Have you ever driven past a construction site, and noticed workers standing around, leaning on shovels and up against half-built walls instead of, well, working?
Wondered where their foreman was or why they were being paid to stand around?
This is a known problem in the construction industry. Current data indicates that most construction workers only spend about 40% of their “time on tools” and the rest of the time… doing other things. Administration. Paperwork. Waiting for materials. Waiting for directions. Taking coffee breaks.
But if you think the sales industry is any better, think again. According to a survey of 700+ sales professionals by Insidesales.com, sales reps on average spend only about 35% of their “time on tools”–i.e., generating revenue.
That’s worse than construction.
And to make matters worse, we plan and strategize based on an unrealistic view of how much time our salespeople actually have available, and an unrealistic view of how long it takes to accomplish the things we ask of them. This leads to missed quotas, missed forecasts, high turnover, demotivated teams, excessive stress, and continually declining effectiveness across the industry.
What if this one thing, estimating time accurately, could improve all of those things and result in more wins, bigger wins, and higher profits and revenue? It can, and here’s how to do it.
Time to get real about time, step by step
1. Add up how many hours a salesperson actually has available in a week
Start with the number of hours a person theoretically has for work in a year: 2,080 (assuming a 5-day work week, 8-hour workday). Now, subtract from that number the hours they will spend on vacation, sick, and on holidays. What is your actual number of work hours per salesperson?
Next up, determine how many of those hours your salespeople actually spend on sales-related activities. Some say most will only spend 35% of their time “on tools.” Other stats claim that they’ll spend more than that–up to 40% on active opportunities, 25% on prospecting and lead generation. Even the most efficient salespeople in an effective organization will generally only spend 65% of their time on revenue-generating activities.
Take the number of available hours, and multiply it by the percentage of time they spend on sales-related activities, and you have a useful idea of how much time your salespeople actually have. It’s probably substantially less than you think.
2. Map the sales process and identify the activities necessary to close or lose
If you don’t already have a formal sales process, you need one. There are plenty of reasons to do this, but one of them is that you can’t calculate how long it takes to win or lose unless you know exactly what activities are required.
Map out your process, include milestones and steps and activities to achieve each milestone. Use a process enablement technology to guide salespeople through each step, so you can track which activities actually win and lose sales.
3. Know how long critical activities actually take
Most of us have an unrealistically optimistic idea of how long activities actually take. For instance:
- Does an hour-long meeting really take an hour? Or does it take more than that because of preparation time, driving time, waiting time, over time, logistics time, and so on. If you’re asking salespeople to conduct a certain number of meetings, or if you know that it takes a certain number of meetings in order to make a sale, be sure you know exactly how long each meeting will take.
- How much admin time does each salesperson have to engage in each day to meet requirements? Are you underestimating this time because it doesn’t feel like “real” time to you or because you’re no longer on the front lines?
- Maybe you’ve calculated how long it takes to win a sale. But have you calculated how long it takes to lose one? Usually, this number is higher than the win number. And unless your team is magic, they’re going to lose some deals.
Take the time to map out the specific activities your salespeople engage in for won and lost deals, and to identify how long each of those activities actually takes, not just what you think they should take.
4. Add it up
Take the numbers you gathered in the previous steps, and figure out whether there are enough hours in a salesperson’s day to actually engage in all of the activities necessary to meet the goals you’ve set.
If not, time to fix it, stat. You might:
- Set more realistic goals
- Establish a more efficient process
- Identify more effective activities to engage in
- Reduce the number of “lost” deals by disqualifying prospects earlier
- Hire more salespeople
- Train more effectively
- Reduce administrative overhead
The upfront time investment to take these steps will be worth it. You’ll identify weaknesses, improve forecasting and get better sales results overall.