When you’re forecasting revenue expectations for any business, it’s not enough to know the size of the total market.
We’ve all read the projections of a multi-billion dollar Internet advertising market within the next five years… but how much of that will any one site get? And, if you can arrive at a credible estimate of potential market share, do you know what it will take to collect on that potential?
Some questions smart sales executives are asking include:
- What will it cost you to run my ad sales operation?
- How many salespeople will it take to cover this market?
- How many calls can a good salesperson make in a day; in a week?
- How many times will we have to see or speak with a prospect to turn them into a customer?
- How long is the sales cycle, and the renewal cycle?
The Advertising Sales Process
For the new sales manager, the executive team setting up a sales operation, or the manager in place who’s looking for a significant up-tick in results, the ability to think through the subtleties of a business’s sales process is an essential undertaking. Not only will thorough planning allow staffing appropriate to cover the market opportunity; process planning will enable better customer support and better internal expectation setting. Best of all, a conscientious planning exercise assures a flawless customer experience, which is the best way to increase close ratios and renewal rates.
Regular readers of this column know that selling begins long before the actual transaction, and that early prep work is where the process planning starts. How will you fill the leads pipeline? If your sales staff is cold-calling from unqualified lists, this adds weeks to the sales cycle and quadruples the number of calls to a close.
If your product is conceptually akin to a well-known and respected buy in the market, with a few feature improvements (“just like AOL, but the ads load faster!”), halve the amount of time needed to explain the offering and triple the expected number of calls per day.
If your prospect base is made up of experienced buyers (say, interactive agencies), the productivity of each actual sales call goes way up. But, unless you have something really unique or compelling to sell, you’ll fight a lot harder to get their attention in the first place. The more developed the market, the harder it is to be heard.
If, on the other hand, you are selling to a less-familiar market (say, local businesses with no web presence) expect to find access easier (curiosity is a great door opener). But the amount of time spent explaining the offering and the number of call-backs to arrive at a signed order will be much higher.
How much of the business will close on the phone, versus that which will require face-to-face calling? What’s the geographic spread of prospects, and what will travel time do to salesperson call levels? How much will the sales people and process impact the renewal rate, as opposed to product performance?
All of these questions (and dozens of others like them), if considered carefully and answered thoughtfully, can add up to the clues you need to design a sales organization that delivers results and allows your business to grow. Where the questions have no easy answers, invest the time to figure them out. The effort will pay off in sales results and in a sales organization that meets and exceeds expectations.