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Is your sales force making too many sales calls?

Tim Connor, CSP & Mike Hourigan CSP

The old story goes like this: Three sales people are sitting in a bar bragging about their busy day. Sales person number one says "I made 6 calls today", salesperson number two says "I made 9 calls today" and salesperson number 3 said "I made 10 calls today and I could have made eleven but one of them wanted to buy something."

One of the best gifts I gave a receptionist was her own business cards. She was so thrilled and said: "Great now I can give salespeople business cards and don't have to stop what I am doing." I knew the answer but asked the question anyway "What do you mean?" She said: "All the salespeople come in the door and pester me to see you, but all they really want is a business card to show to their sales manager."

Have you ever computed what wasted calls are costing you?

Research shows - the ratio of client's sales efforts to sales income, regardless of industry, individual sales experience and market conditions reveals: the average salesperson has a 1 to 4 or 5 - closing ratio on new prospects.

Millions of ineffective sales calls are made every day by well meaning but poorly trained salespeople. One of the common reasons salespeople do not close more sales is because they spend too much time selling to the wrong prospects.

The extrapolated lost revenue of these lost sales is staggering to say the least.

Here is a simple formula to help you determine how much actual revenue you are losing in a year.

1. Subtract the number of closed sales from the total number of presentations given to prospects in a week for one of your average salespeople.

2. Multiply the remaining number (lost sales) by your average sales revenue per closed customer. Granted this number may vary, but it will give you a good indicator.

3. Multiply that number by the total number of sales reps in your sales force. This will give you the total of lost revenue for the week by your combined sales group.

4. Multiply this number by 52 and you've got the amount of lost revenue for your sales team in a year.

Here is an example for a typical salesperson:

-15 appointments per week, 4 sales, 9 no sales.

-Average income per sale - $1,000.

-Lost revenue by this rep in one week - $9,000.

-If you have 10 reps that's $90,000 in lost revenue in one week.

-Times 52 weeks - that's $4,680,000 in lost revenue in one year.

We only used $1,000 for an average sale. You can imagine what the number would be if your average sale was much higher!

Of course results vary by product, market conditions, and/or experience but the fact remains that sales people have a tendency to make too many calls and not enough sales.

A critical part of any sales manager's job is to make sure the sales team is spending their time on the payoff actions necessary to hit budget. One of the best messages to get across to sales people is to "sort before you sell". Spend the time sifting through prospects and preparing for them.

Back to our story: a fourth person joined the conversation and said I only made 4 calls but three bought. Which sales person would you want working for you? Do the math and don't forget to factor in the cost of gas that week.

About the Authors:

Mike Hourigan and Tim Connor are co-authors of the book SOLD - Discovering the World's Best Sales Training Program. They help companies who want to increase their sales results through better hiring, management and a revolutionary new sales method.
They are available to speak for your or your company on ony of these topics.
If interested, please fill out the Sales Speaker Inquiry

Permission is granted to reprint this or any article from our website in print or to use on your website as long as the above paragraph is included together with a link to www.soldbook.com and your contact information is provided to Mike@SoldBook.com

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