The sales managers' challenge:
Get the numbers with smaller budgets and fewer people...
Fierce competition...
Customers who demand more but expect lower pricing...
The most common solutions:
Tweak the compensation system...
Rally the troops...
Apply pressure...
Lower your price...
Look for new talent...
Reforecast...
Why aren't these common solutions producing the results they once did?What has changed? How do you stimulate sales performance.
So here's a detailed look at the manufacturer/distributor working relationship 1996-2000
82% of manufacturers and 92% of distributors said yes to "Are working relationship problems having a negative impact on your business?"
Survey participants indicated that relationship related problems resulted in increased sales and marketing costs and lost sales volume.
Why?
Satified with the status quo, or not aware of the true costs...
We identified the measurable impact of working relationship problems using Kaizen principles.
"What are the most common areas of waste in the relationship between mfgrs and distributors."
#1 Fixing Mistakes
#2 Expediting Orders/Fast Tracking
#3 Excess inventory
#4 Waiting
These unnecessary channel costs resulted in higher operating costs,
increased sales and marketing costs and lost sales volume.
The bullwhip effect: These problems intensify as they move toward the customer --
shifting the burden
Where will these problems have the greatest impact?
Who is going to do everything humanly possible to keep this from happening?
What comsumes a sales person's time? Fixing problems. "We don't notice a lot of these problems because we have a really good rep. When we have problems, our rep throws his whole body at them and fixes them."
The 5% of peak performers:
- Have higher sales volume
- Higher net margins
- More loyal customers
- Less turnover
- Lower overall sales costs
Peak sales performers spend 58% of their time generating revenue, 33% of their time doing operation and management, and 9% of their time doing stuff of questionable utilization.
Of that 58% revenue generating time, 16% is prospecting/qualifying; developing solutions/proposals 13%; and 12% doing needs analysis. 9% is spent presenting solutions/closing and 8% solution implementation (startup).
The O&M time breaks down to 18% travel, 6% responding to email, 4% general sales administration, 3% getting training, and 2% filling out reports.
That 9% of questionable stuff includes 4% dealing with problems and mistakes, looking for stuff 3%, and expediting orders 2%.
This works out to 5 weeks per year per salesperson.
The 90% (average) of performers spend their time differently. They spend 38% of their time generating revenue, 23% questionable utilization, and 39% operation and management.
That's 20% less time selling...than peak performers do.
They spend half as much time prospecting and doing needs analysis.
The most O&M time is spent by the average performers at 15%. Responding to email/text messages is over 10%. General sales administration is 7%. Filling out reports is 4% and receiving training is only 2%.
And they spend almost 23% of their time dealing with problems and mistakes, looking for info and expediting orders.
The most common problems and Mistakes:
Quotes, PO and invoices do not reconcile
Delivery problems: early, late or missed deliveries w/o notification; short stops; picking errors; shipments and paperwork don't match; damage to the shipment.
If you don't do it, nobody else will, and you will lose the account...but it takes away from selling.
The time cost is 11 weeks per year, per salesperson.
What's 11 weeks of your salespeople's time worth?
How does MCAA compare?
108 people responded to the survey.
Only 3% were peak performers. MCAA is slightly worse than the national average.
Average salesperson in automation spends 36% selling, instead of 38% national average.
Only 12% of time is spent prospecting and doing needs analysis.
6% more time in Operation and Management in this industry.
Travel and responding to email/text messages accounts for 32% of time...WAY over the average.
It isn't a travel issue, it is the email issue.
2% under the average for dealing with problems and mistakes. But it is still 11 weeks per year away from selling.
So what if we cut that number to 5.5 weeks? Would that help you top line?
Go to
www.indusperfgrp.com and use the sales calculator.
Now, what separates peak sales performers from average performers? Are they smarter? Are they better looking? Are they more motivated?
Not necessarily.
Are they better compensated? Do they work longer hours? Do they have better territories?
Not necessarily.
Peak sale performance is determined more by the company than by the sales person.
Peak sales performers come from companies that have the following attributes:
1. They understand that all revenue and profits come from customers
They understand that service to the customer is everybody's job
They believe that the primary role of the saleperson is to sell.
They constantly work to free up their salespersons so they have more time to prospect and conduct customer needs analysis.
So how do you build a peak performing sales force?
Start by building peak sales performance COMPANY.
Here are the FIVE COMMON BARRIERS to peak sales performance.
1. Inefffective and outdated work processes.
2. Lack of focus
3. Too little or too more information
4. Outdated selling skills
5. Inability to execute
Go to
www.indusperfgrp.com to see this.
Use the Goldratt Theory of Constraints.
- stop looking for the silver bullet
- stop thinking in terms of hiring peak sales performers
- start thinking about getting more out of your existing sales force
- identify which of the 5 common barriers are holding your salespeople back
- focus on the little things you can do that will fre up your salespeople- one hour at a time.
