Improving the commercial and financial acumen of your salespeople will help to enhance their decision-making and ensure the deals they do really benefit your business. Here are five of the most important steps you can take to ensure your team members are at the top of their game.
The KPIs you select will have a big impact on how your salespeople behave and how they focus their energies. You know the old saying, ‘what gets measured gets done’! As well as obvious KPIs like top line revenue, choose key metrics such as gross profit per customer, territory or portfolio which will focus your sales people on the actual costs of delivering your product or service and make them ‘margin’ aware. Also consider some of the input KPIs such as conversion rates, and ‘time to convert’, all essential stats to help you and your sales people review and adjust what they do, and how they do it.
Ensure your salespeople know exactly what things cost. This means giving them information on the trade or buy price for the products they’re selling, or the equivalent if your business sells services.
Talking clearly about finances will help salespeople understand that any giveaways or discounts they offer when securing a sale will cost your business too. While you don’t necessarily want to stop them offering incentives, it’s important they know exactly how the deals they do impact your bottom line.
Every one of your salespeople should have a basic understanding of cash flow. Most importantly, they need to understand that a sale isn’t a sale until the invoice has been paid and the money is in your company account. If you’re a business with debt, this is particularly important as there will be borrowing costs to factor in as well.
Your salespeople should have an understanding of the national and international economic indicators that can affect how a market functions. These include the jobs market, currency exchanges, interest rates, inflation, oil price, the costs of commodities and any other relevant factors.
As well as having a firm grasp of these issues, your salespeople need to be able to speak about them commandingly. This will demonstrate to customers that they are not only sales people, but business people as well capable of a more holistic business conversation.
A crash course in accounting will help your salespeople better understand the business landscape and the impact of the decisions they make. Ensure your team understands how a P&L works, what a balance sheet is, the difference between gross and net profit margin, what EBIT/EBITDA means, what management accounts are and how these differ from formal published accounts.
Though they don’t need to become accountants, they should understand how the decisions they make about what they sell, when they sell, how and to whom - and what they have to ‘trade’ to make the sale – impact your business.
To learn more about boosting sales performance and giving your employees the commercial and financial training they need, get in touch with a member of our expert team today or take a look at our Commercial Acumen training courses.
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