In this month’s issue of Top Sales Associates Magazine, I had the great pleasure of being interviewed by Linda Richardson. You may recognize her name as the Founder and Chairwoman of Richardson, the global sales performance company. Linda built her company into an international power-house having trained over two million sales professionals to date. Needless to say, it was a thrill to spend time on the phone with Linda, as well as an honor.
Linda wanted to get my thoughts on sales tools and the role they play in today’s sales organizations. The first sales tool I used (other than a rolodex) was the GRiD Systems laptop. The 1982 GRiD Compass has been called the “grand-daddy of all present-day laptop computers”. Interesting side-note, the Compass had 256k RAM, and 384k of internal ‘bubble memory’ that held data with the power off (i.e. the equivalent of 384K of hard disk space)! GRiD was the first Silicon Valley start-up I ever sold for. It was an exciting time, and it is where my love for sales tools began.
As Linda noted in the interview article, Salesforce Automation (SFA) was born shortly after the introduction of laptop computers. Unfortunately, today – approximately 30 years after it was first introduced, SFA (now CRM) is often the only tool that a sales organization uses, ironically, with a surprising degree of market dominance.
CRM is indisputably important as a management framework however there are many more opportunities to impact revenue through the use of tools. That is why it is important to understand the value of sales tools and why they are therefore, vital for sales organizations.
Sales Tools Deliver Revenue Growth!
As the saying goes, time is money, and this simple and crucial equation is especially true for salespeople. Just how much money is time worth? Well, that figure can and must be determined. And therein will lie the answer to why sales tools are essential for optimizing revenue, and why Linda so pointedly entitled our interview “30 Seconds Matter.”
According to our ‘215 Principle’, there are just 215 days for reps to accomplish all of the daily tasks required to develop opportunities and close business in any given calendar year. Spend 30 minutes less each day on non-selling activities and you will end up with 14 days of extra selling time. There can be no real debate on what those extra days of productive selling efforts (nearly 3 weeks’ worth of selling time) can mean for a company’s revenue. However, two key questions arise.
How do you quantify the ‘value’ of that time and how would that ‘value’ translate in terms of revenue?
Take my word for it, my calculator is already set to ON, and it’s smokin’.
Let’s start by determining how much your reps earn per minute. We can calculate that by dividing your average per-rep/per-year revenue by 103,200 minutes (215 days times 480 – the number of minutes in an 8 hour work-day). If your reps generate an average of $1,000,000 of revenue each year, then your calculations will show each rep earns an average of $9.70 per minute.
This is where it really gets interesting. If the use of sales tools saves your reps 30 minutes of time each day – time that can now be spent on other more productive tasks – you will free up a total of 6450 minutes per year (30 * 215) per rep. Can you see where I’m going? Now multiply the total saved minutes, by your average revenue per minute and you’ll arrive at the substantial figure of $64,500. And do I need to also point out that this is the number for just one – (now) vastly more productive – rep?
30 Seconds Matter
By determining your over-all sales capacity (215 days) and your average revenue per minute (9.70), you can determine the value of every minute of the day for your entire sales organization. In this example, 30 minutes of time each day is valued at nearly $65,000 in revenue over 12 months. As I previously mentioned, you would still need to multiply that by the number of reps in your organization to arrive at the over-all impact the adoption of sales tools can have on your revenue.
If you have 20 reps, your potential revenue impact is a staggering $1,290,000 ($65,000 * 20).
So yes, 30 seconds do matter. They matter because seconds add up to minutes, and as I have demonstrated, those minutes have extraordinary value, particularly within the time-sensitive, ultra-competitive, market-driven, customer-savvy, shot-clock environment called selling. Need I say more?
What You Can Do
How can you know which tools are right for you and where to start? I recommend that you begin by taking inventory of how your own salespeople use their time so you can pinpoint what slows them down. Then use that insight to find smarter sales tools that will address those obstacles so you can systematically eliminate or reduce their impact on productivity.
It may be as easy as asking your reps what tasks take longer for them to accomplish than they wished. You may also need to observe a few of your reps. Sit with them as they put a proposal together, or respond to email, or log call notes. Watch for the tell-tale signs of time wasters – what you might call the “multiples” – that is, when a task requires going to multiple screens, using multiple sources, or making multiple attempts. With this ‘altered’ state of objectivity, your sense of sharpened, on-point awareness of these obstacles will focus quite naturally on finding not only the individual solutions, but the best arsenal of tools capable of combating them quickly and effectively.
Sales tools can have a monumental effect on revenue because they help sales reps (and managers) save time. And time is money.
Now, allow me a final illustration on my point. I previously spoke of being an impetus for change, and the most significant consequences of change always begin with the broadest strokes of a brush. Those 6450 minutes per rep also translates into 108 sales hours per year/per rep, or the 14 selling days, whichever you prefer. Beyond the issue of the impact these numbers have on a company’s revenue stream, suppose the entire concept was transposed toward re-working the real parallel crux of the matter – Customer Relationship Management.
What then would this monetarily driven equation of ‘time is money’ mean when applied to more productive efforts in both the quantity and the quality of time invested in relationship-building? If time is in fact money, and money is in reality the customer, the ultimate effect of how much 30 seconds could matter in relation to the hearts and minds of your customers, is not only the real measure of a reps productivity, but it is also your most priceless differentiator.
(note: here’s the link if you’d like to read the entire interview in Top Sales Associates Magazine)
Author, Nancy Nardin is the foremost expert in sales productivity tools. As President of Smart Selling Tools, she consults with many of the top sales productivity software vendors as well as end-user organizations looking to select the right tools. Click to get Nancy’s What & When weekly digest with invitations to complimentary webinars and informative publications. Follow Nancy on Twitter @sellingtools or subscribe to her Tool Talk blog. Nancy can be reached at 916-596-3035. To schedule a free 30 minute consultation click here.