Time and Territory Management. Or double the size of your sales team without hiring a single person

Transcription

1 Time and Territory Management Or double the size of your sales team without hiring a single person

2 Synopsis Effective selling is not just about what happens when your team is in front of their customers. The actual proportion of time spent selling effectively depends on several factors: The % of time spent actively selling (vs. other things, including travelling), multiplied by... The % of time spent selling to the right customers, multiplied by... The % of time spent doing the right things in sales calls. Our research shows that the % of selling can be as low as 8% for a typical salesforce: % of time actively selling vs. other 30% X % selling time with the right accounts X 70% X % selling time doing the right things X 40% = % of effective sales time = 8% This represents a huge opportunity. Improving time and territory management by a small amount can easily double your effective sales time the same impact as doubling your salesforce, for a fraction of the cost. This White Paper sets out some of the key issues involved in improving sales effectiveness, but of course the specific opportunities vary from organisation to organisation. Please feel free to contact us to discuss these issues in more detail. 1

3 Spending the right amount of time selling There are many calls on a salesperson s time. Active selling time, which includes time spent planning and executing sales calls, often takes second place to other activities such as travel, internal meetings and reporting. Those non-sales activities are important, but we need to manage the time invested in them relative to the investment in active selling. The first step is to recognise that some salespeople adopt a victim mentality when it comes to these non-sales activities. They recognise the issue, but often feel putupon, and unable to control the drain on their time. Others, on the other hand, believe that they are in control of their own destiny and are therefore far more proactive in managing their own time. Psychologists recognise this issue and relate it to a concept called the Locus of Control. Individuals with a primarily External Locus of Control tend to believe that what happens in life is outside their control, driven by factors external to themselves, including fate or more likely the preferences of their manager. People with a mostly Internal locus of control, on the other hand, believe that situations and outcomes are within their control, and driven largely by their own actions. External Locus of Control Internal Outcomes are outside of your control, driven by fate Outcomes are within your control, driven by actions This is a spectrum, of course, and few people sit at the extremes. But you ll be able to list people you know who tend to fall towards one or the other end of the spectrum. People who will say things like it s all under my control, at the end of the day, and those who will come up with long lists of reasons why things can t or won t change. An essential step in time and territory management is to help people with an External Locus of Control to believe that they can actually influence their own fate. This can be achieved through a combination of training and coaching, but you ll also need to take steps to change things for them, and to measure their time allocation to make sure it is as you need it to be. 2

4 It s possible to analyse the allocation of a salesperson s time, using a tool called Diary Analysis. This will typically reveal a split something like the left-hand bar below. 100% Meetings and other Report writing Meetings and other Report writing Personal time 80% Personal time Travelling and waiting 60% 40% 20% Travelling and waiting Troubleshooting Order entry Follow up calls Sales calls Troubleshooting Order entry Project planning Follow up calls Sales calls 0% Account planning You should be aiming for greater than 50% of time spent in active selling (which includes planning and follow-up), so you need to know which activities are going to reduce in order to shift towards the situation on the right. It s worth noting that not every nonsales activity needs to shrink. In the example above, the client actually wanted to increase the amount of personal time available to their sales teams, to encourage reflection and creativity. But for the rest, you can use a combination of methods to redesign the time allocation and to equip your sales force to do this for themselves in the future. At a general level, you can: Change the frequency of tasks (e.g. reducing reporting frequency); Change the scope of tasks (e.g. ask for reports by exception only or for the most significant changes); Change the location and timing of tasks (e.g. by combining sales calls in a particular location into a single trip, or by having conference calls instead of face-to-face meetings); Equip people to do the tasks more efficiently (e.g. through training, mobile tools, or allowing them to take a more expensive travel option that saves time). 3

