Improve Your Business - Embrace Follow-Up (Part 3)

In Part 2 of my articles on follow-up, I suggested that it is our responsibility as owners to set and monitor the process we want to see followed by our salespeople. I further suggested that follow-up should be a crucial part of that process. Finally, to give us the impetus to improve this aspect of our business, I recommended calculating what each quote our sales team generates is costing us.

In this article, I want to cover what follow-up looks like. First, the underlying principle of all sales is this:

For every opportunity on my desk as a salesperson, I should know if the opportunity is won, lost, or still in play. For every opportunity still in play, I should have notes and a date for my next action.

In fairness, we shouldn’t expect our salespeople to have memorised where every opportunity is. Still, they should be able to tell us by referring to whatever system we give them to manage opportunities. Better yet, we should have a system that provides transparency without necessarily talking with the salesperson.

The assumption is that we have a system. It might be a manual, paper-based system, or it might be a computer-based system.

Whatever system we use, it is a cardinal sin of sales not to be able to find out the status of an opportunity quickly and not to have a task set for the next sales action.

We should see notes showing the salespeople's activity and their next activity in that system. If we don’t see this, we can only assume that the follow-up activity has not happened. If it has happened but is not recorded, it’s not much use to us having the information in the salesperson’s head when they go on holiday, get sick, or leave the business.

In a previous article, I said we should manage our opportunities like our stock. In some respects, opportunities are more valuable than our stock; we can’t go to a supplier and order more.

So, what does a robust follow-up process look like? In the system we establish, we should be able to see that follow-up is happening, notes outlining what has occurred in previous calls and reminders to take the next follow-up step.

As we spend time amongst our salespeople, we should hear the follow-up calls being made and we should be hearing from salespeople who need help closing a sale. When was the last time a salesperson asked for your help?

If we don’t see follow-up activity recorded and we don’t see evidence of it happening, we can safely assume follow-up is not happening. Despite what our salespeople might tell us.

Another indication of effective follow-up is our conversion rates. The first rule of conversion rates is to calculate them using hard data. We will always overestimate our conversion rate if we rely on gut feeling.

Effective follow-up achieves what I consider to be a satisfactory conversion rate of 65-70%; this might seem modest, given salespeople are telling us they are achieving as much as 80%. My experience is that most salespeople in the flooring industry are achieving 50% or less. In any event, a conversion rate of more than 70% should have us looking at creeping our margin up.

Another outcome of a good follow-up process is the opportunity to ask why we missed out on a sale. Every lost sale should have a reason, and as business owners, we should call those people to see what we can learn about our business.

In our next article, we will have a look at one of the thorniest issues when it comes to sales teams: commission. Most of us agree that it’s a good thing to do, but it is challenging to manage, and it can be contentious if not done well.

In the meantime, if you are looking for a system to help you manage your sales team and grow your sales, you might want to look at RFMS. We will be happy to join you in an online meeting to show you what RFMS might offer for every aspect of your flooring business.

Chris Ogden is a consultant and Managing Director of RFMS Australasia (RFMSanz.com), a supplier of IT solutions for the flooring industry. Chris has an extensive background in all aspects of the flooring industry, and he can be contacted at cogden@rfmsanz.com.