Mumbai: The next time you slam the phone down on a direct sales executive, spare a thought for the number of times he has to talk to a prospective client before clocking a sale. They probably have one of the toughest selling jobs in the business.
Which is why, virtues like persistence and patience are hugely cherished—particularly when they are trying to sell memberships and life insurance where rejection rates are among the highest.
According to industry estimates, a direct sales agent sells one timeshare product after making at least 20 calls.
As for insurance agents, they sign on one policy after meeting, on an average, 15 prospective clients.
Agents selling consumer durables or office automation products don’t have it easy either. At Eureka Forbes for instance, which sells water purifiers and vacuum cleaners, agents make at least 10-12 cold calls before a potential client allows them to demonstrate the product.
But that isn’t enough. Only one out of every three demonstrations actually translates into a sale.
Typically, sectors where the product has to be explained to a customer, relies on direct sales.
So pharmaceuticals, insurance, membership-based services, office automation, and certain high-end consumer goods use this method to reach out to the consumer. In some cases, this method is extremely successful. Office automation companies like Canon and Xerox close at two deals for every 10 calls they make.
Recently, banking and financial services and telecom have also tried their hand at this. But following a clamp down by regulatory authorities, their databases have been pruned to filter out people who choose not to be contacted.
Of what remains, every 30 calls they make leads to 15 prospects. Of these, only 2-4 hot leads remain in the reckoning and holds the potential to morph into a customer.
Faced with a steady stream of rejections, sales agency forces routinely witness high levels of attrition. At Eureka Forbes, it is as high as 40%. “The company combats attrition by giving them salaries and opportunities to grow in the organisation unlike frontline insurance agents who earn only commissions,’’ says S K Palekar, chief operating officer, Eureka Forbes.
In the case of life insurance, agents face a peculiar problem. “People consider it morbid to look at the practicalities of managing life after the death of a bread winner,’’ says an insurance agent. Another factor that also affects output is the mismatch of compensation paid to the agent. “The cost of intermediation has always been an issue of debate. Are agents paid adequately to make selling insurance a full-time job, is the question,’’ says an industry source.
So companies try various tactics to ensure better results on the field. “We encourage our agent advisors to work on referred leads rather than cold calls. And work on keeping our agency force activity focussed instead of concentrating on output only. Agents are encouraged to have a list of at least 10 names to contact each morning and three new appointments. Once it becomes a habit the work flows,’’ says Rajender Sud, head - agency (west & south), Max New York Life Insurance.
Similarly, in the case of lifestyle membership-oriented services, the fact that marketers are selling a concept, not a product makes it difficult. Added to this is the pricing. Agents need to find people willing to buy into the concept at a premium.
Adds Ramesh Ramanathan, managing director of Mahindra Holidays and Resorts India, “The effort is to constantly improve on the conversion process through focussed marketing, better lead generation and training.’’
Which is why, virtues like persistence and patience are hugely cherished—particularly when they are trying to sell memberships and life insurance where rejection rates are among the highest.
According to industry estimates, a direct sales agent sells one timeshare product after making at least 20 calls.
As for insurance agents, they sign on one policy after meeting, on an average, 15 prospective clients.
Agents selling consumer durables or office automation products don’t have it easy either. At Eureka Forbes for instance, which sells water purifiers and vacuum cleaners, agents make at least 10-12 cold calls before a potential client allows them to demonstrate the product.
But that isn’t enough. Only one out of every three demonstrations actually translates into a sale.
Typically, sectors where the product has to be explained to a customer, relies on direct sales.
So pharmaceuticals, insurance, membership-based services, office automation, and certain high-end consumer goods use this method to reach out to the consumer. In some cases, this method is extremely successful. Office automation companies like Canon and Xerox close at two deals for every 10 calls they make.
Recently, banking and financial services and telecom have also tried their hand at this. But following a clamp down by regulatory authorities, their databases have been pruned to filter out people who choose not to be contacted.
Of what remains, every 30 calls they make leads to 15 prospects. Of these, only 2-4 hot leads remain in the reckoning and holds the potential to morph into a customer.
Faced with a steady stream of rejections, sales agency forces routinely witness high levels of attrition. At Eureka Forbes, it is as high as 40%. “The company combats attrition by giving them salaries and opportunities to grow in the organisation unlike frontline insurance agents who earn only commissions,’’ says S K Palekar, chief operating officer, Eureka Forbes.
In the case of life insurance, agents face a peculiar problem. “People consider it morbid to look at the practicalities of managing life after the death of a bread winner,’’ says an insurance agent. Another factor that also affects output is the mismatch of compensation paid to the agent. “The cost of intermediation has always been an issue of debate. Are agents paid adequately to make selling insurance a full-time job, is the question,’’ says an industry source.
So companies try various tactics to ensure better results on the field. “We encourage our agent advisors to work on referred leads rather than cold calls. And work on keeping our agency force activity focussed instead of concentrating on output only. Agents are encouraged to have a list of at least 10 names to contact each morning and three new appointments. Once it becomes a habit the work flows,’’ says Rajender Sud, head - agency (west & south), Max New York Life Insurance.
Similarly, in the case of lifestyle membership-oriented services, the fact that marketers are selling a concept, not a product makes it difficult. Added to this is the pricing. Agents need to find people willing to buy into the concept at a premium.
Adds Ramesh Ramanathan, managing director of Mahindra Holidays and Resorts India, “The effort is to constantly improve on the conversion process through focussed marketing, better lead generation and training.’’