Everyone measures sales as dollars done after the cash is in the bank or after the agreement is signed but good business operators know that there is more to it than that. Looking at your sales figures is like looking at your rear view mirror to check if you’re going to have an accident ahead.
You’re often already six weeks behind before you even know that there’s a problem (monthly sales figures, plus the time taken to get the books up to date, plus the time to look at the figures). And in six weeks a bad sales person can waste your money or even send you close to broke.
So what do you do?
Stop measuring your sales on results based on dollars in the bank and start measuring them on activity and effectiveness.
Activity levels will at least show you how active your sales people are, whether they’re making calls, whether they’re seeing people, what is and isn’t happening. So measure how many calls they are making (per day or week).
But activity is only half the story, effectiveness is determined by the conversion rate. Conversion rate is: how many of the people that you met and spoke to have actually bought? For example: for every ten prospects I see I know I will get four orders.
Every business that I have spoken with that doesn’t measure their conversion rate always assumes that their number is really high (“Oh, if we quote it, we would get it 80% of the time”) and invariably they’re always wrong.
If you’re not keeping accurate statistics on this, you’re missing out and leaving money on the table every time because your conversion rate will let you see how many people are buying. This number will tell you who is a good sales person and who is living off your car and phone allowance.
It allows you to cut through all the excuses, justifications and stories with X-ray like vision to find out what is going on when your salespeople are speaking with your prospects.
So what can you do to improve your conversion rate? Here are some suggestions:
- Measure it and put the number on a whiteboard, somewhere visible to everyone. The very act of measuring it should pull the numbers up straight away, because what we focus on is what we get;
- Get yourself or your team some sales training. The areas you need to look at are: objection handling, how to ask for the sale, how to build rapport, and effective follow up;
- Work out what support they need to get the sale done on the spot. Be it samples, the authority to price, or having someone else to handle the mundane paperwork that keeps them off the road;
- Analyze the key objections and find solutions to each one of them, and review the solutions together with your sales team.
You see, small differences in your conversion rate can make huge differences to your bottom line. It’s not enough to know that your salesmen are active, you need to know that they can sell.
Get moving: start measuring each sales person’s conversion rate starting from next week.
Photo by Debs