Sales Volume - Truth Or Myth?

As brokers, managers, and Agents we become caught up in the myth of sales volume. This myth does some of the greatest damage in this industry. We glorify the Agents with high sales volume and promote and encourage other Agents to be more like them. We award Agents and offices based on the sales volume with little regard to the other factors that make up success in life. New Agents look on in reverence thinking the person who has the most production in sales volume is the example to follow. I would like to take an objective look at the true value of sales volume and point out some other factors to consider when evaluating your business and your Agents' business.

Is sales volume the most important number to determine success in sales?

1. Is the better sales person the one with the higher sales volume or the one with more sale units sold and closed?

2. Where does profitability enter the picture? Does it have any importance?

3. Should the amount of time actually worked be considered to compare an Agent's ability?

4. What is the true quality of life for the Agent, i.e. health, time worked vs. time off?

5. How does quality of service to clients factor in?

6. Are we taking the steps to achieve financial independence based on the individual definition?

Let's take a look at the value of these questions; I believe you will have a different perspective of sales volume when you look clearly at these questions.

Is the better sales person the one with the higher sales volume or the one with more sale units sold and closed?

My position is they both possess merit for what they do. The one with the highest sales volume has a tendency to be placed on a pedestal, and the one with the most units sold is about halfway up. In some cases, sales volume can reflect the value of the market, not the value of the Agent. For example, one Agent's average price range is $100,000, so his average commission check is $3,000. That Agent closes 65 deals a year and earns a gross commission of $195,000. Across town there is another Agent whose average price is $300,000, so the average commission check is $9,000. This Agent closes 25 transactions a year and earns a gross commission of $225,000. Who has more options in his business and may be a better salesperson? I think there are strengths to both. Agent A who does 65 deals only needs to raise his sales price because he already knows how to achieve 65 closed sales per year. He has the skills to close 65 transactions. He understands the process, and if he has set up his business properly, he only needs to apply his philosophy and business in a higher sales price range to earn more income. He also did almost three times as many transactions. Usually Agent B, with the higher commission earned, receives all the rewards from peers, brokers, owners, and the company. Agent B is held in high esteem and reverence because he was the high producer in the office. Agent B has a good business but only sold two homes per month. (By most sales standards this is not an earth shattering mark.) Agent B will also need to learn to do more transactions to increase his business, a far harder proposition. Which one really has a business that is posed to go to the next level?

Where does profitability enter the picture? Does it have any importance?

In my career of selling real estate, coaching, and speaking, I have known many Agents who make a tremendous gross income but have little net income. They spend it all back into their business through gimmicks, marketing, gifts, mailings, advertising, overpaying staff, etc. They make decisions based on the idea that, "If I get one more transactions per month, it will pay for this new gimmick." The unfortunate thing is that they evaluate many parts of their business that way. They have five to ten items they evaluate that way. Suddenly, they need about what they make monthly to cover those gimmicks. Every new idea must pay for itself plus generate a return or profit. I wanted at least ten times return for any investments, so if I spent $1,000 on a new idea, I wanted to receive $10,000 in return from it. Most Agents do not factor their time or the staff's time into the cost of this new idea. That is a legitimate cost that must be added to the cost. For example, the cost to mail something is not just the cost of the stamp, like most Agents would factor. It's the cost of the letterhead, envelope, stamp, label, and staff time to prepare it and your time to oversee the process. That's the overall cost. Then you want a ten times return on the whole cost. This is the only way to evaluate to ensure you make a profit. We all work too hard to only earn wages and not profits.

Many Agents have bought themselves a job and never make a profit. A wise man once said, "Profits are better than wages." Profits continue on; they are the extra you have after you pay your wages and all your bills. Profits, if invested, beget more profits, which create financial independence. Wages merely cover the monthly bills.

Agents need to view the whole picture, the gross and the net. If you want the true reality after all the hype and fluff of sales volume, gross commission earned, and all the other ego stroking we do, look at line 31 on your federal tax return. That is reality. That is what you truly made for your labor last year. Do not kid yourself! What you are taxed on is what you made.

Should the amount of time actually worked be considered to compare an Agents' ability?

I know many Agents who work six to seven days a week to produce their income. If they factored the actual time versus what they earned, they would be sick. Their actual per hour wage is nothing to get excited about. In fact, if you asked them if they would work and do what they do for that wage, they would say, "No." If you want real truth, divide your time by line 31 on your federal income tax form. That is what you truly make per hour. That is after all your expenses to run the business and your personal employee taxes. That is what you would earn if you worked for an actual company. For some people, this exercise is too scary to even imagine.

