This is a question that could be answered in many ways because each company has their own way attributing costs associated with sales. I am not going to give you an answer, but will provide insight into costs that are often overlooked in this calculation.
This is a question that could be answered in many ways because each company has their own way attributing costs associated with sales. I am not going to give you an answer, or a spreadsheet to calculate the answer, but will provide insight into costs that are often overlooked to help you identify what your real costs might be.
Hiring isn’t just about the salary and benefits associated with a role, but you need to factor in the staff time for reviewing resumes, scheduling interviews, conducting interviews, debriefing on interviews, and negotiating offers - all time that is not being spent prospecting or selling your goods or services. That doesn’t include the costs to run ads on job boards, membership dues to trade organizations, or the licensing fees for your candidate management system. Once they are hired the staff costs don’t go away, there is time spent onboarding new hires, training them on your tools, processes, technology - again time your team is not prospecting or selling.
There are also some very hard costs associated with onboarding a new salesperson, hardware like a phone, laptop, desk, tablet, etc. and licensing fees for your CRM, marketing automation, prospecting tools, and industry trade memberships.
Now that they are trained, onboarded, and ready to go you start to incur costs for trade shows, travel, entertainment, and more training - which is not only the fee for the course, but the time to attend the course. There are other factors involved that I haven’t mentioned here, but this is a blog post and not a novel, and these are often the pieces that are not factored into the equation for determining costs to close a sale. Add up all these costs against the sales your team is generating, are you seeing the ROI you expected? If the answer is “no”, how can you improve the ROI for your organization?
Start with making your hiring process efficient and effective, know the type of person who will succeed in your organization, prioritize employee referrals, ensure hires are the right hire, trust your gut here, because having to fill an open role again due to a bad hire adds to your costs.
Standardize and operationalize your onboarding process, from introductions to systems training, have your processes organized and ready to go the day the new hire starts.
Shorten your sales cycles, if it takes 90 days to close a deal evaluate why, and put in place steps to reduce the cycle. Reducing the sales cycle is directly correlated to how well your teams use the tools you provide them, from the CRM to the marketing automation platform, this is where you gain the time to properly vette candidates to ensure you hire correctly without missing out on opportunities and sales.
If any of this makes sense to you and you think there is an opportunity to improve in your organization, contact us, you want to see results fast, that means not taking time away from your staff to develop and implement a plan, leave that to the experts. Having an external team of experts evaluate, process, design, and implement what works for your organization will pay for itself as you see the results of closing deals faster, also improving the ROI of sales team.
Published by Rich Rutherford on 02-13-2018