Sales Management Blog

Sales management tips and advice on how to improve your sales team.

The Scary Math Associated with Producing Unqualified Proposals

Posted by Gretchen Gordon on Thu, Jun 13, 2013 @02:06 PM

In my last article, Reduce the Fluffy Pipeline Syndrome, I wrote about the time, effort and money associated with salespeople producing unqualified sales proposals.  If you are having difficulty breaking your salespeoples’ habit of producing unqualified proposals get them to do the math associated with their lost income as follows:

  1. Calculate the per hour rate of pay (based on last year’s total compensation divided by 52, divided by 40).
  2. Calculate how long it takes to produce one proposal on average (1 hour, 2 hours?).
  3. Then add in the number of hours spent trying to chase the prospect down after sending the proposal.
  4. Add up the number of proposals generated over the last year.
  5. Calculate the number of proposals that have not closed.
  6. Multiply the number of proposals that did not close by the number of hours spent producing proposals and chasing the prospect after.

If they are like most average or below average salespeople this number is a big number.  This is the money they missed out on because they were wasting time with unproductive activities as opposed to getting new prospects that could actually buy.  If you want to really get motivated to control their activities more, get all the salespeople to do this exercise and then total the number.  If your team is like most sales teams this will be a depressing number. 

This is a fairly simplistic calculation that does not take into consideration the real toll on your company associated with the time and effort put in by other members of the team if others outside the salespeople are involved in proposal development.  Do yourself, your company and your salespeople a favor and insist that they fully qualify all prospects before producing proposals.

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Tags: Sales Management, Sales Performance, Sales Force Effectiveness, For Sales Managers, By Gretchen Gordon

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