Strategies to Boost Your Sales - from Part 2 of the free webinar series, Accelerating Your Business Growth
•Download as PPTX, PDF•
1 like•1,088 views
Part 2 of our free webinar series, “Accelerating Your Business Growth” entitled “Strategies to Boost Your Sales”, presented by AnyMeeting together with Comcast Business and SCORE, featured speaker Carleton Smith, the former Vice President of Worldwide Sales and Marketing for Harris Corporation, a Fortune 500 company with worldwide operations. During his forty year business career, Carleton managed turnarounds, acquisitions and mergers, and worldwide sales and marketing for companies and divisions in difficult markets with demanding customers and tough competitors. Carleton has been a volunteer business counselor with SCORE in Austin since 2006. Carleton's insightful and engaging presentation is designed to help small business owners and marketers learn how to accelerate sales by: - Expanding your distribution channels, - Building and motivating your sales team, - Benchmarking, - Using a Customer Relationship Management (CRM) system to manage and retain customers. Get insights and listen to actionable advice as Carleton engages the audience in live Q&A. Whether you are just starting your business, looking to accelerate your growth or simply want to gain an edge to get your business to the next level, you won’t want to miss out. Watch the full webinar recording here: http://anymeeting.com/webinars Be sure to check out the other webinars from this series and sign up for the latest webinar today! http://anymeeting.com/webinars
Recommended
More Related Content
Viewers also liked
Viewers also liked (9)
Recently uploaded
Recently uploaded (20)
Strategies to Boost Your Sales - from Part 2 of the free webinar series, Accelerating Your Business Growth
- 1. web conferencing for small business Accelerating Your Business Growth Webinar Series Presented by: Guest speakers: Carleton Smith, SCORE Mentor, Austin Chapter Part 2 of 3: Strategies to Boost Your Sales
- 2. About SCORE 2 Douglas S. Cavanaugh • Successful and experienced business owners and executives acting as volunteers • Free mentoring: • One-on-one • E-mail • Seminars and workshops • Resources for small business: www.score.org
- 3. Sales Purchasing / Manufacturing Distribution Finance Marketing Service Delivery Program Overview Marketing Your Business Human Resources Customer Service Managing Operations Growing Your Sales Managing Your Time, People and Resources Financial Management
- 4. By the End of This Workshop, You Will Learn: • How to choose effective distribution channels • How to evaluate your sales process • Who should be on your sales team • How to motivate your sales team • How benchmarking can boost your sales • How to implement sales and CRM tools 4 Marta E. Maxwell
- 6. Expanding Your Distribution Channels Understanding Distribution Channels Distribution channels are how your product or service gets to the end user. Expanding distribution channels helps grow your business: • Builds brand recognition • Can decrease risk • Enables you to reach more customers • Potential to increase profits 6 Jennie Dundas & Alexis Miesen
- 7. Expanding Your Distribution Channels 7 Direct • Sales Team • Online • Catalog • Storefront Indirect • Wholesaler/Distributor/Dealer • Retailer • Affiliates • Value-Added Reseller (VAR) • Consultant • Manufacturer’s Rep Multi-Channel/Hybrid • Combination of Channels Examples of Distribution Channels
- 8. Expanding Your Distribution Channels: Discussion 8 Examples of Distribution Channels What distribution channels are you currently using, and what have been the positive and negative aspects of using that method?
- 9. Expanding Your Distribution Channels Channel Choices As you assess distribution options, consider: • What are my customers’ needs? • How could your product/service meet those needs? • Who is my ideal customer? • How can I find more of those? 9
- 10. Expanding Your Distribution Channels Customer Needs Influence Distribution How do customers expect to buy? • Customers require information/service: In-house sales team • Simple buying process: Online, retail, catalog • Customers buy online: E-commerce, resell to online retailer, affiliates 10 Andrew Dunn
- 11. Expanding Your Distribution Channels Research Distribution Channels In addition to your customer needs, consider: • Competitors • Geographic location • SWOT • Barriers to entry • Cost • Pricing/profit • Sales/marketing • Channel conflicts 11
- 12. Expanding Your Distribution Channels Assess Options and Prioritize • Ease of entry • Geographic proximity • Financial goals and risks • Estimated sales volume • Competitors’ positions • Management experience • Staffing capabilities 12
- 13. Expanding Your Distribution Channels Choosing Channel Partners • Identify potential partners • Establish partner relationship • Set goals • Train partner • Provide sales/marketing support • Minimize partner conflicts 13 Marie Seipenko
- 14. Evaluating Your Sales Process 14
- 15. Evaluating Your Sales Process 15 Lead Generation Prospecting Customer/Client Contact Negotiating Closing the Deal 5 Steps to Sales Customer service is key throughout the sales process.
