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[EDITOR’S NOTE: This is a replay of the Creativity in Sales Webinar sponsored by the Institute for Excellence in Sales on May 7, 2021. It featured Sales Process Expert Gil Cargill.]
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GIL’S TIP FOR EMERGING SALES LEADERS: “Do the time and task analysis. Log what you’re doing every 15 minutes of the day for five days. Then after those five days have expired, tabulate your time into two categories: sales time, non-sales time. What can we do to compress or remove non-sales activities from your calendar, and enhance your available sales time? If you do nothing else, you’ll improve your revenue.”
THE PODCAST BEGINS HERE
Gil Cargill: Good deal. Thanks so much for inviting me. I want to thank everybody that’s attending. We’ve got a ton of folks here today. We’re going to talk about sales in a slightly different fashion than you may have experienced in your in your career. First, allow me to introduce myself.
I’ve been a sales coach and consultant since 1978. I’ve worked with over 7,000 business to business salesforces, trained thousands of salespeople. Based on my experiences with those teams, I’ve created a concept that’s based on the new math of selling, which I’ve nicknamed Six Sigma for sales.
Now those of you that are familiar with the manufacturing process, Six Sigma is a data-driven methodology. It provides tools and techniques to define and evaluate each step of a process. Now the definition, which I’ve literally taken out of their dictionary, would have manufacturing where I had sales.
The real key here is for us to understand that sales and sales management is the process of manufacturing profitable transactions, and profitable relationships. Six Sigma provides methods to improve efficiencies in business structure, improve the quality of the process, and increase the bottom line profit.
What we’re going to do this morning is understand how to apply the principles of Six Sigma to the activities of sales and salespeople. Now, the reason this is so important is that all the data shows us that decision makers have changed.
If you’ve been in sales for as long as I have, you have definitely seen major changes in the decision makers, the way they make their decisions, and how quickly they react. The picture you’re looking at is a committee of decision makers that are getting together today to decide who’s going to opt for which launch, if you will, because no one wants to make a decision on their own.
The men and women that our teams need to call on take 17 phone calls per day, they get 3,000 marketing touches daily, and they meet with 4.8 salespeople every week. We have to differentiate ourselves in this environment, or we will become obsolete. Because of the impact of this approach to selling, I offer a training program on the basis of you’ll sell more or we’ll refund your money.
It’s just that simple. Six Sigma for sales focuses on the process. My average client that fixes the process increases the top line by 36%. You see way back when, the focus was on fixing the people. I believe the people are as good as they can be. I have found many, many times that the process is outdated and we need to change the process.
This approach to sales improvement is affordable and guaranteed, and results manifest themselves within 90 days. That’s because we’re adjusting the process, not the people. When you stop and think about it, it’s awfully difficult to get an adult to want to make more money than he or she wants to make.
It’s awfully difficult to get an adult to change when he or she doesn’t recognize a need to change. Conversely, it’s very easy or relatively easy, comparatively easy to change the process. Let’s focus on fixing the process, and we’ll move forward from there. Now, one of the components of our approach is illustrated on your screen.
Every company attending today surely teaches their new salespeople, the products, the prices, the terms and conditions. Many companies offer skills training, but very few offer process management. How to manage your process. How many first meetings should you make per day, per week or per month?
How many proposals should you present or quotes should you present, and how many dollars should those represent? What are the optimum conversion ratios from leads to first meetings to proposals, quotes and onto transactions?
If salespeople and sales teams don’t manage the process, they’re almost doomed to underperforming relative to their financial goals. When you change the process, you do get a tremendous improvement in that top line. I want you to consider modifying your philosophy regarding sales process management if your current revenue trends are bad.
I believe that a new world is coming. All the pundits say it’s around the corner. I believe that getting in touch with decision makers is going to be much more difficult in the future than it’s been in the past. That’s because according to reports that I read just this week, 60% of Americans surveyed said they’d prefer to work from home.
Our decision makers and our influencers are going to be in their home offices, not in the business office. Access, consequently, is going to be much more challenging. We have to change the way we approach. Six Sigma produces predictable, scalable, and repeatable processes.
I have a lot of fun with this picture. It’s an image of the first telephone salesforce here in Los Angeles, California back in the 1920s or give or take. As you can see their entire marketing strategy, their process was to say, “Have you a telephone in your home?” Now they were selling against nobody, they had no competitors.
