Here is what we know: just because we have activity, i.e phone calls, meetings, presentations, etc, doing a lot of work does not necessarily mean it turns into productivity. But the other side of that coin is that without any activity, there can be no productivity. So, what sales performance metrics are you tracking on a daily and weekly basis that have a direct impact on your sales success? Maybe a better question is are you tracking metrics at all?
If you’ve watched our videos or read our articles, I’m sure you’ve heard us say “you must inspect what you expect.” How do you know if you are being successful, and will hit your year-end goal, if you aren’t actively tracking the sales activities that help you get there? In our world, we use a Success Formula to help us and our clients identify what sales metrics are necessary to hit a year end sales goal.
Using the Success Formula to Determine Sales Performance Metrics
The activities we track in our Success Formula include dials, contacts, appointments, opportunities, presentations, and closed business. I think every metric in the Success Formula is equally important as they are all connected. Sure, it’s important to know how many calls you need to make on a daily basis. But it’s just as, or more important, to know how effective you are on those calls. Your effectiveness on your phone calls will determine how many meetings you get. Your ability to uncover compelling reasons in that meeting will lead to an increase in presentations. And so on. Your effectiveness at each stage of the process makes a huge impact on what your sales activity needs to look like.
Completing the Success Formula is a very simple mathematical equation. You start with your annual revenue, whatever it is. You divide that by your average size sale, which gets you the number of sales that you need that year. As an example, let’s say I have a sales goal of $500,000 and my average size sale is $25,000. That means I need 20 wins and I know I close about 50% of the people I present to, that tells me I have to present 40 times. And if I’m going to present 40 times and about 75% of the people I have active engagement with turn into opportunities, the formula tells me I need 54 opportunities in order for me to present 40 times and win 20 of those. And we simply walk through the mathematical gymnastics.
When all is said and calculated, I know that I need to make 13 outreaches a day over the course of the year to be in a position to win. To me, that is a very realistic and easy number to obtain. The more difficult part is creating the time necessary to make these outreaches and making it a priority each and every day.
I encourage you to download our Success Formula worksheet and complete the activity yourself. This will only help you on your journey to sales success by identifying what sales performance metrics you need to be hitting on a consistent basis to achieve your annual goal.
Recruitment Specialist & Sales Development Expert, Anthony Cole Training Group