How the experts set realistic expectations
Setting realistic expectations is also vital when working remotely, just as it is when in the office. You can’t expect your team to have the same productivity levels as they would in the office if their tools and tech aren’t up to scratch.
When Mike Weinberg, a Forbes Top 30 Social Sales Influencer, started working with a client in Texas, he ran into a challenge: “They wanted a significant number of new customers, and placed very aggressive goals on the sales team,” he says.
Weinberg, the author of New Sales. Simplified and Sales Management. Simplified, helped the client come up with an activity metric for his team: 60 outbound sales calls per rep per day, which he saw as “a very reasonable number.”. Yet, week after week, the sales team failed to meet the goal.
Weinberg decided to observe the sales team working for two hours and learned all the reps suffered from a common issue:
Selling was only a small part of their job.
"The number one issue that gets in the way of developing new business: People in charge of selling don’t spend enough time selling,” Weinberg explains.
Randy Riemersma, president of the sales training company Span the Chasm, agrees with Weinberg. By focusing a client’s sales team on the right metrics, Riemersma helped his client increase the average selling price by about 13%.
Here are Weinberg and Riemersma’s top tips to help you get realistic and create a sales culture that brings in the money.
Make sure your sales team isn’t drowning in non-sales responsibilities
Sometimes the attempt to stay lean hurts your bottom line.
“I see companies where salespeople are on the safety committee and operation jobs,” says Weinberg. In the Texas company he consulted, salespeople were responsible for, among other things, shipping paperwork, picking international orders from the warehouse and answering customer service calls when customer service agents were busy.
When your team is working remotely, their time can be even more stretched by responsibilities outside work.
To overcome this, “management has to agree that selling is the sales person’s primary job” and clarify it to the team, he recommends.
According to Riemersma, your sales team needs to focus on no more than three goals:
- Protect and grow deal size
- Shorten sales cycle time
- Increase close rates
When Weinberg convinced the Texan CEO and general manager to let their sales team do what it was hired to do, the sales team exceeded the aggressive growth goal it was given.
The only conversion metrics you should care about
“Organizations don’t have metrics at all, or they’re measuring too many metrics,” Riemersma observes. His client (mentioned above) initially measured his team based on 12 metrics. The salespeople had no idea what to focus on first and morale was low.
Only four metrics really matter:
- What percentage of leads are added to the pipeline?
- What percentage of leads in the pipeline become real opportunities?
- What percentage of these opportunities turn into closed deals?
- How long does it take your team to move from one stage to another?
Focus on gradually improving each of these metrics and get proactive about driving results.
Focus on results
Weinberg tells his clients to focus on a three-step “sales management accountability progression,” as he calls it.
- Step 1: Look at your salesperson’s results. If the results are great, encourage the salesperson to carry on as normal.
- Step 2: If you’re not happy with the results, explore that salesperson’s pipeline and opportunities. If their pipeline is healthy, the salesperson has “a million opportunities and it looks like business is coming, I don’t have to talk about activities,” explains Weinberg.
- Step 3: If the pipeline is weak, it’s time to review their activities. Riemersma recommends reviewing the quality of prospects that salespeople are reaching out to and how they’re communicating value.
If 80% of your salesperson’s calls are to those unlikely to buy, or if the salesperson is not communicating your product’s value the best way possible, it’s time for a change.
Analyze unhealthy pipeline activities to develop realistic sales expectations
You need to quantify sales activities, especially if your pipeline is weak.
“If you want to set realistic expectations, you need to base them on how much you need to sell,” Weinberg explains. “If we need to sell X amount, we need to do some multiple of X of proposals and quotes, because we only win a certain percentage.”
To successfully reverse-engineer realistic metrics, you need to know what percentage of your revenue comes from each salesperson, how long is the average sales cycle per salesperson and why some salespeople on your team do better than others.
For example, are they newer to the profession or your company and have minimal work experience? Did they work on a different prospecting channel or on more challenging-to-close leads? Were they given too many non-sales responsibilities?
Set your sales team to realistic success
For Riemersma’s client, dropping most of their 12 metrics did the trick. The only goals that mattered were to protect and grow deal size, shorten sales cycle time and increase close rates.
A clear focus on sales led to setting realistic expectations and metrics, which drove growth in one year: Average selling price increased from $32,000 to $36,000, the average sales cycle time decreased from 94 days to 78 and close rate increased from 4.6% to 6.2%.
Analyze your team’s results and sales activities, get clear about the most important metrics and start prioritizing sales in your company. Then, set up a call to clearly communicate your sales plans to your team, including your specific expectations from each salesperson and explain how you’re going to set sales goals that help them succeed in closing more deals.