Sales executives tell me often that one of the challenges they face is ensuring that their salespeople are doing a really great job of qualifying opportunities. Unless potential opportunities are well qualified, precious time is wasted, which not only does nothing to drive pipeline and revenue, but it is quite costly to the organization.
Many might say that “marketing” should be qualifying opportunities, but I believe it is the job of both sales and marketing. If you work in a smaller business, there is a high likelihood that you don’t have a separate marketing department anyway. And even if marketing does the early qualification for sales, I still feel strongly that as a salesperson, it is my job to dig even deeper to be sure that there really is a potential for a sale.
Why are salespeople often not good at qualifying opportunities? Well for a few reasons.
1. They don’t ask the right questions.
2. They don’t talk to or meet with the right people.
3. They believe that someone agreeing to a demo is a genuine sales opportunity.
Quantifying the Cost of Wasted Time
Why focus attention on the problem? In a word – dollars! It is very expensive. Many sales managers often don’t know what an “hour of selling” actually costs them. They know that money and time is wasted when their people chase phantom opportunities, but they don’t know exactly how much. Let’s break it down.
Rick McPartlin, a colleague and the President of The Revenue Game gave an example of the size of the problem when I heard him speak at a conference in Atlanta.
Let’s say that you have a sales person with a $1,000,000 quota. After salary, commission, benefits, etc., the cost for your rep is $150,000 annually. Assuming 2400 hrs of annual sales time, your cost per sales hour is $62.50. That probably doesn’t sound so bad does it? It wouldn’t be if your sellers were actually selling all 50 hrs each week.
How much time do you think your people actually spend doing their job?
Consider the real hours spent “selling”, which for an average company with a decent strategy and pretty good business alignment; you may be getting 5 actual sales hours out of your people each week. At 5 hours a week, your $150,000 sales rep costs you $625 per hour, which means you need to generate slightly more than $4,100 of revenue per hour if you hope to reach your annual target.
Can Social Selling Help?
Yes and no. Technology is like putting gas in the car. A full tank lets the car drive around, but you, the driver, still have to steer it toward the destination. Use Social Selling strategies and tools – like Nimble – to do a lot of front end work…expand your network, engage with the right buyers and influencers, conduct your sales call research and generate leads. But it still has to be done in an strategically smart way. Getting the meeting is NOT the same as getting the meeting with the right person, at the right time and who is qualified to buy from you. I know, I know…a flash of the blinding obvious, but sadly sellers and their leaders need constant reminders that a lot of activity is nothing compared to the quality of that activity.
What would it be worth to you if social networking used correctly could significantly shrink wasted money and time on the front end of the sales process?
Do the Math Yourself
As a sales leader, I’m suggesting you make it a number one priority to carefully evaluate how much time your salespeople actually spend on the act of selling. If you don’t, your reps will continue to waste time – and lots of it – on non-revenue producing activity. I think we all know where that will ultimately lead!