How to Increase Sales

How would you like to increase sales and improve your sales force IMMEDIATELY.

Have you ever heard the phrase, “that’s a great business model”?

How about, “that’s a great sales model”?

All businesses work inside a business model.  At the same time, ALL sales organizations work inside a sales model as well, yet few managers and business owners use or understand the premise of a sales “model”.

At the time of writing this our country is going through a major real estate correction.  For close to 30 years almost any form of investing in real estate yielded a nice return.  Investing in real estate  “WAS”  a great business model.  These days, with the economy the way it is, the last couple years have been a blood bath in real estate.  It is predicted that for the next 3 years the average value of American homes will drop 2% per year.  The real estate as a “Model” is broken.

It is believed that over 70% of sales forces and sales managers do not know that they can place the sales division of their company inside its own “model”.

You know your company and / or your sales force is working inside a “model” when you can predict, with near certainty, your gross sales 6 months from now.

The reverse is also true.  If you can’t predict your sales 6 months from now, you are not operating your sales division in a “model”.

How much more productive and relaxed would you be if you could predict your companies gross sales 6 months from now?

If you are not working inside a sales model you are scratching your head or grabbing a scratch pad.

In all 3 publicly traded companies I managed in, we were able to predict, within 15% certainty, how much business we would bring in over the next coming months.  It made life and business very predictable.

There are a few great sales models out there.  One model that every company of any size can adopt is to simply switch their sales force from an “Activity” model to an “Accomplishment” model.

An activity model is when a company or a sales manager does a version of the following:

Activity Model

Places a Quota on a sales rep
Provides a territory, a leads list, or the motivation to “cold call”
Provides a form of management or mentorship
Expects a 9-5 good solid effort
Manage the sales reps
Hopes for the best

In the above method there is no predictability.  There is no way to GUARANTEE what will be produced in 90 days.

An Accomplishment Model operates completely differently.  Instead of managing activity, productivity is managed.  Below are the fundamentals of a solid Accomplishment Model that any company can initiate next week.

Accomplishment Model

Determine and post  DESIRED  monthly gross sales
Determine and post the average sale amount
Determine and post the amount of sales needed to hit DESIRED sales amount
Investigate and post the companies closing ratio
Determine and post the necessary number of monthly appointments to hit Desired sales amount
Determine and post the necessary number of weekly appointments to hit monthly appointment amount
Determine and post the necessary number of appointments per rep per week
** Work the week backwards   (this is the simple key to this model )
Manage the amount of appointments per rep per week

Here’s an example of the above with some great tips and advice to ensure success.

First, set a DESIRED monthly gross sales amount that would get both the sales reps and the management excited if it was hit.  Post the dollar amount in a public area of the business, such as the lunch room or sales office.  We’re going to use an example company with 4 sales reps that does about $1,200,000 in sales each year, but would like to increase by 50%.

Goal – Monthly sales next March   $140,000

Second would be to actually take the time to go back and average the last 6 to 12 months worth of sales.  This step is not optional.  Some companies still have poor sales tracking software and look at tracking this type of information as a waste of time.  The  Accomplishment Model, which provides immediate increases in business, can not be done without this step.  Once the average sale is calculated, post it below the desired monthly sales goal.

Monthly sales next March   $140,000
Average sale amount                $7,000

Third, determine how many sales would be needed to hit desired monthly sales amount.

Monthly sales next March    $140,000
Average sale amount                 $7,000
Sales needed to hit March sales       20

Determine company closing ratio

Monthly sales next March    $140,000
Average sale amount                 $7,000
Sales needed to hit March sales       20
company closing ratio                   25%

Determine monthly appointments needed

Monthly sales next March    $140,000
Average sale amount                 $7,000
Sales needed to hit March sales       20
company closing ratio                   25%
Monthly appointments needed         80

Determine weekly appointments needed

Monthly sales next March    $140,000
Average sale amount                 $7,000
Sales needed to hit March sales       20
company closing ratio                   25%
Monthly appointments needed         80
Weekly appointments needed          20

Determine weekly appointments needed per rep

Monthly sales next March          $140,000
Average sale amount                      $7,000
Sales needed to hit March sales             20
company closing ratio                         25%
Monthly appointments needed               80
Weekly appointments needed                 20
Appointments needed per week per rep    5

Here’s how to manage this “Model”.

