Don't Shoot the Sales Team

Revenue is down. Sales are slowing. The CEO looks up from the business plan and realizes that the company won’t meet analysts’ expectations. Focusing on the organization’s sales leader, the stage is set for sacrificing a scapegoat.

Upon who else should the axe fall when the sales organization misses revenue targets? After all, aren’t sales and revenue the responsibility of the sales leader? The answer may be as easily forgotten as it is obvious.

To one degree or another everyone in an organization impacts the revenue generating process. The strategic plan of the board of directors and the CEO provides the overall strategy for revenue generation. The marketing department provides crucial demographic and psychographic customer or client information on which the sales department relies in formulating industry and account strategies. Manufacturing, finance, legal, customer service and all other departments facilitate or constrain the process of generating revenue, each in their own peculiar way.

The sales organization’s influence in enterprise revenue generation is con-centrated in the sales pipeline. Identifying bona fide sales opportunities, managing those opportunities through the sales pipeline until they produce revenue, and then managing customer or client relationships are the primary responsibilities of the sales and sales management teams. Rarely, if ever, does the sales organization control the resources of manufacturing, marketing, finance, legal and customer service.

The picture most companies present to the world show the sales organization “out there,” in front of customers and clients and in front of the rest of the company’s departments. Even marketing, the first cousin of sales, is more often than not as disconnected from sales as are the other departments. The sales group leads the company charge, and the other departments take up rear support positions, providing tangible and intangible support.

Revenue generation is a cross functional, company-wide process that involves every department and all employees in the organization. The CEO and the Board of Directors set corporate strategy and everyone else in the organization executes that strategy.  We have never observed a situation where the sales organization is in disarray while all the other business segments are humming along with little or no friction. In those rare cases where the failure or underperformance of an enterprise’s revenue generation process lies within the sales organization, the appropriate sales executives, managers and sales professionals should be held accountable and should suffer the requisite consequences. Before CEO’s shoot their sales teams, however, they might want to take a critical look at the entire revenue generation process and how each business segment contributes to or detracts from the success of the process. Like America’s favorite psychologist, Dr. Phil, would advise: Every department in an organization either contributes to the company’s revenue generation process or contaminates it.

Does Your Sales Training Program Address Your Sales Performance Issues?

In Part 1, we went over the steps to uncover sales performance issues and decide which are applicable at a high priority for pin-point sales skill training. We first documented the main sales performance issues. There are (4) distinct sales performance silos that will effect the overall outcome of any sales team, year in and year out. They are:

•    % of Sales reps to Quota
•    Average New-hire Ramp-to-Quota in months
•    Sales Employee Turnover rate
•    Time spent versus Result achieved

Next we, listed (4) steps to find out if you have any sales performance issues in each individual sales performance silo and if so to what degree. They were:

Step 1: ‘Run the Numbers’ for any realistic ROI opportunity
Step 2: ‘Run the Numbers’ hypothetically for a ‘Specific’ improvement
Step 3: ‘Run the Numbers’ for a ‘Reality Check’
Step 4: Set the Goal and ‘Train to It’

In our first example, we looked at a sales organization’s performance silo of ‘New-hire Ramp-to-Quota and determined (1) a sales performance issue and (2) a worthy sales training objective and (3) a realistic sales training return on investment.

Let’s take that same sales force and utilizing our (4) step process look at the remaining two Sales performance issues; ‘Sales Employee Turnover rate’ and ‘Time spent versus Result achieved’ to see what the X2 Evaluator™ system turns up.

Step 1: ‘Run the Numbers’ for any realistic ROI opportunity

Our example sales force has 350 sales reps that are responsible for securing new business each month. They currently have a sales employee turnover rate of 45%, or 155 reps per year. I’ve found in the sales industries I partner with, my clients average between 30%-70% sales employee turnover per year, so these folks are right in norm.
But the ‘norm’ doesn’t have to be the ‘Future’.

Here’s another important point. In the sales arena, 95% of sales employee turnover is due to Low 1st appointment activity. And in our example sales force, it was nearly 100%. Simply, if you’re not creating enough sales appointments each month, you either go out the door or you are ‘Shown the door’.
Now let’s run the numbers to see exactly what this sales employee turnover is costing them and attach a weight of priority to consider ‘pin-point’ sales performance training.

