The Math & Diversified Sourcing
John Pierce, Author, Sell More and Sleep at Night – Developing Relationships with Emotional Intelligence to Increase Sales
Senior leaders have learned there are many reasons for stalled sales and missed goals. Today we explore two concepts that can keep senior leaders better informed and help increase company sales:
1. The Math
“The Math” is an easy concept to understand, yet far too many companies avoid applying the concept. They may believe it does not apply to them. The math is simply an analysis of past activities that produce accurate conversion rates during different sales cycles. Your math results allow you, as a leader, to better guide the sales and marketing organizations to achieve your company’s objectives.
Let’s use a simple example to make the point: You need to sell 4 Units. To sell 4 Units you know you need to make 8 offers – so your Offer to YES is a 50% conversion rate. To get 8 Offers you need to have a total of five face to face meetings with each prospect – so, 40 F2F meetings to get 4 sales. (There is no such thing as a “phone meeting.” This is a “phone call” and does not count!) You know it takes 100 phone calls to get the first initial face to face meeting and not all prospects will meet 5 times with your team. This is your basic math. What I have learned is that many companies avoid the rigor it takes to truly understand what their math is. The math is critical because you can pinpoint high activity, lower effectiveness people that need to be coached up; low activity people that need to step it up; recognize your Rock Star performers; have an early indication when ratios are slipping, and detect changes in the competitive environment.
Be aspirational with your math. Collect the data from your best sales people and understand their ratios. Work backwards to align activity with sales goals and the effectiveness of each person on the team.
2. A Diversified Sourcing Strategy
Once you know your math, have a Diversified Sourcing Strategy (DSS.) Often salespeople engage in tasks they like to do, not necessarily activities that are the most effective. A DSS requires multiple activities, fun and not, to achieve sales goals. Wouldn’t it be nice to have a 100% referral business? While nice, it is not realistic in most industries. You have to diversify with cold calling, warm calling, cold/warm walking, working with centers of influence, employee referrals/connections, external sourcing, industry events, continuing education events, drip-mail/e-mail, seminars, events, dead lead follow-up, advertising, past rejected offers, social media, local publicity, position papers and the list goes on.
Diversification requires doing multiple activities consistently, not just the stuff you like to do. Some people can “fake it” one year by doing one thing well, but most wash out over time because you never know what activity will work in each sales cycle.
Once the math and DSS are mapped out, you can get sophisticated. You can learn the conversion rates of each activity and understand how to effectively time manage.
I would encourage you to understand the math, and then implement a Diversified Sourcing Strategy to increase sales. Have an awesome 2015! JRP
About the Author
John Pierce spent 20+ years at Merrill Lynch and Ameriprise Financial in various senior leadership roles. He earned his MBA from the University of London and resides in Philadelphia. His recently published book, Sell More and Sleep at Night – Developing Relationships with Emotional Intelligence to Increase Sales is available in multiple venues including Amazon.com. Visit John’s LinkedIn Profile or johnpierceconsulting.com for additional information.