If you are the sales boss in a business this post is for you.
The achievement of sales budgets in any business is critical to that business’s profitability and longevity; not to mention the longevity of the sales boss.
A sales boss can do a number of things to help their salespeople achieve their sales budgets. Here are some of them -
Break their budgets down in to achievable ‘chunks’ of activity
We all know that the way to eat an elephant is one bite at a time. Similarly with sales budgets; the easiest way to achieve them is one chunk at a time. Here are some tips that will help –
Firstly, allocate a portion of the annual sales budget to each month of the year. This is rarely as simple as dividing the year’s budget by twelve and allocating the result to each month as that month’s sales budget. In most businesses there is a seasonality that applies to their sales results.
For example in some businesses January may be a traditionally quiet month while June may be the biggest sales month of the year. Other month’s results may also reflect seasonality. The sales boss in such a business would be wise to allocate each month’s budget accordingly.
Secondly, convert each month’s budget into a number of sales (or orders) to be achieved. This is as simple as establishing the average sale value likely to be achieved (taking into account past results) and dividing that value in to each month’s sales budget. The result is the likely number of sales that will need to be achieved in each month.
Thirdly, establish the number of proposals (or quotes) that will need to be presented to customers to achieve the necessary sales. For example, if a business ‘closes’ half of the proposals it presents it will need to present twice as many proposals as it expects to make sales.
By now your salespeople have a budget broken down into monthly chunks covering sales dollars, numbers of sales and proposals to be presented.
They can now focus, month-by-month, on presenting the required number of proposals.
(If your sales activity records are good enough you could go at least one step further and determine the number of sales calls needed to be made each month.)
Record this data on a spreadsheet to allow for easier tracking and clearer feedback.
Ensure that customers are categorized
The 80/20 Rule applies to sales in a number of ways. One of these is that generally 80% of a business’s sales revenue comes from its top 20% of customers.
A practical application of this is to categorise the business’s customers into three groups, A’s, B’s and C’s as a way of ensuring that the business’s customers get appropriate attention and service.
Most of the TLC should be directed to the business’s A class customers because it will be the sales made to them that make or break the sales budget.
Help them balance their time allocation
The 80/20 Rule also applies to salespeople’s time. If a salesperson spends 20% of their time pro-actively prospecting for new sales opportunities they generally create enough follow-through work to achieve the desired sales result. (Prospecting in this context means phoning or calling on prospective customers to secure sales appointments; but not time spent in sales appointments).
Put another way, if a salesperson spends an average of 2 hours a day setting up sales appointments with good-quality customers they will achieve a high level of follow-through activity and plenty of sales.
Unfortunately many salespeople spend considerably less than 2 hours a day setting up sales appointments. Sometimes this is due to poor self-organisation. Other times it’s caused by distractions within the business. These can occur if non-sales staff, who don’t appreciate the sales staff’s priorities, side-track them with non-sales activities like administration or service work. (Sometimes non-sales staff simply need to get out of the way and let the sales staff do the job they are paid to do.)
As the sales boss you can help by ensuring that your sales staff manage their time properly and that non-sales staff are supportive and not accidental saboteurs.
Provide regular balanced feedback
Salespeople, like everyone else, respond to feedback that’s honest, fair and balanced. Don’t be a sales boss who only gives feedback when the news is bad.
Feedback can be informal or formal. Informal feedback is the impromptu enquiry as to how things are going and the impromptu pat on the back for a job well done.
Formal feedback requires preparation by the sales boss and involves noting key points to be covered in a feedback (or review) meeting. The individual salesperson should also be encouraged to do some preparation. One way to do this is to provide them with a short self-analysis questionnaire, asking them to comment on their own performance, in advance of the feedback meeting. This will prompt them to collect their thoughts in order to make the meeting more meaningful.
Be sensitive to the ‘atmosphere’
Salespeople get best results when they work in a positive and structured atmosphere.
Make sure that all staff are positive and supportive of each other; don’t put up with whiners anywhere in the business.
(The up-coming post for Wednesday 18/2 is Make your customers feel valued. It's a reminder that the more valued your customers feel the more likely it is that they will continue to do business with you..)
Monday, February 16, 2015
Friday, February 13, 2015
How to conduct performance reviews with sales staff
If you are the ‘sales boss’ in your business (whether you are the business-owner or an employed manager) you owe it to your sales staff to maintain a schedule of regular performance review discussions in regard to their sales activities and results. This applies whether you have a sales staff of one or many.
Unfortunately, there are plenty of opportunities for mistake-making when conducting review discussions – so here are a few ‘do’s and don’ts’.
