Simple Sales Tracking Blog

Where Do The Dollars Come From?

When considering this question many of us think of activities such as marketing and advertising, operations, lead management – the list goes on.

The fact is that only one activity brings money into any business and that is sales, unless of course you are a non-profit organization.

There is an old saying “Nobody gets paid until a sale is made”

You can have the best products in the world but unless someone is actively selling these you will go out of business.

If we can agree that sales are one of the most important activities in our business then the next question to consider is “are our salespeople making the most of the opportunities that are out there?”

Sadly the answer to this question in the majority of cases is “No”.

Here is some data from a study conducted with the Fortune 500 companies in the States, which found –

98% of salespeople do not have a consistent methodology for their presentation
95% talk too much
93% volunteer a price decrease without being asked
86% ask the wrong questions
87% of sales inquiries are never followed up – not even once
90% depend almost totally on leads from marketing efforts

What this information points to is a lack of sales skills training for the sales teams.

According to ASTD research conducted in 2008 – 48% of salespeople learn selling through trial and error. How many prospects do these people waste while learning?

Many of the people I train have been in sales for years and have basically learnt through this method.

The most common issue I see with the trial and error training methodology is a lack of confidence in the salespeople.

The next most common group I come across are the salespeople that did a sales course ten or so years ago and are still using the old style selling techniques.

Sales like any other business activity should be systemised.

When selling becomes a process your salespeople will become more confident, your sales closing ratio will increase and your cost of sales will decrease.

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, on-going training – the list goes on.

Using $150/hour as an example let’s 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
Total 8 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)

We will look further at developing sales teams in the next article.

Quote of the Week:

From Jim Koch of the Boston Beer Company, who once was asked by a wholesaler why he invested so much in training his people, when ultimately they might leave.

His reply –

“What if I didn’t train them, and they stayed?”

Brett Burgess is a Sales Trainer and Programme Developer for Sales Impact Group.

Filed under: Sales Techniques and Strategy, Uncategorized, , , ,

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About

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.
Go to SimpleSalesTracking.com

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