- 16. Evaluating Your Sales Process: Activity 16 5 Steps to Sales Using the Sales Process Assessment worksheet, write down the methods you are currently using for your strongest and weakest steps Then include some challenges you face for each.
- 17. Evaluating Your Sales Process Step 1: Lead Generation Marketing can generate leads: • Advertising • Online (website, search engine optimization, pay-per-click ads) • E-mail • Social media • Client/customer referrals • Trade shows • Direct mail • PR 17 Jennie Dundas & Alexis Miesen
- 18. Evaluating Your Sales Process Step 2: Prospecting Prospecting reaches out to leads using: • Phone/cold calls • Email • In-person networking • Social networking • Direct mail • Trade shows • Referrals 18
- 19. Evaluating Your Sales Process Step 3: Contact • Qualify the prospect • Set initial meeting 19 David Lomakin
- 20. Evaluating Your Sales Process Step 4: Negotiating • Know your goals • Determine customer needs • Be prepared • Determine deal breakers • Create win-win situation • Build relationship 20 Douglas S. Cavanaugh Sr.
- 21. Evaluating Your Sales Process Step 5: Closing Tactics for Closing: • Understanding • Quality • Identify significance/value of product • Empathy • Know when to stop Obstacles to Closing: • Price • Not decision-maker • Product/service not needed • Fear • Timing 21
- 22. Evaluating Your Sales Process: Discussion Step 5: Closing Can anyone share closing challenges that you commonly come across, and/or closing tactics that have worked? 22
- 23. Evaluating Your Sales Process Customer Service Acquiring a new customer costs 5 times more than keeping an existing one* • Follow up • Resolve problems • Build relationships • Use CRM tools (Plaxo, Salesforce, Zoho) to maintain customer history • Get referrals/testimonials • Sell additional products/services • Stay in touch *Source: Gallup 23 Katrina Markoff
- 25. Your Sales Team 25 Who Is Your Sales Team? • You (Owners) • Existing Staff (performing other functions) • Your Website (e-commerce) • Dedicated sales staff • Outside consultants • Others?
- 26. Your Sales Team 26 1 • Set measurabl e goals for each step of the sales process 2 • Know your ideal target customer 3 • Measure outcomes constantly and adjust accordingly 4 • Apply best practices techniques to sales process Setting Sales Goals
- 27. Your Sales Team Match Skills to the Sales Process • What steps in the sales process are the most important for your business and why? • What skills do your salespeople need to succeed at those steps? 27
- 28. Your Sales Team Sales Team Options • Telemarketing • Dedicated Sales Team • Manufacturer's Reps • Retail Associates 28
- 29. Evaluating the Needs of Your Business 29
- 30. Evaluating the Needs of Your Business Is It Right For You? Now that we have reviewed sales team options, think about which options are right for you. Ask: • Will this help achieve my sales goals? • Will this reach my target customer(s)? • Will I be able to find qualified candidates in my area? • Does this fit my budget? – (Typically 3%-10% after 1-3 years) 30
- 31. Evaluating the Needs of Your Business: Activity Is It Right For You? Using the Sales Teams Options Overview, complete the Sales Team Assessment worksheet to determine what will work best for your business. 31
- 32. Motivating Your Sales Team 32
- 33. Motivating Your Sales Team 33 1 • Set goals – for business and salespeople 2 • Performance measurements – for sales 3 • Payment formula – keep it simple 4 • Minimum base pay – higher for new employees 5 • Rules Creating Your Sales Compensation Plan
- 34. Motivating Your Sales Team 34 Commission-Only: Motivates salespeople Paying for results May be insufficient for new salespeople Can alienate salespeople Focus on quick sale Price-slashing Best for short sales cycle Salary-Only: Can demotivate salespeople Eases learning curve for new rep Creates teamwork Invested in company goals Suited for long sales cycle Commission vs. Salary
- 35. Motivating Your Sales Team Balancing Salary and Commission Commission can range from 20% to 85% of salary Factors to consider: • Sales cycle • Job duties • Tenure • Experience • Industry standards 35
- 36. Motivating Your Sales Team Bonuses • Additional incentive beyond commission • Typically paid at year-end • Graduated levels • Keep it simple • Make it motivating 36
- 37. Motivating Your Sales Team Sales Incentives • Non-monetary • Contests or compensation • Set clear goals and rules • Best for short-term results • Make it meaningful 37
