Embed Size (px)
Citation preview
Sales AnalyticsACHIEVING WIN – WIN – WIN
• FOR THE COMPANY
• FOR THE CUSTOMER
• FOR THE SALES PERSON
Sales Analytics
The 400 LB Gorilla in the Room
What sales volume does the employer need?
What compensation does the sales person want?
Is it fair and equitable to both parties?
Does it end up serving the customer?
Sales Analytics
Design Compensation Plans
75% base + 25% Commission = 100% Comp on 100% Plan Achievement; Commission starts at 75% of plan
Capped or Uncapped
Increasing % or declining % after 100%
Financial Incentives - Benchmarks
Sales Analytics
Example
$3,000,000 Plan @ 25% margin = $750,000
20% gross = Salary, Benefits, Expenses, Commission (In this case $150,000)
75K Base, 20K Benefits, 25K Expenses, 30K Potential Commission
Plan $250K Month / 75% Plan = $187,500
$62,500/25 = $2,500 Pt. 1 Point pays $300
Sales AnalyticsEquitable to all Parties?
Does the base salary hurt the company if the territory does not perform?
Will the sales person loose focus and motivation if territory does not perform?
Will the effort level be evident to the existing customers and prospects?
Sales AnalyticsExample of Poor Performing Sales Assignment
66% of Plan = $2,000,000 x.25 = $500,000
Total Cost to employ = $120,000
Criteria is 20% of GP = $100,000
Additional Risk is 150% plan one month and subpar performance the remainder of the year ($22,500 cost)+ $120,000 = 144.5K
Sales AnalyticsDesign Compensation Plans
100% Commission
Starter base pay or draw
Pays a percentage of the Gross Profit
Percentage varies from single digits to 50% based on GP and size of sale
Pay is a function of Sales (Gross / Gross Profit)
Sales Analytics
Risk for 100% Commission Sales
Sales person accepts risk of low income or fluctuating income vs High Income Level
Company risk: Assumes production will occur
Company risk: Marginal control of sales person and unacceptable turnover rates
Sales Analytics
When Do You Pay?
Base: Bi-Weekly – Every 15 Days – Monthly
Commission: Monthly, Quarterly, Annually
Product Delivery - When the customer pays
Commission: Independent time periods, cumulative time periods - IMPORTANT
Sales Analytics Independent or Cumulative Quota
Draw back F/Company: Sale person blows quota away in one time period, receives big check, poor performance remainder of the year
Salesperson benefits: Slow start to year or a bad quarter does penalize remainder of the year
Sales AnalyticsMarketing Efforts & Time Utilization
Normally depends on the size of company and staff
Small company: Sales people and owners become jugglers
Sales AnalyticsMarketing Efforts & Time Utilization
Larger Companies:
Marketing tools provided
Lead generation support & CSR
Website, Videos, Webinars, Newsletters, Events, Trade Shows, New Product Information, White Papers, Sales Engineers
Sales AnalyticsKey Factors
Selling days or time available
Average ticket item price / $’s per month
Quota or sales person’s goal
Close ratio as a % of presentations
Close cycle in time / Gross margin %
Compensation program
Sales AnalyticsNot All Sales Dollars are Created Equal
ITW OPERATING RESULTS In Thousands
Operating revenues $ 14,484
Operating income $2,888 = 20%
After-tax income from continuing operations $1,890 = 13%
Sales Analytics ITEM 6. SELECTED FINANCIAL DATA - Flextronics ” Fiscal Year Ended March 31, 2015 (In thousands, except per share amounts)
CONSOLIDATED STATEMENT OF OPERATIONS DATA: Net sales . . . $26,147,916
Cost of sales . . . . . . . . . . . . . . . . . . . . 24,602,576 Restructuring charges . . — 58,648
Gross profit . . . . . . . . . . . . . . . . . . . $1,545,340 = 5.9% Selling, general and administrative expenses . . . . . . . . 844,473
Intangible amortization . . . . . . . . . . . . 32,035
Restructuring charges . . . . . . . . . . . . . — 16,663
Other charges (income), net(1) . . . . . . (53,233)
Interest and other, net . . . . . . . . . . . . . 51,410
Income from continuing operations before income taxes . . 670,655
Provision for income taxes . . . . . . . . . 69,854
Income from continuing operations . . . . . . $600,801 = 2.29%
Sales Analytics Sales Person – Measurements
New business generation vs existing business
Farmer or Hunter? You may need both……..
Time management versus time available
Account nurturing – One time order? Repeat business? Annualized sales generated
Training responsibility?
Sales AnalyticsSales Person – Measurements
Churn rate factor – Account Turnover Issues………. Yes or No?
Number of presentations
The power of a personal contact – Face, Video, Phone, Text
Closes / Close rate
Team player?
