Sales Training:

Sales Training America is a world class sales training and custom development training company specializing in sales training and sales skill development of our client's sales force. At Sales Training America we help our clients improve their sales profitability through the development of their sales management and sales efforts through SalesForce.com implementation. Sales Training America offers both public (open enrollment) sales training seminars well as the development of customized sales systems and sales seminars for Fortune 1000 companies across United States and Canada.

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Sales Training Tips:

Sales Training - The Hidden Way to Improve Business Return

I have just finished working on a new Sales KPI model, trying to capture what I have learned about the numbers that really count when you are trying to improve sales performance.

After a lifetime of selling for a living, am surprised by what it revealed,

Like all sales managers, I have always been driven to increase sales, because an increase in sales is essential to any sustainable increase in profits. As a consultant, I have known that an increase in sales, without an increase in resources, has a multiplier effect on business return.

My work on extending my Sales KPI Model has revealed new insights, or timely reminders, of ideas that can so easily get lost in the day-to-day pressures of running a business. So here are some suggestions on Sales and Marketing Key Performance Indicators that you may wish to consider.

Start by mapping your sales process.

This is the common starting point for every discussion about sales key performance indicators.

The sales process varies for every business, and certainly for customer or product segments within a business.

New customers need a different sales approach from established customers; I suggest that if you take a large sheet of paper and map the selling process from beginning to end you will find that a small number of sales models are at work in your business. Once you have defined them you know what your Sales KPI model needs to look like. The key to mapping is to focus on defining the milestones that really move the sale process forward and increase your confidence that the sale will be completed. Then you just put them in the right sequence.

You can use the map as the foundation for your Sales KPI model, your sales forecasting model, and to guide your sales activity.

A sales manager's view of the real KPIs.

How much money does the business make for each sale completed; contribution per sale? This is clearly a Sales KPI, because it measures the productivity of the sales operation.

What drives Contribution/Sale?

There are two drivers: Gross Profit/Sale and Total Selling Cost/Sale; the latter is the sum of your face to face selling cost/sale.

Total Selling Cost/sale includes the cost of generating leads and creating a sales opportunity by making a face-to-face appointment. This is usually considered to be a marketing function, but its inclusion in the model transforms our view of the relationship between marketing and sales, and is the true view of the total sales process.

The model shows that the way to increase Gross Profit/Sale is to reduce the Total Cost of Selling/Sale. The drivers of this factor are complex, so achieving the optimum balance of expenditure on prospecting and promotional programs is very challenging.

If you use a Sales KPI Model to explore alternative scenarios you can take the guesswork and the live experiments out of your search for viable new sales or marketing tactics

Unexpected results

I did not expect to discover that increasing the number of sales people to cover an increase in sales opportunity did not really influence the Selling Cost/Sale. This is due to the way the KPI is define, and presents a very different view of sales and marketing costs as a driver of profit.

What was the real Key Performance Indicator? The model showed that increasing the productivity of the face-to-face sales discussion with the customer was the biggest driver of increased business return. An increase of just 13.6% in sales force productivity increased business return by 46.4%. (My input data was hypothetical but reflected a real business situation.)

I suspect that sales managers have intuitively known this, but have not had a way of proving how powerful a focus on this KPI really is. They have not had the tools to quantify the return on an investment in sales force competence, or the factors that the business needs to work on to generate the full return.

A Sales KPI model built on this concept may transform our understanding of how to improve sales team performance. I suggest you explore the unrealized potential hidden in your sales process. You could get a head start on your competitors.

Source: Michael Taplin link

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