Sales Analytics by Trucon
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The document discusses sales analytics, focusing on designing equitable compensation plans for salespeople while ensuring they benefit both the company and customers. It includes various compensation structures, performance metrics, and the impact of sales strategies on potential earnings and company expenses. Additionally, it emphasizes the importance of time management, sales training, and using data effectively to enhance sales performance.
Sales Analytics by Trucon
- 1. Sales Analytics ACHIEVING WIN – WIN – WIN • FOR THE COMPANY • FOR THE CUSTOMER • FOR THE SALES PERSON
- 2. Sales Analytics The 400 LB Gorilla in the Room What sales volume does the employer need? What compensation does the sales person want? Is it fair and equitable to both parties? Does it end up serving the customer?
- 3. Sales Analytics Design Compensation Plans 75% base + 25% Commission = 100% Comp on 100% Plan Achievement; Commission starts at 75% of plan Capped or Uncapped Increasing % or declining % after 100% Financial Incentives - Benchmarks
- 4. Sales Analytics Example $3,000,000 Plan @ 25% margin = $750,000 20% gross = Salary, Benefits, Expenses, Commission (In this case $150,000) 75K Base, 20K Benefits, 25K Expenses, 30K Potential Commission Plan $250K Month / 75% Plan = $187,500 $62,500/25 = $2,500 Pt. 1 Point pays $300
- 5. Sales Analytics Equitable to all Parties? Does the base salary hurt the company if the territory does not perform? Will the sales person loose focus and motivation if territory does not perform? Will the effort level be evident to the existing customers and prospects?
- 6. Sales Analytics Example of Poor Performing Sales Assignment 66% of Plan = $2,000,000 x.25 = $500,000 Total Cost to employ = $120,000 Criteria is 20% of GP = $100,000 Additional Risk is 150% plan one month and subpar performance the remainder of the year ($22,500 cost)+ $120,000 = 144.5K
- 7. Sales Analytics Design Compensation Plans 100% Commission Starter base pay or draw Pays a percentage of the Gross Profit Percentage varies from single digits to 50% based on GP and size of sale Pay is a function of Sales (Gross / Gross Profit)
- 8. Sales Analytics Risk for 100% Commission Sales Sales person accepts risk of low income or fluctuating income vs High Income Level Company risk: Assumes production will occur Company risk: Marginal control of sales person and unacceptable turnover rates
- 9. Sales Analytics When Do You Pay? Base: Bi-Weekly – Every 15 Days – Monthly Commission: Monthly, Quarterly, Annually Product Delivery - When the customer pays Commission: Independent time periods, cumulative time periods - IMPORTANT
- 10. Sales Analytics Independent or Cumulative Quota Draw back F/Company: Sale person blows quota away in one time period, receives big check, poor performance remainder of the year Salesperson benefits: Slow start to year or a bad quarter does penalize remainder of the year
- 11. Sales Analytics Marketing Efforts & Time Utilization Normally depends on the size of company and staff Small company: Sales people and owners become jugglers
- 12. Sales Analytics Marketing Efforts & Time Utilization Larger Companies: Marketing tools provided Lead generation support & CSR Website, Videos, Webinars, Newsletters, Events, Trade Shows, New Product Information, White Papers, Sales Engineers
- 13. Sales Analytics Key Factors Selling days or time available Average ticket item price / $’s per month Quota or sales person’s goal Close ratio as a % of presentations Close cycle in time / Gross margin % Compensation program
- 14. Sales Analytics Not All Sales Dollars are Created Equal ITW OPERATING RESULTS In Thousands Operating revenues $ 14,484 Operating income $2,888 = 20% After-tax income from continuing operations $1,890 = 13%
- 15. Sales Analytics ITEM 6. SELECTED FINANCIAL DATA - Flextronics ” Fiscal Year Ended March 31, 2015 (In thousands, except per share amounts) CONSOLIDATED STATEMENT OF OPERATIONS DATA: Net sales . . . $26,147,916 Cost of sales . . . . . . . . . . . . . . . . . . . . 24,602,576 Restructuring charges . . — 58,648 Gross profit . . . . . . . . . . . . . . . . . . . $1,545,340 = 5.9% Selling, general and administrative expenses . . . . . . . . 844,473 Intangible amortization . . . . . . . . . . . . 32,035 Restructuring charges . . . . . . . . . . . . . — 16,663 Other charges (income), net(1) . . . . . . (53,233) Interest and other, net . . . . . . . . . . . . . 51,410 Income from continuing operations before income taxes . . 670,655 Provision for income taxes . . . . . . . . . 69,854 Income from continuing operations . . . . . . $600,801 = 2.29%
- 16. Sales Analytics Sales Person – Measurements New business generation vs existing business Farmer or Hunter? You may need both…….. Time management versus time available Account nurturing – One time order? Repeat business? Annualized sales generated Training responsibility?
