What type of sales manager are you? Are you a sales manager, sales manager (?) or sales person? Look at these three real life scenarios and find out. But first, the setting.
You are a manager in a life insurance company on a three-day sales management retreat (conference, kick-off) somewhere out of town. The CEO is in attendance too. The Sales Director shares the ambitious overall company targets, and said targets broken down for each team. “For your team Juma, that translates to Kes. 10,000,000 in premium this year. We know you can do it.” She also shares details of the competition this year to help boost performance, complete with rewards for the sales people. Shopping vouchers worth Kes. 10,000 each, a bonus over and above the usual commissions, and even a night for two somewhere in Naivasha.
Scenario 1: Selling-bound Sales Person (Manager?)
“I know I can sell so I know I will get these awards,” you tell yourself. Being the selling-bound sales manager you are, your eyes light up picturing yourself doing a Ksh. 10,000 shopping and paying with a voucher. You are giddy with excitement when you picture how much you will be making in bonuses and spending it on the dinner with your spouse (or significant other).
And, dear reader, in case you are wondering, yes, such type of sales manager is more common than you think. Typically it’s one recently promoted from salesperson to sales manager.
Scenario 2: Plan-bound Sales Manager
This type of sales manager is a man with a plan. So, he goes into high gear to plan how to meet this target given by his boss. After ruminating over the challenge, back in the office he calls in his team to share a brief of the retreat and competition, and shares his thoughts. “Team. Our target is Ksh. 10 million this year.”
Following the mixture of stunned silence, whispered grumbling and murmurings of doubt, you uplift the team. “I understand your concern. That is twice what we did last year. I’m aware this is no mean feat but it is doable. And I’ll show you how.
“Looking at our performance over the last three years, we convert 1 out of every 10 prospects. In addition, our average premium amount per customer, is 1,000 shs per month. (Premium is the amount a customer pays every month for their chosen insurance plan) Also, 10% of all customers drop off every year. So, with that knowledge, let’s do some maths together.
Breaking down the numbers
“First, how many customers paying 1,000shs every month do we need to get a total of 10,000,000shs by end of year?
- 1,000shs per month is Kes. 12,000 per year
- Kshs10,000,000 divided by shs. 12,000 translates to 834 prospects each paying 1000shs monthly.
- But because we lose 10% of customers within the year, let’s round that 834 to 1000 paying customers. That way, if we lose 10% we still have 900 customers-still above the 834 we need.
“So far, so good? Yes? Good. OK.
“Remember these are customers not prospects. To get 1,000 customers, we need 10,000 prospects because our conversion rate is 1 in 10. So, 1,000 multiplied by 10 is, what? Yes. Correct. 10,000.
From prospects to sales
“Now where do we get ten thousand prospects to engage with? When I thought about it, I thought of ‘camping’ – optimizing our time and maximising our efforts by selling in one area where we can find a large pool of prospects. Kenyatta National Hospital (KNH) came to mind. When I checked, I learnt that at any day there are a staggering five thousand people on the expansive grounds. Admittedly, not all are prospects. A significant number nonetheless are. In theory, however, every two days we have the potential of addressing the 10,000 prospects we seek. “
The sales manager sees the hitherto grim faces start to light up. They see hope. “This ‘10 million thing’ can actually be done,” they start believing.
The daily sales plan
He continues.
“We are 10 in our team. If each of us makes 8 pitches every day that’s 80 per day, 400 a week and 1,600 presentations a month. Of these, at a 1 in 10 conversion, 160 will buy in a month and 1,920 (160 x12) in the year. That’s almost twice the 1,000 we need; meaning, we can meet our target in 6 months time. In fact, I want us to set our own target of 20 million this year. Not just to push us but also because the bonuses will be based on total premium collected and I will negotiate higher ones for you for surpassing the set targets by double.
“Oh, and by the way, once you make your 8 presentations for the day, even if it’s by midday, feel free to go home, go pick your child from school, see a pal, have your hair made, whatever really,. I don’t care. Just make sure to send me the names and contact of the eight by 5 pm.
So. Can we do this?”
Yes!
“I can’t hear you. Can we do this?”
YES!
“OK. Let’s go set up shop at KNH!”
Scenario 3: Third type of sales manager: the desk-bound Sales Manager
What type of sales manager are you? After the targets are shared you still picture yourself seated behind your desk waiting for sales people to come to your desk when they have a problem. After all, you are no longer a sales person. You are now a manager with office meetings to attend. Meeting sales targets is the sales peoples’ job. Selling is not your job.
What type of sales manager are you? Which one do you think will keep you in the job? Selling-bound, plan-bound or desk-bound?
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