- 38. Motivating Your Sales Team Developing Talent Training and education options: • Industry associations • Online courses and webinars • In-house training • Model best practices 38 Doug Zell
- 40. Benchmarking Sales Why Benchmark? Benchmarking = Comparing Performance benchmarking vs. Process benchmarking Benchmark: 1. Your past history 2. The competition 3. Your industry 40
- 41. Benchmarking Sales 41 Determine processes/ measures Gather data Assess data Adjust process/goal s 4 Steps to Benchmarking
- 42. Benchmarking Sales Using Technology to Enhance Sales Customer Relationship Management (CRM): • Differs from Contact Management • History of interaction • Share information • Create reports/forecasts • Spot trends • Time management • Consistent sales process Choosing CRM Solutions: Simple and Scalable 42
- 44. Helpful Resources Suggested Contact Management/CRM Software • Infusionsoft CRM (www.infusionsoft.com/integrated-contact-manager) • Intuit QuickBase (http://quickbase.intuit.com) • Oracle CRM OnDemand (www.crmondemand.com) • Plaxo (www.plaxo.com) • Sage CRM Solutions (www.sagecrmsolutions.com) • Salesforce (www.salesforce.com) • SalesNexus (www.salesnexus.com) • Zoho (www.zoho.com/crm) 44
- 45. Helpful Resources Sales Resources Sales Organizations • Direct Selling Association (www.dsa.org) • National Association of Sales Professionals(www.nasp.com) • Professional Society for Sales and Marketing Training (www.smt.org/) • Sales and Marketing Professional Association (www.smei.org) • Sales Force Effectiveness Benchmarking Association (http://sfeba.com) • Sales Lead Management Association (www.salesleadmgmtassn.com) Sales Compensation Software • Callidus Software (www.callidussoftware.com) • Makana Solutions (www.makanasolutions.com) • Xactly (http://www.xactlycorp.com) 45
- 46. Review • Distribution channels are how the end user gets your product or service. • There are 5 steps to the sales process: lead generation, prospecting, customer/client contact, negotiating, closing the deal. • There are multiple ways to form, motivate and train a sales team, depending on the needs of your business. • Benchmarking sales will allow you to see your progress. 46
- 47. Keep up the work and remember that nothing happens in a business until you sell something and you get an order! 47
- 48. Q & A web conferencing for small business Presented by: Accelerating Your Business Growth Webinar Series
- 49. Next in Series: Smart Financial Management Wednesday, December 2, 11am Pacific Time Register at anymeeting.com/webinars web conferencing for small business Presented by: Accelerating Your Business Growth Webinar Series
- 50. Thank You! web conferencing for small business Presented by: Accelerating Your Business Growth Webinar Series
Editor's Notes
- Talk to clients about the benefits of working with SCORE. Follow the slide and point out the success stories presented in their workbooks. This is also your opportunity to talk about your local chapter and all that you offer. Talk about community partnerships and what clients can expect from their relationship with SCORE once they start their business. Provide them with the website URL for your chapter.
- Simple Steps for Growing Your Business workshops are focused on the key “functional” areas of your business. Whether you are large enough to have departments that lead these functions or if you have a few employees that manage and direct all of the activities, SCORE offers education to help you learn where there are areas in your business that can be improved to get better business performance. When trying to attract customers, businesses use marketing. Sales follow and customer interaction with the company’s customer service process, for placing sales orders or future service after the sale begins. It is then up to Operations to acquire or make products and then deliver the products or services to the customer. Human resources deals with employees in all areas of the company assuring that the many facets of attracting and keeping good employees is effective for the company. Finance insures that all financially related transactions, internal to the company or with external organizations are recorded and reflected properly for business performance analysis and required government filings. It is the successful and efficient integration of all of the business functions that the business owners and management must manage and direct. REMEMBER: Customers are impacted by ALL FUNCTIONS of your business. Owners/managers are responsible for business performance in all areas.
