Managing your sales people By Leon Presser, author of What it takes to be an Entrepreneur One of the most pressing challenges you will face as an entrepreneur starting and growing a business is how do you put together a sales force and how do you manage your sales people? There are many critical decisions you will have to make in order to create a sales force. These decisions include: ● What kind of sales channels (direct sales, internet sales, sales through distributors, outsourced sales …) will you put in place? ● What are the types of sales people that you will hire? ● How are you going to compensate the sales people? ● Where should these sales people be located? ● How are you going to price your products to maximize sales? ● What kinds of sales methodology are you going to employ? ● How are you going to manage your sales people? ● How are you going to monitor the actual progress of sales efforts? There are a number of other important issues you will need to address in order to create a sales force, but the above list provides you a good sense of what issues you will need to deal with. In order to manage your business and your growth effectively you need sales projections to be reliable. However, most sales people are by nature highly optimistic and will forecast their performance accordingly. It is not unusual to receive sales forecasts that turn out to be pure smoke. In this Post I am going to deal with a single question: That is, you prospect for potential clients, you qualify the prospects you have identified, you obtain a commitment to purchase from the qualified prospects, and finally you receive a
How do I know that the sales forecast being given to me by a sales manager or a sales person is a realistic one? You must have a sales methodology in place before you start any sales efforts. Let’s assume here that your sales process is a straightforward one consisting of the following stages: 1. Prospecting 2. Qualification 3. Commitment 4. Procurement
purchase order (i.e., procurement). Of course, the number of prospects diminishes as you progress from stage to stage. With time you will need to also meter how long it takes a prospect to travel from one stage to the next. Eventually, you will need to be able to know, in general, how many prospects you need at each stage to effect one single sale, and how long it takes for a complete sales process. So, for example, on average, you may need 50 prospects to achieve one sale, and it will take 4 months to make it happen. Now, when a salesperson provides you with a sales projection you can check with specific prospects to see where they are in the sales journey. Then, you can compare what you are finding with the projections that have been given to you, and decide how good these projections are! I want to emphasize that even if you are starting your business and you are the only sales person in the picture, it is very important that you clearly understand your sales process. Although you are wearing multiple hats you must understand the timing and purpose of each hat. Of course, I must tell you that I do cover this topic and related issues in more detail in the book. I do want you to read the book. I also encourage you to go to the book’s website (www.whatittakestobeanentrepreneur.com) and subscribe so that you will be notified each time a new post occurs.