The first thing to understand is that business is VERY predictable.  If over a 12 month period of time your company averaged $7,000 per sale, the odds are very strong that the next 12 months will probably average the same.  What is great about finding the amount of your average sale is that the only thing that needs to be managed in the above model is the last line, “Appointments needed per week per rep”.

In my near 20 years of managing and consulting sales reps, the absolute most explosive single tip I can give a sales organization is to begin working their sales week BACKWARDS.

The result of increased sales is literally IMMEDIATE.

Most reps at most companies make their sales calls whenever they can fit them in.  Most reps don’t have any system at all.  Many organizations have found that after a detailed evaluation of their sales force, nearly 30% of the sales week is wasted.  It is wasted either driving to appointments, shuffling business cards, long unnecessary meetings, and the infamous “call reluctance” of the average rep with a low self image.

Most people hate making sales calls.  Even worse, on this same point, is that the average rep in the average company is in an actual closing situation less than 15% of the week.  That means in a 40 hour week, the average rep is in a closing situation only 3 hours a week.

If there is one thing you take from this lesson on how to increase sales is to immediately institute a BACKWARDS work week.  Having a sales force that works its week backwards simply means that the first appointment a rep sets that week is set for the latter part of Friday, say 3pm.  The next appointment this rep sets will be for around noon on Friday.  The third appointment this rep sets will be for 9am Friday.

When it comes to the point in the sales call to set the time and date for an actual sales appointment, no matter how open the reps schedule is, the appointment will get set for Friday, or Thursday if there is no way for a Friday appointment.  The reason for this is because it has been PREDETERMINED that the single most important factor in the reps week is to make sure they set 5 appointments that week.  Please understand, in this model, the most important piece is not closing business, the most important piece of the model is making sure each rep sets 5 appointments for the week.

If each of the 4 reps in this company sets 5 appointments each week, we know this company will hit it’s sales goals.  The closings will take care of themselves.  Using the above method will leave Tuesday and Wednesday open for cold calling and the calling of provided leads for the rep to hit their PREDETERMINED accomplishment model of 5 appointments that week.

Lets say Monday finishes and the rep called all day long and the rep set 3 appointments.  In a company that is not working under a model, that rep may have an appointment for Tuesday, one for Wednesday, and maybe one for Friday.  The rep and the company probably will classify that as a successful Monday.  If I’m managing that rep, they get an “F” for the day.  I would actually not mention anything to the rep, I would give the manager the “F” for allowing it to happen.

What happens in the above case is that the rep is going to spend the necessary time prepping for the sales calls, driving to the sales calls, and then driving back to the office.  The driving back to the office is the real productivity killer.  What a waste of actual time.  If you run a sales team with 5 plus reps, driving back to the office is like burning $1,000 bills.  The rep should be driving to the next appointment, not to the office.

If I’m managing a rep that set 3 appointments on a Monday they would for sure set 2 for Friday, and maybe a third for Friday.  Sometimes an appointment set on a Monday will be set for a Thursday.  The reason becomes obvious.  The rep can now come into the office Tuesday morning with a clear mission for the day, set 2 more appointments to hit their target of 5.  Because the rep didn’t mistakenly set one of their 3 appointments for Tuesday, they are not driving around, or planning for an appointment, they are laser focused on hitting their managed target.

Remember, you can’t hit a target you can’t see.  When you give a sales rep a quota of monthly sales, there is no quota on appointments.  Thus the target number of appointments needed per month and per week is not clear.  The goal at this point is to stay as busy as possible.