- Today’s session will focus on the aspects of sales that are of greatest concern to small business owners as they seek to increase their sales. You’ll learn: How to choose the distribution channels that are most effective at moving your product, reaching customers and expanding sales. How to evaluate your sales process to pinpoint weaknesses and make sure you have the right sales team in place. Who you need on your sales team—assessing the various types of salespeople and how they can help your business Secrets to motivating your sales team by structuring an effective compensation plan Using benchmarking to track, monitor and improve your sales Great sales tools and resources for small businesses including CRM software
- The next section is Expanding Your Distribution Channels.
- Distribution channels are how your product or service gets to the end-user. Expanding your distribution channels is a key step in growing your business. Builds your brand – Your product or service is available in more places, so more potential customers hear about it. Can decrease your risk – Using multiple distribution channels can help spread your risk. If sales in one channel decline, there is the potential that sales elsewhere will pick up the slack. Increases exposure to new customers – the more places/ways your product is sold, the more potential customers you can reach. Increases potential profits – by reaching new customers, you have the opportunity for potential new profits. If you are targeting a new type of customer, launching a new product, or adding a new service, you need to reassess your distribution channels.
- Here’s an overview of the 3 primary distribution channels. Direct : You sell directly to the end user of your product or service. This can be done using: an in-house sales team The Internet (where customers buy directly from your site) Through your own product catalogs or direct mail sales Through a brick-and-mortar store Indirect: You sell to resellers who sell the product to the end user. This can include: Wholesaler/distributor/dealer: this company buys products from a wide range of companies and resells them to other resellers or retailers. Value-added reseller (VAR): VARs provide custom solutions for customers, using products and services from many different companies. Consultant: Consultants might recommend your product or service to their customers, or might purchase it from you and resell to the customer Retail: a retailer buys your product and resells it to end users via a store, website or catalog. Affiliates: affiliates sell your product or service through their websites and receive a percentage of sales in return for facilitating the sale. Manufacturers’ representatives: Salesperson who sells products from a range of different manufacturers to customers in a specific industry or region. Multichannel/hybrid: A multichannel or hybrid strategy uses more than one distribution channel. While this can increase your sales, it can also end up cannibalizing sales if you’re not careful. For instance, if customers are able to get your product or service cheaper in one channel than in another, sales via the more costly channel will suffer.
- Estimated Time: 5 minutes
- As you consider possible new distribution channels, start by assessing the four factors here.
- Here are some examples of ways that customer needs might drive your choice of distribution channel. The key factor to consider is customer convenience/routine. How do customers expect to buy? If customers need a lot of in-depth information, training, or service to understand and buy your product or service, you may need an in-house sales team so you can have greater control over the process If the buying process is simple and doesn’t require a lot of hand-holding or interaction, your product may be suited to online distribution, retail sales or catalog sales. If customers indicate they prefer to buy online, you can sell via your own e-commerce site, sell your products to other online retailers to sell on their sites, or sell via online affiliates (who promote your product on their site, link back to your site for the sale and receive a percentage of the profits.)
- Your customer needs are a primary driver of your choice of possible distribution channels. But also consider these factors: Competitors: which channels do your competitors use? Geographic location: does this channel reach the desired geographic location where my target customers are? SWOT: Do a SWOT analysis. What are the Strengths, Weaknesses, Opportunities and Threats associated with each distribution channel? Barriers to entry: What are the barriers to entry for each distribution channel? These could include cost, competitors, time to establish a foothold, etc. Cost: What is the cost of each distribution channel and how will this affect your cash flow? Can the cost be passed on to customers in the form of price increases or must it be absorbed? Pricing/profit: How will using a particular channel affect your pricing and in turn, how will that affect your profit margins? Be careful when expanding that sales channels don’t cannibalize each other. If prices are lower for your product in one channel than in others, this may cause problems. Sales/marketing: what are the costs (both in money and time/manpower) for the sales and marketing efforts required for each channel? Channel conflicts: If your product is currently sold only in independent stores, expanding to a mass market retailer like Wal-Mart could create a conflict with the smaller stores. It could also affect your brand image. Consider potential conflicts and weigh the benefits of entering a new channel against potential costs.
- As you research all the possible distribution channels, you may come up with several options that would work for your business. But time and cost issues are likely going to keep you from attacking all of them at once. So how do you decide? Set priorities and choose the order in which you will approach new channels based on: Ease of entry (How simple or complex is it to enter the channel? How long will it take to get established? Do you have contacts that will help?) Geographic proximity (does the channel reach the geographic location/s where your target customers are?) Financial goals and risks (How much money do you have to spend? Which channels can you afford to enter and which will have the greatest payoff?) Estimated sales volume: what volume of sales can you expect from each channel? Competitors’ positions (Is there too much competition in a given channel? Some channels may be so dominated by competitors that your business is unlikely to succeed there.) Management experience (How much experience do you have with each type of channel?) Staffing capabilities (Do you have the appropriate team in place to handle a new channel?)
