Sales Is a Numbers Game
Use this Magic Formula to Increase Your Sales
Sales can be tough work, from prospecting and qualifying right through to closing the deal. Each step in the sales process can be filled with challenges, Some sales professionals understand that sales is often a numbers game, and more importantly, know how to use those numbers to propel them towards their goals. Sales is more of a process than it is a task.
To understand the sales numbers game, it helps to review the different stages that are common to most sales cycles.
Prospecting for Clients
Prospecting is where the sales cycle begins. It involves identifying potential customers using whatever qualifying methods help you determine who is and who is not a potential customer. A big part of prospecting is not only identifying potential customers but calling on them. Prospecting calls can be accomplished in several ways, including cold and warm phone calls, direct mail and face-to-face visits.
Prospecting is easy when you have a product to sell that everyone wants. For products that might be necessary but not exciting, such as insurance, selling requires you to play the numbers game, which is really simple and really tough at the same time: The larger the number of prospects you have, the higher the number of sales you'll make.
Getting an Appointment
Once your prospects have been identified and contacted, the next step is to secure an appointment. Getting an appointment is generally a sign of interest on behalf of your prospects and each appointment set should be seen as a victory. Having more appointments leads to more chances to make a sale.
Submitting a Proposal
As part of many sales cycles, you will need to deliver some sort of a proposal to your customer that spells out your offered solution or product along with the price. As in each other step of the sales cycle and numbers game, the more proposals you can bring to qualified, interested parties, the more sales you'll make.
Close the Deal
Each step in a sales cycle should be designed to lead up to closing the deal. If you did a thorough job with qualifying the customer and designing a proposal that matches the customer's needs and handles any objections, then you should be all set to close the deal. This, of course, sounds much easier than it is but closing a sales cycle in which you did not do a good job with the steps leading up to the close is significantly more challenging.
How to Set Up and Play The Numbers Game
While some may argue that there are more steps to a typical sales cycle than the basics presented here, these four steps provide a solid summary of a sales cycle. To understand the numbers game part of sales, you need to start with your goals. In other words, armed with a full understanding of your compensation plan, determine much money you want to earn in your position. Once you are clear on how much total compensation you want to earn, figure out how much you earn on an average sale. If you are too new to the position to know what an average sale pays, ask your co-workers for their average income per sale.
Once you know the average commission for an average sale, divide your total desired commission income by the average sale's commission amount. The result will be the number of sales you need to close in a year to hit your income goal. To serve as a simple example, assume that you need to close 50 sales per year to hit your income goal.
Next, determine how many proposals that you deliver result in a closed sale. Again, if you are new to your sales position, reach out to your co-workers to find out how many proposals usually end up with a sale. Using the above example of having to close 50 sales to hit your goal, assume that you need five proposals to close one deal. In the example, you will need to deliver 250 proposals in a year to make 50 sales and hit your income goal.
The next step is to determine how many appointments you need before finding a customer who is ready for, and qualified for a proposal to be designed and presented. To keep things clean, assume you need two appointments before finding a prospect to propose to. Using the example numbers, you will need 500 appointments per year to arrive at 250 proposals.
The last step is to find out how many prospecting calls you will need to complete. Again, determine how many prospecting calls (cold calls, phone calls, etc.) that you need to secure a customer appointment. Say that you need five prospecting calls to get one appointment.
Putting the Numbers All Together
Using the examples above, you can assume that you need five calls to set one appointment, two appointments to deliver one proposal and five proposals to close one deal. Once you have your total number of sales needed to hit your income goal, just work backward to arrive at your specific numbers. In this example, you will need 1,500 prospecting calls to secure 500 appointments, that will yield 250 proposals, resulting in 50 sales.
You will need to determine your numbers to make this work for you. Once you know the numbers, you can design your days with much more focus. If you end up needing to make 1,500 prospecting calls per year, you should break this number down to monthly, weekly and daily activity standards.
If you work 250 days per year and your numbers show you that you need to make 1,500 prospecting calls, you will have a daily target of 6 prospecting calls per day. Seeing a small number like "6 calls per day" is much more motivating than working towards hitting 1,500 calls in a year.