“It’s all about the numbers”, is something that we hear a lot in business circles and sales meetings, basically indicating that the greater the amount of sales activity the greater the results. Is this true? Here is my first and most important sales training Tip.
The most obvious ‘number’ that people discuss in relation to selling is increasing the number of contacts that are made with prospective clients. Usually implying that the more cold calls, telemarketing calls and face to face appointments that are made, the greater your sales will be.
And this is undoubtedly true, however, you can’t just measure how many doors you are knocking on. Tracking and managing this activity is critical but you also need measure and track many other elements to maximise quality and results.
In many organisations, salespeople are set a huge number of selling objectives or KPI’s and they become so focused on meeting these that they forget their job is to sell.
I have seen some organisations that have more than 30 separate sales KPI’s, which is ridiculous and overwhelming for any sales person. You don’t want to take your eye off the goal of generating revenue while you are achieving a set of beautiful sales reports.
Managing activities is very important and good management of sales KPI’s is at the heart of most good sales teams. It is therefore critical that the ’numbers’ that are focused on will have the desired effect of driving results. My suggestion is that there should probably be no more than 6 ‘numbers’ that are tracked.
|Call Rates||How many Visits are being made?|
|Opportunities being worked on||How many proposals are in the market?|
|Closing Ratio||How many say yes to how many say no?|
|Time opportunity in pipeline||How long it takes to work on a deal?|
|Value per opportunity||How much is the business worth?|
|New / Existing Business Ratio||How many meetings are for New Business?|
Managing and improving “the numbers”, does have a very positive impact on the business. If you can increase the pipeline activity AND the skills (closing ratio), compounded this has amazing results. This chart illustrates why:
Here are a few examples to help explain:
If a sales person is knocking on 30 doors per week and adding 8 opportunities that are in line with their target market, then simply saying ‘knock on more doors’ or ‘make more cold calls’ may not be enough. To knock on more doors may be the strategy, but the goal must be to add more ‘target market opportunities’ to their pipeline.
If a sales person simply takes on one number to focus on, (in this case, make more cold calls), they may do a great job to increase this number but if the act is quite aimless and they are doing this and not identifying the target market, you could end up with double the number of doors knocked per week (big tick in that box) with the same number of opportunities identified. This activity is simply important time lost.
If a sales person is working on 13 opportunities today and has a closing ratio of 30%, we need to ensure we are keeping an eye on the fact they are winning just under 4 opportunities. If they start increasing the number of calls and opportunities worked on and then for whatever reason the quality slips and their conversion ratio decreases, it could actually have the reverse effect on sales due to focus on calls. In this case, they may increase the number of opportunities to 15, but their closing ratio slips to 20% which results in them only winning 3 opportunities
So, is it all about the closing ratio? Maybe not. If the closing ratio increases, could the number of opportunities they are working on slow down. Or maybe the length of time it is taking to work on an opportunity increases. Or, the average size of the deal drops. Or maybe they are all existing bits of business and the sales person is not looking at a new business which means they will miss targets in the future. It is very dangerous to link your sales efforts with just one number as many things need to be.
Is the sales person making lots of calls but not adding to the pipeline? If yes, what is happening with the other visits they are making? Do they spend their time visiting their, regular clients? Are they having lots of cups of coffee? Is this where they feel comfortable?
There are many salespeople who prefer to cater to the clients they know well than to look for new business. So in this case measuring only the number of meetings would not give you a true reflection. You need to ensure a ratio of New to Existing is in place to be sure
So, the answer to the question about sales being about numbers is a definite yes. As is often said, “You cannot manage what you don’t measure”. However, we must move away from the old-school approach of being one dimensional, where the number of customer contacts alone is the key to success. The key is to identify the critical numbers that are relevant to your selling activity and focus on the ones that have the maximum impact.
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