I just finished speaking to a
large CEO group this morning,
and I asked a very simple question.
"What do you do to track your sales people?" and a lot of them
didn't have an answer, but the one said did.
There was a few, and one man raised his hand, who owns a manufacturing
company and said, "We track the amount of quotes that they send out on a
monthly basis." I said "Ok,
tell me about that." He said,
"Well, we require all sales reps", and he has sales reps around the
world, "to put out 20 quotes per month, for their minimum
requirement." I said "Ok, why do you do that?" and he looked at
me with curiosity, and said "What do you mean?” "That's how we track
what they're doing and we know that if each one of them puts out 20 quotes,
they'll typically get six back with interest, they'll negotiate and usually
close two of them". I said,
"So you're closing 2 of every 20?" "Well, not every 20, but
pretty close, that's pretty much our track record" I said "Ok". "How much time are they spending on the
other 18 that they don't close?" He said, "What do you mean? They
don't spend any time on them." I
said "Who does their quotes?" "They do." "Who puts them together?" "They do." "Who sends that out or presents them to
the clients?" "They do."
"Who follows up?" "They do." "Then ok, so have you ever tracked the
amount of time they're spending on the ones they don't close?" "And a 2 out of 20 ratio is 10% and so if
you think a 10% closing ratio is a good idea, I would make sure that you are
hiring very very inexpensive sales reps, and just get them to throw enough
quotes out there. You certainly don't
need professional sales people because you're not looking at professionalism
when you do it that way."
This is such a common occurrence,
when I talk to leaders of sales organizations.
So many of them don't have any tracking at all. So many of them just say, "I hire
professionals, and they get out there, and if they don't meet their revenue
number, I get rid of them."
"Ok, that's one way of going about it, but you're supplying no
tools to them, no coaching, no mentoring, no leading and that's not the right
thing to do. You take a big chance
there." So I do admire the fact
that he's tracking something, though he is tracking the wrong things. You don't want to track the amount of quotes,
proposals, whatever you call them in your world. You don't want to track those,
because anybody can throw a bunch of proposals and quotes out there and see
what sticks. You might as well sit back
in your office and sent ‘em on out. What
you need to do, is not send any
proposals or quotes out until you actually have a conversation with
somebody. It is imperative to
pre-qualify every opportunity, confirm that they have issues that you know you
can solve with your product or service, you have had some level of discussion
about investment so not to spring that on them in the proposal and finally a
true understanding the solutions that you're going to provide. Most
importantly, and most commonly missed, you know when they get that proposal, what
they're going to do with it. Who's goanna
be looking at it? Who are they, and if
they're happy with the proposal, what is going to happen on the other side of
that?
If you don't know those things, and
your sales people don't know those things, you shouldn't be putting proposals
out in the street. Depending on what kind of company you have and what you do,
you could be spending a lot more time and money than you think developing
recommendations and proposals, getting quotes, putting numbers and things
together.
It is a huge waste of salespeople’s time to
throw a bunch of quotes and proposals out there and just keep following up on
them until you either exhaust the client or the salesperson.
Maybe, they do buy 2 out 20, It's
probably less than that. Either way 2 out of 20, a 10% closing ratio is
shameful, absolutely shameful. Your
proposal should never get into the hands of anyone until number 1, you know
what their issues are, you know what their needs are and you know you can solve
them. You have an idea of what solutions you will use to solve them. Number 2,
You have had a discussion of what the approximate dollar amount would need to be
for you to come up with a solution to solve their problem. You don’t have to give the number but you
had to have some level of investment discussion.. And 3, in my opinion most importantly, is
never give anyone a presentation or a proposal or a quote until you know
exactly what they're going to do, once you presented to them, if they like
it. We all know what they're going to do
if they don't like it. So if they do,
what are they going to do with it?.
My friend who owns the
manufacturing company is a very bright man. He has processes in place for
everything and I admire that, but the process he has in place for tracking his
salespeople is poor, and if I was grading him on it, he would get an F. Make sure that you keep your proposals back;
you hold your proposals and don't show them to anyone until they qualify and
deserve to see them. Proposals never
sell. The sales should be almost
complete before you make your presentation, and your presentation or proposal
or quote is merely the proof statement of what you already discussed. If that's not what is happening , you're
doing it backwards.
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