Renegade Conservatory Guy

In the current economic climate it is vitally important that the sales team within any company is structured in the right format to maximise the conversion levels, and thus the volume of sales.

So, I have worked on some simulations of a typical double glazing company’s sales force, and how adjusting the structure of that sales force could dramatically improve the effectiveness.

The picture below shows an example of the annual sales of 4 salespeople in a fictional double glazing company:

I’m sure many double glazing company owners would be very happy with results like these. At first the figures look pretty good, with 2240 leads, a conversion rate of 46% on average and combined sales of over £6m. Each of the sales people seem to have worked very hard and all achieved annual sales of more than £1.5m each. Not bad, eh?

Well, not really! Assuming all the leads sat are of a similar quality, then serious consideration needs to be taken with the position of John. Even though he has sold the second highest amount, and has worked hard sitting 800 leads during the year, his conversion rate is only 30%.

John’s lower conversion rate is having a detrimental effect on the turnover of the company, and the profit margin.

So, one option is to bring in a different sales person to sit these leads, and improve the company’s overall sales:

The replacement of a poorly performing sales person has made a big difference. Assuming Jim has taken on all John’s leads and converted at a better conversion rate he has added 110 sales, and a massive £704,000 to the turnover. If the company is trading at 35% gross profit, then this would add £246,400 Gross Profit. If the company did not alter the overheads substantially then much of this gross profit, would become net profit!

However, Jim has still only converted at 44% whereas we know that Matthew, Mark and Luke are converting at around 50% or more. I believe that there is a threshold where sales staff can simply sit too many leads, and by doing so rush appointments, not send professional quotations out on time, and not follow them up properly. Sitting 800 leads per year is far too many, so Jim, like John, is wasting leads.

So, the next option to consider is spreading the workload equally between Matthew, Mark, Luke and Jim:

According to this simulation sales have actually reduced.

Even though, Jim’s coversion rate has improved, the extra leads spread between the other 3 sales people has reduced their effectiveness. They’ve all achieved great targets personally, and I’m sure at 5-10% commission they’d all be very happy.

But, the overall sales for the company has reduced by around £100K compared to the previous simulation.

I believe that the best scenario for this fictional company (which is not at all similar to the company I run in West Yorkshire) is the one below:

The first simulation showed that Mark was selling at around 57% by sitting fewer leads than all the other guys.

This means any sales person could be trained to sell at 57% within this company, as long as they are not given too many leads. By adding Jane and Jim to the sales force, and ensuring they are all trained to the same level as Luke, then the impact is dramatic:

Clearly, these figures are all made up (and I have made many assumptions), but there’s a serious message here.

I know many owners of double glazing companies who procrastinate, and continue to employ ineffective sales people. It’s easier to leave them there than deal with the issue. After all, a 35% conversion rate is not too bad is it?

Wrong!!!…. any conversion rate less than 50% is NOT GOOD ENOUGH.

If you have sales people working for you that are converting at much less than 50% then you need to act now, because not doing so is costing you big money. You need to retrain them, provide them with support, look at the amount of leads they’re sitting, or maybe even consider getting shut of them completely.