Many businesses do a good job of tracking important metrics such as sales, gross margin, net profit margin, turnover, and cost per lead. The most important sales number you can track is the cost per sale. The cost per sale measure how much is costs your company, both externally and internally, to generate revenue.
The variables associated with costs per sale are as follows: salaries, benefits, commissions, and bonuses for your inside and outside sales team, total compensation for your marketing team, your marketing budget, direct labor costs, material costs, overhead costs, and the blended hourly rate of each person within your organization that assists in a sale.
The inside sales team consists of those responsible for upselling existing clients. This could be a Project Manager at an Engineering company that is responsible for uncovering additional opportunities within their client base. The inside sales team could also consist of your sales support team such as Sales Development Representatives, Telemarketers, and Appointment Setters. The outside sales team is responsible for getting new clients. One of the most unaccounted for line items in sales are resources you use to close a sale. This could be one or more of the following positions: Chief Executive Officers, Chief Operating Officers, Sales Engineers, Subject Matter Experts within your company, and Department Heads just to name a few.
Cost Per Sale = (total compensation for inside sales and outside sales team + direct labor costs + material costs + overhead + marketing costs + total compensation for your marketing team + website maintenance + shipping + the weighted average total cost of your sales assist team) / (total sales)
The best way to reduce the risks associated with your total cost per sale is to track the productivity of each component of the cost per sale equation and hold those responsible for each category accountable towards agreed upon standards. The table below goes into some typical Key Result Indicators (KRIs) for each position.
Cornerstone’s Sales Assessment program is designed to do a deep dive into your lead generation system, your relationship building system, your follow up system, and your sales conversion system and provide your organization a list of recommendations on how to increase the conversion rate and reduce the cost per sale.
What you get:
- A thorough assessment of your existing sales and marketing process
- A detailed report that contains recommendations that will enhance your sales and marketing results
- A step-by-step plan on how to implement the recommendations
How we get it for you and the process in which we review and make recommendations on enhancing your sales process:
- Step 1 – Lead Generation Review: We will review the time, money, and resources spent on each of your lead generation strategies and determine where you are getting results from and where you are not getting results.
- Step 2 – Relationship Building Review: Leads and prospects must first know, like, and trust your sales team. We will review the process in which your sales team members build trust and credibility with their leads and prospects.
- Step 3 – Discovery Process Review: Cornerstone believes that selling is not telling. Rather, it is a process in which the sales team asks great questions. We will review what the sales team does in extracting information from the leads, what depth they go into the discovery questions, and how they use that information.
- Step 3 – Making Effective Presentations: Most sales teams do not have a proposal or presentation that ties the organization’s solution to the challenges the prospect is facing. Cornerstone will review how your business makes presentations and submit proposals.
- Step 4 – Follow Up Review: Most sales professionals only follow up with their leads 2 or 3 times. It takes 6 to 12 follow ups to convert a prospect into a new client. We will review how many follow ups and what systems to use to remind the sales team as to when to touch base.
- Step 5 – Sales Conversion Analysis: Cornerstone will review how your sales team asks for the order. According to Hubspot, 37% of sales professionals never ask for the order after a proposal is sent.
- Step 6 – Upsell and Referral Review: Fifty-one percent of customers and clients would give a referral yet only 11 percent of sales people ever ask for one. We will review how your organization asks for referrals and the process in which your team using to upsell other products and services to your clients.
- Step 7 – Recommendations: Cornerstone will provide your organization of formal report on our finds along with a list of recommendations that are tied to overcoming the challenges that stand in the way of meeting your sales objectives.
Click below to schedule a call with one of our Growth Strategist to discuss growing your sales.