What Are the Numbers?
“What are the numbers?” Al asked. “What should I be shooting for?” He was looking to me for the answer.
Al was a computer salesman with about one year’s experience and I was the sales management consultant who had been brought in to help the company get their salespeople back on track.
“I don’t know, Al, but whatever the numbers are, they have to be yours, not something the company gives you.”
Al was asking a good question, one that more salespeople should be asking themselves. What are the numbers that you have to do to make the money you want? Or, in some cases, what numbers do you have to do to keep your job!
Al’s monthly quota was $80,000 and that presented a problem. It was a problem because Al really didn’t have any say in the setting of the quota – it had been presented to him by management. If salespeople don’t have an input into the setting of their quotas, they don’t take “ownership” of the number and don’t feel any great responsibility towards reaching it. After all, they didn’t say that they could DO that number. When the salespeople are partners in setting the quota, there is a greater tendency for them to strive to achieve it.
I decided to address the matter of the quota at a later date and push ahead in answering Al’s initial question of what are the numbers.
Unlike most salespeople I know, Al kept reasonable sales records, so we were able to ascertain that his closing ratio, on a dollar basis, was about ten to one. This meant that for every ten dollars of sales opportunities that Al dug up, he closed one dollar. This made our job much easier. Obviously, if Al was to close $80,000 each month, he better have around $800,000 worth of opportunities on his plate. As a minimum, he had better be able to see that much potential at any given time.
“$800,000!” Al wailed. I could tell by the look on his face that he hadn’t looked at the problem in this light before. “That’s almost my whole year’s quota,” he astutely noted. “How am I going to do that?” At least he hadn’t thrown his arms up in despair.
I told him that there were three solutions – two short term, and one long term. The long-term solution was to hone up his selling skills and improve his closing ratio. By simply closing two out of ten rather than one in ten, he would halve the number of sales opportunities he needed to make his quota.
The first short term solution was to improve his prospect qualifying abilities which in turn would affect his closing ratio. We sat down and developed a number of questions that he felt comfortable with and that would quickly allow him to determine if he had a real prospect in front of him or if he was dealing with a potential time waster.
The second short term solution was to get off his duff and make more calls. Simple as this solution was, it hadn’t occurred to him. I suggested that he seek and find at least 20 new sales opportunities each month. Some of these would be of the fast turnaround variety and close within 60 days, but many, particularly the larger dollar value ones, would take longer to close. After a few months, Al should have 45-55 current sales opportunities that he is watching over and moving closer to either closing or losing.
By continuing to find at least 20 NEW opportunities each month, Al can quickly reach the $800,000 level of sales potential. If he combines these numbers with an increase in his closing ratio, he should begin to achieve his monthly quota on a consistent basis.
How does he find the 20 opportunities? You guessed it; cold calls, asking for referrals, servicing existing accounts, etc.
Al and I sat down and discussed the “numbers.” Al said that he would plan his week to make sure that he visited at least one existing account each day to do some public relations and seek out referrals. Furthermore, he would find at least 15 new sales opportunities each month. He also committed to making contact with at least four new accounts each month.
While I had some input into the numbers, they were essentially Al’s. When I sit down with Al next month and ask how he did, he’ll be reporting on HIS efforts towards reaching HIS goals, not mine.
And do you know what? I bet he’s going to reach them!