is your hourly selling cost.
Then, using your CRM system, track the number of hours spent on each sale. For each sale, multiply that num- ber by the hourly selling cost to get the estimated cost for each sale.
BASE SALES COMPENSATION ON NET PROFIT
Subtract the actual cost per individual sale from the gross margin per indi- vidual sale to get the net margin per individual sale.
Base your commission structure on this number, rather than on the revenue. Make it possible for the sales rep to query within the CRM system the profitability (and, by extension, the commission) of the expected sale throughout the sales process. The sales rep will now be able to see the commission become smaller based on the amount of time spent with the customer – or, if the rep man- ages to increase the size and scope of the deal’s profitability, to see it go up.
MEASURE CREATION OF MARKETING ON DEMAND Marketing groups frequently waste money on activities that are marginal to the selling process. The solution to this problem is to measure and compensate market- ing on the quantity and quality of leads they generate. For example, if marketing runs an advertisement, the impact in terms of generating pros- pects should be measured before and after the ad runs – and that measure- ment should continue through the sales process until the leads gener- ated actually become customers.
CREATE A FORMAL METRIC FOR R&D REQUESTS Using research and development (R&D) to help close business can fool sales reps into thinking they’re reduc- ing the cost of sales – when, in fact, they’re simply shuffling the cost from the SGA line to the R&D line. More importantly, if the R&D group becomes mired in special requests for work that’s needed to close sales, future
SELLING POWER OCTOBER 2019 | 11 © 2019 SELLING POWER. CALL 1-800-752-7355 FOR REPRINT PERMISSION.
products can be delayed indefinitely. To prevent such problems, create a formal process that allows sales management and engineering man- agement to decide collaboratively what deserves the attention of the R&D team.
CREATE A SPECIAL METRIC FOR STRATEGIC ACCOUNTS According to Sam Reese, CEO of the sales training and consulting firm Miller Heiman, a strategic ac- count is one in which the relation- ship is so important it transcends the need to make money. For example, a small software firm might number IBM among its clients and tout that relationship in all of its marketing materials.
SELLING TIP
Keep Selling It’s only natural to feel like, when you get a prospect to sign on the dotted line and close the deal, it’s time for a celebration. That may mean knocking off for the rest of the day or taking a long lunch. But think about it. At that moment in time you’re confident, feel great about yourself, and are at the top of your game. It’s the perfect time to go see that difficult prospect – the one you’ve been trying to crack forever. The reality is…the best time to make a sale is after you just made one. – WILLIAM F. KENDY
VIDEO: DIGITAL TRANSFORMATION IN SALES
‘‘
If freedom makes social progress possible, so social progress strengthens and enlarges freedom. ROBERT KENNEDY
If your metrics focus purely on
profit, it may become difficult for the team to focus on such strategic accounts, so you’ll need some other kind of metric to account for involve- ment in these relationships.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41
