Why sales activity is more important than sales
Sales & Marketing (or Marketing & Sales as I prefer it). It really is a numbers game. I’m sure you’ve heard this before, but do you really understand what it means in the context of how you can continuously win new business?
Managing sales people and their activity (particularly if you have a multi-person team) can be a full time job, and it’s very easy to get sucked into the ‘perceived normality’ that because salespeople appear to be busy that they actually are, or even, that they’re busy working on the right things at the right time.
Investing in direct sales is an expensive business and you need to be in control (as much as possible) of both the direction of travel and the narrative. What does this mean? Well, it means that you should have a sales process inside your business that’s a well-worn path, and, that your salespeople should follow it at all times.
Get with the Program!
It’s extremely important that this process is one that’s designed by you and for your prospective customers, within your defined marketplace. This is because it’s likely that how you sell needs to be idiosyncratic to your business in order to have the best chances of success. You will know this, and you are very likely to be the best person to understand the nuances of how to make a new sale happen.
There are many ways to consider this, and there’s far too much detail to go into here for a high-level blog but here’s a taste of some of the things that need to be considered;
|Sales Play Book||Win/Loss Analysis|
|Activity Targets||‘Closing’ Policy|
|Mandatory CRM Rules||Pricing Discretion Policy|
I could go on and on, but these are the bare minimum in terms of process that I believe you need to have in place in order to keep control over the sales function in your business.
You’ll notice that I haven’t included sales targets and complans here. I’m taking these as a ‘given’ but these are also very personal sales attributes that your team will already understand. Why? Because it’s how they get paid, so trust me they’ll be all over them!
All of the above areas should be described and documented (in the Sales Play Book along with the actual sales process itself) and can therefore be the very first port of call for a newbie when they’re being onboarded.
They’re all very important but if I had to pick one that sorted the men out from the boys, it would be Activity Targets. When I say ‘selling is a numbers game’ I really mean it. We’ve all seen that horrible ‘sales funnel’ that, somehow, shoots out paying customers at the bottom, but the fundamental principle behind it is activity.
Think about the maths behind this for a minute. If a salesperson has an annual target of £1M this year and you have an average sales value, per sale, of £100k, then they only need to make c.10 sales this year in order to hit their target. Easy right? Wrong.
If you’re average close rate per opportunity is 10-15%, that means that they will only likely close 1-1.5 deals for every 10 that they engage properly with over time. If you take the worst-case scenario from that it means that they’ll need to engage with c.100 opportunities in order to close the 10 that they need. This is why they need a year to do it; not because they’re closing 10 deals, but because they may have to spin up to 100 plates to achieve that. It’s a fulltime, highly coordinated job and requires a lot of time, energy, patience and mental fortitude to excel at (and not to mention a fair share of luck).
You would be amazed, stunned even, at the number of businesses and salespeople that don’t know the activity levels required to close their own targets. It can be like the blind leading the blind.
This level of activity, if multiplied out across your team, clearly, is also why you need to know that your marketing efforts are generating the right types and numbers of opportunities to support these people. Starve them of this and they will most certainly fail, and what’s more; it won’t be their fault.
Similarly, setting sales targets ‘out of thin air’ without reference to the activity levels needed to achieve them or the marketing resources to support them is an object lesson in denial and a real lack of joined-up thinking. All of these things are interconnected for a reason; they are completely interdependent upon each other.
Work back to front
So, once you’ve worked backwards from marketing capacity to activity levels to targets, it’s really important that you measure and monitor them within your CRM, nowhere else. This way you can not only gauge whether your assumptions were correct (all in one place) but you’ll also be able to see who your real sales performers are, because it is a combination of closed sales and activity levels that demonstrates this, not just revenues alone.
If, like me, you believe that sales really is a numbers game then stick to your guns; don’t remove salespeople because they haven’t sold if their activity levels are where they should be (particularly if you’ve set them). It’ll happen, or, at least, it’ll be more likely to happen if you support them in an area that perhaps they’re weak in. Personally, I’d be much more likely to remove a salesperson for a lack of activity than revenue, and I guess you know why now.
It’s always great to see new revenue come in the door. It vindicates your ‘go to market’ model and your sales process. However, if you really want to be in control of your sales pipeline, focus on the clearly visible levels of activity from your team. Then you can be comforted that the numbers will eventually fall in your favour, if nothing else than from the law of averages alone.