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