August 2006 Newsletter

In this issue:

Improving your sales force....

80/20 rule prevails in sales

Most everyone has heard of the 80/20 rule: 80 percent of sales comes from 20 percent of a company's saleforce.

It should come as no surprise then that recent evidence shows a top producer will generate five to six times the sales of a bottom producer. In a recent study of more than 100 businesses of various sizes and types, the top producer outsold the same company’s bottom producer by an average of 5.7 to 1.

And to think the bottom producer still held his or her job!

Actually, the study revealed a 3:1 to 9:1 range. But do the math using the lowly 3:1 differential as in the chart below, and you'll quickly realize how important successful salespeople are to any business. And for businesses with only one or two salespeople, it's even more critical that these positions be filled with top producers.

Effects of top producers

#1 produces $750,000      #1 produces $750,000

#2 produces $525,000     #2 produces $525,000

#3 produces $330,000      #3 produces $330,000

#4 produces $275,000      #4 produces $275,000

#5 produces $250,000         #5 produces $750,000

Total Sales = $2,130,000       Total Sales = $2,630,000

                               
An extra $500,000!

Whopping 75 percent of sales job candidates are unsuitable

Looking at the above table, wouldn't we all like to have a sales force made up of only top producers!

Unfortunately, few companies, if any, do. Worse, for many, three out of four sales hires fail to work out at all. A new salesperson has only a 25 percent chance of seeing his first anniversary on the job. Of those who stay, only one in 10 becomes a true top producer within three years.

Sales managers tell many horror stories about costs related to unsuitable salespeople. These include:

And unfortunately there are more, of course.

Why poor sales performance?

Many factors contribute to poor sales performance, but traditional hiring methods and beliefs are at the root of the problem for most businesses.

For example, many hiring managers believe "if you can sell, you can sell anything" when, in fact, research clearly indicates this is not the case. Reporting on such research in their book, "How to Hire and Develop Your Next Top Performer," Herb Greenberg, Harold Weinstein and Patrick Sweeney conclude that:

· More than half of those working in sales should not be in sales at all because they lack the basic characteristics of good sales people.

· Of the remaining 45 percent, half are selling the wrong thing in the wrong place for the wrong managers. (This leaves about 20 percent to produce most sales.)

Tips: How to hire successful salespeople

How, then, does a business owner or sales manager attempt to ensure that salespeople will successfully perform in their business?

Here are a few tips to increase your chances of hiring top producers:

· Use hiring assessments to measure

o How candidates think, learn and act at work.

o What careers truly interest candidates.

o Other characteristics critical to sales performance.

· Measure top performance job by job using assessments to determine what is top performance in your workplace and in this job.

· Hire for fit. The better your candidate matches measured dimensions, the more likely he or she will become a top performer.

· Build a pool of potential. Find top performers now; don't wait until you need another sales person. Continue to improve your sales force replacing bottom feeders with people who fit your job.

The search for top performing salespeople is seldom simple,

but imagine what your business will be like if each of your salespeople performs as well as your current top performer.

MGA can help put people in jobs where the demands match their abilities, the stimulation matches their interest, and they have the greatest opportunity to succeed.

Never forget, you already have a significant investment in your people through salary, benefits, recruitment and training.  This investment can add up to hundreds of thousands of dollars per year, per person.    With MGA you can maximize that investment.



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