Maximising
the Potential of Your Sales People
You
are losing 15% to 20% of your sales turnover.
We know that because every client we have asked this questions
has come back with the a very similar answer, once they took the
time to look at the figures. This is how you do it.
Take a company with 10 seasoned salespeople. They have equal territories,
and annual sales ranging from £250,000 to about £1,000,000.
| STEP
1. Rank-order salespeople based
on their personal production (from highest to lowest). Here
is our fictional sales team: |
Bill: £1,000,000
Jane: £900,000
John: £800,000
Alice: £700,000
Alan: £600,000
Isobel: £500,000
Simon: £400,000
Ron: £300,000
George: £200,000
Sandra: £100,000
|
| STEP 2.
Add together the sales figures of them all and divide the total
by three. This yields three tiers that allow you to divide your
salespeople into meaningful sales production levels. |
Total sales of £5.5M divided by 3
= appx. £1.8M per sales tier.
|
| STEP
3. Start at the top of the list and assign each
sales person to a sales tier |
Bill/Jane = £1.9M (TOP)
John/Alice/Alan = £2.1M (MIDDLE)
Isobel/Simon/Ron/George/Sandra =
£1.5M (BOTTOM)
|
| STEP
4. Divide sales production (within each tier)
by the number of people in that level. This shows you the average
sales generated by each of them. |
Bill/Jane -£1.9M ÷
2 = £950k average top-tier performance
John/Alice/Alan -£2.1M ÷ 3 =
£700k average mid-tier performance
Isobel/Simon/Ron/George/Sandra - £1,5M
÷ 5 = £300k average bottom-tier performance
|
| STEP
5. Calculate the average sales production difference
between a mid-tier and a bottom-tier sales person. Using a mid-tier
sales "target" provides a conservative estimate of
lost sales. |
£700k (MIDDLE) - £300k
(BOTTOM) = £400k - The
average sales production lost by each of your bottom-tier
sales people.
|
| STEP
6. Multiply this figure by the number of sales
people in the bottom tier to calculate the total sales lost
each year by your bottom-tier sales people. |
£400,000 x 5 = £2.0
Million / year! |
| STEP
7. Get focused on the opportunity. |
Start by working out if the figure
of 15% to 20% is anywhere near the mark. It usually is. |
SOME IMPORTANT THINGS TO REMEMBER
- No conscientious
manager knowingly hires low sales producers (unless they are blood
relatives). You do not need to use "top-tier" sales
people as your "target" because no hiring system is
perfect. If you did that, you would need a bigger bucket. All
you need to do is raise awareness of the high cost of low producers
when they are compared with a reasonable, average target.
- Acquisition
and recruiting costs pale into insignificance when compared with
lost sales.
- All the salespeople
in this example looked good enough to hire. In addition to lost
sales, bottom-tier salespeople take considerably more management
and coaching.
FIXING WHAT'S BROKEN
This is a simple to use model that will highlight
what the bottom-line consequences are when poor salespeople slip
through the screening phase and get hired.
Simple models can create attention, but it takes
a lot more digging to actually discover the real hiring problem.
What, for example, is lacking among your poor performers?
- Is it
a motivational issue?
- Interpersonal
skills?
- Learning problems?
- Analysis problems?
- Fact-finding?
- Market awareness?
Discovering the root cause requires some careful
investigation.
SALESMAX is a SALES SELECTION &
DEVELOPMENT tool we use to help our clients recruit new people and
develop existing teams to become superior sales performers, who:
- Have
the potential to consistently perform in the top 50% of a sales
team
- Have personality
characteristics which can have an impact on sales success
- Understand
effective strategies in relationship selling
- Are motivated
more by a Company’s compensation or commission structure.
SALESMAX is capable of determining an individual’s
sales knowledge, motivations and sales personality. That is powerful
information for you and your business.
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