Originally published in: Distributor Sales Report
Some time ago, Hewlett-Packard decided to automate its sales process. About $8 million into the project, somebody uttered that word we all dread -- "Oops!" Sales numbers had begun going in the wrong direction. Turns out, H-P was automating a poor sales process and, thus, making mistakes more efficiently. It had to begin again.
Fortunately, H-P was could absorb the costly mistake. The majority of companies, however, have no room for an 'Oops' in the budget.
The key to avoiding that four-letter word is to improve your sales process before you install sales force automation. There are four key success factors that companies must address before they automate the sales process:
- Put methodology before technology
- Have clear objectives
- Provide training and support throughout the deployment stage
- Establish a clear and aggressive timeline
Technology in search of a problem rarely solves anything. You need to balance high tech with "high touch" to get higher sales. A 'touch' is a customer contact -- a letter, e-mail, fax, visit, or phone call.
Studies show it takes 6.7 of these touches before a customer will buy. Yet, typical salespeople devotes just 29 percent of their time to customers or prospects. The rest of their time is spent tending to non-sales activities. Our research shows a salesperson's time breaks down like this:
- 34% doing administrative tasks
- 32% waiting or traveling
- 5% making service calls
- 15% with customers
- 14% prospecting
The average business purchase decision involves three to five people, which means the rep has to make 20 to 30 touches per account. Multiply that by the number of accounts each sales rep is chasing, and the numbers quickly strain resources. The No. 1 reason for sales failure is that the salesperson is not "there" when the customer is ready to buy.
With 70 percent of the sales rep's time devoted to activities that have little to do with selling, it's no wonder so many sales opportunities are missed. National studies show:
- 48% of all salespeople give up after the first contact
- 25% more give up after the second contact
- 12% more give up after the third contact
- 5% more give up after the fourth contact
Yet according to Sales & Marketing Management magazine, 80 percent of all sales are closed after that crucial fifth contact.
Here's what salespeople are up against: To be successful, they have to close deals during that "window of opportunity" when prospects are ready to buy. The best way to ensure your salespeople are "there" when that window opens is to engineer a process that puts your name and product in front of prospects more than 6.7 times.
That takes a proactive business development approach. Automation alone is not enough.
Do your salespeople have time to be proactive? To get a handle on the value of your salespeople's time, calculate your revenue per sales hour and then track how salespeople are spending their hours.
At the risk of appearing to micro-manage, you can achieve this through a time-ladder log, in which salespeople record their activities every 15 minutes for five consecutive business days. At the end of the week, analyze those activities to determine which are revenue-producing and which are revenue-wasting.
One example of a revenue waster is letter-writing. Many salespeople don't type well, yet one company spent a fortune on laptops so salespeople could key-in their own correspondence. After calculating its sales revenue per hour at $1,800, the company discovered this chore was costing about $900 per letter! They realized they had automated the wrong process and quickly transferred typing back to typists.
When you transfer non-selling activities to lower cost resources, such as assistants and telemarketers, you save by allowing salespeople to concentrate on what serves the company best -- selling. |