5 More specific ideas can be created by brainstorming around your own diary analysis, but some typical solutions are as follows: Non-active selling activity Admin, reporting and forecasting Internal meetings (formal and informal) After-sales service Random interruptions Travel and meals Personal time management Ideas for managing Recognise there will always be admin, reporting and forecasting to do but improve efficiency and consider reducing frequency. Allow flexibility so that salespeople don t waste time filling out forms with random information because it needs to be there. Train to get the most out of the CRM system. Consider reducing frequency or duration, and/or using conference or video calls where possible. Have meetings at a consistent time to avoid disrupting the work week. Tackle root causes to reduce fire-fighting. Make sure salespeople get a reliable signal from the rest of the organisation when actions are underway, so that they don t waste time in unnecessary chasing. Set aside diary appointments for yourself for sales planning. Switch off notification to allow yourself to focus on one thing at a time. Use conference calls where appropriate, but don t under-estimate the power of face-to-face. Make sure each meeting is designed to move towards a sale; reduce purely relationship meetings. Group meetings together and choose best routing approach (straight line or clover-leaf) to minimise travel time. Confirm meetings before leaving. Use hotel time to follow-up. Self-discipline around prioritising activities based on importance and urgency. Recognising your own style and habits and how to improve them (e.g. procrastination). There is potential for an organisation to gain more from time management principles if learners can think both individually and as a team about where the big gains to efficiency could be made within their own functional context. We typically conduct initial workshop sessions to identify the biggest opportunities, and then provide detailed training to support implementation. It is worth noting, of course that time management needs to be applied carefully. Some time management rules, applied without judgement and team context, can have unintended consequences. For example, in deadline-driven environments, someone sweating the detail can mean the difference between successful results and a wasted opportunity. 4

6 Spending your active time with the right customers The second part of our equation involves spending your active selling time with the right customers (i.e. those that will give you the greatest return on your investment of time). This requires a combination of territory design and account prioritisation. Territory Design The phrase Territory Design is used here in a broader sense than just the geographic one. Interpreted as the way you organise your sales team, territory design is very closely aligned to customer segmentation. The best approach depends on what the most significant differences are between customers (from a sales point of view). For example: If customers are fairly homogeneous and need to be visited in person, then geographically-based territories may be most appropriate. This is also the case when lead generation requires local presence and networking. Geographical territories most often fall into two general types: Slices of the pie when salespeople work out of a central office Circular or square when salespeople work out of a home office Where there are significant differences between the needs of customers in different industries, and salespeople need to be matched to those industries, it may make most sense to use vertical market-based territories. If your customers need handling very differently depending on their account size, then the best approach may be to allocate territories based on account size. Of course, in many companies, there may be a need for a multi-dimensional approach to territory design, as shown below: Location A B C Large Account size Medium Small A B Industry C 5

7 Within your chosen framework, the specific territory allocated to any given salesperson should satisfy several criteria: The territory should match the knowledge, skills and personality type of the salesperson involved; It should provide a fair level of potential business so that each salesperson is able to make a living, and so that no territories go under-served; It should be designed to allow manageable travel, and access for the sales manager; Taken together, all territories should cover your whole target market - obviously! (If you can t create sensible territories that do, then you need to look at your levels of resourcing.) Even with a perfect territory design, however, each salesperson will still need to prioritise their activities by account. The old 80/20 rule often applies 80% of your revenue will come from 20% of your customers. So it s critical that salespeople don t waste time on deals that won t deliver. Account Prioritisation The basic principle of account prioritisation is to match the time and effort invested in any given account to its potential revenue (or, ideally, margin contribution). However, that potential is actually the product of two things: how attractive a given account is (in terms of size, product mix, etc.), and how achievable it is for your company and sales team. The relationship between these is shown below: High High value deals Attractiveness More challenging markets Low Low Achievability High 6

8 Ideally, you want to focus on accounts and opportunities that are both highly attractive and highly achievable. However, in more challenging markets (and in more challenging parts of the economic cycle), you will need to loosen the criteria somewhat to allow enough deals to come through. A typical set of factors for assessing attractiveness and achievability would include: Attractiveness: Do they need something that we can offer? Is this an existing customer (hence lowering of the cost of sale)? Is it a significant opportunity (either initially or through repeat business)? Is there good margin potential (because of product mix or moderate purchasing behaviour)? Will they look at factors beyond price? Would this account meet our company s strategic objectives in other ways? Achievability: Is there an incumbent player with a strong relationship? Is there an important and urgent need that creates value? At which stage of the Buying Cycle are they (generally, the earlier the better)? Does the customer seek advice; are they prepared to invest in buying process? Do we have a solution that matches their likely decision criteria better than the competition? Are they likely to see any insurmountable risks in working with us? Do we have any significant supporters or detractors in the target organisation? You will of course have your own list of qualification criteria, but it s worth noting that many of the factors under achievability are not ones that are normally considered. Traditional qualification criteria tend to focus on size and profitability, whereas the additional factors listed here tend to be more value-based. It s worth reinforcing one observation here: attractiveness means potential attractiveness in future, rather than the size of the initial opportunity. Your sales force should actively seek to sell small deals to big clients footholds have a habit of growing fast if you implement well and over-deliver. Equally, your salespeople should not walk away from an account just after they have won a deal. To quote Gerry Duffy, Head of Sales at THUS, that s like rowing up to an island and picking the first coconut you see, then getting back in the boat and spending a year getting to the next island. Wait. Look around. Find more coconuts. 7

