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THE BEST SALES PEOPLE DON’T FOCUS ALL THEIR EFFORTS ON SALES REVENUE!

By Peter Heredia Managing Director

Peter has been involved with sales for over 2 decades, dealing with multiple industries and diverse sales team cultures. He knows how to get the best out of any sales team and has the experience and results to back it up.

focusing on sales revenue

You probably think I’m mad. But before you give up on this article, just read a little further as I’m sure that I can convince you.

Did you know if a marathon runner accidently left his watch at home before a race and had to run without it, he would not come close to his best time? Why do you think this is? He needs to pace himself, running his race according to his predetermined plan. His watch is telling him where he is at every stage of the race and therefore he knows what he needs to do next.

A sales person is very similar. He must know where he is today so that he can focus on the right activities to ensure successful completion of his race for sales. The best way to do this is to break down your sales process and identify what activity will bring in the revenue. Hitting sales targets is like any goal you are trying to reach, you need to break it down to see how best you are going to achieve it.

John D Rockefeller said “If your only goal is to become rich, you will never achieve it’. What he meant was that just having a goal isn’t enough, you also must understand how you are going to achieve it. This is the same for a sales person. Mr. Rockefeller could just as easily have said – “If your only goal is to reach revenue targets, you will never achieve it”. Simply put you need to focus your efforts on what you will do to achieve your goal rather than just visualising the revenue target goal that you set.

Another analogy is; what would happen if Real Madrid and Barcelona drew 0-0, during an El Clasico match? What would the coaches tell the teams to go away and work on? Shooting, defending, time in possession, time in the opponent’s half, or any number of other key activities that affect performance on the field. Of course, the answer is we don’t know, but what we do know is that the only way that the coaches will be able to identify where the performance was lacking is by analysing the statistics of what happened during the game.

It is the same with sales people. The 0-0 result is just like your monthly sales figures. Whether you have had a fantastic performance or have lost miserably, you need to know what activities delivered these results. This then allows you to manage these activities to improve and better results will follow.

WHO IS THE BEST SALESPERSON?

Let’s consider two different salespeople:

  • The Closer: a salesperson who is great at closing deals and that’s really all he thinks about
  • Mr. Efficient: not so gifted at closing deals but a well-organized, planner

This table shows a very simplistic view of their results showing that by managing activities thoroughly results in nearly double the revenue while closing only half as many deals.

Sales Comparison

I’m not saying that it is always better to be more efficient than to be an effective closer. The example is to demonstrate that you need to be managing more than just one part of your selling job. Many people (especially managers) often think it is all about closing business; it’s very important but not everything when looking to improve sales performance.

IS MANAGING ACTIVITY FOR UNDERPERFORMING SALESPEOPLE ONLY?

Of course, it’s not. No matter how well you are doing, you can always get better. I have seen time and time again, top performing sales people do even better by identifying areas they can focus on. To go back to a footballing analogy; Lionel Messi didn’t get to be the best in the world by only focusing his efforts on the footballing skills he was good at.

For example, if a sales person is closing 50% of the opportunities that they have and are working on 6 opportunities per month, they will be winning 3 deals per month. If they could increase the number of opportunities worked on to 8 per month and maintain their 50% closing rate, they will win 4 deals. Suddenly they have grown their additional business by 33%.

Basically, if you are doing well, it doesn’t mean you can’t do better.

TOP 5 SALES ACTIVITIES THAT DELIVER RESULTS

1. Make sure that you are visiting your clients. No Excuses. This is the Golden Rule of selling. Segment your customers and identify an appropriate call cycle for them.

2. Manage your sales pipeline:

  • What is the value of your pipeline?
  • Are you working on the right sized clients?
  • Do you have the right number of opportunities in your pipeline? If you have too few opportunities being worked on you won’t achieve your target. Managing opportunities is the activity closest to generating revenue.

3. Manage the sales cycle effectively. Ensure that 80% of opportunities in your pipeline haven’t been there for longer than the time you consider to be long enough to bring on a piece of business. Don’t let the pipeline get stale or you will be just kidding yourself that you are working on genuine opportunities that are ever likely to close.

4. Monitor and assess your Closing Ratio. It tells you not only if you are good at closing but that you are working on the right deals. Learn what it is that you have done well whenever you are successful.

5. Take care that you have a good split of calls between Existing Clients and New Business opportunities. Are you comfortable with only seeing your clients or could you be neglecting your existing clients?

Note: There are many more activities than these 5 and you will need to analyse what YOU need to do to achieve the results you require. Take care of these 5 key areas though and you will be on the right track in most situations.

MAINTAINING PERFORMANCE

Did you know that if you looked at 10 underperforming sales people, there would be at least 8 different reasons for their poor results? If you only focused on their revenue targets and did not break down the performance into key activities that can be measured, you would never get to the bottom of the poor performance.

To demonstrate this, consider this real-life example from my early days as a salesperson. I worked alongside a colleague who had an amazing start to the year. He had won two large pieces of business, smashing his budget for the first 6 months. He did well to close these two deals, but the problem with winning the business was that he started to relax a little and his activity dipped.

The result was; you guessed it……… he stayed ahead of his target! Hold on, if his activity slips shouldn’t he fall behind his target. Well no, not yet anyway, the impact of the big wins early on carried him through his third quarter revenue target.

This is where things got messy; since he stayed ahead of his target even though he had taken his foot off the gas, meant he relaxed even more and he finally started to fall behind on his numbers. He still made his full year revenue target due to the great first 6 months, however, at the turn of the next year, there was panic. He was required, like any sales person, to grow his business year on year and with little activity over the last 6 months, his pipeline wasn’t really holding many worthwhile opportunities. He had also got used to not really going out and searching for business. In truth, a light seemed to have gone out in him. After a very tough 6 month, my colleague fell so far behind target he left and took another job. The moral of this story, (or one thing to learn from it) is that if he had been managing his activity rather than resting on his laurels and basking in the early success, he would have continued to build throughout the year and probably been promoted as opposed to having to leave.

CONCLUSION

The best sales people understand that to achieve their revenue targets they must focus on the activities that will achieve that goal rather than just focusing on the result.

The best sales managers make sure that their sales team are provided with the necessary visibility on their activities and provided support in identifying any shortcomings rather than just beating their teams up if targets are missed.

The most efficient and successful businesses understand that in the same way that they must manage all their business activities to thrive, their salespeople need to have the necessary tools for them to manage all their activities to ensure financial success.

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