FAQ: "What's Wrong With Sizeable Live Sales Forces And In-Person Sales Calls?"

NNothing's wrong with it per se. It's an excellent waste of time, money and energy, but in most cases increasing the size of your sales force only leads to lower performance.

In a way it's similar to buying a dog and barking yourself. Yes, it's doable, but why would you do it?

The larger the sales force, the more internal competition you have among salespeople. And once they compete internally, they can't compete externally, so the internal competition can eat you alive.

I know, some people slap themselves on the forehead in the blinding flash of the obvious, and ask themselves why they would even remotely consider the hassle of creating all these written materials and automatic distribution systems when they can just hire more salespeople on straight commission, and they can achieve the same result a lot cheaper.

Good question.

Let's do the sales force first.

Every addition of a new salesperson to your sales force exponentially increases the difficulty and complexity of managing that sales force. Herding cats comes to mind.

The bigger the sales force, the lower is the personal performance. Also, you'll never be able to work your sales force as a team. They will be competing with each other, losing deals left, right and centre.

If there is an area in life where size doesn't matter, it's your sales force. What matters is how closely they work as a cohesive team.

Have you thought about why the OPTIMUM number of horses to pull a stagecoach, when stagecoaches were used, was four. Not two. Not eight or 16. My driving instructor explained this interesting phenomenon to me when, during my gravedigger years in the UK, I was studying to get my driving licence to drive a horse-drawn hearse.

Thinking that we can double our sales by doubling the size of the sales force is a fallacy of biblical proportions that has penetrated the IT industry over the years.

Actually, as CSO Insights reports in its Sales Management Optimization (SMO) Study...

"The percentage of reps making individual quotas dropped significantly, and the percentage of the overall company revenue target achieved dropped, as well. Yet, in spite of this poor performance, 85% of the firms surveyed reported that they had raised individual quotas again for 2010."

Using the previous stagecoach example, this lunacy is the same as breaking one leg of each horse and then whip them harder to make them run faster. They won't.

We can set individual quotas sky-high, but the trend is still a continuing drop in quota achievement. Of course, managing company sales by individual quotas is retarded but that's for another discussion.

But before we go any further...

Let's Calculate A Little Bit And See What The Numbers Say

In 2001, Reed Business found that the average cost of a B2B sales call was $392. It's not too hard to imagine that since then, that number has climbed quite a bit higher. But for the sake of argument, let's stay with this number for now.

Also, the same study reports that it took 5.1 sales calls to close a typical B2B deal.

So, now we are at $1,999.

Do you really have 2 grand, on the top of your marketing budget, to bring each opportunity to fruition?

That's what a systematic and automatic distribution of your materials can achieve.

Even if you FedEx every piece, it costs you less than $20 to deliver each piece. And no matter how I look at it, $20 is a tad less than $392.

You can complete the 5.1 sales calls at $100 instead of $1,999.

The same Reed Business report also indicates that the typical salesperson spends about 20% of her time meeting prospects. The other 80% is admin and other ancillary activities.

Considering time off, vacations, etc., the typical salesperson spends fewer than 50 days a year with new prospective clients.

Let's say, being generous, a salesperson can have four sales appointments a day, that is, 200 appointments per year.

Since it takes 5.1 calls to close one deal, then 200 calls can close, assuming 100% closing rate, 39 deals.

But the typical B2B closing rate is around 4-7%. Let's be generous and round it up to 20%.

And now we're at eight sales per year.

So, eight deals out of 200 sales calls.

This may look great on the surface, but the cost of those 200 calls is $78,000.

That's a cost of $9,750 per sale.

Now imagine you could replace the first three visits with automated messages, and there are only two in-person visits.

Now the 200 sales calls can close, assuming 100% closing rate, 100 deals.

At our generous 20% closing rate, this is 20 deals, instead of eight. It's a 150% increase in effectiveness.

So, instead of eight sales, the same $78,000 generates 20 sales for your company.

That's a cost of $3,900 per sale. A walloping 60% drop in cost of sale. That's not too shabby, isn't that?

And these numbers are based on 2001 data. Since then the gap between the two methods have become even wider, which should really make your toes curl with excitement and unprecedented euphoria.

So, Why Sales Copy And Not A Field Sales Force?