Clearly, regardless of what you’re selling today, I’m willing to bet a significant amount of money that you have a ton of competitors. And that those competitors more often than not are arguing for lower prices, as opposed to higher value. So we have to change our process, so that we will be viewed differently.
As I said at the outset, our job is to manufacture profitable relationships. Now, as soon as you apply the concept of manufacturing to sales process, the entire Six Sigma picture becomes pretty clear. You start with raw material, leads, databases, list of names. You add energy, talent, time, that’s called selling.
When those things are mixed in the appropriate proportion, you get a profitable transaction. That can lead to profitable relationships, and our job is to maintain those relationships while optimizing effectiveness and efficiency. We manufacture transactions, keep that in mind. It’s very important to understand that that’s the concept we’re talking to.
Now there are five metrics and if you get nothing else out of this morning, I really want you to keep these metrics in mind. The metrics are the number of first meetings that are closed or booked per day, per week, per month, so on. The percent of transactions that close. What’s your closing percentage?
Your sales cycle length, not in terms of weeks or months, but in terms of selling hours. How many hours of sales time are required to close your typical transaction? Then how many dollars do you quote and propose? Last but certainly not least, how many hours of available sales time do you have?
Now the importance of sales time will become very clear in just a moment or two, but when you coach with these metrics in mind it’s very easy to project where you’ll be by the end of the year. You see, most salespeople work up close to the end of their sales year, or many salespeople, and then they realize that it’s too late for them to achieve their goals.
When you coach based on these metrics, you can literally project mathematically to the end of the year to predict where you’ll be if you keep doing what you’re doing. I’d rather know in January or February that my current activity level is not sufficient to hit my yearend goals by December, than to realize in November that I won’t hit those goals.
Let’s make sure that you walk away from today’s presentation with a personal commitment to start trending the number of first meetings that you put into your calendar on a daily, weekly, monthly basis. Trend the number of dollars that you close per transaction. Trend your closing ratio, the length of your sales cycle, and the amount of available selling time.
All of that can be boiled down into an algebraic equation, which I’ll walk you through in just a moment. This is eighth grade algebra, because ninth grade stumped me. Let’s take a look at each of the numbers represented by the symbols. The first symbol represents the number of first meetings.
The number of first meetings times the dollars per transaction, times your closing percentage, divided by the length of the sales cycle, multiplied by the number of sales hours available, equals the maximum dollar production.
When you improve all of those metrics even slightly, you can get a huge improvement in your top line. One of our clients literally documented a 72% increase in their top line by adjusting the activities of the salespeople. Not by replacing them, not by changing them. It’s all about improving small things frequently.
Those things all add up to improving the funnel. We want to improve the volume of deals in the funnel, and the velocity that those deals manufacture as they go through the funnel. It’s a two-prong approach. Let’s increase the volume into the funnel, and increase the velocity.
Now, if you will send me an email at email@example.com, I’m going to send you a sales manager’s toolkit. It’s about 125 pages of pre-written forms, tools, et cetera. This is one of them. You can work with yourself or with your team members to plug in four estimates in the yellow boxes at the top of the spreadsheet. In the green box at the bottom, you’ll see the dollar volume estimated that you’re not contesting.
You see, I believe that the processes we use literally limit the amount of competition that we can undertake. By changing the process, you can compete for more orders. When you compete for more orders, you’ll win more. Now part of our program is that we give each one of our students an app called the Cargill Copilot.
This is an app that runs in smartphones. It allows a salesperson, and his or her manager to project mathematically where they’ll be at the end of the calendar year or the fiscal year. By making these yearend projections, coaching and adjusting the process becomes relatively easy. Otherwise, we just have to work hard and hope that we’ll hit our target.
How many times have you heard managers say, “We have to work harder, we have to work smarter”? Well, I don’t like those phrases, because I’d like us to tune that to say, “We need to make two more first meetings per week, and you’ll be okay by the end of the year.” By utilizing our Copilot the math is done for you, and you have that projection at any time that you’d like.
You see, the secret sauce to changing the results is to change the process. Traditionally, sales teams have been managed with lagging indicators. If you’ve had any experience in the manufacturing world, you know that a manufacturing company that measures itself based on lagging indicators is a company that’s on its way to financial ruin.
