Increase Sales: Focus On Ratios
By: Alex Shattuck
Many businesses put growth as one of their top objectives when I ask them what they wish to accomplish. This goal puts new customer acquisition towards the top of the list of areas that need work. What I find is that almost all of these companies already have a way to measure the success in this space, and many have it broken down to each specific employee working in new customer acquisition or sales. Typically, they are tracking the team’s close ratio and the individual’s close ratio. What I hardly ever see tracked or discussed are the ratios that get us to those ratios. Let me explain.
Let’s say you have employees Bob and Sally on your team. They are hired for new customer acquisition primarily through outbound sales calls to prospects from leads you or your marketing team funnels their way. By all accounts, these two are given the same opportunity with the same leads, resources and support staff around them. Now let’s say Bob’s close ratio is 5% and Sally’s close ratio is sitting at 10%. This is where we naturally want to start applying pressure on Bob and force him to get better; or hit the bricks. It’s too soon for that though. We need to take a deep breath, take a step back and ask ourselves, “WHY?”
Let’s start with looking at all of the ratios and not just the close ratio. The close ratio tells us the conclusion but it doesn’t tell us the whole story.
Call Back Ratio: What percent of the voicemails left on a sales call yields a call back from that customer? If Sally leaves 100 voicemails and gets 10 call backs, but Bob only gets 5 call backs out of 100 calls that helps paint the picture. That shows Bob is actually having HALF of the conversations that Sally is having so his “close ratio” isn’t actually any worse. He’s just as good as Sally once he gets someone on the phone but there’s something that Bob is doing or not doing when leaving voicemails which is impacting his call back ratio. The good news is that it can be an easy fix. Have Bob walk his butt down to Sally’s office and sit with her for a day to figure out exactly what she’s saying and how she’s saying it. Copy and paste what she’s doing and how she’s doing it, and there’s a great chance Bob doesn’t end up having to hit the bricks after all. Great for Bob and great for the business!
Stay On The Phone Ratio: Same deal here. If Sally makes 100 calls, 20 prospects answer and she keeps 10 of those 20 on the phone for a sales conversation but Bob only keeps 5 on the phone, that would also yield half of the sales conversations and half of the production. The solution is the same but I will go into more detail on how to increase your chances of success while leaving voicemails, or when someone answers the phone later.
Referral Ratio: How many referrals are each of these two getting? Maybe it turns out Bob is better with the above call back ratios but is still falling short. How can this be? Each industry varies BUT for the most part, referrals typically have much higher close ratios than many of the other marketing sources that we rely on. If Sally gets a referral 80% of the time and Bob only gets referrals 40% of the time you end up with Bob not keeping up once again. How to fix this? Practice. I will be discussing referrals in more detail in a later but we need to have specific training around this task. A marketing source with the highest close ratio, and free, cannot be ignored.
Product Per Account Ratio: If we are tracking overall products sold vs. opportunities or leads, the numbers can also be impacted by Sally selling four products per account or household in comparison to Bob’s two. If this is happening it tells me that both are equally as good with their ratios above, but Sally is better at finding additional opportunities within that account or household. Practicing and training those sales conversations will help Bob find more opportunities. The more effective way I’ve found to help here is to train for triggers within these opportunities.
Some of these ratios are easy to track and some not so much. What is most important is to be sure to track everything that can be tracked, which should help you narrow your search so you know where to focus your efforts. Without proper tracking you may be spending your time training an employee in an area that she’s already great in. Find out which ratio is the problem and focus on just that. If everything else isn’t broken do not waste time fixing it. While you’re making adjustments, be sure to make one at a time before moving on to the next. This is similar to trying to figure out food allergies in a child. If you remove more than one food at a time you won’t know for sure which one was the problem. Lastly, even though some ratios are hard to track and, in some cases, may not be tracked, it is important to focus on the mindset behind the ratio. Have conversations with your employees about these and get them thinking differently about each step in their sales process.