Most sales professionals are notorious optimists. We always think our next big sale is right around the corner, that the opportunity we were excited about last week is definitely almost ready to close, and that we’re going to absolutely make our quota this time.
Optimism and a positive attitude is a necessary trait in a profession with lots of stress, high turnover, and almost endless exposure to rejection.
But there’s one area we don’t often talk about, where excessive optimism is making salespeople, managers, and executives crazy.
We think we have much more time than we actually do, and it’s causing us to set unrealistic goals and chase improbable opportunities and waste much more effort than we can possibly afford.
Here are four reasons we don’t have as much time as we think:
- An hour-long sales meeting actually takes much more than an hour. There’s prep time before, follow-up time after, time spent managing the logistics of the meeting, and travel time to and from the meeting.
- More than a third of a salesperson’s work time is spent on internal meetings, administration, and miscellaneous activities that are not actually selling.
- A 40-hour work week is not really 40 hours when you factor in vacations, holidays, sick days, water cooler time, training time, bathroom breaks, and so on.
- In most cases, lost sales eat more time than won sales, yet often aren’t accounted for in time planning.
But it’s much worse than just that. We have less time than we think because most of us haven’t actually worked out how much time we have, and how much time it takes to do the things we need to do.
When managers and salespeople sit down to work out annual goals, they rarely look at it through the lens of how many hours it will take to complete all of the activities necessary in order to meet those goals.
They may benchmark against other salespeople, against what the salesperson’s or manager’s “gut” says, and/or against revenue goals sent down from above. These measurements can be useful, but without a clear concept of how much time is required, they can also lead to unrealistic and frustrating goals.
Time to get realistic about time
Effective time management begins with realistic goals and a clear understanding of where salespeople should be spending time in order to get the most out of their efforts. Here’s how.
1. Map the sales process and calculate the time necessary to close or lose
If you don’t already have a formal sales process, it’s time to sit down and map it out. Include the mandatory milestones and activities a salesperson must complete in order to bring an opportunity to close.
With a full set of activities, work out how much time the salesperson must spend on each won opportunity. Now do the same for lost opportunities. Remember to take into account that each activity that is directly buyer-facing (such as a sales meeting) will require preparation and follow-up time, as well as potential travel time.
2. Establish the number of hours each salesperson has available
Based on 52 weeks and 40 hours per week, there are 2,080 business hours in a year. However, an individual salesperson will have fewer hours once you take out vacations, sick days, and holidays. Determine what the real number is for each salesperson.
Next, calculate how many of those hours are available for sales activities. According to CSO Insights, the average salesperson will spend about 40% of their time selling on active opportunities, 25% on prospecting and lead generation, and 35% on non-selling activities.
Your numbers will vary based on individual salespeople, how you sell, and the structure of your organization.
3. Add it up
Now it gets a little tricky. In order to determine whether your salespeople have enough time to complete all the things they need to do in order to make their goals, you need to know information such as:
- Your expected win rate, average deal size, and sales cycle time
- How many opportunities needed to reach quota (counting backwards)
- How many prospects needed to create enough opportunities
- Time spent on opportunities (that are won, or lost)
- Time spent to find and generate a new prospect
Using this data, you can begin to form a picture of whether each salesperson has enough hours in the year to meet the goals you set for them.
If your numbers are off, you have two main options:
- Adjust your numbers
- Adjust how your people sell so that they can make the numbers
This exercise has the added benefit of providing visibility into areas where your salespeople might save time. For instance, if they’re wasting a lot of time on lost opportunities, you may be able to improve your qualifying process to help them disqualify sooner and reclaim that time.
By tweaking and adjusting your numbers, you can achieve a much more realistic goal for your salespeople while simultaneously enabling them to become more effective at their work.
To make the exercise easier, we designed this interactive goal-setting tool. It’s one of our most popular downloads, and we hope that you find it useful. Check it out here. It comes with a free white paper that will walk you through the process in detail.