Lesson 7: The salesperson's time

Kestrel’s projects division lights factories, warehouses, offices and roads. Neha Kapoor runs it.

Neha: “The plant halved our lead times last year. Delivery is the best it has ever been. And sales have been flat for three years. Ruth, I have nine salespeople and every one of them is busy from morning to night.”

Ruth: “Busy doing what?”

Neha: “Selling, of course.”

Ruth: “Let’s check.”

Where is the constraint now?

The plant? No. Output and lead times have improved; it can take far more.
The market? Construction and industry keep growing, and Kestrel’s share is small. It isn’t the market.
So the real constraint is the capacity of the sales team.

Pause and think: if the sales team is the constraint, would more selling interactions with customers lead to more sales?

No: customers buy when they need to, whatever we do, so more visits only add cost
Yes: in B2B, more selling interactions with the right customers mean more sales
Only if prices are cut

Which raises Goldratt’s second question: how well are we exploiting the constraint? How much of the sales team’s time is actually spent on selling interactions?

What is a sale?

To measure that, you need a definition. Ruth gave Neha’s team a strict one:

A sale happens only when you add a new customer, or sell a new product to an existing customer.

Selling existing products to existing customers is a transaction: necessary, valuable, but it doesn’t grow the business.

By that definition, what share of a salesperson’s time is spent on sales? Neha’s team kept a diary for a month. Across companies, the picture is remarkably similar:

Area	Typical tasks	Share of time
Fulfilment and admin	Reports, coordination with head office on deliveries and payments, replying to customers, service issues, discount sanctions, filing, dealer claims, supply follow-up, team issues, audits	about 50%
Existing customers	Visits about competitors’ failures, complaints, relationship, replacement demand, outstanding payments	20–25%
Dealers	Reviews of enquiries, stock, progress against target	10–15%
New customers	A big enquiry, a new segment, showing capability	5–10%

The busiest people in the division spend less than a tenth of their time doing what the division needs most.

Why does this happen?

Ruth asked the team to explain it, cause by cause. The tree they built started from one entity: the salesperson’s prime measurement is the sales target for the month.

When the evaluation horizon is short, people take the actions that give results within that horizon.
Existing customers convert faster and more often than new ones. So the salesperson spends most of the time with existing customers.
Existing customers bring “noise”: unresolved issues that could affect current and future business, so they need attention now. During negotiations, customers also raise noise issues on purpose, to put the seller on the back foot.
Every salesperson handles many customers, and most issues demand immediate attention, so he multitasks between them, often with more than 200 open tasks at a time. Every switch costs capacity; issues take longer; customers grow dissatisfied.
Field visits have a big set-up, the travel, so work is batched: week one reports and reviews, weeks two and three customer visits, week four payments, clearances and order booking. Dispatches skew to the month-end while the plant produces evenly: finished stock piles up, then overtime and expediting at the end.
With little time left, new customers are approached late in their buying process, when the specification is fixed and only price is left to discuss: pricing pressure. Small orders are ignored.
And management, wanting more information about the market, asks for more reporting and more reviews, which take more of the same time.

The result: sales growth depends on the business growth of a few existing customers. Sales grow marginally, and the more the company depends on few customers, the less bargaining power it has.

Neha’s best salesperson, Vikram, switches between 200 open tasks. Three tasks of 10 hours each, worked one after the other, finish at hours 10, 20 and 30. Worked in rotation, a few hours each, when do they finish?

Earlier, because he keeps all customers happy
At the same times
All of them near hour 30, or later once set-ups are counted

Bad multitasking stretches every task to the end of the whole batch, and every switch adds set-up time on top. Customers wait longer for everything, which creates more “noise”, which creates more switching.

Conflict 1: hire more salespeople?

Neha’s first instinct was the obvious one.

Conflict 2: existing customers or new ones?

And under the time problem sits a second cloud, the one every salesperson lives in.

Check your understanding

Answer all five. Get four right to complete the lesson.

1. By Ruth’s definition, a sale is…

Adding a new customer, or selling a new product to an existing customer
Any order booked, from any customer, in the month
Any invoice raised
Any customer visit

Repeat business from existing customers is a transaction.

2. A typical B2B salesperson spends on real sales about…

50% of the time
30%
5–10%
80%

Half goes to admin and fulfilment.

3. The entity at the root of the time problem is…

Lazy salespeople
The monthly sales target as the prime measurement
Bad products
Too few customers in the territory for the target set

A short evaluation horizon drives the choice of short-horizon actions.

4. Why do dispatches skew to the month-end even when the plant produces evenly?

Customers order late in the month to get the best terms
Trucks are scarce
The plant batches
Salespeople batch their work: payments, clearances and bookings in the last week

Field visits have a big set-up, so work is batched by type.

5. Before adding salespeople, Goldratt’s steps say…

Hire faster
Exploit the existing capacity first
Cut prices
Raise the target

Elevate only after exploiting and subordinating.