How will the sales rep project their coming year’s production with any certainty? The only reasonable method is to take their previous year’s production numbers for each channel and make projections based on their past numbers along with their prospecting commitments for each channel.
For example: If the reps closing ratio last year was 32% for a given channel and their prospecting produced 100 qualified prospects in that channel and they had to talk to 250 people to find 100 qualified prospects, then they must project based on those numbers. Based on these numbers, last year they talked to an average of 20.833 people per month to find an average of 8.33 qualified prospects resulting in an average of 2.67 sales per month for that channel. Let’s assume that they spent an average of 18 hours per week marketing to that channel. In addition, let’s assume that their objective for the coming year is to double their production from that particular channel. In order to do so they must project 36 hours per week dedicated to that channel, generating, on average, 41.76 people spoken to, with an average of 16.66 qualified prospects, making an average of 5.34 sales per month.
Now in addition to their doubling their time and effort in that particular channel, they should be taking proactive steps to 1) increase their closing ratio and 2) improving their prospecting abilities. By proactively taking steps to increase their close ratio such as, reading sales related books, listening to tapes, taking seminars and seeking help for managers and top producing peers, they will probably, over the course of the year, significantly increase their close ratio. But, since these skills have yet to be developed, they cannot assume an increase. Likewise, if they do the same to increase their prospecting abilities, they will probably realize another increase in close ratio. However, again, they cannot make that assumption. The bottom-line is they must be willing to commit the time and effort necessary to generate their desired production based on their historical numbers. If they do, in fact, improve over the course of the year, they have the option, once the improved numbers have been stable over a period of four to six months or readjusting their time commitment–or just making more money.
They will have to make these income and time projections for each channel they commit to. Depending on their willingness to commit, they may or may not have the ability to meet their desired income. For instance, if they want to double their income, but their projections show they would have to commit to working 78 hours per week, 52 weeks of the year in order to hit that mark, but are only willing to commit 60 hours per week, they cannot legitimately project a doubling of their income. Their projection would have to be based on their time commitment of 60 hours per week. They must then decide how those hours will be committed and make their projections based on that.
In addition, you, as their manager, must make a decision as to whether their time commitment is realistic or not. If one of your reps says they will commit 65 hours per week, 50 weeks out of the year and you, knowing the particular sales rep have serious doubts as to their willingness or ability to maintain that commitment, must be willing to help the rep readjust their projections to a more sustainable number. Maybe you believe 50 hours per week, 48 weeks out of the year is more realistic. Help your rep make these adjustments.
Both you and your rep want realistic, meet able numbers. Not easy to reach numbers, by any means, but reachable. If the rep is not willing to make the commitment to meet at least your minimum standards, then you must consider replacing that rep.
Now that the rep has made their projections, they must lay out in detailed format exactly how they are going to make those numbers work. Exactly what are they going to do to reach those numbers? They have to talk to 41.76 people per month. Exactly how are they going to find 41.76 people? Exactly what are they going to during those 36 hours per week? If they plan to send our mailers during the course of the year, exactly what are they going to send and when? If they are going to have a personal brochure, it needs to be designed now if it doesn’t already exist.
In our next segment, we’ll talk about creating a marketing calendar and creating the marketing plan.