As a business owner or sales team leader, you may look at your sales staff and see a collection of personalities: some stars, some average performers … and hopefully none who are below average. Some owners view their sales force as an investment, others as a cost drain. There’s a lot of emotion involved in managing a sales team – the thrill of landing a new account, the agony of losing one – and it can be difficult to set those emotions aside for a clear-headed evaluation of the team.
Here’s a different approach: consider putting on your CFO glasses and viewing your sales team as a group of small business owners.
How so? Viewed as a set of small business owners, your salespeople can be evaluated more objectively. Each has his or her own ROI, and you can go so far as to view each member of the team with their own “mini P&L:” a revenue target side-by-side with a cost stack (salary, benefits, vehicle, phone, meals, training, events, travel).
The CFO would want to know who is paying their own way and making you a profit, and what their margins look like. For a broad-brush example, if a salesperson costs the company $100,000 annually with benefits and so forth, they need to generate $300,000 in revenue just to break even, assuming gross margins of 30 percent (this will vary, of course). Looking at your team this way can be a real eye-opener.
If you can’t associate each team member with a winning income statement, it may be time for additional training … or time to make a change. Someone who’s not covering their costs and generating sales of 3 to 4 times your annual investment (again, depending on your industry) is dead weight being carried by your company.
Thinking more like the CFO can remove the emotion from the process and light the way towards the necessary steps to get your sales back on track.