roi presentation
DESCRIPTION
Analyzing Your Sales Team - Understanding/Cal-culating your ROI on current sales team.TRANSCRIPT
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The Real World: Analyzing Your Sales team
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51,300,000
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About Your Team
Let’s say you’ve got a team of ten salespeople…
…each carrying a quota of $600K
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Meet Your Team
• Carrie• Kelly• Simon• Ellen• Jordin• Chris• David• Kara• Taylor• Ruben
Total Sales Fiscal Year 2008
$6,000,000
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But what if you analyze their performance a little more closely?
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Utility Analysis – A definition
“Utility analysis is a quantitative method that estimates the monetary value of benefits generated by any intervention based on the improvement it produces in worker productivity.
Utility analysis provides managers information they can use to evaluate the financial impact of any intervention, including computing a return on their investment in implementing it”
- Bernstein, Allen L. “A handbook of statistical solutions for the behavioral sciences”. New York: Holt, Rinehart and Winston.
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Utility Analysis – Assumptions
1. Employees generate results that have monetary value to the organizations that employ them
2. Employees differ in the degree to which they produce results even when they hold the same position and operate within like circumstances
The implication is that the level of results produced by employees in their jobs have different monetary consequences for the
organizations that employ them
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Process Overview
• Rank your salespeople – top to bottom• Create 3 performance tiers• Identify salespeople on each tier• Identify average sales per tier• Use this information to manage the
business
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Your Team - Ranked
• Carrie$1,000,000
• Kelly $1,000,000• Simon $700,000• Ellen $700,000• Jordin$600,000• Chris $500,000• David$500,000• Kara $400,000• Taylor$300,000• Ruben $300,000
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Add all sales results and divide by three
- to create performance break-points that will allow us to allocate our
salespeople across three performance levels or ‘tiers’
Create Performance Tiers
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Total Sales
• Carrie$1,000,000
• Kelly $1,000,000• Simon $700,000• Ellen $700,000• Jordin$600,000• Chris $500,000• David$500,000• Kara $400,000• Taylor$300,000• Ruben $300,000
$6,000,000
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Total Sales divided by three
$6,000,0003
= $2,000,000 per ‘tier’
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Assign Salespeople to Tiers
Top Tier:Carrie $1,000,000Kelly $1,000,000
$2,000,000
Middle Tier:• Simon
$700,000• Ellen $700,000• Jordin$600,000
$2,000,000
BotCarrie Tier:Chris
$500,000David
$500,000Kara
$400,000Taylor
$300,000Ruben $300,000 $2,000,000
“Stars”
“So So”
“Passengers”
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Calculate Averages per Performance Tier
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Tier Averages
• Stars– Carrie & Kelly = $2,000,000 / 2 = $1,000,000
• So-So– Simon, Ellen & Jordin = $2,000,000 / 3 = $667K
• Passenger– Chris, David, Kara, Taylor & Ruben =
$2,000,000 / 5 = $400K
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Use this information to manage the business
Difference between a So-So
and a Passenger?
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So-So Average: $667KPassenger Average: $400K
Difference $267K
…every time you hire a Passenger instead of a So-So it costs $267K
…if you’d been hoping for a Star you missed by $600K (they average $1M)
…but let’s keep it conservative and focus on moving Passenger to So-So performers
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Use this information to manage the business
Difference between “Star” salesperson
and “So-So” salesperson?
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“Star” Average: $1M
“So-So” Average: $667K
Difference $333K
…every time you hire a “so-so” salesperson instead of a “star” it costs $333K
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So what’s your loss fromhaving Passengers vs. So So? Remember, you had five:
Chris David Kara Taylor Ruben
So Passengers represent a loss of $1.3M ($266k x 5) in sales…
…but what’s the premium for getting it right?
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The ‘Getting it Right’ Premium
• What’s the premium if:– Raise one Passenger to So-So level?
• $267K – total sales go from $6M to $6.27M (+4.4%)
– Raise two Passengers to So-So level?• $534K – total sales go from $6M to $6.53M (+8.8%)
– Raise all Passengers to So-So level?• $1.33M – total sales go from $6M to $7.33M (+22%)
…and these are sustainable ANNUAL increases – not one-off premiums
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The ‘Getting it Right’ Premium
If we weren’t keeping it conservative you might ask:
“what’s the premium if all are Stars”?
Total sales increase by $4M from $6M to $10M (+67%)
Annually!
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The Dark Side
This knife cuts both ways:
– Lose just one Star performer and replace with……a So-So – costs you $333K (per year!)…a Passenger – costs you $600K (per year!)
– Lose just one So-So performer and replace with……a Passenger– costs you $267K (per year!)
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“So how do I…”
1. Hire Star salespeople first time?2. Raise Passengers to So-So level?3. Raise So-So Performers to Star Performer level?4. Make sure I lose no So-So or Star Performers?
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Assessment Performance AnalysisMeasuring Assessment Impact
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Case Study
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Productivity
2010 Production Tenure 4 – 15 months = 237100%+ Quota – 81 = 34%
+100% Average 178.6% 7 months average tenure
-100% Average 43.1% 6.7 months average tenure
Above Quota produce 75.8% more volume
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New Pattern Analysis
79%+ 78%-$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000$8,528,179
$5,136,486
Revenue
Revenue
JMP PTQ # Q Revenue79%+ 170.6% 159 $5,000,000 $8,528,17978%- 102.7% 199 $5,000,000 $5,136,486
Difference $3,391,693
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500+ 100-500 0-100
73.0
74.0
75.0
76.0
77.0
78.0
79.0
80.079.9
76.275.6
JMP
JMP
% JMP500+ 79.9
100-500 76.20-100 75.6
New Pattern Analysis
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Key Learning Points
• Every sales team has uneven performance – Stars, So-So and Passengers
• You pay dearly for So-So and Passenger level performance
• Your Stars share something in common – and that can be profiled
• That profile can be used to raise Passengers performance to So-So level, So-So to Star level
• This is a more enlightened way to manage for future sales success
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