- Channel partners are the people and companies that help you move your product or service through distribution channels. These include wholesalers, retailers, distributors, consultants, etc. Choosing the right channel partners saves you time and money, and you can gain from the knowledge, experience and contacts of the partner. You may already have some channel partners in mind, and maybe that was a deciding factor in your choice of channels. If you don’t have a partner in mind, search for partners by determining who your target customers already interact with. Where do they shop? Who do they buy from? What websites do they visit? These will be natural partners for your business. Approaching a channel partner is like making any sale. You need to: “Sell” the partner on the benefits of the relationship and why establishing a partnership is worth their while. Set goals including performance expectations and how the partner will report results Train the partner (if necessary) so they have adequate knowledge of your product/service to handle their role Provide sales/marketing materials as needed to help the channel partner sell Partner conflicts: When adding new channel partners, be sensitive to existing partners. For instance, if you sell your products mostly via small retailers and you add a channel partner such as Wal-Mart, your other channel partners will suffer if Wal-Mart’s prices undercut theirs. The product will also lose some exclusivity that it had when it was only sold at smaller stores. Weigh the costs and benefits of adding any new channel or channel partner.
- Next we’ll discuss Evaluating Your Sales Process.
- There are 5 steps to a successful sales process.
- Estimated Time: 10 minutes
- Generating “leads,” or people who may be interested in buying from your business, is done via your marketing. Marketing tactics you can use to generate leads are listed above and discussed in more detail in Session 3, Marketing Your Business.
- While lead generation drives people to your business, prospecting focuses on reaching out to customers to pull them into your business. The two terms are sometimes used interchangeably, and some of the methods are the same, as you see. Cold calling can still be effective in BtoB sales. Targeted emails can be sent to prospects with special offers to drive interest. In-person networking is still a key prospecting tactic, especially in the BtoB world. Social networking is becoming more frequently used. LinkedIn and Twitter can both be good methods for BtoB prospecting. Direct mail pieces with more information or targeted offers can also work. Trade shows are a good place to prospect as well. Reach out to referrals from existing clients. In prospecting, you are looking to qualify leads—that is, to determine if these people truly have the interest, inclination and can afford to buy your product or service. A key part of prospecting is seeking quality above quantity. It’s better to have a few well qualified leads than hundreds of leads that don’t fit your needs. Instructor Note: Ask attendees what some of the prospecting methods they use; are there any not listed here? Spend 5 minutes discussing this.
- In your initial contact with the prospect, your goal is to qualify him or her (if you haven’t already done so). Ask key questions to determine if the prospect fits your target customer profile. Can he or she make a purchasing decision? Does he or she need the benefits your product or service offers? Is the product or service timely (needed at this time)? With initial contact likely be by phone or e-mail, the goal is to set up an in-person meeting. This may be informational in nature to find out more about what the prospect wants.
- Negotiating the sale may take minutes or months depending on the project size and type of client. In any negotiation, your salespeople must always enter negotiation: Knowing their goals – what is their ultimate objective? What would be “nice to have” and what is not negotiable? Determine customer needs – what excites them? What keeps them up at night? Be prepared – these days, it is simple to research the client or prospect’s needs and get an idea of what you can expect. You may even be able to get information from current or past vendors. Know going into the discussion what’s negotiable and what’s not. In other words, determine your deal breakers in advance. Your salesperson should have some benefits he/she is prepared to offer the prospect. Strive to create a win-win negotiation in which each party compromises a bit so everyone feels they have gained. The ultimate goal of a good negotiation is to build a lasting customer relationship. Compromise is an essential step.