Here are the numbers relevant to costs:

•    Average Salary:     $30,000
•    Recruiting Costs:     $ 2,000
•    Training Costs:      $ 3,500
•    Monthly Sales Quota:  $ 3,500

In sum, this sales management team is looking eye to eye to a total of $4,512,200 going out the door each year, a combination of revenue ramp up costs on the front end, revenue production loss on the back end, salaries and benefits, then again revenue ramp up costs and salary for the replacement new hire. It’s a vicious circle.
And once again that total ‘Penalty cost’ number is an attention getter.
Simply put, each sales rep going out the door, due to low sales appointment activity, is costing the company $29,300 of lost revenue.

Does that portray a legitimate sales training Return on investment opportunity? Well, in less you need to invest $29,300 per sales rep in the training of choice to remedy the sales performance issue  it certainly does.

Step 2: ‘Run the Numbers’ hypothetically for a 50% improvement

In this case, I showed the sales management team what return on investment they would get by retaining just half of the sales reps going out the door due to low sales appointment activity.
Using their numbers my diagnostic system showed them a ROI of $2,256,100 just by reducing their sales employee turnover due to low sales appointment activity from 44% down to 22%. That’s keeping 77 sales reps from going out the door and adding to the sales productivity pool.

Step 3: ‘Run the Numbers’ for a Reality Check

Remember in Part 1 of ‘Does Your Sales Training Program Address Your Sales Performance Issues?’ we ran this sales force team’s key sales performance indicator numbers in the X2 system to see ‘if and where’ there were leaks in the ‘KPI ship’. And we discovered not a leak, but a big ‘ole fire hose.

Two ‘KPI issues’ were apparent. First, their ramp-to-quota for a new-hire took 7 months when the average sales cycle is 17 days? Second, they were only setting 3 new appointments per week when they needed to set 6, based on their other KPIs and a subsequent sales appointment activity number.
Thus, their sales appointment ‘activity barometer’ was only running at 50%. And that we determined dictates a longer ramp-to-quota.

Then we dug a bit deeper in the X2 system and out popped a 6% conversation-to-appointment ratio; they had to conduct 15 prospect conversations to get 1 new appointment.

We then asked the ‘Reality Check’ question. Is it realistic to focus on reducing the sales rep turnover due to low sales appointment activity in half, from 44% to 22% for a sales training ROI of $2,256,100 or $29,300 per rep?

And we answered ‘yes’ if they addressed the front-end of their sales process; setting targeted sales appointments. Again as before, they needed to (1) establish an activity standard to reach quota based off of individual KPIs and (2) develop a sales prospecting methodology and supporting system to spend less time in achieving it.

Because most sales employee turnover happens in the new hire ramp-to-quota issue silo, the same pin-point sales skill training initiative kills two birds with one stone.

And if you add those (2) ‘sales training initiatives birds’ up, it points to $14,532,100 of realistic revenue recovery.

Step 4: Set the Goal and ‘Train to It’

Reducing sales employee turnover due to low sales appointment activity now appears to be a worthy one. It makes good business sense for this sales organization. And if we measure our results, we will probably add some more revenue back on the table with additional reps not going out the door  to the tune of $29,300 per rep.

As in Part 1, our sales training goal in this case is to spend the least amount of time to get the desired number of sales appointments each week to assure our monthly success.
Now as a side bonus, let’s take a look at our last sales performance issue silo, ‘Time spent versus Result achieved’, and see what, if anything, we can address related to our pin-point sales training initiative.

“Time is money”. What’s your ‘Hourly rate’? If you’re a sales rep with a W-2 goal of $100,000 your hourly rate is approximately $51 dollars an hour. Here’s an interesting statistic. My clients spend an average of 50% of their time on the very front-end of their sales process; sales prospecting for new opportunities to initiate their sales process. This sales management team gave me an average prospecting time of 45% to plug into the Evaluator™ system.
And here’s what it showed.

