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How many outbound phone calls
really need to be made? © 2007 David Peterson
Sometimes I think I'm talking to myself.
I try to get job candidates to understand that in my type of
sales environment you have to keep calling. That's because in
my sales environment you have to actually sell. It's not like
selling Honda Accords to people who walk up on the lot and say
"I want you to give me a blue one."
I almost try to scare candidates out of
the job. I often say in the interview... "When you leave
here go home and think about it, do you really want to make
this many calls?"
Why do all new job candidates say...?
"You have to keep smiling and dialing...," or have
you ever heard "absolutely I can make 100 calls a
day...," or my all time favorite "I will make as
many as it takes..."
I'll press the job candidate...
"Have you ever made 100 calls a day - everyday? Do you
know what that feels like?" Always the answer is
the same - "Yes, I understand what it takes."
Here is why I press so hard, trying to
get a commitment from a job candidate - I know my close
rates! I have history on my side that says if you do
"x" amount of outbound calls "y" will
happen. In a previous article I wrote that Sales is absolutely
a numbers game. I know with certainty what those numbers are.
I know that it really does take 100 calls to make a sale.
I know my close rates!
Now not everyone has the same sales
skills. I will grant you that, but everyone has a close rate.
The goal is to know what that close rate is.
Let's take a step back, what is a close
rate?
A close rate is the
total amount of calls it takes to close one deal.
I am writing about prospecting calls.
How many prospects must I talk to in order to secure one sale?
In order to have a prospect you must have a decision
maker.
You have to focus on prospecting calls.
When representatives start to fail they will often say
"Well I'm making my calls." I'll agree they are
making calls but they are making follow-up calls to their
current lead base. Eventually you will run out of leads so you
have to continue to prospect. You have to prospect even when
you blowing out your sales numbers.
No prospects, no leads - no leads,
no sales!
It seems so simple to me that I feel
silly repeating it to the reps. Yet if I don't repeat it they
will literally stop make the required number of calls.
What is the required number of calls to
close a deal? (i.e.: What is the close rate?)
Let me work through the math to show you
just how easy it is to figure out.
To get to the close rate number just
take the average number of deals your team closes in a month
and then divide that by the number of decision makers
(prospects) reached.
Example:
15 units sold per month / 500 decision
makers reached = 3% Close Rate or sales to prospects
So in this example I need to reach 500
decision makers in a month to close 15 deals.
How many decision makers do I need to
call everyday?
Example:
500 decision makers / 22 business days
= 22.73 decision makers each business day
Now for the hard part... How many
outbound calls does it take to reach one decision maker? Again
just look at your team's history. The team averages
"x" amount of calls and they have determined that
they plan on following up with "y" amount of
decision makers.
Example:
500 decision makers reached / 2,000
total calls made = 25% Close Rate of prospects to total
calls
Last step.....
15 total units sold per month / 2,000
total calls made = 0.75% Close Rate of units sold to total
calls made in the month
To sum it all up: The
rep needs to make 2,000 calls in order to get 500 decision
makers which will lead to 15 units sold.
I'm going to show you an even simpler
way so you can stare that rep right in the eye and say
"go make "x" calls and "y" sales will
happen."
Follow this scenario:
"Jimmy I need 15 units from
you this month - no exceptions! You tell me - how are you
going to sell 15 units? I need to know right now how many
calls you need to make to hit that number!"
At this point the average rep says something
stupid like... "As many as it takes Mr. Smith." But
Jimmy knows his close rate. He knows how many units Mr. Smith
wants and he just has to figure out the math to determine how
many calls to make.
Luckily the math is pretty simple if you
know your close rates.
Example:
15 Total Number of Units Needed /
0.75% Total Call Close Rate = 2,000 total calls!
PS: For this math to work you either
A: Have to use the % sign when you do the math on a
calculator or B: You have to understand that 0.75% is
actually 0.0075 (15 / 0.0075 = 2,000)
Now that you know how to figure your
close rate and how to use it to determine the total number of
calls needed you should be able to walk into the office and
say with confidence..."Go make "x" calls and
"y" will happen!"
There is no denying the numbers in
sales. Each rep will probably have a slightly different close
rate. My advice is to track the team's numbers and use that as
a starting point.
Once you get the starting point then
start comparing that to your individual performers.
The good news is that once you actually
know your close rates you can absolutely hit any number thrown
your way - unless of course you don't have enough people to
make that many calls - which is why you were interviewing the
job candidates in the first place.
Sincerely,
David
Peterson
Author
of:
Been There - Done That
David
Peterson's Search Engine Optimization Guide
Please
send all correspondence to: questions@usreference.com
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