Instituting an Accomplishment Model into a sales force is the equivalent of holding a magnifying glass between the sun and a piece of paper.  If you hold the magnifying glass in the perfect spot, the paper will catch fire.  When you take a sales force and focus them on the weekly number and you actually clear their schedule so they can hit the number, it increases productivity IMMEDIATELY.

It is great to witness what happens to a sales team when they have hit their combined 20 appointments by Tuesday afternoon.  The rest of the week is very exciting because there is an obvious decrease in the usual pressure that comes with being a sales rep.

The best thing about an Accomplishment Model for a sales manager is that they can stop managing reps and start managing the model.  Productivity increase is near immediate.  Under this model the reps know exactly what they are responsible for.  They no longer need to be motivated.  Under this model, the management knows exactly what they are managing.   It takes away office politics, sales rep self image challenges, call reluctance, and the general ups and downs and highs and lows of a sales force.  The sales force is now operating inside a model.

If 60 days into this model a manager notices the average amount per sale is dropping, it obviously changes the rest of the numbers.  Now the manager can simply add another sales rep, or increase the amount of appointments needed per week per rep.  The point again is that the management never has to wonder why a rep is not producing.  Management can simply manage the one factor of why a rep is not setting  5 appointments over a 3 day period of time.

Over 80% of the lack of production in the average company I’ve managed or consulted is because of the severe lack of appointments being ran per rep.  When we set a very reasonable target for appointments set per week per rep, if a rep can’t set that amount of appointments between 9 – 5, over 3 days, then sales is not for them.

I will take a great appointment setter, over a great closer, ANY DAY OF THE WEEK.

The number one reason that the average rep sets a very low amount of appointments per week is because they confuse activity with accomplishment.  The rep feels because they are setting some appointments each week and running those appointments each week, their week FEELS full.  It FEELS like they are doing something because they feel BUSY.  In reality, this rep is simply confusing their activity with accomplishment.   When a rep switches to working their week backwards you will see a near immediate increase in their self image and productivity.

The reason for this is psychological.  When a rep starts to realize that they themselves are now operating in a predictable model, they can now relax.  This is where the statement “Relax in the Numbers” comes from.  Some of the greatest sales coaches of all time teach sale forces to simply “Relax in the Numbers”.

When an individual rep comes to the realization that over a given period of time, if they set a predetermined amount of appointments, they will manufacture a predetermined amount of commissions, they become energized.  It is believed that between 5% – 10% of a reps week is spent thinking or communicating about their worry of not hitting their numbers.  Another huge drain on production.
When you educate a rep on what it means to work inside a model, they become super-salespeople.  I’ve seen reps that haven’t produced in years blossom into very productive sales reps in a matter of 2 – 3 weeks.

Of the 400 plus books I’ve read on the topic of sales and management, I consider the book Psychology of Selling, by Brian Tracy, to be the best sales book of all time.  The book has been mandatory reading for all sales reps and all management of the 6 companies I’ve owned.  There are 3 chapters specifically dedicated to the self image or self concept of a sales rep and the factors that contribute to their self image.  The book proves that the amount of appointments a rep sets in a given period of time is directly related to their self concept.

I’ve proven, over the past 12 years, that even a rep with a low self image that is taught how to begin working inside an “Accomplishment” model will out-produce a sales stud that is setting appointments whenever they can fit them in.

Any rep that works their week backwards, only setting appointments for Thursday and Friday, keeping Monday, Tuesday and Wednesday, strictly for appointment setting, will always out-produce a rep that will book an appointment for any time and day of the week.

When I first learned about adding an “accomplishment model” to a sales force I owned a company that had 7 sales reps.  By managing the model, instead of the reps, I was able to double our gross sales 5 of the next 7 years.

I’d recommend adopting an Accomplishment model and start predicting your sales.

Growth Consulting for Today
-Ken