Too many salespeople worry about each of their month’s sales. So do businesses. Salespeople are saying, “Boy, I had a good month. I hope that I can do it again next month.” The manager might even say, “Hey gang, nice month. So, what is going to happen to our team next month?
We should quit thinking about the present and start to think about the future, or a much longer game plan. It is humorous to me how companies and their sales managers do annual budgets and the whole exercise of forecasting sales. The stability of the business or organization is generated from people who are responsible for the revenue. In this case, it is the salespeople, who basically work from month to month.
The key here is to quit thinking about sales; they are short-term goals. Really concentrate on the here and now. I like to believe in longer-range goals and focus more on the future, and keep things much more consistent over the long haul.
Study after study shows in business-to-business selling situations, salespeople usually close between 50% to 70% of their legitimate prospects. That means the customer was ready to make a decision. Who they will buy from, what they will spend and when they will make the decision is what determines a genuine prospect.
If a salesperson has four prospects for a specific month, that would equate to having about two sales toward his or her performance quota. Let’s assume they need four sales for the month to be at 100% of quota, that would put them at about 50% of plan.
When I was a kid and working at Xerox, we had to sell five copiers per month (these were the smaller units) to be at 100% of our sales goals. You wanted to be at 250%, because if you achieved that goal, you received a high bonus for each quarter (or three months). If we continued that 250% performance for the other three quarters or the entire year, we also received other quarterly bonuses and a substantial year-end bonus. The big income to achieve, when I was a sales rep for Xerox, was being at 250% of plan or better.
It was simple to set up my income goals. If selling five copiers put me at 100%, then I would need at least 14 copiers sold to get me well over 250%. Not an easy task, but it can be done with a steady game plan and more sales calls for the entire year.
Using the numbers I discussed before and figuring a 50% close rate, I needed 28 to 30 prospects per month. I like round numbers, so let’s use 30. That was it. I now had a game plan I could manage and stick with. It was simple, straight to the point and something I could not let up on. I decided to concentrate on the prospects and if I did this on a continuous basis, the sales would naturally follow.
Did that plan work? Sales were better than I expected. I was well over 300% for the year and was way ahead of the other salespeople.
It was a simple trick. I quit thinking about sales and concentrated on always keeping my prospect base at 30 legitimate customers ready or fairly close to making a decision. By staying in touch with the current prospects and continually adding new ones, there was not going to be a slump in my sales. No spikes or even bell curves, just a nice easy flow of sales that evened out all year long.
Quit thinking about the month when you should care about the year.