Best organizations not only adapt quickly and effectively to external factors, they also implement new strategies, launch new products, develop new sales process, revamp their sales structure, and seek constant improvement in their sales performance. This goes along a thorough examination to the internal factors.
1. Sales Strategy: Start evaluating the company on the macro level. Was the strategy appropriate in regards to all external factors? Where and when did you succeed or fail? A very helpful tool to go through is to graph your organization timeline for 2011 with all its peaks and valleys, stating the reason behind every milestone.
2. Sales Model and Process: Before blaming your salespeople, evaluate your sales process in comparison to the continuous change of your customers’ behavior. 1999 despite the long term record of success, its stock hitting high of 64$ a share, Xerox was in trouble, it needed to implement tremendous change to meet its objectives. It implemented a two-part sales strategy along with two different sales models and process. One process focused on global customers, where account managers were dedicated to create a need, educate clients on the new products to provide them the best fit solution. The other product oriented sales model focused on SMEs, that were later reassigned to indirect channels.
3. Sales Force Design: It is true that a sales person is an income generator, but there is a ceiling for newcomers, even when they are good. There are some analytical approaches that determine the size and structure of your sale-force.
i. Activity based method: (X amount of customers × % of reach × y hours per customer per year) ÷z hrs
per salesperson per year = # of salespeople to cover a specific product for specific market.
ii. Target return per call method: Companies often have a target ROI for any investment they make. The same % should be used to compare it to the calls and meetings conducted by every salesperson. This will highlight the need of increasing the sales force or developing their closing ratio.
iii. Sales response method: The sales response approach employs concept of “sales force drives sales” directly to the product. To formulate it, use your historical information and forecast your sales for a specific product under alternate sales force size scenarios.
4. Sales Numbers: Because the purpose of sales organization is to generate sales, analyzing their numbers is a very critical task that should be conducted thoroughly. The difficulty lies in determining exactly what should be analyzed and what factors to add to the metrics.
I’ll try to simplify it as follows:
i. Organizational Level: Sales analysis should be performed on different organizational level. Performing a hierarchical sales analysis would identify specific problem areas. This goes by starting on the top level and going successively to lower levels in the organization.
ii. Type of Sales: Best categorized into
a.Product type or specific products
b.Account type or specific accounts
d.Sales deals or order size
The key is to conduct again an organizational level analysis while the numbers are categorized as above.
iii. Type of Analysis: comparing actual sales with sales forecasts and quotas is extremely revealing, especially that sales forecasts represents an expected level for defined product from a defined market according to a set strategy. An effective index could be computed by dividing actual sales results by the sales quotas and multiplied by hundred. The result should be compared directly by the sales effectiveness of different organizational level again coupled with different type of sales.
5. Sales Productivity: productivity is typically measured in terms of ratios between input and output. Because the direct effect of numbers is the productivity of sales person where all ratios are expressed in terms of the same units, it would be most useful to analyze every salesperson’s productivity. Factors could be extracted from the milestones of a sales mapped process, Refer to article published on Tuesday, September 27th, 2011. Major advantage of productivity analysis is that it provides useful information that is not available from any other type of analysis. Some factors to look at, but not limited to: number of accounts handled, number of new prospect contacted, % reached, sales target, selling expenses (variable and non-variable), sales calls, sales meeting, demonstrations, proposals, closed deals, ….