Simple Sales Tracking Blog

How many sales are you losing through poor sales process?

“To train or not to train?” – that is the question

Many businesses spend thousands of dollars on marketing and advertising to generate inquiries and yet spend nothing on training their salespeople to convert these same inquiries into sales.

A common misconception is that if the salesperson has great product knowledge they can make the sale. These types of salespeople rely on what we term “show and tell” selling which leads to price focused buyers rather than needs based selling.

Many sales are lost as a result of poor or even non-existent sales processes. The analogy I often use is when baking a cake you follow a recipe and if you do you get the same result each time. When you decide to change the recipe and say use less baking powder you may still get something that is edible but not the best result.

Well it is the same with many salespeople who have never had any formal sales training – they may have a recipe/process they are following but some of the key ingredients may be missing, resulting in missed sales which invariably leads to increased cost of sales not to mention lost sales revenue.

When you consider the cost of making a sales call can be from $90 to $500 depending on type of call and then take into account the lost opportunity costs it often comes down to leaving sales to chance.

I meet many businesses who would gain immediate sales from sales systems but will delay sometimes up to 12 months before starting.

The great thing about sales training is that it is entirely measurable and the return on investment can be seen almost immediately.

The cost of missed sales can be huge even for small businesses. An example might be a business where an average client may spend $200 per month over 12 months – this adds up to $2400 p.a. If the average client stays loyal to this business for 5 years then the average lifetime value is $12,000.

Now if our untrained salesperson is fumbling one sale per week over 46 weeks this amounts to $552,000 in lost business and over 5 years this could come to $2,760,000 and remember this is per salesperson.

Quote:

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

Action Steps:

Review your sales processes – do you have systems for:

• Asking for referrals
• Managing new leads
• Identifying potential prospects
• Making appointments using the telephone
• Conducting sales interviews
• Quantifying your prospect’s problem in dollar terms

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

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

What Are Your Key Prospecting Activities?

This is a question I always ask when meeting salespeople and sales managers.
The answer I often hear is “cold calling or managing referrals from existing clients.”

The next question I ask is “what processes do you have in place to maximise these opportunities?”

The answer is usually “none”!

Which leads me to the subject of this article which is “Prospecting Activities” or
more specifically  – “Planning your Prospecting”.

The first place to start in developing your plan is to work out your numbers.   The key numbers for us in sales are:

• Total sales for the year expressed in dollars
• Conversion ratios – leads to appointments – appointments lead to sales
• Number of sales we can expect from existing clients
• Number of new sales to new clients
• Average client value based on sales over 12 months e.g. an average customer spends $600/week every week, over 12 months they spend $31,200.  This is the real dollar average sale

By working through your numbers you will arrive at the estimated number of referrals you need to generate on a weekly basis to achieve your sales targets.

This will help you to focus on the prospecting activities that will yield the highest return for the time invested.

In my experience there is a hierarchy of prospecting activities salespeople participate in.

I have ranked these as to what I believe is the value of their effectiveness in generating qualified referrals which give the highest chance of converting to sales.

1. Referrals from centres of influence
2. Referrals from advocate clients
3. Self referrals from marketing and advertising
4. Referrals from business referral groups
5. Attending networking events
6. .
7. .
8. .
55.   Cold-Calling

 

For many salespeople the biggest challenge is managing their prospecting time
effectively, therefore focusing on the right prospecting activities can pay huge dividends if managed properly.

No 1 on this list is referrals from centres of influence.  This is the most valuable prospecting activity if managed correctly.

The key is selecting the right centres of influence.

The criteria we use is:

1. The very best at what they do
2. Have the same type of clients that you do but don’t compete
3. They are active in sales and business development
4. You may only have one in each field

Once we have selected our centre of influence (C.O.I.) the next step is managing the relationship.  This is where most salespeople drop the ball – they sell the concept of swopping referrals to the potential C.O.I. then neglect to follow up.

The key to managing these people is regular contact.  I recommend monthly face to face as this leads to a more solid relationship which in turn leads to more referrals therefore more sales.

We will look into this in more depth in my next article.

Sales Action Step –

Make a list of at least 10 professions who have the same type of clients that you have but don’t compete.     These will form the nucleus of your centre of influence group.

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

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

How Many Networking Opportunities Have You Wasted?

In this article I continue with the sins of networking theme from my last article.

The next sin is failing to establish a connection.

