Want to Make More
by Working Less?
- Create a system that develops leads 24/7/365
- Increase Revenue NOW!
- Hiring Salespeople Doesn't Work!
- Use Social Media to ATTRACT Customers
- Stop trying to find a replacement for YOU!
Blame the Salespeople or the Sales Strategy?
Friday 29 May, 2009
I have been exploring this subject with a friend of mine from business school. He has 8 sales people reporting to him, selling outsourced HR solutions ($70k avg deal), each with a quota of $425,000. Over the course of the last year, here are the results:
#1 salesperson (3 years tenure) - sold (6) units for $1,000,000 (185% quota) this year in territory A.
#2 salesperson (1.5 years tenure) - sold (5) units for $365,000 (85% quota) this year in territory B
#3 salesperson (1.5 year tenure) - sold (3) units for $150,000 (35% quota) this year in territory C
#4 salesperson (2.5 years tenure) - sold (4) units for $190,000 (28% quota) this year in territory D
#5 salesperson (1.2 years tenure) - sold (0) units, $0 this year in territory E
#6 salesperson (1 year tenure) - sold (0) units, $0 this year in territory F
#7 salesperson (1 year tenure - left company) - sold (0) units, $0 last year in territory F
#8 salesperson (9 months tenure) - sold (0) units, $0 this year in territory E & G
He is in the process of terminating the bottom three salespeople and rehiring for those positions. I advised him that he might want to look at their sales and marketing strategy/process, rather than blame the five “failed” employees (including the two salespeople who left after a year, not having sold anything). In addition, each employee represents $120,000 annually in first year salary, benefits and training. Since none of the five employees generated any profit (let alone revenue), they represent a loss of $600,000 over the last year and a half….and yet, he is going to re-hire for those same territories. Why? Because he is only responsible for a revenue-based quota and does not have P & L responsibility. Therefore, he is only concerned about putting “more boots on the street,” in order to bring in more leads and help him attain his overall quota.
I don’t think his company is hiring the wrong people (they are known for being a professional employer - recruiting, testing and hiring “the best salespeople”), as much as employing the wrong strategy. I encouraged him to look at consolidating territories which would save the company hundreds of thousands of dollars in salary/benefits/training and give the existing salespeople additional “dirt” in order to close more deals and make more money - both for themselves and the company!
