Sales Is a Numbers Game
Use this Magic Formula to Increase Your Sales
Sales veterans understand that they're playing a numbers game: the more prospects you have, and the more proposals you send, the more sales you're likely to close each year.
Every step in the sales process is equally important and is filled with unforeseen challenges. Finding a prospect, getting them to open up to you, pitching your product, and closing the deal can each be arduous work. Before you hit the street and start selling, you should understand the four stages that most sales cycles have in common:
- Prospecting for Clients Prospecting is where your sales cycle begins. It involves identifying potential customers who can truly benefit from whatever product you happen to be selling. A big part of prospecting is not only identifying potential customers but calling on them to make sure they're the right fit. You can do this by placing cold or warm phone calls, sending a direct mail with targeted surveys, or conducting a face-to-face visit where you can learn more about your potential customer.
- Getting an Appointment
Once you've identified and contacted your prospects, the next step is to secure an appointment. Once a prospect has answered the phone, you have about 10 to 20 seconds to grab their attention and make your pitch. If you practice your approach beforehand, you'll have a higher chance of keeping them on the line. Make sure to do your research so you know specifically how your product can help. Getting an appointment with your prospect is generally a sign of interest, and each appointment should be seen as a victory.
- Submitting a Proposal
If your appointment goes well, you'll be asked to deliver a proposal to your potential customer, spelling out your offered solution, along with the price, time frame, and all relevant warranty information. Being prepared to follow up as soon as possible will help secure your lead's interest. The more proposals you can bring to qualified parties, the more sales you'll eventually make.
- Closing the Deal
Each step in the sales cycle leads up to closing the deal. If you did a thorough job of qualifying prospects who need your product or service, and an equally diligent job designing a proposal that matches their needs, then you should be all set to collect a check. This sounds much easier than it is, of course, but it's even more difficult if you haven't done a thorough job with the prospecting, appointment setting, and proposal delivery for each potential client.
How to Set up and Play the Numbers Game
To play the sales numbers game, you must start with an understanding of your goals and compensation plan, and determine how much money you need to earn in order to be happy with your current job. Once you've made up your mind, figure out how much you currently earn on an average sale—or if you're new to the position—ask your superiors what you might expect to earn on each sale.
Divide your total desired income by your commission from an average sale; the result will be the number of sales you need to close in a year to hit your income goal.
Next, determine how many delivered proposals 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. If you need to make 50 sales to hit your goal, and you assume that you'll need to create five proposals to close one deal, it follows that you'll need to deliver 250 proposals per year to make 50 sales.
The next step is to determine how many appointments you need to set up before finding a customer who is ready (and qualified) for a proposal. Assume you need two appointments to lock in a prospect; as such, you'll need to set up 500 appointments per year to successfully deliver 250 proposals.
The last step is to find out how many prospecting calls (cold calls, warm calls, emails, etc.) you will need to make in order to secure one appointment.
Putting the Numbers Together
Assume that you need to make five calls in order 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 (to hit your income goal), work backward to arrive at your specific numbers.
In the example above, you'll need 1,500 prospecting calls to secure 500 appointments, which will then yield 250 proposals, resulting in 50 sales closed.
You'll need to determine your own estimates for this exercise to be useful, but once you know the numbers, you can attack your days with much greater 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 need to make 1,500 prospecting calls during that time, you'll have a daily target of six calls.
By conceptualizing your sales goal as a numbers game, you can turn methodical daily action into a more productive way to prospect and close new clients.