Straight Sales Talk | Feature
Any Road Will Get You There -- Or Will It?
You may remember this famous passage from Lewis Carroll's Alice in Wonderland:
"Would you tell me, please, which way I ought to go from here?" "That depends a good deal on where you want to go," said the Cat. "I don't much care where," said Alice. "Then it doesn't matter which way you go," said the Cat. "So long as I get somewhere," Alice added as an explanation."Oh, you're sure to do that," said the Cat, "if you only walk long enough."
And what, you may ask in the Cat’s voice, does this have to do with sales? Well, have you ever stopped in the middle of your frantic sales activity and asked yourself, "What am I doing, and why am I doing it?" Don’t worry if you haven’t asked. Most of us haven’t -- until it’s too late. But now might be a good time to start.
I’m talking about your personal business plan. Every successful business has to have a plan to make sure it allocates resources efficiently in order to achieve its goals. Since sales professionals generally operate as independent businesses, they need to have a plan.
Of course, most companies require their sales reps to prepare annual territory plans. These plans typically contain statistics about the territory, prospects, existing customers, current challenges, and future opportunities -- all great information, but, once the plans are submitted and approved, they generally end up gathering dust on the shelf.
Why is this? I believe it’s because the plans are not personal. They don’t relate to what the reps want. So I suggest you create a Perpetual Personal Territory Business Plan, a living document to guide you in allocating your most precious resource -- your time -- in order to make your goals. Follow these steps to create your plan:
First, determine how much you want to make--not what your comp plan says. We’ll call this your Target Annual Earnings (TAE).
Subtract your salary, if you’re lucky enough to have one, from the TAE. The remainder is the amount of commission you must earn.
Divide the commission by the actual or approximate percentage rate you’re paid on revenue. The result is the amount of revenue needed to generate the commission you’re looking for -- this is the only time you need to worry about your quota. (If the amount of revenue in your calculation doesn’t equal or exceed your quota, you need to raise your sights or find a new job!)
Now, based on experience, divide the revenue you require by the average sale size. This will give you the number of sales you must make. From here, you just need to figure out how to make the required number of sales. I always use worst-case numbers to make sure I achieve or exceed my TAE. You can use my numbers below or modify them based on your experience.
Working backwards, I usually figure that for every three prospects I have in my forecast at 50 percent probability or better, I will get one sale. So, I multiply the number of sales from #4 above by 3, to get the number of prospects at 50 percent I need.
I estimate that it takes me six contacts to get one prospect to 50 percent probability of closing. So I multiply the number of 50 percent prospects I need (from #5 above) by 6 to get the number of contacts I must make.
Then I take the number of contacts and divide it by the number of workdays in the year, usually 200-250, to arrive at the number of contacts I need to make each day. This establishes the baseline of what you need to do to consistently make your TAE goal.
Now use the research you developed for your company-assigned territory plan to figure out the best way to make the required number of contacts. The tactics that work for you may be different from the tactics that work for others, so try different ones, but keep the activity consistent. Seminars, webinars, emails, direct mail, phone calls, and social media are all good ways to make contact.
Make a daily, weekly, and monthly schedule incorporating your most effective tactics, and avoid the temptation to stop when your pipeline begins to fill. Without a consistent inflow of prospects, your pipeline will dry up faster than you think.
This process should take you about 30 minutes and will pay dividends for the rest of your sales career. Not a bad return on investment! Good selling!