Case study no.1 (The "too good to be true" case) for the "Fundamental Equation of Sales":
Web Design And SEO Services Sales Department
Lets say your monthly Sales Department Target is T=21000 USD according to the budgeted income.
Your department's Hit Rate is H=15%, meaning your Department's consultants / account managers sign 15 contracts for every 100 visits they report.
Average Rate Per Unit is ARPU=500 USD. This is the average value of a signed Web Design and SEO Services contract.
Number of consultants / account managers in your department is N=5.
In this case X (the number of necessary visits per month per consultant) becomes:
Great news! 56 visits per month means an average of 2.8 visits per day. This rate allows your consultants to properly prepare every detail of their consultative sales visits in a relaxed manner. On an average, a consultative sales visit should not take more than 1.5 hours (which is very long!)
Further more, your department could easily cover a 20-30% Target raise in the near future and with efforts even a 50% Target raise.
My advice is to force a promotion or at least a salary negotiation following these steps:
1. Ask for a superior management position or, if you are not really ready for it, at least ask for a better salary.
2. In exchange, offer the achievement of a new set of objectives: 10%+ each month for the following quarter.
3. Push the team a little harder and achieve a 12%-15% monthly raise.
The outcome could and inside a objective driven company should be your promotion to the next level or your targeted salary raise.
Happy end for the moment.
Although this seems as I said before "too good to be true", in fact it is not. There are many sales departments in this situation. The figures are different for each company, but the number of visits required is still more than reasonable.
NOTE: Before engaging in any procedure restructuring process PLEASE do reassess your department's activity as a whole as there might be a source of discomfort among your consultants. Make sure the changes you are about to implement are not too much of a burden to your people.
Questions:
1. Is your Sales Department in a similar situation?
2. Do you think that there is any Sales Department in a situation like this?

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