Sales Math 101

Five Factors to increase sales

Everyone is looking for ways to increase their sales. Here are five mathematical factors to increase the sales output of your salesforce:

Factor 1 - Increase the number of salespeople

The Multiplicative Effect -  The mathematical thought here is that if each  salesperson sells one million in revenue…then 10 salespersons will sell 10 million!  

This is clearly a management decision, but one that needs some thought behind it!  Placing another salesperson into a trouble organization will not yield these simple mathematical gains in revenue. This factor is best considered only when the company has new territory to cover.  Over saturation in sales is never the answer.

Factor 2 – Increase the selling time of salespeople

The Multiplicative Effect -  If only 50% (which is high) of the salespersons time is in front of prospects –increasing that time by 20% will yield the same increase in sales .

This is often one of the biggest complaints we hear from salespeople.  I have to spend much of time creating reports to justify my commission or existence that I can’t get anything done.  Most salespeople from smaller organization also spend a great deal of their time marketing.  Marketing opens doors, creates warm leads rather cold ones.  Cold calling has no mathematical place in our five factors. The old numbers game of a 100 calls leading to 10 meetings leading to 5 quotes and then leading to 1 win is NOT mathematical.  In fact when you really think about it – it just doesn’t make sense!  This is something some sales manager made up to get salespeople to cold call.  It’s not a sales strategy it’s a waste of precious selling time.

Factor 3 – Increase the dollars per sale

The Multiplicative Effect - instead of a $1,000 sale, up sell them with more products or services to a $2,000 sale! Double your quota with every sale

Easier said than done, because some sales people don’t want to come across pushy – just make the $1000 sale now and come back later for the rest.  The problem is that many don’t come back and those that do need to start the long sales process all over again!  Why do that to yourself?

The real key to selling more products per sale is the knowledge and information the salesperson has at their fingertips.  They need to be organized in such a way that they will be able to determine the up sell opportunity.  Second they need to have established that relationship in advance to be able to make the pitch.  If they have a sales manager pushing them on the number game – make more cold calls – they will not take the time and effort requires to up sell the account.

Factor 4 – Decrease the selling cycle time

The Multiplicative Effect - 2 month sales cycle reduced to 1 month = could mean the time and ability to make 12 more sales per year.

Selling cycle times vary according to industry and product.  Intangible services have a longer selling cycle than a consumable commodity.  The key to decreasing the selling cycle is the required repititions to create reputation and relationship.  Some market data states that it takes 7 touches to get a response.  Does your salesforce have the time and fortitude to make that happen?

Factor 5 – Increase the win rate

The Multiplicative Effect - If you submit 2 million dollars in quotes, but close only a million, increasing your win ratio by to 20% will increase your sales by the same percentage.

Wow!  What a great idea!  Just win more sales opportunities.  I wish I would have thought of that earlier!  The fact is – we all hate to lose sales.  We believe that we put everything into all our sales meetings.   But did we?  Do your salespeople have the time and the resources to make this buying experience something special for your customer?  If you can increase the customers experience in the buying decision – you WILL increase your win ratio!

Summary

The following old quote sums it up the best:

“One of our most successful salesmen who is in a large city and who uses a wagon constantly hires a driver for his wagon and pays him out of his own pocket.  This gives the salesman time to attend to selling registers.  He does not have to bother with carrying the registers in or out of the wagon, looking out for his horses, or such details, and does nothing but sell; consequently, he sends in, on average, about fifteen orders a month.”

National Cash Register CEO

October 1, 1893

The key to a multiplicative effect for your sales organization is to give your salesforce effective tools and market assistance so they can spend their time selling.  Every minute in front of a prospect or customer produces  a multiplicative effect to your revenue.   Class adjourned!  Go sell something!