Why You Want Sales To Be A Numbers Game0

By Tibor Shanto – tibor.shanto@sellbetter.ca 

If you follow this blog you know that I do not understand or stand with those who say sales is not a numbers game.  While I agree that the focus should always be about quality over quantity, the reality is that no matter the quality of your prospects, you will need a given (minimum) quantity of quality sales in order to meet, or better yet, exceed quota.  Now, unless you are one of a privileged few, there is no getting away from the fact that your quota is a number!  You’re going to have to deal with, and use numbers to meet or exceed that all important number.

Numbers = Accountability

I find it amusing that many of the pundits who insist that sales is not a numbers game, will drone on for hours about conversion and conversion rate.  They are absolutely right, without those ‘numbers’ (conversion rates) it is not only hard to plan, but know where you are, so you can refine your plan and execute.  This may explain why so many sales people fail to achieve quota.

Knowing your key conversion numbers gives you the power to take charge of your success and be accountable for your results.

Can’t Measure Everything – But You Should Measure Some

Part of the problem is the lack of imagination displayed by many managers, sales leaders and enablement types.  They use numbers as a weapon, and each time they are at a loss to explain why things are the way they are, they add another measure to the mix, leading to their people working the numbers rather than the sale.  The fix is in focusing on key numbers that help one plan an improvement plan that will the rep execute and win sales, not just hot arbitrary and meaningless numbers.

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What to Measure

I find four numbers give you the opportunity to continuously leverage them to improve your sales approach and execution, and by extension your success.

  1. Deal size
  2. Proposal to Close
  3. Discovery to Proposal
  4. Initial meeting (live or virtual) to Discovery

To change any of the above, you will need to develop a strategy for change and improvement.  As you implement the plan, you will be able to measure and review, and make changes based on the results.  Numbers 1 & 4, will require you to change your territory and account planning, while challenging who you prospect and how.  Number 3 & 4, forces you to examine and how well you can engage and help the client articulate how you can help and deliver value, and maintain focus, if not urgency.

These are tip of the iceberg things, the devil is in the detail, and the execution.  We plug these into a proprietary tool that helps our clients develop improvement plans for their reps, based on real world inputs.  This in turn allows them to plan specific improvement plans for individual reps, while still supporting a standard sales process.  And what makes it work are the numbers.

Failing to focus on numbers in sales, always results in the number on your commission check decline or dwindle; but you don’t care cause sales is not a numbers game, and neither is your mortgage, right?

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Time questions concept as a group of floating clocks and timepieces shaped as a question mark as a metaphor for deadline or business schedule confusion or corporate appointment information as a 3D illustration.

Getting Time On Your Side0

By Tibor Shanto – tibor.shanto@sellbetter.ca 

If you manage hang on for another week, I assure you that there is life after the election, and what is waiting on the other side is not the end of the world, but the end of your sales year. Which if you plan it right is not as big a deal as many would make you believe, unless of course you’re one of those sales people who exists from crisis to crisis. (If you are, then you can skip the rest of this post).

We’ve all heard that knowledge is power, and in this case, it truly is. If you know the specifics of your sales cycle, average length of cycle, critical points, number of interactions (phone, live, web, e-mails, etc.), then you have the data on which you can build knowledge and success. You can map out your sale, manage it and lead the sales process not just go along for the ride.

A critical one is the average length of a cycle. This will vary based on type of sale, if you have multiple offerings, and other factors, but there is no escaping the fact that if you looked at you last 15 – 20 sales of the same nature, you will be able to determine a relative average length. You can do that using your CRM, and host of apps you bought to do something sales professionals have done for ages using pen and paper. The fact that many sales people answer the question about the length of

Assuming your average cycle for a given product or service three months, this is hand shake to close, it doesn’t matter if it took you a year of effort to engage; a sales cycle is handshake (yes it can be virtual), to close. There may be seasonal changes, causing that to contract or expand slightly, but if they are indeed seasonal than they are known to you and you can incorporate that into your thinking and execution.

