WHY SALES REPS DON'T WRITE MANY ORDERS

As a sales manger, one of the most common complaints I hear from business owners is that their sales reps aren’t out writing enough orders.

On the other hand, the sales people often say the economy is bad and stores just aren’t buying (that’s not really the case as we discussed here ).

Both viewpoints  are really missing the big picture.  The reality is that after the trade show there are simply too many reps, vendors and product chasing too little opportunity.

Another way to put it is that supply exceeds demand.

Click to read why…

SALES IS ABOUT OUR CUSTOMERS’ NEEDS NOT OUR GOALS

We may set out sales targets for ourselves, such as how much of a sales increase we will target in the next period.  But the crucial missing element when we set  these targets is the customer.  Why would they buy from you?  Do they actually need you when you show up?

The intensity of our desire to sell means nothing to the customer if they don't need anything.  So let;s take a look at when they may need us. 

WHEN CUSTOMERS ARE LIKELY TO PURCHASE

Let’s take a look at the annual sales of a typical CGTA retailer generating $300,000 in sales.

As discussed here, we can take a very educated guess at a store’s monthly sales, and they will look something like this:

 

Now, once you know the sales pattern of your customer, you can start to predict when and how much they will likely buy.  And the biggest purchasing event is the trade show.

 A typical retailer at the trade show (according to the CGTA) will place an average order of about $700 with approximately 40-50 vendors.  For simplicity we'll say that means they purchase $40,000 at the show.

We can also assume that a store will keep an average monthly inventory of $75,000 to ensure the store is well-stocked.

By combining how much they buy at the show, and using our estimated monthly sales, we can now predict how much buying a store will need to do in any given month.  And it looks something like this:

Look closely at February and March.  Not only are these the lowest sales months for our customer, their inventory levels are at their highest since they have just received their trade show merchandise.

Just because a store owner didn't buy from you at the trade show doesn't mean their short on stock.  They're full of merchandise...it just may not be yours!

We can easily calculate how much they may purchase in these months and it's probably in the vicinity of $2000 worth of merchandise...and they have over 1500 vendors to choose from!

In season orders are typically quite small at about $200-$500 each.  Which means that a retailer may place orders with only 4 to 8 vendors in these months.  It's worth repeating again that there will be 1500 vendors chasing that small amount of business. Not very good odds if you're a sales rep.

Many sales reps service 200 customers or more,  So the question is, how likely is it that a sales rep will be in a store on the day the customer actually needs to place an order?  Probably very unlikely.

TIMING IS EVERYTHING:  WHY IT'S DIFFICULT FOR A REP TO SELL IN BETWEEN SHOWS

The fact is there is very limited opportunity after the trade shows. The biggest chunk of the retailer's buying is done at the show.  Afterwards, they're filling in the gaps.  And when you look at it on a monthly basis, most retailers don't need to purchase very much.

Stores will purchase when they are out of certain merchandise.  If you sell candleholders and the store's shelf if full of them on the day the your rep shows up there's not much the sales person can do.  

This is why booking programs are a better way to boost sales as discussed on our post on strategy here. Booking programs meet specific customers needs which is why customers rewards vendors and reps who offer these programs with much larger orders.