The sales reps were spending an average of 20 hours per week on sales prospecting and sales appointment generation. But they were only running at 50% on their ‘Activity Barometer’ and needed to generate 50% more sales appointment activity; going from 3 new appointments per week to 6.
At their current sales prospecting efficiency rate of 6% (15 Prospect conversations to get 1 appointment) they would need to dedicate 33 hours per week to sales prospecting and sales appointment generation. And we know that’s not realistic.

But if they set a sales training objective of moving that appointment conversion ratio to 50%, they would not only meet their sales appointment activity number but save 26 hours per week, for a time recovery of 79%, from 33 hours per week to 7. And 26 hours times $51 per hour recovers $1326 ‘Hourly Rate’ money, allowing sales reps to increase capacity and pursue higher-value, solutions-based selling opportunities.

Once again with our last (2) sales performance issue silos we determined (1) a sales performance issue and (2) a worthy sales training objective and (3) a realistic sales training return on investment.

Ask any CFO what their first impression is when they hear the words ‘Sales Training’ and they might communicate back their ‘Real world’ vocabulary of ‘un-accountable’ and ‘un-measurable’. Simply put, they know they’re wasting at least half their sales training budget dollars; the problem is they don’t know which half.

As a sales management leader, methodically discovering sales issues first and then running ‘Quantitative’ sales performance numbers to check for feasibility, worthiness, and return on sales training investment will differentiate you from the pack. And you’ll stand an excellent chance of getting the result you want.

In this case, giving sales reps a skill-set to set 1 ‘Top-down’ business appointment in 2 conversations will allow participants to set the required amount of targeted business appointments to assure their monthly revenue goals. So less people will leave, they’ll make more money and spend less time and you will recover measurable dollars; something you can actually put your finger on.

Does Your Sales Training Program Address Your Sales Performance Issues?

Sales training programs encompass a variety of necessary components; things like company policies, sales paperwork, CRM/sales force automation orientation, sales processes, company services, sales skill training and product features and benefits.
But when I ask Sales executives and Sales trainers how their current sales training program is aligned with their sales performance issues I get the look of УNo speak EnglishТ.

LetТs first categorize СSales performance issuesТ. There are (4) distinct sales performance silos that will effect the overall outcome of any sales team, year in and year out. They are:

Х    % of Sales reps to Quota
Х    Average New-hire Ramp-to-Quota in months
Х    Sales Employee Turnover rate
Х    Time spent versus Result achieved

This is a good place to start in determining what sales skill training to implement to achieve a measurable return on investment. But hereТs what will set you apart when you walk the request up to the front office. Start out with the NUMBERS.
ThatТs right. Take a diagnostic view of your current sales performance silos, one by one.

LetТs look at a real sales performance issue example of СAverage New-hire Ramp-to-QuotaТ. I recently conducted a СSales Performance Improvement BlueprintТ web-cast for this sales organization.
The company was hiring 155 sales reps per year. The ultimate objective of any new-hire sales training program is to ramp the new sales rep to Quota. Simply, give them everything they need to effectively reach their monthly sales goal.

So how was this company doing? They were obtaining this ultimate sales training program objective in 7 months. So how does one determine if that training outcome is a СSales Performance IssueТ? LetТs take a look.

Step 1: СRun the NumbersТ for any realistic ROI opportunity

Х    Each new-hire rep had an ultimate quota of $3500
Х    Sales Cycle was 17 days
Х    Average customer term agreement of 36 months
Х    Average 'Sub-Quota' revenue per month during ramp of $1300 (This number reflects the average monthly revenue a new-hire achieves before they achieve quota attainment)

Step 2: СRun the NumbersТ hypothetically for a СSpecificТ improvement

In this case, I showed the sales management team what return on investment they would get by helping just 1 sales rep achieve full sales quota in 6 months versus 7 months. Based on their numbers my diagnostic X2 EvaluatorЩ system showed them a ROI of $79,200 just by trimming off 30 days. If they did that for all 155 of their annual new-hires, they could realize $12,276,000.
And that got their attention. So, is it now a worthy sales performance issue to attach pin-point sales training to? Not quite yet.

