“We have to build up our revenue so we can afford to hire a salesperson!”
That’s close to an actual quote I uttered several years ago. It probably was connected to a statement about how salespeople cost money and don’t really do anything. I couldn’t have been more wrong.
Based on my own experience and hearing from other businesses in and out of our industry, one thing is clear: A sales-driven company is a growing company. This article will discuss four things you should do to build your sales.
1. Build Your Team
In our industry, the owner or the longest tenured employee typically is the primary salesperson. This could be flawed strategy.
From an owner’s standpoint, we believe we’re the best salesperson for our business, because we’re the most passionate or knowledgeable. That might well be true, but because of other business priorities, a business owner always will be limited in their time to dedicate to sales. That effectively makes sales a part-time position. When you prioritize sales as a part-time position, you will get part-time results!
Your most experienced person also might not be your best salesperson. They well might have the technical knowledge necessary but might lack the relationship-building skills, administrative skills or the ability to build or follow a sales process. An experienced technician is a great resource to identify the proper solution, but they could overlook additional sales opportunities, because they’re too focused on solving the technical problem.
An effective salesperson will create and manage customer relationships while understanding the problem the customer has before jumping to a solution. They also will provide pricing for solutions and a timeline for delivering the solution to a customer. These are basic functions of any organization, and you would do well to have at least one person dedicated to handling these.
Also, keep in mind that there are different types of salespeople for different roles. Here are a few examples to consider:
- Hunter. A hunter finds new customers and new opportunities, tracks them down and brings them to the company. They cold-call well, don’t need many warm leads and won’t give up until they get a “yes.”
- Consultant. A consultant typically works with warm leads, or people who already are interested in your business, have a problem and just want a solution with a price and a friendly contact.
- Manager. A manager handles consistent accounts that just require a point of contact, knows the intricacies of the account’s business and can send repeat requests.
Each role requires different personalities and different goals. A hunter wants a challenge; a consultant wants people to connect with; and a manager wants accounts to manage.
2. Define Your Process
To build a sales process, you first must define the outcomes you expect and determine ways to track the progress of your sales initiative. The first question is: Are you looking for volume or profit? Volume is great, but margin or profit goals are less subjective and a clear guideline for your business and the salesperson.
When you set profit goals, you also will want to answer these questions:
- How much of a discount will I allow the salesperson to apply in competitive quotes?
- What items am I willing to discount and not discount?
Providing parameters allows your sales team to make quick decisions for your customers. But make sure you know your bottom line when you set the boundaries.
Also, you’ll want to identify your ideal customers. Ideal customers are determined by your business plan and strategy. Consider the types of customers you have the best rapport with or your business tends to get the best results from. Do you support car dealerships, real-estate professionals or commercial-property managers? When you identify your ideal customers, it will help a salesperson know where to focus their attention.
3. Set Your Target
A simple formula for creating targets for a salesperson is 10 times their salary in revenue. This basic starting point can have variables if you have other support personnel who help with purchasing or project management. If you focus on a margin target (revenue minus cost of goods sold), you might choose a smaller multiplier. Either way, establishing that annual goal is crucial.
With most any goal, breaking it down into achievable small projects is a great way to develop a plan. For example, your sales goal might be $500,000. You could break it down this way:
- 2 $50,000 projects
- 4 $25,000 projects
- 10 $10,000 projects
- 20 $5,000 projects
- 40 $2,500 projects
The salesperson now has an actionable checklist to start working on. Rather than focusing on an undefined large number, they have 76 actionable projects to achieve, or 1.4 approvals per week.
You’ll have to make sure your salesperson understands a sales cycle and closing percentages. A sales cycle for a $50,000 approval will be longer than one for a $2,500 approval because of the complexity of the quote and that an approval might require multiple layers of approvals within the customer’s organization.
Closing percentages vary by organization, but 30–45% is common. Keeping a simple tally of the number of quotes sent, value of those quotes, time for approval and your closing rate (the number of approvals divided by the number of quotes sent) will give you an understanding of the activity necessary to accomplish your sales goals.
4. Present A Professional Image
How do you want your company represented before and after the sale? When it comes to thinking about the sales appointment, get specific about the details, and don’t assume it doesn’t matter. Consider the following:
- Vehicle Appearance and Parking: Having a clean vehicle and parking-lot etiquette make a big difference.
- Salesperson Appearance: A clean uniform that has a visible logo and a well-groomed appearance will affect the outcome of the conversation. First impressions leave an impression!
- Company Introduction: What information should the salesperson always share about your company, and why is it important?
- Take Notes: This is how the salesperson will document their findings.
- Create an Agenda: Come to a sales meeting with a plan. Let the customer know you’re prepared and ready to solve their problem.
- Ask Questions and Listen to the Responses: This should go without saying.
- Promotional Materials: Come with items you can leave behind after the appointment. These include a company brochure, a business card, logo pens and logo cups.
- Action Items: Make a commitment for a quote-delivery date and meet it.
- FOLLOW UP: Think about how the quote is delivered, when you should call again and how many times you should follow up.
Also, define your installation process ahead of time. A big debate between sales and installation boils down to effective communication of what was sold and what has to be installed. After you have the approval, what happens? Does the salesperson manage the project, or will it be handed to a project manager or installation team? What information must be communicated to the installer or technician to provide the solution? Getting the salesperson or team in sync with the technician’s ideal solution helps to minimize this conflict and provide the customer with a more seamless experience.
Developing a sales team is an investment in your growth. As with any employment decision, I believe in hiring people who align with your culture and core values. This is particularly important for a salesperson who will provide solutions directly to your customers. When you find that person, work with them to create growth in the business.
Chad Lingafelt is managing partner of Loc-Doc Security in Charlotte, North Carolina. Loc-Doc Security is composed of a Locksmith and Door division, an Electronic Security division and The Lab, a digital content creation and software development division.