- 17. Sales Analytics Sales Person – Measurements Churn rate factor – Account Turnover Issues………. Yes or No? Number of presentations The power of a personal contact – Face, Video, Phone, Text Closes / Close rate Team player?
- 18. Sales Analytics Outside Sales – Sales Process Prospect – Qualify Prepare Present – 70% of Shopping/Research done before contact with a sales person Overcome objections Close Build relationships and trust throughout the process
- 19. Sales Analytics Quality of the Representative Unconsciously incompetent Consciously incompetent Consciously competent Unconsciously competent
- 20. Sales Analytics
- 21. Sales Analytics Where the Rubber Meets the Road Presentations Close Rate Time Utilization Assume 20% Close rate of all actual presentations
- 22. Sales Analytics Why They Don’t Close? Cannot afford – Wrong budget cycle Don’t need – Don’t trust Incumbent in place Competitor strengths Weak sales work – (Mean Sales Manager?)
- 23. Sales Analytics Simple Case Scenario 316 Working days Subtract 11 paid holidays & 8 More for Thanksgiving/Christmas Subtract 10 days of vacation Subtract 4 sick days Subtract 6 training days = 277 working days
- 24. Sales Analytics Simple Case Scenario 100% Commission Plan Typical order generates $1,500 for the rep Rep wants to make $100,000 a year $100,000 / $1,500 = 67 closes per year Employer normally will have a minimum number of closes to stay on board
- 25. Sales Analytics Typical Constraints Appointment setting Travel time - Presentation time – Too many touches (Poor preparation) Taking applications Customer qualification Personal lead generation – Internet research Multiple attempts to contact Customized quotes
- 26. Sales Analytics Simple Case Scenario 67 x 5 (20% close ratio) = 335 Presentations 335 Presentations / 277 Working Days 1.2 presentations per day / 6 per Week Can your people maintain this pace?
- 27. Sales Analytics Simple Case Scenario Changed Assumptions $2000 per sale / 25% Closing ratio 50 Closes x 4 (25% close ratio) = 200 Presentations 200 Presentations / 277 Working Days .72 presentations per day / 3.6 a Week
- 28. Sales Analytics Large Account Manager Illustration $3,000,000 Plan 277 Days x 8 Hours = 2216 Hours $3,000,000 / 2216 Hours = $1353.79 Hour Role: Maintain and Grow Assigned Accounts Role: Capital Equipment/Services Sales Find opportunities and close – Big Data direction
- 29. Sales Analytics Time and Energy Management Imperative to pre-plan and execute Work through channel partners / reps Work on the Pareto Principle 80/20 Rule Know your industry ratios for closing When are you “At your best?”
- 30. Sales Analytics Time Management 8 to 5 is selling time Spend 80% of your time in one of the sales process steps Police distractions: Junk e-mails, Facebook, Games, News, Socializing, Extended Lunches, Likeable People Intense focus on constant improvement
- 31. Sales Analytics - Time One Week = (5/277) .018 % of a Year Or 1.8 % Year One Day = (1/277) .00361 % of One Year Or .20 % Week 4 Hours = (4/2216) .001805 % of One Year Or .10 % Week 1 Hour = (1/2216) .000451 % of One Year Or .025 % Week
- 32. Sales Analytics Hours Prospecting Prep Present Objections Closing Trust Admin 45 Hours 80% Sales Work 20% Admin 1. Prospecting 2. Prep 3. Present 4. Objections 5. Closing 6. Trust 7. Admin
- 33. Sales Analytics Creating Efficiencies Superior marketing tools - differentiation Referral partners Customer qualification criteria – Shun poor opportunities Sales automation Outsourcing Guerilla marketing tools Quote automation
- 34. Sales Analytics Creating Efficiencies Focus on sales activities – Do not assign or allow your reps to get involved in other activities because they appear to be an untapped resource. Focus on the correct target market Create real value / differentiating message for reps to sell Increase the close ratio with sales training
- 35. Sales Analytics Creating Efficiencies Time & energy management training Hire Well - Cost to fill or replace 1.5 to 2 times annual salary Productivity measurements Create accountability Close list Data driven sales activities
- 36. Sales Analytics How Do You Get Data? Buy a list with specific demographics Log your calls into known categories Compute the percentages from the call log Hire a Consulting / Research firm Examine your newsletter dashboard open rates and individual names
- 37. Sales Analytics How Do You Get Data? Run Google Analytics on websites & landing pages Age, Gender, Language, Country Interest: Sports, Computer, Food, Travel Sessions, Bounce Rate, Mobile Starting pages, 1,2,3rd interaction
- 38. Sales Analytics How Do You Use Your Data? Direct your sales efforts to the correct market Clearly sell your value proposition Fiercely guard your production time
- 39. Sales Analytics Trucon Business Development Tel: 512-219-6677 E-mail: Trucon@sbcglobal.net Website: www.truconbd.com Linkedin: https://www.linkedin.com/in/truconbd