Across all industries, the cost to make a face-to-face sales call ranges from $125 to over $600. It's a wide range because the cost depends on many factors, such as:
- A sales rep's compensation and benefits
- Sales costs, such as travel and lodging
- The number of days available for selling
- The number of sales calls per day
- The industry
For selling industrial products, and for selling B2B in general, the average cost per sales call is around $400.
While sales managers continuously look for ways to cut costs of sales, there is a limit on how much control they have. For fixed compensation and benefits packages, not much, if any. For variable costs, expenses, and accommodations, some control, maybe.
But there's another way for sales managers to significantly lower costs. It's by helping their reps increase the number of face-to-face calls made per day or per trip. By increasing the number of calls per trip, sales reps are becoming more efficient, thereby lowering the cost per call.
This can be easily done with a CRM (Customer Relationship Management) system, mapping software, and call planning.
What is Your Average Cost for a Sales Call?
If you would like to better understand and control the cost per sales call, review the "Calculating the Cost of a Sales Call" worksheet. In the example, the total sales cost per year is $107,000, with the average cost per sales call ranging from $460 with 1 call per day, dropping to $230 with 2 calls per day, and to $153 with 3 calls per day.
Calculating the Cost of a Sales Call
Cost per Sales Call = Sales Costs/(Sales Days Available)(Calls per Day)
|Sales Rep's Annual Compensation and Benefits||$85,000|
|Travel (auto, air, etc.)||$10,000|
|Lodging, Meals, Entertainment||$10,000|
|Sales Costs Total||$107,000|
|Sales Days Available||Days|
|52 weeks/year x 5 days/week||260|
|Less Holidays||- 8|
|Less Vacation||- 14|
|Less Personal/Sick Days||- 5|
|Sales Days Available Total (260 -8 -14 -5)||233|
|Cost per Sales Call = Sales Costs/(Sales Days Available)(Calls per Day)|
|Sales Days Available||233|
|Cost per Sales Call with 1 call per day = ($107,000)/(233)(1)||$460|
|Cost per Sales Call with 2 calls per day = ($107,000))/(233)(2)||$230|
|Cost per Sales Call with 3 calls per day = ($107,000)/(233)(3)||$153|
Notes: The “Cost per Sales Call” formula is based on the “2007” Sales Benchmark Index”. For the formula, see http://www.salesbenchmarkindex.com/Portals/23541/docs/cost-of-sales.pdf. For the Sales Benchmark Index, see http://www.salesbenchmarkindex.com/
The above example shows how two and three calls per trip significantly cut the cost. The total cost for the travel day or entire trip is the same; however each multiple trip is more productive and cost-efficient.
Imagine the impact on the average cost per call over a year if a sales rep made only one extra call per week. Better yet, how would more calls per trip affect your bottom line?
To find your costs, go to http://bit.ly/153h6jb for a worksheet, in which you can plug in your numbers to calculate the cost for a face-to-face sales call. Simply type in your numbers over the sample numbers and your data will automatically be calculated and displayed. As you work the formula, notice how the "Calls per Day" significantly affects the "Cost per Sales Call."
How to Lower the Cost of Sales Calls with CRM, Mapping, and Call Planning
Getting multiple productive sales calls per day is possible with effective call planning, using integrated mapping with a CRM system. With this combo, sales managers and sales reps can plan calls by leads, accounts, and contacts, by any database criteria, such as sales volume, number of employees, and type of company – all color-coded on maps. Mapping provides the visualization that turns data into knowledge.
While you don’t have much control over the salary, benefits, and bonuses when it comes to sales calls, you can increase the productivity of your sales team. Increasing the productivity will, in turn, reduce your cost per call. One way to do this is to add mapping software and call planning to your CRM, which improves the company’s bottom line. You have the control. All you have to do is gather the knowledge and take action.
Bob Sullivan is president of InfoGrow Corporation. Bringing 24 successful years of experience in CRM, mapping, lead management, business intelligence, and B2B market analytics, InfoGrow helps clients identify their best prospects, discover missed opportunities, focus reps on the most profitable accounts, and reduce marketing waste. Contact Bob at 800-897-9807, x224.