The Sales Effectiveness Explosion

3D rendered abstract financial diagram and ascending arrow

What if you could achieve a 25-50% increase in your commissions without spending any more time at work than you do at present?

Who wouldn’t want to learn to do that?

In the next 4 minutes, you’ll have the formula to get yourself started down that path.

Effectiveness in selling is comprised two sides of the same coin.

One side is tactical and one is strategic.

Tactical

Think of tactics like individual troop movements on a battlefield.  Tactical skills are your interpersonal abilities deployed in real-time.    This is the “in the moment” ability to build rapport and establish credibility with others.  This is your personality, your aura, and your internalized dialogues.  Can you clear the hurdles that are automatically placed in front of you because you are a salesperson?

Strategic

This isn’t the battlefield, it’s the situation room 5,000 miles away with the satellite view of the entire theatre of war.  It’s your overall approach and activity model.  How many calls do you consistently make per day?  Has your activity model been designed for maximum impact?

These 2 components blend together to create your sales “effectiveness.”

As they work together, they determine how full you can keep the funnel as you move from the initial stages of your sales process all the way to the close.

Both of these components are critical.

You can’t be a genius with people, but only talk to 3 a day.  You’ll never get off the ground.

On the other side, you can’t be poor at communicating and try to make it up with 100 contacts a day or you’ll burn out.

If you work toward mastery of these 2 components, you will experience a phenomenon I like to call “The Effectiveness Explosion.”

The Math Behind the Effectiveness Explosion

 

So…you’ve heard the phrase, “work smarter not harder” right?

It’s one of those maxims that everyone happily nods their heads in agreement…and then spends zero time thinking about what it actually means to DO it…or what the results would look like if you did.

Today we’re going to find out what happens when you actually DO look at the end result of working smarter.

Let’s say you’ve been tracking your numbers like a good business person.

You’ve figured out you need 10 initial contacts to set up a face to face meeting, and you need 10 of those face to face meetings to close a deal.

This means that at your present level of effectiveness, you need to contact 100 people to close one deal. 10 initial contacts per meeting x 10 meetings = 100 contacts per deal.

But what if your tactical and strategic approach was better?

What if your ability to make good language choices, take quality action, bond with people, and your overall activity model allowed you to be more effective?

What if you simply brought your average down from 10 to 7 cold calls to get an appointment…and down from 10 to 7 appointments to close a deal?

Now you only need 49 initial contacts to close a deal, not 100.

You are twice as effective…despite only improving your numbers by 30%

Every time I do this exercise with different numbers it’s like magic to me.

What if you improved by just one more?

6 initial contacts to the appointment…6 appointments to sale.

That’s 36 contacts to a sale.

You’ve become almost THREE times more effective….and you still lose 5 out of 6 times.

This is why it’s nonsensical to get hung up on any kind of rejection.  Even at all-star levels of sales skill, you’re still experiencing rejection almost all the time.

So, what are your numbers?  Do you need 10 new meetings to close a deal or do you need 6?

Do you see how important it is to actually know this?

Don’t wander in the darkness for too long.


 

A final note on effectiveness: 

Your effectiveness at selling and relationship building must scale in direct proportion with the “commodity-ness” of the product you sell, so that you can still compete.

The little league snack bar employee that sells ice-cold water on a blazing hot day doesn’t need to be that effective at his sales pitch. In that environment, you’ll gladly pay $2.00 for a 20 cent bottle of water.

At the other end of the spectrum, the industrial supplies salesperson with the same exact brand of safety gloves, boxes, tape, etc as the 35 other vendors in town needs to figure out a better way to position herself than selling the same products as her competitors at a slight discount.  She needs a way better activity model, product knowledge, and a creative mind to stand out from the competition.

So invest a little time each day or each week in your personal development.   Sharpen the saw and make sure you’re becoming more effective.

Your wallet will thank you.


 

Further Math Geek Reading:

Let’s break the numbers in the post down into a full (yet admittedly simplified) time value study.

You can plug your actual average numbers into the parenthetical figures below if you know them.

Let’s assume the following:

Each initial contact takes an average of (5) minutes.

Each face to face meeting takes an average of (20) minutes.

At a 1 out of 10 success ratio, that’s 50 minutes prospected to secure a single face to face meeting.

50 minutes invested per secured meeting x 10 meetings = 500 minutes prospecting time invested to close a deal.

At a 1 out of 10 meeting close ratio, that’s (200) minutes of face to face time invested to close a deal.

Now, let’s say each sale nets you an average of ($1,000) commission.

You’ve spent (500) minutes prospecting and (200) minutes presenting to get to the paycheck.

That’s (700) minutes (11.667 hours) invested to earn ($1,000) in commission.

You’re earning $85.71 an hour.  Not terrible right?

BUT, what if you improved your strategy and tactical skills and got yourself to that 1 out of 6 level of effectiveness?

Each initial contact still takes an average of (5) minutes.

At a 1 out of 6 success ratio, that’s (30) minutes prospected to secure a single face to face meeting.

(30) minutes invested per secured meeting x 10 meetings = (300) minutes prospecting time invested to close a deal.

Each face to face meeting still takes an average of (20) minutes.

But now, at a 1 out of 6 success ratio, that’s only (120) minutes of face to face time invested to close a deal.

Each sale still nets you an average of ($1,000) commission.

With your new and improved skills you’ve spent 300 minutes prospecting and 120 minutes presenting.

That’s a new total of 420 minutes (7 hours) invested to earn yourself the same $1,000 in commission.

Now you’re earning $142 an hour.  Much better than $85.

In fact, at 40 hours a week, the difference is amazing.  $5,680 vs $3,428 weekly.

By simply becoming more effective, $2,252 (60%) more commission has been earned.

The annual income difference becomes staggering:

$295,360 vs $178,280.   In the same amount of time.

What could you do with an extra $9,000 per month?

You can only work so hard.

Make sure you devote some time to working smarter.

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