Linking Human Capital With Strategic Intent
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DSFE

Developing Sales Force Effectiveness
by Rick Tiemann

Man Under WaterHow many of your salespeople are underwater?

I once asked a Sales Manager, “Would you tell me roughly how many sales people work here?” His reply was, “Oh, about half of them!” While it is funny, well in some ways maybe not, I feel certain every sales manager sees the humor in some way. Having been in various sales manager roles myself, I am also certain every sales manager who is experiencing a lack of sales force effectiveness also feels the pain.

In the last 24 years of working with sales teams from various industries from selling caskets to software I have seen in well over 75 different companies that 20% to 25% of their sales force is underwater and selling below quota. So what does this cost a company? What does this cost a sales manager besides headaches? How true is this for your sales team and what is your percentage of salespeople underwater on your team? If this is true for your sales team, what is your solution?

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Here is what this costs a company.
If a sales person has a Million dollar quota
and the company operates at 10% EBITDA,
the numbers say you will make $100,000.
Now if the sales person’s burden is $80,000
your net is $20,000.
Now for argument’s sake,
for every person selling at 75% of quota,
what is that salesperson costing you?
The answer is a loss of <$5,000 pure bottom line cost per person.
This does not factor in any other costs
such as coaching and counseling,
lost opportunity costs or especially turnover costs.
75% of quota is $750,000
and at 10% EBITDA is $75,000.
With an $80,000 cost of burden your in the hole
<$5,000 per salesperson.

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Now if you have 100 salespeople and 25% are underperforming at 75% of quota or even less, what is your loss? 25 salespeople at <$5,000 = <$125,000 pure bottom line. There are many reasons why salespeople don’t hit their quota and it is everything from sales call reluctance to overly aggressive selling.

Having been a former sales manager, then a Director of Sales and Marketing, then VP of Sales and ultimately Asian Business Development Manager I have seen first hand the challenges of creating a dynamic sales force. I am no stranger to the challenge of Developing Sales Force Effectiveness! Over the last 24 years I have developed a 6-step program designed to correct the problem. I have a solution…do you?

Go forth and sell!
Rick Tiemann
President, The Executive Group

The Executive Group
80 E US Hwy 6
Valparaiso, IN 46383

Tel: 219.477.6378
Fax: 219.477.6379
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