Sales Blog with Sales Tips

If sales is nothing else, it is a game of comparison.

“How am I doing against my budget?”
“How do I compare against my peers?”
“How do my company’s procedures and capabilities compare to my competitors?”

In today’s sales tips post, I’m focusing on common practices within inside sales departments. Inside sales departments are critical to the overall revenue of a company and the success of its outside sales force.

I combed through a 2010 Bridge Group report on inside sales and selected what I feel are the most interesting findings. The data was collected from inside sales departments at 115 North American technology companies.

These are presented in no particular order and include my notes and comments.

The Findings
The study found the average inside sales department has the following attributes:

1. Primary function of the department is outbound calling (i.e. new business development). This was identified by 89% of respondents.

2. Level of sales experience for newly recruited salespersons: 3.1 years. This number is trending up each year.

3. Time for a new hire to reach full productivity: 4.5 months.

4. Tenure of an inside sales representative: 2.9 years (34.5% annual turnover rate). Companies know the lifetime value of their customers, but have they stopped to think about the lifetime value of an inside sales representative?

5. Percent of total compensation at risk (i. e. commission, incentive compensation): 44%.

6. Percentage of representatives who achieve their quota: 50%. This number has decreased steadily since 2007.

7. Number of calls per day per representative: 39. Less than five per hour. This suggests there is ample time for inside sales representatives to research prospects at most companies. My long-term sales tips readers will know that I think this is a good thing.

8. Number of emails per inside salesperson per day: 24. This number seems low to me. Could this be an indication that social media is beginning to have a significant impact on how we communicate?

9. Twenty-seven percent of prospecting calls are a result of a lead generated by marketing.

10. Number of contacts required to move a qualified prospect to a customer: 9.3. This number is higher than most other studies I’ve seen. It’s probably indicative of our current challenging economic environment.

11. Close ratio for all new business development activity (i.e. “in the pipeline”): 23%. This number is pleasantly high and reflects a quality-versus-quantity mindset (see number seven above).

12. The average direct sales manager is responsible for eight inside sales professionals.

13. Percent of total company revenue generated by the inside sales group: 42%.

14. Sixty-three percent of the inside sales group’s revenue comes from new business. This is not surprising in light of number one above.

15. Sales cycle in days: 108. This number seems to fluctuate only moderately among all industries and sales channels.

Your Mileage Will Vary
These are averages. How they apply to your company will depend on your industry, target markets, etc.

These numbers remind us that in order to benchmark our company, we must first measure and track the numbers that make a difference.

©2010 Scott R. Sheaffer

Find a New Sales Job

There are a million myths about the selling profession. What’s most frustrating is that many “sales trainers” dole these out as quality sales tips.

Here are 10 of my not-so-favorites presented in no particular order.

Myth #1
Salespeople lie more than buyers. The math on this one is simple. A sales professional has a lot more to lose by lying than a buyer. As an example, I’ve asked dozens of professional buyers if they’ve ever lied about pricing. I haven’t found any who said they hadn’t engaged in this practice. A salesperson would be committing sales suicide to lie about a price.

Myth #2
The internet will replace all sales professionals. Ever see a website find a decision maker or uncover a prospect’s budget? How about discovering a buying time frame or learning about the competitive landscape?

Myth #3
Ninety-two percent of our communication with customers is through body language. If this were true, then phones, emails, text messages, marketing collateral, etc. would be virtually useless.

Myth #4
If you can just get your foot in the door, you’re halfway there. If this is how you get an audience with prospects, you’ve already alienated them. They aren’t listening to a word you’re saying either.

Myth #5
ABC (Always Be Closing). People are hardwired to resist being pushed. Push enough and they’ll run – and not toward you. The close is merely the final and natural step in a well-orchestrated sales process.

Myth #6
People buy on price. Price is always a consideration, but it actually ranks number five for buyers in study after study. Availability, risk, service and quality are more important to a buyer than price. Buyers ask about availability and price because we can immediately give them hard numbers on these items. Risk, service and quality are learned through relationship and time.

Myth #7
There is a stereotypical sales personality. If that were true, a pre-hire sales test would exist that could effectively weed out the non-sales types. There isn’t such a test (i.e. one that works) because all successful sales professionals are different.

Myth #8
Sales professionals only care about making money. Studies show that income ranks below a number of other factors such as job satisfaction and professional growth for sales professionals just as it does for people in other occupations.

Myth #9
Sales is just a game of numbers. This might have been true 15+ years ago – but not today. Sales is an information and relationship game. Quality, not quantity.

Myth #10
Working for the best vendor or supplier means you’ll win the sale. Creating a relationship with a prospect that is based on your good character and work ethic gets the business. Besides, the prospect decides who is the best vendor.

©2010 Scott R. Sheaffer

There is a budget associated with being a sales professional that is only partially related to money. This budget metric is extremely important, yet many sales professionals have little awareness of it. Most have never done any planning in order to optimize it either.

Call Budgets
The metric I’m writing about is your call budget. Simply stated, this is the number of customer calls or prospect calls an average outside sales professional can make in any given period.

I’m going to provide call budget averages below and I think you’ll find them sobering. You have less time than you think. You’re probably wasting time on sub-optimal customers and prospects and not giving enough to others.

I provided some sales tips on segmenting your accounts and opportunities more efficiently in my last sales blog post.

Call Budget Stats
These aren’t my numbers. These are accepted numbers for an outside sales professional.

• Average number of calls per day: 4
• Average number of net selling days in a year: 220 (365 minus weekends, holidays, vacation, sales meetings, office days, training, sick, etc.)
• Average number of calls per year: 880
• Average number of calls per month: 73

The Math
Add your number of accounts to the number of prospects in your funnel. I think you’ll find you don’t have the call budget that will enable you to keep in contact with all of them in a way that even approximates regularity.

As a result, you have to segment. You have to make choices. You have to profile. Not all customers and opportunities are created equal.

For starters, let inside sales or your company’s website handle low potential accounts. Completely ignore low potential prospects.

Sales Tips Wrap Up
I hope this sales tips post has been a call to action for you. There are hard limits to the amount of time available for servicing your customers while simultaneously growing your business.

Make the hard decisions regarding how you will allocate your time. Please see my last sales blog post for more information.

©2010 Scott R. Sheaffer