Last week we looked at Sales Result Efficiency. This was the product of the Average Sales value multipled by the volume. Both numbers are percentages of the targets.
In this week, lets go into more details and focus on a parameter called Sales Process Efficiency.
What's that? Price and Volume are the result of doing a set of sales activities, they are "results".
Results come from doing a set of activities well.
Health is a result of exercise and good diets.
Marks in exams are the result of good studies.
Sales is a "result" of:
a. Making calls.
b. Sending introductory proposals.
c. Doing meetings with new clients to explore needs.
d. Sending specific proposals to address expressed needs.
And all of points b, c and d can be measured as a percentage of target achievement. eg
Our sales champion performer for this month has the following sales process numbers:
a. Sending intro proposals - Target 20 / Achievement 12 = 60%.
b. Meetings - Target 10, Achievement 8 = 80%.
c. Specific proposals - Target 8 / Achievement 4 = 50%.
We multiply the three percentages above:
Sales Process Efficiency = % Achvmt (Sending proposals) * % Achvmt (Meetings) * % Achvmt (Specific proposals)
= 60% * 80% * 50% = 24%.
So what does this indicate?
Sales process efficiency this month or week or fortnight (whatever is your selling cycle) is a accurate indicator of future sales. Our sales champion is running at a sales process efficiency figure of 24%.
What's going to happen next month unless he buckles up? His sales are going to dip, does not take a genius to figure that out.
Great young leaders would therefore go beyond tracking sales results efficiency to look at sales process efficiency in a lot of detail for each of their sales people. And this would be the basis for a review.
..................................Ideas discussed in our sales training assignments.