So, if you initiate an opportunity today, October 31, 2016, then on average, that opportunity will/should close on or around (a couple of days) January 31, 2017. Assuming you need four sales a month to exceed quota, you will need one of those a week. But let’s be real here, you will need to have a multiple of opportunities, based on your close ratio, that is the number of opportunities you require to get one close, say 4:1. You will need to be prospecting (including referrals, up and cross seals and more) at a level and quality that will lead to four prospects/opportunities a week to end up with one close. So if one prospects and drives four new opportunities a week, they will have their one “right” opportunity each and every week. An opportunity that will on average close three months later.

Do this every week and it doesn’t matter if it is the beginning, middle or end of they year, just start four real opportunities a week, and you will close one three months out. That’s why I tell managers to stop asking about what their sales people are closing, and make sure that they what they are opening.

The data is there, the knowledge that affords you is there for you for the taking, what’s missing is the application, which is why as you read all the sage advice on how to end the year, start the year, and all that other noise, just remember, it is all about the execution – everything else is just talk.

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What Other Metric Counts? – Sales eXecution 3100

By Tibor Shanto – tibor.shanto@sellbetter.ca 

Metrics 2

A recurring and ongoing discussion is sales revolves around the role of numbers in sales. You have the soft, relationship, Quality crown chanting their sacred mantra: “Sales Is Not Numbers Game!” “Quality over Quantity” or is it “Quality über alles”. So it came as some surprise when I was talking to a Ms. Not Numbers Game, and she started talking about the role and importance of metrics is sales success. OK, what are metrics? Further, she started talking about an HBR piece called “The Twelve Sales Metrics that Matter Most”.

Read the piece but the 12 boil down to:
1. Percent of Organization Achieving Quota
2. Quota Attainment Average
3. Average Annual Quota for Field Salesperson
4. Average Annual Quota for Inside Salesperson
5. Average Annual On Target Earnings
6. Average New Deal Size
7. Sales Cycle Length
8. Vertical Sales Adoption
9. SMB Specialization
10. Field Sales Revenue Trends
11. Inside Sales Roles
12. Sales Preparedness

Looks like most revolve around numbers.

The other thing that most of the above have in common are the fact that they are mid-cycle or lagging indicators. This does not make them inferior or useless, it is just that they are no things that will help change the outcome of the current cycle, if changes are not made they may not change the matric after the next sale.

I guess I struck a nerve when I said that I think the most important metric are those based on activity. Before I can explain, Ms. Not Numbers Game, came undone. “That’s just so old school, do a hundred calls, talk to 10, and get one sales, it doesn’t work like that today Tibor”. That wasn’t my point, but if you look at most of the metrics on the list above, ONE of the KEY elements to improving them, is changing both the quality and quantity of activity.

While I am not a fan of 100-10-1 number, I do believe that one should know the numbers it takes to get to quota (which BTW is a number). If you have $100,000 monthly quota, and the average deal is $25,000, you’re going to need 4 sales a month. Now you could put a plan into effect that will allow you to increase the average deal size to $30K – $35K, and that would involve a change in activity and execution. How many proposals will you need to present to get those 4 deals? How many prospects will have to go through the discovery process to generate sufficient proposals? How many prospect will you need to engage in order to have enough go through to discovery? How many people will you need to prospect in order to engage with enough? All these are leading indicators, all based on activities, all open to improved quality to positively change the quantity required.

From an organization perspective, the HBR list is fine, but from a front line perspective, the metrics that count are all activity related, as all activity is related to working with buyers. Without that none of the other dials will move much, but focus on activity related metrics, and you can move the dial to reduce quantity and improve quality.

Tibor Shanto    LI Bottom banner

Metrics and Numbers – Sales eXchange 2201

By Tibor Shanto – tibor.shanto@sellbetter.ca

Increased sales

I have the pleasure and opportunity to “sales” with a lot of people, some in sales themselves, some management, and some who don’t sell but have firm unfounded opinions they like to share or yell. One area they all seem to have opinions on is whether sales is a numbers game or not. The familiar and popular line is that it is not a numbers game, this is quickly followed by something along the lines that “it is about quality, not quantity”; while I get the sentiment, I am not sure that the two are that linked.

What’s interesting is that many in leadership positions, be they executives or pundits, who in an effort to be ultra-modern adopt the “sales is not a numbers game” posture, are at the same time big proponents of “Metrics” and some form of KPI’s, both of which are good when applied the right way. But the question remains, are metrics not numbers?

