They say that sales is a numbers game. It’s not a numbers game; it is far too complex and too important to be boiled to something as simple as making more calls. But that doesn’t mean there isn’t a lot to be gained by looking at some metrics and making some judgments about where you might improve your sales efforts. It’s time to Quantify Yourself.
Let’s look at a few basic metrics you should already track and a few more you may need to do a little work on, and then we’ll look at how you might use them in 2010. (at the bottom of this post is a spreadsheet you might want to open and refer to as you read this post).
Attempts to Scheduled Appointments
Prospecting is the lifeblood of success in sales. Period. But it is not a numbers game. Sure making more calls may get your more appointments. But being a great salesperson requires a more thoughtful approach then the clumsy application of brute strength. Being a great salesperson means reflecting on what we are doing, noticing what is working and what is not working, and making some adjustments.
It doesn’t matter how you obtain appointments, you can track this method by counting the number of times you ask for an appointment and how many times you secure the appointment. If you ask for an appointment 10 times and get 3 appointments, that’s a 30% effectiveness score.
The question here is:
1. How do you get this number to 40%?
Conversion from One Stage to the Next Stage
Regardless of your sales process, this is a critical metric. Once you classify a sales encounter as a stage in your sales process, you then have to track how many prospects enter that stage and how many actually move to the next stage. If the needs analysis is stage one, and your presentation is stage two, then you need to divide the number in stage two by the number in stage one to get an effectiveness score. For easy math, we’ll assume you had 10 prospects entered stage one, and 5 entered stage two. That means your effectiveness score is 50%.
The questions here are:
2. How do you make it 60%?
3. What is happening (or not happening) on the first call that prevents prospects from moving to the second call?
4. What is going right on the calls with the prospects that are moving forward that isn’t happening on the calls with the prospects who aren’t advancing?
The result here might indicate a qualifying problem (which is bad), or it may indicate a sales behavior problem (which could be something far worse).
How much is your average sale? How many deals do you need to make your quota? This number gives you great power and flexibility in reaching your quota by helping discern whether you need additional deals in your pipeline, or whether increasing the size of the deals or wallet share can help you reach your quota or goals.
Here you might ask these questions:
5. How does your average sale compare with your peer group?
6. If there is a difference, why?”
7. Is it an option to sell bigger deals to reach quota?” (Maybe you are too focused on transactional accounts)
8. Is it option to sell more but smaller deals? (Maybe you are simply trying to only slay dragons)
This is a critical metric. You are not going to win every deal. In fact, your closing percentage may be too high (I have seen salespeople make the mistake of not competing for enough deals, literally only working on what they believe they will win).
This is simple math. How many deals do you compete for where a decision was made and how many did you win? That is your Win Ratio. But, it isn’t enough. You need to also capture how many decision did you compete for where no decision was made (this may also indicate a qualifying problem).
That might look like this: Competed for 10, won 4, with 2 no decisions. This means you won 4 and lost 4, but you also have to account for the percentage of prospects that make no decision. You cannot use a 50% win ratio with any reliability, because some prospects will decide to do nothing.
How You Might Use These Metrics
Quantify yourself. Use your own numbers to make your own judgments about where and how you might improve your own performance. Don’t wait on your sales manager—you alone are responsible for your own performance, and that starts with an understanding of how you are performing and where improvements might be made.
I have attached a very unsophisticated spreadsheet you can download and modify with your own numbers. You can enter in the numbers shaded in yellow with your actual numbers, and see where you might make some improvements. If you fill in the yellow shaded numbers, the spreadsheet will make the calculations for you, including how many deals you need to compete for to make quota.
9. What metrics are you going to use to quantify yourself in 2010?
10. What crude calculations do you to judge your own sales performance?
Download: Crude Sales Quantifier
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Filed under: Sales 3.0