How should B2B sales people spend their time in order to reach quota?

Get your spreadsheets out! Or, use this template. We created it to help our clients answer a very important question:

How should our sales people allocate their time between different activities to optimize their chances of reaching quota?

Before we deep dive into details, let’s take a moment to look at the bigger picture.

What activities are a B2B sales person expected to perform? 

Well, a lot. If you are looking for scary information and statistics on this subject, click here. Naturally, there are variations. Some sales organizations have dedicated prospecting teams and a higher degree of specialization than others. However, for the purposes of this post, we will take a closer look at a quota carrying sales person that is also responsible for generating new opportunities to the pipeline. What is the process for determining how they should structure their time between prospecting and opportunity management in order to have a realistic chance of achieving the desired outcome?

Enter time tracking

Can you answer these 2 questions?

• What is your average sales cycle length?
• What is your lead to opportunity conversion rate?

You will most likely know the answer to these off the top of your head, or find the answers relatively quickly in your system.

How about these questions?

• On average, how much time do your sales people spend on opportunities they win?
• On average, how much time do your sales people spend on opportunities they lose?
• On average, how much time do your sales people spend on qualifying new leads? 

Why were these answers either not available, or hard to quantify? You guessed it – it is not something we have made a priority to track and measure. Despite time being a non-renewable resource for everyone on this planet, including the people on your sales team.

In order to determine how your sales people should spend their time between different activities to reach their targets, we need to first understand how they are spending their time today. Once this has been established, you can coach your people to help them achieve the desired result in less time.

However, the main point is this:

Once you have determined the average time it takes your sales people to:

• Generate a sales qualified lead and;
• Complete all relevant sales process steps to win (or qualify out from) a deal

…then – and only then – can you start looking at the optimal allocation of time between the different activities they are expected to perform.

If you are not a numbers person, you might want to avert your eyes – we are going to run through a full example below. Whether you continue reading or not, I highly recommend doing this exercise using the spreadsheet we have developed for this purpose.

Let’s say a sales person is expected to work 40 hour per week, over 5 days. Further, let’s assume that 20% (8 hours) of his/her time is spent on activities not directly related to prospecting and opportunity management. 

If we estimate that this person will be absent a combined 25 days per year due to vacation/sick days/public holidays, the average net sales time per week suddenly becomes 29 hours. In summary, this person has less than 6 hours per day to dedicate toward generating new opportunities and closing enough deals in the pipeline to reach quota.

Looking at goals – for this pretend person I just made up, let’s assign a $720,000 quota / year ($60,000 / month), with an expected average deal size of $15,000, average sales cycle of 4 months and an expected win rate of 40%. 

In the above scenario, the sales person would need to win 4 opportunities per month and bring 3 new qualified lead into the pipeline per week. 

However, we still need to account for how long it actually takes to complete the relevant activities. A 1 hour face to face meeting with a prospective client quickly translates to 3 hours of effective time if you include preparation work, transport time and post meeting follow up activities. 3 hours translates to half a work day. Remember, this sales person has 6 hours of “net sales time” to utilize every day. 

Let’s say the lead to opportunity conversion rate is 1:5, or 20%. While some prospects can be disqualified instantly, others will require additional work. We estimate that this person will need an average of 30 minutes in order to go through the process of properly qualifying a given lead. 

Finally, we estimate that this person needs to spend an average of 12 hours in order to complete all best practice activities needed bring an opportunity to close. This includes meetings, negotiations, preparing documentation etc. We’ll further assume he/she will spend 15 hours on deals lost. I know it sounds counterintuitive, but we spend a lot more time - according to TAS Group, 65% more - on deals lost compared to those we win.

Using the spreadsheet we have created, I can see that our goals are not realistic. The sales person would need 38 hours, rather than the available 29 hours, in order to reach these targets. 

Let’s adjust the estimates – we revise the lead to opportunity ratio to 25% and the total time needed to qualify a given lead from 30 to 25 minutes. Further, we revise the time spent on won/lost deals to 10 and 12 hours, respectively. In this scenario, the goals are deemed to be realistic. I am also advised on how the 29 hours available each week are to be divided between prospecting and opportunity management.

There you have it. Now, how do you help a person stick to this schedule? In the white paper that accommodates the spreadsheet referred throughout this post, we talk more about batching, time boxing and other sales effectiveness techniques.

Download your copy of the Realistic Goal Setting kit and get started!