While there are many similar definitions of business metrics, I like this one:

A business metric is a raw measurement of a business process. It’s important to remember that metrics are a means to an end, not an end unto themselves. Measuring a metric is not always enough – you need to use that metric to guide business decisions and to ensure your business is on the right track. (Klipfolio.com)

I like it because it does root things in numbers, how else can you measure. It ties to process, and having a sales process is a clear way to bring the numbers to life in the form of action and execution, and the use of metrics in guiding performance and decisions. By extension, this drives accountability, and bundled together these elements dictate and shape you sales culture. In the end, it allows for the use of numbers as a core component of strategy and execution, but not at the exclusion of other important elements that make for a winning and evolving sales culture.

The dark side of taking the sales is a numbers game stance to far can often be found in KPI’s and how they impact sales. Many organizations will have KPI’s for key activities their reps have to execute. For example eight meeting a week, with at least three being with new prospects. Without a qualitative layer to the KPI, it will serve little in helping the company achieve it intent. What you often get is exactly what you asked for, eight meetings, three with new people, and not one worth the time it took one to secure the meetings.

KPI’s should be rounded out in ways that ties the indicator to results, not the activity alone. This will allow for coaching opportunities that are directly tied to daily activities and results. If a rep has difficulty hitting wither side of that, it is a great opportunity to coach and focus on the qualitative aspect of the KPI. And here is where both camps can converge, quality of execution, tied to the numbers and results involved.

In the end, even the qualitative aspect of things will be measured in some empirical way, and most importantly, the result, be that sales, clients acquired or most importantly profits, are all measured in numbers or tied to metrics in a direct way.

What’s in Your Pipeline?
Tibor Shanto  

How Many Sales People Can Dance On The Head Of A Pin?0

by Tibor Shanto – tibor.shanto@sellbetter.ca

Sales Pin

Ever wonder why some companies can generate as much revenues with less sales people than others with more?  I think it has to do with the hoarder mentality that permeates sales thinking.  “The more territory, the more accounts I get, the better I will do”.  Yet often the opposite is true, more often than not, less is more in sales accounts and territories.

I remember when I was given responsibility for a new region, eight sales people looking after 13 states.  First thing I asked them to review the status of their top ten accounts, recent activity, and their specific plans for the next 12 months (pre CRM days).  Each of the eight territories, had some 300 – 500 accounts; on average, the top ten accounted for 72% of revenues in the territories, ranging from a low of 64% to a high of 82%.  Coincidentally, around the percentage mark of where they were to quota.  Their coverage plan was routine rather than inspiring, and growth was going to be more from momentum and rhythm, rather than execution of a structured plan.

I then asked them when they last saw or spoke to account number 25, account number 51, and number 100.  As you may expect, #25, sometime in the last six months, one remembered speaking to number 100 at Christmas, mostly because they called in to update their password, a call they transferred to their inside account support person.

When I asked them what can be done to hit their goals, all but one suggested that we add accounts to their territories that were homeless due to a recent departure.  When I suggested that I was actually planning to go the other way, reduce the number of accounts down to about 50 per rep, the hording gene really kicked in.  “That crazy Canadian, I always knew they were socialists, he is looking to nationalize my accounts, reduce my empire”.

Well I wasn’t going to nationalize, but give it to the support team, who were dealing with accounts number 50 and on as it was.  This would make for less clutter for the territory reps, and provide the clarity they needed to work with their clients, prospect for new opportunities, and drive success.  They thought I was nuts, when I suggested they can have as many accounts as they want to prospect and bring on, 20, 50, 100, whatever they liked.  But with nearly 72% of their revenue coming from ten accounts, it would be easier to grow the ten, add a few juicy new accounts to make goal, rather than spending their time counting accounts from a distance.

The hoarding gene is strong in sales; after all, some of these reps become managers, then directors, and eventually VP’s.  You can tell when you meet them, the solution to everything is adding more resources, more territory, more reps, more accounts; behind on the numbers, “give me another rep”.  At the same time you meet others, who after analysing the data, look to optimize territories to maximize client experience and revenues, shrinking territories to create focus, rather than growing them and creating dilution.

One of the only good things to be said for the recession is it showed many organizations that they could in fact deliver more numbers with less headcount.  Reducing creates focus which drives creativity, when you reduce, the competent reps step up and deliver, while others demonstrate why you may be better off with less.  Sellers always tell you that in sales it is “quality over quantity”, why not apply that to territories and reps as well?

