What do most of them do?
Act macho cowboys. Threaten. Push. Lets go a for a beer. Motivate? More like a painful three hours for the subordinate. Utility of any of these things? The beer session is always paid for by the company. Does the employee benefit? Do sales improve?
Doubtful. Why?
Because none of these techniques address the fundamental root cause, they only address the symptoms.
Why are sales down?
Because the market is down.
Because customer does not have budgets.
Because bosses did not give discounts
Because ....... Because...... because..........
And a whole lot of silly excuses given by most salespeople.
Why are sales down?
Because there are fundamental productivity issues with the sales team. Which no amount of screaming or threatening or beer can address.
They are poor in knowledge of the product.
They are poor in knowledge of industry.
They have poor ability to generate leads, they depend on marketing to do so.
They are poor in the Sales KYC process - ability to understand and probe for real customer needs.
They cannot make a professional presentation about their company's products.
They cannot handle objections from the customer.
They are scared of closing the deal.
And the beginning has to be made in the Sales review being oriented towards finding out which of these root causes exist in which sales people? How?
The solution lies in establishing clear cut process measures. Lets take an example:
Sales Result Efficiency:
Consists of the following three parameters:
a. Total Sales value sold.
b. No of units sold.
c. Average Sales Realization per unit.
Lets take a specific example. Say a auto company sets the following targets for each of its sales people:
Rs 100 Lakhs in Sales to come from 20 cars at an average price of Rs 5 Lakhs each.
The actual performance of one of the salespeople is as follows:
Rs 86 Lakhs in sales from 10 cars at an average price of Rs 8.6 Lakhs. How would you measure the efficiency of this sales person:
1. Sales Value = 86 / 100 = 86%.
2. Cars sold = 10/20 = 50%
3. Value = 8.6/5 = 172%
Sales Result Efficiency = Multiply the three percentages 86% * 50% * 172% = 74%
Most companies only measure the first figure, which is misleading. The combination with the other two figures results in a much more accurate figure of Sales Results Efficiency which is a focus on:
a. Range Selling - selling the full range of the company's products, not just .
b. Sales Value - Ensuring focus on EBITDA.
Tracking Sales Result efficiency is the starting point for a sales manager to figure out what areas of improvement his team needs to work on.
How many companies do you you know where the Sales team has taken incentives and the company has made losses? That's where you would implement such a system immediately.
.............watch out for the Sales process efficiency description in the next article in this series. These ideas were discussed in a recent training intervention we did for a large client recently.
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