If you had the opportunity to hire salespeople, you already know how difficult it is. Finding an effective person who will be a good fit for your company is one thing but meeting their financial expectations is yet another challenge.
In an optimistic scenario, finding a sales team member and verifying them takes about 2 lengths of the sales cycle plus the time needed to find the person you want to hire. If it doesn’t work, you start from scratch.
Can the sales team’s results be increased solely by hiring more salespeople? In addition to working on the effectiveness of sales and marketing activities (e.g. improving the quality of leads or your sales skills), there are other ways to make sure the salesmen conduct more talks with potential customers on a monthly basis. One of them is a presales, who will help the team arrange sales conversations.
Let’s see what would happen if your top 3 salespeople could have yearly 180 additional talks with customers?
What is the sales effectiveness in your company right now?
Even if you know who usually sells the most, without data on the current state of sales, it will be difficult for you to assess how effectively you attract prospects and customers. The more accurately you measure the effectiveness of your sales consultants at particular stages of the customer acquisition process, the easier it will be to estimate what needs to happen for a presales to be real support for the sales team.
For the purpose of this article, let’s assume that the average transaction value is USD 2,000 and you have three sales representatives who slightly differ in terms of effectiveness. Conversions from sales talks that change potential clients into paying customers are 45%, 35% and 30% respectively. This is the data:
What do your salespeople spend time on?
The next step is to determine how much time salespeople spend on:
- bringing a lead to the stage of a sales conversation (i.e. what the presales consultant will ultimately do)
- conducting a sales opportunity from a business talk to the end of negotiations (i.e. what salespeople will continue doing)
To make matters easier, the numbers in the example have been rounded — they will most probably look different in various companies. The sale of a service worth USD 2,000 a month requires different commitment than the sale of a several hundred thousand dollars service or a production line costing millions of dollars. Moreover, not every lead takes the same amount of time — some of them are lost during the first sales call and negotiations with others may take months.
How exactly does your sales team work?
With accurate data on how much time the average sales opportunity takes and how many leads are handled by the each salesperson on a monthly basis, you can assess how much time sales representatives spend at each stage of the sales process.
Perhaps your interest was spiked by the fact that a salesperson deals with sales only for 46 hours on a monthly basis, while the working month is about 160 hours. Yes, we are not the first to notice this surprising occurrence. It is not a mistake, but a rule. Your sales team spends most of their time not selling.
How much additional time could be retireved with presales support?
In this example, we assume that the presales consultant would deal with the first contact with a potential customer, i.e. arrange meetings with a sales representative. If a salesperson didn’t have to do this, they would gain about 10 hours of free time per month. Since it takes 2 hours to take a lead from a sales talk to the end of negotiations, it means that a salesperson could deal with approximately 5 more sales opportunities per month.
What increase in sales could you achieve with presales support?
An average salesperson is able to carry out 18 business talks per month. Thanks to a presales support who will take care of the new customers at the beginning of the sales process the sales representative will be able to have 5 more, which totals to 23:
In the hypothetical example, salespeople could get 5 more customers, the team’s monthly sales could increase from USD 38,000 up to USD 48,000 (or 26%), so the presales help would generate USD 10,000 additional income. Remember that we adopted USD 2,000 as the average transaction value. The higher the average transaction value, the more revenue will be generated due to the fact that presales allows salespeople to conduct more business talks.
Of course, this example assumes that:
- the organization is able to increase the number of leads
- presales consultant will arrange the sales appointments as efficiently as the sales team
None of these assumptions have to be true. It may also be the case that the effectiveness of the presales will be higher than that of salespeople. Or that a positive first experience (call back after 5 minutes) will also translate into an increase in conversion from meeting to transaction. Let’s check what the presales’ effectiveness must be so that he can make up for his salary.
The employment cost of a presales in this example is USD 4,210.
In this case, the presales will reimburse the cost of they employment if they arrange the sales meetings with a 50% efficiency.
The above calculation method will help you clarify the conditions under which a presales will contribute to increasing your sales results. Of course, some indicators will need to be estimated, so it is worth adopting two scenarios: a conservative and an optimistic one to objectively assess the likelihood of effects. Good luck!