By Marc Spritzer, Guest Contributor
I have been in business development and sales management for more than 15 years. With that history, I have seen my share of sales processes that run the gamut from overly-simple (or even non-existent) to overly-prescriptive approaches. As a result of this disparity, companies are sometimes burdened with inconsistent measurements and varying results, which leads to businesses and their sales teams not attaining their full potential.
Salespeople tend to be high energy, independent thinkers who can often feel stifled working within an overly complex and monitored system. Balance is key in developing a standard sales process that is representative of the brand while allowing sales professionals to flourish. Consider a process of 3-5 stages with metrics tied to activity and outcomes, paying particular attention to the determination of appropriate quotas and result metrics.
A Sample Approach:
- Salesperson quota is $1mm net new revenue per year
- Average size deal for company is $50k
- Average close rate is 40%
In this example, the salesperson would be expected to attain 20 new clients in a year. With the close rate of 40%, the salesperson needs to have 50 meetings with qualified, willing to purchase, prospective clients. A quality salesperson should be able to be in front of 5-7 first time meetings per week (200+ per year) if they come from a sales development team (also referred to as internal sales, lead generation or demand generation). If leads are generated from internal teams, those leads will presumably be pre-qualified and warm to a meeting. If such is the case, it appears we may have set the quota too low; however, other circumstances could dictate that the quota is reasonable.
There are multiple levers a salesperson can use to enhance his/her sales performance, including:
- Increase the number of meetings
- Increase the size of opportunities
- Improve the close ratio
All these levers can -- and more than likely will -- positively affect sales revenue; so be sure your sales process takes this into account and implement metrics to measure accountability. This will embolden your sales team to steer their own success… and ultimately the success and profitability of your business.
Marc Spritzer, a native Coloradoan, is a seasoned consultant and expert in revenue growth, business development and portfolio management.