Increasing Sales Efficiency
Have you experienced a cost explosion in your field sales department
? Many managers who arrange sales training courses for their team complain about the rising costs of their sales force. The subsequent five instruments can help you get costs in proportion.
The costs incurred in personal sales are escalating: experts estimate that costs in personal sales have risen by 200% over the last twenty years.
If we look at the real sales active working time of a salesperson, the cost of a client visit in certain branches often costs between 250 and 400. Furthermore, an increasing number of visits are necessary in order to gain just one new client.
The only way to get out of this cul-de-sac is to implement measures to improve efficiency. The following details give you an overview of the five most important measures which you can implement.
Account Management Programme
The premise on which this programme is based is that different sized clients should also be dealt with differently. A capital goods company, for example, allows the office sales force to deal with all clients whose annual turnover is up to 300,000 instead of allowing these clients to be dealt with personally by the field sales force. The costs per client contact dropped from 200 per visit to 15 per call. The goal of implementing such a "small client programme" is to care for these clients equally well but for a lesser cost.
Many companies have found that switching from personal sales to telemarketing leads to an improved coverage of the market and therefore higher turnover. A telesales person has more contact per day with clients than a salesperson in the field sales force.
The field sales capacity that is saved through this is invested into improved service for key clients (key accounts). 75% of all companies which have introduced key account management have been able to increase their market share and thereby their turnover.
Lead Generation Programme
A good lead generation programme (a programme to gain enquiries) needs to meet the following demands:
One acquisition track is not enough to get a sufficient number of qualified enquiries. Always have several acquisition tracks, using, for example, trade fairs, sales department programmes and mailings.
Within your company there should be one salesperson or department which is responsible for the organisation, coordination and monitoring of enquiries. Make sure that you have a clear request profile for the "ideal enquiry": How suitable are our products for potential clients? How great is turnover potential? Is the enquirer a bona fide potential client? Has the enquiry come from one of the decision makers in the client's company?
Clearly apportion accountability for processing enquiries. A conceivable way of doing this could be, for example, allocating enquiries according to sales areas or client branches.
Make sure that the field sales force or telemarketing department follow up enquiries and orders consistently.
Regularly assess your lead generation programme. Appropriate indicators include the number of external sales department visits up to transaction, the proportion of enquiries which lead to orders or the costs incurred by client acquisition.
Computer Aided Selling
According to expert opinion the best way of increasing sales efficiency is to introduce computer aided selling. Computer aided selling opens up a myriad of opportunities: sales area optimisation, turnover planning, client analysis, sales department assessment system, order status analysis, electronic mailing system, competition analysis, tour planning, etc.
By introducing computer aided selling you can increase sales department productivity by up to 40% and increase sales-active time by up to 50%.
Determine which sections and/or tasks are to be targeted before you introduce computer aided selling.
When doing this, concentrate on points which offer your clients tangible advantages (eg, faster answering service or shorter delivery times).
Make certain that your financial plan is not too diminutive. Experience shows that you can expect costs of between 2,000 and 5,000 per salesperson.
Telemarketing
In this area, experts expect an annual growth rate of 25%. Around 20% of industrial companies are currently using telemarketing.
Bear in mind the following recommendations when introducing telemarketing:
Expect resistance from your sales force, who will be concerned about loss of jobs. Employ expert trainers to provide sales training for your workforce. Set comprehensible revenue and profit targets. Telemarketing people should be paid the same performance related pay as your other salespeople. Create the same hierarchy in telemarketing as you have in the field sales force and offer your telemarketing people promotional opportunities.
Systems contracts
This is a delivery contract between client and manufacturer, which is long term and agrees an exchange of all information by data transfer.
This way, the field sales force changes from being an 'order form writer' to being a true salesperson and can concentrate wholly on client acquisition.
Offer systems contracts mainly for unproblematic products with long life cycles.
Make sure that this is no more than 50% of your turnover and no more than 20% of this is solely from one client's systems contract. Otherwise, you will easily lose important clients and market contact.
Fix prices for a maximum of two years to cover for price fluctuations.
Negotiate a good long term contract to ensure revenue stability. Make sure that your sales team are comfortable negotiating and have received the suitable sales training.
Combine the systems contract with a 24 hour or 48 hour delivery service in order to make it appeal to your clients.
by: Richard Stone
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