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Business Intelligence for Custom Integrators

Tuesday Morning Coffee

Tuesday Morning Coffee

VITAL Question #67

Posted on June 2, 2015 at 1:05 PM

In CI, How much should a sales person write?

And… What should s/he do besides sell?

 

Used to be that a salesperson writing $500K/year was pretty good, and a $1M salesperson was exceptional. But as the CI channel has grown, so have the numbers. In fact, recent data from the Bravas Group suggests that salespeople who write only $500K may carry prohibitive costs for their employers.

 

Consider what a company can pay a $500K producer. At 8% of sales – a percentage that’s fair to the employee and the company – the salesperson would earn $40,000. At 10% of sales, which is too high for many companies, it would be $50,000. We regularly see such performers earning more.

 

Another cost is that $500K salespeople tend to sell smaller projects than $1M and $2M salespeople. This isn’t necessarily because the company caters to mostly small projects – it’s an accurate observation among companies with multiple salespeople. The less confident, less skilled salespeople aren’t comfortable presenting big price tags. Instead of closing the customer at $40,000, the deal gets closed at $30K, or even $20K. That’s a huge cost to the company, and maybe to the client, too.

 

There are related issues. Low-end producers churn thru a higher number of potential clients, which requires more proposals and meetings. It’s really inefficient; with a typically lower close rate than the more successful salespeople. Deals that should have come to the company go somewhere else.

 

Different duties

When compared with salespeople writing $2M or more, the sub-$1M producers show significant differences in their involvement with business development, proposal generation, and actual production. The $2M+ salespeople are intrinsic to the business development process but far less involved with generating proposals. Once the deal is closed and actual production has commenced, these star performers go back to generating new business, leaving the project in the hands of the production staff.

 

These observations will impact the way our companies staff and organize their sales departments. The Bravas Group will be defining the best ways to do that, with a focus on how to find, develop, and foster high-producing sales talent.

 

You should join us.

Categories: VITAL QUESTIONS

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