level, but often the less experienced sales people don’t sit down and say out loud to themselves, their spouses, their friends, or their relatives what that goal is. If they did, they might hold themselves responsible to hit that target.
So let’s say that Sarah tells me she wants to earn $90,000 over the next twelve months. If she were a professional salesperson who knew her statistics, she would be able to work backwards to determine the daily activity needed to achieve this objective. However, Sarah is new to sales, and nobody taught her how to forecast her financial year, so she doesn’t know how to plan her day-to-day activities. As the company sales manager or training manager, I should know what the overall performance averages in my company are, and by using that knowledge I should help Sarah plan her activities so she can achieve her goal. Over time I should be able to determine Sarah’s personal averages, and with that knowledge we’ll be able to fine-tune her financial planner.
Let’s say that at my company, people who sell the products and or services Sarah will be selling earn on average $400 per sale. My first step, then, is to divide the earning goal of $90,000 per year by our company average, $400 per sale, to determine how many average sales she needs to make by year end to achieve her financial goal. Next, I divide that goal by twelve months, and I spread out that goal in a ramp schedule with fewer sales expected in the first and second months and increasing in the months after that. The assumption is that if Sarah has just started, it will take time for her to build to what our average salesperson produces.
Now I have Sarah’s sales goal for the first month and every month this year. But I’m not finished yet. The next logical question is, what does Sarah have to do every day to insure she achieves the monthly, quarterly, annual goals we’ve planned for her? What daily activities must Sarah perform to hit her target?
Here is how the statistical averages come to play. Let’s suppose my people sell, on average, one out of every three presentations they make with a potential client. That means that in Sarah’s case, I should multiply the number of sales she has to make this month by three, giving me (and more importantly, her) the number of presentations she must make on a daily and weekly basis.
How does she ensure that she has the opportunity to make the number of presentations she needs to make? The answer is to keep working backwards and use the statistical averages for your company again.
Let’s suppose that your salespeople develop their own leads by cold-calling. How many doors must someone knock on before getting one person to listen? Do you know? Regardless of what you sell, if you dig deep enough, you will discover averages that you can use to help yourself or help your team determine what it takes to achieve desired results.
At a previous company we knew that, on average, our salespeople had to knock on twenty-five doors to make one presentation. So if a salesperson’s personal close ratio was one out of three presentations then, using statistics to forecast sales, he or she would have to knock on seventy-five doors to make three presentations resulting in one sale.
Getting back to Sarah and using the above statistics, we would develop the following action plan to help her achieve her personal income goals.
| Annual goal | $90,000 |
| Monthly | $7,500 |
| First month | $4,800 |
| Number of sales ($4,000/$195) | 12 |
| Number of days selling per month | 20 |
| Daily sales needed | .6 |
| Closing ratio | 33% |
| Presentations needed daily | 2 |
| Door knock ratio (historic) | 25 to 1 |
| Door knock goal (to make two presentations) | 50 |
So in short, based on corporate averages, in order for Sarah to earn $90,000 per year, she needs to:
Knock on fifty doors per day (minimum)
Make two presentations per day
Make one sale per day, paying an average of $400 each
Work twenty days per month
From this point on, Sarah is in control of her financial destiny. She can measure her performance against corporate averages. If she performs below average on any of the critical activities shown above, we’ll know where she needs help. If she is simply not making enough presentations, she will need to increase her output in this area. If she’s making the right number of presentations but not closing at the average rate, we have to work on her closing skills.
If she produces above average, great! She can change her results by improving any or all of the statistical averages. She is in control. She is on her way to being a professional salesperson.
Do you and all of your salespeople know their statistics? Are your salespeople in control of their financial destiny? Can you and your salespeople predict within a decimal point what their sales production will be this year and how much they will earn? If your answer is yes to all of the above, and your predicted sales volume meets the requirements of your company, you are truly an asset and you can safely call yourself a professional.
3. Recruiting Salespeople
A challenge facing all company leaders and sales managers is recruitment: how to recruit, when to recruit, and which media or methods to use. No matter how you go about it, recruiting is an essential ingredient to growing sales. Let’s look at a few methods companies are using today to find sales talent.
Headhunters
At one time there were plenty of employment agencies a company could contact for the purpose of hiring salespeople. The difficulty lay in negotiating the fees.
Most employment agencies based their fees on the income the hired candidate would receive. Here is where the first point of contention occurred. If a manager told the agency that a better-than-average salesperson could earn $100,000 a year, the agency based their fee on that figure. You know and I know that while some salespeople earn top dollars, more than half do not. So if the candidate they furnished only produced enough to earn $70,000, the company paid too high a fee.
As a result, some managers would tell the agency that the earning capability was $65,000 instead of $100,000 so as to pay a lower fee. The agency would then tell potential candidates that the earning potential was only $65,000, and the company would get a less qualified salesperson—one who would be happy earning the lesser amount.
This may be why employment agencies don’t operate this way any longer. The fee structure didn’t work for anyone involved. Though headhunter companies do still exist, they almost exclusively conduct searches for management positions, and they function differently. Today employers give headhunters a description of the type of employee they are looking for, and the headhunters conduct searches for candidates who fit the description.
Can you find salespeople that way? In my opinion, based on the conclusions above, your chances of hiring good salespeople through headhunters
