Manage Your Tail-Enders
Some years ago, a colleague of mine in the Carpet Court group was talking about his tail-enders. He was a cricket enthusiast, and he thought of his sales team as a cricket batting lineup: opening batters, the middle order, and tail-enders.
It’s a useful metaphor for anyone who relies on a sales team to achieve their business goals.
Depending on size, most flooring businesses will have at least one strong salesperson relied upon to consistently deliver a large share of total sales. While we appreciate having a strong opener when it comes to sales, it exposes the business to some risk:
If your best salesperson is you, then the value of your business is very much reliant on you. A prospective purchaser doesn’t want to see the best salesperson walk out the door when the sale is concluded.
Relying on one or two salespeople exposes us to the risk of losing them; recovering from losing a star salesperson can take time, and in the meantime, profitability is adversely affected.
When we rely on a salesperson to achieve the sales needed to run the business, we risk creating a prima donna.
The middle order in our sales team usually delivers significantly lower sales than our openers, but they are steady and can be relied on for reasonable sales.
For this article, tail-enders are the focus and our biggest concern. They likely deal with just as many sales opportunities, but they close far fewer.
To illustrate my point, the following data is from a real, but anonymised, RFMS database.
In the graph below, we can see the conversion rates for five salespeople:
Reid is the star performer, with a conversion rate of 62%, while Isaac’s is just under 30%.
When we look at their comparative performance, we see it’s even worse than we thought.
Isaac actually had significantly more opportunities than Reid.
What might be happening?
Isaac quoted $928,778 across 197 opportunities; nearly $300,000 more than Reid. Yet Reid converted $387,023 while Isaac walked away with just $196,172. Over $730,000 in potential business slipped through Isaac's fingers.
It’s worth noting too that Isaac’s average sale was $1,000 lower than his average quote. He is playing a numbers game: pumping out prices without following up, losing the high-value projects, and winning only when the price is discounted. In this economic climate, no flooring business can afford to let its marketing budget be squandered by the tail end of its sales team.
What are the takeaways?
Business owners need to understand how their salespeople are performing in greater detail than they currently do.
Sales teams must be coached. If they are left to go about their sales roles without supervision, input, or analysis, the business will underperform.
The first step is access to data. If you can’t access real-time, accurate information about how your sales team is performing, you won’t have the information you need to improve performance.
RFMS is the management solution that can provide the deep, flooring-specific sales analytics you need to coach your team and protect the value in your pipeline. If you would like to see what RFMS might offer your business, we would like to talk with you.
Chris Ogden is a consultant and Managing Director of RFMS Australasia (RFMSanz.com), a supplier of IT solutions for the flooring industry. Chris has an extensive background across all aspects of the flooring industry and can be contacted at cogden@rfmsanz.com.