• Unlike a field sales force, sales copy can create a purchase-rich business environment.


• Unlike a field sales force, sales copy can bring in a very high return (relative to the cost of doing it).


• Unlike a field sales force, sales copy's performance is consistent and predictable, so it builds steady income streams.


• Unlike a field sales force, that need constant managing and motivating, once sales copy is written it can be used forever.


• Unlike a field sales force, sales copy positions your brand in the marketplace the way you want it.


• Unlike a field sales force, sales copy can be constantly tweaked for higher performance


• Unlike a field sales force, that works only eight hours a day with weekends, vacations and holidays off, sales copy works 24/7.


• Unlike a field sales force, sales copy can "revisit" unresponsive prospects in short intervals without creating resentment or raising suspicion.

Last But Not Least Let's Look At Some Stats

Having an effective sales force is like having an effective light bulb.

The typical incandescent light bulb uses roughly 2% of the invested energy to generate light, and 98% to generate heat.

The typical sales force is pretty much like that. For instance...

• Proudfoot Consulting, "2006 Proudfoot Productivity Report: "Salespeople spend on average only 11% of their time actively selling to customers."


• American Marketing Association. Proceedings of the Customer Message Management Forums, 2003: "80 to 90% of marketing collateral is considered useless by sales, and salespeople have to re-create them"


• IDC Executive Advisory Group: IT Buyers Speak Out, April 2010: "47% of buyers are dissatisfied with the quality and value of information from IT vendors'


• CMO Council Study, 2004: "As much as 40% of a sales rep's time is spent re-creating and customising those presentations and messages marketing has created for them"


• McGraw-Hill Research Foundation, Cahner Research: "One average field sales call costs $329 and it takes 4.3 calls to close the deal. A call outside your town or city costs over $1,000"


• IDC, CMO Council, Yankee Group, InTouch: "80% of marketing expenditures on lead generation are lost, ignored or discarded by sales"


• Cahner Research's study in 2001: "A typical B2B sales over $35,000 takes 5.12 sales calls to close. But typical B2B buyers take only 4.61 telephone sales calls a week and grant 1.81 in-person meetings per week with salespeople"


• Research by Mac McIntosh Inc.: "25% of buyers buys within 6 months; 25% buys within 12 months; 25% buys within 18 months; 25% buys after 18 months. If you want to stay in touch with these buyers using a life sales force, you may well lose your shirt in the process"


• In Making the Number: How to Use Sales Benchmarking to Drive Performance by Greg Alexander, Aaron Bartels and Mike Drapeau: "Attrition in the sales profession has consistently been 40% or more, and on average 27% of salespeople fail to produce enough even to cover their costs of employment"


• IDC Executive Advisory Group: IT Buyers Speak Out, April 2010: "Over 50% of salespeople are ill-prepared for meetings with prospects"


• IDC Executive Advisory Group: IT Buyers Speak Out, April 2010: "Sales reps are unable to put aside the generic sales pitch to have deeper conversations with their prospects/customers- Hence prospects do their best to avoid salespeople"


• Aberdeen Research: "Companies that get lead scoring right have a 192% higher average lead qualification rate than those that do not"


• Brian Carroll of InTouch) and Dr. Flint McGlaughlin of Marketing Experiments: "Nurturing (leads) with relevant communication and multiple touches increased conversion to sales ready leads by 375% in the first eight months"

Trying to do old-fashioned selling in this new buying environment is like trying to race your old, limping donkey at the Kentucky Derby. Yes, it's doable but what's the point?

Today's buyers are eager to consume relevant information handed to them in an intelligent fashion. But they are getting more and more evasive of meeting salespeople the same way they used to.

We must realise that B2B buying decisions are made in the absence of salespeople, based on the quality and relevancy of the content buyers have received from sellers. These include self-requested information buyers receive on autopilot and information salespeople leave behind after meeting buyers.

And while an IT company with a legion-sized sales force and crappy, self-aggrandising collateral materials can make significant revenues, another IT company with a microscopic sales force but kick-arse collateral materials can run rings around the former company in terms of net profits.

So, what is your business objective? Enlargement - to increase gross revenues or growth - to increase net profits?

As the saying goes, sales is vanity, profit is sanity and cash is reality. What's your reality?

Back to main FAQ page.