I suspect that if salespeople realized the real cost of making a sales call they might be more careful about how they spend their time and who they spend it with. I mean it just doesn’t make sense to make a sales call that costs say $400 to sell a product or service that costs half as much – $200 – does it? Yet, that’s the kind of thing that’s going on day after day. In fact a lot of people are making $400 sales calls and not selling a thing!
You simply calculate the salesperson’s costs by totalling his or her compensation, benefits, and travel-and-entertainment expenses and divide that amount by the number of sales calls he or she made over the past month, quarter, or year. While the costs are usually easy to find out, the one piece of information that may be missing is the actual number of calls your salespeople are making. You may need to have your people turn in their numbers every day or week until you’ve got enough to work with. You’re looking for the total number of face-to-face calls your people made, not just “sales calls.” If all else fails, you may have to make an educated guess at this number.
What Are You Paying For?
You want to be sure your people are making calls with a purpose and hopefully that purpose is to start, advance, or close a sales opportunity. That’s what they’re getting paid to do.
Of course, all the calls in the world aren’t worth dust unless sales are being made. You need to balance the cost of a sales call against sales results. If sales are roaring in, you can be less concerned about your cost of a sales call but don’t get complacent. Keep your financial finger on the pulse of your sales team.
Tell the Troops
Once you’ve gone through this exercise, I recommend that you let your salespeople know what it’s costing you to have them make calls. I’m not suggesting you do this to intimidate them. Don’t use the information as a club, use it as a tool. The primary purpose for telling them is to create awareness among the team that their time and effort has a dollar value associated with it.
The average salesperson might find the numbers interesting but won’t know what to do about it. Some won’t care. But the smart ones will think twice before making a call without setting a call objective.
The smart ones will make every call count and that’s what you’re looking for.
Now your challenge is to hire and/or develop a bunch of smart ones!
For more information on this topic, please refer to The Right Skills.
Salesforce Training & Consulting is a professional sales training firm and registered Salesforce.com Consulting Partner based in Toronto, with offices in Boston and Chicago, providing sales coaching, sales management consulting, salesforce implementation, sales training and sales personnel assessments.