Every year, during the Executive Forum and Fly-In, a delegation of member executives from Plumbing Manufacturers Intl. (PMI) travels to Washington...
Recently, we held a small sales and management seminar and we found out that only one dealer in the room actually had a sales department. The rest thought they did, but when we analyzed the situation, they realized they actually had misplaced their sales department a few years ago and hadn’t even noticed.
This is extremely detrimental to the business because a business without a sales department is just a ghost of what it could be. Has your sales department disappeared or been misplaced? Here are a few ways to find out.
One of the dealerships at the seminar was composed of the owner and four salespeople. This sounds like a large sales force. A time analysis, however, revealed that all but one salesperson spent 10% of their time (about four hours per week) on sales. They spent the rest of their time on service and selling other products. Counting heads is not as accurate as counting hours. We suggest you count the time each employee spends on actual sales activities—prospecting and doing demos. The result may surprise you.
Another way to measure the size of your sales department is a game we call Count the Demos. Take an accurate count, complete with customer names, of the demonstrations or sales visits performed in a week. Our survey of dealers with active sales departments says you will have eight to 10 actual demos or selling appointments completed for each salesperson who is actually selling full time. Take your total, divide by eight, and that is the number of active salespeople on your team. If it is less than you expected, you need to hire or refocus your current team on sales.
Customers prefer to buy when they are not working. They don’t want to take time off to meet the water guy. For most people, that means evenings and weekends are the prime buying time. These are also the hours that offer the least amount of distractions from selling. One way to estimate the “force” in your sales force is to determine how much of that prime selling time your team is utilizing. If you set the “golden selling time” as 5 to 9 p.m. Monday through Thursday and Saturday, that is a total of 24 hours per week. Measure the percentage of those hours your staff is out selling, and then you will have a good measure of the percentage of a sales force you actually have. If you have four salespeople who are in the field 50% of those hours, we believe you should discount the size of your sales force by 50%.
The ratio of prospect to call-in is interesting. Take a look at a week’s sales and list the ones that resulted from call-ins and company activities like telemarketing and shows. Now list the sales (if any) that resulted from referrals, courtesy calls, bottling, door knocking and all other prospecting activities. For example, if five sales were from call-ins and three were from prospecting, the ratio is 5:3 or 1.66. Most productive dealers agree that the ideal ratio is 1 or lower. A high ratio equals fewer sales generated by your team.
Another measurement of sales success is the number of sales generated each week from calling people who did not buy at their initial appointment and attempting to get the sale. Good dealers add about 15% to total sales from callbacks. If your percentage is less, you are leaving money on the table that could be in your pocket.
At our recent seminar, most attendees said their sales would be zero during the seminar because no one was left at the dealership selling. The largest dealer there calmly said he knew his team would sell two systems each day whether he was at the store or not.
If you can go on vacation or to a seminar or take a sick day without closing, you have a sales department. A sales force that sells constantly is a necessary foundation for companies that make a profit every day.
Another interesting measure of your sales department is the focus of your company and the importance of sales.
If your company believes anything other than demos and sales is important, you don’t have a sales department. If the first questions on everyone’s mind each morning are, “How many products did we demo and sell last night?” and “How many will we do today?” you have a sales department. Ask each of your staff members what the most important thing on their minds is today. The answer may surprise you.
Another interesting component of your sales department is its membership. Is at least one person a full-time salesperson? Is everyone focused on selling? Do you keep track of the number of appointments generated per call-in? Do you train the entire staff to use calls to generate sales? Does your delivery staff call on neighbors of your customers to see if they need salt or water? Do your techs pick up water samples for sales staff to analyze in every home they service? If not, these staff members are overhead when they could be an important part of your sales department.
If you take these tests and find you have misplaced your sales department in the years since you opened for business, now is the time to recoup. Without a proper sales team, a company withers and dies. You have the power to direct every member of your team to sell every day. Remember that your costs don’t go up as you focus on sales, but your income does. No matter how many systems you sell each month without a sales department, you could sell a lot more.