I think we all can do more in less time. As a personal example, I switched over four years ago to a four-day workweek, Monday through Thursday. My production increased over 30% each year compared to the previous year. I reduced my time working by at least one full day, and I was rewarded with a financial increase. My skills improved exponentially, and my focus and concentration intensified. I also re-claimed my life for my family and myself. I was able to spend three days a week with my family. I also increased my time investment in personal development, which leads me to my next question:

What is the true quality of life for the Agent, i.e. health, time worked vs. time off?

You cannot be a seven days a week wonder forever. At some point, you need to reclaim your life. You have to control your clients and the other Agents. My philosophy is that earning large sums of money is the easiest area of your life to improve. Working to improve your spiritual, mental, physical, family, and financial areas are far more difficult.

When you schedule your time off and place the same value on it as you do your work time, you will have the opportunity to reclaim your life. Once you do that, your productivity will increase dramatically during your work time. The value of my time with my family is worth more than my work time. If you have that philosophy, you will focus on your family when away from work and focus on work when at work. It is clearly a philosophy you need to implant in your mind. While many Agents are at work, they think they should be at home. When they are at home, they are mentally reviewing their work rather than focusing on their spouse and children. Wherever you are, be there!

How does quality of service to clients factor in?

To create a sustainable business, you need to take care of your clients. The Agent who continually works with new clients and rarely gets referral or repeat business is lacking in service. We all need to spend some of our day finding new clients. Long-term success comes from repeat and referral business from clients who are already sold on our service. Are you doing the job you were hired to do? Do you provide the best service you can utilize in the market place?

Part of providing better customer service is improving your product. The product you are selling is you. If you are not spending significant amounts of time improving yourself, your competitors will eventually pass you. Jim Rohn says that you need to work as hard on yourself as you do on your job. I believe that doing so will lead you to greatness, both personally and professionally. If you are not investing at least half an hour daily in personal development, you will be left behind.

Are we taking the steps to achieve financial independence based on the individual definition?

Everyone has his own definition of what constitutes financial independence. Spend the time to clearly define yours. Invest the time to plan out how you are going to get from where you are today to where you want to be. Too many people fail to plan their future. It has occurred to me that, often, the Agents with the highest gross commission save and invest little or no money. They believe there is always tomorrow, and if they could earn more, they could save more. Develop the discipline to save right now, today. Saving does not get easier when the numbers or amounts get bigger. Instead, the want list gets longer because you think you deserve and can afford it. That is what your mind is telling you. Only you control the destiny of your money. You must create a savings plan today.

When other areas in our lives are out of balance, we spend to reward ourselves. We spend to make up for shortcomings in our unbalanced lives. We must create a savings and balance plan, so we can achieve financial independence. Our goal in life should be to be financially independent. We should all have the desire to amass enough assets to retire comfortably by living off the income or interest they generate. When we get the financial issue out of the way, we can really begin to live life to the fullest.

These are the true measures of success in the real estate business. These are the measures of success in any business. Why should we as REALTORS® be any different? Do not be fooled by the sales volume myth. More Agents have gone down in flames chasing their sales volume tail than from any other myth in real estate.

How to Generate New Clients - A Process Approach

I have been thinking lately about the idea of a "process" in the lead generation world. As sales training folks, we see most sales organizations struggle with prospecting. One problem is I believe they prospect ONLY when they need business, rather than ALL THE TIME. I sometimes feel like we all make prospecting really hard. So here's my advice, if you're feeling like prospecting is difficult:

The First Step

Think Engagement. Not Selling.

Do you have a "process for engagement?" Let's say you meet someone on a trip that might make sense to have more conversation with. Do they go into a process of any kind? Well, they should. Yet most of us don't think about prospecting as a process. We mistakenly think of it as an action.

Creating Prospect Engagement After the First Conversation

As the threshold of free goes up in the marketing world, you must have something that engages the prospect after that initial conversation. Calling them for an appointment might be too much. So instead, write down all the things that you could use to engage them further prior to the next call.

-Do you have a report that you could send them that educates them?

-Do you have an article that addresses the most common problems people similar to him have?

-What about an audio recording of a speech that you made where you discussed trends in the industry?

Creating Your "Sequence of Events"

Think of the process engaging prospects as a "sequence of events" that happens so that when you do call, they're ready. (Or, they call you first--Even better!) And even better, if you have someone in you office that is good with "systems thinking," then have them help you flow chart an engagement process. You'll be surprised at how a prospecting system will help you meet your goals.

Here are some other resources that will help as you learn the content in this article:

http://www.caskeyone.com/blog

Article Source: http://EzineArticles.com/?expert=B_Caskey

Sales Training For Service Businesses - Why Should I Use You? - Part 1 of 3

It's not always about sales training. The most common mistake I see with Services marketing is the 'it's all about me syndrome'. All of a company's letters, web site, and networking interactions are all about the company and what you can do. Without being too brutal here, most people do not care! They are not too interested in knowing what you HAVE, DO, or KNOW. They want to know what is in for the them.

