If the salesperson made sales calls to the large-volume account more productive and was able to cut down those calls to every other day, the time cost would be reduced and it also would free up time every other day to call on others. The process of measuring the value of time proves that time really is money and that time valuation is a concept that every salesperson must consider.
A salesperson can easily apply this technique to any of his or her individual accounts and can utilize the formula to calculate the value of time in a number of ways. For example, a salesperson could calculate the value of time for an individual account by dividing the account’s sales by the number of sales calls devoted to each customer. In this case, the value of each sales call to the large-volume account is $1,000 ($250,000 in annual sales divided by 250 annual sales calls) while the value of each sales call to the smaller-volume account is $4,167 ($50,000 divided by 12).
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In order to create more understanding of your own sales behavior and the value of time, try the following:
Change your reporting methods. Too many sales managers and salespeople focus on call reports that become little more than creative writing assignments. And they’re no picnic for the manager to read, either. Instead of burdening each other with these types of reports, strive to communicate in objective numerical terms. This will lead to more opportunities for coaching and performance improvement.
Count. The simplest thing a salesperson can do is simply count the number of sales calls made in a given day, week, and month. As this count is accurately developed, opportunities for improvement will instinctively appear. But until you take the time to honestly tally the number of sales calls you make, you will never really know the true value of your time.
Rick Davis is president of Building Leaders, Inc., a Chicago-based sales training organization. 773.769.4409. E-mail:
rickdavis@buildingleaders.com
Analyze. After you have begun the process of counting, you should start analyzing the data and strive to find ways to improve your process and therefore improve the value of your time. If you determine you are spending too much time with one customer, you’ll know that you need to gain more sales from that customer, perhaps by selling additional products, or you must strive to make your communications with that customer more efficient to cut down on the number of sales calls required. But you will never see these opportunities until you analyze your current performance.
Keep in mind, the exercise of evaluating your time is purely mathematical, but it leads to intuitive realizations. After you have calculated the value of your time, you will learn to “feel” when you are investing too much time on non-productive tasks. One thing is certain: If you don’t calculate how you have historically used your time, you’ll never be able to improve the value of your time in the future.
