Simple Sales Tracking Blog

What Is It Costing You Not To Have a Systemised Sales Process?

Last time we were looking at why we need to develop good questioning processes. I want to explore this subject more, however let’s look at why it is so important to follow a questioning process in your sales presentation.

We know that following a process will increase your closing ratio and will therefore reduce the overall cost of making sales.

The cost of making a face to face sales call can range from $90 – $500 depending on the location and time.

What many of us fail to take into account when working out these costs are the hidden cost such as technical support, administration support, ongoing training – the list goes on.

Using $150/hr as an example lets look at what goes into making a sale

Preparation and getting the appointment – 1 hour
Face to Face presentation (including travel) – 2 hours
Preparing Proposal – 2 hours
Follow-up appointment to present/discuss proposal – 1.5 hours
Miscellaneous – phoning, research etc – 1.5 hours

The equation is 8 hours x 150 = $1200

This is assuming that you make the sale however there are very few companies in the world who have a 100% closing ratio. Most companies average 35%. This relates to proactive selling (you approach the prospect) as opposed to reactive selling (the prospects approach you)

A company I spoke with recently that actually measures its closing ratio admitted it was 23%.

For our example let’s work on 50% – this means that the cost of making a sale is around $2400. Even if it was only half this figure, it is still a huge cost.

Certainly makes you think about the skills of your sales team in relation to asking for the sale.

Studies have shown that in 62% of presentations the buyer is never asked to buy.

There can be a number of factors that cause low ratios including lack of process, poor prospects, failing to qualify, failing to establish a need or return on investment. Many of these issues can be rectified with training.

Businesses spend thousands of dollars on marketing and advertising to generate leads but are reluctant to invest in training their salespeople to maximise the rate at which they convert these leads into sales.

This in turn results in the very high cost of making each sale which brings me back to the importance of good questioning which I will come back to in my next article.

Quote of the Week –
Success is 20% skills and 80% attitude
Sales are 20% questioning and 80% listening

Brett Burgess

BRETT BURGESS is a programme developer and facilitator for Sales Impact Group Ltd.

Filed under: Sales Techniques and Strategy,

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Simple Sales Tracking is web-based sales CRM software for the tracking, analysis and forecasting of individual and team sales pipeline and contacts.

Built with simplicity at its core, focus is kept on key sales tasks, while eliminating unnecessary ones, helping to ensure buy-in of the entire sales team.
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