9 Doing the right things with those right customers The final piece of the effectiveness/efficiency puzzle is the proportion of time (spent in front of the right customers) that is spent doing the right things to make a sale. This is about the quality of selling as well as the quantity and that means focusing on the customer s agenda, not yours. Imparta s Creating Client Value methodology covers this in detail, but to summarise, all buyers go through a process that is both predictable, and a key driver of what salespeople must do to achieve a successful conclusion. The right thing to do for a salesperson absolutely depends on where the customer is in this cycle. Awareness of Needs: During this phase, the buyer moves from being happy with the status quo to recognising the need to change an existing product, service, process or supplier. The research shows that problems ( Pain ) are a stronger motivator than opportunities ( Gain ). The role of the salesperson during this phase is to plan out the potential value to be created, gain access to the account through Centres of Receptivity, help the customer explore their needs and potential solutions, build momentum for the decision, quantify the value that it would create, and help overcome barriers to change. Focusing on the skills at this stage can improve the sales pipeline, increase share of wallet, and reduce sales cycle time. 8

10 Assessment of Alternatives: At this point the customer has decided to act and is evaluating the product or service against competing alternatives. The salesperson should be actively helping the buyer(s) to identify their decision criteria, and then working to position themselves in the best way possible against these criteria. This can be counterintuitive for salespeople, who often take a head in the sand approach to the competition. The specific outcomes we help to create during the Assessment of Alternatives stage include improving success rates in competitive situations (one client measured an improvement from one in ten to three in ten) and improving profitability by managing the discounting behaviour of staff. Alleviation of Risk: During this stage, the customer has narrowed their choice of preferred solution, but begins to think about the personal and business risks that may be involved. The role of the salesperson is to uncover these risks and help them find ways to address them. This can again be a counterintuitive process for salespeople, who need to become comfortable with discussing risks. Doing it right can reduce the number of stalled opportunities and improve your overall conversion. Achievement of Results: In this final phase, the decision has been made and the solution is being implemented. The salesperson s role will vary depending on how you handle implementation, but at a minimum it should be to prepare for a successful implementation, help to anticipate potential issues, and look for additional opportunities. In particular, this is a great opportunity to actively manage referrals within the territory one of the best possible sources of new leads. * * * It s critical to examine your own business, to understand where the greatest levers are to improve your own sales team s approach to time and territory management. But if you can increase the proportion of time spent selling, focus that time on the right customers, and make sure the time is being used correctly, you can literally double the size of your sales team without hiring a single person. 9

11 Why Imparta? Imparta is ranked among the top three global sales training companies by US based consultancy ES Research Group, and has been named among the Top 20 global Sales Training Companies for the last three years running by TrainingIndustry.com Our long-term clients include some of the world s leading organisations, including GE, O2, Lloyds TSB, HP, Intel and the WPP Group. We cover sales, marketing and service, and are able to provide the glue that aligns those teams (e.g. sales-enabled product training) as well as in depth expertise in each field. We have a dedicated Client Impact team that can help you roll out a single workshop, or a sophisticated Sales, Marketing or Service Academy covering reinforcement, application, coaching, measurement and accreditation. Our expertise in experiential learning design ensures very strong learning impact (we are a pioneer in the world of simulations and remain a Microsoft Gold Certified Development Partner). Imparta has 140 trainers and associate trainers around the world and the capability to deliver large-scale, global roll-outs in local languages. Next steps We hope that these ideas are helpful as part of your decision-making process, and would be delighted to discuss any issues with you in more depth. Please feel free to contact one of our Client Directors on +44 (0) , via clientenquiries@imparta.com or via 10