a lot more effectively if companies analyse return on investment thoroughly and ensure sales teams follow the most effective strategies

Lord Leverhulme, the founder of Lever Bros, famously remarked: "Half the money I spend on advertising is wasted and the problem is I do not know which half."

Some things haven't changed since Victorian times. Aston University research shows most companies waste 30-50% of their marketing spend on activities that fail to produce a satisfactory return or stimulate sales.

This is a common phenomenon regardless of company reputation, perceived marketing strength or product quality. In fact one of the UK's leading companies wasted 37% of its marketing budget with four of its most strongly supported marketing programmes failing to justify their cost.

There are even more marked differences with sales force costs. Most companies believe their sales reps follow the strategy they are directed to.

This is not the case. Most sales forces actually deploy several distinct strategies that differ markedly from their company's intended strategy.

This is because individuals act differently, depending upon education, prior experience and mindset. Reps copy successful actions and discard those that don't yield results or that are awkward.

This establishes set patterns of behaviour for their time on territory. These patterns are not unique to the individual, however, and generally comprise six to eight different choices.

The differences between these strategies explain big differences in performance, with some approaches 40%, 50% or even twice as effective as the most common benchmark strategy.

Knowledge of these strategies often explains what our best sales people have in common. By identifying the most effective strategies and encouraging teams to adopt them we can revitalise sales growth and increase sales for the same or reduced cost.These sales improvements can be very marked, often in the order of 30% to 50%, while the most effective sales strategy may also be a lot less resource-hungry.

Why, then, did we take so long to get around to grasping this critical relationship between marketing expenditure and sales? There are three main reasons.

Firstly, markets are more competitive and investors more active, which means demands on companies to improve productivity have increased. Secondly, we have much greater computing power and this has allowed us to develop mathematical and statistical techniques to dissect market costs and identify the activities that drive sales - and those that don't.

Thirdly, thanks in part to this technology, companies can create much richer databases. Data can now finally be turned into actionable information. In short, new techniques have changed the "art of the possible" for marketing professionals.

It is no longer acceptable to make a leap of faith when adding a new sales team or to presume that last year's budget is a satisfactory template for this year.

Now we can measure accurately our return on investment for each and every activity, from company level to individual sales territory level. This new information allows us to hone each element of our budget based on actual performance and to deploy our sales forces with greatly increased

effect. n

Graham Leask is a member of the Economics and Strategy Group at Aston University

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