Step 3: СRun the NumbersТ for a СReality CheckТ

The most successful businesses Ч and certainly, sales departments Ч have identified their Key Performance Indicators (KPI); individual gateways that directly effect the outcome of a particular process. Then they measure the competency ratios in line with them.

A good KPI example in the sales process might be how many times you advance the first sales appointment to the next phase, whether thatТs a demonstration, a site visit, a survey or a proposal. Another KPI is how many times you gain a new customer once the first gateway is passed. And when you do gain a new customer, whatТs the average revenue you achieve? And how long does it take to gain a new customer on average; i.e. sales cycle? 
How about how long it takes you to gain 1 new sales appointment, defined by sales prospect СconversationТ? And as a by-product of all this, how many new appointments are needed each week?

We ran these numbers in the X2 EvaluatorЩ system to see Сif and whereТ there were some leaks in the СKPI shipТ. And hereТs what we discovered; not a leak, but a big Сole fire hose.

Two СKPI issuesТ were apparent. First, why does the ramp-to-quota for a new-hire take 7 months when the average sales cycle is 17 days? Second, they were only setting 3 new appointments per week when they needed to set 6, based on their other KPIs. So their sales appointment Сactivity barometerТ was only running at 50%. And that will dictate a longer ramp-to-quota.
Dig a bit deeper in the X2 EvaluatorЩ system and out popped a 6% conversation-to-appointment ratio; they had to conduct 15 prospect conversations to get 1 new appointment.

OK, back to the СReality CheckТ. Is it realistic to focus on reducing the new-hire ramp-to-quota from 7 months to 6 months for a sales training ROI of $12,276,000 or $79,200 per rep?
You bet it is. These folks needed to address the front-end of their sales process; setting targeted sales appointments. To do that, they needed (1) establish an activity standard to reach quota by month six and (2) develop a sales prospecting methodology and supporting X2 EvaluatorЩ system to spend less time in achieving it.
Then they needed to plug their sales prospecting СsystemТ into their current sales training program and work to a weekly sales appointment activity goal to assure a monthly revenue result by month 6.

Step 4: Set the Goal and СTrain to ItТ

A sales training ROI goal of $12,276,000 or $79,200 per rep is for sure a worthy one. And the diagnostic system showed us they would meet this goal just by setting 3 additional sales appointment per week per rep; 6 appointments versus 3.

Actually, I lied. The X2 Evaluator system showed an even brighter picture if the sales appointment activity standard of 6 new appointments per week was met. If they could support their new-hires with a sales prospecting system that could help them achieve 6 new sales appointments per week, they would actually cut their new-hire Ramp-to-Quota by 4 months; from the current 7 months down to 3 months.
And that sales training ROI would be $316,800 per rep or a whopping $49,104,000.

One of the reasons why sales training fails is a failure to define a useful objective. In this case, our diagnostic method has defined a single useful objective for them to train to. And this same diagnostic method can be utilized if you have a СSales Performance IssueТ of an unacceptable percentage of Sales reps reaching Quota each month.

In Part 2, we will take a look at (2) other sales performance issues, СSales Employee Turnover rateТ and СTime spent versus Result achievedТ with this same sales management team and see what our diagnostic method to sales performance improvement and ROI turns up.

Death of a Salesman? ItТs What Happens When the Customer Says УIТll Think It Over!

I was selling employment testing material that was based on the teachings of a well-known sales trainer. The question that brought the most conversation was about closing. How do you ask for an order? When someone says IТll think it over, do you become the nice customer service type that says Уfine, call me when youТre readyФ or do you go for the throat and say Уwhat is there to think about?Ф You know the first response is totally wrong and the second, which is the suggested answer, will probably turn the customer off. You try to say it nicely but at this point itТs likely heТs not going to say much more. What did I do? I said gently and with a smile in my voice, УMr. Customer, could you think out loud so I can hear you?Ф

I must tell you, I did not expect the response I got. He laughed heartily and said he could do that. He proceeded to tell me his reasoning and I proceeded to answer all his objections. We were both very relaxed; he purchased my product and congratulated me on my question and my closing.
ThereТs an old adage that says, УA smile given to another can make the difference in their day and yours too.Ф

Needless to say, I decided selling could be fun. I did not go back to boring bookkeeping and now that IТve retired, these words Сcould you think out loud so I can hear youТ are my present to you.