- A good salesperson may have literally dozens of tactics for closing a sale (ie., moving the prospect to take action and buy). Here are some common problems in closing and ways to deal with them. Objections: Every sales process involves objections on the prospect’s part. A good salesperson uses objections to understand what the customer desires from the product or service. Ask more questions about the objection to draw out the true reason behind it. Price is a common stumbling point. Solutions may include pointing out the quality of the product/service, offering a lower price (negotiating) or adjusting some other aspect of the deal. Identify and emphasize the significance and value of the product in solving this particular customer’s problem or filling the customer’s need. Not decision-maker: Sometimes you get to the closing point in the sales process only to find that the client/customer does not have decision-making power. Avoid this by qualifying the prospect earlier in the process. Product/service not needed: Often a prospect will decide the product or service is not needed after all. This is typically due to inertia or hesitancy about the cost or effort of your solution. Explore why the product or service is needed. Fear: Prospects have many fears including spending too much, buying a product/service that doesn’t solve their problems, or looking bad in front of coworkers or bosses. Use your empathy to uncover the fears that are blocking the decision and address them. Timing: budget cuts or changes in plan may be an issue for clients. Know when timing is truly wrong and end the closing efforts, but follow up with the relationship to see if you can serve this prospect in the future.
- Estimated Time: 10 minutes
- Customer service is often neglected but is a key part of the sales cycle at every point. Research from Gallup has shown that the cost of acquiring a new customer is five times the cost of retaining existing ones. Customer service is essential to keep customers buying again and again. Follow up: every sale should include some type of post-sale follow up. For a retailer, that could be an email to the buyer asking them to review their purchase on your website or offering a discount if they buy within a certain time. For a B2B customer, it could be a personal phone call or note from the sales rep. During follow-up, be sure you provide the customer an opportunity to bring up any problems or concerns with the purchase, and resolve them immediately. The real goal of follow-up is building relationships so that you become a trusted partner to this customer. Encourage them to do things such as get on your mailing list or e-mail newsletter list, follow you on Twitter or like you on Facebook. Keep in touch with them going forward. CRM can facilitate the customer service process. Going beyond contact management, these software programs enable you to maintain a detailed record of your entire customer relationship. There are many low-cost solutions available; a few are listed here. We’ll discuss CRM in detail and go over more options later in the session. Once you know the customer is satisfied with the purchase, ask them for referrals to other prospects or testimonials about your product/service. These can be used to generate new leads, continuing the sales cycle. Follow-up is also a great time to suggest additional products or services that complement what the customer has already bought from you. Keep in touch with them by all methods—phone, mail, email, social networks, etc.—and regularly let them know about special offers or new offerings that might be of interest. Stay in touch with customers and make contact periodically.
- Now we’ll talk about your Sales Team.
- Ask the group who is currently selling their product or service, and why. If the business is small, the owners might be the only “salespeople.” Similarly, existing staff should be considered (and should consider themselves) salespeople. In some cases – especially if the business is involved in e-commerce – the website itself might be part of the sales team. The copy and layout of the website should be maximized for making sales. Instructor Note: Find out what other methods the participants use. Discuss for 5-10 minutes.
- In each step of the sales process, set measurable goals. For instance, for every type of lead generation activity you engage in, set goals such as: How many leads do you want to generate? What are your requirements for qualified leads? How much time should be spent on lead generation/prospecting compared to other steps in the sales process? Know your target customer. Who are your current best customers? Know their demographics, psychographics and habits. The better you know your current customers, the more accurately you can target similar people/companies as prospects. Regularly measure your results. If you are not achieving your goals in one area, take steps such as: Eliminating that activity Training salespeople in that area Hiring new sales staff to fill a gap As you see what tactics get results, you can develop best practice techniques to use in sales training and as part of your team’s sales routine.
- Although every company goes through some variation of the six-step sales process, certain steps in the process are more important for some companies than others. For instance, if you own a retail store, “negotiation” is not really a key step, but “customer service” is. Similarly, if you own an IT consulting firm that does large projects for corporate clients, negotiation may be the most crucial skill in the process. Consultative selling skills are needed for selling complex services or products, while product selling skills are sufficient for simpler product sales. Understand what skills are most critical to your business’s sales process and look for salespeople with strengths in those areas.
- Review the Sales Team Options handout with participants if relevant (depending on the make-up of the group, some or all parts of the guide might not be relevant; the presenter should be familiar with the guide).
- Next we’ll talk about Evaluating the Needs of Your Business.
- Going over the previous information about sales teams and compensation methods, determine which type of sales staff or which combination of sales personnel will work best for your business.
- Estimated Time: 10 minutes
- Now we’ll discuss Motivating Your Sales Team. Instructor Note: This section will not be applicable to all audiences. Use your discretion to determine how much (if any) time to spend here.
