This call was brief, and matter of fact. The prospect was courteous, polite, and even sounded happy. But after the call, I found out that this scene was identical to one that had occurred at least 6 times before. Same outcome – no progress. I asked this sales rep what the estimated potential value of the account was. Between $20-$50K. Next I asked what he estimated the total Cost to Sell was. He didn’t know.
This is a recurring theme with sales reps. It is also one that can make the difference between a year being a success and a failure. Do you have prospects that are dragging you down? Are you wasting your time? Do you even know?
How will you be different in 2013 with your selling efforts? Two places to start:
- Ideal Customer Profile – Get clear about your ideal customer. Who is it? What does he look like? That is who (and only who) you should target.
- Account Segmentation – Proper segmenting of your accounts will help organize you. This should be the first step in your sales strategy. Before attacking any prospects, you need to understand what type of prospect they are. Do they fit one of your Ideal Customer Profiles? If so, which one? If not – cut bait and move on to more fertile prospects.
The Cost of Chasing the Wrong Prospects
In order to improve in 2013, you need to know where to focus your efforts. By using our Cost to Sell Calculator, you can get a feel for how much effort a prospect is worth. If your effort is outweighing the potential payoff, you should invest your time elsewhere.
Salesmanship 101 tells you to invest your time where you have the most potential. However, as described above, many reps will invest their precious time chasing the wrong opportunities. With every prospect there is a point where the cost of time spent will surpass your payout. Call it the “Law of Diminishing Returns” in sales.
What criteria go into calculating the total cost of sale? Well for starters:
- Call prep time (include research or prospecting time)
- Call time
- Travel time and expenses if applicable
- Number of calls
In addition, don’t forget about 4, 6 and 8-legged sales calls. These are the calls when you bring a manager, sales engineer, or other company resource along to support your efforts. While the Cost to Sell Calculator doesn’t account for the additional resources, you should still be mindful of those costs.
If you break your salary down into an hourly rate, the cost of these efforts becomes all the more clear. Once you know the total cost of sales, you can determine where to spend your time, and with whom. Here’s a link that provides a snapshot for quickly calculating your hourly rate.
Avoid Pitfalls and Time-Sucks
Improving your own personal sales strategy can be a difficult task. Self-assessment and self-improvement are huge obstacles to overcome. However, once overcome they can yield some of the greatest successes.
SBI can help you get started by:
- Developing a clear Ideal Customer Profile – Pinpointing your Ideal Customer Profile isn’t easy. World-class organizations invest hours laboring over this problem. Why? Because they know it makes all the difference between success and failure. The same goes for you and your performance. A better Ideal Customer Profile = Better Targeting = More Productive Time Spent = More Money Made.
- Proper Account Segmentation – Once you have your Ideal Customer Profile created, you need to segment your accounts. Do they fit the mold? Is the lead hot or cold? This will help you to prioritize your prospects. Just one more step towards capitalizing on your time and executing a successful 2013.
- Optimizing Time Management – You obviously need to know which prospects to spend your time on. The Ideal Customer Profile and Account Segmentation can help with that. But you also need to know what tasks to spend your time on. There should be specific time allotments for research, prep, call time, etc. Knowing how to optimize that time can make all the difference.
Have questions about figuring out your Cost to Sale? Not sure how an Ideal Customer Profile or Account Segmentation can help you succeed in 2013? Contact SBI and we can help.