Easy steps, how to multiply salespeople results
In the ideal world a salesperson’s job can be broadly classified under four functions which are dealing with client search, figuring out their needs, offering solutions and closing deals. However, in 2017 Pace Productivity and in 2018 Forbes conducted a research and found that the world is not that ideal.
The truth is that salespeople spend only about 1/3 of their time in activities that are related to sales and the other 2/3 is spent for non-sales activities and administrative formalities. When I look back at my last 15 years of experience in sales while I was engaging with salespeople who worked in hundreds of the companies, I can confirm, that similar tendencies are widely spread as well in Estonia.
How a salesperson’s time is divided between different activities in real life?
Activities direcrtly related to sales:
- Planning (includes searching clients) – 6% of total working time
- Selling itself – 23%
- Customer management (includes processing orders, which should fall under client service team) – 11%
Non-sales related activities:
- Customer service in narrow meaning (including solving claims or other misunderstandings) – 10% of total work time
- General administrative actions – 22%
- Travelling – 11%
- Breaks – 7%
- Internal company meetings – 5%
- Other – 5%
*Info based on Pace Productivity studies
How can we can plan a course of action based on this data?
According to Pace Productivity statistics, it is possible to alleviate salesperson’s workload or reduce the time they spend on work by up to 49%. We see that it would be reasonable to remove the time spent on planning (6%), customer management (11%), customer service (10%) and administrative activities (22%) or assign these activities to the right team. All sales related activities should stay the same, because these are integral parts of salespeople’s everyday work. If we could dedicate at least half of the time that we saved from non-sales activities to selling, then in theory we can double or even triple salespeople’s selling results.
What do the numbers say?
According to Palgad.ee the Estonian sales representative’s net income is between €798-1725. To understand this better, let’s take €1500/month as net income. Which means that together with salary, taxes and other compensations for example company car, gas, office expenses, phone etc the total monthly cost to the company is around €3500. According to this survey we can analyse it as follows – a salesperson, who generates €100.000 for the company on monthly basis as sales revenue is able to do that with 23% of his time only, and the cost for the company is about €800. Other activities together with additional fees (about €2700) go to activities, that have no direct connection with revenue for the company.
If the salesperson could save more time, that he/she is able to use for selling through the procedural changes and using some automation tools, then the expanses will stay same, but with freed time and resources he/she is able to bring €100.000 revenue in theory (using 23% of time available for selling) even about €200.000-300.000 (spending 50-70% of available time for selling).
Here we see an opportunity for a company to properly map out their salespeople’s tasks and sales process, introduce various measures and additional changes to increase time spent on sales thus increasing company turnover.
What tools you need to make this happen?
To lessen workload of salespeople, we have many options to automate some activities which are not connected with selling for example to onboard a CRM solution, that helps with streamlining processes, focus on key activities, cut down administrative time and automate some other activities. Time that we spend for planning can be better optimized with the help of a database. It is also suggested to engage external partners who can offer support with specific services like presales which brings ready-to-buy contacts to the table. For the after sales optimisation, it is advisable to have separate teams which can help to offload some activities like after-sales services, customer management, delivery, work orders, complaints etc from sales. Once we adopt these strategies, we can see a noticeable improvement in a very short period.