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How Do I Manage The Sales Function In My Small Business?
The sales function is a critical component of any business and most small business CEO's are not great sales managers. So what to do? Well, you remember that old baseball movie with the tag line, "Build it and they will come!"
By: Michael Davel Anderson
The sales function is a critical component of any business and most small business CEO's are not great sales managers. So what to do? Well, you remember that old baseball movie with the tag line, "Build it and they will come!"
By: Michael Davel Anderson
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Well that applies exceptionally well to managing your sales function. Build the sales activity level and the sales will surely come.
The fact that you asked the question in the first place is a really good sign. The first step is to acknowledge that the sales function needs to be managed. The second step is to remember that to manage effectively you have to be able to measure. In the sales function that means that measuring dollarsis not enough, you must also measure activities.
If you examine your sales function you will be able to define several specific activities like collecting leads, setting appointments, preparing proposals, making presentations, closing the sale, etc. Each of these activities has, over time, got a definitive success ratio. So you measure how many times are needed to make a presentation before it turns into a sale? If you are calling on the right prospects and your presentation is a good one, the closing rate could be at least 33%. Let's use an example of four new sales per week. With a closing rate of 33%, you would have to make 12 presentations. So to get four sales a week, you manage the process to ensure you make 12 presentations each week.
This process is extended down the line on the sales process. To get each presentation your sales person needs to make four calls. Ok, so that is 48 sales calls per week. And each call requires 2 appointment setting phone calls, or 96 phone calls per week. And so on. It is so much easier to say to your sales people, "I want to see a hundred appointment setting phone calls resulting in 50 sales calls each week". It is also easier to measure these parameters.
Done this way managing your sales function is just the same as managing any other part of the business:
* Tell your people what you expect them to do;
* Measure their performance;
* Provide them with feedback;
* Reward them for quality performance and discipline them when performance falls below par.
Managing your sales function by the numbers is particularly important in longer cycle sales. If you ensure the level of activity is where it should be, sales will surely follow.
With 45 years of experience in leading positions in business across North America and internationally, Mike Anderson knows the business of business. More important, he has learned how to teach it. He is now consulting to small and medium sized companies, specializing in CEO and senior management training. Please Visit www.trainmetobeaceo.blogspot.com
The fact that you asked the question in the first place is a really good sign. The first step is to acknowledge that the sales function needs to be managed. The second step is to remember that to manage effectively you have to be able to measure. In the sales function that means that measuring dollarsis not enough, you must also measure activities.
If you examine your sales function you will be able to define several specific activities like collecting leads, setting appointments, preparing proposals, making presentations, closing the sale, etc. Each of these activities has, over time, got a definitive success ratio. So you measure how many times are needed to make a presentation before it turns into a sale? If you are calling on the right prospects and your presentation is a good one, the closing rate could be at least 33%. Let's use an example of four new sales per week. With a closing rate of 33%, you would have to make 12 presentations. So to get four sales a week, you manage the process to ensure you make 12 presentations each week.
This process is extended down the line on the sales process. To get each presentation your sales person needs to make four calls. Ok, so that is 48 sales calls per week. And each call requires 2 appointment setting phone calls, or 96 phone calls per week. And so on. It is so much easier to say to your sales people, "I want to see a hundred appointment setting phone calls resulting in 50 sales calls each week". It is also easier to measure these parameters.
Done this way managing your sales function is just the same as managing any other part of the business:
* Tell your people what you expect them to do;
* Measure their performance;
* Provide them with feedback;
* Reward them for quality performance and discipline them when performance falls below par.
Managing your sales function by the numbers is particularly important in longer cycle sales. If you ensure the level of activity is where it should be, sales will surely follow.
With 45 years of experience in leading positions in business across North America and internationally, Mike Anderson knows the business of business. More important, he has learned how to teach it. He is now consulting to small and medium sized companies, specializing in CEO and senior management training. Please Visit www.trainmetobeaceo.blogspot.com
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