When it comes to doing business, it’s commonly known that not everyone can sell. What’s not common knowledge is how to manage those of us who can.
The formula most organizations use is as follows:
Market X Coverage X Salesperson Quality X Product Saleability = Revenue
Market – is the amount of money a region spends on a particular product, in a given time frame (usually a year). For example, hot tub sales in Edmonton, per year.
Coverage – is the percentage of prospects being presented with your company’s offerings before making their decision (i.e, number of deals you’re in on). This includes keeping up with potentials so you’ll receive consideration when they are in the market.
Quality – people buy from people they find competent and trustworthy. So in terms of selling, quality is measured by both a salesperson’s business and personal skills. Business skills are product knowledge, ability to demonstrate, and ability to strategize (e.g., customizing your pitch for a specific company). Personal skills include likeability, professionalism, natural sales ability, and integrity.
Saleability – how your product or service compares with the competitor’s.
So if the market is alive, and you have good coverage by quality salespeople along with a decent product, you’ll do fine. But if the sales numbers aren’t there, there’s usually a problem with some part of your equation.
Why salespeople get fired
It’s always for one of two reasons: not covering the market or poor quality.
Not covering the market can be due to laziness or being a slow worker. It can also be caused by the salesperson not being a good qualifier (i.e., spending too much time chasing poor prospects). In any event, if the market is not being properly covered, action must be taken.
Poor quality is measured by a low “win percentage.” How many deals do they win compared to the number they compete for? Remember, losing only strengthens your competitor’s confidence. So sometimes you’re better off not competing at all.
Why salespeople get laid off
It’s usually due to a decrease in market size. If management feels the potential to meet one’s quota isn’t realistic, then people must be shed. This can be due to a change in the general business climate or your company’s competitiveness.
Summary
Salespeople are a different sort of cat and every company needs them. Oftentimes they’re managed by people who haven’t a clue. If that sounds like you, now you know better.