In the simplest scenario they have a problem and they are looking for a solution. The company that can clearly articulate -

"I understand you, I know what your frustrations are and I know how to solve them." - will be the one that is the most successful. This sounds simple, I know, however the majority of my prospective clients still have an inward way of thinking and say: "this is what we have got and this is what we can do - do you want some?"

At the other extreme many prospective service clients do not always realise they have a need for a service. In this case, only a clear articulation of the beneficial outcomes, and not the process used will spark that magic moment when someone says "we need to meet".

How can service businesses effectively do this?

By focusing on solutions and benefits - in every communication you have with a prospective client.

Specific Targeting:
Much has been written about this and many people pay lip service to it yet most companies I work with can't clearly answer the following questions:

* Target Message: Who exactly are you talking to?
* Problem/Solution: What is the concern of your prospective clients and what is the solution?
* Benefits: What are all of the ways your services help your clients?
* Unique Competitive Advantage: What makes you stand out in a way that makes a difference to your clients?
* Risk Reversal: What are you promising to deliver that reduces the perceived risk of your clients?

I do not underestimate the difficulty in clearly defining these things. Yet if they can be achieved they will make the difference between a good and a truly great business.

A well used example of a service business that used this to catapult them from nowhere to a major worldwide organisation was Dominoes Pizza. Their whole marketing was based around their slogan:

"Hot, fresh pizza in 30 minutes or less, or it's free"

They knew their uniqueness, they invented it!

Note that not once does Dominoes say the Pizza will be tasty. It probably isn't the best pizza available but to their prospective clients it was unique. They knew it would be with them in 30 minutes or it would be free. Their needs have been met. Unlike the competition who would say:

"It could be 90 minutes. I just don't have the drivers and when you get them you can't trust them. And besides I just can't forecast my demand. Any way it'll be with you tonight sometime."

You don't always need sales training but if you do need sales consultancy then I would be glad to help. Look out for part 2 and 3 on this site

Why not sign Up for '21st Century Selling' - The Bi-weekly Sales and Marketing Newsletter. Its's free and easy and it's jam packed with Information to help you make more sales. Use the Easy Sign Up box at Sales Training Also - Have a look at the latest Sales Videos, Techniques and Ideas at the Sales DNA Blog - Sales Blog.

Article Source: http://EzineArticles.com/?expert=Peter_O'Donoghue

Sales Training Ideas - Do You Remember That Big Sale You Made?

Remember that big, or critical sale that you made? It may have been a huge dollar amount or it may have been that account that you finally broke into. Either way, it was a highlight in your selling career and it made you feel great. Question: What are you doing to keep it fresh in your mind to stay positively motivated?

Here's a simple, uncomplicated idea:

Have a memento around to remember it by. It doesn't have to be a major item, it can be a magnet, a stuffed animal, anything, but it should have something on it specific to that sale, even if you have to stick something on, and it needs to be somewhere where you'll see it, A LOT, like on your desk or somewhere in your car. That way, every time you look at it, you'll be reminded of that great sale.

Here are the keys, again, they're simple:

1) When you make a big sale, get a memento of some kind.

2) Make sure it is personalized to that sale. Again, if you need to stick something on it or write something on it, that will work.

3) Have it in front of you in your work environment. If you're in telephone sales, it should be on your desk or in a prominent place in your office where you will see it constantly. If you're on the road, have it in your car, perhaps hanging from your mirror.

4) To take it a step further, if you can put yourself back in that sales situation and remember what it felt like, it will help to keep you positively motivated. In the best case scenario, you will remember what you heard, saw, felt, smelled, etc. The more senses you can involve, the better.

Bonus tip - Set your next target by asking yourself what would be a big sale, dollar amount or a certain account, or figure out what else you could do that would have a major impact on your career. Whatever the answer, set that as your next goal. When you get there, you got it, get a memento to remind yourself of it. And now I would like to offer you free access to a monthly newsletter that will give you great tips to use instantly to improve your sales. You can get your access at http://www.completeselling.com

Article Source: http://EzineArticles.com/?expert=John_Chapin

Be Impressed, Grasshopper, Not Impressive

"Master," the Young Professional addressed his mentor, "You have told us that in order to hire us, a client must Like us and Trust us."

"That is correct, Grasshopper," the Master replied.

"I understand how I can earn a client's Trust," continued the Young Professional, "But how do I get him to Like me in the short time I might be in his presence?"

The other professionals snickered at this simple question, but they were secretly glad their classmate was so bold as to ask it, because they did not know the answer either.

