It’s that time of year. Sales managers and corporate leaders are looking ahead to next year and trying to set budgets that are realistic, but that also push the organization to drive as much revenue as possible. At some point in these discussions, the topic of the head count always comes up. Someone will ask the question: “Do we have enough salespeople?”
Conventional wisdom tells us that big armies beat small armies, so it’s easy to see the logic in adding more salespeople. But if you are turning over 25 percent or more of your sales team, like many organizations do today, this will become very expensive, very fast.
We could certainly have a great discussion right now on the culprit behind this turnover. And that would be a discussion worth having. We could talk about the increasingly unbalanced ratio of sales managers to salespeople; it should be about 1:6 but is often closer to 1:12. We could also spend some time talking about how little time and attention most sales organizations devote to training and skill development and how their focus is more often on “What can you write up this week?”
But we’re not going to go there with this article. We’ll save that discussion for another day, because today we are going to zero in on the specific problem we are trying to solve: How do sales managers drive more top-line revenue?
Every sales manager knows that they need more sales opportunities to be created on a regular basis. And they know that in order for that to happen, more quality appointments need to be set. This is a numbers game, and it all comes down to getting more salespeople in front of more decisionmakers so they can find more needs and present more solutions.
The more quality appointments we set, the higher the chances are that we get to go back with a proposal and create an opportunity. When this is done well, we are able to create new clients and bring in more revenue.
Finally, we’re back to the original question: How do sales managers drive more top-line revenue? Does it involve hiring more salespeople?
LET’S TAKE A LOOK
If you have eight salespeople going on an average of 2.5 quality appointments per week (which is pretty normal), you will have a total of 20 quality appointments each week.
If 20 appointments in a week won’t cut it, you could add four more salespeople to your team. When each of your sellers goes on 2.5 quality appointments per week, you will now have a total of 30 appointments per week.
In this scenario, you added four salespeople and you got 10 more appointments per week. You should check the math here, so you can know what you are paying per appointment. With high turnover, it adds up, and the cost per appointment is high.
THERE’S A BETTER WAY!
What if instead of hiring those new salespeople, you focused your attention on helping your original eight sellers to increase the number of appointments they make each week? What if they went from an average of 2.5 quality appointments per week to five (one per day)? That would mean that while your head count remains the same, your eight sellers would essentially double the number of quality appointments to a total of 40 per week. And, as an added benefit, the increased practice that each seller would get by doing more quality appointments every week would help them to get significantly better at making them. It would be logical to expect them to close more business than ever before.
Greatly increasing productivity without hiring more people is an exciting thought!
But before we get carried away, we have to acknowledge the fact that asking sales reps to double their appointments is not easy. They will tell you that if they could do that, they would have done it long ago.
So how do we make this math work in our favor? It’s easy!
The investment still has to take place, but not necessarily in hiring more salespeople. Instead, consider investing more in pre-sale activity, like marketing that will effectively attract more leads and result in more calls. You can do this with an appointment setter, a lead-generation specialist, or a good inbound marketing strategy. Consider investing more in post-sale activity as well, hiring someone to ensure that everything sold is actually implemented correctly.
By taking some of the pre-sale or post-sale responsibilities off a sales rep’s plate, you will finally free them up to go on more appointments and do what they do best — find needs and sell solutions.
The future of media sales is very bright, but knowing how to structure the sales department for revenue growth will take new thinking.
Matt Sunshine is Managing Partner of the Center for Sales Strategy.