- Sales compensation is a key motivator for salespeople. There are 4 elements to a compensation plan: Set goals for the business. What ultimate outcomes do you want for your business? What goals do you want your salespeople to achieve? This isn’t just about numbers and quotas; it could also include behavior such as encouraging teamwork. Your goals should be achievable, but challenging—not too easy, but not so hard that salespeople give up. You may want to set the same goals for all salespeople in a particular territory or with the same duty. Or you may want to set goals based on tenure at the company or a person’s past track record. 2. Performance measurements: specify what will be measured and how. This could include number of calls, number of leads, number of sales closed, a sales quota in dollar figures or percentage increases. There could also be compensation for bringing in new business as opposed to retaining customers. Make your benchmarks and performance measures clear and simple to understand. 3. Payment formula: Spell out how salespeople will be compensated in different types of situations. This formula should be clear enough that salespeople can figure out for themselves how much they will make if they make a particular sale. Also specify the timing of the payment (monthly, quarterly, annually). 4. Keep base pay at a minimum—but set it higher for new employees so they can support themselves as they improve their sales. 5. Rules. This section explains how questions or conflicts will be resolved. There will always be something that wasn’t covered in your compensation plan. This is perhaps the most essential component that spells out to your staff what is in it for them.
- Some companies pay salespeople straight commission (where they earn money based on sales made); others pay straight salary. Commission: Being able to control your own income based on your activity is a big motivator for many salespeople, especially experienced ones. On the flip side, for some salespeople, having to rely solely on commission does not provide enough job security and they won’t accept a job with your firm. A commission-based pay structure can create “lone wolves” who are only out for themselves and alienated from the company’s big-picture goals. They may focus solely on how many deals they can close and not on the quality of the deals or building relationships with clients. Commission-only pay can lead to price slashing. If the commission is based on sales made (not gross profit) the salesperson may be tempted to slash the price to make a sale, leaving your company with little profit while he or she gets a commission. On the plus side for your business, when you pay on commission you are paying for results and not paying the salary of a salesperson who isn’t producing. Commission-only compensation works best in industries with a short sales cycle. Otherwise, the salesperson has to wait too long without income. Salary Only: Being on a salary can de-motivate salespeople. Unless they have a way to earn more money, they may be tempted to “coast” and do the bare minimum. On the plus side, a salary eases the learning curve for a new salesperson and can be a good tool to build a bench. Salaried employees are more likely to feel a sense of teamwork with the company. They will benefit when the company does, so they will be inclined to pull together. Salaried employees are more likely to be invested in the company goals rather than their own personal gain. If your industry has a long sales cycle, you need to offer a salary to keep salespeople going until the sale is made.
- Because of the problems with straight commissions and straight salaries, most companies offer a combination of salary plus commission for sales staff. Commissions can range from 20 percent to 85 percent of salary. Set salary high enough that the salesperson is able to pay their bills without worry but low enough that he or she is motivated to earn the commission. Factors to consider in setting the balance of salary vs. commission include: Sales cycle: In general a longer sales cycle calls for a higher percentage of salary. Job duties: Some salespeople are only involved in one facet of sales, while others are involved in the entire process. Those who do more work to make the sale should earn more reward. If several salespeople have the same job duties, their commission structure needs to be the same as well. Tenure: Some companies pay more salary based on tenure with the company. Others go the opposite route, starting new salespeople out with a higher percentage of salary and increase the percentage of commission the longer they stay with the company so they have more control over their earnings. Experience: You may want to adjust the balance of salary vs. commission based on a salesperson’s years of experience. Industry standards: Find out what the norms are in your industry. Salary.com is a good place to look for competitive salary information. Also ask your industry trade association, peers or even salespeople. It is crucial to be competitive to keep good salespeople. Sales incentive management programs are available on a software-as-a-service basis from such providers as Salesforce.com, Xactly, Incentive, Callidus Software, and Makana Solutions, among other providers. If you want to retain a top-level sales force, your plan needs to be competitive. Gather intelligence on how your competitors compensate their sales professionals. You can figure out what commission levels are reasonable and competitive for your industry or profession through an Internet search at a source such as www.salary.com.Human resource specialists in an industry often can help you locate surveys with compensation information; or sales professionals always know what their industry pays and can share documentation. You also can tap in to your industry's professional association or ask your peers how they structure their commission contracts.