The Master smiled gently and explained, "To be liked, you must try to stop being liked."

A look of confusion passed across the students' faces, and although he was blind, the Master could see it.

"We want to talk about our education, our skills and our accomplishments. We want our clients to see how well we dress, and the fine vehicles and homes we have acquired through our efforts. We want them to warm to our smiles and our conversation," the Master explained, "but what our clients want is for us to like them."

"To be Liked by a client, Grasshopper," the Master continued, "the client must perceive that you like him--that you are impressed with his accomplishments, however small they might be, and that you care about him."

"Ah," exclaimed the younger man, "I must be impressed, rather than impressive."

"Good, Grasshopper," the Master said gently smiling. "But it's more than being impressed," he continued, "You must Listen deeply and ask questions with Childlike Curiosity-not just about the problem you were trained to solve, but about his family, his hopes and his dreams."

A light began to grow in the younger man's eyes and, once again, the blind Master could see it.

"What you seem to be saying, Master," he began with excitement in his voice, "is that clients don't care how much we know, until they know how much we care. Is that it?"

"Yes, Grasshopper," the Master replied warmly, "You have learned well."

The younger man bowed, and the blind Master acknowledged it.

Turn Good News Into a Sales Pitch

I recently read an online article by Eric Chabrow on CIO Insight titled "Computer Jobs Hit Record High". While there can be negative news about employment readily available, I thought I'd share with you some signs of a sector with strong economic numbers that might bode well for you and your sales.

The article states "unemployment among computer-related jobs hovers near historic lows as the U.S. information technology workforce tops 4 million for the first time."

It also says that "the number of workers employed by IT services firms rose by 56,100 this past year to 1,414,400, a 4.1 percent increase, according to last month's BLS establishment survey of some 160,000 businesses and government agencies covering about 400,000 worksites."

So what does all this mean?

Chabrow writes: "Why would IT employment remain robust as unemployment rises in most other job categories? IT performs a critical role in business productivity, and the efficiencies it brings are crucial for employers looking to trim costs -- including payrolls -- as fuel and related expenditures soar and the economy and dollar weakens. In addition, companies today cannot operate without functioning IT systems, so certain business technology skills cannot be eliminated if a company wants to remain competitive."

Furthermore, "The increase in IT services employment reflects the continuing need by companies for outsourcers to manage corporate IT infrastructures as well as provide hard-to-find but needed skills to develop and support new applications and systems."

Again, the quote is -- reflects the *continuing need by companies for outsourcers* to manage corporate IT infrastructures.

Besides this good news there are at least a couple of take-aways:

* First, look at ways you can further increase business productivity. Chances are some of your clients are going to trim costs. Help them by making sure there is a technology solution that is going to help them stay efficient.

* Second, it is a good sign that payrolls at IT service firms are growing. It's a sign that many of your customers are looking to save on cost by outsourcing to companies like yours.

From a marketing standpoint I would suggest having your sales reps use the data I've quoted to ask questions about future plans, cost cutting measures, etc. Help them plan by being part of the solution.

The other item from a marketing standpoint is that you can create topics around these data points having to do with saving money, cutting cost, and staying ultra productive and efficient.

Limiting Factor Analysis

Limiting factor is any factor which limits the activities of the organization. The most common limiting factor is the sales volume because a company can not sell the entire product it manufactures.

Limiting factor analysis help companies to identify bottleneck resources and use best combination of available resources to maximize profit. Limiting factor in an organization or a company might be raw material, labour time, machine time. Limiting factor analysis can be applied where there is only one limiting factor involved. In case where there are more than one limiting factor, we have to use Linear programming or Simplex method.

Linear programming involves mathematical model which is solved using mathematical equations. The common area on the graph paper is called Feasible Region. The simplex method can only be solved using spread sheet software such as Microsoft Excel. In limiting factor analysis we calculate each product contribution (sales less variable cost) and then divide the contribution by per unit of limiting factor. Let's suppose raw material N is in short supply (that is it is a limiting factor) For example (Data is based on per unit of each product):

Product A Sales Price : 100$ ; Product B Sales Price : 200$

Variable Costs A : 50$ Product B : Variable Cost 135$

Contribution Per Unit A .......... 50$

Contribution Per Unit B .......... 50$

N used per unit of A 10 Kg

N used per unit of B 20 Kg

Therefore:

Contribution per Kg A ..........50/10 = 5

Contribution per Kg B .......... 65/20 = 3.25

As you can see Product A Contribution per Kg is greater than that of Product B, so every effort should be made to produce as much units of Product A as possible. After producing all units of product if company still has some kg of raw material N, then it should utilize N to produce Product B. In short the Products are ranked according to Contribution per Kg in order to maximize profitability.