Converting Your Website Leads to Sales

Your website exists either to sell products or generate leads that can be later converted into paying customers. In the former case, unless you sell inexpensive commoditized widgets, it takes several interactions with a prospective customer before you can close the sale. Therefore, a top priority of almost every online business is to gather, organize, and convert website leads to sales.

1. Gather leads

Most of website visitors who are interested in your products or services aren't ready to buy just yet, but they sure have some questions and would like additional information (if it's not too hard to obtain). Don't make them search for it -- put your contact information right in front of them. Every page of your website must have call for action and contact options that are impossible to miss. Some examples include:

- Ask a question via email
- Call your sales phone number
- Request an instant call-back
- Sign up for special offers
- Contact for a price quote
- Download product brochure
- Submit an inquiry form
- Chat live with a sales representative
- Subscribe for a newsletter

When gathering leads, stick to the KISS principle. Don't ask for more information than absolutely necessary. For example, if you only need to know your potential customer's state of residence, don't ask for a full mailing address. If you do all your sales via email, don't require a phone number, or at least make it optional.

Be sure to provide a clear, concise statement about how the information you collect will be used. Assure your prospects that their contact data will not be shared with other parties and they can stop receiving communications from you at any time.

2. Organize leads and prospects

Leads are useless unless they are properly organized. First, you must establish the systems and processes for recording all pertinent information for leads collected via different channels, such as website, incoming phone calls, trade shows and so on. Aside from the contact information, each prospective customer record should date and source, products and services of interest, subscription and contact preferences, and any other relevant data.

Your lead management system must also be able to record the history of all communications with a lead, such as incoming and outgoing emails, phone calls, voice mails, faxes, and items sent via postal mail. Each lead must be assigned to a sales representative, and categorized by the level of interest, size of opportunity, and sales pipeline status (more on that later). Sales reps should also be able to enter internal notes and comments about the prospect, and set reminders for the future follow ups.

Last, but not least, your lead system must be centralized. Every person involved in a sales process should have the ability to instantly access and update the information, without the need to upload, download, and synchronize the data. This is especially critical if members of your team are geographically dispersed or telecommuting.

3. Convert leads to prospects to customers

This is where the rubber hits the road. There is a number of distinct steps in any sales process. Below is a typical example of a sales process. You can easily adopt its stages and definitions to your situation:

Lead - a contact that has expressed an interest in your product or fits the target profile of a potential customer.

Prospect - a lead that continues to express interest in your product or service after a two-way information exchange.

Qualified prospect - a prospect that has participated in a discussion with a sales representative and confirmed their need.

Confirmed prospect - a qualified prospect who has the info they need to make a decision and budget to go with it.

Committed prospect - a qualified prospect who has reviewed your price quote or proposal and has indicated that she is ready to move forward with you – but haven't yet.

Customer - ka-ching!

You can use your sales pipeline status report to not only organize and monitor the effectiveness of your overall sales process and individual sales representatives, but to forecast sales as well. To estimate the dollar value of your entire prospect base, multiple the average probability of closing the sale at every stage of the pipeline by the number of prospects currently assigned to that stage.

Establishing and managing your lead conversion process is all but impossible without proper customer relationship management (CRM) tools. You will need a system that captures lead information from your website and other channels, and integrates it with email, contact manager, calendar, and sales force automation software.

The companies that have established the systems and processes for converting leads to sales are already reaping the rewards.

Comparison Sites Attributing To A Higher Level Of Online Sales

What is the attraction and value of these for users and what are retailers and service providers finding them a useful tool as they strive for online sales?

The online retail sector for products and services has been buoyant for a number of years and the level of resource and funding that major retailers dedicate to the online market surges with each turn of the calendar. As the online marketplace has developed, the consumer offerings have become increasingly sophisticated and more reflective of the offline marketplace and traditional marketing. Consumers demand greater choice and shop around for the best deals – the benefit of increased levels of competition. Online comparison sites have developed a niche in recognising and reflecting offline shopping habits and reflecting this in terms of online user search habits.

