Ignite Double-digit Growth in your Salesforce

A sale is not something you pursue; it's what happens to you while you are immersed in serving your customer

By Mark Wills, Sales Performance Coach & Consultant Partner, MHI Global

 

While it is incredibly important for companies to have a solid sales process in place, the best sales happen not when your salespeople are following a handbook, but when the process is so deeply ingrained in them that it is in the very DNA of your company. The payoffs and additional growth potential for your organisation can be significant, when the salespeople have internalised the process, and adhere to it naturally and unconsciously.

 

Where are we in this evolving Sales Training market? Unfortunately, most businesses have yet to develop or adopt a specific approach or methodology for engaging with their customers. There is a growing number of businesses which recognise the value in adopting a manageable, repeatable, and above all, consistent approach to customer engagement. There are quantifiable benefits that have arisen from doing so.

 

A 2016 Sales Optimization Study by CSO Insights (part of MHI Global) examined the impact of not only having a methodology implemented in a business, but also how this effects key sales performance metrics. The research suggests that when greater than 90% of salespeople consistently use a methodology; in other words, it is cultural in its adoption and becomes the way a business engages with clients and is not optional, the number of forecast deals won, increases average by 11%, from 45 to 56%, as seen below.  (Table 1- Sales Performance Optimisation Study).

 

Table 1: CSO Insights Sales Performance Optimization Study

Percentage of Sales People Consistently using Methodology

<90%

>90%

Forecast Deals- Won

45%

56%

Forecast Deals- Lost

31%

22%

Forecast Deals- No Decision

24%

22%

Sales force turnover rate

26%

14%

 

What does this mean for an organisation in terms of potential growth? Let’s understand this with an example: Company A has 100 salespeople, each with an annual quota of $1,000,000. The total targeted revenue for the year is $100,000,000 (100 X $1,000,000). Looking at the sales metrics; the average case size is $50,000 which means each salesperson will need to successfully sell 20 cases of business in a year, to achieve their quota. In Company A, the average closure rate is 45%, meaning each salesperson will need 44 opportunities to enter their funnel, throughout the year to achieve quota.

 

If the sales training program achieves the 11% boost  suggested, then salespeople who now close at 56% deliver the business an extra 5 sales per salesperson (44 opportunities X 56% = 25) as opposed to 20 previously. Assuming the average case size remains at $50,000; Company A now has an extra $250,000 in revenue per salesperson, which is potentially 25% additional growth. Company A now benefits from $25,000,000 in additional sales revenue, that year all things being equal.

 

Theoretically this all sounds nice, but what about in practice? In 2014, one such company began the deployment of a market-leading methodology into its US business (Europe and Asia soon followed). Within the first 12 months in the US alone it attributed $396,000,000 in additional sales revenue to the implementation of the methodologies. When surveyed, 92% of respondents agreed that the methodologies had been, either in full or in part, a contributing factor towards landing the additional business.

 

What would it cost to take on such an initiative? Understanding how much investment is required is critical to understanding the likelihood of attaining the desired increase in sales revenue growth, as well as calculating ROI. From the data provided a spread of investment was determined, and the impact those levels of investment would have on Sales. (Table 2- Investment per salesperson)

 

Table 2: The Business Case for Sales Training

Total Training Spend (Related to Sales Skills Program Ratings)

Sales Skills Training: Needs Improvement

Sales Skills Training: Meets Expectations

Sales Skills Training: Exceeds Expectations

Annual Investment (Training per Salesperson)

$2,202

$2,489

$2,885

 

The research was able to highlight a few critical data points that pointed to multiple significant benefits of adopting a sales methodology, above and beyond the 11% jump in closure rates. For instance, the number of reps meeting their quotas jumped from 83% to 91%.  The number of deals lost dropped by 9%. This would impact the overall cost of sales and efficiencies of the business, as time and money invested in lost opportunities, would have reduced significantly. There was also a reduction in salesperson turnover rate, from 26% down to 14%. Reducing sales force turnover rate by nearly half can have exponential cost saving implications.

 

Now returning to Company A’s situation. To get to the 11% increase in forecast deals closed, the report suggests spending $286,500 on a sales force of 100 people - not an insignificant investment. In Company A’s case, this would have generated a staggering 8,885% return on this investment, based on an increase in sales revenue of $25,000,000. Other cost benefits not factored into this simple example include greater process efficiency, opportunity resource allocation, shortening of sales cycles, cost of salesperson turnover, and more.

 

Is it possible for other companies to replicate the successes experienced by Company A? Yes, firstly companies need to assess the development needs of its salesforce. Through behavioural benchmarking and sales performance assessments, to identify any gaps in behaviours known to be drivers of sales outperformance. Fostering these key behaviours, through consistent coaching and training. combined with the deployment of sales enablement tools will elevate performance metrics significantly.

 

The interesting thing about knowledge is that once you know it, you can’t “un-know” it. If your business was asked to invest in an asset that could drive a 25% growth in sales revenue, and yielded an ROI that was potentially thousands of times that of the original investment, most businesses would take a very hard look at that opportunity.

 

About the Author

 

Mark Wills is a Sales Performance Coach and Consultant Partner at MHI Global who coaches and consults with businesses primarily in the financial services, manufacturing, real estate, telecommunications and professional services industries. He has more than 22 years of experience in sales leadership, enablement and effectiveness and has been living in Southeast Asia for the past 14 years.

 

MHI Global is one of the largest dedicated performance improvement companies in the world, bringing game-changing insight to sales performance, customer experience and leadership and management

 

Find out more at www.mhiglobal.com

 

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