Imagine if you could know as much about the performance of your business as you do about the petrol in your car!
Petrol is surely one of the most measured commodities in our day to day lives. The price is presented outside every supply point as well as on the nightly news. You monitor the unit volume and total value as it flows into your car. Your dashboard presents a live report of the amount you have available, as well as consumption efficiency. It also projects how far you are able to go, based on current performance. Why isn't sales performance always as transparent as that?
Sales is the petrol of business. It is true; “Nothing happens until someone sells something."
You must first invest in sales to fill the tank. No petrol in the sales tank, the business doesn’t go forward.
While the analogy of a valuable commodity is pretty clear, few people would think of wasting petrol the same way as sales resources are often wasted in small business.
Missing Dashboard - the first indication of waste is the absence of real measures.
Can you imagine a car that didn't have a dashboard? It is almost inconceivable.
What do you know about the cost of your sales process? Go to a cash machine and pull out $350. You have just filled the tank for one day, for one salesperson whose base rate is $65,000 per annum.
So, it is now 6:00pm. How many K’s have you progressed today? The tank is empty and tomorrow morning you will again pull out another $350. If you could just open a little dashboard on your phone and see the RIO on that $350, you’d have a quick look wouldn’t you?
What would you expect to see? How many contacts or enquiries were managed? How many leads did you get? How many sales presentations are booked for next week? What is the quality and projected sales value of the opportunities? What is the value of sales closed in the last week?
With the current technology available today, this data should available in real time. If you aren’t seeing it each day, or at least weekly, how can you be comfortable setting aside $1,750 in cash for next week?
If these numbers look unrealistic, grab the calculator and enter the annual combined sales salaries. Add on super, payroll tax, workers comp, and a proportion for office infrastructure, HR, administration, recruitment and training. Then, from the days in a year, take off public holidays, annual leave, cumulative sick leave and carers leave. People are at work around 220 working days each year or 44 working weeks. That is just over 18 days per month, or less than 85% of the time your business is likely to be operating.
Leaky tank or funnel – poor quality or missing feed process.
Attribution is the line between the source of the resource and the value of the spark or sale. If the pipeline between supply and result is convoluted, inefficient or leaky, you are wasting resources. As a simple example. I recently worked with a business where the sales process of lead salesperson was post-it notes and a whiteboard. The problem was, the lead nurturing decision cycle was six to ten weeks. What was that guy’s name again? When did he say to call him back? How often should I be calling, and what is the prospective customer researching or experiencing in the meantime?
Burns fuel inefficiently – is it a naturally aspirated carburettor, fuel injection or turbo charged?
In a vehicle, the number of cylinders versus the weight of the vehicle and the fuel system will indicate the capacity of the vehicle and performance you might expect from your fuel. The two key reasons salespeople leave a job is because the business can’t afford to pay them enough, or they don’t believe in the product. This suggests performance is under capacity compared to the competition.
It might be simply that the product isn’t good enough, but too often operational structure, systems design or lack of measures results in poor execution, which means the product/service cannot carry the weight of the vehicle.
Investment in poor performing fuel – contaminated supply
Sales is a numbers game. Sales attribution is a data driven science. There are a million forms of bad, unmeasurable advertising where the prime outcome might only serve to pump up the tyres of the business owners’ status at the golf club. As dumb as this sounds, I have seen many hundreds of thousands of dollars evaporate in just this manner.
The issue is not so much poor performing fuel, but in not knowing the quality of the fuel and therefore paying too much for the results. This applies to every cost in the sales and marketing supply chain – including the people, and again it comes back to lack of data and measures.
Resources being diverted or siphoned - resources applied to other purposes
People who lack the discipline or intrinsic motivation to succeed in sales, will always find something more pressing that requires their time. Resources divert to a comfort zone.
Alternatively, because of their broad knowledge of the business, structured approach and presentation capabilities, salespeople are extremely useful for a wide range of business tasks. I was recently engaged in a sales marketing capacity, but spent the first twelve months solving operational and structural issues.
In small business, it is common to justify the $65,000 base salary for a sales support role, by topping it up with a wide range of administrative functions. In my experience, this is the number one killer of sales performance
, because it undermines the ability for clean execution and measurement of what must be a highly streamlined process.