| on_start --> | | | | Current Average Ramp-to-Quota: 5 months |
| The last thing a sales manager wants to do is to | | | | Improve Average Ramp-to-Quota: 4 months |
| go through a certification course in 'Sales | | | | Average 'Sub-Quota' Revenue per Month during |
| Prospecting'. They've been there and they've | | | | Ramp: $2,800 |
| done that, or they'd not have been promoted to | | | | Annual ROI: $112,800 |
| a sales manager level. After all, that's up to the | | | | In this example, reducing the time it takes for (1) |
| sales rep. That's why they are hired on. In fact, I | | | | new-hire sales rep to achieve Quota by only 1 |
| recently asked a Vice President of Sales in a | | | | month returns back to the sales manager |
| competitive industry if he'd be open to looking at | | | | $112,800 in additional sales revenue. |
| a 'Sales Prospecting System' for his sales | | | | The other and sometimes forgotten performance |
| managers his remark was "That's what we hire | | | | silo within the term 'New-hire' is sales employee |
| sales reps for. If they don't do it, we fire them | | | | turnover. Most sales employee turnover occurs |
| and find some that will." | | | | with the first 8 months of bring a new sales |
| Well, by definition, I guess that's fair. Because if | | | | employee onboard. My studies also tell me that |
| you take a look at any outside sales | | | | 90% or more of that turnover is directly related |
| representative job description, you'll see | | | | to low sales activity; not setting enough new |
| experience criteria listed such as: "Excellent cold | | | | appointments to meet the quota ramp criteria. |
| calling and lead generation experience," or "Must | | | | Using the same model as above, let's look at |
| be able to identify Target Prospects and maintain | | | | what's in it for the Sales manager to promote a |
| an appropriate activity funnel," or "Must meet or | | | | Prospecting system to reduce new-hire employee |
| exceed activity standards." | | | | turnover. |
| So why should a sales organization consider | | | | Number of Sales Reps: 10 |
| establishing a prospecting certification course for | | | | 12 Month Turnover Rate: 40% |
| their Sales Managers? In order to consider this | | | | Average Salary: $25,000 |
| argument, let's first take a look at standard | | | | Recruiting Costs/Rep: $1,000 |
| criteria within a sales manager job description: | | | | Training Costs/Rep: $1,800 |
| "Responsible for managing Sales activity for new | | | | Monthly Sales Quota: $7,500 |
| and existing Account Executives" | | | | Improve Turnover Rate To: 30% |
| Now let's break this job criterion into individual | | | | Revenue Ramp-up Costs: $60,000 |
| elements and look at it as a professional Investor | | | | Total Annual Cost: $178,533 |
| would look at a 'Business Case'. Here are some | | | | Revenue Production Loss: $63,000 |
| synonyms for the word 'Responsible':o | | | | Saved Reps: 1 |
| Accountableo In chargeo To blameo Liableo | | | | Annual Savings: $44,633 |
| Guiltyo Answerableo Dependableo Conscientious | | | | Reducing annual turnover for just (1) new-hire |
| I don't know about you, but if I understand the | | | | sales rep returns back to the sales manager |
| King's language here, I am beginning to feel I have | | | | $44,633 in additional sales revenue and recovered |
| some 'Skin in the game' as a sales manager | | | | costs. Multiply that out by your own sales |
| already. Let's investigate a little further by pulling | | | | employee turnover number. |
| out the phrase 'managing sales activity'. | | | | Now back to our sales manager job description |
| There are (2) different ways to manage. You can | | | | criteria of "Responsible for managing sales activity |
| choose to 'Supervise' or you can elect to | | | | for new and existing Account Executives." Let's |
| 'Organize'. If 100% of your sales team is 100% | | | | investigate the term 'existing account managers' |
| effective at professional prospecting; meeting or | | | | and what managing sales activities by 'supervising' |
| exceeding the necessary activity standard, | | | | or 'organizing' means to our career. |
| 'supervising' will do the trick. | | | | First of all, what percentage of your existing sales |
| You're dismissed. | | | | team is reaching or exceeding quota each month. |
| But to the extent that they are not is the extent | | | | Of the percentage that is not, what percentage |
| you will need to 'organize', put in order a best | | | | of them are not achieving quota due to sub-par |
| practice prospecting system to support new sales | | | | sales activity? When you uncover that sales |
| appointment activity. (Or start over like the sales | | | | performance number and understand the |
| executive fore-mentioned.) | | | | ramifications to revenue result, you will move |
| Now let's peel back the phrase 'new and existing | | | | another notch closer to your ultimate answer of |
| account reps'. | | | | 'supervise' or 'organize'. |
| In a sales manager dictionary, 'new' means | | | | Secondarily, what percentage of your sales reps |
| 'New-hires' and 'New-hires' reflects 'Ramp-to-quota'. | | | | time is spent on securing new business |
| Simply put, the quicker a new-hire ramps to | | | | appointments? JDH Group clients spend on |
| Quota the better for both parties; the new-hire | | | | average 50% of their weekly 'hourly rate' on |
| and the sales manager. Both get more credit, | | | | prospecting. For a sales rep working 45 hours per |
| earn more recognition and receive more | | | | week, that's over 22 hours dedicated to front |
| commission. And what is the most important | | | | end activity. If you decided to 'organize' a |
| facilitator in getting a new-hire sales rep to Quota | | | | prospecting system, become certified in it and |
| in the least amount of time? | | | | help others with it, would that drive that number |
| It's making sure they secure the necessary | | | | down? Will that allow your sales team more time |
| amount of new appointments. It's the fuel in the | | | | to pursue higher-value, solutions-based selling |
| tank. The quicker they do that, the quicker they | | | | opportunities? |
| will ramp to quota with the proper mentor | | | | One definition of 'Best practice' is the sum of |
| support of course. | | | | everything everybody in your sales organization |
| And that brings us back to the leadership choice | | | | knows that gives you a competitive edge in the |
| between choosing to 'Supervise' versus electing to | | | | market place. Putting in place a 'Prospecting |
| 'Organize'. | | | | system' with best practice components and |
| Here's a (1) rep 'Hard-number' example. | | | | elements, becoming independently certified to it as |
| Average New Hires per Year: 1 | | | | a manager/leader and mentoring it throughout |
| Monthly Sales Quota: $7,500 | | | | your sales team will ensure that nobody is left |
| Average Term Agreement: 24 months | | | | behind. |