The Formula for Better Sales Success
BY Tom Searcy
Are you getting the most out of your sales efforts? Get out your calculators--here's a formula to help you figure it out.
I'm a fan of Tim Ferriss' "The 4-Hour Workweek" and other books about hacking life. That's what Tim calls it, hacking. The term refers to getting a higher yield of outcome for your time invested. We all want more for less and in the world of sales we want more success for fewer hours.
The first step in figuring out how to do this is by breaking down each outcome into its contributing components. I refer to this as "optimizing the power curve." Essentially, this is just a way of figuring out which of your activities has the most impact in creating your ideal outcome.
I have a tool that you can download for free that gives you a fill-in-the-blank approach to this. You can download it here.
Here's how it works:
Step 1--Separate your revenue projections into three categories:
Current book of sales
Average new accounts you land
For each one, determine what the average amount of revenue an individual account will generate for you in each of the three categories.
Step 2--Estimate how many accounts you have--or will have--for each of those three categories.
This is an important step, because it not only checks the revenue coming into your company, but it also quantifies the amount of time going out to land and support each of those accounts.
Step 3--Calculate the total value for each of the three categories of revenue. It should be as easy as multiplying the number of customers by the estimated average revenue. You can cheat on your current book of sales by looking at the history of their purchases and your projections. The others will need to be calculated.
Step 4--(More math...) Calculate the percentage of sales revenue each category represents. It's not trigonometry. Just add the revenues of the categories from Step 3 to get your total. Then divide each of the categories individually by that total to determine the percentage of sales each category represents. Hint: If you add the three percentages and it equals 100%, chances are you did it right.
Step 5--Gut check. Estimate how much time you are CURRENTLY spending on each of the three categories of revenue.
If you want a better yield, you have to determine if you have the right inputs aimed at the highest-yield outputs. In words, are you spending the right amount of time in the right categories of revenue? If your revenue percentages and your time percentages match up, you are on the right track.
Do the worksheet that I provide for download, here, and see how you match up. Are you maximizing the value of your time or are there some things you need to revisit to better optimize your power curve?