Indeed the online comparison sites appear to be a making a good fist of it with new research from E-Consultancy revealing that in some industry sectors up to 30% of online sales are referred by shopping or product comparison sites. More and more, online comparison sites are being considered as part of the online marketing mix for retail and service providers and represent the entire business model of a new wave of comparison based reseller and aggregators.

Personal finance is one sector where aggregator and referral sites thrive. The impartial aspect of allowing consumers to compare and contrast a range of services and providers to find the deal that suits them best allows a degree of empowerment on the part of the consumer and offers a distinct competitive advantage for reseller and aggregators. Sites such as Moneynet ( moneynet.co.uk ) and the Motley Fool ( fool.co.uk ) provide users with information in a simple, no nonsense manner allowing them to select the product or service that suits them and pocketing the referral commission.

Other sites such as Dial-a-Phone ( dialaphone.co.uk ) are more straightforward in their approach to referrals. A bulk reseller, they can display preferential deals from the main mobile phone networks, avoiding the middle man and passing savings on to the consumer. Again, there is an essence of customer freedom involved as the user can compare and contrast various services and offerings before committing to a particular network or package and again the reseller picks up the commission for passing the user on.

With the online marketing model continuing to develop in size, scope and sophistication, the future look bright for online referral, reseller and aggregator sites and these look set to be a continued integral aspect of online marketing.

Come on salespeople ... 11% just isn't good enough!

"Salespeople spend 79 percent of their time doing things other than selling or prospecting. The actual time spent selling averages 11 per cent." Source: Sales and Marketing Management

I was blown away when I read this statistic. I love that saying and get to use it so infrequently.

How many people today, regardless of profession, can use 11 per cent of their capacity and survive? Perhaps this explains the high mortality rate in the sale arena where we do battle every day. This number screams complacency to me. Actually, I might give complacency higher credit, maybe 20 percent.

Anyone who has worked in a sales environment knows the challenges one faces in keeping the shoulder to the grindstone. Sales is a very tough profession, especially a commissioned environment. You don't produce you don't get paid. It is a black and white scorecard. You can not bank talk or laziness, and you certainly can't buy groceries with either.

So how is it salespeople are spending only 11 per cent of their time on the tasks critical to their success? Some will be quick to say the remaining 79 per cent is taken up with administrative tasks, paper work, chasing down orders, providing customer service, and the list goes on and on. If you can hear yourself saying this, my suggestion is for you to get in front of a mirror and look in it. Ask yourself, "Is my workday appropriately filled with tasks that will provide the income and recognition I seek?" My guess is if you look yourself in the eye, the true answer is no. Time mysteriously is filled doing other "stuff".

So what does this other stuff look like? Is it having a coffee with other 11 per centers? Is it sneaking in that "last" game of free cell? Is it worrying about what the sales quota is looking like for the month? Is it comparing excuses for why the business is not there? If so, then snap out of it.

Only you can control your actions. The first thing you need to do is to get in the game mentally. Are you telling yourself you can be more successful or are you wallowing in self-doubt? Do you believe in yourself? Do you believe in your product? Do you believe in your customers?

Have you created a plan, one that sets a goal with supporting objectives that are measurable and realistic? Have you the discipline to ensure you are doing the necessary activities that will ensure your success? The prospecting, networking, relationship building that top performing salespeople do consistently.

Have you identified where your time is going? If not, create a time log for a week or two and keep track of what you are doing by the half hour throughout the day. You might surprise yourself when you find the time spent on selling and prospecting is only 11 per cent.

Once you have analysed the problem you are well on your way to finding a solution. Imagine if you could increase your productivity two fold. What impact would that have on your income? What if you could increase four fold, and don't think you can't! When you begin to think success, your actions will support you on the path to success.

Before discounting this article or the 11 per cent number, take a good look at the top sales professionals in your company. What percentage of their time is spent selling and prospecting? What are they doing different from you? What can you learn from them? Where is their mindset? Are they positive, optimistic and disciplined in how they approach their day?

Make the effort to get a fix on where you are spending your time. Ask yourself, "Is what I am doing right now, the best use of my time?" Then you need to be honest with yourself when you answer. Good luck and good selling!