Effective networking means actively making a connection with the people you meet.  Your goal is not to meet everyone at the event.  You are better off having one or two meaningful conversations than collecting 10 business cards.

Malcolm Gladwell in his book “The Outliers” talks about “super connectors” – these are people who know a vast amount of people and keep in regular contact with them – an example of a super connector was Paul Revere.

In 1775, Paul Revere made his famous ride to spread the word that the British were coming.  He rode North West to warn the settlements and local militaria.

His colleague fellow revolutionary William Dawes rode south.

Because of his many connections Paul was taken seriously by the townspeople he spoke to and the British met fierce resistance in the North.  While in the south they met virtually no resistance and believed the townspeople were actually loyal to them.

As Paul had developed so many contacts he was well known and trusted.  The opposite was true of William Dawes.

The message – get connected and just as important stay in touch on a regular basis!

One last point on being connected comes from the book “The Luck Factor” by Richard
Wiseman.    It was found one of the key traits of “lucky people” was they kept regular contact with a large number of people.  In meeting more people it increased their chance of opportune meetings.

The next sin is inability to articulate your unique selling proposition (USP)

Have you ever met anyone, had a conversation about their business and at the end were no clearer about what they offered in their business?

This has happened to me on more than one occasion.  We need to be able to clearly state what we do for our clients and what an ideal client for our business would look like. Stating “anyone would be a good prospect” is far too broad.  The more specific we are about what we offer and about who we are looking for the more chance we have of getting a qualified referral.

At the next event you attend consider some of the key points we have looked at in this article – put them into practice – and look for the results.

Quote of the Day:

It isn’t just what you know, and it isn’t just who you know,
It’s actually who you know, who knows you and what you do for a living.

                                                                                                                         Bob Burg

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

Filed under: Sales Techniques and Strategy, , , ,

How Many Sales Interviews Are Your Team Doing?

Recently I was questioning a sales manager about the number of new sales interviews each of her sales team did each week.

Her answer was that a week probably wasn’t the right duration – more like a month.

When I asked how many they were doing a month the answer was that they would be lucky to average one a month each.

The explanation for this she said was that they were busy sorting customer problems, building the relationship, doing pricing/proposals, delivery services or installations.

My thoughts were she didn’t have salespeople; she had very expensive mobile customer service reps disguised as salespeople.

This is a problem I see in many businesses I work with – the sales teams getting bogged down in the admin and low payoff areas of the business.

There are two reasons for this –

Firstly the company is under resourced which means the salespeople must be “jacks of all trades”. While I understand not all businesses can afford to add adequate support staff to take on the extra duties that could be delegated by the sales team, the questions I asked the sales manager were –

1. What was an average client spend over 12 months Answer: $6000

2. What was the average conversion ratio of your salespeople? (Most businesses guess around 80%, in fact conversions for most companies run at around 35-45%, say we work on 50%)

3. How many extra appointments with new prospects could your sales team do if we took away one activity, say quoting? Answer: 5 new appointments per week

If they converted half of these that would be 2.5 extra sales per week or $15k if we translate these into dollars or $780k over 12 months
Quite a compelling argument for freeing up your sales teams time!

The second reason is a lack of confidence in the actual salespeople themselves usually due to a lack of sales skills/systems. Interestingly enough I often see this lack of confidence in very experienced salespeople who have fallen into the role of “farmers” over the years.

“Farmers” is the term given to salespeople who spend the majority of their selling time managing existing clients and selling to these clients and slowly get out of the habit of prospecting and selling to new clients.

These “farmers” have become busy looking after the relationships they originally gained through prospecting.

The lack of confidence to go out and prospect for new clients generally stems from a lack of a step by step plan on how to prospect.

The answer most sales managers and business owners offer on how to prospect is “go knock on enough doors and you will get the business”. This is known as “cold calling” which is defined as: “calling on a prospect who may not know you and isn’t expecting a call”.

Some companies believe sending a letter then ringing helps to warm the call up. In my opinion the only advantage of this type of approach is that it may save the salesperson a little time.

Cold calling is a punishment for not having a prospecting plan.

We will look at this in more depth in my next article.

Quote:

There’s no magic to it, and you don’t need a lot of natural talent.
What you need is a disciplined organized approach to selling.
If you have that, you’ll outperform the great salesman
who doesn’t understand the process every time.
Selling can definitely be learned.

Steve Bostic

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

Filed under: Sales Techniques and Strategy, , , ,

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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