Do conduct your review discussions regularly and at appropriate intervals. This may mean that you have a review discussion with your experienced salespeople every three months. For a salesperson who is in the intermediate stages of development your review discussions may be conducted on a monthly basis. For an absolute beginner you may conduct review discussions weekly.
If you don’t conduct review discussions on a regular basis you will probably fall for the trap of ‘reviewing' only when the news is bad. This is not smart because it puts these discussions in a negative light.
Do have your salespeople do some preparatory work before the review discussion. In my view the best way to do this is to provide them with a self-analysis questionnaire. This questionnaire should, as a minimum, invite them to (a) comment on their own performance (b) nominate any areas where they have experienced difficulty and (c) give them the opportunity to point out actions they, or you, could take to help them improve their performance. This questionnaire can then be used as the backbone of the review discussion.
Do be prepared yourself. You will almost certainly have points you want to raise. Have these points prepared, with any backup data at hand so you can access it quickly if it’s required.
Do be open-minded and encourage two-way communication. Because you have done your preparation you may be tempted to speak but not listen. You must listen to your salesperson out of respect. Also, they may have an idea that could make a significant difference to the business (but, they will offer their ideas only if they believe they will be listened to with an open mind).
Don’t let the review discussion become an ear-bashing. This generally happens when ‘reviewing' a salesperson’s performance when that performance is below standard.
A properly conducted review discussion with such a salesperson can often uncover barriers to that person’s performance. Other times it can uncover that salesperson’s motivational buttons.
However, neither of these things will happen if the boss doesn’t ask the right questions and quietly listen to the answers.
Do be balanced in your comments. Rarely is the news all bad or all good. Deal with any ‘bad news’ aspects in an open manner. When dealing with bad news items, stick to the facts and try to point your salesperson in the direction that you want them to go.
As far as ‘good news’ items are concerned; highlight them. If praise is deserved, make sure that you give it. (Praise is like fertiliser for salespeople in that it helps them grow. Also, like fertilising, it can be overdone, so keep it sincere.)
Don’t cross the line and get too personal. The purpose of the discussion is to (a) review progress (b) identify areas where changes are necessary or additional help, training and support is required and (c) reach agreement on actions to be taken. This requires focus on the facts not the person.
Don’t make threats. If the performance of the salesperson is such that you are tempted to threaten them this sort of discussion is the wrong forum. Perhaps you should get your HR advisor involved and conduct a formal warning meeting.
Do follow-up in writing. This makes follow-though easier and helps make the next review discussion with the individual more meaningful. The written follow-up should be in the form of a letter from you to your salesperson. It is not a formal record but simply a summary of the key points discussed and any actions agreed upon by either party. The tone should be friendly and supportive; and it must finish on a positive note.
Do follow through on agreed actions (both your own and your salesperson’s). If you have undertaken to do certain things as a result of the review discussion, do them in a timely fashion. If your salesperson has undertaken to do certain things, make sure that they also keep to their side of the agreement.
Don’t try to save time by reviewing your salespeople in groups. To do so is disrespectful to your people and will certainly result in the laundering of comments by them. Let’s face it, an individual is unlikely to be totally open and unguarded if forced to discuss their own performance in front of their peers.
Summary
Preparing for, conducting and following through on review discussions requires the investment of time and effort. If you can accept the challenge of making that investment you can expect to receive some considerable benefits.
These include a better relationship with your salespeople; plus a better understanding of them and their motivators as well as their needs in terms of training and support. They will gain a clearer understanding of your expectations.
This, in turn, can only lead to a better business environment and better sales results.
(The up-coming post for Monday 16/2 is Let's beat that sales budget. It's about actions that you can take to ensure that you achieve, or exceed, your sales budget.)
Unfortunately, there are plenty of opportunities for mistake-making when conducting review discussions – so here are a few ‘do’s and don’ts’.
Do conduct your review discussions regularly and at appropriate intervals. This may mean that you have a review discussion with your experienced salespeople every three months. For a salesperson who is in the intermediate stages of development your review discussions may be conducted on a monthly basis. For an absolute beginner you may conduct review discussions weekly.
If you don’t conduct review discussions on a regular basis you will probably fall for the trap of ‘reviewing' only when the news is bad. This is not smart because it puts these discussions in a negative light.
Do have your salespeople do some preparatory work before the review discussion. In my view the best way to do this is to provide them with a self-analysis questionnaire. This questionnaire should, as a minimum, invite them to (a) comment on their own performance (b) nominate any areas where they have experienced difficulty and (c) give them the opportunity to point out actions they, or you, could take to help them improve their performance. This questionnaire can then be used as the backbone of the review discussion.
