If you want to reach your 2015 sales goals, you need to consistently produce the right outcomes. But too many entrepreneurs and salespeople don’t do the simple work of reverse-engineering necessary to create and win an opportunity. This work is fundamental to a sound sales plan.
Appointments to Opportunities
How many appointments does it take to create a new opportunity?
Activity by itself won’t get you to your goals. You also need to make sure you are effective in every interaction with prospects. Luckily there’s a simple metric to help you understand how much activity you need to reach your goal, and it gives you some idea of how effective you are at converting leads into prospects.
Look back over your 2014 results. Let’s say you convert two leads out of five into real sales opportunities. That might be as good as it gets. Maybe only two were qualified leads. If so, you are super-effective. But if all of the leads were qualified, you are effective 40 percent of the time. You can work on your effectiveness over time, but for right now, we can use this metric to help guide our plan.
How many of the opportunities that you create do you win?
To calculate this metric, you divide the number of deals that you win by the number of deals for which you compete.
Your win rate is a crucial statistic. It gives you an idea of how many opportunities (or deals) you will need to create, and it helps you get a handle on how effective you are.
How many opportunities do I need in my pipeline to cover my monthly goal?
If an average opportunity is worth $2,000 and my goal is $10,000 a month, I know I need to win five new deals every month. At this point, the metrics that we’re examining start to guide our actions. If it takes me five appointments to create two opportunities, and 50 percent of those opportunities turn into deals, then I know I need 25 appointments every month to reach my goal of $10,000 in sales per month.
Activity and Effectiveness
When you know these numbers, you can easily plan to undertake the activity necessary to reach your goals.
More activity generally results in better performance, but so does improving your effectiveness. So make your plan based on your current effectiveness rate, but also work to refine your skills so that you can reach your goal by, say, Oct. 15, and then by Dec. 31, 2015, perhaps you’ll have exceeded it by a generous margin!