BUSINESS Managing Your Sales Force “Sales force structures and compensation programs should not be designed in a vacuum. Indeed, success may require intelligent realignment of sales territories.” Lead – This is someone who may have the potential to even- tually become your customer. It might begin as only an in- quiry or name on a list and may not advance to the next step for a host of reasons (e.g., you may not offer specifically what they require). Qualified lead – This is a lead that has been screened and confirmed as having the potential to become a customer of your company. Prospect – This is someone who expresses a serious interest in buying your type of product or service and is likely ready to buy. Typically, there has been some two-way discovery communication. Customer – This is someone who is currently doing business with you or has done business with you in the past. If this one is unfamiliar, it’s probably best for all concerned if you don’t manage any sales force! Close ratio(s) – This is customers/orders won compared to presentations you made. (There are many ways to calculate such ratios.) Sales funnel – This is a vertical concept based upon leads be- ing poured into the wide top of a funnel and flowing through to the narrow bottom, where some become closed. Sales pipeline – This is a horizontal concept wherein activi- ties are flowing through various structured stages of a well- defined process, consisting of specifically prescribed steps. Again, it’s common to have some different interpretations of the exact definitions to use, especially for the various stages of a lead. Hopefully, the aforementioned definitions will be helpful in sorting this out. You can tailor these to your particular company’s situation, marketplace and sales process needs. Rather than getting hung up on definitions, if you prefer to streamline all stages of a lead, just categorize every situation as either a lead or (where/when appropriate) an opportunity. 20 KEYNOTES DECEMBER 2020 Next, let’s look at some tools that can help us organize and manage sales and a sales force. Using Sales or CRM Software Some businesses conform their sales definitions to the stages of their sales process to more closely align with their company’s sales management or CRM (Customer Relationship Manage- ment) soſtware. If you don’t already have soſtware to manage your sales process, consider using applications such as ACT or Goldmine, or if your needs are more complicated or demand- ing, you might consider Salesforce or one of the others. Each of the well-established programs is available in network, online and cloud versions. Don’t fall into the trap of having your new salesperson use their own sales management soſtware for your business. Sure, it’s temping when the new salesperson says, “I already have all the end users and potential customers in my soſtware from my previous job, and I already paid for the CRM soſtware license,” but it’s a situation that’s best avoided. Make sure your company is the lessee of the license and the owner of the data, so that if your salesperson leaves your em- ployment, you don’t lose all your sales lead, prospecting and business development contact information. It’s best to have all of these files backed up in the cloud or somewhere else off- site that’s safe. I keep looking up in the sky but can’t figure out which cloud has my data and files. Exploring Your Sales Force Compensation Options Fundamentally, sales force compensation systems are typically structured in one of three ways: salary, commission or a com- bination of base salary plus commission. While each of the three fundamental compensation struc- tures has its pros and cons, their ultimate success will depend heavily upon how appropriate the selected structure is for the situation at hand and how well the program is designed within that structure. Without knowing the particulars of each com- pany’s situation, we can only say that, generally speaking, a combination of base salary plus commission seems to work best for most firms. Obviously, like the rest of us, salespeople have overhead and bills to pay. Even a highly successful sales professional working on an all-commission compensation program would probably need some spool up time to generate meaningful sales volume when they’re new. In the best of times, few things are more important than the ability to generate a steady flow of profitable business at a reasonable cost. When business is soft, this usually WWW.ALOA.ORG