Do be prepared yourself. You will almost certainly have points you want to raise. Have these points prepared, with any backup data at hand so you can access it quickly if it’s required.
Do be open-minded and encourage two-way communication. Because you have done your preparation you may be tempted to speak but not listen. You must listen to your salesperson out of respect. Also, they may have an idea that could make a significant difference to the business (but, they will offer their ideas only if they believe they will be listened to with an open mind).
Don’t let the review discussion become an ear-bashing. This generally happens when ‘reviewing' a salesperson’s performance when that performance is below standard.
A properly conducted review discussion with such a salesperson can often uncover barriers to that person’s performance. Other times it can uncover that salesperson’s motivational buttons.
However, neither of these things will happen if the boss doesn’t ask the right questions and quietly listen to the answers.
Do be balanced in your comments. Rarely is the news all bad or all good. Deal with any ‘bad news’ aspects in an open manner. When dealing with bad news items, stick to the facts and try to point your salesperson in the direction that you want them to go.
As far as ‘good news’ items are concerned; highlight them. If praise is deserved, make sure that you give it. (Praise is like fertiliser for salespeople in that it helps them grow. Also, like fertilising, it can be overdone, so keep it sincere.)
Don’t cross the line and get too personal. The purpose of the discussion is to (a) review progress (b) identify areas where changes are necessary or additional help, training and support is required and (c) reach agreement on actions to be taken. This requires focus on the facts not the person.
Don’t make threats. If the performance of the salesperson is such that you are tempted to threaten them this sort of discussion is the wrong forum. Perhaps you should get your HR advisor involved and conduct a formal warning meeting.
Do follow-up in writing. This makes follow-though easier and helps make the next review discussion with the individual more meaningful. The written follow-up should be in the form of a letter from you to your salesperson. It is not a formal record but simply a summary of the key points discussed and any actions agreed upon by either party. The tone should be friendly and supportive; and it must finish on a positive note.
Do follow through on agreed actions (both your own and your salesperson’s). If you have undertaken to do certain things as a result of the review discussion, do them in a timely fashion. If your salesperson has undertaken to do certain things, make sure that they also keep to their side of the agreement.
Don’t try to save time by reviewing your salespeople in groups. To do so is disrespectful to your people and will certainly result in the laundering of comments by them. Let’s face it, an individual is unlikely to be totally open and unguarded if forced to discuss their own performance in front of their peers.
Summary
Preparing for, conducting and following through on review discussions requires the investment of time and effort. If you can accept the challenge of making that investment you can expect to receive some considerable benefits.
These include a better relationship with your salespeople; plus a better understanding of them and their motivators as well as their needs in terms of training and support. They will gain a clearer understanding of your expectations.
This, in turn, can only lead to a better business environment and better sales results.
(The up-coming post for Monday 16/2 is Let's beat that sales budget. It's about actions that you can take to ensure that you achieve, or exceed, your sales budget.)
Monday, February 9, 2015
It's about numbers
Selling is also about 'the numbers'. Because of this we need to track our match stats in the sales game - as a way of identifying what's working for us and what's not.
How do we do this?
By keeping track of our basic units of sales activity on a daily basis. This means counting things like the number of sales calls (phone and/or face-to-face) we make; the number of presentations we make and the number of sales we make (plus the sales revenue and contribution to profit that they generate).
(Depending on our industry and our sales processes we may need to count additional activity units.)
We can then use a spreadsheet to record our activity units and to calculate our personal KPIs.
This in turn makes it easier for us to spot opportunities for improvement. It also makes it easier to trouble-shoot if results start to fall away.
Remember the old saying 'If we keep the score the score gets better'.
(The up-coming post for Wednesday 11/2 is How to conduct performance reviews with sales staff. The title says it all.)
How do we do this?
By keeping track of our basic units of sales activity on a daily basis. This means counting things like the number of sales calls (phone and/or face-to-face) we make; the number of presentations we make and the number of sales we make (plus the sales revenue and contribution to profit that they generate).
(Depending on our industry and our sales processes we may need to count additional activity units.)
We can then use a spreadsheet to record our activity units and to calculate our personal KPIs.
This in turn makes it easier for us to spot opportunities for improvement. It also makes it easier to trouble-shoot if results start to fall away.
Remember the old saying 'If we keep the score the score gets better'.
(The up-coming post for Wednesday 11/2 is How to conduct performance reviews with sales staff. The title says it all.)
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