I believe that sales teams should be managed with leading indicators, and those are the five metrics that I talked about a moment ago. When we just do traditional sales skills training, the lasting effect of that training is 5.3 weeks according to studies published in popular magazines like Selling Power, et cetera.
When we change the process, the improvement is permanent. By just changing skills, you’ll get a 5.3 week bubble. When you change the process, it becomes permanent. The Copilot was developed to reinforce the new activities and the leading indicators, and it will detect any noncompliance.
Now, we have to do this, because traditional sales skills training has disappointed thousands of salespeople and their managers. Studies have shown that in spite of the billions of dollars invested in sales skills training, the effect of the results are temporary at best.
Six, 18 months after a salesperson abandons an opportunity to close, that opportunity will close statistically, 45% to 63% of those opportunities will close. 87% of leads are abandoned prematurely. Even worse, 22% of forecasted leads fizzle.
Now, fizzle means that the lead didn’t buy from you, didn’t buy from anybody, but we invested all the time, money and energy to create proposals, quotes, give demonstrations or whatever. By not qualifying deals better, we’re wasting a significant amount of selling time pursuing deals that can’t buy, won’t buy or worse, shouldn’t buy.
In your toolkit, I have a checklist for qualifying that takes three minutes, and will prevent thousands of dollars of headaches in terms of creating proposals that fizzle. 84% of decisions according to some studies are pre-made before a decision maker contacts a salesperson. Once again reinforcing the need to change our process.
Old school prospecting doesn’t work as well as it did in the past, and sellers can’t afford to pursue those outdated tactics. Now, this is a very important chart if you’re considering changing your process. If you’ll look at it, this is the result of a survey that was done by a sales group in Chicago, called Dartnell, many years ago.
They found that salespeople abandon opportunities prematurely. Let’s go down the stairs there. 50% of salespeople abandon an opportunity after one contact. 65% after two. 79% after three, and 90% after four. Now don’t get me wrong, I’m not criticizing salespeople.
The reason they do this is because the process that they’re working within encourages them to either move on or get the deal. The pressure’s on them to close prematurely, incent them or direct them to abandonment of opportunities. If you go further down the stairs, you’ll see that customers, according to the same survey, weren’t ready to make a buying decision until the eighth, ninth or 10th contact.
So that delta between the point where we abandon opportunities, and the point that the opportunity is ready to buy is the sweet spot that you want your process to attack. Now the process again, I’m indicting it, has been tested to be very inefficient. You’re looking at a pie chart that’s a result of studies that we’ve done with 400 of our clients.
34% of these business to business sales teams spent 34% of their day pursuing administrative tasks. Now, that’s a process problem. Let’s assume this pie chart is relatively accurate to your team. What would happened if that yellow slice of the pie was turned dark blue or light blue, and we spent that time with prospects or customers?
I think you’d agree, revenue would increase dramatically. When we realize this, we said we have to take administrative tasks out of the life of salespeople, and they have to be relegated to a non-sales customer support person. When that time is rededicated to selling, you’re actually doubling the amount, more than doubling the amount of sales time.
Assuming that the proficiency of the salesperson won’t change, then you’re going to double the output from that process, especially given that the sales day is pretty finite. Give or take is about eight hours a day. If the process reduces the amount of selling time, it also reduces the sales potential.
The average salesperson has 173 hours of sales time available per calendar month, 2,000 hours per year. Our job is to make sure that we spend as much of that time as possible on the phone or on Zoom, or face-to-face with customers and with prospects. Not doing paperwork.
Non-sales tasks that are executed by salespeople reduce the ability of that sales man or woman to produce profitable transactions for their company. It’s vital that you keep that in mind. One of the other tools that’s in the toolkit is a time and task analysis. You can’t manage your time better, until you know what’s going on with your time.
That’s in the toolkit. It will take a few minutes per day for five days to document what’s happening, and you’ll be in a position to improve. One of the biggest process improvements that you can implement is called closed-loop marketing. Most prospects don’t buy when you contact them the first time.
As a matter of fact, studies show that only 3% of customers are ready to buy when they’re contacted. 97% are going to buy sometime after that first contact, so it’s vital that we have an ability to stay in touch with them, maintain top-of-mind awareness and this is done with automation tools. These are very inexpensive tools, and they produce tremendous results.
