We salespeople have a way of convincing ourselves that we spend more time and energy doing the things we don’t enjoy than we really do. We fret about low sales and wonder how we could spend so much time prospecting and marketing with so little return. We become discouraged because we aren’t closing sales and wonder why our closing ratio has dropped so dramatically. We blast our market with direct mail and can’t figure out why the response on the mailing is so much lower than in the past.
Some of us really do spend a great deal of time prospecting and marketing and a significant drop in production is, of course, a danger sign. Likewise, some do see precipitous drops in their closing ratio or response to their direct mail pieces. These also are danger signs.
However, for most of us, our feeling that we’re investing a ton of time and energy in prospecting and marketing, that our close ratio was much higher in the past, or the response rate to our pervious mailings was much higher, is just that—a feeling. Most of us have no real idea of how much time we really spend prospecting, what our close ratio really is, or what the response rate to our direct mail really has been. Most of us, in fact, have no grasp on any of the major details of our sales business.
We operate on gut feeling, not on facts. We ‘feel’ we’re doing more than we really are because we’re always busy doing something. The problem is we attribute being busy with being productive. The two are not the same.
Operating your sales business is no different than operating any other type of business. You have to base your decisions and actions on the reality of your situation, not on vague feelings or a guess.
As a salesperson, you own and operate your own business—even if you’re considered an employee by the company you are currently selling for. Your employer is you—you just happen to have only one client, which is the company whose products and services you are currently selling. Although you own and operate your sales business, you’ve contracted with a single client to sell their products and services, and they pay you as they pay any other vendor—they cut you a check for the services your company has rendered them. The only difference between you and their other vendors is they do your payroll accounting for you.
Just as any other business owner, you must know what is really going on within your business. Business owners operate their business from a set of documents that tell them exactly what is going on with their business. You must do the same.
The typical business owner’s first document is their daily receipts. This informs them on a daily basis what their sales were, that is what they sold and how much money came in to the company. Although useful, their daily reports don’t give them enough information to make real decisions about their business. Of course, they have other documents that are equally narrow—account registers, bank statements, and the like. The information in these documents is too narrow, too limited in scope to be useful for making long-term decisions. In order to know what changes or additions they must make or to detect potential dangers or new opportunities, they need information that shows trends, that show the business over a much longer period.
Business owners have those documents. Their Profit and Loss Statement informs them on a monthly, quarterly and annual basis of the details of their business–where money comes from, where it goes, how much is left over when all the bills are paid.
They also have a Balance Sheet. The Balance Sheet shows the big picture of the business—what the company owns and how much money it has after every debt is subtracted. It’s the big picture revealing the big bottom-line.
The Profit and Loss Statement and the Balance Sheet combined are the historical documents of the company. And they are far more than just historical documents. They show the business owner trends—good and bad—in their business. They reveal real or potential problems and real or potential new opportunities. They are the facts that tell a business owner where his or her time, money, and energy has been spent—and where they should be spending more of their time, money, and energy. They are the facts that tell the business owner what they’ve done wrong that must be fixed and what’s working that they should be doing more of.
As the owner of a sales business, you must have your own set of historical documents that give you the real facts about your business. You can no more run your business effectively without real knowledge about your business than can any other business owner. The old adage that knowledge is power is just as true for your sales business as it is for any other entity. The more you know about what is really happening in your business, the more successful you can become.
Just as other businesses, your sales business has several documents also. Your pipeline line and commission reports are akin to the daily reports other business owners receive. The information is useful, but too narrow to really show what’s happening in your business. You need information that consolidates your activities and results over a longer period of time.
Unfortunately, salespeople don’t have a codified set of documents for their business such as a Profit and Loss Statement or a Balance Sheet. You have to create your own historical document.—your sales and marketing history document.
Your sales and marketing history document should contain every scrap of information you can feed it. And like a Profit and Loss Statement or a Balance Sheet, it needs hard facts, not guesses or wishful thinking. It needs to consolidate every marketing and sales activity you engage in. It should be able to tell you how many people you called, how and where you found those prospects, how many bought, what they bought, and even why they bought. Your document needs to go beyond numbers because not only is it a document about numbers, it is a document about who, what, when, where and why.
A properly researched and constructed sales and marketing history can tell in detail where you spent your time and what the results of that effort were; who you sold to, how you found them, and why they bought; what you did well and need to do more of and what you did that didn’t work and that you need to change. A proper sales and marketing history will reveal problems and often tell you exactly how to correct those problems—and what you did that by doing more will increase your sales. It will reveal new opportunities and warn of potential problems before they become real problems.
As a business owner, you must take responsibility and act like a business owner. You must take the steps that any reasonable business owner would take to discover how they can improve their business and you can’t do that without knowing exactly what is happening in your business.
You can manage your sales business the way most salespeople do—by chance and accident, by ‘feeling’. Or, you can manage your business as a business. Over 40% of the men and women who enter sales fail and are out of sales within 24 months. Another 45% never earn above an average or just slightly above average income for their industry. Most of the failure and the mediocre performance come not from a lack of effort but from a lack of productive effort. If you don’t really know what’s going on in your business, how can you know what effort is productive and what isn’t?
Contact: If you have a topic you’d like addressed or if you’d just like to contact me, email me at firstname.lastname@example.org or visit my website at http://www.mccordandassociates.com