## Site Visits

The financial and cultural switch from using salespeople to sell via a telephone to selling in person is massive. The time, support costs, and payback escalate and can only be justified on top ticket items (> \$5,000) or high-volume sales (100 x \$50 upwards). These figures are highly subjective as it depends on the sales cycle of your product and the average number of visits required to convert a customer. Table 16-2 shows an example of a firm selling a \$5,000 product. Look what happens to the bottom line as selling costs vary.

 Table 16-2 Bottom Line Sales Aspect of Sales Cycle Cost RRP of product \$5,000 Average sales cycle of product 3 months Average number of visits 3 (1 a month) Cost of each visit (travel expenses, time, and so on) \$500 Cost of sale \$1,500 Salesperson's commission (30% of RRP) \$1,500 Gross profit \$2,000

So on a \$5,000 sale your real profit (after production, marketing, and sales costs) may only be \$2,000 (see Table 16-3). However, when you start to factor in the success rate (the number of clients you must visit to affect each successful sale) watch how evenly this profit can slide into a loss.

 Table 16-3 Profit versus Loss Success Rate J in J 2 in 3 J in 2 J in 3 Cost of product sold \$5,000 \$10,000 \$5,000 \$5,000 Cost of visits \$1,500 \$4,500 \$3,000 \$4,500 Salesperson's commissions \$1,500 \$3,000 \$1,500 \$1,500 Sales profit \$2,000 \$2,500 \$500 -\$1,000 Average profit per sale \$2,000 \$833 \$250 -\$333

The figures obviously vary with product and company, but when you bear in mind that a good salesperson will win about half their leads and on average about one in three or four, you may appreciate how closely you have to watch results.

For low-value sales, the figures hardly add up. It's only when you make inroads into large companies and get a taste of pulling off volume deals that salespeople stand a chance of being viable, as illustrated in Table 16-4.

 Figure Work Behind Large Deal Cost Value of sale \$250,000 Average sales cycle of product 6 months Average number of visits 12 (2 a month) Cost of each visit (travel expenses and so on) \$500 Cost of sale \$6,000 Salesperson's commission (30% of RRP) \$60,000 Gross profit \$184,000

With large sales, a salesman may need to succeed only once in 31 times to net you a profit.

There is no rule of thumb. You have to use what facts you can establish and work out the odds for yourself. (This was discussed in Chapter 13 on pricing.)

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