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

WASHINGTON, 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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