectiveness?
- Efficiency and effectiveness need to go together for the good of the company
- Be effective or be efficient? Sell more or sell better?
Efficiency and effectiveness are two concepts that apparently sound alike but are actually different from each other. And when it comes to sales, this is even more evident.
Of course, both are important within the business process of any business. But, better than understanding what each one means, it is understanding where they are distinguished.
And understanding the difference between efficiency and effectiveness is important for a sales leader to be able, for example, to assess the work of their sales team and better manage sales.
It is necessary to have this clear in order to understand how the sales sector’s internal processes are and, eventually, correct the course if necessary.
In this article, we’ll explain how efficiency and effectiveness differ and why it’s important to keep these concepts clear in your head.
After all, at some point, it may be necessary to detail both. It can be in a presentation, meeting or even in a conversation with the sales team. And, right now, nobody wants to make mistakes, right?
More than that, we will talk about how this helps efficient and effective management to make better decisions and identify bottlenecks in sales management in companies.
Stay with us.
Do you know the difference between the two terms?
Efficiency and effectiveness: what is the difference between being efficient and being effective?
Achieve goals and objectives, sell more and better, grow and always be a reference in what you do. Those are certainly the goals of any salesperson and any sales manager, right?
For this, it is necessary to have efficiency and effectiveness aligned. And understanding what each one is is important for all the decision-making necessary to fulfill this mission.
What is sales efficiency?
Efficiency refers to doing (in theory) the best possible way to achieve goals. In inside sales, it is about being able to sell in a way that uses less time, also reducing the sales cycle and consequently the CAC.
But it can mean using fewer resources, no matter what, no matter how the company sells. Save fuel, energy, among others.
However, it is necessary to be aware. To be really efficient, it is necessary to maintain the required level of quality. Without this, it will be useless to have been efficient.
An example of efficiency?
A salesperson is able to close a sale in less time than usual but to do so, ends up “pushing” the offer to the customer. The pressure ends up having an effect and the sale is sealed.
The sales time was shorter and the target was reached ahead of time. Hello! Efficiency? Not!
The risk of churn is high, as the customer was not prepared to buy – and this will negatively impact the company’s results soon.
What is sales effectiveness?
Effectiveness means achieving the expected result. Increase revenue, ensure customer success, etc. Effectiveness is the “what” and not the “how”. Complicated? We explain.
It’s simply about reaching the goal and hitting the goal. Whether this generated more costs, wasted time or even resources, it doesn’t matter. The operational is in the background.
Because of this last sentence, it makes little or no sense to just be effective when selling. It is not healthy for any business, in any segment, to “sell anyway”.
No sales team will succeed, at any operational level, if time, resources, etc. are wasted. This is definitely not the right way to work.
Efficiency and effectiveness need to go together for the good of the company
The best way to get the best business results is when efficiency and effectiveness go hand in hand. When they are present in a seller, an SDR, or the entire sales team.
Being efficient but not effective is not enough as it will negatively impact the company’s earnings, right? You have to hit targets and it won’t do any good to be quick and save resources.
At the same time, being effective but not efficient can mean business stagnation and, in some cases, loss of money as well. You will spend more and not necessarily get a return on it.
Every company CEO certainly thinks about how to increase revenues while decreasing expenses. For this, it is always necessary to review internal processes and restructure them when necessary. And here efficiency can weigh more than effectiveness.
To better understand what is ineffective or inefficient within the sales process of any business, feedback meetings can be critical. Only in this way is it possible to better understand the daily work of each professional involved in the sales routine.
But for that, you need to be armed with information that a good sales system, such as an Online CRM, provides. With it, it is possible to know, for example, how many phone calls and how much time was spent with a prospect so that he could finally buy. Or, know why the opportunity was lost.
Be effective or be efficient? Sell more or sell better?
Of course, all companies want to sell more. But what good is it if she doesn’t sell to someone who has the ideal customer profile? Or, if the seller has given too many discounts, made a payment more flexible… this may have an impact on the sales forecast that will not necessarily be positive.
Selling better is actually a way to sell more. But one comes first then the other, and the order must be respected. However, for this, it is vital to manage very well the opportunities that are in the sales funnel.
It is necessary to manage both it and the customer base well. Only then will it be possible to optimize the sales process and, consequently, have a predictable revenue of how much you will be able to sell in a month, for example.
And then, finally, we will have efficiency and effectiveness when selling. And, of course, selling more and better will come as a result. You will sell more and be effective. But it will sell better, to the right customer, who will be more mature and prepared and will be efficient.
Being efficient effectively means delivering better results.
Focus on the opportunities that really make sense for the company’s business. The customer acquisition process is important, but salespeople need to get in touch with those who really fit with the company. Otherwise, inefficiency will be present.
It’s no use, therefore, simply assigning any and all opportunities in the sales pipeline for salespeople to hit the sales target.
If you are consistent, optimizing the work and selling better will inevitably achieve the effectiveness that sales work demands – even if it takes a little longer.
Also, it’s important that sales and marketing talk. Who knows efficiency and effectiveness in sales have nothing to do with lead generation?
With strategies geared towards the business persona, and with pre-sale lead nurturing, it will be much easier to sell. And then that talk of efficiency and effectiveness won’t be any more a problem, because you’ll be both at the same time.
The company thanks you!
So, how can we help you?
If you’re in doubt about what it’s like to be efficient and effective or have any “pain” in managing sales, talk to a consultant today.
Enjoy and read two articles that can help your business to sell more and better every day.
The first has 17 sales tips to help the sales team achieve their goals.
The second talks about the importance of the power of persuasion to sell.