Sales Analytics
Outside Sales – Sales Process
Prospect – Qualify
Prepare
Present – 70% of Shopping/Research done before contact with a sales person
Overcome objections
Close
Build relationships and trust throughout the process
Sales AnalyticsQuality of the Representative
Unconsciously incompetent
Consciously incompetent
Consciously competent
Unconsciously competent
Sales Analytics
Sales Analytics
Where the Rubber Meets the Road
Presentations Close Rate Time Utilization
Assume 20% Close rate of all actual presentations
Sales AnalyticsWhy They Don’t Close?
Cannot afford – Wrong budget cycle
Don’t need – Don’t trust
Incumbent in place
Competitor strengths
Weak sales work – (Mean Sales Manager?)
Sales AnalyticsSimple Case Scenario
316 Working days
Subtract 11 paid holidays & 8 More for Thanksgiving/Christmas
Subtract 10 days of vacation
Subtract 4 sick days
Subtract 6 training days
= 277 working days
Sales AnalyticsSimple Case Scenario
100% Commission Plan
Typical order generates $1,500 for the rep
Rep wants to make $100,000 a year
$100,000 / $1,500 = 67 closes per year
Employer normally will have a minimum number of closes to stay on board
Sales Analytics Typical Constraints
Appointment setting
Travel time - Presentation time – Too many touches (Poor preparation)
Taking applications
Customer qualification
Personal lead generation – Internet research
Multiple attempts to contact
Customized quotes
Sales AnalyticsSimple Case Scenario
67 x 5 (20% close ratio) = 335 Presentations
335 Presentations / 277 Working Days
1.2 presentations per day / 6 per Week
Can your people maintain this pace?
Sales AnalyticsSimple Case Scenario
Changed Assumptions
$2000 per sale / 25% Closing ratio
50 Closes x 4 (25% close ratio) = 200 Presentations
200 Presentations / 277 Working Days
.72 presentations per day / 3.6 a Week
Sales Analytics Large Account Manager Illustration
$3,000,000 Plan
277 Days x 8 Hours = 2216 Hours
$3,000,000 / 2216 Hours = $1353.79 Hour
Role: Maintain and Grow Assigned Accounts
Role: Capital Equipment/Services Sales
Find opportunities and close – Big Data direction
Sales Analytics
Time and Energy Management
Imperative to pre-plan and execute
Work through channel partners / reps
Work on the Pareto Principle 80/20 Rule
Know your industry ratios for closing
When are you “At your best?”
Sales Analytics
Time Management
8 to 5 is selling time
Spend 80% of your time in one of the sales process steps
Police distractions: Junk e-mails, Facebook, Games, News, Socializing, Extended Lunches, Likeable People
Intense focus on constant improvement
Sales Analytics - TimeOne Week =
(5/277)
.018 % of a Year Or 1.8 % Year
One Day =
(1/277)
.00361 % of One Year Or .20 % Week
4 Hours = (4/2216) .001805 % of One Year Or .10 % Week
1 Hour = (1/2216) .000451 % of One Year Or .025 % Week
Sales AnalyticsHours
Prospecting Prep Present Objections Closing Trust Admin
45 Hours80% Sales Work20% Admin
1. Prospecting2. Prep3. Present4. Objections5. Closing6. Trust7. Admin
Sales Analytics Creating Efficiencies
Superior marketing tools - differentiation
Referral partners
Customer qualification criteria – Shun poor opportunities
Sales automation
Outsourcing
Guerilla marketing tools
Quote automation
Sales AnalyticsCreating Efficiencies
Focus on sales activities – Do not assign or allow your reps to get involved in other activities because they appear to be an untapped resource.
Focus on the correct target market
Create real value / differentiating message for reps to sell
Increase the close ratio with sales training
Sales AnalyticsCreating Efficiencies
Time & energy management training
Hire Well - Cost to fill or replace 1.5 to 2 times annual salary
Productivity measurements
Create accountability
Close list
Data driven sales activities
Sales AnalyticsHow Do You Get Data?
Buy a list with specific demographics
Log your calls into known categories
Compute the percentages from the call log
Hire a Consulting / Research firm
Examine your newsletter dashboard open rates and individual names
Sales Analytics
How Do You Get Data?
Run Google Analytics on websites & landing pages
Age, Gender, Language, Country
Interest: Sports, Computer, Food, Travel
Sessions, Bounce Rate, Mobile
Starting pages, 1,2,3rd interaction
Sales AnalyticsHow Do You Use Your Data?
Direct your sales efforts to the correct market
Clearly sell your value proposition
Fiercely guard your production time
Sales AnalyticsTrucon Business Development
Tel: 512-219-6677
E-mail: [email protected]
Website: www.truconbd.com
Linkedin: https://www.linkedin.com/in/truconbd
