An integrated unique approach to improve sales performance
With the beginning of 2013, companies are refocusing their attention towards sales growth. And to elaborate on the debate concluded from the previous article “We Don’t Do Sales Training”, many tend to focus on building models that focus on developing personalities, skills and behaviors of salespeople.
The real challenge is in creating a model that establishes what makes some people better at sales than others—and then supports the replication of those characteristics across the entire sales force.
Below is a unique model, best characterized as “Formulating Sales Toward Transformation”, that would give some directions on how sales could be formulated. This article is an attempt on narrating the formulas of sales, and how applying science on a sample case study with some given constraints would lead towards sales transformation.
It would be best described like an iceberg. Looking at the surface of water or even digging one layer down would be difficult to judge the major issue(s). The shapes of the underwater portion, the real challenges, are the areas that are required to be intensively analyzed. But what’s clear meanwhile:
- Company is not meeting their overall objectives with too many roller-coaster sales performance.
- Many salespeople aren’t pulling their weight: On average, the top 20 percent of the sales force generates 62 percent of a company’s revenue, and 51 percent of sales people failed to meet their quotas.
Leads: Sales cycle always starts by generating leads, irrespective of how.
- # of Leads: Calculate the required # of Leads to be generated on a bi-weekly basis and set a targeted objective for salespeople.
Setting 65 Leads instead of 44 to be approached weekly would increase your sales by 50%. How: 65 Leads would generate 15 meetings/week as per the formulas stated above. The later would lead to 3.174 deal/month x1100$ = 3491.4$ as target/ salesperson based on the given conversion rate.
Conclusion: Target achieved, peaks and valleys are minimized.
- Potential Leads: Build a systematic way to generate more organic leads and reduce sales admin work, those leads have higher conversion rate in practice too.
- Referrals: they have a higher % of reach. Increasing referrals by 20% would lead to a 40% increase in sales.
ex: given referrals have a conversation rate of 40% ( 16% reach) instead of 5.29%
⇒ (10 meetings x 4 weeks x 20%) X (16%) X 1100$ average Deal = 1408$ – 465$ original sales = 943$ which is 40% increase in sales. Thus:
- Design the sales structure to increase referrals: very focused areas might be addressed by salespeople within such an industry.
- Build a process to constantly ask for referrals
% approached: few points to look after:
- develop a process to contact again turned down leads.
- drop off non potential leads in order to keep the (%) high.
- set constant objectives for calls to be contacted /week / salesperson.
Conversion Rate: few points to look after:
- develop sales people calling capabilities
develop a structure for approaching clients and verification whom to contact
develop a calling guideline to ease the process
Design Customer Segmentation:
- Direct Salespeople on potential customers
- Allocate salespeople relevant to customer segmentation
Develop a Sales Process:
- Reduce sales cycle: a simple step when developed properly could eliminate duplicates.
every single step eliminated in the sales cycle would increase the % of Reach by 42.9% (1/Conversion Rate). Thus new % of Reach is 7.56%. So Sales = 7x (40 X 7.56% x 1100$) = 7×3,326$ = 23,284$.
- Build a standardized sales process with relevant capabilities required for each step
- Prioritize steps
- Break the sales process in blocks
Focus on Targeted Offering
- Eliminate non potential products
- Direct sales people on potential products relevant to customer segmentation
- Building a structured sales process that aid salespeople to identify clients’ requirements in order to act as a solution provider rather than a product oriented sales.
- Developing sales people up-selling capabilities through a tailored development program
- Optimizing prices