So to answer the question as to how many reps can dance on the head of a pin?  A lot less than you think you need to have on that head.

What’s in Your Pipeline?
Tibor Shanto

Metrics – Shmetrics!57

Metrics are key to sales success, we all heard and know that if it is not measured it does not count, and that if it is not measured or doesn’t seem to count, it is hard to change, usually for the better.  Some have difficulty knowing where to start, but as you can see from the video below, and this complementary article, it is best to start at the end and work back.

Take a look at the segment below, and see where you fit, or where you need to start.

Next Step

  • Workout key conversion points that can be measured
  • Decide which of the above make best sense for you
  • Work your metrics

What’s in Your Pipeline?
Tibor Shanto

Working Backwards From Your Goal To Get Ahead – Sales eXchange – 9910

[table id=7 /] A couple of weeks ago I posted a piece on metrics, and one of the questions I got back was how do you figure out how to calculate time, and other elements that go into sales success.  The question brought to mind an article I wrote back in 2006, as that predates this blog, I think it is a good time to reintroduce it.

It is always interesting when you sit with a group of sales people and the subject turns to sports. No matter what the sport, there is the inevitable talk of the leaders and their potential accomplishments over the course of the season. When it comes to individual athletes, the talk turns to their numbers, total goals, batting average, number of at bats, plus/minus averages, number of times striking out with men at second, short handed or power play goals, home average vs. road average, and so on. The athlete’s numbers are dissected and analyzed from all angles, usually in connection with a pool or a wager.

Yet often when you ask the same sales professional what their numbers are, they usually tell you their goal, where they are vis-à-vis their goal, perhaps how many sales they have that month, how many accounts they currently have, but usually not much more.

But like athletes, sales professionals need to track much more if they want to consistently outperform. How many at bats? Or better yet how many appointments did you have this year, and how is that versus last year? Is that number of appointments adequate to get you to your goal? To properly answer that, it is necessary to break down your goals to understand the level of activity needed to achieve it. Somewhat like working on your batting average and number of hits. To accomplish this you need to track a number of things, and then work backwards from your goal.

Let’s look at three as an example:

  • The average length of your sales cycle
  • The average size a sale
  • The number of meetings (appointments if you will) during that sales cycle to close the sale.

Very few sellers can tell you what their average sales cycle is for a given product (understanding that some folks sell a variety of products, and each may have a different cycle), key here being average. When we ask about the length of the sales cycle for a product we often get a wide range of answers. Recently we had a manager tell us that the normal cycle was between 10 to 12 weeks. When we put the question to his team of 8 reps, the shortest was 6 to 9 months; the longest was a year to 15 months, quite a range.  Who was right, did anyone really know?

Now if you looked at the last 100 sales for a given product, a pattern will emerge. After you take skills and other factors into account, you will see a discernible curve. Leave out the anomalies and you’ll find that some 80% will fall in to a tight range. That is your sales cycle. A bit of work the first time, but a worthwhile exercise that helps everyone set benchmarks; and hey, leverage the investment in that CRM. This same process will give you the average size of each sale.

This done you can then focus on the average number of meetings to close a deal. This is much more an individual exercise, but there is benefit in knowing the organization’s average. Unless you know how many meetings you will need to close a deal, how will you plan, manage and execute the sale, how will you manage your diary, how will you know what you can improve? With tools available today this is an easy thing to discover and track going forward.

You have to take the time at the start of the year to work backwards from your goals, using your specific stats (at bats, batting average, times called out on second after a walk to first…). You need to repeat this at least quarterly based on success YTD, or even monthly depending on product, market and cycle. In a slow year, you need to increase activity and productivity according to results.

By understanding your objective > destination > goal, visualize where you want to be, you can work backwards to find the most efficient of getting there, every time.  Add to that sufficient prospects to work with, and you can be selective in your success, and just focus on the best opportunities.  Without these benchmarks and measures, you will just chase things.

Now athletes and coaches go through this almost daily, not only looking at game stats, but reviewing tapes, and then adjusting accordingly. Sales professionals have to as well. Without working backwards from your goal, you have little chance to get ahead.

What’s in Your Pipeline?
Tibor Shanto

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