| The last thing a sales manager wants to do is | | | | |
| to go through a certification course in | | | | Average 'Sub-Quota' Revenue per Month during |
| 'Sales Prospecting'. They've been there and | | | | Ramp: $2,800 |
| they've done that, or they'd not have been | | | | |
| promoted to a sales manager level. After all, | | | | Annual ROI: $112,800 |
| that's up to the sales rep. That's why they | | | | |
| are hired on. In fact, I recently asked a | | | | In this example, reducing the time it takes |
| Vice President of Sales in a competitive | | | | for (1) new-hire sales rep to achieve Quota |
| industry if he'd be open to looking at a | | | | by only 1 month returns back to the sales |
| 'Sales Prospecting System' for his sales | | | | manager $112,800 in additional sales revenue. |
| managers his remark was "That's what we hire | | | | |
| sales reps for. If they don't do it, we fire | | | | The other and sometimes forgotten performance |
| them and find some that will." | | | | silo within the term 'New-hire' is sales |
| | | | employee turnover. Most sales employee |
| Well, by definition, I guess that's fair. | | | | turnover occurs with the first 8 months of |
| Because if you take a look at any outside | | | | bring a new sales employee onboard. My |
| sales representative job description, you'll | | | | studies also tell me that 90% or more of that |
| see experience criteria listed such as: | | | | turnover is directly related to low sales |
| "Excellent cold calling and lead generation | | | | activity; not setting enough new appointments |
| experience," or "Must be able to identify | | | | to meet the quota ramp criteria. |
| Target Prospects and maintain an appropriate | | | | |
| activity funnel," or "Must meet or exceed | | | | Using the same model as above, let's look at |
| activity standards." | | | | what's in it for the Sales manager to promote |
| | | | a Prospecting system to reduce new-hire |
| So why should a sales organization consider | | | | employee turnover. |
| establishing a prospecting certification | | | | |
| course for their Sales Managers? In order to | | | | Number of Sales Reps: 10 |
| consider this argument, let's first take a | | | | |
| look at standard criteria within a sales | | | | 12 Month Turnover Rate: 40% |
| manager job description: | | | | |
| | | | Average Salary: $25,000 |
| "Responsible for managing Sales activity for | | | | |
| new and existing Account Executives" | | | | Recruiting Costs/Rep: $1,000 |
| | | | |
| Now let's break this job criterion into | | | | Training Costs/Rep: $1,800 |
| individual elements and look at it as a | | | | |
| professional Investor would look at a | | | | Monthly Sales Quota: $7,500 |
| 'Business Case'. Here are some synonyms for | | | | |
| the word 'Responsible': | | | | Improve Turnover Rate To: 30% |
| | | | |
| · Accountable | | | | Revenue Ramp-up Costs: $60,000 |
| | | | |
| · In charge | | | | Total Annual Cost: $178,533 |
| | | | |
| · To blame | | | | Revenue Production Loss: $63,000 |
| | | | |
| · Liable | | | | Saved Reps: 1 |
| | | | |
| · Guilty | | | | Annual Savings: $44,633 |
| | | | |
| · Answerable | | | | Reducing annual turnover for just (1) |
| | | | new-hire sales rep returns back to the sales |
| · Dependable | | | | manager $44,633 in additional sales revenue |
| | | | and recovered costs. Multiply that out by |
| · Conscientious | | | | your own sales employee turnover number. |
| | | | |
| I don't know about you, but if I understand | | | | Now back to our sales manager job description |
| the King's language here, I am beginning to | | | | criteria of "Responsible for managing sales |
| feel I have some 'Skin in the game' as a | | | | activity for new and existing Account |
| sales manager already. Let's investigate a | | | | Executives." Let's investigate the term |
| little further by pulling out the phrase | | | | 'existing account managers' and what managing |
| 'managing sales activity'. | | | | sales activities by 'supervising' or |
| | | | 'organizing' means to our career. |
| There are (2) different ways to manage. You | | | | |
| can choose to 'Supervise' or you can elect to | | | | First of all, what percentage of your |
| 'Organize'. If 100% of your sales team is | | | | existing sales team is reaching or exceeding |
| 100% effective at professional prospecting; | | | | quota each month. Of the percentage that is |
| meeting or exceeding the necessary activity | | | | not, what percentage of them are not |
| standard, 'supervising' will do the trick. | | | | achieving quota due to sub-par sales |
| You're dismissed. | | | | activity? When you uncover that sales |
| | | | performance number and understand the |
| But to the extent that they are not is the | | | | ramifications to revenue result, you will |
| extent you will need to 'organize', put in | | | | move another notch closer to your ultimate |
| order a best practice prospecting system to | | | | answer of 'supervise' or 'organize'. |
| support new sales appointment activity. (Or | | | | |
| start over like the sales executive | | | | Secondarily, what percentage of your sales |
| fore-mentioned.) | | | | reps time is spent on securing new business |
| | | | appointments? |
| Now let's peel back the phrase 'new and | | | | |
| existing account reps'. | | | | JDH Group clients spend on average 50% of |
| | | | their weekly 'hourly rate' on prospecting. |
| In a sales manager dictionary, 'new' means | | | | For a sales rep working 45 hours per week, |
| 'New-hires' and 'New-hires' reflects | | | | that's over 22 hours dedicated to front end |
| 'Ramp-to-quota'. Simply put, the quicker a | | | | activity. If you decided to 'organize' a |
| new-hire ramps to Quota the better for both | | | | prospecting system, become certified in it |
| parties; the new-hire and the sales manager. | | | | and help others with it, would that drive |
| Both get more credit, earn more recognition | | | | that number down? Will that allow your sales |
| and receive more commission. And what is the | | | | team more time to pursue higher-value, |
| most important facilitator in getting a | | | | solutions-based selling opportunities? |
| new-hire sales rep to Quota in the least | | | | |
| amount of time? | | | | One definition of 'Best practice' is the sum |
| | | | of everything everybody in your sales |
| It's making sure they secure the necessary | | | | organization knows that gives you a |
| amount of new appointments. It's the fuel in | | | | competitive edge in the market place. Putting |
| the tank. The quicker they do that, the | | | | in place a 'Prospecting system' with best |
| quicker they will ramp to quota with the | | | | practice components and elements, becoming |
| proper mentor support of course. | | | | independently certified to it as a manager |
| | | | leader and mentoring it throughout your sales |
| And that brings us back to the leadership | | | | team will ensure that nobody is left behind. |
| choice between choosing to 'Supervise' versus | | | | |
| electing to 'Organize'. | | | | And enabling your sales team to share |
| | | | knowledge and insight stimulates 'Targeted' |
| Here's a (1) rep 'Hard-number' example. | | | | sales activity that will drive new business |
| | | | and help you reach your desired results more |
| Average New Hires per Year: 1 | | | | often. |
| | | | |
| Monthly Sales Quota: $7,500 | | | | As a Sales manager, are you a 'Supervisor' or |
| | | | an 'Organizer'? When it comes to achieving |
| Average Term Agreement: 24 months | | | | revenue results for new and existing sales |
| | | | reps, this article will help you decide which |
| Current Average Ramp-to-Quota: 5 months | | | | side of the fence you should be on… |
| | | | because there is no middle ground. |
| Improve Average Ramp-to-Quota: 4 months | | | | |