How Productive Were You in 2008 Part 2

Examine your sales capacity
Another way to look at productivity is to analyze your 2008 sales capacity. Do that by multiplying the following:

(# of reps) X
(average hours you work per day) X
(number of weeks you work per year) X
(% of selling time) X
(closing ratio)

For example, if you worked 10 hours per day, 52 weeks per year, spent 100% of your time selling, and had a 100% closing ratio, your sales capacity would be a whopping 520. This, of course, is an entirely unrealistic number, but it serves to illustrate how this kind of analysis is conducted.

Realistically, most sales people work an 8-10 hour day, up to 46-48 weeks per year. Selling time per day is a huge variable. The key question is how much time you spend talking to customers. Most sales people report 30% of their day is spent talking directly to customers-and I find it can be as high as 60% and as low as 10%. If you’re unsure, estimate that 50% of your time per day is spent selling and the other half is spent in meetings, at lunch, driving, talking to coworkers, entering data into CRM, research or doing general administrative work. Enter this number as a decimal in the formula.

Closing ratios can be as low as .008 (125:1), and as high as 0.5 (1:2). It depends on whether you’re cold calling from the yellow pages (which has the lowest closing ratios), or growing your business based on referrals (which has the highest closing ratios). Be honest with yourself and make sure you consider your closing ratio from net new contacts to close-not just the closing ratio from proposal stage to close.

Now that you have your sales capacity number, you can set some goals to improve it. Try to get as close to the unrealistic 520 number we mentioned earlier!

What to improve first? For starters, don’t think about increasing the number of weeks you work in 2009. That number should be decreasing not increasing. Also, there’s no point in adding sales reps to the equation if your sales capacity is already too low. Instead, consider the following activities.

Optimize your number of hours selling – Can you outsource some non-sales work to others so that you can increase the number of hours you spend per week in front of customers? Consider outsourcing low-return tasks (e.g., expense reports, preparation of slide decks, editing).

Improve your closing ratio – Are you asking for referrals every day from clients? Can you target your market to a smaller niche? Can you improve your qualification steps? Do you have a targeted marketing program to help the right clients find you? Are you reaching out to your existing customers at least once per month?

Sure, we all want improved productivity, but if you don’t know how productive you were last year, how will you know what to improve? To reinvent your sales in 2009, you must know your 2008 benchmark. Once that’s established, you can choose the right activities to improve. You must measure results at every step, and make decision based on the numbers-not your gut feeling.

As I do every year, I invite you to set a goal for yourself for 2009, and send me your implementation plan. I am happy to hold your feet to the fire every month-just a friendly check-in to see how you’re doing!

Happy Planning!