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Use Benchmarks To Optimise Sales
An established means of improving existing structures and business as covered on good sales management courses is Performance Comparison.
Are your sales people achieving enough? Is the company geared towards optimising business? Are the right sales and presentation techniques being used? Is your competition way ahead of you?
Benchmarks will help you answer these questions. They enable you to evaluate your growth with that of other businesses.
Benchmark analysis can have two objectives in principle:
1. You know that your sales could be better organised and structured and know some competitors who are significantly better. You therefore look for opportunities for development and to motivate your sales team through comparison with other businesses.
2. To go in a new direction you need to be looking for new ideas and concepts to improve your sales.
Select the most suitable benchmark for your objectives:
Internal benchmarking compares your sales department with sales departments in other companies. Although relatively easy to understand such data, it only gives a very limited view point.
The purpose of competition-orientated bench-marking is to make comparisons with direct competitors. However, it can be very difficult to obtain corresponding information on different business areas.
Although functional bench-marking is best for finding new ideas and concepts, internal and competition orientated bench-marking is more suited to the development of detailed plans for improvement.
The comparison of sales departments with companies in other lines of industry is naturally more costly and more difficult than the other two methods.
The four stages to every bench-marking project are:
Deciding what the comparison subject should be. This will depend on which aspect of your sales department is to be analysed.
It is suggested you have a very narrow focus, as otherwise the information obtained will not be very meaningful. Therefore your bench-marking project should focus on either:
The sales department
Acquisition of contracts
Product development
Or the follow-up
Trying to investigate all areas simultaneously should not be done!
Focus on those areas of the process that use most resources.
Internal Analysis. You must know exactly how the process to be analysed functions within your organisation, before considering other organisations. When taking this into account, identify possible weaknesses in your organisation! This is important area should always be considered and is a central theme to good management courses.
Consider asking your clients for example. Ascertaining general indicators such as the average time taken to process a sale, the average volume of sales in pounds in relation to the time taken to make a sale or the number of sales per order will give you crucial information on the weak points in your sales. In this example, you should commence the analysis with evaluations and specifications.
Choosing a suitable company for comparison. Who has the highest sales in your line of business do you know? If you do, then you have already found your possible partner for bench-marking. Although this idea may sound ridiculous, many competitors regularly collaborate on certain programmes in order to achieve their goals. Consider the joint venture programmes within the automotive industry where major car manufacturers combine forces, market intelligence and research to co-produce a new vehicle. Many of these are firm rivals in their sector. Interesting partners for functional bench-marking might be your suppliers and clients. You will have less work at the analysis stage if your choice of bench-marking partner has been thoroughly thought through.
Analysis of your bench-marking partner. In the entire process, this is the most sensitive stage. Your partner must now open up their doors to you, and you let them take a look at your organisation. At the start of this phase, you should present the objectives and especially the advantages of the bench-marking project once more.
Condense the requests you make for information to truly important and standard measures such as cost of sales as a percentage of turnover, turnover per salesperson, length of time it takes to process a sale, number of out-house sales meetings per day, etc.
The search for new and better ways should be on-going, even after the bench-marking process is complete, as part of the continuous improvement process as encouraged on management courses, because your competition does not stand still.
