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Looks like a great company and a great concept. Good luck with the new position.

Your website has the best address/location function I have seen anywhere on the Internet.

Well played.

BRC
http://www.themusingsofthebigredcar.com

I’m starting a new position at Robin Technologies as the Sales Director – Robin Robots http://tryrobin.com .

I will be tackling many of these challenges beginning on Day 31

I did pretty well getting most appointments made for 75% of calls.

What’s funny looking back on that startup, was the other guys thought they were running the company. They sat back and hoped that I would sell most of it for them.

Here’s the graph:

(1) Get Some Idea of Market Potential

May have some sales territories, that is, have partitioned the world into non-overlapping areas that in total cover the world.

In each territory that for your selling is relatively mature and stable get what data is available relevant to potential sales or market potential and then using all the data from all the territories do a simple (IBM Scientific Subroutine Package, SPSS, SAS, R, Excel) regression analysis that seems to do well predicting sales from the data.

So, if you are selling commercial floor maintenance supplies to offices, schools, hospitals, retail stores, etc., then estimate, say, in each territory what the total area is in square feet, and use that to estimate market potential. Some other variables might also help. E.g., might get the area separately for each of schools, hospitals, or just commercial, government, etc.

Uh, the software may report an ANOVA table; that’s just the three legs of a right triangle as in the Pythagorean theorem generalized, which it does, to higher dimensions (in some cases, to infinitely many dimensions).

Use the results of that analysis to decide what old territories to split so can assign more sales persons, to pick new territories to attack next, estimate sales growth rates in each territory, and develop sales quotas.

(2) Poor Performers

For any poor performers without obvious serious problems, try to manage, lead, motivate, and train them before firing them?

(3) Growth Curves

I attach a graph of candidate sales growth curves — you may want one such curve for each territory.

There is a little freshman calculus here:

Let t denote time, say, in days, y(t) the sales in dollars on day t, b the market potential for that territory obtained from (1) above, and y(0) the sales in that territory today.

Assume that sales grow proportional to classic word of mouth advertising, virality, etc. so that at each time the rate of growth in sales is proportional both to the sales at that time, that is, the market potential achieved so far, and the market potential yet achieved.

So, for some constant k, with the calculus first derivative y'(t) the rate of growth is

y'(t) = k y(t) ( b – y(t) )

Can solve for y(t) for all times t with freshman calculus. Extra credit for doing so, or I will post the solution upon request!

Then depending on the constant k, will get a curve something like those in the attached graph.

Say that the constant k should be from the sales person in question, beginner, super star, or in between — adjust k with that in mind, and learn what values of k are appropriate from historical data of sales growth.

First-cut, back of the envelope, simple minded, vanilla pure, common, ordinary, everyday, garden variety, that’s roughly how sales will grow. One Saturday just after noon in Memphis, that equation kept FedEx from going out of business.

Sure, if there is some exogenous biggie such as a new competitor, an old competitor who quit, an old competitor you bought out, good stories in the news, bad stories in the news, a big trade show, a sales person who got run over by a truck, retired, etc., then this analysis needs some intuitive, manual application of Fink’s Finagle Factor or Kelly’s Variable Constant. Otherwise you have a somewhat useful tool.

We’re not talking the accuracy of a space flight trajectory to Jupiter here, but we are going for something better than just qualitative guessing.

(4) Spreadsheet over Time

You want sales to grow, and you know that that will take some time. So, you are planning over time.

All along you will be investing in new sales persons, salary, benefits, unemployment insurance, training, assigning them territory, giving them an office, expense account, covering travel expenses, gifts, etc. You hope to make money on this investment, but for now as you hire new people likely you will be losing money.

Well, you want to grow as fast as you can, but you don’t want to invest so much and try to grow so fast you might go broke along the way.

So, your mission, and you have to accept it, is to plan how fast to grow the sales team to get rapid sales growth but keeping the bank account current assets nicely positive.

So, develop a spreadsheet. For each sales person and the territory they are assigned to, use the territory analysis in (1) and the growth curves in (3) to estimate how fast the revenue will grow. Include how your expenses will grow due to the hires.

Then sit in bed with a good laptop computer next to your spouse as they watch a cooking show for how to make some goodies for the NBA Playoff games, tweak the partitions, the constants k, and the number of sales persons over time, and see how fast and when can hope to add sales persons to get sales growing as fast as possible without the cash in the bank getting too low.

Sure, do the analysis for, say, two to, maybe, five years, say, long enough for the hew hires to become significantly productive, but actually TRUST the analysis for only a few months into the future. That is, hire in steps, see how it goes, and then adjust the analysis and take another step. “Measure twice, saw once.”.

Hope that helps.

Of course, there is another approach: Call sales staff all-hands meeting, explain that have a warehouse full of inventory and past due bank loans on that inventory. So, get all that inventory SOLD in the next 60 days or we will all be looking for new jobs.

http://themusingsofthebigredcar.com/scaling-sales-one-index-card-shop-talk/

BRC
http://www.themusingsofthebigredcar.com

#scalingsales #sales #ceo #founder #entrepreneur #startup #growth