People don’t deliberately plan to fail but often fail to plan.
In sales one of the most crucial elements is a prospecting plan.
A challenge for many salespeople is they do not have one and as a result spend the vast majority of their selling time with their “friendlies” (clients they get on well with), who may be great people but not necessarily their “A” or “B” customers. This often results in poor sales results and leads to a lack of growth. These type of salespeople are often referred to as “Farmers”.
To develop a prospecting plan we need to start with clear sales targets and goals, as without these we cannot work out the activity target and our numbers. Once we have a number we can work out our average sale which we divide into the total sale target to then come up with the number of sales we need to achieve the overall target.
From this we can divide by our closing ratio to see how many sales interviews we need to achieve our overall target.
We can now work out how many referrals we need to generate by again dividing this number by 80%. Generally with referred leads 80% will give you an appointment.
This is what it looks like –
Sales Target $500,000
÷ 10,000 Average sales over 12 months
50 Sales required this year
÷ 50% Closing Ratio
100 Sales interviews this year
÷ 80% Appointment closing ratio
125 Referrals required this year to achieve sales target
÷ 46 Working weeks in year
2.7 Referrals per week
We now have the numbers, the important one for us is the number of referrals needed each week e.g. 2.7 as our example shows. The next step is to plan where these referrals will come from.
Referrals come from many sources including existing clients, peer groups, referral groups, social networks, centres of influence, family and friends etc. The challenge with many of these sources is at best they are spasmodical and at worst we get none at all. We as salespeople are leaving referrals and our sales success to chance.
A survey conducted by CSO Insights in 2007 which analyzed lead generation published the following results –
5.7% customer service
17.5% customer referrals
24.4% marketing programmes
40.8% self generated by salesperson
What these results clearly show is the greatest opportunity for frontline salespeople and business owners who have to sell their services to grow their business is through self generated leads.
To achieve this we need to systemize our referral systems, firstly from our existing clients and then through centres of influence, our two biggest/best sources of referred leads.
A question I often ask experienced salespeople is “how often do you ask your clients for referrals?” and the answer I get is “hardly ever”.
The reason is they used to ask but after many “can’t think of anyone right now but will think about it” they gave up asking. I often say the quality of your questions will determine the quality of the answers so if you want more referrals from existing clients stop asking “who do you know who might be interested in what we do?” and ask for a specific referral to someone you know they work with or associate with.
In my next article I will look at the key activities of a prospecting plan.
Quote of the Week:
If you don’t ask the answer is always “No”
Brett Burgess is a Sales Trainer and Programme Developer for Sales Impact Group.