Measuring Sales Performance
Consider your business. Do you have these numbers?
Tip 6 of 7 – Numbers and volume of sales for self-generated, previous customers, or referral business (unpaid advertising).
These are really helpful numbers to know when you are measuring sales rep performance. As marketers, many of us are of the opinion that we do not mind spending more to get a customer up front, because if we take good care of that customer, they will continue to take care of us. In other words, the will tell their friends and neighbors about us, and they will come back to us when their own personal needs arise. Knowing this, it is easier to swallow some of the up front costs.
Once you start tracking your sales reps, you will see that the ones who are really building relationships are out there asking their previous customers to refer business, and really working that end of the business. On the other hand, you will find those who just wait for paid leads to come in the door, and are not too motivated to get out there and solicit leads through previous advertising and customers.
In our sales meetings last week, we just went through the goals for next year. The company guarantees a certain number of paid advertising leads for each rep on a weekly basis, but not enough for them to meet their goals. We want them to be proactive and really working with their customers and current base to generate some lower cost (and no-cost) sales.
We also have certain expectations that when we give out paid leads, they need to keep the acquisition cost at a certain level, and if it goes above that level, they must generate more sales through either their previous customers, referrals or by working their old and dead leads in order to offset the high cost of advertising.
When you have been tracking these numbers and compare them, you will see that the self-generated, previous customers and referral business have a much higher close rate than the paid advertising, “cold” leads. In most cases, the contract sizes are larger, too. All the background work has already been done before, and there is a trust relationship. Your customers are more willing to part with money. It is a natural that these are much better leads than the paid advertising
Many seasoned salespeople will not even want paid leads or calls that come into the office. In their minds, their chances of making the sale are less than if they go out to someone they already know and have a relationship with, and they’d rather spend their time on those leads. It makes sense.
Leads that come from paid advertising are a good way for a new salesperson to build a customer base, but the minute they get a customer, the good salespeople are working to maintain a standing relationship with those customers, and are building their customer base in a warmer, more sure direction. In the end, they will have to make a lot less calls for a lot more business when they’re working with warmer leads.
How about in your business? What is the ratio of sales that come from paid versus unpaid advertising? What are you doing to increase the percentages of sales for unpaid advertising?
Are you ready to start measuring sales performance? Call 1-800-972-6952 or CONTACT US HERE.