Sales is a numbers game. Period. There is no getting around this fact. If you want to be successful at all in any kind of sales environment, whether it is field sales or tele-sales, then you simply have to put the numbers in.
I was once told the story about a man that saw another man get attacked by a gang in the street. As he ran to help, he watched as the man under attack remained perfectly calm and still until one of the gang actually went to hit him. At this point he saw the man block the attack and knock two of the gang members out cold with a single spinning kick. The remaining members of the gang fled at the sight of this. As he arrived at the scene, realizing that his help was in no way needed, he courteously asked whether the man was alright. When he said he was, the observer remarked what an amazing kick that had been to knock two people out in one go. To this the other fellow responded that, in actual fact he was an expert in martial arts and that, while it may have only looked like one kick to an observer, in actual fact it was the culmination of perhaps a million kicks practiced repeatedly in readiness for a moment such as this.
The moral of this story is simple. Excellence is not a single action but an overall result of many, many actions taken to perfect a skill. This is the essence of the numbers game. We all play the same game in sales, it just so happens that some are more skilled than others through practice and perhaps a little luck. Let me explain the numbers game a little more clearly:
Suppose that if you hit your target you will earn £40,000 per annum (roughly $80,000 U.S.D.) and you need one sale per day to hit your target. Let us further suppose that to make that sale you must make ten sales presentations over the phone, on average. Further, let us assume that to enable you to make those ten presentations, you must make, again on average, one hundred individual calls to different companies. Clearly these figures will vary depending on your industry, your product and your level of skill, however, for the time being let us work with these for the sake of illustration.
We are left with the following:
100 calls per day = 10 sales presentations
10 sales presentations = 1 sale per day
1 sale per day = £40,000 per annum
Simple. Okay, but let us take this one step further. If there are 52 weeks in a year and we are allowed 20 days holiday, then we are left with 48 working weeks. If we then subtract the number of bank holidays which usually equals 8 days, (this is for the UK), we are left with 46.4 working weeks. If we then assume a further two weeks for sickness throughout the year, we are left with a grand total of 44.4 working weeks to each calendar year. This works out at 7.6 weeks of lost selling time which equates to 38 lost sales if you do not manage this lost time properly.
So we have:
52 weeks in a year
- 4 weeks holidays
- 1.6 weeks bank holidays
- 2 weeks sickness & misc. absence
44.4 weeks selling time remaining
This may all seem like I am going a little too far but please remember that a company will generally make far more money from you and have to pay you far less money if you almost hit your targets but not quite. In each of the companies I have owned, that is exactly the way I set commission structures. I was delighted when an employee just missed their target because of all the extra commission and bonuses I did not have to pay out.
Companies may say that your targets are weekly ones but that is not the case at all. Any organization worth its salt will set its targets first of all annually and then quarterly and then monthly or weekly. This is why when I worked for a very large private healthcare provider they did not allow their sales staff any leeway over missing targets due to holidays. Staff were expected to manage their holidays and their sales so that they hit their targets no matter how much time they had off.
So let us return to our initial model. If we multiply it up a little, we see that to earn your £40,000 per annum you had to achieve one sale per day. Therefore, we can assume that what that means is that you have a target of around 260 sales per annum, (1 sale per day x 5 days per week x 52 weeks per annum).
However, in reality, your target is no longer one sale per day because now we have to divide 260 sales by 44.4 weeks and then by 5 days per week. The result of this is roughly six sales per week and so 1.2 sales per day.
This may not seem like such a big deal but what it actually means is that if you work on a basis of one sale per day and five sales per week, on average you are likely to end up short of your target at the end of the month by four sales. This is how companies profit from you. If you miss your monthly and quarterly targets, chances are that you are missing out on some pretty nice bonus and commission incentives. The company will be delighted because you are doing what they need and they are not having to pay you very much for it.
If you are one of those cynical people that does not think that it works this way then I would urge you to check out the people that are earning big money in your organisation. I guarantee you that they will run through figures like these on a regular basis. Every single successful salesperson that I have ever met, including myself, regularly check where they are in terms of their required sales figures and how much they need to do and how many calls they need to make to achieve that.
The next step is to determine what our actual figures are. It is all well and good me saying that to get one sale you need to make on hundred calls, but what if that is not the case for you. I know that I used to work on very different figures from this indeed. I usually only needed to average around ten to fifteen calls to make a single sale. Having said that, I knew many colleagues that had to make the hundred mark to even have a chance of a sale.
The way to discover your actual statistics is to simply count them up. Start by collecting some hard data. If your company can provide you with the number of calls you have made over a given period then by all mean get them out and start doing some sums to see where you are up to. If they cannot or will not provide these then you will just have to compile them yourself.
The easiest way that I have found to do this is by just sticking a post-it note to your desk and making a small mark each time you make a call. The added advantage of this is that it can give you more detailed data that a simple phone bill. You can use it for example not just to record how many calls you make but also how many decision makers you speak to and how many full presentations you make. This is invaluable information for a sales person.
By way of a slight aside here, it occurs to me that some of you may think that all this is very pedantic and merely producing figures for the sake of it. Indeed, I have been accused of this on occasion by some bosses. Yet, when they see the results I get they soon shut up about it and let me get on with it, thank you very much. The point is that one of your primary business tools is your telephone. That hunk of plastic that sits on your desk staring at you all day long can bring you great riches and happiness if you learn how to use it properly. It gives you constant feedback by way of these daily figures. Use them and be the better off for it.
Remember, even if you are the worst sales person in the world this method of selling WILL work for you. Even if it transpires that you need to make twice as many calls as your colleagues to get the same sales then what does that matter? For as long as you put in those calls, you are guaranteed, statistically speaking at least, to get those sales.
So what do you need in the way of raw data? You need several values:
o Total number of actual calls made during a specific and measured time period
o Total number of sales made during the same time period.
o Total monetary value of sales made in the period
o Total number of days worked
What you then do is simply apply the following statistical formulae:
o (Total number of sales calls) divided by (Number of days worked) = Average number of sales calls per day
o (Total monetary value of sales) divided by (Number of days worked) = Average £’s per day
o (Total number of sales) divided by (Number of days worked) = Average number of sales per day
Then simply divide the results of those, i.e. average £’s per day by the average number of sales calls per day to get the average number of £’s per call. Do the same with the average number of sales to get the average number of calls needed to get a single sale. You can go on with this process depending on the depth of data that you collect. If you have information, for example about how many full pitches you managed to make and how many actual decision makers you speak to then you can calculate how many pitches you need to make to get a single sale and so forth. All of this can be collated on a simple spreadsheet to give you regular feedback.
The point of this should be very clear. If it transpires that you usually make around 80 calls per day and get one sale per day, it does not take a genius to realize that without improving your selling skills one little bit, you can easily make one extra sale every four days if you simply increase your daily calls average to a hundred. Or, if you are this way inclined, you could make your average of five sales per week by Thursday and then take it easy on Friday. It is up to you.
The value of knowing your work input level to sales output level in terms of statistical ratios is enormous. Everyone has a comfort level. Most sales books assume that you want to be the next Bill Gates. I do not assume that. The majority of successful sales people that I have ever met were happy earning a certain level that they had determined necessary to live the lifestyle they wanted. Obviously that figure varied from person to person, but once they had achieved that they generally preferred to enjoy their lives and get to know their work colleagues or spend more time with their families than stressing out over looming sales targets. Life, in any arena, is about balance. The value of statistics in sales is that they tell you, (on average it must be stressed), what you need to do on a daily basis in terms of your own personal level of effort to achieve your goals.