- Bonuses can be a valuable addition to your compensation plan and can push your salespeople to reach new levels. A bonus is paid on top of commission and is usually given at year-end. Bonuses are given for reaching specific targets or other measurable goals. For instance, you might give a $1,000 bonus for a certain level of sales, a $3,000 bonus at the next level, and so on. Put the bonus structure in writing and make it simple to understand so there is no confusion. You also need to make sure the bonus amount is large enough to keep your sales staff motivated to reach it.
- Sales incentives are non-monetary rewards that salespeople earn for achieving certain goals. This might include a trip or a gift certificate. If you use barter or otherwise get the incentives at a discount, this is a good way to reward your sales team without affecting your cash flow. Incentives are often used in contests, such as rewarding the top salesperson who sells the most of X product in a certain time frame, but they can also be built into your compensation plan. Whether they are part of a contest or part of your formal compensation plan, make sure the rules for receiving incentives and the goals that must be met are clearly defined. Incentives work best to motivate short-term results, so you typically want to offer them quarterly or even monthly, or at the end of a big sales push. Frequent small incentives can work better than one big one. And don’t forget peer recognition as an incentive (“Salesperson of the Month”). To get the most results from incentives, make them meaningful to the employees. It needs to be a reward that’s worth striving for. Incentives can be used for all kinds of salespeople—you just need to tailor them to the effort and the industry. An incentive can be something as simple as a gift certificate or an “Employee of the Month” designation for a retail employee, or an all expenses paid trip to Hawaii for a B2B salesperson. Instructor Note: Ask attendees what some of the sales compensation tools are that they have used. What worked and what didn’t? Spend 5-10 minutes discussing.
- Employee development is important to salespeople, who are always seeking ways to improve. Your sales team will be far more motivated if they know they have opportunities to learn more at your company. Some of your options for low-cost or no-cost training and education include: Conferences, seminars and webinars offered through industry associations or sales organizations Online courses and webinars (often these are free) In-house training: Have salespeople regularly share tips at sales meetings. Best practices: model the sales practices of your top sellers into your sales training program.
- The next section covers Benchmarking Sales.
- Essentially benchmarking means comparing. In performance benchmarking, you compare performance metrics such as units sold, profit margins or other measurable figures. In Process benchmarking, you compare processes used by your company to processes of other companies to determine which processes have the best results (“best practices.”) You can use both types of benchmarking for your sales. The ultimate goal is to improve your processes and your performance by continual comparison. What are you benchmarking against? You may want to benchmark against 1) your company’s past performance; 2) your key competitors or 3) industry leaders. In general, you want to benchmark your business against top performers in the industry and see where you stand.
- There are 4 basic steps to benchmarking Determine what measures or processes you will benchmark Gather data (from your past history, the competition or from industry associations or similar sources) Assess the data and how your company measures up Adjust your processes and/or goals as needed.
- Technology tools can enhance your sales. CRM is different from Contact Management software. Contact management software lets individual sales reps quickly access and manage their accounts and contact info. While it can be helpful for managing data, it can’t be used to generate informational reports. It typically can’t be shared across users. Its functionality is limited. CRM Software provides the same contact management tools but much more: It includes comprehensive, detailed customer information. You can see the life cycle of the entire customer relationship, buying history, access past correspondence and interactions. CRM software enables data to be shared among the entire team. If one sales rep leaves, another can take over his or her accounts and have the entire history at hand. CRM software also enables you to create sales reports and forecasts easily. Depending on what information you gather about customers, you can spot trends based on your customers’ demographics, ages, interests, locations, or industries. This helps you target them better and add new services or products to meet their needs. CRM benefits your business by helping your sales team with time management. It allows them to track, automate and schedule things like client contact, follow-up, and report generation. It also creates a consistent sales process for your customers. If your entire sales team uses CRM then each rep will approach sales in the same format. CHOOSING CRM SOLUTIONS: There are many CRM options for small businesses today. Many are web-based, which means there is no expensive software to install and the tools can be accessed from anywhere, such as by sales reps on the road. Because of the many options, choosing CRM can seem overwhelming. We list some solutions on the next slide. When choosing CRM keep two words in mind: Simple and scalable. You want the product to be simple enough that your sales team will actually use it and the learning curve isn’t too great. You also want it scalable so it can grow with your company as you grow.
- Here are some resources that might help you.
- These are some of the most popular contact management/CRM solutions for small business.
- Here are some Sales resources.
- As a review, we talked about distribution channels and how the end user gets your product or service, the five steps in the sales process, your sales team and how to motivate them, and benchmarking sales to see your progress.
- Good luck and thank you for attending this session!