Sales managers spend a great deal of time trying to develop workable strategies to get their team to hit their sales goals. Many managers focus so much on dollars, that they forget the fact that the only way to close deals is to engage in specific activities. Getting reps focused on those activities can do wonders for your quotas. While you can’t ever eliminate dollar goals, you can add activity goals to the mix to get your reps moving in the right direction.
“Many companies will debate if real results are the priority or if the activity is the priority because it produces the result. Either way, don’t forget how you get to the end of closing the deal. Forecasting experts will tell you why they are so good, because they know what to do to get there. The activities should never be dismissed!” says Abby Prince, Managing Director, CSS ProSearch, of Contemporary Staffing Solutions.
Focus on Activity Metrics
Every rep has to take the same journey to close a deal. The path and methods they use may vary, but every salesperson has opening/introductory calls, defines new opportunities, presents proposals and closes deals. There are rare cases when a step might be skipped but in general, you can’t get to a close without initial conversations, uncovering opportunities and presenting a proposal.
It is critical to understand the conversion rate between these steps. It’s not quite enough to say that for every 100 opening conversations a rep has, she closes 4 deals. As a sales manager, you must know what’s happening throughout that sales process. Let’s say Sally has 100 prospecting conversations this month. Out of those 100, she creates 20 opportunities. From those 20 opportunities, she sends out 10 proposals and closes 4 deals.
To calculate Sally’s conversion through the sales process, divide one activity by the second. To find the ratio of proposals to closes, divide 10 proposals by 4 closed deals. Her conversion rate is 2.5 proposals to closed deals. That means it takes sally 2.5 sent proposals to close one deal. This will give you a stronger, measurable understanding of how your reps move towards their goals.
Connect Dollars To Activities
Once you’ve determined how your reps convert proposals to opportunities to closed deals, you need to determine your average rep quota and average deal size so that you can calculate just how many deals a rep must close to hit quota. Divide the average quota by the average closed deal size. You can use this number to work backward through the sales process. So, divide the number of opportunities by the conversation-to-opportunity radio to uncover just how many conversations a rep needs to have in order to reach their end goal.
Develop Individual Activity Plans
It’s important not to focus too much on getting reps to increase their initial conversations. If you emphasize the number of conversations too much, reps will get stuck on that number, and it could impact the quality of the rest of their work. In order to achieve their goals, they must focus on quality, even at the widest portion of the sales funnel.
To get them to buckle down and focus on the entire process, they should understand their current conversion rate between milestones in the sales process and those numbers should be broken down into smaller daily, weekly and monthly goals.
Once you work through everyone’s process, you can break down their activity goals into manageable chunks. So, in Sally’s case her activity goals might be 5 new conversations per day, 5 uncovered opportunities per week, 10 proposals per month and 2-3 closed deals per month at a minimum of $5,000 each. Not only does this help reps see their quotas as more achievable, but it provides them with a clear roadmap of how to get there. Keeping them focused on activities will inevitably generate dollars.
If you are looking for new ways to attract and retain top salespeople and sales managers who can help your organization achieve its revenue goals, the expert recruiters at CSS ProSearch can help. Contact us today to learn more about the ways we can help you cultivate a profit-generating team.