Costs of Closing Industrial Sales Are Skyrocketing

By Selling Power Editors

New York, NY – McGraw-Hill’s Laboratory of Advertising Performance Report #8051 reveals that, on the average, 4.3 calls are needed to close an industrial sale. At $137.02 per call, it costs an average of $589.18 per sale.

The figures may be different in your company, but they indicate that the cost of selling has skyrocketed. What can you do about it? How should you direct your management efforts to obtain higher sales and higher profits?

We talked to a number of sales managers who shared these ideas with us:

1. Communicate your company’s standard calling/closing ratio.

One sales manager reported: "When I saw the figure, I went through our sales records and analyzed how many calls our people make on the average to close a sale. I was amazed when I realized that it was five! My new objective is to obtain higher sales and reduce the number of calls needed to obtain an order.

2. Improve your sales support system.

Better communication between your sales rep and the home office contributes to call productivity. One company claims that by assigning a product specialist to the sales staff, they can shorten communication time and significantly reduce the wasted time of field reps.

3. Use the telephone as a sales tool.

Review sales leads, qualify clients, and develop a special checklist to review customer needs prior to the actual call. For example, one sales manager reported that in the past, his salespeople used the telephone to schedule only their appointments; now they ask detailed questions to review their prospects’ needs. This step cuts down on the number of calls and makes for more effective in-person calls. Result: lower call/close ratio.

4. Increase your rep’s skills in getting the order.

This does not necessarily mean that your salespeople need to improve their closing skills. Chances are that they know how to ask for the order but don’t know how to create the opportunity to close the sale. Only if you train your reps to become product specialists and people specialists, can you be sure that they will do their best to meet your sales goals.

5. Create incentives to close a sale with fewer calls.

One sales manager advises: "A few years ago, I said, ‘I don’t care how you get the order, as long as you get it.’ Now, I realize that my expectations did not contribute to higher productivity. Today, I expect my reps to make a sale in three calls or less. If I notice that a rep needs to make four calls or more on a consistent basis, I know that something is wrong and I will take appropriate action. On the other hand, if a rep consistently brings in orders in less than three calls, they receive a plaque inscribed ‘Most productive sales rep of the month’. I realize that volume and profits are separate entities. Now my reps realize that it is the bottom line that counts.

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