“I don’t accept the status quo. I do accept Visa, MasterCard, or American Express.”

Stephen Colbert

Numbers.

They scare a lot of people. Especially if math is involved.

Even though I passed all my math courses in school, my eyes still roll a little when I have to do something with numbers in my head. Or calculate the tip for my lunch bill. All I can say is…thank goodness I’ve got a calculator on my iPhone!

But the numbers and simple math I want to talk about today is actually super easy to do. And actually super important if you’re in sales. Or frankly, if you do anything sales-related at your company.
So there’s no need to flip out over these numbers!

doing-nothing-costing-us-whatOver the next three weeks in this “Justifying Sales Enablement” blog series, I’ll walk you through 3 calculations to prove that buying a sales enablement solution is actually less expensive and generates more revenue than choosing to do nothing at all at your organization. But…if you don’t want to do the “hard” math with me…you can just use the sales enablement ROI calculator.

If you’re reading this, I’m going to take a guess that you don’t have a sales enablement solution yet. And I’m guessing this is probably why. You’ve been told:

  1. “Well, maybe if we can find room in next year’s budget.”
  2. “We have Salesforce.com and Sharepoint, that’s good enough.”

But I’m guessing the biggest reason you don’t have a sales enablement software yet is because you haven’t been able to prove it will actually improve the way your team works, and as a result, drive revenue. Which at the end of the day, is what really matters to the boss, right – money coming through the door.

To put it another way, your current approach is why you’re told time and again there’s no budget. It’s why your executives are nervous about pulling the trigger. It’s why you’re not consistently hitting sales numbers and why you’re STILL looking for a better sales solution.

So help yourself out. Read through this blog series and get those closely guarded “justification” calculations you need to back up your case. I promise you, these are killer numbers that will make your boss fall out of his/her chair.

So…roll up your sleeves, ‘cause here we go…

What is the status quo costing you?

First, let’s go through an example calculation of what the status quo of not having a sales enablement tool is costing you.

Start by calculating the value of 1 sales reps selling time per hour. This is an important variable because a salesperson only has so much time to be selling in a given day, and can only generate so much revenue in that time. My good friend Nancy Nardin at Smart Selling Tools has done some great research on this. So Nancy has calculated that there are about 215 selling days in a year. That accounts for things like weekends, holidays, time off, etc. When you multiply that by an 8 hour work day, you get 1,720 hours a year that a salesperson could potentially be selling.

So, for purposes of this example, let’s say you work for a software company and the typical sales rep is responsible for a $1 million annual quota. If you divide that by the total time they have to generate that revenue, you get $580. In other words, the typical rep is worth $580 in revenue per hour to your company.

But keep in mind…in reality; a typical sales rep isn’t actually selling every hour of their day.  In fact, Jim Dickie at CSO Insights does annual research on this and has shown that a typical B2B sales rep actually only spends about 35% of their time selling 1-on-1 with prospects. So the question is, what are they doing with the rest of their time? Well…they’re searching for stuff to send to prospects, they’re updating stuff in Salesforce, they’re creating their own presentations…the list goes on and on…

But for purposes of calculating the status quo cost, you need to put a value on time that rep is spending on non-selling activities…because that’s the opportunity value you’re giving up by NOT having a sales enablement tool. And as the saying goes, “time is money”, right?

So, when you take that 65% non-selling time and multiply it by the total available time to sell you get 1,118 hours per year. Then, if you take that and multiply it by the $580 number we came up with earlier, you get $650,000 in missed revenue potential.

So in other words, choosing to do nothing different to impact that “non-selling time” is essentially “costing” you $650K per rep per year!

YIKES!!

Obviously…there’s room to impact that number. A major benefit of having a sales enablement tool is to help your sales reps get back some of that non-selling time. So in our next installment of this series, we’ll be calculating what that cost.

Next up in this series: Calculating the Cost of a Sales Enablement Tool

Nichole Auston
Nichole Auston is the Director of Marketing at RO Innovation. With a background in digital marketing and nearly a decade of experience managing marketing programs for a variety of SaaS companies, she’s passionate about sharing insights, best practices and stories about sales enablement and customer reference management, and the people and technology that power it.
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