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Planning Sales

4 Factors of Sales

Plan your work & work your plan

I’ve been thinking about different factors in sales lately. Most salespeople focus on two or three of the four elements.

  • Time Management
  • Territory Management
  • Prospect Management
  • Sales Cycle Management

Most salespeople concentrate their effort on the first two and are ambivalent about the last two until the end of the month, and sales are short. The last two are just as important as the first two because of two things, chasing bad prospects and weak sales projections.

Time Management

Time management is the classic definition of the quote at the top of the article. If you do not make a plan and carry it out, you will waste time. Period.

Example: I remember one of my first days as a salesman with no experience. I headed out to “make calls” without a plan. I spent the first part of the day, driving around “looking” for a business that appeared “good” to call on. By noon, I have made one or two cold calls with poor results. That afternoon I knew I wasted a day and needed to figure out a better way. A long conversation with my sales manager helped put it in perspective. I got better by planning.

No plan results in wasted time.

Territory Management

Territory management is crucial to sales success. Some territories are small, and some cover multiple states. 

Example: If you covered Texas, Lousiana, Oklahoma, and Kansas, you wouldn’t think of making one call in Dallas, then drive to Oklahoma City for your second call then back to Houston for the next one.

A few years ago, I worked with a sales rep in San Antonio. After leaving the office, we made a call in Southwest San Antonio. Then, to my surprise, we headed north on the highway ending up West of town about ten miles. Our next stop was back inside the 410 Loop South of our last call and finally headed Northeast to call on a customer outside of the outer loop about five miles. Mapping this comes to 74 miles and over 1-½ hours of travel time. 

In discussing the day, I discovered this was a typical day for them. We quickly went to work on her territory management skills. Think about your territory and put together a management plan that gives more prospect time and less windshield time.

No plan results in wasted time.

Prospect Management

Prospect Management goes back to the proper qualifying of prospects. To manage your business, you must spend your time with the best opportunities in your territory. If you waste time with people or companies that are not a good fit for your company, you will make unreal sales projections and frustrate your sales manager to no end. 

Example: A salesperson working for me projected the same sale to close for the third month in a row. In my office, the salesperson insisted the deal was good for the month. I said, “Fine. Let’s go see them and get this done.” They were not a prospect, and they were not closing that month. After that, we spent some quality time on qualifying an opportunity.

No plan results in wasted time.

Sales Cycle Management

Sales Cycle Management is a combination of time, territory, and prospect management. From my experience, sales cycles can get out of control if a salesperson doesn’t focus on the first three factors. 

Sales cycles vary with industry, products, and sales experience. An inexperienced sales rep can stretch a 15-day sales cycle to more than a month without coaching. A six-month sales cycle may never close because it falls through the proverbial cracks.

Some industries are one or two call sales. Though they require a plan, it doesn’t have to be as extensive as a long close cycle.

The longer the sales cycle, the more management it requires. If you work in a long cycle sale, what is the plan to keep it on track and moving forward? 

  • Do you owe the prospect answers to questions? 
  • Do you owe the prospect additional specs?
  • Are they waiting for your proposal?
  • Are they waiting for the results of your walkthrough?
  • Do you owe the prospect a summary document of your meeting with key personnel?
  • Are they waiting for your financial analysis of their problem?
  • Have you scheduled your company expert for his input?
  • Did you schedule the next meeting? What is the purpose?

You get the idea. If a salesperson does not manage the sale, it will die.

If you don’t continue to manage the sales cycle, a sale can stretch beyond normal limits or, worse, be lost.

No plan results in wasted time.

Responsibility

The above sales factors should be a part of the onboarding training with every new hire. Just because a salesperson had years of experience doesn’t mean they are efficient. A sales manager needs to feel comfortable that the salesperson understands time, territory, prospect, and sales cycle management. 

Time for some self-reflection. How do you measure yourself at the four sales factors that influence your sales? I only managed to get better after realizing I didn’t understand the basics and needed guidance.

Books, tapes, and CDs make learning easy in “automobile university,” as Zig Ziglar said. Make use of the windshield time and hone your craft. 

Thoughts?

Categories
Information Life Lessons Sales

How To Calculate Your Monthly Sales Projection

How do you calculate your monthly sales projection?

 

On the first of every month, sales managers gather all the salespeople into a room to get their sales projections. What number will you hit this month? Traditionally, salespeople have no real idea, and most are not taught how to calculate their monthly sales numbers before the month begins.

How do most salespeople calculate a sales projection?

I find that most salespeople take a look at their funnel and then make up a number out of thin air.

Example: They look at the funnel and see a total number at the bottom of $100,000. The thinking goes that the salesperson will add a few more into that number during the month, so they project $125,000. Thin air!

Real-life shows us that the above projection is a fantasy.

Allowing this fantasy to continue will frustrate a salesperson because they rarely hit that number. There has to be a formula that helps salespeople be better at this monthly process.

There is.

Experience helps

Early in my sales career, I kept meticulous notes. I tracked leads, meetings, proposals, and sales. After a while, patterns begin to emerge.

I began discussing my findings with other people and found theirs were similar. Mind you; we were all in the same industry selling to the same type of prospects. I wondered if it held for other sectors.

Then I left that industry and changed companies. I went from monthly route sales to one-off sales of equipment. The change was both harder and easier than I thought, but success came rather quickly.

Why? I knew how to figure a monthly sales projection, and I don’t remember a time I didn’t make my number. I wasn’t low-balling the forecast either. It didn’t take long for my manager to use my number when giving his team number to the Regional Vice President.

He would doctor most other numbers, but learned mine was as close as one could get in the type sales we did.

How do you get to the number?

Historical data is the secret sauce. I noticed a pattern that seems to hold for most industries (I’ve used it in four different industries) and is easy to use.

Referring to the earlier example of the salesperson with the $100,000 funnel. Real-life shows us that 1/3 will close, 1/3 will push, and 1/3 are lost. The correct projection for this person is $30,000. Yes, I know that is only 99%, and that $30,000 is not quite a third, but I like round numbers.

Using this formula is also an excellent way to increase your sales. There is magic in the numbers.

How do you increase your sales using the funnel?

How can a funnel increase your sales? Working the rule of thirds means if you improve the number of correct prospects and close the same ration of 1/3, you will increase your sales. Need to sell 100,000 per month? Increase your funnel to $300,000.

Increasing your sales funnel is the easiest way to increase your monthly sales. It’s not easy, but it is the easiest. 

Make that extra call on the way back to the office. 

Make another dial before breaking for lunch. 

Do the work for more sales.

Will some months exceed the number? Yes. Will some fall below? Yes again.

Just a rule of thumb

We all know sales is a hard business. Monthly projections are only our best guesses of what number we can confidently hit for the month. Trust me, your sales manager might grimace when you give a smaller amount, but after a few months of close, accurate numbers, they will begin to appreciate the new you.

Use the rule of thirds for yourself for a few months and see how close it gets to your actual number.

I’m betting it will be on target.

Let me know your results. I am always collecting data for sales projections accuracy.

Later we’ll discuss the other two ways I know to increase your sales.