In your toolkit, you’ll find many different checklists. Use these checklists to make sure that first and foremost, you increase your funnel volume. We have an exercise in the toolkit called your marketing footprint. I’d like you to know how many demographically desirable opportunities exist in the geography that you’re attacking, and I’d like you to know how many of those you’re actually attacking.
If there’s a big delta between those two numbers, then you must change your process. You can do that exercise for free with the tool in the toolkit. It will help you eliminate shoppers, the lookie-loos, or the men and women that we use to nickname the see-more’s. It will help you generate revenue, and will help you generate constant marketing touches.
I want you to change your process, so that the maximum number of salespeople are at this intersection with the maximum number of decision makers. You see, nobody buys anything from anybody if they don’t trust them. And if the timing is wrong, even if the trust is there, you can’t sell. We have to get people to this intersection with prospecting and marketing activity.
We have to develop a relationship to increase trust, and then when timing is appropriate, you’ll get considered and you’ll have better than an even chance of winning the deal. That’s because the number one sales problem is we’re not there when the customers are ready to buy. How many times have you thought the phrase a day late and a dollar short was coined for a salesperson?
I think it was. That’s because we got there after they bought from the competition, or before the timing was right. We have to engineer ways to maintain top-of-mind awareness, maintain a huge number of relationships so that we are top of mind when they’re ready to buy. Sales is still a numbers game, but the numbers have changed and the way we use them has changed.
You have to manage the metrics to produce the results that you want. If you only manage lagging indicators, these are indicators, by the way, that start with a dollar sign. How many dollars did you do last week, last month, last quarter, then you will always be surprised with yearend results.
When you mathematically correlate those five metrics to the dollar result, you will be able to predict your future. When you can predict your future, you can adjust in time to avoid surprises. The Aberdeen research group showed that this approach to sales management produces a 36% increase in year to year sales.
21% increase in conversion rates, a 26% increase in the return on your marketing investment. 17% increase in customer retention, and a 21% increase in your average order. Let me sum up by saying the only benefit of not planning is that failure comes as a complete surprise, and is not preceded by a period of worry and depression.
Most sales teams don’t have a sales plan. If the plan is in place, it’s written at the beginning of the year and never looked at. Please use the five metrics to build sales plans, and then trend and manage to those metrics. You will learn how to increase your sales, how to shorten the sales cycle, increase the number of first meetings.
You’ll be able to qualify people in or out of your world better and faster. You’re going to be able to optimize social media prospecting, increase the dollars per deal. Close more deals more rapidly, and that all is the result of following a plan that you build.
If your only plan is that you’re going to work harder or smarter, then I’m here to tell you you’re on your way to a disappointment. Let’s increase the number of first meetings with prospecting activity. Let’s increase the closing percentage by establishing a quid pro quo as early as possible, also known as an upfront contract.
Be prepared with an elevator speech. Let’s shorten the sales cycle to create a sense of urgency on the part of you and your customer. You have to always understand and be able to articulate the cost of no or not now from the customer’s point of view. What does it cost your customer to say no or not now?
Don’t be one of the salespeople as I’ve represented on the screen, doing 83 different tasks every day. Block time for prospecting, for follow-up. For admin as minimal as possible. Specialize tasks, take non-sales tasks and delegate them to non-salespeople. Establish your value by understanding the cost of no or not now, and resist discounting.
If you’re solving a business problem, I don’t think you should discount. I believe this is a better way to sell, because we’re going through a step by step process. In summation, I’d like to say if you’d like my toolkit, please send an email to firstname.lastname@example.org or call me at 310 447 4102. That’s, as we say out here in Hollywood, a wrap.
Fred Diamond: Hey, Gil, this was fantastic.
Give us an action step. you’ve given us a lot of ideas, but something specific people should do right now, or as they’re done listening to this podcast.
Gil Cargill: The number one thing I recommend is to do the time and task analysis, whether you get your toolkit from me or not. This is a logging procedure. Log what you’re doing every 15 minutes of the day for five days. Then after those five days have expired, tabulate your time into two categories: sales time, non-sales time. What can we do to compress or remove non-sales activities from your calendar, and enhance your available sales time? If you do nothing else, you’ll improve your revenue.
Transcribed by Mariana Badillo