• How many of the qualified leads schedule an initial appointment ? Inbound leads should be aggressively followed up with and further qualified by a salesperson over the phone . If they are a qualified prospect , an appointment should be set to conduct an initial consultation / assessment . But be careful . You don ’ t want to get too far into the weeds on the phone prior to meeting with them or you can lose them .
• How many of those initial appointments move to the proposal stage ? You might be surprised to hear that not all initial appointments should go to the proposal stage . If you ’ re doing your job well as a salesperson , you should be qualifying them a bit more in that meeting to determine if they truly have the authority , budget , and desire to buy . If they ’ re just looking or using you to beat up the incumbent provider , why waste your time doing a network assessment and working up a proposal ? Further , some of the prospects who initially look good may reveal that they are not the type of client you want after you ’ ve met with them and had a deeper discussion regarding their needs , budget , etc . I learned a long time ago that you ’ ll regret accepting a client who is not a right fit for you far more than the money lost from not closing that sale .
• How many proposals close ? You should also look at your close rate from the initial opportunity so you have an idea of how many opportunities you need to hit your new client acquisition goal .
Now , let me show you how to use these numbers in a practical application . In my business , we have a division that sells advertising and sponsorship for this magazine and various events . We close roughly 56 % of the initial opportunities we open when selling sponsor contracts . The average opportunity is $ 16,282 . If a rep has a quota of $ 100,000 per month in sales , they need seven closed sales to hit quota every month ($ 16,282 x 7 = $ 113,974 ). Given our average close on an opportunity is 56 %, they would need 13 new opportunities per month ( 7 ÷ . 56 = 12.5 , rounded up to 13 ). Further , I know our prospecting efforts generate a 10 % opportunity rate . Therefore , they would need to prospect 130 companies per month to get 13 opportunities to close seven deals .
Now , when I ’ m managing a new rep , I can map out what 130 companies they are going to prospect that month and in the subsequent months . Some of those that we initially pick might turn up as unqualified or dead ends . Some will show hope but not in the near future . At the end of that month , we look at how many they want to continue to work and how many net new prospects they need to add to their prospecting bucket to keep the 130ish pool churning .
Now , I have a plan with metrics . If they ' re not prospecting 130 companies , I know they ' re sliding and may not hit their quota . This is where metrics are critical for managing sales reps and ensuring they hit quota . Most companies do not give their reps a prospecting quota , much less a sales process , so when the end of the month comes and they ’ ve not hit quota ( or worse , zeroed ), the manager sits down and asks why .
Of course , the salesperson always has a story about how many prospects they ’ ve talked to and how many opportunities they ’ ve got working and how they are going to have a stellar month next month . Their manager , with no way of knowing if the salesperson is full of it or telling the truth , tells them to “ work harder ” and “ prospect more .” Of course , this process repeats itself over and over again until six months or more pass by without a quota being hit , and the owner ends up firing the rep .
If You Want To Avoid That Scenario Repeating Itself , You Need To Do The Following :
1 . Track your sales metrics so you know exactly how to plan backward to the specific activities a rep must complete to hit quota , as I did in the above example .
2 . HAVE A SALES PLAYBOOK that teaches the rep how to prospect , WHO to prospect , how to qualify , how to close , etc . This is a living document that will continually need updating and documentation , testing , and improvement . Get it good enough to start because it will never be “ finished .”
3 . Manage your reps to the activity and process , not the end results . Ultimately , you cannot manage to end results when they ’ re first starting up because there are no results . You can only track and measure activities : how many people they are prospecting , how many are turning into opportunities , and how many of those opportunities ultimately turn into a sale .
Without knowing those numbers , it ’ s very difficult to accurately plan to hit your sales goals . If you don ’ t know what they are , go back and look at historical numbers . Yes , you ’ ll have to do some digging . But some idea is better than none . From there , discipline yourself to track these numbers every month so you can spot problem areas , troubleshoot barricades to money coming toward you , and work to improve the overall performance of your sales funnel . n
Want A Free Sales Playbook Checklist For MSPs ?
Go to MSPSuccessMagazine . com / playbook to gain instant access to a free Sales Playbook checklist that details what you need to have , create , and put into a productive Sales Playbook for selling IT support and services .
26 | MSPSUCCESSMAGAZINE . COM • VOLUME 1 ISSUE 6